Let Gerald Levert’s death provide a valuable lesson: don’t mix Darvocet, Percocet and Vicodin, Xanax and two OTC allergy medicines. Unless you’re Rick James.
Unrequired Reading: Feb. 16, 2007
Always with the stuff I didn’t have time to write about this week!
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Bizspeak
I read a lot of financial earnings statements at my job. I learned early on that “pro forma” and “adjusted” numbers, intended to give a true reflection of a company’s performance, are usually crap, and that when a company takes a different “extraordinary charge” each quarter, then they’re not so extraordinary, and the company is just fudging its accounting.
So it’s in that vein that I present to you this morning’s earnings statement by Sanofi-Aventis, “In a Difficult Environment, Another Year of Growth in Adjusted EPS Excluding Selected Items”
In order to give a better representation of its underlying economic performance, the group has decided to present and explain an adjusted consolidated income statement for 2006 and the fourth quarter of 2006, and to compare them with an adjusted consolidated income statement for 2005 and the fourth quarter of 2005 respectively.
Which is a bit like saying, “Excluding sectarian violence, our nation-building mission in Iraq is doing well.”
Say hello to Hollywood
Derek Lowe writes about a great article in the February issue of The Scientist. The anonymous author discusses the flaws in the R&D model among major pharma companies and develops an interesting method of fixing them: Go Hollywood!
Big Pharma continues to follow the old studio model, though there are signs that this may be changing. A similar and necessary evolution to what Hollywood underwent in the 1950s may be beginning, with increasingly more drugs being discovered outside Big Pharma, presumably because the R&D process elsewhere is more conducive to creativity. Biotechs or small pharma settings tend to be flexible and nonhierarchical, with a tolerance for mistakes and constructive dissent — all characteristics of environments that nurture creativity and innovation. Consequently, the trend towards more drugs being discovered outside Big Pharma is likely to accelerate.
There is a precedent for pharma emulating Hollywood: Pharma’s main preoccupation, the creation of blockbusters, was directly copied from Hollywood. The blockbuster model is really defined by broad and aggressive marketing, though the term is less accurately, if more commonly, used to define revenue thresholds. Hollywood’s blockbuster model was created in 1951, when the term was first applied to the movie Quo Vadis because of its then-huge budget of $7 million and the unprecedented zeal of its promotion.
I know it sounds bizarre, and it may be dry subject matter, but this is a really compelling opinion piece, and I think laymen (like myself) can gain a lot of perspective from it on some of the problems with developing new drugs.
Unrequired Reading: Dec. 29, 2006
It’s the end-of-year edition of Unrequired Reading, my unrequired readers! We’ve got more long-ass articles and otherwise interesting pieces that I haven’t had time to write about than you can shake a stick at!
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Unrequired Reading: Dec. 8, 2006
Sorry for the paucity of posts this week, dear readers. I’ve been pretty burned out from work. Plus, we spent last night picking up my wife’s new Mini Cooper S, which has her pretty excited. Pix to follow this weekend.
Your Unrequred Reading is carefully hidden away under that “more” link!
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Pfailed
What a difference two days make. On Nov. 30, Pfizer gave an “R&D open house” event where it discussed its drug pipeline. The biggest drug in that pipeline is torcetrapib, a compound that raises “good” cholesterol. For years, Pfizer’s been developing it as a combo-drug with Lipitor (atorvastatin), which reduces “bad” cholesterol.
Prior to the meeting, Pfizer issued a press statement that included this passage about torcetrapib:
Commenting on torcetrapib/atorvastatin (T/A), Dr. LaMattina said, “We are first-in-class and we intend to remain best-in-class in a category that has the potential to change the face of cardiovascular medicine. T/A raises HDL and lowers LDL. We believe that the net benefits of the drug — characterized by significant HDL elevation and LDL lowering vs. the small elevation in blood pressure — will greatly benefit patients with CV risk.
“The development of T/A has required tremendous innovation on our part from the earliest stages of discovery through one of the most cutting-edge development programs ever carried out anywhere. At the end of this comprehensive program, we expect to have a medicine with unparalleled efficacy in raising HDL, lowering LDL and with an anti-atherosclerosis indication.
“We will learn of the top-line results of the three pivotal imaging trials during the first quarter of 2007. During this same period, we will also receive the results of some additional Phase III lipid studies. To obtain a reliable picture of the overall safety and efficacy profile of T/A, the results of all these studies will need to be analyzed and reviewed together, and this will happen in the context of the American College of Cardiology Meeting in March, 2007.”
Yesterday, Pfizer announced that its independent Drug Safety Monitoring Board discovered a significantly higher mortality rate in the torcetrapib wing of late-stage clinical trials. The results must have been overwhelming, because Pfizer said that it’s stopping the trials, canceling all development of the drug, and accelerating its restructuring plans. A few days earlier, the company announced that it would lay off 2,400 sales reps, as part of its reorganization. Torcetrapib’s failure means large numbers of people will be getting fired in the next few weeks.
If you follow the pharma industry, you already understand what a cataclysmic event this is for Pfizer. I don’t think it’s on the scale of a Vioxx, because there’s likely no legal liability issues, but the lost sales will be in the tens of billions. Beyond that, there’s the opportunity cost of the R&D that was performed on the product, as well as nearly $800 million in actual development costs.
I’m not trying to convey a “poor little Pfizer” impression here; I disagree with a bunch of the company’s practices (particularly its growth-by-acquisition model from the first half of this decade). What I’m trying to get across is that developing new drugs is a mighty risky proposition. I’m not sure that people who complain, “Drugs are too expensive; pharma companies are evil,” have much idea about the risks and the costs these companies incur.
It’s a Rap!
(You know you wanna check out the pix from my meanders in Toronto on Friday)
Home from Toronto a lot easier than my boss, whose flight home on Friday got cancelled due to “the airspace over Boston,” according to his pilot. He asked if this meant the bad weather & high winds we had all over the northeast, and was told that it did not. So, after 4 hours in an Embraer 145, he was allowed to leave and headed back to our hotel, where he sat in the bar and watched hockey.
Meanwhile, official VM buddy Sam and I went to see the Raptors play the Celtics in what Sam called “battle of the worst coaches in the NBA.” Since the Raptors have a game tonight against the Knicks, we figured maybe it’s a round-robin tournament.
We had fun at the game, but it was despite the action on the court. Sam’s now been to two NBA games with me (we hit a Dallas game against Orlando in April 2005), and he’s convinced I have NBA-Tourette’s, in which a constant stream of analysis & invective pours forth from my mouth during professional basketball games. We joined up with my boss after the game for a drink or two. He seemed pretty exhausted by the hurry-up-and-wait. I admit: if I were stuck in an Embraer for 4 hours, I’d probably go bananas.
Earlier in the day, after I visited Sam’s company in Oakville and toured the company’s produciton facilities (not as heavy-duty containment suiting as I wore on Thursday), I wandered around Toronto a little, while the weather was clear.
Unfortunately, this wandering didn’t coincide exactly with the clear weather, and I was stuck in some darned cold rain for a while. Early in my meander, I stopped at the Roots store in the Eaton Centre to get a hat and gloves. But then I decided that they were kinda pricey and, besides, the weather was okay now, so it would stay that way forever.
From there, I exited onto Yonge Street, which I forgot was an interesting amalgam of high-end retail, good record stores, and low-rent strip clubs. I headed off from there to a used bookstore I remembered from a past trip, but didn’t find anything.
I decided I’d walk through the University district and visit the famed comic store, The Beguiling. I spent a while there, hoping the weather would clear again and trying to justify spending $240 (Canadian) for a limited print by Sammy Harkham of a golem walking in the forest. I held off (I’ll wait till the USD appreciates against Canada’s dollar, and I’d probably be fine with a panel from The Poor Sailor anyway).
One of the nice things about having started doing yoga is that rambling ambles like this one don’t seem to give me the slight mid-back pain I was getting the past few years. I’ve only been on it for a few weeks or so, so hey.
During this walk, I came across two things I didn’t take pictures of: the Bata Shoe Museum and the Robarts Library. The former looks entertaining enough, and I bought a postcard from there for Amy, to give us yet another reason to take a long weekend here in the springtime.
The Library, on the other hand, is one of the most overwhelmingly depressing buildings I’ve ever seen. It may’ve been worse because of the rain and gray skies, but I can’t imagine a scenario which the appearance of this building inspires anything but fear and dread. Don’t let 1970s architecture happen to you!
After I left The Beguiling emptyhanded, it was time for another overpriced cab ride back to the hotel. I was amazed by the cost of cab rides in this city, as well as the ones I had to take to the pharma companies, which were outside the city. The flat-rate limo-y cars were also awfully expensive, including $51 CAD for the 20-minute ride from downtown to the airport.
In keeping with my recent post about accumulating all sorts of change and foreign currency, I returned home this morning with about $47 in Canadian bills and change. I feel like George Soros.
Anyway, a really neat thing happened during the short (54-minute) flight today. We completed our initial descent through the cloud cover, and all I could see were brown-gray hills and a few houses and a winding road or two. I thought, “We’re only 15 minutes from landing, but I have NO idea where we are right now.” It looked like Pennsylvania farmland, or far western NJ.
Then I noticed the Sheraton Crossroads to port, and it hit me: I was looking down at my morning commute! Sure enough, Rt. 17 threaded away from the Sheraton, southeast to Ramsey. Our plane followed Rt. 208 for a bit, as I picked out landmark after landmark (the Nabisco plant, the Ikea across from Garden State Plaza, even the Lukoil I stopped in last week). I’ve only had this perspective from a plane once before. Usually, I come home at night, or on different flight paths.
It helps to see things from different angles. Except Raptors/Celtics games.
(check out a couple of pix from my Toronto walkabout)
Containment Policy
I spent a chunk of the day wearing containment gear during a visit to a drug manufacturing facility near Toronto. Unfortunately, I had to sign a confidentiality agreement before the visit, so there was no way to take photos of myself in this amazing get-up.
My guide for this tour told me that the facility’s policies are for redundant safeguards against contamination (there’s some high potency materials in this site), so we were overdoing it for the sake of added safety. Even so, we didn’t enter any of the production suites where the material actually gets handled; the staff in those rooms wear full rebreather gear on a daily basis.
So, as you can tell, I’ve started another trip. This one’s pretty brief: I’ll be visiting one more drug manufacturer tomorrow, then hitting the Raptors/Celtics game with my contact at that company, official VM buddy Sam Ricchezza, last seen writing the Raptors report in our NBA preview, and goofing on me for not coming up to visit him and see his company.
Right about now, I’m hitting up the minibar for a caffeine fix. I’m also eyeing the pod-coffee machine pretty suspiciously, but it might be necessary to keep me awake till dinner, which we’ll be having at Rain, which “was once the site of Toronto’s first women’s prison,” according to the site.
Anyway, I took Shakespeare Wars with me (hardcoveritude be damned!), and have enjoyed the first 50+ pages. I’ve also got my Yoga for Regular Guys with me, since I’m trying to make a habit/practice of that. The weather’s pretty grotesque, so I doubt I’ll be able to take any good pictures. It’s a pity, since Toronto’s a kinda neat city. It’s my 3rd trip here, and it’s always struck me as a pretty good place to be. Admittedly, I know nothing about the economics of the place.