Deals Of The Week: PPD/Carlyle Group & Hellman & Friedman; Pfizer/Puma Biotechnology & More...

This past week may have seemed plain vanilla from a deal perspective, but, ironically, it was among the most topsy-turvy of all in a year that has been relentlessly volatile for the burgeoning field cancer immunotherapy.

On Oct. 3, the Nobel Assembly announced winners of the Nobel Prize for Medicine were three immunologists, including Ralph Steinman of The Rockefeller University, who had died of pancreatic cancer three days earlier and thus became one of only a very few scientists to receive the award posthumously. The recognition came for Steinman’s discovery of dendritic cells decades ago; his work has most recently laid the scientific foundation for the biotech Dendreon Corp. to break ground and then much later dash expectations with its controversial but first-in-kind cancer vaccine Provenge for advanced prostate cancer. Bruce Beutler and Jules Hoffmann were also winners of the prize, for their work on the innate immune system, and the work of all three scientists has had implications for industry.

The mood was therefore understandably bittersweet at Cancer Research Institute’s annual scientific meeting. The meeting began in New York on Oct. 3, coincidentally the same day as both Steinman’s death and the Nobel Prize in Medicine were announced; all three prize winners have been active in CRI and winners of CRI’s prestigious William B. Coley Award. Work in the field progresses, as the roster of world-class speakers attested to, and Mitch Gold, CEO of Dendreon, received the Oliver R. Grace Award for Distinguished Service in Advancing Cancer Research – a salve no doubt in light of the recent flubbing he has taken on Wall Street for botching the Provenge launch, at least initially.

Lost in the greater dramas, perhaps, were two small deals around cancer immunotherapies, one involving a barter exchange between Merck KGAA and Ono Pharmaceuticals around Stimuvax, now in Phase III for non-small-cell-lung cancer; in exchange for Japanese rights to the cancer vaccine, Ono is giving Merck KGAA worldwide rights, excluding Japan, Korea, and Taiwan, to its experimental treatment for multiple sclerosis. In addition, Pfizer out-licensed to AZ's Medimmune subsidiary rights to its fully human monoclonal antibody tremelimumab, which binds to the protein CTLA-4, expressed on the surface of activated T-cell lymphocytes. In all cases deal terms were not disclosed but DOTW speculates…

PPD/Carlyle Group & Hellman & Friedman: Since the summer, rumors have swirled that contract research organization Pharmaceutical Product Development Inc. was in play. This week, private equity firms The Carlyle Group and Hellman & Friedman struck a $3.9 billion deal to acquire PPD, taking it private in a leveraged buyout announced Monday, Oct. 3. Affiliates of the two firms will combine to put up nearly $1.8 billion of their own equity capital, although neither firm revealed whether they contributed equally. The firms arranged for the remaining $2.2 billion as debt funding from four lenders: Credit Suisse AG, J.P. Morgan Chase Bank N.A., Goldman Sachs Bank USA and UBS Loan Finance LLC. The deal will compensate PPD stakeholders with $33.25 per share. That’s a premium of nearly 30% over PPD’s closing price of $25.66 on Sept. 30. In July, after rumors first suggested PPD might explore a sale the Wilmington, N.C.-based company issued a statement confirming that it would conduct a strategic review of its options. At the time, however, executive chairman Fred Eshelman insisted that PPD remained committed to its long-term plan and had not considered combining with another CRO. The deal is subject to a 30-day “go-shop” window, and is subject to a $58 million breakup fee if PPD chooses a higher bid, or a $116 million fee if the parties walk away for some other reason. – Paul Bonanos
Merck KGaA/ Ono Pharmaceutical Co. Ltd: Why pay cash if you can barter asset rights instead? In a duo of agreements announced Oct. 4, Germany's Merck KGaA licensed worldwide rights outside of Japan, Korea and Taiwan to Ono Pharmaceutical 's Phase II MS candidate, ONO-4641, while granting Ono Japanese rights to its own Phase III cancer immunotherapy Stimuvax. This is the second barter-style deal that Ono has signed in recent weeks. It licensed Japanese rights to Bristol-Myer Squibb's Orencia (abatacept) on September 20, while BMS gained rights in additional territories to an Ono antibody, ONO-4538/BMS-936558.

The deals were described as two separate agreements, but linking them means that less cash changes hands: Merck owed Ono Yen 1.5 billion ($18.6 million) for the MS drug, but was able to knock a third of that by granting Ono the rights to Stimuvax, now in Phase III for non-small-cell lung cancer, for €5 million ($6.6 million). No further financial details were given, except that milestone payments would be made to Ono on Merck's progress with the MS drug. Merck Serono licensed exclusive worldwide rights to Stimuvax from the US biotech, Oncothyreon. And Merck Serono has also recently snapped up another MS therapy, PI-2301, from a US company going through liquidation, Peptimmune Inc., for what appears to be a bargain $1.5 million up front.—John Davis

Puma Biotechnology Inc./Pfizer Inc.: Entrepreneur Alan Auerbach may have found a replicable biotech business model in a tough financing environment, which relies on private placements and reverse mergers to shore up financing for development of new compounds. Auerbach, a former securities analyst, founded Cougar Biotechnology in 2003 to develop oncology drugs, took it public through a reverse merger in 2006, and sold it to Johnson & Johnson for nearly $1 billion in 2009. Along the way, the company raised several hundred millions of dollars from private placements with institutional investors, who earned handsome returns upon the J&J sale.

Now, he is taking a similar tack with another start up he founded, Puma Biotechnology Inc. On Oct. 5, Puma announced that it had in-licensed worldwide commercial rights from Pfizer to an investigational pan-HER inhibitor, neratinib, now in Phase II studies for Herceptin (trastuzumab)-resistant metastatic breast cancer patients. Almost simultaneously, it also announced completion of a reverse merger with a shell company, Innovative Acquisitions Inc., and a $55 million private placement, which attracted some veteran biotech investors, such as Orbimed Private Investments IV, Adage Capital Partners, H&Q Life Science Investors, and others.

Also, in July, a company with Auerbach on its board of directors, Radius Health Inc., followed a similar financing path after a key partner elected not to exercise its option on its lead compound, a treatment for osteoporosis. Radius raised $91 million from a private placement consisting of two-thirds equity and one-third debt and engineered a reverse merger with the shell company MPM Acquisition Corp. Neratinib is being studied in the neoadjuvant, adjuvant and metastatic settings in patients with HER2/ErbB2 positive breast cancer, the same indication targeted by Roche/Genentech's closely watched T-DM1, for which FDA issued a refuse-to-file letter in August 2010.—Wendy Diller

AstraZeneca PLC/MedImmune/Pfizer Inc: Neratinib wasn’t the only oncology compound Pfizer out-licensed this week. It also gave global development rights for the cancer immunotherapy tremelimumab to Medimmune, AstraZeneca’s oncology arm. Terms of the deal were not disclosed. Tremelimumab is a fully human monoclonal antibody, which binds to the protein CTLA-4, expressed on the surface of activated T lymphocytes. Pfizer is working to build its global oncology franchise, now a distant runner to some of its Big Pharma competitors. Its top oncology drugs are Sutent (sunitinib) and the newly launched targeted therapy Xalkori (crizotinib). But it has had difficulty expanding Sutent indications beyond advanced renal cell carcinoma and gastrointestinal stromal tumors.

The question, then, is why Pfizer would have out-licensed either drug. None of the companies involved in these deals was available for comment, but Pfizer appears to be taking a nuanced approach to building its oncology franchise and is focusing on targeted therapies. And Medimmune’s expertise is in biologics, which could fit well with tremelimumab. –Wendy Diller
Gilead Sciences Inc./ Boehringer Ingelheim: Gilead will license an indeterminate number of non-catalytic site integrase inhibitors (NCINIs) for HIV from Boehringer Ingelheim, including the lead compound BI-224436. Terms were not disclosed other than that Gilead will pay BI an upfront payment plus further payments based on the achievement of development, regulatory and commercial milestones, as well as royalties on future net sales for exclusive worldwide rights to the series.

These second-generation integrase inhibitors represent a new class of antiretrovirals that bind to a novel site distinct from the current catalytic site targeted by the current generation of integrase inhibitors including Merck’s Isentress (raltegravir) or Gilead’s own late-stage candidate elvitegravir. Klaus Dugi, SVP medicine at BI, said in a press release that BI would focus on development of other assets in their virology portfolio, in particular on hepatitis C. BI-224436, which has completed a PIa trial, may offer a superior resistance profile compared with the predecessor drugs by engaging a different site on the enzyme. –Mike Goodman

No Glass Ceilings: Medtech Women Gather at Unique Industry Meet-Up

MedtechWOMEN co-founders Amy Belt and Deborah Kilpatrick

Something new happened in the medical device world two weeksago. It wasn't a new technology or a big research discovery, nor was it a breakthroughtreatment for heart disease, cancer or diabetes, though it could possibly leadto one of these.  

What happened was an unprecedented medical technologyconference, featuring exclusively women speakers, panelists and attendees. Thesold-out Medtech Vision conference in Menlo Park, Calif. on September 15 and 16brought together more than 200 business executives, entrepreneurs, investors, physicians,inventors, providers, patient advocates, policymakers and regulators and generatedan energy that attendees claimed – and I will vouch -- was not just palpablebut electrifying.  

The idea was hatched a year ago when Covidien Ventures directorAmy Belt got fed up with the typical medtech meeting scene. "I was lookingup from the audience and realized that there were no women on the podium – again.I was frustrated not to see women on the podium, as well as on boards andexecutive teams, because I know the women experts are out there and I wanted tohear from them," Belt said. So she pulled together a like-minded group andset about, with major support from Covidien, Abbott Laboratories and law firm Fish &Richardson, to create something new.  

The invitation that landed in my inbox July 27 came from anew organization called MedtechWOMEN andpromoted the conference as "the first ever to highlight women on the forefrontof medical innovation." Intrigued, I anticipated speeches about glassceilings and male dominated C-suites. Boy, was I wrong. Instead, thepresentations and panel discussions proved true to the meeting's agenda: toidentify solutions to today's big challenges in medtech: a jittery venturecapital community, shifting models of care delivery and reimbursement, increasingregulatory demands, and laser-like attention to healthcare outcomes and costs.

Speakersset right to the task with pointed advice. On an investor panel, VersantVentures managing director Beckie Robertson advised against entrepreneurs workingon small projects. "The opportunity for a win-win is in meeting a hugeunmet need and getting out before commercialization," she said. Johnson& Johnson worldwide VP of new business development Susan Morano agreed,highlighting spectacular exits in the last two years for companies thatgenuinely responded to unmet needs. 

Among big populations with unmet needs are women themselves,noted Lynn Westphal, director of women's health at Stanford University.Westphal named several common diseases and treatments that are inadequatelystudied in women, explaining that females often display symptoms and respond totherapy differently than males. Imagine the opportunities, she suggested,awaiting companies that break the mold and extensively enroll women in largetrials for cardiovascular, cancer, diabetes and other diseases. 

Interventionalists and surgeons had their say, too. Surgicaloncologist Shyamali Singhal explained that for new technology to be adopted,"it has to be faster, easier, and more doable than what I'm doing now insurgery." And the designers of those new technologies need to interactmore with physician users, said Bonnie Weiner, a cardiovascular researcher,clinician and former president of the Society for Cardiovascular Angiographyand Interventions. "Nobody ever asks us how we're going to use the device.Come to the cath lab and follow us around!" 

On a reimbursement panel, speakers agreed that the days of"build it and they will come" are over, and the way forward is toimprove health outcomes or procedure workflow. "We look for clinicallymeaningful improvement in outcomes" backed by high-quality evidence, saidBetsy Thompson, chief medical officer for the San Francisco regional office ofthe Centers for Medicare & Medicaid Services. Advancing patient safety isalso a good bet, she said: "If a new product improves safety but noteffectiveness, we would probably cover it." 

Liesl Cooper, VP of global healthcare economics, policy and reimbursementat Covidien, pointed out that with patients paying more for their care,industry also needs to think more about how to educate them. "We're notused to that," she said. "Shame on the medtech industry for nottouting better outcomes such as a 24-hour stay compared to a six-day stay!"

So what difference did it make that the people talking were allwomen? Amy Belt put it this way in her opening speech: "Leadership doesn'thave to wear a navy blue blazer. Women represent 51% of the population, 58% ofthe population over 65, spend two out of three healthcare dollars, are half ofthe graduating classes of physicians today and over 90% of all the registerednurses. Why would it make sense for women notto be significantly represented in leadership positions where key decisions aremade about the delivery of care and investment in innovation when theyrepresent half the population, control the healthcare dollar and provide themajority of healthcare services?"

Beyond Belt's introduction, though, the conference was notabout advancing women, but about advancing medical technology and healthcare. MedtechWOMENfounder Deborah Kilpatrick, a senior VP at diagnostics firm CardioDx, waspleased it went that way. Women's place in the industry "was just not whatwe were there to discuss," Kilpatrick said. 

Nevertheless, the thousand-watt energy at Medtech Vision wasa departure from the standard atmospherics of industry conferences. Itreflected, I think, the pride of 200 women medtech leaders seeing themselvesassembled in one place, listening closely to each other, making newconnections, and realizing – unexpectedly, inspiringly – that solving the challengesahead may suddenly have gotten a little bit easier. -- Mary Houghton

Insulin Pricing: Let The Battles Begin

In the same week that Novo Nordisk filed its latest-generation insulins, ultra-long-acting Degludec and the DegludecPlus combo, in Europe and the US, the drug makers says it won't be seeking the highest price it feels its new offerings could command.

"We could probably justify a higher price premium [for Degludec] than in reality we can ask for," acknowledged EVP & CSO Mads Krogsgaard Thomsen in a Sept. 28 phone call. He alluded to a host of health economic outcomes research the Danish group has carried out on its new products from Phase II onwards, but admitted that "the financial crisis and the focus on short-term financial optimization rather than long-term societal costs" means Novo won't push its luck.

You bet it won't. Even without the financial crisis, insulin pricing is becoming a hot issue as governments and payers try to cut down on the costs of a disease that's spreading fast. Never mind that insulin's value-proposition is still significantly better than that of many cancer drugs. Never mind the argument about long-term cost-savings from effectively controlling diabetes. The bottom line is that older insulins are cheaper, and not that much less effective, at least according to this BMJ Open article published Sept. 22 . That piece went on to declare that the U.K. NHS could have saved over £600 million between 2000 and 2009 if it had prescribed human instead of analog insulins. (The Germans reached a similar conclusion years before).

Now as with any analysis, the BMJ study wasn't perfect. Many would dispute the size and value of analogs' advantages over the human version. But by underscoring the high overall cost of insulin treatment, it comes to a conclusion that "should scare the daylights out of the major insulin companies," according to Diabetic Investor publisher David Kliff.

Indeed, NICE, the cost-watchdog for England and Wales, was quick to jump on the bandwagon, issuing a release Sept. 26 to remind the world that it recommends using human insulin treatment as first-line, and that had those guidelines been followed, those millions would have been saved.

If some payers aren't even convinced about the relative value of so-called 'modern' insulins (now 15 years old) and still recommend versions first introduced in the 1980s, what hope for the positively futuristic Degludec, a next-next-next generation version of this hormone first discovered in 1921?

Novo management itself hinted in this IN VIVO feature from 2007 that Degludec may represent the last innovation round in injectable insulin -- in other words, we're reaching the point where it can't get any better. The remaining challenges are education, adherence, convenience, delivery -- which, along with lack of new products, explains Sanofi's integrated service strategy.

Still, Degludec is better, Novo argues. But the company will have to work hard to prove it. A decrease in night-time hypoglycemic events may not be enough to convince all, though flexible dosing ("at any time of day, on any day"), a Lantus-beating half-life and a nice device will help.

Novo's remarks on pricing arguably represent its opening hand in payer-negotiations that will occur against a backdrop of already-raging pricing battles in the ranks of less-innovative insulins. Lilly in particular is attempting to squeeze whatever it can from a dwindling, market-trailing franchise that lacks new products: when Novo (prematurely, as it turned out) withdrew its human insulins in the UK in 2010, Lilly lowered the price of its human insulins to secure Novo's patients.

Meanwhile, Lantus goes off patent in 2015, after which time biosimilars (including one from Lilly) could start to pull down the price not just of Lantus, but of other basal insulins including Novo's own Levemir (though admittedly, biosimilar insulin isn't the most attractive target for large-molecule copycats).

In sum, we're not surprised Novo's saying it won't be greedy. The question is, will it get anything at all? And as regards the BMJ paper: "I expect there will be a reaction from leading diabetologists," predicted Thomsen.

In other words, keeping watching this space. There will be more to come.

image by flickrer james.gordon6108 used under creative commons

at the fair

Matt's sister and her family were in town this weekend for her high school reunion. They live in NY now, and the kids had never been to a real (big) fair. So on Sunday, we went and I think they had a great time. The Dixie Classic Fair is so good, and any other fair I've ever been to (which are just dinky county fairs) don't even compare. AND Jonah go to see the train that brings the fair to town, which according to his Real Trains For Kids video is the last carnival train in America. 

Jonah got spoiled ROTTEN this weekend having family in town, and Grandaddy was definitely the main culprit. Jonah loves him some Grandaddy (but not as much as Granny, of course. Ahem.).

It was way hotter than it was supposed to be and Jonah got sun burnt. Yep, Mother of the Year award right here. I felt so bad, but it's already faded a lot, so I think it looked worse than it was. Still, sun burn in October? I didn't even think about it!

Waiting on the pig races to start.

Uncle Andrew thought this was hilarious and was definitely the highlight of his day. Man, those things really run for the Oreos. This big guy blew them all away!

Then it was off to the big kid rides, so Grant, Abby, and Will could have some fun.

Jonah had SO MUCH fun. I think our Tweetsie and Day Out with Thomas trips made him eager to ride. He rode four rides, and loved every single one! For a kid who cries when the Crock Pot is out on the counter, that's pretty huge.

Deep fried butter, deep fried Twinkies, deep fried bacon etc and so and so forth. Only in the South, Folks.

It was a really fun day. And as much as I'd love to write more about it, I just found a surprise stash of Hershey Kisses in my pantry. I love it when my In-Laws come and leave behind their chocolate. They know me well. I'm truly loved.

Here are our fair posts from 2009 and 2010 if you want to see them. Jonah has changed so much!

slices of life, vol. 4

Because I want to remember these days...

Jonah adds an extra "en" in the progressive tense when he uses it. Examples: "Mommy cookening?" or "Car honkening!" etc. The other day he had a particularly bad bloody nose. We were having a hard time getting him to cooperate in tilting his head/pinching the bridge etc. When we were almost done, he said, in a sad crying voice, "All done boogerning!"

We went to the fair yesterday. When we were doing bath and bandages and Jonah would start being uncooperative, we would say, "It's okay, Buddy. We gotta hurry and get all clean so we can go to the fair." So this morning, as soon as I put him on the dressing change table and sat him up to take off his wet towels, he said to his Grandaddy and me, "Let's go, Guys. (Jumbled, incoherent words) go to fair!"

Any time Jonah feels an emotion that makes him whiny (fussy, grumpy, tired, mad, frustrated etc), he says, "I cared!" (I'm scared.)

Any time ANYONE coughs or sneezes around Jonah, he says, "Okay, Mommy?" or "Okay, Aunt Kim?" and so on.

Jonah wants to be just like his Daddy. If Matt is sitting in the floor playing with him, he usually gets a pillow to go behind his back up against the coffee table. Then, Jonah immediately goes and gets a pillow to put behind himself too. Matt wears a Wake Forest hat most all the time. Jonah insists on wearing Daddy's other hat (a Braves hat). Up until today, both have been Daddy's hats and Jonah would say he was wearing "Daddy hat." Today, all of a sudden, Jonah made it very clear that the Braves hat now belongs to him. He said, "Take it hat" when we were about to leave for Community Dinner, and Matt said, "You wanna wear Daddy's hat?" Jonah put his hand on Matt's head/hat and said, "Daddy hat." Then patted his own head with the Braves hat, and said "Jonah hat." Well then.

Jonah is trying to learn how to do a knock-knock joke.
Jonah: Knock Knock.
Other Person: Who's there?
Jonah: Jonah Lillams (Williams)

But it applies to other people too.
Jonah: Knock Knock
Other Person: Who's there?
Jonah: Granny Lillams/Kim Lillams etc.

Apparently Lillams is always the punchline.

Sorry, I Still Don’t Get It

Pfizer launched its first TV campaign for Exubera this past week in an attempt to breathe a little life into the stalled inhaled insulin brand. And with just $4 million in quarterly sales after 18 months on the market, Exubera needs all the help it can get.

But will the “Now I Get It” campaign be enough to put Exubera on a faster track? As we pointed out in an IN VIVO article in May, Exubera has some pretty major marketing hurdles: 1) it’s not clear that inhaled insulin is any more effective than the injectable stuff; and 2) there’s that pesky long-term pulmonary safety signal.

But perhaps the biggest hurdle is the size of the inhalation device. As big as a can of tennis balls, it’s not exactly something you’d like to whip out at a restaurant. Pfizer tries to dispel that notion in the commercial: a man is shown holding and closing the device while having a meal with a friend—but in such a way as to disguise the actual size of the thing.

The size problem isn’t new: as reported by The RPM Report, during FDA’s 2005 advisory committee review of Exubera, one panelist noted that despite the increase in “metrosexuals carrying purses,” the inconvenience of carrying the device may actually prevent patients from complying with their treatment regimen. Embarrassment also may be a factor: as the Pharma Marketing Blog points out, the inhaler looks like a large bong.

It’s also interesting to note that the commercial doesn’t ever discuss the convenience factor of inhaled insulin—in fact, the word “needle” is never uttered. But maybe that’s because for the majority of patients, inhaled insulin can’t replace injections. Instead, Pfizer sells Exubera as a treatment to help control blood sugar levels.

Inhaled insulin should be an easier sell, and with a number of other inhaled insulin products coming down the pike (all with smaller inhalation devices), Pfizer is running out of time. It’s a slick commercial, but it’s doubtful that the introduction of DTC ads for Exubera will help Pfizer overcome device envy.

But hey, don’t take our word for it: judge for yourself. To see a clip of the broadcast ad, click here, and tell us what you think.

my first 5K!

I had so much fun at my 5K today! Well, maybe not so much fun when I was actually running it, but felt GREAT afterwards. I ran it in a little over 35 minutes, which was an 11:19 mile. And that is really good for me. I never stopped running, which was my own personal goal, so overall, I feel really happy about it.

And over $10,000 was raised for the Second Harvest Food Bank! Hooray!

Before-run potty break.

The Fun Run!

Getting Ready!

There was this...

And then, all of a sudden, the gun sounded.

And we were off.

And then we finished.

And it was awesome!

Merger Vaults Peripherals To Bigger Stage

Half a decade ago, the peripheral vasculature market was a clinical backwater for most cardiovascular device companies, who were more interested in the larger, more dynamic coronary area.

Now, the peripheral vasculature market is going Big Time.

This week’s merger of ev3 and FoxHollow Technologies reflects a new optimistic view of this space. The deal creates the largest peripheral vascular device company, one with a market cap of $1.7 billion on sales of around $600 million. But more importantly this combination establishes a single leader to push the peripheral market forward.

There is an irony to the success that both FoxHollow and ev3 have enjoyed in the peripheral market. Like other cardiovascular companies developing peripheral products, both Fox Hollow and ev3 were founded to focus on coronary applications, and only after finding that challenge to be too great did they eventually find their primary success in the peripherals.

FoxHollow’s success, in fact, is built on a technology—atherectomy—that has largely been shunted aside in the coronaries by the success of stents. The technology’s growing peripheral adoption is a vindication of sorts for company founder and current CEO John Simpson, PhD, MD, an angioplasty pioneer, who has long advocated that restenosis is best treated by taking the plaque out, not by putting a stent in.

Indeed, FoxHollow’s rapid growth, particularly as a public company, did much to change the thinking among CV device companies about the value of the peripheral market, while also reviving atherectomy: witness the emergence of new peripheral atherectomy players such as Cardiovascular Systems and Pathway Medical. Though FoxHollow’s market cap is no longer north of $1 billion, adoption of its technology remains strong, creating a compelling basis for this deal.

As successful as each was on its own, both companies were feeling the pressure to offer more broad-based product lines.

The ability to link atherectomy systems with ev3’s line of innovative stents and embolic protection devices potentially solves FoxHollow’s problem of being a one-product company and ev3’s issue of lacking a market-leading product. (FoxHollow does have an innovative service-based relationship with the drug company Merck, but that alliance does little to shore up its business with peripheral specialists.)

Indeed, the merger represents the logical conclusion of a product development and distribution collaboration the two companies initiated this past January linking ev3’s embolic protection device with FoxHollow’s atherectomysystem, (and discussed in a profile of ev3 that appeared this past February in IN VIVO).

For both companies, however, the collaboration was as much about market development as technology enhancement. As FoxHollow’s atherectomy technology evolved and the company’s ability to remove plaque grew more precise, it could expand the number and type of cases it treated, but in the process, issues regarding the potential need for embolic protection naturally surfaced. For ev3, the FoxHollow deal opened the door to take a technology, embolic protection, that had been used primarily in the coronary and carotid arteries and develop it for peripheral applications. Combining with ev3 should also help FoxHollow expand in Europe, where ev3 has a strong distribution platform and FoxHollow hardly any at all.

As the peripheral opportunity moves from the wings to center stage, this deal begs the question: won’t big CV device companies, particularly Medtronic and Abbott, who currently lack peripheral (non-carotid) vascular plays, see the same kind of opportunity in FoxHollow that ev3 prizes? But if breadth of product offering and, more importantly, a development effort focused on peripherals are important, it may make even more sense for the Medtronics and Abbotts and any other interested parties to let this deal close since a combined ev3/FoxHollow may be even more valuable to them down the road.

Evista Update

Lilly's response to my questions about the Evista press release (subject of a July 25 post):

"Following the July 24 meeting of the Oncologic Drugs Advisory Committee (ODAC), Lilly issued a press release containing factual information about the meeting’s outcome pertaining to Lilly’s osteoporosis drug.

'We believe that our actions were consistent with the laws and the consent decree,' said Anne Nobles, Vice President, Compliance and Enterprise Risk Management. 'Lilly takes very seriously our responsibility to abide by all the laws governing our business practices and are committed to ensuring our employees' actions reflect the highest legal and ethical standards of conduct.'"

The REMS Pioneers: GlaxoSmithKline Edition

By our count, the Food & Drug Administration has used its newest regulatory tool--Risk Evaluation & Mitigation Strategies--seven times since the authority took effect at the end of March.

The REMS is the centerpiece of the new drug safety legislation enacted in 2007, giving FDA much greater authority to regulate drugs on the market using tools like consumer medication guides, enhanced communication programs, and restricted distribution. (If you haven't been keeping up, you should be: start here.)

Remarkably, one sponsor--GlaxoSmithKline--has been involved in four of the first seven. GSK (or its partner) has negotiated a REMS as part of the approval process for the migraine combo Treximet (developed by Pozen), a broader indication for Advair, the new drug Entereg (developed by Adolor), and a pharmacogenomic safety screen on Ziagen. (And GSK isn't done: another REMS is in the works for the pending Promacta application.)

The other REMS all involve different sponsors: UCB's new biologic Cimzia, Biovail's new salt formulation of bupropion Aplenzin, and a revised label for Schering-Plough's Intron A.

So GSK's regulatory affairs group sure has been busy lately, since the new REMS authorities involve unchartered territory for both FDA and the sponsors.

But don't feel too bad for GSK. The company has had more than its share of the early work on navigating the REMS process--but it also has benefited in at least two ways.

First, as we wrote here, the intial wave of REMS pioneers have all involved applications stuck at FDA. So GSK has shouldered a greater burden in figuring out how the REMS will work in the regulatory process, but it has been rewarded with the opportunity to sell two new products--Treximet and Entereg--that might not otherwise have been marketed at all. The broader labeling for Advair also helps the company tell a good news story about the drug at a time of ongoing safety concerns for the long-acting bronchodilator class.

The Ziagen REMS may be the most interesting of all--a real world case-study in personalized medicine--but its hard to say it is paying off for the sponsor. (You can read more about that REMS in "The Pink Sheet.")

Here's the second payoff for GSK: the company now knows the most about how the new drug safety regulatory system works. FDA officials have put it better than we can: this is the most important change in the drug approval process in generations, and essentially every new approval sets a precedent. FDA plans to draft guidance to explain the new system to sponsors, but not until it has more experience. So the only way to learn is by doing.

GSK finds itself as the early leader in that learning.

Now, does that pay off in a competitive advantage for the company as it tries to get more drugs to market? We'll see....

Schwan Song

Roche’s announcement that Severin Schwan, the head of its Diagnostics division, is set to succeed Franz Humer as CEO of the Roche Group next March came just hours after we’d filed a story for the upcoming issue of IN VIVO looking at Roche’s recent acquisitions, including its ongoing $3 billion hostile tender offer for anatomic pathology specialist Ventana Medical Systems. Given his recent history in diagnostics, the Schwan news would’ve made an excellent punch line to the article, which talks about the firm’s belief in diagnostics and its bet that personalized medicine--an area where innovative platforms and molecular test content will play significant if separate roles—will be key to its long-term growth.

This past Monday, the IN VIVO Blog also cited a rumor that Novartis could be grooming Joerg Reinhardt, the head of its vaccines and diagnostics businesses, as successor to CEO Dan Vasella.

Is it a coincidence that both firms are turning to Dx veterans? Novartis doesn’t have an in vitro diagnostics business anything like the scope of Roche’s, nor does it have a life sciences research tools unit. But Novartis knows blood banking, to which it has applied a nucleic-acid test (NAT) based platform for virology testing. And like Roche, Novartis has a significant investment in targeted cancer therapies, for which companion diagnostics are assumed to play a vital part. (Ventana, for example, markets a molecular test to gauge patients’ potential to respond to Novartis’ Gleevec).

So maybe it's a good time to examine Roche’s strategy.

Unlike other Big Pharmas (including Novartis), Roche has dedicated itself to the in-house development of companion tests. Its molecular diagnostics unit has developed know-how around adapting microarray technology to clinical diagnostics--one of the most complex aspects of the approval process for drug-diagnostic tandems--via a series of collaborations with Affymetrix, leading to tests for mutations in the p450 and cystic fibrosis genes. Roche is applying the same tools to developing its own drugs, including a p53 diagnostic for a cancer drug that binds wild type p53. And before Roche took rights to Plexxikon’s PLX4032 cancer program, which inhibits a gene mutation present in roughly two-thirds of melanomas, the two companies had begun a diagnostics collaboration around a molecular test for the mutation. Indeed, one reason Roche paid so much for the Plexxikon compound was that the companion diagnostic could dramatically expand its market into solid tumors by targeting the same mutation in those far more common cancers.

Roche has the free cash to invest in its diagnostics businesses and is clearly aiming at personalized medicine as a principal way to bolster them long term – and importantly, also support the development of targeted drugs on its pharmaceutical side. On the conference call discussing the Ventana tender offer Schwan said flatly that Roche wants it for strategic reasons relating to its drug business. The Ventana deal “is very much driven by the synergies we have on the R&D side, by the development of targeted medicines. The real value is that we can leverage the different capabilities across the entire Roche Group,” he said. “The earlier you start the exchange of ideas between pharma research and diagnostics, the better chance you have to come in parallel with the development of a companion diagnostic,” added Roche CFO Erich Hunziker.

It’s long been held that pharma holds all the leverage when it comes to drug-diagnostics partnerships. But the demand for innovative test content to run on molecular diagnostics platforms is increasing: witness the recent upswing in deal-making, along with renewed VC interest in diagnostics. It suggests that the area's potential to drive health-care innovation by directing therapy more efficiently is finally being recognized. Even Abbott Labs noted this when, in the wake of the breakup of GE Healthcare’s bid to acquire Abbott's diagnostics businesses, Ed Michael, Abbott’s newly appointed head of diagnostics, commented to us that there are synergies between all of its diagnostics divisions--especially between the molecular and point-of-care testing businesses.

So if pharma companies truly believe in the vision – and more to the point, the necessity -- of personalized medicine, and if the development of tandem drug-diagnostic combos is best started early in development, it makes sense they’d want their senior executives to have hands-on experience with the ins and outs of diagnostics development. Finally.

Thought-Leadership in Hoosiertown: Lilly’s Innovations in Pharma Finance

It was hardly groundbreaking, as the Covance/Lilly deal was described by one of the PR flaks who’d pre-alerted us to the deal (you can read more of our Pink Sheet Daily coverage here).

But as one piece of the overall strategy Lilly has been fitting together over the last few years, it does indicate to us that those isolated Indianapolites are now the leading Big Pharma thinkers when it comes to financing R&D.

Let’s not go overboard here. The Covance deal isn’t a brand new concept. Aventis (and a few others) did more or less the same thing with Quintiles in the previous decade (see this piece, for example: you can get it for free and it will outline the key issues Lilly also had to wrestle with).

But add this deal together with Lilly’s recent three-way Alzheimer’s funding/development program with the private equity firm TPG-Axon and Quintiles’ NovaQuest unit, plus Lilly’s Asian forays in cooperative discovery (see this analysis, for example), and the company’s FIPNet notion is looking like a lot more than a marketing slogan.

Lilly, in short, seems almost uniquely serious about both variabilizing and off-loading development expenses. The first bit is pretty easy and relatively popular – all drug companies want to cut expenses. Lilly’s sale of a standalone drug-development facility and transfer of employees is simply one technique among many (like firing people, an activity with which Big Pharma has gotten a lot more comfortable over the last two years).

The second bit is harder: we haven’t seen any Big Pharmas except Lilly turn in a big way to private equity to help them fund high-risk R&D and share in the returns. (Lilly and other Big Pharmas have let NovaQuest take on some development risk in return for milestones and royalties, but those are pretty limited deals; Bristol has of course rather famously turned for financing and development help to other Big Pharmas).

There have certainly been plenty of discussions with PE – we ourselves know of several. But by and large the investors we’ve spoken with want more than just a couple of high-risk projects in these financing arrangements – they want a market basket of compounds, and so far as we know, no major drug company has been willing to share the upside that broadly. (Interesting that Mikael Dolsten, who was running an incipient Pharma-funding operation for Orbimed, gave up that job to run Wyeth’s R&D organization.)

In this regard, the Lilly/TPG deal was a compromise: two different Alzheimer’s compounds, both about ready to start Phase III trials, but hardly the four or five programs that would make most PE players comfortable with the development risk.

CROs, meanwhile, are anxious to take advantage of Big Pharma’s new attitude toward infrastructure and risk sharing. Their businesses are booming with Big Pharma’s boom in Phase I and II programs; they need more people to handle the additional trials. Getting them from Pharma in a friendly sort of way is good business for two reasons: the drug company pays the costs of their new employees for the first year or two; and it’s likely that the Pharma will be more inclined to send a preponderance of their new business Covance’s way. We very much doubt, incidentally, that other Big Pharmas will shun Covance because it is too cozy with Lilly: there’s simply too much momentum towards outsourcing in general.

If this merry-go-round of employee transfers stops – it’s fueled by the boom in early-stage productivity -- the CROs will be stuck with the firing duties and expenses of doing so, as was Quintiles when it ran into problems earlier this decade (problems which, among others, eventually led to its LBO). But in 2008 – unlike 1999 -- drug companies are pretty committed to outsourcing; should their mid-stage pipelines dry up any further, they’re as likely to layoff more of their own employees as they are to use them on work taken back from CROs.

Image from flickr user Marttj used under a creative commons license.

Even Cancer Ain't Exempt

No drug is exempt from FDA’s ultra-conservative stand, it seems, even those, like GPC Biotech’s satraplatin (Orplatna), that allegedly improve survival among cancer patients with few if any treatment alternatives.

An oncology advisory committee (ODAC) yesterday recommended that FDA delay considering prostate cancer candidate satraplatin for approval until overall survival data from the company’s 950-patient SPARC study is available. This recommendation came despite interim analysis strongly supporting the efficacy and safety of satraplatin, which was granted priority FDA review in April 2007.

Still, it wasn’t a complete surprise, at least since the rather negative FDA briefing documents released last week. These raised five “issues” including questions over the company’s assessment of pain progression, and, more importantly, over the definition and composition of one of GPC’s two key primary end-points used in the trial, progression free survival (PFS).

According to GPC’s “greatly disappointed” CEO Bernd Seizinger, GPC had communicated intensively with FDA throughout the application process and amended various aspects of the trials in accordance with FDA suggestions—including suggestions on what pain score to use. In sum, they’d done everything possible to make this work. (Listen for yourselves here.)

But FDA wasn’t having it. According to one analyst, “GPC walked into a complete stitch-up—FDA primed the advisory committee that they didn’t want this to happen.” Reading the briefing document, we’re inclined to agree.

Now, sources tell IN VIVO Blog that there’s no love lost between GPC and FDA—the ODAC meeting was “hostile and antagonistic,” according to one observer. Combine this with FDA’s overall caution (the last thing they want is to be hauled in front of the Senate for injudicious approvals) and you have a recipe for delay, if only temporary.

Still, GPC isn’t just an innocent victim here. Let’s go back to that issue of end-points. The briefing documents state that FDA had all along warned GPC that a PFS end-point may be problematic. Yet GPC failed to communicate this concern to the investment community.

That’s why analysts are so pissed—many had buy ratings on the stock, even after the review documents were released last Thursday. GPC shares fell 35% back then, and about the same again today. “Trust has been lost,” says one in London. “When it comes to the investment community, GPC are on their own.” (They can sulk in a corner beside Sanofi Aventis, which hasn't won any prizes for transparency among the investment community either, particularly with regard to Zimulti's rocky ride, on which we've reported extensively, including here.)

It’s a worrying time for the German biotech. All of a sudden, the overall survival data for satraplatin—which is the other primary end-point, alongside PFS--has become a make-or-break issue for the company. If it’s positive, the drug will probably still make it, although not in an accelerated fashion. If it’s not, the drug may not get onto the US market at all—which could prove fatal for GPC.

The rest of the sector has cause for concern, too, though (not to mention androgen-independent prostate cancer patients that have failed first-line therapy). This bleak little episode—besides showing up personal clashes between applicants and the agency, which, it seems, do matter—may mean that regulators’ caution is spreading beyond primary-care drugs like Avandia or the Cox-2s, where the main concern is safety.

Today, it seems, the tough hurdles can come from anywhere--including from non-safety-related issues like how pain is measured. Some might call this nit-picking.

Lilly’s Evista for Breast Cancer Prevention: Vindication or Provocation?

It looks like Eli Lilly & Co.’s raloxifene Evista is poised for approval for reduction of the risk of breast cancer. A Food & Drug Administration advisory committee voted yesterday to support use of the drug for that use in post-menopausal women at high risk of breast cancer, and—more narrowly—to support use for breast cancer prevention in post-menopausal women with osteoporosis.

The agency itself has until September to make a decision on Lilly’s pending supplemental FDA. But all signs point to an approval that, whatever else it means, will feel like vindication for Lilly.

Just 18 months ago, the company paid $36 million to settle an investigation into its promotion of Evista. The drug has been approved for use in osteoporosis for a decade. But in 2005 Lilly pled guilty to a criminal misdemeanor charge that it promoted the drug for breast cancer prevention and cardiovascular risk reduction. The conduct involved occurred in 1998; the company simultaneously settled related civil claims dealing with conduct that continued into 2000, but Lilly did not admit guilt.

In addition to paying the fine, Lilly entered into a consent decree prohibiting it from promoting Evista for breast cancer prevention without formal FDA approval.

Not that you would know that from reading Lilly’s press release announcing the advisory committee vote. Underneath a headline announcing the advisory committee vote, Lilly includes what starts out sounding like a disclaimer but ends up sounding like a claim of effectiveness for the new use: “EVISTA is currently indicated for the prevention and treatment of osteoporosis and may provide an important option for postmenopausal women at increased risk for breast cancer.”

Now that sentence is surely unobjectionable on its face. But it definitely counts as bold talk from a company that just signed a court order saying it is “permanently enjoined from directly or indirectly promoting Evista for use in preventing or reducing the risk of breast cancer…unless and until it is authorized to do so by the FDA by the approval of a supplement to the New Drug Application for Evista.”

Especially when you consider that the DoJ investigation included, among other allegations, claims that Lilly promoted the off-label use through its press releases about Evista. (Read the Justice Department’s summary of Lilly’s conduct here.)

Of course, the consent decree includes other provisions, notably one stating that “nothing in this Decree shall be construed to limit or expand the rights of Eli Lilly under the First Amendment of the Constitution.”

When it comes to off-label promotion, that is precisely the question: what are the rights of drug companies like Eli Lilly under the Constitution? Free speech advocates argue that companies have the right to engage in scientific discourse about their products, even if they are talking about uses not approved by FDA. After all, if raloxifene works to prevent breast cancer, millions of women would benefit from knowing that as soon as possible.

Prosecutors see it differently: the FD&C Act prohibits promotion of unapproved uses of drugs, and they have gone after many companies for promoting their drugs beyond the label. There have been several recent settlements (with the Evista case one of the first) in which manufacturers have accepted that premise—explicitly or implicitly—rather than fight the charges in court.

In our next issue, The RPM Report will be taking an in-depth look at the current state of uncertainty in industry after the recent wave of settlements.

As the advisory committee vote indicates, Lilly’s statement that Evista “may be an important option for post-menopausal women at increased risk for breast cancer” is undeniably true. But it was undeniably true a decade ago too. And that didn't keep Lilly out of trouble.

Now, here’s a thought: Johnson & Johnson made headlines recently when it offered a money back guarantee to the UK National Health Service on its cancer therapy Velcade, promising to pay back the government if the therapy doesn’t prove cost effective.

Maybe Eli Lilly & Co. should take a page from that playbook. But instead of offering a refund to the US government, maybe Lilly should ask for its money back from the Department of Justice. Justice.

Confused Communications

I suppose it’s tempting to try to spice up the news during slow summer months. But Northwest Biotherapeutics should have known better than to issue a press release earlier this month declaring its delight in being “the first company to reach the market with a personalized therapeutic vaccine for brain cancer.”

The release stated that Switzerland’s Institute of Public Health had issued an Authorization for Use for the product. Exciting news, it seemed. The wires and papers picked it up. Even VCs and analysts were fooled--London-based house brokers Collins Stewart issued a report that talked about “history in the making”, with this first approval for “a new class of product called personalized vaccines.” This, the analyst said, was a “high value event.”

So in flocked the investors—Northwest’s stock, listed on the OTC bulletin board in the US and on London’s AIM since June this year, more than tripled.

Trouble is, it wasn’t an approval at all. The ‘news’ was an import-export authorization for the product in Switzerland, and one with conditions attached, which the company is still fulfilling. Northwest won’t seek product approvals in the US and EU before 2009.

All of this was clarified in a release issued a week later (why not clarify it properly in the first one?) prompting the stock to fall back to where it started.

Now, we’re not saying Northwest set out to deceive or confuse—you can judge that one for yourself. But we are saying that positioning an import-export order as equivalent to “reaching the market”—which is what Northwest did—is just silly. And suggesting, as the second release did, that the media is to blame isn’t very clever either.

Yes, cancer vaccines are indeed an exciting, promising area where a handful of companies may be on the cusp of a breakthrough. (Dendreon’s Phase III Provenge, an active cellular immunotherapy treatment for prostate cancer, received an approvable letter from FDA in May 2007.)

But the sector already has to battle with the disappointment caused by over-optimistic mainstream press reports about cures for cancer and Parkinson’s disease being around the corner. It doesn’t need its own members fuelling that fire. Nor does it need another report of misleading behavior, whether in promotional activities or in corporate communications.

Northwest has come back from the edge once already—it was saved by VC fund Toucan Capital after bombing out following its December 2001 Nasdaq listing. This episode won’t reassure its new investors. It wouldn't be surprising at all if the SEC took a long look at the announcements, given the share price movements. Nor will it help anyone else in the space, either—least of all the brain cancer patients with only a handful of inadequate treatments currently available to them.

Dissin' Steve Nissen?

The New York Times ran an interesting profile of the Cleveland Clinic's Steve Nissen on Sunday in light of his "controversial" meta-analysis finding over a 40% increased risk of heart attack for diabetes patients on GlaxoSmithKline's drug Avandia.

I interviewed Dr. Nissen a few months ago. Check out our July issue of The RPM Report called "Inside the Mind of a Serial Drug Killer" to find out what makes him go, what would make him stop and what he thinks is driving some members of Congress to criticize his efforts. Note, the Times may have higher circulation than The RPM Report , but we had the better headline.

But don't take our word for it. Here are a couple of excerpts:

The RPM Report: What would make you stop doing this type of work in the area of drug safety?

Nissen: It is all of our jobs, not just the FDA’s job to do this. Those of us in the physician community owe it to our patients to give equal balance and weight to positive and negative findings about drugs, and so should the FDA. Even if the FDA were doing an outstanding job, it’s still the responsibility of independent scientists to do these sorts of things, so it really isn’t about the FDA.

The RPM Report: So creating two drug centers—one for premarket review and one for postmarket surveillance—would not stop you from doing this kind of research. You feel this is a moral obligation.

Nissen: It is a moral and ethical obligation; it’s just about good science, it’s a scientific obligation. Science is about pursuing the truth and wherever that leads you. If we had very, very good regulatory agencies looking after this, there may be fewer opportunities to turn these things up.

How did we find out about fen-phen? There was an independent group of physicians that began seeing fen-phen patients with valve abnormalities. They said, “Oh my God, this is a potentially serious problem, let’s publish it,” and they did a great thing, they probably saved a lot of lives; they’re heroes.

The RPM Report: Why is there such a visceral reaction to you and the research you are doing? FDA’s meta-analysis of Avandia studies showed similar findings as your meta-analysis.

Nissen: Right. Part of the problem is this is not about me. One of the issues is sometimes when you don’t like the message; it’s easier to attack the messenger. It’s to be expected, but we’ve got to keep everyone focused on the science. I was very restrained in that [Avandia] hearing, I didn’t attack back. I simply said: this is what we did, this why we did it, this is why it’s important, and I’m going to stay on that message because it’s the right thing to do.

The RPM Report: Rep. Darrell Issa (R-Calif.) seemed particularly unnerved by your analysis and the process you took to get it published?

Nissen: He was wrong about the statistics, you cannot calculate an effect size if there are no events [studies with no heart attack events were excluded from Nissen’s meta-analysis]. He had been briefed by people giving him campaign contributions and that happens to be GSK. I looked it up. The three people on the attack at the hearing were very heavy recipients of GSK campaign money.

For the rest of the interview, subscribe to The RPM Report. Also, Nissen will be speaking at our annual FDA/CMS Summit in December in Washington, D.C. in case you want to hear him in person.

Speaking of Avandia, there is a July 30 fact-gathering meeting between FDA and Glaxo (Takeda, which markets Actos, is an invited guest) regarding the cardiovascular profile of the diabetes drug. While something conclusive could come out of that meeting, it's highly doubtful. So we'll just have to wait and see whether Nissen and his meta-analysis are vindicated for finding risks that hadn't been previously uncovered or his findings were rushed, sloppy and wrong. Stay tuned. It could be a while.

While You Were Moving to Higher Ground

Ah, England in summertime.

For our UK readers, we hope you avoided the flooding. Here are a few stories you may have missed whether you were evacuating or simply focused on the last Harry Potter ...

• And then there was one. Of Europe's five big pharma, only Novartis' Dan Vasella will have survived as CEO by next summer, Reuters reports. Roche's recent decision to replace Franz Humer at CEO with Severin Schwan may also put pressure on Novartis to likewise split its chairman/CEO positions. Word on the street is that Vasella may groom vaccines head Joerg Reinhardt as a successor.
  
• They grow up so fast. Tysabri turns one today, sort of. The MS therapy returned to the US market one year ago. Elan and Biogen Idec estimate 14,000 patients receive the infused treatment.
• The quick brown fox jumps over the lazy catheter (or something like that). EV3 is buying Fox Hollow for $780 million in cash and stock. The companies have been working together in peripheral artery disease since early 2007. More to come on this story.
• And the New York Times profiles the Cleveland Clinic's Steve Nissen. Naderesque? OK, maybe consumer rights crusader Nader, not election swaying Nader.
  

this and that

Things are going pretty well around here. Jonah is over his cold and is holding his food down again. This weekend Matt's family is coming into town. Granny and Grandaddy up from SC and Kim, Andrew, and the kids down from NY. Kim's 20th high school reunion is Saturday, but lucky for us, we get to spend the whole weekend hanging out with them. We're heading to the fair this weekend too! I can't wait. I love the fair, and I think Jonah will really enjoy it this year. (And I'm running my first 5K on Saturday morning!!!)

Jonah went straight into class tonight with not so much as a glance back at us! No crying, no throwing up. Nothing. He's still struggling on Sunday mornings because we haven't been able to be as consistent on Sundays, but lots of progress!

I haven't gotten a recent update but Matt's Aunt Katherine is still in the hospital, so please keep praying. I know she is desperate to get home to her family.

And I don't really have any new photos of Jonah, but here is one I tried to take of us at our neighborhood block party Saturday.

Loving the cool weather! Loving fall! Loving life!

Inverness' String of "I do's"

Inverness Medical Innovations certainly has no problems with commitment.

The Waltham, Mass-based diagnostics company—still in the process of integrating Biosite Inc., for which it paid $1.6 billion—grabbed a 51% stake in Diamics Inc., developer of a molecular based cervical cancer diagnostic.

The privately held Diamics took considerably less bling, requiring roughly $6 million in a staged investment, according to a release on the deal. But still it goes to show the Inverness isn’t allowing the megamerger with Biosite to take its eyes off the prize of building a broad portfolio of diagnostics the ole' fashion way--buying them. (By our count, this is number nine--or 8.51 if you consider the equity stake.)

While the Biosite deal (as well as the pending acquisition of Cholestech Corp.) gives Inverness’ cardiovascular practice a significant boost, (for an overview on Inverness check out your July IN VIVO), the Diamics deal falls closer to Inverness’ roots—women’s health care. Diamics is developing “a line of products designed to improve the effectiveness of cervical cancer screening and make the procedures less painful for patients,” according to the release. For a full profile on the company, check out last October’s START-UP Magazine.

Although Wall Street analysts say they don’t expect Inverness to make any major purchases in the future, the company has the firepower and desire to continue inking deals like this one.