Drug makers report setbacks
Drug companies were hit with a series of bad breaks Monday, led by Novo Nordisk’s announcement that it discontinued its experimental AERx inhaled insulin system and is expected to fire most of its 360-person team on the project in Hayward, Calif.
In addition, Merck & Co. and Schering-Plough Corp. said their cholesterol pill Vytorin worked no better than an older, cheaper drug, threatening the medicine’s sales.
And U.S. patent officials initially rejected claims for the basic patent on Pfizer Inc.’s blockbuster Lipitor cholesterol treatment, though the drug maker said it remained confident that the patent would ultimately be upheld.
Novo Nordisk, the world’s biggest insulin producer, with 45% of the market, said its product offered little clinical benefit, and it took a charge of 1.3 billion Danish kroner ($260 million) for 2007.
Novo’s decision was based on an analysis of medical and commercial prospects for inhaled insulin, the Danish company said. There was little benefit when the inhaler system was measured against injection products using a needle that looks like a ballpoint pen.
As a result of the decision, a “significant number” of the 360 jobs at Novo’s Hayward site will be affected, spokeswoman Lori Moore said. The company has about 4,000 U.S. employees.
People in clinical trials with the treatment will be put on alternative therapies by their doctors, the company said. Novo said it would continue to research long-acting inhaled insulin.
U.S.-traded shares of Novo fell as much as 3.1% to $63.56 after the close of U.S. markets.
Merck and Schering-Plough said patients with a predisposition to high cholesterol fared no better when taking their combination cholesterol drug Vytorin than with a high dose of the generic form of Zocor.
Amid concerns about whether Vytorin posed a risk of liver damage, Wall Street has been anxiously awaiting details on results of the study begun in 2002. Shares of both companies fell Monday.
Vytorin is a combination of Zetia and Merck’s Zocor, which lost patent protection in 2006. In the quarter ended Sept. 30, sales of Zetia and Vytorin hit $1.3 billion, up 26% from the year-earlier period. The companies market Zetia and Vytorin jointly and split the profits.
The study measured the amount of artery-clogging plaque in three areas. It focused on a group of 720 patients with a rare condition predisposing them to high cholesterol. The patients were given either Vytorin or a high dose of generic Zocor, known as simvastatin.
Merck, based in Whitehouse Station, N.Y., and Schering-Plough, based in Kenilworth, N.Y., are conducting three additional studies.
Merck shares fell 77 cents to $59.78, and Schering-Plough lost $2.21 to $25.52.
Pfizer said the U.S. Patent and Trademark Office initially rejected the basic patent for Lipitor, the world’s top-selling drug, in a review that could take years before a final decision is made.
An initial rejection isn’t unusual in such proceedings, the New York company said. The “basic patent was properly granted and will be upheld,” Pfizer said. The patent office agreed to take a second look at the patent at the behest of a law firm that represented Ranbaxy Laboratories, Pfizer said in a regulatory filing in November.
The patent keeps Ranbaxy from selling a generic version of Lipitor until March 2010. Lipitor had sales of $12.9 billion, about 27% of Pfizer’s revenue, in 2006. The company may lose half its sales in the next five years as Lipitor and other products lose patent protection.
Pfizer shares fell 5 cents to $23.97.
