Just when you thought there were no more Big Pharma deals to be done, in the UK newspaper The Sunday Times over the Easter weekend, in an unconfirmed news story, Pfizer was reported to be bidding to acquire AstraZeneca. And then GSK and Novartis pull their own rabbit out of the hat! But not only that, Eli Lilly gets in on the act as well!
Not unexpectedly, in a separate transaction, Novartis is handing over its animal health business to Lilly for $5,.4bn – a divestment that has been on the radar screens of pharma watchers for a number of months.
But as for the rest of the changes, pharma watchers have been taken a little unawares despite all the restructuring that has been announced by Novartis in recent months by a series of swap, sell and partnership deals with GSK.
Firstly, Novartis OTC and GSK Consumer Healthcare are pooling their businesses to create a joint venture consumer healthcare business, with revenues of £6.5bn. GSK will be the controlling partner, with Novartis owning a 36.5% share, with four out of eleven board places and minority rights and exit rights at a pre-defined, market-based pricing mechanism.
Novartis is also divesting its vaccines business, excluding its flu vaccine activities that are to be sold separately, to GSK for $7.1bn, while GSK is divesting its currently marketed oncology products, R&D activities and rights to its AKT inhibitor, together with commercialisation partner rights for future products, to Novartis for $16bn. GSK will, however, continue oncology R&D into new treatments in cancer immunotherapy, epigenetics and tumour environment.
Novartis ceo, Joseph Jimenez, described the transactions as marking ‘a transformational moment’, focusing the company on ‘leading businesses with innovation power and global scale. They also improve our financial strength, and are expected to add to our growth rates and margins immediately.’
GSK’s ceo Andrew Whitty said: ‘This proposed 3-part transaction accelerates our strategy to generate sustainable, broadly sourced sales growth and improve long-term earnings. Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce. With this transaction we will substantially strengthen two of our core businesses and create significant new options to increase value for our shareholders.’
So we have seen US Big Pharma go through this process, and now Europe has joined in, but while there are obvious advantages in terms of scale, does this change the overall situation that Big Pharma finds itself in with gaps in pipelines and the need to rely on small entrepreneurial biotech and other research based companies?
It remains to be seen what happens next!
Neil Eisberg – Editor
On my way to a meeting in London’s Kensington last week, I might have imagined I was somewhere in Asia. So shrouded in smog was the area that many of the borough’s residents had resorted to wearing face masks. The reason, according to national newspaper reports, was a blast of Saharan dust and emissions from continental Europe blown our way – so bad, indeed, that it stopped the PM from taking his morning jog in Hyde Park.
As a feature on page 13 of the next (May) issue of C&I points out, however, London still has a long way to go before it catches up with China’s pollution record. Air quality measurements taken at the end of February 2014 showed Beijing at an index level 517, compared with 207 for New Delhi, 34 for New York and 30 for London, says a report by World Review (WR).
In the evening of 12 January, the WR report notes that Beijing reached 755, 30 times higher than the World Health Organization (WHO) safety limit of 25 over a 24-hour period.
Thankfully, the Saharan dust was dispersed from our own streets in a matter of days, and nor does it pose a serious health hazard compared with the finer particles, for example, from diesel engines, which travel deep into the lungs, according to a release by UK company Air Monitors. Even so, the London smog episode shows how much work still needs to be done to tackle air quality problems in the UK and the importance of live access to air quality data, says Air Monitors’ MD Jim Mills. ‘The problem with solving air quality problems is that death certificates never say “Died from pollution” so the statistics that 29,000 premature UK deaths as a result pass largely unnoticed because the “cause of death is usually a heart attack, a stroke or some other cardiovascular ailment,’ the company points out in a release. Yet the fact is that this figure exceeds those for obesity, alcohol and road traffic accidents.
In China, by comparison, in 2010 pollution was reported to have caused the premature deaths of 1.2m and reduced life expectancy by 5.5 years. Worryingly, WR also refers to a study at China’s Agricultural University that suggests if smog persists it could even impede photosynthesis and threaten food supplies.
London may not yet be as polluted Beijing, but as numbers of cars, people and smokers on our own streets expand, the Sahara dust episode is a timely reminder of how urgently we need to find and develop better technologies to curb the attendant pollution problems.
Cath O’Driscoll, Deputy editor
Shale gas fracking in the US has slashed energy prices and led to a $100bn boom in petrochemicals investment. But what of the prospects for fracking here in the UK? The UK Chemical Industries Association (CIA) report, Shale gas: the facts, sets out some of the issues and attempts to lay to rest some of the concerns. And a recently updated assessment of the UK’s Bowland shale reserves by the British Geological Survey, for example, suggests there are reserves of 1300 trillion cubic feet – at ten times the depth of any US shale reserves, the report points out. That’s enough gas to supply the country for 40 years.
With UK energy regulator Ofgem recently predicting that spare electricity generating margins could fall to 2% by the middle of the decade as more coal fired power stations close, locally sourced shale gas would improve energy security and lessen the risk of high and volatile prices due to uncertainty about gas imports. The latter now represent almost half of UK gas consumption, the CIA report notes – and, as the ongoing problems in the Ukraine highlight, continued supply is by no means assured.
While any energy technology will inevitably have drawbacks, fracking takes place at depths where it would be ‘highly unlikely’ to impact on aquifers, the report authors say. While acknowledging that it requires a lot of water to open fissures in shale to release the gas, they point out that the 10-30m litres needed for each well is ‘approximately the same as the amount used to water a golf course for a month’. Meanwhile, the recent earth tremors caused by fracking activity in Blackpool are dismissed as ‘minor’ and on a par with other natural seismic activity.
Speaking at a CIA chemical writers’ dinner last week, Ineos director Tom Crotty commented: ‘Shale gas is a no brainer, we must have it.’ While we will see a contraction in the UK chemicals industry in coming years, regardless of shale gas, Crotty says that the consequences will be far more serious and could spell the sector’s demise if Europe does not exploit its shale gas reserves. Added to this are Europe’s burdensome climate change regulations, he says. If EU chemical firms cease trading, Crotty warns this could ‘defeat the objective’ as CO2 levels may well rise without access to clever chemistries to reduce greenhouse gas emissions.
Cath O’Driscoll - Deputy editor
Meeting increasing demand means improving our resource productivity – dramatically – according to Stefan Heck and Matt Rogers. Writing in the McKinsey Quarterly (March 2014). Heck, a consulting professor at Stanford University’s Precourt Institute for Energy, and Rogers, a McKinsey director in San Francisco, point out that the annual productivity improvement required to meet global demand over the period 2010-30 amounts to 1.3% GDP/t for materials in general; a 1.5% increase in food yield/hectare; 3.2% GDP/Btu in terms of energy; and 3.7% GDP/m3 for water.
They point out, however, that the heat-rate efficiency of the average coal-fired power station, still a major source of electricity in the US, has not significantly improved in more than 50 years, and automotive fuel efficiency improvements have consistently lagged behind productivity growth across the US economy.
‘Under-utilisation and chronic inefficiency cannot be solved by financial engineering or offshoring labour’, they write. ‘Something more fundamental; is required. We see such challenges as emblematic of an unprecedented opportunity to produce and use resources far more imaginatively and efficiently, revolutionising business and management in the process.’
They have looked back to 1776, and Adam Smith’s The Wealth of Nations, pointing out that out of the three primary business inputs that Smith identified: labour, capital and land – or broadly any resource that can be produced or recovered, or disposed of as waste on land – the two industrial revolutions that have occurred so far have focused primarily on labour and capital, but neither focused on land and natural resources.
This is arguable, since the more recent industrial revolution focused on crude oil, and latterly gas, both natural resources extracted from the land, and sea. They are, however, supporters of the concept that the third industrial revolution involves IT, nanotechnology and biology, which they believe can yield substantial productivity increases. They also cite the achievement of high productivity growth in the developing world as offering the largest wealth-creation opportunity in a century.
‘Rather than settling for historic resource-productivity improvement rates of one to two percent/year, leaders must deliver productivity gains of 50% or so every few years,’ they believe, but this will require new management approaches.
They lay out five distinct approaches for business to capitalise on this revolution in a new book: Resource Revolution. These are substitution, replacing costly and or scarce materials with less scarce, cheaper and higher-performing alternatives; optimisation, by embedding software in resource-intensive industries to dramatically improve production are scarce resource utilisation; virtualisation, or moving processes out of the physical world; circularity, or finding value in finished products after their initial use; and waste elimination, through greater efficiency and redesigning products.
So nothing really new then – and the green chemistry movement already has most of these approaches covered. Perhaps the chemistry, the chemical industry and its customers are ahead of the game after all. What do you think?
Neil Eisberg - Editor
What have Great apes, Orang-utans and the Giant Panda got in common with the elements indium, gallium, germanium and arsenic? The answer, of course, is that they are all endangered species. But while the problem of endangered animals has aroused huge amounts of public sympathy and concern, not to mention efforts to conserve and protect the affected species, the issue of endangered elements is virtually unknown among non-scientists. Now a new campaign launched this week at the American Chemical Society (ACS) meeting in Dallas, Texas, US, aims to raise awareness of the problem with the creation a novel colour coded version of the Periodic Table of the Endangered Elements.
Created by the ACS’ Green Chemistry Institute (GCI), elements highlighted in red are those whose availability poses a ‘serious threat in the next 100 years’, explained GCI’s David Constable, while those in orange, including platinum, rubidium and iridium, are under ‘rising threat from increased use’, and yet others in blue, such as selenium, phosphorus and cadmium, are ‘limited availability, future risk to supply’.
The biggest consumer of many of these threatened elements is the modern car, noted Karl Gschneidner of Ames Laboratory, Iowa State University, US, which not only contains Nd, Pd, Dy, Y, Eu, Tb and other rare species, but also requires yet more rare elements - such as Ce used to polish car windscreens – for its manufacture. Recycling of these elements from consumer products is not always practical as they are present in such tiny quantities, Gschneidner said; the energy needed for their separation is often higher than the energy required to mine and extract them from their underground ores. Instead what is needed, according to Constable, is to move the global economy towards ‘closed loop manufacturing technologies’ where process feedstocks are recycled and products reused.
Yet another strategy involves using nanotechnology to replace these rare elements with other more plentiful ones, said Jillian Burriak of Alberta State University, Canada, referring, for example, to recent work to replace the indium tin oxide used in flat screen displays and other electronic devices with metal nanowires derived from so-called ‘rock elements’, such as iron pyrite and oxides and zinc phosphide. Using elements at the nanoscale not only means using them in incredibly tiny quantities, Burriak noted, but also confers on them new and unusual properties that can make them valuable substitutes for rarer species.
The topic of element supply, meanwhile, is particularly relevant to the theme of this the 247th ACS meeting, which focuses on ‘Chemistry and Materials for Energy’, Burriak said. With world energy demand expected to double or even triple in the next few decades, new solar technologies especially are urgently needed to fill the shortfall, with nanotechnology expected to play a major role.
Meanwhile, if you want to support a good cause you could buy one of the GCI’s Tee-shirts like I did. It features an endangered Silverback ape on the front – with the message ‘We need our silver back!’ – and a copy of the Periodic Table of the Endangered Elements on the back.
Cath O’Driscoll - Deputy editor
The pace of scientific discovery cannot move fast enough for many people. And patients with life-threatening illnesses cannot be expected to ignore any potential lifeline that the global pharmaceutical industry can throw them. But they do not have the time to wait for all the trials and regulatory hurdles to be overcome. Ensuring the safety of our medicines is one thing, but should it be at the risk of denying patients a therapeutic lifeline?
A case in point has arisen in the US, where this week the case of a seven-year old boy suffering from cancer and now a life-threatening virus has finally prompted a change in how clinical trials can be arranged and authorised. The boy’s parents had discovered that a small biotech concern, Chimerix, based in Durham, South Carolina, has been engaged in Phase 2 clinical trials of an experimental therapy against lethal viral infections, brincidofovir, that was being developed with US government funding. Naturally they contacted the company and asked to be able to use the so far unapproved treatment.
The biotech was therefore caught between a rock and a hard place – whether it wanted to or not, it could not supply an unapproved drug that had not even completed its Phase 3 trials but was, at the same time, subjected to intense media attacks for denying it, with the ceo and staff members even receiving death threats.
Fortunately, the US Food & Drug Administration has found a way around the situation by allowing the treatment to be used in this case as a pilot study, with Phase 3 trials to follow at a later date, but this case throws up a major conundrum for the pharma industry, regulators and society.
While we all expect to have all our drugs complete appropriate clinical trials, regulatory approvals etc to meet the efficacy and safety concerns of all involved, the process can take too long, especially for patients for which the therapy concerned might just be their last hope. In the UK, for example, it can take a year or more for marketing approval to be granted by the Medicines and Healthcare Regulatory Authority (MHRA) even though all the necessary trials etc have been completed with satisfactory outcomes.
To overcome this particular hurdle, the UK government plans to introduce a Promising Innovative Medicine (PIM) designation and an Early Access to Medicines Scheme (EAMS). The EAMS aims to support access in the UK to unlicensed or off-label medicines in areas of unmet medical need. The PIM designation will provide an early indication that a product may be a possible candidate for the Early Access to Medicines Scheme. The MHRA will issue an EAMS opinion if the quality, safety and efficacy data provided in support of the application is sufficiently compelling for a positive benefit: risk balance and added clinical value, and the EAMS scheme will be complemented by the introduction of a new National Institute for Health & Care Excellence (NICE) technology appraisal and NHS England Commissioning process.
As Steve Bates, ceo of the UK BioIndustry Association expressed it, the introduction of the PIM designation and the EAMS ‘shows the UK is committed to an "all hands on deck approach" to speedily progress promising innovative therapies to the patients that need them.’ However he warns that ‘as it is currently envisaged, without centrally funded reimbursement, the scheme runs the risk of being under-utilised’, undermining its attractiveness to UK SMEs and to global corporations choosing the UK as a location for their clinical trials.
‘To ensure that patients receive the next generation of breakthrough therapies in the UK, while supporting overarching industry objectives, under the EAMS companies will need to be reimbursed at an earlier stage in development at a price that recognises the uncertainty of the effectiveness of early stage products,’ he added. So this adds yet another dimension, this time economic, to the already complicated health and safety debate.
When suffering from a life-threatening disease, patients do not appreciate any obstacles that might stand in the way of them receiving a therapy that may save their lives. There is a balance that needs to be struck between health and safety in all aspects of our lives, but for such patients, where that balance falls is crucial. While small steps are being taken, this debate will continue to run and run.
As chief surgeon in hit US TV series M*A*S*H, actor Alan Alda had to learn a lot about science and medicine in order to deliver a convincing performance. Many of the scenes were created after complex and often brain-draining discussions with real surgeons, Alda told delegates at the AAAs meeting in Chicago in February 2014. Years later, he recalled how he surprised medics by saying he himself needed a surgical procedure known as ‘end to end estenosis’ – a procedure he had regularly carried out on film.
Today, Alda is putting some of those lessons to use at the Alan Alda Center for Communicating Science at Stony Brook University in the US, where he is dispensing some of his top tips about how scientists should better communicate with the lay public about their work. The first thing to remember, Alda said, is that good communication is a bit like ‘a blind date between two strangers’, moving from attraction through infatuation to commitment. For effective communication to happen, he advises scientists need to ‘forget the podium’ and engage face to face with their audience.
They also need to talk slowly, start at the very beginning and never assume too much knowledge, and perhaps most critically of all, to tell a good story in order to grab the imagination and catch interest. A point that Alda demonstrated by asking a woman to move a full glass of water from one side of the stage to the other and place it on a bench; when the same task was performed with the caution that if she spilled a drop on the way her entire village would die, the audience suddenly became much more alert.
Scientists, Alda said, often suffer not only from a lack of emotion or detachment when talking about their work, but also from the ‘curse of too much knowledge’ that can make it difficult for people to understand their train of thought. The trick, he says, is: ‘Don’t say everything you know, just enough to get your audience interested.’
Three years ago, Alda started an international contest called The Flame Challenge that asks scientists to communicate complex science in ways that would interest and enlighten an 11-year-old. The winner of the first question ‘What is flame?’ was a physicist, for a short film and song – judged as the best of hundreds of entries by a panel of 11-year-olds, while last year’s winner for the best explanation to ‘What is time?’ was won by a chemist.
This year, the question that scientists are being asked to address is: ‘What is colour?’ Anyone interested in entering should click here. But hurry - scientists have until 1 March 2014 to submit their answers in writing, video or graphics. And good luck!
Confusion over the Merck name has been a constant since the end of World War I, when the German pharmaceutical company was split up as part of the war reparations. The US portion of the company became Merck & Co, but this name could only be used within the US – in the rest of the world it became Merck Sharp & Dohme, or MSD. The German headquartered Merck has tried to distinguish itself as Merck KGaA, but in today’s global market it became inevitable that confusion and conflict would arise.
In the pages of C&I, we have striven to make the difference obvious, but far too often observers have lapsed into using Merck for both companies, further fuelling the confusion.
And while this situation has rumbled on at a relatively low key, the situation has hotted up recently in our increasingly brand-conscious world.
The problem has come to a head with a number of recent incidents, including protestors demonstrating outside Merck KGaA’s London, UK, office about a position adopted by US-based Merck & Co over lobbying against new generic drug rules in South Africa! We truly live in a global marketplace, but the demonstrators ‘rubbed salt in the wound’ by using Merck KGaA’s logo rather than the US version! The demonstration organiser has since apologised to Merck KGaA, but the company sees this as just another example of how the ‘real Merck’ – as its ceo Karl-Ludwig Kley describes his organisation - suffers by being confused with its US namesake. He also objects to having to use the KGaA suffix: ‘We are Merck in practically all countries around the world’.
The problem even spread to the domain name ‘Merck’ on the internet, with both companies appearing on the same Facebook page for a short period. This situation was finally resolved with Merck KGaA having its name on the page, while Merck & Co has moved to MerckBeWell.
Since the Merck KGaA name can be used all over the world, unlike the US company, which has to use MSD, the German company believes that it has the full right to the Merck name and the family name has been used for 350 years, especially as it also does not claim a major market share in the US.
As Timothy Calkins, a professor of marketing at Northwestern University’s Kellogg School of Management told the news service Bloomberg: ‘There’s no question that having two major pharmaceutical companies with the name of Merck causes a lot of confusion. It is something I think they should address. As we get more global, and as these companies bump into each other more often, it’s going to become more and more of a challenge.’
But Merck KGaA is not in the mood to discuss possible name changes. In fact, its boss has also been quoted as saying that he will be much more aggressive about protecting the ‘real Merck’, even if that means taking legal action. The battle lines are being drawn but who knows who will blink first?
Watch this space for the next instalment in this name game!
Obesity is a growing problem, as C&I’s editor points out in the leader in the current February issue of the magazine. And not just for developed countries but in the developing world too. According to the World Health Organization (WHO), over-eating is the fastest growing form of malnourishment in the world, while for the first time in history, notes a report by Worldwatch Institute, the number of overweight people rivals the number who are underweight, both estimated at 1.1bn.
It is timely then, that this week sees the announcement of a new UK funding initiative to invest in research that promises to help tackle some of the problems of food nutrition, along with issues of food safety, specific dietary requirements and food waste. The £8.5m funding competition, called Nutrition for Life, is a UK Technology Strategy Board initiative and will support 39 projects, including a low calorie chocolate bar that should taste ‘as good as the real thing’; a high fibre white bread; and work to identify food constituents to prevent or treat osteoporosis.
Technological fixes alone, however, are unlikely to solve the problem of over-eating. As the Worldwatch report points out: ‘While the US Agriculture Department spends $333m/ year to educate the public about nutrition, the US diet and weight-loss industry records annual revenues of $33bn.’ It notes that liposuction is now the leading form of cosmetic surgery in the US with 400,000 operations/year, while recent reports in the UK suggest that overweight people here are eating more in order to achieve the necessary body mass index (BMI) for gastric band surgery. And remember Olestra? A calorie-free fat substitute that also loosens stools and lowers vitamin absorption.
Perhaps most tellingly, Worldwatch reports that food companies spend over $30bn/year on advertising in the US, more than any other industry, often on foods of dubious nutritional value. Children, it says, are some of the biggest viewers of these commercials - watching an average 10,000 commercials/year, 90% of them for sugary cereals, candy, soda, or other junk food, according to surveys by the Center for Science in the Public Interest.
The film and tv industries have not gained a very complimentary reputation among scientists for their portrayal of science, but in fairness, it should be pointed out that it is not necessarily the fault of producer and writers – they are, after all, looking to entertain. The blame does partly lie at the feet of scientists, as was revealed at the recent Informex event in Miami Beach by the scientific adviser for a major US tv series.
The case in point was Breaking Bad, the hit tv show that aired in the US from 2008 to 2013, and in the UK on cable television. The crime drama depicted the downward journey of a US high school chemistry teacher, Water White, who, when diagnosed with terminal cancer, decides to secure his family’s financial future by applying his expertise in the production of illicit drugs, in this case methamphetamine, more commonly known as crystal meth.
Unusually, the producers of the proposed series had asked for volunteers to provide ‘constructive criticism’ of the science they planned to feature in the American Chemical Society’s weekly magazine Chemical & Engineering News (C&EN). ‘Because we are very concerned about getting more students interested in science,’ Donna Nelson, a professor in organic chemistry at the University of Oklahoma, told delegates at the Informex conference that she jumped at the chance to help put science in front of a ‘hip young audience’.
‘When I first got a copy of what they had written, I thought they really are going to need me. It was really messed up,’ said Nelson. But she added that she was also worried about being affiliated with a show about crystal meth – ‘most of us are conservative about drugs’ – but she saw that it did not glorify drugs or the drug culture. ‘In fact, we watched Walt being punished for what he was doing.’
One of the first things Nelson was asked was: why would someone would become a scientist, to provide background for the main character. She was also asked about chemical structures that would be used on a classroom blackboard, about alkenes and also about nomenclature. Nelson saw her role as ensuring that nothing would jar with anyone in the audience that had a scientific background. ‘They wanted everything to be correct therefore I had to give information in a way that was easy to understand – I tried to change as few words as possible in the scripts as I had to respect their needs.’
One particular incident stood out for Nelson, who had accidently used the term ‘precursor’, which the production leapt on and used, correctly, on a number of occasions during the production.
Another issue Nelson highlighted was the fact that the production team used non-SI measurements, for example, she was asked how much crystal meth could be produced from 30 gallons of methylamine, which the main character was going to steal. At this point, the production team also had the involvement of agents from the US Drug Enforcement Administration involved as they wanted to ensure that while the details were accurate, they were not sufficient for anyone watching to be able to go out and start production themselves.
On checking the literature, Nelson found a variety of routes for the synthesis, but eventually homed in on the aluminium/mercury route ‘as it was easy for the actors to say’. Once the route was decided, Nelson was then able to calculate the yield.
Ultimately, Nelson said there was only one major error in the show: crystal meth, a white substance, was actually coloured blue in the show, but Nelson said the producers were looking for something to ‘brand’ it so she let that go through.
Nelson believes that her involvement demonstrates three benefits: scientists get to increase accuracy; writers get to learn about science; and the public is exposed to correct information.
The outcome from her involvement in the six-series show was for Nelson to put together a symposium Hollywood Chemistry for the ACS in Anaheim, and again in Denver, and she has since been involved in other projects, even consulting with law enforcement agencies – ‘reality following fiction’, as she expressed it.
The twist to the story, however, is that after Nelson had become involved in the tv production she discovered that she was the only person to have volunteered their services, out of 160,000 readers of C&EN.
Communication is about getting involved and if scientists want to see their particular speciality portrayed correctly on out screens, then they have to get involved.
But perhaps the most telling comment from Nelson was that while she had seen a dramatic increase in the discussion about chemistry and the tv series among young people, no-one among her chemical contemporaries has even seen the series, something that was echoed across her audience!
I have actually now bought the DVD box set of Breaking Bad and will watch it with new interest! Please don’t telephone me at home for the next few weeks!
Neil Eisberg - Editor
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