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Abbott's billion dollar deal for branded generics & Other Pharma As Well
  Abbott will become a leader in the Indian branded generics market by acquiring Piramal's Healthcare Solutions business for an upfront payment of US$2.1 billion, plus $400 million annually for the next 4 years.
The lowdown: For Abbott, the acquisition of Piramal's Healthcare Solutions business is the latest deal that aims to strengthen their position in the branded generics market. Piramal's Healthcare Solutions will become part of Abbott's newly created Established Products Division, which will focus on expanding the global markets for its branded generics portfolio. This also includes the branded generics that Abbott gained when it completed its $6.2 billion acquisition of Solvay Pharmaceuticals in February 2010.
Abbott is not the only pharmaceutical company that has been expanding its branded generics portfolio recently. For example, GlaxoSmithKline partnered with Dr Reddy's Laboratories in June 2009 to develop and market selected branded generics across an extensive number of emerging markets (Nature Rev. Drug Discov. 9, 417-420; 2010). And in May this year, Sanofi-Aventis announced a joint venture with the Japanese company Nichi-Iko Pharmaceutical to capture some of the growth in generic-drug use in Japan.

Nature Reviews Drug Discovery 9, 417-420 (June 2010) | doi:10.1038/nrd3204
Evolving R&D for emerging markets
From branded generics to drugs developed specifically for patients in Asia, Bethan Hughes investigates the strategies that large-cap pharmaceutical companies are pursuing to meet the medical needs of emerging markets.

Within the next decade, Asia is expected to overtake Europe in pharmaceutical sales, driven by growth in key emerging markets. For example, China is predicted to be the second largest pharmaceutical market after the United States by 2015. "Eighty-five percent of the world's population lives in the emerging markets, and during the past 5 years, all real economic growth has come from these markets," says Patrick Keohane, Vice President (VP) for R&D Asia Pacific at AstraZeneca.
Such observations help to explain why many large pharmaceutical companies have increased their presence in emerging markets in recent years - in particular in China, but also in other countries including India, Brazil, Russia, Korea and Mexico (see Box 1 for a case study). Notably, this growing presence is increasingly moving beyond the use of contract research organizations and marketing of established products to include early-stage research aimed at specific medical needs of patients in these regions.

Box 1 , Case study: GlaxoSmithKline
At the beginning of 2009, Sandy Macrae - Senior Vice President for Asia Pacific, Japan, and Emerging Markets (APJEM) R&D at GlaxoSmithKline (GSK) - was charged with establishing the APJEM R&D group at GSK. "We realized that we wanted to support the emerging markets, but everyone was fully occupied looking after the United States and Europe. So, there was a real drive to have a group of people who could connect between the emerging markets and the rest of R&D at GSK," he explains.
GSK's APJEM R&D group do three things in the emerging markets: branded generics, intra-regional business development and local regional development. "We have been producing branded generics for a long time," says Macrae. "For example, our antibiotic Augmentin (a combination of amoxicillin and clavulanate), has been on the market for ~30 years but has not been patent protected in many markets for some time. If you think of the generics scene, there are commodity generics that are sold cheaply to pharmacies and then there are branded generics where a compound is no longer patent protected but which will be supported through ongoing medical education and in some cases continued research. Doctors buy into the brand because they know that it is made, distributed and supported by a company like GSK."
To develop generics, GSK announced an alliance with Dr. Reddy's Laboratories in Hyderabad, India, in June 2009. "The deal is that GSK comes up with the ideas and Dr. Reddy's will check the intellectual property landscape and do the pharmaceutical development as far as the human bioequivalence studies. Then GSK will do the clinical studies. It is a unique combination of an R&D company like GSK and a generics company like Dr. Reddy's each doing what they do best," says Macrae.
As an example of their intra-regional business development, Macrae cites GSK's deal in July 2009 to in-license denosumab (a fully human monoclonal antibody in late-stage development for osteoporosis and oncology indications) from Amgen. With agreement from Amgen, GSK is responsible for the clinical development, regulatory work and marketing of denosumab in the emerging markets. "Amgen were looking for a partner to work with them in the emerging markets. We have local operating companies with extensive experience of working with the regulatory authorities and the pricing and reimbursement groups in these areas, so working with GSK is an easy way for them to realize the commercial value of their asset in the emerging markets," says Macrae. "We are going to be doing a number of deals that look like this."
With regard to local regional development, the APJEM R&D team at GSK assesses opportunities where there is a medical need or a commercial opportunity to develop a product specifically for the emerging markets. "For suitable projects, we put together a business case and then persuade GSK to invest. We focus on projects in Phase III development, or other people's marketed products that need further development before they can be registered in an emerging market. For example, we have one product in development that requires a different dose in Asia Pacific than is available in the United States or in Europe; we have one product in development for a disease that is only present in an emerging market; and we are producing a new variant of one of our major compounds that we hope to make available in emerging markets at significantly reduced cost."
A diversity of medical need
Meeting the medical needs of emerging markets is a complex task. "You have to be aware of the wealth pyramid and the fact that although there are many people at the top of the wealth pyramid who can afford the same medicines that are available in the United States and in Europe, there are many more who survive on significantly less money," says Sandy Macrae, Senior VP for Asia Pacific, Japan, and Emerging Markets R&D at GlaxoSmithKline. Indeed, providing access to drugs or developing new combinations that are cheaper and encourage greater compliance is particularly important for a substantial part of the population in emerging markets, says Marc Cluzel, Executive VP for R&D at Sanofi-Aventis.
Lily Lee, VP, Head of Asia Pacific at Johnson & Johnson Pharmaceutical R&D sees the diversity of wealth, disease patterns and accessibility to health care as opportunities for drug manufacturers. "When you have a country like China that is so big that you have clusters of populations that live in fairly remote areas and cannot easily get prescriptions refilled or have regular check-ups, you have to think about what is the most appropriate dosage form and the right formulation to deliver benefits," she says. "Local market dynamics can be vastly different from one emerging market to the next," adds Keohane. "Differences are found in patient biology, medical infrastructure, patient access, insurance coverage, drug approval processes, as well as the presence of local competitors."
These considerations are reflected by the range of health-care products that the large-cap pharmaceutical companies aim to bring to the emerging markets. These fall into three broad categories: vaccines (for companies with this capability), generics (see Box 1) and intellectual property-protected medicines. Importantly, companies are now taking steps to address the lag between registration of new intellectual property-protected medicines in emerging markets relative to the United States and Europe.
"One of our efforts is to speed up the introduction of new medicines from our global portfolio to all countries," says Steven Yang, VP and Head of R&D in Asia at Pfizer. Keohane agrees: "At AstraZeneca, we have been persistent in building the clinical and registration capabilities of our China team, to the point where we will be able to ensure that future new launches in China will only be 1 or 2 years behind global first launch."
One way to help ensure that new drugs can be launched in a timely manner in emerging markets is to include patients from relevant countries in clinical development programmes. For most large-cap pharmaceutical companies, this practice is routine. "We often try to have global programmes where the drug is studied in Europe, the United States, and increasingly in the Asia Pacific," says Trevor Mundel, Global Head of Development at Novartis. Indeed, including patients from emerging markets in clinical trials also helps companies to enrol enough patients for large mortality and morbidity studies, which are increasingly being required for drug development in areas such as cardiovascular and metabolic diseases. "In fact, I would say that such studies might be impossible to execute if there wasn't a large contribution from China," adds Mundel.
A current example is the development programme for dapagliflozin (Bristol-Myers Squibb/AstraZeneca), an inhibitor of the sodium-dependent glucose transporter 2, for the treatment of diabetes. "It is being studied in global Phase III trials and there are some development efforts to support its approval and introduction specifically in India and China," says Elliott Levy, VP, Global Development Operations at Bristol-Myers Squibb.
Addressing lifestyle-associated diseases
Bristol-Myers Squibb and AstraZeneca also launched their dipeptidyl peptidase 4 (DPP4) inhibitor saxagliptin (Onglyza), for the treatment of diabetes, in India on 1 April 2010, less than 1 year after its US FDA approval in July 2009. Saxagliptin is also currently in development for use in China.
Treatments for diabetes are likely to become more widely used in China and in India, as the incidence of the disease is increasing. For example, a recent study conducted from June 2007 to May 2008 reported that 9.7% of the general adult population in China have diabetes and 15.5% have pre-diabetes, compared with 2.4% and 3.2%, respectively, in a similar study in 1994 (N. Engl. J. Med. 362, 1090-1101; 2010).
"As the emerging markets grow, one thing that grows with them is lifestyleassociated diseases."
This increase in disease prevalence has been attributed to longer life expectancy and lifestyle changes that have occurred through rapid economic growth. "As the emerging markets grow, one thing that grows with them is lifestyle-associated diseases. The NEJM article notes that there are ~92 million people with diabetes and ~148 million with pre-diabetes in China. So, that represents an opportunity for our new generation of diabetes medicines. In fact, we recently launched our DPP4 inhibitor Januvia [sitagliptin] in China," says Merv Turner, Chief Strategy Officer and Senior VP, Emerging Markets R&D at Merck Research Laboratories. "China also has 100 million people suffering from hypertension and, with 62% of males being smokers, the country's lung cancer rates are among the highest in the world," says Keohane.
India has also seen a similar increase in lifestyle-associated diseases. "By 2025, there will be nearly 189 million people over the age of 60 years in India, so you will have an elderly population, who are often overweight, with an increased risk of developing diabetes and cardiovascular disease. It is therefore very important to think of the medicines that we will make available for these countries with regard to the types of disease, as well as their cost point and accessibility," says Macrae.
Shifting R&D focus
Together with the growing emphasis on the timely introduction of drugs for diseases such as diabetes in Asia, there has also been an increase in discovery research for diseases that are more prevalent in the region than in the United States and in Europe. "Rather than trying to find a use for approved medicines that were developed for a non-Asian phenotype, the move is to discover and develop medicines specifically to treat Asian diseases," explains Paul Bolno, VP of Oncology R&D, Business Development at GlaxoSmithKline. This is also reflected in the therapeutic areas emphasized for research at the core R&D facilities that some pharmaceutical companies have established in Asia (Table 1).
Table 1. Core R&D facilities of ten pharmaceutical companies in Asia*

"The move is to discover and develop medicines specifically to treat Asian diseases"
Oncology is the therapeutic area in which companies are most actively pursuing strategies to gain more knowledge about Asian patients and to develop therapies to treat them. In part, this is because diseases such as liver cancer (owing to infections of hepatitis B and C), stomach cancer, and head and neck cancer have a relatively high prevalence in Asian populations. In addition, genetic biomarkers in specific patient populations have been shown to be valuable in predicting which patients are likely to respond to particular cancer therapies. For example, gefitinib (Iressa; AstraZeneca), a small-molecule drug that inhibits the epidermal growth factor receptor (EGFR) kinase, is more effective in patients with locally advanced or metastatic non-small cell lung cancer that have EGFR mutations. Such mutations are more frequent in Asian patients than in Caucasians (N. Engl. J. Med. 361, 947-957; 2009).
In 2007, AstraZeneca launched the Asia Oncology Strategic Alliance, which is aimed at evaluating novel treatments for stomach and liver cancers. "We focused on China, Japan, Korea and Singapore because the governments there have prioritized cancer therapy," explains Keohane. One example of a collaboration that was established through this alliance is with Guangdong General Hospital in China - which AstraZeneca identified as a strong partner for developing compounds for lung, liver, stomach and oesophageal cancers. The hospital provided the clinicians, the laboratory space and the ability to test tumour tissue, and AstraZeneca provided the expertise in oncology drug development and the research funding. "We have succeeded in building disease models in stomach, liver and lung cancer that will pave the way for new treatments," says Keohane.
In addition, a key focus of AstraZeneca's Innovation Centre in Shanghai is to develop knowledge about Chinese patients with cancer, including relevant biomarkers and genetics. Similarly, Johnson & Johnson Pharmaceutical R&D recently started a collaboration with Tianjin Medical University Cancer Institute and Hospital in China to improve their knowledge of oncology in the region. "We are studying the pharmacogenetics and biomarkers of products in our pipeline, as well as the cancers with high incidence in Asia that may not have been as aggressively studied from a genetic predisposition and biomarker standpoint as other cancers," says Lee.
This is also a focus of the Lilly Singapore Centre for Drug Discovery (LSCDD). "We are using systems biology for tailoring therapies and identifying biomarkers for oncology," says Jonathon Sedgwick, Managing Director and Chief Scientific Officer, LSCDD. The integrative computational sciences expertise at the LSCDD will also play a key role in the recently formed Asian Cancer Research Group (ACRG) - an independent, not-for-profit organization established by Lilly, Merck and Pfizer in February 2010 to accelerate research and to ultimately improve treatment for patients affected with the most commonly diagnosed cancers in Asia.
"The aim of the ACRG is to collect a large cohort of tumour samples with associated clinical data and to generate deep genetic data about them. Once the data have been collected and validated, it will be released to the public. How the data will be used will be up to the public - academic researchers, governments, biotechnology companies and pharmaceutical companies," says Kerry Blanchard, VP and Head of Drug Development in China for Lilly.
Although the LSCDD will be responsible for curating the data on behalf of the ACRG, Lilly, Merck and Pfizer will not benefit from the information more rapidly than anyone else, says Sedgwick. "This is a pre-competitive effort to generate data that has enough statistical power to be useful. We [Lilly, Merck and Pfizer] have shared resources because the sample sets required are so large that it would be difficult for academic groups to have the financial support to do this," says Blanchard.
"This is the type of information that you need to collect to start to identify specific types of patients who can respond to therapies," says Sedgwick. "From an R&D perspective, a lot of medicines that may have universal applicability were developed for the United States and Europe. We are now turning our attention, particularly through the use of patient tailoring and biomarker approaches, to start to understand better whether the medicines that we are making, and that we believe are important to address the fundamentals of disease, are appropriate or not for patient populations in Asia."
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