The Friday Five – Five of the past week's stories you can't afford to ignore...

Novartis + Roche = ?

Could the appointment of a new chairman at both Novartis and Roche rekindle suggestions of a merger?

Pierre Landolt – a member of the Novartis board since 1996 – suggested it may do; such a move would create a "European pharmaceutical champion," Landolt reportedly added. Daniel Vasella – the recently departed chairman and former CEO of Novartis – spent a good proportion of his time in the early 2000s promoting a similar message, but to no avail. Despite Novartis' ownership of a 33 percent stake in Roche, the Hoffmann-Oeri family, which owns a controlling stake in the company's voting shares, has always been opposed to such a move.

Is there any reason to believe that this stance has softened? There shouldn't be, argued John LaMattina – former head of R&D at Pfizer – in Forbes this week. LaMattina, who has seen first-hand the impact of so-called 'mega M&A' transactions, suggests that any proposed deal between Novartis and Roche would damage R&D productivity and should be give a wide berth by senior management. Given that both Swiss players appear to be performing well on this front, is there a valid reason to take such a risk, concludes LaMattina.

The sometimes disruptive nature of large-scale M&A was also cited this week in relation to the news that the FDA had granted a second complete response letter for Merck & Co.'s sugammadex – a drug that it gained from Schering-Plough, which had earlier acquired it from Organon. Prominent blogger Derek Lowe added to a growing chorus of voices suggesting that sugammadex is a great compound, which has become embroiled in bureaucracy. More to the point, postulates Lowe, where now are the scientists that first discovered the drug at Organon? See also ViewPoints: Sugammadex setback blunts the new R&D narrative at Merck & Co.

Returning to the notion of a Swiss pharma marriage, an alternative view is that Vasella's departure as chairman will facilitate the sale of Novartis' Roche stake, which could then fund share buybacks or an increase in dividend. Analysts at Citi Group this week also suggested that the next 12 months could see significant portfolio restructuring at Novartis, including the sale of its animal health division and further bolt-on acquisitions to grow its OTC business.

See also In Focus: Will Roche's R&D day meet lofty expectations?

Prostate cancer race set to intensify as Johnson & Johnson steps up ARN-509 programme

If you have spent up to $1 billion acquiring a new drug you probably don't want to leave it lying around on the shelf. However, Johnson & Johnson caught a few analysts off-guard this week when it became apparent that the company will soon begin a Phase III study for the prostate cancer treatment ARN-509, which it acquired from Aragon Pharmaceuticals earlier this year.

The initial strategy is to push ARN-509 into late-stage studies for non-metastatic, castration-resistant prostate cancer (CRPC) patients and is designed in part to broaden Johnson & Johnson's footprint in the market (its current therapy Zytiga is indicated for pre- and post-chemotherapy patients with metastatic prostate cancer). Some caution is also being displayed, as in this setting Johnson & Johnson avoids the need to place ARN-509 in head to-head trials versus either Zytiga or Medivation's competing treatment Xtandi.

Read further analysis here.

Eli Lilly's bold move

With intensification of competition in the US diabetes market a recurring theme in recent weeks, it was interesting to hear Eli Lilly say that it would not be entering into a sales rep 'arms race' with competitors.

This dynamic appears to have been triggered by Novo Nordisk's earlier decision to switch sales reps originally earmarked to promote Tresiba (rejected by the FDA in February) to other diabetes brands, notably Victoza. More recently, AstraZeneca and Bristol-Myers Squibb have confirmed expansion of their own combined diabetes sales force in a bid to counter loss of share for its Onglyza and Byetta/Bydureon franchises.

Eli Lilly's proposition appears to be a bold one in a market that increasingly harks back to the primary care battlegrounds of days past. Key to its strategy will be its ability to offer as broad a diabetes portfolio as possible; within a few years the company is expected to have a marketed product in each of the main diabetes drug classes and will be the only player to do so. Analysts have for some time identified this is as key strength for Eli Lilly, but only time will tell whether the theory converts to practice.

See also In Focus: Discounts, differentiation and determination – why Boehringer Ingelheim, Eli Lilly's Tradjenta is bucking the trend in the US diabetes market.

Belgium's biotech bonanza

Belgium's biotech credentials received a significant boost this week thanks to Ablynx and Galapagos (see ViewPoints: AbbVie makes long-term bet on cystic fibrosis market, but finds a confident partner in Galapagos), which signed three notable licensing deals – two of which were with AbbVie.

AbbVie's agreement to in-license Ablynx's experimental nanobody ALX-0061 – which is being developed for the treatment of rheumatoid arthritis (RA) and lupus – for an upfront fee of $175 million was the standout deal.

Ablynx believes that ALX-0061 could offer a more compelling clinical profile versus competing anti-IL-6R antibodies, such as Roche's Actemra, which is expected to generate peak annual sales of around $2 billion. To drive home such an advantage, AbbVie may have to think aggressively about head-to-head studies; Ablynx CEO Edwin Moses told FirstWord he agreed with this sentiment, but did not foresee such a trial design until ALX-0061 is entered into larger Phase III studies, which could produce "really valuable data." - see ViewPoints: Why AbbVie needs to follow-up its Ablynx deal with aggressive head-to-head trials.

Asked about the current status of Europe's – and in particular Belgium's – biotech sector, Moses told FirstWord that the deals signed this week by Ablynx with AbbVie and Merck KGaA will build confidence and that he hopes "success breeds success" in the region.

Data manipulation?

The controversial practice of post-hoc patient grouping in clinical studies was highlighted again this week in a Washington Post article about the former Intermune CEO W. Scott Harkonen. Harkonen is currently serving six months of home confinement having been found guilty of wire fraud for "willfully overstating in a press release the evidence for benefit of a drug his company made." The full, fascinating, story – and its broader implications – can be read here.

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