Category Archives: Business of Medicine

Biotechnology Stock Price Drivers

The following may be happening that can affect the stock price:

  • Presentations or buzz occurring at key scientific and medical meetings; for oncology from which many biotechs sprout, we have ASCO, ASH, AACR, to name a few key meetings.
  • Clinical trial results are closely pending or just released. Typically companies dealing with the same or similar technology/pathway are affected by a peer company’s clinical trial results.
  • FDA decisions pending or released.
  • FDA holds on a clinical trial either imposed or lifted (as with $GERN).
  • Management taking the “poison pill” strategy against possible hostile bids (as with $ARIA 2 years ago)
  • Earnings are reported (usually at a loss unless there is already a commercial drug).
  • Merger & acquisition activity (Drama around $VRX hostile bid for $AGN).
  • Licensing announced including upfront/milestone payments.
  • Orphan drug designation announced (as with $ISIS recently).
  • Key management (C-level for biotech) changes.
  • Major insider buys/sells (like when $INO’s CEO bought a ton of company stock as a show of confidence when stock dropped last year because a blogger made unfavorable comments about the company’s drug, or $OPK’s founder buying a ton of his company’s stock last year when $IBB went through a bloodbath.)
  • Major shareholder (usually investment firms or hedge fund managers) buys/sells.

For the most part, biotech stocks should be viewed either as a speculative investment and/or truly for the long term. Those who bought $MDVN or $PCYC when these were in double digit prices and held through 2015 has seen their investment double or triple in value. There are those who daytrade and really speculate the sector for its volatility, but that’s a pretty stressful “day job” in my personal opinion.

Why Consumers aren’t Buying “High Cost-of-Developing Drugs” Argument

The Economist recently published an article on the government of India denying Novartis the patent for its cancer drug, Glivec (in the U.S. marketed as Gleevec).

In reading the reader comments, it is obvious that a sense of fairness violation was perceived by readers who felt that the government was correct in denying Novartis this patent, given that the readers perceived the company should have “made back its R&D losses” in developing this drug and beyond.
Image by Chris Holder
Pharma companies cite R&D development costs as well as the pitiful yield in its success rate in developing novel drugs as the reason why drugs cost so much. Thus patent is given as a way for companies to recover overall losses in this risk-intensive business as well as remain sustainable over the long term.

Yet companies are also known to go for patent extension strategies that do not represent truly novel contribution to market, by creating slightly different forms – or formulations of the drug – and then gaining patent on that slightly different form. Then companies use their sales and marketing arms to then keep patients on the “newer” (in patients’ mind, “better”?) version of the drug instead of the cheaper generic.

Those who argue for patent protection speaks about the risk and astronomical costs in bringing a drug to market. This is true, especially during human clinical trials, which consumers are rarely given the full picture of just how much “each patient” in a clinical trial actually costs the company to run the complete trial, especially when there is tremendous overhead in setting up these trials across different clinical settings within the country.

But consumers also perceive the unfairness of the pricing and when it comes to healthcare and medicine, emotions run high and it is common to conclude that pharma companies are greedy and being unfair given that they should have had already recuperated on their fixed costs and now they are using strategies to boost their bottom-line when they aren’t really investing in that drug (but they have to keep investing in their pipelines of drugs, many of which will fail, rendering huge losses to the companies).

Drug companies try, and its advocacy arm (PhRMA in the u.s.) tries, but the approach and message don’t seem effective. These messages are often very abstract and statistics-driven, which do not lend well to personalization. Statistics aren’t stories the average consumer can relate to.

Dream and Nightmare of Web-Scale Pharmacovigilance

I’m not going to tap into fear-mongering of why Microsoft is involved in the study that pulls adverse event (side effect) data from the internet, but I’m wondering what’s taken people so long to figure out the vast pool of patient experiences available online. Oh wait, those of us involved in industry know about this, only we don’t want to know about it.

There is at least one valid reason: you need to have a full picture of what is involved behind a side effect, to say with some level of confidence that your reported side effect experience came from the drug you said you took, not the other drugs you’re conveniently not saying you’re taking (especially the not-so-legal kind), or that you have a drinking habit (alcohol has major interactions with every drug under the sun), or that you’re taking 20 supplements you got from the nutritional store, and some prescription med you got off the internet by some shady doctor who asked you a few questions before writing you the Rx…

But reality check. Web-scale pharmacovigilance is here, and needs to be here, and should be leveraged conscientiously and systematically.

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Some years ago I gave a talk at a DTC conference in New Jersey about the patients’ voice when it comes to safety information. I am not in the business of web-based pharmacovigilance, nor did I set out to collect this information, but patients started sharing their personal experiences with an antidepressant on my mental health website. Yes, there are paroxetine/Paxil-related reports, but for the most part patients talk about bupropion/Wellbutrin, and over the span of many years there are hundreds of patient reports that are consistent in terms of their side effect experience.

This all started with one reader asking a question about a particular side effect of bupropion, and whether there were any published studies about a particular side effect. I’m sure there are scores of data from the manufacturer, but like much of drug data, these are kept “proprietary” with the ever-present “data on file” label on clinical slide presentations that the manufacturer supplies to a well-selected public (doctors).

Industry shouldn’t fear it or revile it: pharmacovigilance is critical for gathering drug information over time as part of safety monitoring, and the FDA sucks at making this an easy task for anyone with the desire to report adverse events with bureaucracy.

Read NYT’s take on web-scale adverse event reporting and drug safety monitoring.

Patient Hot Buttons in Pharma: Absurd Advertising

Series with Casey Quinlan

Absurd Advertising (Lyrica + Cymbalta for example) that make potent meds seem like something for a rainy Monday.

We in pharma have only a limited (less than 1 minute) of air time, and part of our challenge is to combine increase in awareness of something that used to be seen as “fault of the person” (i.e. depression as a character flaw, not a medical problem) with usage/safety. So it comes across as if we’re making light of the potency of med — obviously we like our meds to be potent so they get approved and look better than our competition — but we also are balancing this perception of “potency = seriousness of my condition, and I want to deny that I have a problem.” How do we improve this balance without turning off people we can truly help?

I don’t see this as a TV-only issue at all – the wide array of advertising, particularly in print and online, are in many ways both more annoying (how many pages will I have to turn in this mag before this drug ad ends?) and a huge waste of company $$ (I know that the lawyer’s chorus of massive small print is FDA-required). What’s the ROI on an ad that no one looks at?

This is true. I will look at only the 1st page of the ad and pretty much ignore the other 30 pages (I’m exaggerating, it’s a bit less than 30 pages…) but yes, pharma companies cannot print only 1 page, they’d love to, but they can’t, because of the requirement to include key data and safety information as mandated by the FDA. I think this is the FDA’s conspiracy to empty drug companies’ coffers through expensive advertising that no one looks at, which counteracts the FDA’s original intent of having patients and consumers exposed to fair balanced (safety especially) information, because no one will look at the whole ad to get the balanced picture.

continued in the COMMENTS portion — jump into the fray with us!

Patient Hot Buttons in Pharma — Series with Casey Quinlan

Introduction: I met Casey Quinlan in October 2011 when we both presented at a Digital Pharma industry conference hosted by DTC Perspectives. Casey describes herself as a “rabble rouser”, and of course, I cannot resist. This is a series of conversations with Casey on various “Patient Hot Buttons in Pharma” that we will be relay-blogging.

Casey

Jane

Segments of this Series:

Absurd Advertising

Lack of Transparency

Behind the scenes manipulation we sense but can’t see

Lack of Presence

Cost