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Executive Summary

Beecham is actively seeking to outlicense its antidepressant paroxetine and has had serious discussions with several firms, the company indicated during a Nov. 29 meeting with securities analysts. The 5-HT uptake inhibitor is in the late stages of clinical development with Beecham predicting first regulatory approvals in 1990-1991. Paroxetine (tradenamed Aropax) has been under development at Beecham for approximately seven years. The compound was licensed by Beecham from Ferrosan in 1981 for development outside the Nordic countries. Beecham execs told the Nov. 29 meeting that the product appears to have "enough differences in side effects to infer that this will be a significant new product" in the antidepressant category. Noting that paroxetine may have potential for an obesity indication, the Beecham execs declared: "We are going to focus it on the manic depressive effect,. . . possibly the best value that this compound holds for Beecham is as a license candidate. There are already a number of companies that have expressed a great deal of interest in the compound." The company was asked specifically about the obesity indication during a question and answer session. Beecham Pharmaceuticals Chairman James Andress said that the company has limited data on that indication. "I wouldn't dignify [the existing data] by saying that we have the product in clinical development [for obesity]." He reiterated that Beecham "is focusing very solidly on the antidepressant claim. We are not abandoning the anti-obesity claim, but we are concentrating on the anti-depressant claim. We think it has potential enough in that area." Beecham has a number of other 5-HT uptake inhibitors under consideration and is actively studying a 5-HT3 receptor antagonist, with a one-indication "rifle-shot" approach, as an anti-emetic. Beecham believes the class has potential against migraine and obesity, as well. Paroxetine is the furthest along of a series of mental health products being developed by Beecham. The company reports spending almost a quarter of its R&D budget (22% or about $40 mil. in the current year) in the mental health area. In addition to paroxetine, Beecham has at least one other mental health drug in active clinical development: denbufylline (for senile dementia). The product is being studied outside the U.S. and is reportedly being used in about 1,000 patients. Andress lists denbufylline among the most promising compounds research compounds in the Beecham pipeline. "I am also very encouraged by denbufylline," he said. He declared that Beecham's R&D staff is "very excited about this drug. It is not snake oil: it has a role to play in the therapy of senile dementia." He said that Beecham is going "to advance the compound aggressively." The company estimates first approvals for the product in the mid-1990's. The Beecham exec acknowledged that there are significant preconceptions about dementia drugs that Beecham will have to overcome before registering the product in the U.S. "I know what the U.S. attitudes are towards this class of drugs," he stated. "I know... [FDA Neuropharmacologic Drugs Division Director] Dr. [Paul] Leber's attitude towards denbufylline." However, he pointed out that the agency has reversed positions against classes of drugs in the past. "I know what their attitudes were about beta blockers some number of years ago. Remember?" The CNS research at Beecham is apparently viewed by the new management group as a fertile area for trade candidates. The company suggested during Q&A that a logical outlicense/inlicense trade could bring a quinolone antibiotic to the strong Beecham antibiotic sales force in exchange for the antidepressant or a psychiatric drug. Andress explained the outlines of one potential product trade. He noted that "there are companies that don't have a very effective antibiotics salesforce. We have a marvelous one. Maybe they are hip-deep in quinolones; we don't have any. I'd like to have one. So would all of us." Beecham has "the products in the CNS area," Andress reiterated. Some of the other companies "may not have an antidepressant; they have a pretty good CNS/psychiatric product line and they may have quinolones." Indicative of Beecham's continued strength in the antibiotic field, Augmentin (amoxicillin/ clavulanate potassium) sales grew by 50% worldwide in the six months through the end of September. The product's sales grew 45% in the U.S. and 63% in France. Overall, the company's pharmaceutical business did over $670 mil. in that six month period (up about 14% before an unfavorable currency translation which cut 7% off the growth rate). The OTC business grew at a similar rate worldwide (up over 13% before currency translation adjustments). The first half sales for OTCs were about $210 mil. at the Sept. 30 pound-dollar exchange rate. In the U.S., Beecham reported OTC sales gains of 10%. "The line extension of Tums antacid tablets to include a liquid formulation contributed to the brand's strongest ever market position," the firm said. Beecham views its OTC position as another of its key bargaining chips in license discussions. The firm says that it can identify about 100 prescriptions products at other firms without existing OTC arms that could make good Rx-to-OTC switch candidates. The company indicated that it would be willing to discuss joint ventures or product swaps to get those OTC switch candidates if necessary. Beecham's comments to the analysts on the potential for future OTCs come within a month of Merck's declaration of its intention to participate in the OTC business again ("The Pink Sheet" Nov. 7, p. 10). Together, the comments highlight a return to vogue for the OTC business with the financial community. The Beecham execs talked about product trades so extensively to the New York meeting that one exec quipped that he did not want to sound like a "rug merchant or camel trader." He noted, however, that the firm has an armful of products that make excellent "trade bait." The new prescription products for Beecham in the short-term are the thrombolytic Eminase (APSAC) and the NSAID nabumetone. The firm noted that the one-year data on 1,023 patients in the APSAC Intervention Mortality Study (AIMS) reported in mid-November in Washington indicated that the reduction in early death remained fairly constant from 30-day results (41% reduction for one year vs. 49.4% after 30 days). Andress predicted eventual action on the pending nabumetone NDA. He pointed out that the company's "recently hired" new director of regulatory affairs in the U.S., Robert Powell, is shepherding the nabumetone NDA as one of his key projects. "He is in there [at FDA] almost literally every week and that's one of the projects that he is pursuing. That'll break loose; there is nothing at all to impede the progress...," Andress said. Nabumetone is marketed as Relifex overseas; Relafen is the probable U.S. tradename. The Beecham exec again cautioned the analysts to be aware of a potential FDA bias, saying that FDA may not be inclined to approve another NSAID NDA. The agency, however, has recently approved two long-pending NSAIDs, Upjohn's Ansaid (flurbiprofen) and Ciba-Geigy's Voltaren (diclofenac). Andress, a recent recruit from Sterling, also praised the Beecham anti-viral R&D work. "I'm very excited about our antiviral program," he noted. "We have a lot of capability in the antiviral field: I think many people would be surprised by that. If you spend more and more time with [Beecham Pharmaceuticals Research Chairman] Dr. Mansford, you'll see why I'm so excited." Andress knows the antiviral field well because that was one of Sterling's focus areas in R&D. Sterling recently reported dropping its lead antiviral compound disoxaril from clinicals. However, that company says it is continuing work on two back-up compounds.

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