BioWorld Today Columnist
Now that you have recovered from your April 1st festivities, here are the rest of our sector's soap opera news items:
• In more herbal news, GW Pharma, of Salisbury, UK, has announced plans to investigate the anti-obesity properties of a cannabis-derived drug. Somehow, this seems counterintuitive.
GW's mission is "to be the global leaders in prescription cannabinoid and botanical medicines." The firm has identified 70 different cannabinoids and is investigating the biological properties of each. Its lead product, Sativex, is marketed in Canada by Bayer HealthCare for relief of neuropathic pain in multiple sclerosis.
So far, the U.S. and Europe are resisting that product, thanks to years of the "Just Say No" campaign. Seems to me it would be a great alternative to the confusion caused in California by medical marijuana, especially if they can develop a brownie-based delivery system.
• BusinessWeek reported that finance professors have shown that lackluster stock price correlates with size and price of CEOs' homes - the ritzier the pad, the poorer the stock performance. And we're talking significant differences. CEOs buying smaller homes outperformed the S&P by 22 percent in the following three years, while those buying megamansions lagged the S&P by 25 percent. Nothing was reported on the effects of Caribbean "mansions-away from home" on stock price.
• Roche Diagnostics filed a federal lawsuit against firms it claims scammed almost $12 million in diabetes products by pretending to distribute the samples to independent pharmacies. Instead of generating an expected $35 million for Roche in future sales, the accused instead kept the products and were trying to resell them at a discounted price. The group was busted by a vigilant Walgreen's security team suspicious about the low pricing.
Roche claimed that the evil-doers gained access to the products by convincing a senior VP that he was being recruited as a CEO candidate, providing him and his wife with free trips to New York City with all the perks. The suit was settled last month; terms were not disclosed.
• That's Telling Them: Abbott Labs has decided not to launch any new drugs in Thailand to protest the new Thai government's decision to void patents blocking sales of low-cost generics to seriously ill patients.
• The Wall Street Journal published a report on how Merck & Co. saved a whopping $1.5 billion in U.S. taxes by paying itself for use of its own drug patents. "But wait," you say. "How is this possible?"
It's a bit more complex than the Elan "turn partnering expenses into income" plan of the 1990s. Merck set up a subsidiary in Bermuda in partnership with a British bank, Abbey. Merck moved the patents protecting its blockbuster products Zocor and Mevacor into the subsidiary and then paid the subsidiary royalties to use its own patents.
The subsidiary then loaned Merck back the royalty money via another subsidiary, and Merck got the interest payments back when the Bermuda partnership with Abbey was dissolved. Abbey didn't have to pay taxes on income allocated to it because of a twist in British law, and Merck has its taxable income reduced.
Needless to say, the IRS got very cranky about the decade-long shell game and wanted its money back. Merck recently agreed to pay $2.3 billion to settle with the IRS. GlaxoSmithKline ponied up $3.1 billion to the IRS in 2006, and GE and Dow Chemical found themselves in similar battles with the IRS this year.
• You know you're a real industry when you get into the SkyMall catalog! Ace BioWorld Today, Anette Breindl, spotted The Wrinkle Terminator gene therapy machine for a mere $59.95! It restores the "S Complex Gene via a copy sound wave" to produce results in just one week!
• The venture and biopharma communities have jumped on the "Asian outsourcing" bandwagon with great enthusiasm, touting the ability to pay one-third the U.S. cost by using labs in China and India. Some have voiced concerns about the potential downside of outsourcing to those regions when your products directly affect health.
Those concerns got a big boost recently when the former head of China's State Food and Drug Administration was charged with accepting bribes from drug companies. Drug-related deaths and serious morbidity have put the case in the spotlight, affecting domestic and foreign pharma firms. Bribes of cash and travel abroad apparently were used to grease the drug approval wheels.
The corruption isn't confined to China. Johnson & Johnson's worldwide chair for medical devices & diagnostics resigned after the company alerted the feds to bribes made in two countries.
• The BBC reported that UK scientists want to make cow-human hybrid embryos for stem cell research. Who knows? They just might come up with teenagers who are easier to herd.
• This year's "If it says -omics, it's got to be good" story involves the newest version: the peptidome! The Scientist reports that researchers are very excited about the previously unexplored area, which could provide low molecular weight protein fragment biomarkers for disease detection.
We hear that this hot new science is the inspiration for the upcoming Mad Max movie "Beyond the Thunderdome and into the Peptidome"!
• And finally, Forbidden Sequences: Field reporter Dave Robbins said that a team at Boise State University at Idaho has developed software to come up with all possible sequences of DNA and then scan genome databases to look for sequences that should be there - but aren't. The team believes these are sequences that are not compatible with life, and have been selected out of existence. So far, they have found 86 11-mers that have never been reported in humans, and 60,000 15-mers not found in any species.
What does that mean? It's too early to tell. The team plans to test the sequences in bacteria and human cells to see what happens. The Department of Defense is interested (cue ominous music), and the sequences could be used as "suicide genes" for controlling genetically modified organisms.
Robbins-Roth, PhD, founding partner of BioVenture Consultants, can be reached at email@example.com. Her opinions do not necessarily reflect those of BioWorld Today.