Solazyme: Algae-based biofuel fuels cars, warships, airplanes

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Costa Rica: Tourism, jungles and medical devices?

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St. Jude Medical will open a production facility in the Alajuela, Costa Rica, to make heart valves. The facility will be located within El Coyol, a state-of-the-art, free trade zone catering specifically to life sciences and other technology companies. The company plans to invest an estimated $670 million in Costa Rica and hire up to 2,000 employees in the next five years.

The medical device industry first discovered Costa Rica in 1987, when Baxter set up a manufacturing facility. Today, medical devices accounts for almost 10,000 employees from the likes of Hospira, Boston Scientific, Koros, St. Jude Medical, Hologic, Arthrocare, and Allergan. In addition, the country has a variety of medical product suppliers, contract manufacturers and sterilization providers.

Amgen on the prowl?

The world’s largest biotechnology company is again in feeding mode. According to CEO Kevin Sharer, Amgen is reportedly eyeing alternatives toward acquisitions to add to its international footprint. Best guesses have Dendreon, UCB, Ipsen & Actelion on their target list.

Amgen’s cash position includes $12.3 billion being held in international accounts, which would be subject to a 35% tax rate on profits if repatriated to the United States. This provides a unique incentive to pursue overseas transactions with tax-free profits.

Belgian pharmaceutical group UCB has been quietly growing its presence in the U.S. out of Atlanta, GA. French drugmaker Ipsen (oncology, hematology, endocrinology) solidified its U.S. foothold through the acquisition of Tercica in the Bay area. Expansion plans are aggressive for 2011. Actelion is Europe’s largest biotech company focused on orphan drugs for cardiovascular diseas & has expanded its U.S. presence nearly next door to Ipsen in northern California.

What U.S. companies could draw Amgen’s interest? Genzyme is not an option, as Amgen is unlikely to bid against Sanofi Aventis. However, two midsize targets could include Human Genome Sciences in MD and Dendreon in Seattle.

While no deal is not eminent, most expect its only a matter of time due to Amgen’s financial position and the need to foster continued growth. Certainly, acquisitions are a part of the company’s history with the largest being Immunex back in 2001.

So, who do you think Amgen will pursue?

An olive branch from the White House for the life sciences industry

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The current White House administration has not been nearly as supportive of the life sciences industry as other that came before.  Today, some good news.  All categories of the life sciences industry could potentially benefit from President Obama’s proposal to expand the R&D tax credit.   Obama has asked Congress to expand the tax credit by about 20%and make it permanent.   Starting in 1981, the credit has been extended 13 times and expired 8 times – most recently on the final day of 2009.

AdvaMed, BIO and PhRMA (& anyone else in our industry) supports the move by the White House.  In a statement by PhRMA: “For America to keep its global leadership in medical innovation, it is critical that public policies and programs support continued research and development (R&D) of new medicines. Investments made in R&D help support the economy and U.S. jobs, including jobs in the U.S.-based biopharmaceutical sector.”

At the end of the day this is $100 billion dollars on the table over the next 10 years for companies that are performing research and development in the U.S. A full approval by Congress may take into next year; yet, in the wake of healthcare reform & stem cell rulings, this is the first good news our industry has seen from the Obama White House in a while.

Rumors of deep cuts at Roche? Standby…

In a statement riddled with bad intentions, Roche AG announced that it will ‘review its business and cut costs to cope with recent setbacks on key drugs and rising pressures on prices from healthcare reforms’.  In plainspoken language, significant cuts are on the way.

The world’s largest maker of cancer drugs, once seen as the darling of the pharmaceuticals industry, has slipped since the acquisition of Genentech.  Most of its shortcomings are related to disappointments within its development pipeline, including follow-on indications for Genentech’s Avastin.

No details have been provided about reductions in force or cost savings.  According to Roche, details will follow in the coming months and be implemented starting in 2011.  Swiss newspaper Sonntag has speculated that Roche could slash thousands of jobs across drug sales, research and development, production and administration.

J&J CEO faces the music & shows why he is one of the best

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In the past six months, Johnson & Johnson has issued almost a dozen different product recalls including Benadryl, Tylenol, hip implants and contact lenses. From the outside, it appears a debilitating mess.

Yet in all the confusion and miscommunication, CEO Bill Weldon goes on CNBC to face the scrutiny.  Maria Bartiromo shows all the consternation she can muster, even calling him William like a scolding grandmother.  And while Weldon admits the company has ‘let customers down’, he deserves credit for taking the questions and doing what he can to set the record straight.

Location, location, location! Bristol-Myers acquires Zymogenetics

Seattle-based companies continue their streak of headlines. Following Dendreon, Alimera and soon-to-be Seattle Genetics, Zymogenetics made its own splash this week with its acquisition by Bristol-Myers Squibb. BMS did the deal for Zymo’s hepatitis C biologic treatment that has been the focus of a collaboration between the two companies.

Hep C is predicted to a grow into a multi-billion dollar market, and Vertex, J&J and Merck are already in the race. With ZymoGenetics, BMS becomes an immediate player in this growing market. On a lighter note, they also now control one of the more storied and attractive landmarks in the life sciences industry. Zymo’s corporate offices are on the shores of Lake Union in Seattle in a distinctive converted factory. Anyone who’s driven by has had their attention drawn by the enormous stacks protruding from the renovated historic steam plant. Without question, the office building is one of the more recognizable across the entire industry. Of course, neither company is speculating on the fate of Zymo’s offices or its employees until the deal closes.

So our question: Is Zymogenetics building the most unique for any life sciences company?   If not, submit your nomination.

CEO gone, HR exec takes over. What’s up with Beckman Coulter?

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Beckman Coulter has announced that Scott Garrett has resigned as Chairman, President and CEO of the southern California biomedical testing company.  Even though no reason was given for his departure, Garrett’s departure is not surprising. His five year tenure is marked by…..well, nothing in particular.  Most in the industry see Beckman Coulter as having tread water for the past few years.  Almost one year ago today, an article was printed entitled Where is Beckman Coulter going?

In a move that clearly hints at their long term intentions, the Board appointed Bob Hurley as interim President & CEO. Hurley is the company’s head of human resources & the chairman of Baxter Japan. By trade, he is an HR guy.  He also has earned his stripes as a line executive in Asia Pacific for Baxter & then Beckman Coulter.  Still, he’s an unlikely candidate to become the permanent CEO of Beckman Coulter.  Instead, the company will conduct a search across the industry.

All of this is a blow to Beckman’s proud heritage.  The company was once considered a ‘belle of the ball’ following the deal to bring together Beckman Instruments and Coulter in 1998.  For the past half decade or so, it seems to have slipped off the radar.  Garrett was brought in as the successor to then CEO Jack Wareham.  He proceeded to surround himself with executives from his old stomping grounds at Baxter (including Hurley) thus earning the ‘Baxter West’ moniker for the company under his leadership.

No one is sure what the path forward is for Beckman Coulter.  Maybe that’s the point…and why the Board felt the timing was right to make a change.

Developing the next generation of performance enhancing drugs. Should we?

Anabolic steroids, human growth hormone and other PED’s have dominated the sport’s landscape for the past decade. While governing bodies must decide how best to police & regulate such technology, the industry is on the hunt for the next generation of such products. A new alternative to controversial anabolic steroids would build muscle by mimicking the effects of the hormone testosterone without the side effects. Human growth hormone is also frowned upon because of side effects and questions about whether it can increase strength. But what if the industry could develop a better, safer way to deliver the same results?

Companies like GTx and Ligand Pharmaceuticals are developing drugs called selective androgen receptor modulators, or Sarms. These Sarms can potentially deliver the muscle-building qualities of HGH or steroids without side effects. On a different tack, Pfizer, Amgen and Acceleron Pharma are separately pursuing drugs that block myostatin, a protein made by the body that acts as a brake on muscle formation. The proof can be found in cattle raised in Belgium. Belgian Blue cattle, which do not make myostatin, have huge, rippling muscles and yet are otherwise apparently healthy. Several years ago, scientists reported that a German boy who lacked myostatin because of genetic mutations had abnormal strength and muscle mass.

Most of the drugs have been tested in only early-stage clinical trials so far, and there have been many setbacks. Wyeth, now part of Pfizer, dropped a myostatin inhibitor that did not work well in a muscular dystrophy clinical trial. Amgen last month called off a trial to test its myostatin blocker for age-related muscle decline. Merck withdrew from a partnership to develop GTx’s drug.

But those companies all say they are not giving up on the quest. And, while these technologies all have potential clinical applications not related to performance in competitive sport, there is certainly a moral boundary. But apparently not one strong enough to hinder the natural progression of technology & science.

Genzyme CEO to Sanofi: “We are not a fixer upper…we’re beachfront property!”

Henri Termeer finds himself at a crossroads.  The biotech industry pioneer and CEO of Genzyme the verge of losing control of the company he transformed from a start-up in 1983 into a $4.5 billion biotechnology powerhouse.  Those who know Henri can share how much he loves managing Genzyme. They can also share how difficult the past few years have been.

Now, pressured by an $18.5 billion buyout offer from Sanofi Aventis & antagonistic shareholders, Termeer says he will consider selling, if he can get the right price.  Termeer stands to make about $300 million from a sale to Sanofi.  At the same time, Termeer is under siege.  Billionaire investor Carl Icahn controls two seats on the board and would like nothing more than a quick transaction to realize gains from his investment.  What else?  Genzyme is racked with manufacturing & quality issues that have led to product shortages that devalued the stock.

Thus far, Genzyme has rejected Sanofi’s initial offer, saying it undervalues Genzyme’s pipeline of potential products.  And, the deal centers on a Genzyme share price that is already depressed, down 43% from a 2008 high.  Still, this is not a one sided deal.  Sanofi Aventis & new CEO Chris Viehbacher need new products to help replace revenue that will be lost in 2013 due to generic competition.

Most in the industry believe, like Roche-Genentech, it’s only a matter of time…and money. But be sure that ‘Biotech Hank’ will not sell out for one penny less than what he believes his company to be worth.  Let the posturing begin…