PhillyInc

Auxilium Pharmaceuticals Inc. of Malvern gave Armando Anido quite a welcome when he became chief executive in July, according to the company's proxy statement that was filed today with the Securities & Exchange Commission. Anido, 49, received $909,098 in compensation from the company, including a bonus of $146,250, the guaranteed minimum under his employment contract. He also received a "relocation expense reimbursement" of $74,181. Gerri A. Henwood, whom Anido replaced, had a pay package of $901,022. She received $20,262.50 per month to serve as a consultant between July 17 and March 15. -- Jonathan Berr

Orthorvita Inc., which makes materials used for bone regeneration and soft tissue healing, is proposing to reduce the number of outstanding shares in order to boost their price.

Shareholders are being asked to approve the move, called a reverse stock split, according to a filing with the Securities and Exchange Commission. The company says its shares, which currently trade less than $3, are priced too low.

"Many institutional investors have policies prohibiting them from holding lower-priced stocks in their own portfolios, which reduces the number of potential buyers of the company's common stock," the Malvern company said. " In addition, analysts at leading brokerage firms may be reluctant to recommend lower-priced stocks to their clients or monitor the activity of lower-priced stocks. " -- Jonathan Berr

Unionized workers at Merck & Co. Inc.'s Montgomery County plant, where the drug company is making its new cervical cancer vaccine and other key products, have ratified a three-year contract containing a no-layoff clause. The United Steelworkers, which represents about 1,800 of approximately 10,000 workers at the huge West Point complex, said its members would receive each a $4,500 "signing bonus" and a 3.5 percent raise in 2007, 2008 and 2009. See the story. -- Thomas Ginsberg

J.P. Garnier, chief executive of the global drug giant, who lives and works part-time in the Philadelphia region, is scheduled to retire a year from now from the London-headquartered company. And according to the London Daily Telegraph, Garnier has assigned three top lieutenants some special duties to prove their mettle and, supposedly, winnow them down to an heir apparent. Two are Americans, and one -- David Stout -- is also based in Philadelphia. Worth reading here: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/04/28/ccgsk28.xml -- Thomas Ginsberg

Barrier Therapeutics Inc., a Princeton biotechnology company, bought about $186,000 worth of raw materials and clinical supplies from businesses controlled by shareholder Johnson & Johnson of New Brunswick, Barrier reported in a filing with the Securities & Exchange Commission. Princeton-based Barrier plans to hold its annual meeting June 6 at its corporate headquarters. -- Jonathan Berr

A plan to close FDA labs in seven cities, including Philadelphia, and consolidate operations elsewhere is now facing opposition in Congress from a union representing the federal employees, backed by Sen. Arlen Specter. The Inquirer reported briefly on the planned action in February. An updated story is here. In Philly, it comes down to about 25 jobs, and does not affect a number of others here. This looked like a sleeper issue until the pet-food contamination debacle. What's the issue now? Doing what's best for safety, or for local jobs? The Philadelphia Regional Port Authority has pushed Specter (download its letter) to save the labs.
- Thomas Ginsberg

Some shuffling at Digitas Health, formerly called Medical Broadcasting Inc., whose founder, David Kramer, sold to Digitas last year. See press release here.

Orchestra Therapeutics Inc., a California biotech with facilities in King of Prussia, says in a new SEC filing that it has stopped manufacturing at its King of Prussia HIV antigen manufacturing facility. It also reports that it has "substantially reduced headcount" there. The company must raise additional money before the second quarter ends. As of March 31, the Carlsbad, Calif,-based company had an accumulated deficit of more than $155 million.

Beijing Med-Pharm Corp., the Plymouth Meeting-based distributor of drugs in China (See archived stories here), says in an SEC filing that things may get tough if it cannot raise more capital soon. "If we are not able to raise additional capital through fund raising activities, we could be forced to curtail some of the currently anticipated expenditures in the above mentioned areas and our anticipated future growth will be adversely affected." The company employs a handful of people in Plymouth Meeting and scores in China, where it helps western drug companies distribute and market their products. The company told the SEC it is looking to raise additional funds in the next six months through public or private offerings, debt financing or from other sources. - Jonathan Berr

Biotech firms are well-known for churning along for years without a penny of profit. (Deep-pocket investors looking for a reliable loss?). But Philadelphia-based biotech Hemispherx Biopharma Inc. is surely a standout. In an SEC filing today, the developer of flu treatment Ampligen said it has not reported a profit in 20 years. Two full decades. It says: "We began operations in 1966 and last reported net profit from 1985 through 1987. Since 1987, we have incurred substantial operating losses, as we pursued our clinical trial effort to get our experimental drug, Ampligen, approved." As of March 31, the company said it accumulated deficit was more than $172 million. The SEC filing listed the sale of more than 13 million shares held by a major stockholder. (See past Inquirer stories on Hemispherx.) - Jonathan Berr

Eurand NV, a Dutch specialty pharmaceutical company that announced pricing of its IPO today, has entered into a lease for about 9,000 square feet of office space near Philadelphia. It says in an SEC filing today that it's setting up a "sales and marketing organization" here. - Jonathan Berr

To that nagging question, "How do biotech startups with no earnings stay in business?", here's one answer: Pay your employees nothing. Of course, it's standard practice for owners of struggling small businesses and mom-and-pop companies to sometimes sit on their paychecks, rather than cash them, in order to afford paying the light bill. But publicly traded firms don't usually bend that far. New Life Scientific Inc. (OTC: NWLSE), of Princeton, said in an SEC filing today that it expects to stay in business only because it will not be required to pay salaries to officers and directors. It did pay $87,977 to its "team" of executives last year, which includes Henry Val, Eugene Zabolotsky, Wieslaw J. Bochenek and Peter Goodenow. But this year will be different. "Because we are not currently required to pay salaries to our officer/directors, management believes that we have the ability to continue operations through the foreseeable future. In the event additional funds are required to allow us to continue our operations, it is anticipated that these funds will be loaned to us by management, as it is doubtful that we will be able to obtain loans from any established financial institution." Oh, and by the way: "It is further anticipated that we will continue to incur expenses without corresponding revenues during the foreseeable future." The company's website says it develops and commercializes novel biotech/pharmaceutical products, vaccines and genetic treatment modalities. -- Jonathan Berr

Two items make us wonder about the road ahead for Avandia, GlaxoSmithKline's diabetes medicine now facing new safety questions. First, firms that organize legal strategy sessions for plaintiff lawyers have snapped into action on Avandia. These meetings offer advice and strategy for suing GSK and, perhaps more importantly, create a forum for big firms to get referrals from little ones. Second, a think tank that opposes excessive litigation against drug companies (among other things) is sounding an alarm about Avandia lawsuits, although it cites mainly a single Reuters story as evidence. To be clear, the question is not whether GSK will get sued, but how it responds and whether the lawsuits will constitute a trickle or a tsunami, as Merck & Co. Inc. faces over Vioxx. Merck has disclosed spending more than $1 billion just on lawyers so far. Should GSK put aside a similar reserve? - Thomas Ginsberg

Ron Klink, a onetime U.S. Senate Democratic contender and former U.S. Congressman from the Pittsburgh area, who also owns the lobbying firm Klink & Associates in Western Pennsylvania and Washington, has landed a gig with a pharmaceutical industry group in Washington. According to Ed Silverman's Pharmalot blog (citing the Washington Post), Klink is one of the Democratic insiders hired by the Pharmaceutical Industry Labor-Management Association, a pharmaceutical industry group that tries to nurture common ground with labor unions. - Thomas Ginsberg

(Commentary by PhillyInc contributor Daniel Hoffman)

The ‘With Allies Like This, Who Needs Enemas?’ Award for Irresponsibly Selling a Formerly Prescription-Only Weight Loss Drug Over-the-Counter

Jokes aside, the Boston group worries about abuse of the drug and says the FDA should require users to consult a doctor first. GSK, which has taken the potty humor in stride since Day One, had promised the FDA to be "responsible" and candid in marketing. It has an education kit for every buyer that discusses the side effects and makes clear the drug's effectiveness is tied to healthy eating habits. Jim Edwards at the blog BrandweekRx faults GSK for omitting the side-effect information in an early TV ad, but credits GSK for the information kit. The classic angle here seems to be get people to buy the product, then give them the full gory details later. Still, GSK is at least giving the details. And perhaps it should consider a special campaign for its hometown, Philly, once voted among the fattest in the country. - Thomas Ginsberg

On one side are cardiologists represented by the American College of Cardiology and the American Heart Association (AHA, among others. They have engaged in an intense battle with the American Diabetes Association (ADA), led largely by endocrinologists, over the large and rapidly growing disease of diabetes. At stake in this turf battle are matters both scientific and commercial.

Steve Nissen, the Cleveland Clinic cardiologist whose study in the NEJM triggered the Avandia flap, is the past president of American College of Cardiology. (By the way, Temple University's emeritus professor Alfred A. Bove is the current vice president.)

Scientifically, the divergent approaches of cardiologists and endocrinologists result from the different points along the disease continuum where the two specialties see patients. Endocrinologists typically see patients at about the time they are diagnosed with full-onset, Type 2 diabetes. As a result these specialists consider blood sugar control as the main objective of their efforts. Cardiologists, by contrast, often see patients at an earlier, pre-diabetic stage when controlling blood pressure and cholesterol appears key. They believe the challenge lies in delaying the onset and progression of diabetes. For that reason the cardiologists pay relatively more attention to factors such as blood lipid fractions and less to 90-day blood sugar (HbA1c). After diabetes progresses along its course and begins to ravage the heart and other organs, then the cardiologists re-enter the picture because heart disease becomes the principal worry.

As an example of their divergent clinical perspectives on diabetes, the ADA and the AHA fundamentally disagree as about "metabolic syndrome," that complex of hypertension, high cholesterol, obesity, elevated blood sugar and other factors. The AHA claims it represents an epidemiologically real and useful concept while the ADA, by contrast, sees it as more of a marketing term that doesn’t help to identify particular patients or guide the course of treatment.

A commercial consequence of this turf war will concern which specialty the pharmaceutical companies target as the "Key Opinion Leaders" or "Influentials" for new diabetes products. Which specialists will be the lead researchers, main speakers and overall savants?

- Daniel Hoffman

Opinions expressed by contributors to PhillyInc are exclusively those of the contributors.

PWC recommends that Big Pharma -- it defines them as the 13 largest companies, all but one with revenue of at least $10 billion -- fundamentally change the economic model on which their industry is based. Failure to do so will result in private equity funds pouncing to acquire the Big Pharma companies and then tearing apart each one at its roots. Very little of its findings or conclusions are new. But it does a reasonable job of bringing together many ideas raised elsewhere over the past several years. A few of its key points:

The fundamental factor eroding the industry’s future profitability lies in the fact that it launches fewer and fewer products capable of advancing treatment standards, even as its R&D spending keeps rising.

Unless Big Pharma substantially lowers its prices, its revenues and profitability will be in real jeopardy.

The industry will need to use different standards for pricing its products while promoting them in other ways.

The drip-drip of bad behavior by Big Pharma has eroded the public trust required for the government indulgence these companies will need as they seek to change their way of doing business.

It is not possible to have effective health care without an innovative, productive pharmaceutical industry. The industry’s leading companies must decide whether they will seek to fill that need or have others seize the franchise from them and address it in a way that few today would find attractive. PWC has done an intriguing job of explaining part of the challenge and the need for change.

- Daniel Hoffman

Opinions expressed by contributors to PhillyInc are exclusively those of the contributors.

The other shoe has started falling on those CFO departures from Big Pharma. Wyeth appoints Greg Norden and Merck appoints Peter Kellog. See Pharmalot.

Courtesy Quickguides.org

As the Times rolled out this series of abuses, a few of my business and personal acquaintances saw it as further evidence of the pharmaceutical industry’s fundamental corruption. I disagree. Instead I would place most of the blame for the sordid situation at the feet of physicians, either as individuals or as professional societies. In one sense the argument is the old, largely academic one of deciding whether to assign more blame to bribe givers or to bribe takers. In this case I would argue that physicians must be held to different standards than the drug companies and other manufacturers.

This comes five weeks after the Arab News reported that a different TV advertisement for a rotavius vaccine was aired in Saudi Arabia with a similiar panicky response. Arab News did not identifiy the rotavirus vaccine or the company. Merck in West Point, Pa. makes and markets RotaTeq in worldwide but it was unclear if this is the vaccine in question. Silverman opines on Wyeth's Prevner campaign: "Is it too much to ask of a marketing team to show a little good taste?"

Interestingly, however, the Arab News really raises a different issue: the problem of people relying on herbal folk fremedies instead of modern treatment and vaccinations. One expert it quotes, Khalid Danish, a consultant of neonatology at the King Fahd Military Medical Complex, seems to just as concerned about this as the Prevnar hype.

- Thomas Ginsberg

Courtesy centerforsecuritypolicy.org

Indeed, the implication seemed worse than the evident reality in some cases. At least two Philly-area companies made the list: London-based AstraZeneca P.L.C. (which has North American HQ outside Wilmington) for its sales in Cuba, and Cellegy Pharmaceuticals Inc. of Wayne for apparently seeking patent registration in Sudan. There were hundreds of other companies, most of them foreign-based like AstraZeneca. The SEC looked only at the five countries -- Cuba, Syria, North Korea, Sudan, Iran -- labeled by the State Department as state-sponsors of terrorism.

SEC Chairman Christopher Cox called the takedown a "temporary suspension." But this sort of criticism doesn't usually leave room for a comeback. Cox even told the AP that the site may never come back, because he said there's enough public ways for investors and analysts to ferret out this information themselves "without need of an SEC-provided Web tool at all.”

So, which financial news service will start posting a "terrorism ticker"? We're not holding our breath, although security groups are already on the case. Here's at least one effort at the Center for Security Policy, which already had compiled a list of state pension investments in suspect countries.

- Thomas Ginsberg

Courtesy washingtonpost.com

GAITHERSBURG, Maryland (Reuters) - GlaxoSmithKline Plc's widely used diabetes drug Avandia should be pulled off the market, U.S. Food and Drug Administration reviewer David Graham said in a presentation prepared for delivery on Monday.

Graham, in slides prepared for his remarks to a U.S. advisory panel, said Avandia increases the risk of cardiovascular problems such as heart attacks, while a rival drug, Actos, made by Takeda Pharmaceutical Co. Ltd., does not.

Senior FDA officials say they do not know if Avandia increases heart-attack risk and are asking the advisory panel if the drug should come off the market or stay with stronger warnings or limits. Panel recommendations are expected on Monday afternoon.

The documents for today's hearing are here. GSK is disputing the conclusions. Its Avandia defense campaign, run out of the Philadelphia office, has put up its presentation here.

Stay tuned.

- Thomas Ginsberg

Pardon my skepticism: I will believe such high-minded restraint and truth-in-advertising when I see it. ...

- Thomas Ginsberg

J.P. Garnier, CEO of GlaxoSmithKline P.L.C. (NYSE: GSK), reportedly netted about $2.6 million in an insider stock sale in the wake of his company's survival of an FDA review of its diabetes drug Avandia. (Pharmalot spotted this on Bloomberg.) Actually, it doesn't seem like a lot of money. More sales to come?

- Thomas Ginsberg

Come and get me!

Not with terms like “dead cat bounce,” “eyeballs” and “gross impressions.” That one is a personal favorite. It’s what employees do when they have to imitate their bosses' motivational speeches. (Actually, it’s an advertising term for how many times a message is seen or heard.)

How about this one, courtesy of today's corporate news: “Reverse logistics.” Does that mean making tidy and orderly systems messy? Most of us have kids or spouses who are expert in that -- no need to venture into the business world at all.

The term comes to us today from Genco Infrastructure Solutions Inc., which praises itself as the “recognized leader in Reverse Logistics.” The Pittsburgh company and its sister Genco subsidiary, Capital Returns Inc., just landed a $38.4 million, five-year-contract from the Philadelphia-based Defense Logistics Agency, Defense Supply Center.

If logistics means moving supplies or products efficiently through a manufacturing, warehousing and distribution center, reverse means the opposite — sucking all that product away from its former final destination. Genco, which handles retail returns, for example, will be sucking back (efficiently, we presume), expired or soon to be expired pharmaceuticals from the Defense Department along with medical supplies and related waste materials. Efficiency will be key, since the materials will come from throughout the United States as well as overseas.

Have a favorite term? Send it in with your own definition (but please, include the real meaning too!)

- Jane M. Von Bergen

Nicholas Teti and his management team at Isolagen Inc. (AMEX:ILE) of Exton are spending far less time then they would like developing what the company calls "emergent skin and tissue rejuvenation products."

First of all, there is the legal defense against a class action securities lawsuit and another against a class-action derivatives lawsuits that the company, in an SEC filing yesterday, says "distracts our management, is expensive to conduct and seeks a damage award against us." The cases have been around since 2005 and Isolagen is dutifully fighting them "vigorously."

And that's not the half of it. Teti's team finally has settled an evidently nasty separation dispute with former president and board member Susan Ciallella. It disclosed that back on June 8, the company and Ciallella agreed that she would get, among other payments, $690,000 by September, then another $40,000 each month until next July 2008, plus $1.7 million related to her "legal claims relating to her termination." The company is also paying her $159,245 legal fees. Ouch. Isolagen already has a deficit of about $148 million. It said this week that it's ability to continue operating is dependent on its ability to raise adequate capital prior to March 31, 2008. Nothing like a deadline to clear one's mind of distractions. A spokesman for the company declined to comment further to us about the situation.

- Jonathan Berr

Shamrock Holdings, a Burbank, Calif., fund controlled by the family of Roy Disney, nephew of Walt, said in an SEC filing last week that its Shamrock Activist Value Fund had acquired more than 2.6 million shares of eResearch, making it a major shareholder. Shamrock described the shares as "an attractive investment opportunity." No further details were provided in the filing about its intentions, and a Shamock spokesman didn't respond to our phone message. eResearch Chief Financial Officer Richard Baron declined to comment to PhillyInc.

Chances are Shamrock won't be quiet for long. Activist investors such as billionaire Carl Icahn buy stock in what they consider undervalued companies, then press management to make changes, such as laying off workers or selling businesses to boost the value of the shares. According to an old but good summary by Bloomberg News, Roy Disney has a long track record of trying to shake up companies, including a failed hostile bid for Polaroid Cop. in the 1980s and a $100 million investment in trendy sneaker L.A. Gear Inc., two companies which later filed for Chapter 11 bankruptcy protection. And don't forget, Roy was partially responsible for the ouster of Michael Eisner as chief executive of the media company that his uncle Walt founded. Recall that his showdown with Eisner found its legs after a strong showing against Eisner during Disney's 2004 annual meeting ($ required) at the Pennsyvlania Convention Center in 2004.

Shamrock isn't shy about letting companies know where they've gone wrong. In its filing, Shamrock says: "We are not passive investors, and we have a long and established tradition and culture that respects all stakeholders -- owners, employees, customers and the community." Earlier this week, Shamrock demanded that NuCo2 Inc., (NASDAQ: NUCO), a supplier of bulk carbon dioxide, institute a special dividend. Shamrock also complained that $1.1 billion offer for packaged ice make Reddy Freeze Inc. (NYSE: FRZ) was too low.

What Shamrock's gripe is with eResearch isn't clear. Shares of eResearch have been on a tear lately, soaring more than 28 percent over the past three months. Last week, the company reported second-quarter net income of $4.1 million, or 8 cents per share, a gain of 147 percent from $1.7 million, or 3 cents, a year earlier. Revenue rose 8.4 percent to $24.7 million. eResearch also said it expected net income this year to be at the "high end" of its guidance of 25 cents to 30 cents per share. Analyst George Hill at Leerink Swann & Co. initiated coverage of the company last Friday with a rating of market perform. He couldn't be reached for comment.

- Jonathan Berr

PharMerica, based in Louisville, Kentucky, is recently hatched and just started trading its shares Aug. 1. AmerisourceBergen employs about 370 Teamsters in a workforce of more than 14,000, including some in the company’s Thorofare, N.J. distribution center.

Here's a question: Why would the union write a letter that could lead to Amerisource losing business and their members, perhaps, losing jobs?

A Teamster spokesman -- not international president James P. Hoffa -- told PhillyInc that Teamsters’ pension funds are invested in both companies, hence the union's concern. And, he said, AmerisourceBergen should be able to compete for the business in the marketplace.

Michael Kilpatric, an AmerisourceBergen spokesman told PhillyInc that it is standard practice for institutional pharmacies to buy most of their drugs from one company “because it increases efficiency and lowers costs.”

It's also standard practice for unions to have research staffs who examine companies' business performance for investment and organizational purposes.

By the way, Yost is set to leave PharMerica's board next year.

- Jane M. Von Bergen

James Kuo, who was hired in May as CEO of the money-losing biotech company Duska Therapeutics Inc.(OTC: DSKA) of Bala Cynwyd, may want to consider taking up the company's old business of landscaping. In an SEC filing today, Kuo's company disclosed that it believes its "cash balances will only be sufficient to fund our planned level of operations through approximately August 2007." About two more weeks.

Duska, which had an accumulated deficit of $9.2 million as of June 30, said its independent auditors have cast doubt about its ability to continue as a going concern. Its chairman is listed as Amir Pelleg. It seems not to have updated its Web site in ages, the online equivalent of letting the paint peel and shutters fall off the storefront.

Duska had come to life in 2004 through the landscaping and development firm Shiprock Inc. (OTC:SKRI) of Nevada, through what the company described as a "reverse triangular merger." For accounting purposes, Duska was deemed the acquirer and later "ceased its landscaping and irrigation business," the filing said.

This is the way some small companies get their start, by buying shells of other publicly-traded companies, no matter what they do, than converting them. But in this case, maybe Duska should have stuck with landscaping.

- Jonathan Berr

In April, the U.S. Drug Enforcement Agency revoked a license issued to AmerisourceBergen Corp. (NYSE:ABC) allowing it to distribute controlled substances (drugs) from its warehouse in Orlando, Fla. Maybe the feds caught Donald Duck and Mickey Mouse trying to smuggle something into Disney World, or maybe Cinderella's obnoxious stepsisters needed some pain medicine after trying to stuff their feet into that tiny glass slipper. If you're a parent with a couple of toddlers at the amusement park, you might be willing to pay just about anything for a nice prescription mood enhancer. Whatever the problem was, it appears to be resolved now. The Valley Forge company announced today that it had resumed distribution on Saturday.
- Jane M. Von Bergen

Power Medical Interventions Inc. Chief Executive Michael Whitman doesn't let little things like product delays or lack of profitability get in the way of his plans to sell shares of the medical device company to the public.

The company's PLC 60 linear stapler, which had been expected in 2006, was delayed almost nine months because of design flaws and problems getting parts, the Langhorne, Pa.-based company said in a filing today with the Securities & Exchange Commission.

"Our ability to generate revenue from the PLC 60 staplers that we have placed in hospitals since December 2006 has been adversely affected due to the unavailability in 2007 of certain reload cartridges for the device," the filing said.

A recent FDA inspection also found instances where Power Medical failed to properly process customer complaints. Some of the FDA's "inspectional observations" had also been observed in previous inspections by the agency, the company said

"Whether the FDA will accept our response is uncertain, particularly in light of the similar nature of the current inspectional observations to the previous observations," the company said, adding that the company recently hired a senior vice president of regulatory affairs and quality assurance and has engaged a consultant who has noted that the company is making improvements.

Power Medical, which has an accumulated deficit of $150.9 million as of June 30, also has found "material weaknesses" in its financial reporting that need to be fixed. The company expects to lose money through at least next year.

- Jonathan Berr

Power Medical Interventions Inc. Chief Executive Michael Whitman doesn't let little things like product delays or lack of profitability get in the way of his plans to sell shares of the medical device company to the public.

The company's PLC 60 linear stapler, which had been expected in 2006, was delayed almost nine months because of design flaws and problems getting parts, the Langhorne, Pa.-based company said in a filing today with the Securities & Exchange Commission.

"Our ability to generate revenue from the PLC 60 staplers that we have placed in hospitals since December 2006 has been adversely affected due to the unavailability in 2007 of certain reload cartridges for the device," the filing said.

A recent FDA inspection also found instances where Power Medical failed to properly process customer complaints. Some of the FDA's "inspectional observations" had also been observed in previous inspections by the agency, the company said

"Whether the FDA will accept our response is uncertain, particularly in light of the similar nature of the current inspectional observations to the previous observations," the company said, adding that the company recently hired a senior vice president of regulatory affairs and quality assurance and has engaged a consultant who has noted that the company is making improvements.

Power Medical, which has an accumulated deficit of $150.9 million as of June 30, also has found "material weaknesses" in its financial reporting that need to be fixed. The company expects to lose money through at least next year.

- Jonathan Berr

Kurt J. Hilzinger, the 46-year-old president of AmerisourceBergen Corp. (NYSE: ABC) in Valley Forge, has quit and prompted a reshuffling at the drug distributor. The company said in a statement that Hilzinger has left to join an unnamed private equity firm and praises his "leadership, hard work and insights" over 16 years.

No word on when Hilzinger left. But the statement by CEO R. David Yost makes it seem the reshuffling has been in the works for awhile and notes "we had been reviewing our future organizational structure for some time. ... Subsequently, with the resignation of Kurt, we have finalized an organization which will create the future infrastructure and cost structure that ensures we will continue to increase our efficiency and effectiveness.”

From the statement:

• In place of Hilzinger, the COO job will go dark and Yost will assume the position of president. Yost assumes direct leadership of AmerisourceBergen Drug Corporation with the executives heading Sales and Marketing, Supply Chain Management, and Operations functions reporting directly to him.


• Steven H. Collis will be promoted to Executive Vice President and will continue as President of AmerisourceBergen Specialty Group reporting to Yost. He adds new responsibilities for shaping the Company’s policies and strategies and for more closely integrating the Specialty Group across AmerisourceBergen.


• Michael D. DiCandilo continues as Executive Vice President and Chief Financial Officer, adds additional responsibilities, and continues to report to Yost.


• Thomas H. Murphy, Senior Vice President and Chief Information Officer, will report to DiCandilo


• Ed Hancock, President of AmerisourceBergen Packaging Group, will report to DiCandilo.


• Mark Hollifield, President PMSI, will report to DiCandilo.


• Terrance P. Haas will be promoted to Executive Vice President and Chief Integration Officer, leaving his position as Senior Vice President and President of AmerisourceBergen Drug Corporation (ABDC). In his new role, which reports to Yost, he will lead the multi-year implementation of an Enterprise Resource Planning (ERP) information technology system for the Drug Corporation within the Company’s current capital and expense structure.
  
• Joining the AmerisourceBergen Executive Management Committee, which already includes Yost, Collis, Haas and DiCandilo, will be John G. Chou, Senior Vice President, General Counsel and Secretary, and Jeanne B. Fisher, Senior Vice President, Human Resources. Chou and Fisher will also become Executive Officers of the Company.

- Thomas Ginsberg

AstraZeneca P.L.C. (NYSE:AZN) has been signaling for awhile that it's going to outsource more of its manufacturing work. Or is it? Last week the Times of London quoted one of its European executive as suggesting that research and marketing, not manufacturing, is a "core activity" and detailing a shift to China and India, among other places. But now AstraZeneca tells Ed Silverman at Pharmalot and Gary Haber at the Wilmington News Journal (where AstraZeneca has its U.S. HQ and hundreds of employees) that it actually does not plan to get out of manufacturing entirely. "Fully outsourcing supply and manufacturing activities, as implied in the article, is not part of the AstraZeneca strategy.

This subject is a delicate balancing act, of course, because public companies have to please investors, who generally like to hear about cost-cutting actions, and public customers and politicians, who often react against the loss of jobs. Is this is a case of journalists getting it wrong, or AstraZeneca just trying to soften the message?

- Thomas Ginsberg

Ex-pharmaceutical research chief Tachi Yamada left Philadelphia and GlaxoSmithKline PLC (NYSE:GSK) more than a year ago. He now leads the global health program at the Gates Foundation. But perhaps his old pharma industry will still find a way to get some mileage from this: The Queen of England has named Yamada a "Knight Commander of the Order of the British Empire" in recognition of his work as chief of research and development at GlaxoSmithKline, headquartered in London. (See the Queen's list here and download the effusive statement here. Hey, perhaps this is just what Big Pharma needs to repair its reputation: a nod from Liz. It didn't hurt AstraZeneca PLC (NYSE:AZN) when its former boss, Tom McKillop, was given a knighthood.

- Thomas Ginsberg

That was a bit faster than expected. Bernard Poussot, who was toiling as division chief of Wyeth Pharmaceuticals in Collegeville just three years ago, has been named CEO today of Wyeth (NYSE:WYE), to replace Robert Essner in January. Only nine months ago Poussot got the No. 2 job as chief operating officer, solidifying his place as heir-apparent in a seemingly routine succession process. Still, Wall Street didn't quite expect this move so fast, even if it is welcome. The company has had three products postponed this year already. Its stock price is sitting near a 12-month low. Ed Silverman at Pharmalot questions the selection of an insider at a time when Wyeth is facing pipeline, manufacturing and shareholder troubles.

- Thomas Ginsberg

Seems like a perfect target for the Philaelphia Film Office: Reuters is reporting today that the actor-writer Tim Robbins has gotten a contract to direct a pilot for a new TV drama about a family that runs a pharmaceutical company. He calls it "Possible Side Effects." Hey, imagine the Philadelphia backdrops.

The U.S. pharmaceutical division president of GlaxoSmithKline PLC (NYSE: GSK), David Stout of Philadelphia, has lost GSK's rather unusual contest to become the next CEO. See AP story here.

- Thomas Ginsberg

Perhaps it was a secret hiding in plain sight. But Peter Rost at BrandweekNRX got our attention this morning by saying that Jeff Kindler at Pfizer Inc. (NYSE: PFE) not only contributes to Democrats but is a major supporter of Hillary Clinton for president. He bases this on a clear pattern of pro-Hillary campaign donations, and he poses this question:

Question is what this means as far as Hillary goes - if the big drug companies start to support her, she sure has come a long way since she tried to implement healthcare reform.

We also might wonder how this might play with other C-level pharma executives, who by and large are Republicans and support Republicans, according to our experiences and a raft of research. Merck & Co. Inc. (NYSE: MRK)'s CEO Dick Clark is a registered Republican in Montgomery County. So is Wyeth's R&D chief Bob Ruffolo. The list could go on. And of course the industry's lobbying generally has been skewed toward the GOP, and the GOP has been skewed to support the industry. Then again, the political landscape for Big Pharma began changing last year with the Democratic takeover of the House. Stay tuned.

- Thomas Ginsberg

The Financial Times says today that David Stout, the Philadelphian who lost the race to become CEO of GlaxoSmithKline PLC (NYSE: GSK), may now be invited to join the GSK board along with the other passed-over executive, Chris Viehbacher. At least we get an answer to our last post on the topic. Ed Silverman at Pharmalot observes it would also change the balance of execs to non-execs on the GSK board.

- Thomas Ginsberg

West Pharmaceutical Services Inc. (NYSE: WST) of Lionville was one of many companies left gasping by New York-based Pfizer Inc.'s (NYSE: PFE) surprise decision last week to shelve its inhalable insulin product Exubera. West Pharmaceuticals had been contracted to help make the devices. CEO Donald E. Morel Jr. said in a news release that the company it was stunned and is still evaluating the fallout. Other local companies had a role or stake in Exubera, including Plexus Ventures LLC.

- Thomas Ginsberg

J.P. Garnier, the Philadelphia-domiciled, soon-to-retire, notoriously outspoken CEO of GlaxoSmithKline PLC (NYSE: GSK), told a conference of business editors that newspaper journalists are shooting themselves in the foot in the way they cover the pharmaceutical industry. According to a blog account of the Society of Business Editors and Writers conference, Garnier said that "two out of every three" readers don’t trust the media. "And that will be the cancer that will kill the media." He also faulted journalists for, among other things, relying for information on plaintiff attorneys who “are in it for the money, and they want to use the newspaper to make their case to the public." On those two points, Garnier may know what he's talking about, because both quotations might apply to the pharmaceutical industry, too.

- Thomas Ginsberg

Merck & Co. Inc. (NYSE: MRK) is launching a spin-off from its authoritative Merck Manual and Merck Veterinary Manual. The new Merck/Merial Manual for Pet Health (also here), edited by Cynthia M. Kahn, will be the "first complete health guide for pet owners," or so Merck crows. Call it another sign of Big Pharma's pitch for the Animal Planet generation. Animal and veterinary products long have been big business, but some companies are upgrading their marketing strategies. Pfizer Inc. (NYSE: PFE), for example, has created a "Cats of the Revolution" website, replete with online games and chats, to promote its heartworm-and-flea medicine Revolution. Merck's new project is being done with Merial Limited, an animal health company based in Duluth, Georgia. Merck says it'll be a non-profit venture, although it telegraphs the vast positive P.R. potential by noting that "pet owners spent an estimated $9 billion on veterinary care for their animal companions."

- Thomas Ginsberg

This may be oddest tale yet from the long and already scandalous fen-phen diet drug litigation relentlessly dogging the local drug giant Wyeth (NYSE: WYE) : Hundreds of Kentucky plaintiffs got a $200 million settlment from Wyeth. But their lawyers Shirley Cunningham Jr. and William Gallion allegedly pocketed too much of the money. The plaintiffs sued the lawyers, won and were awarded, among other things, the lawyers' 20 percent stake in champion race-horse Curlin, winner of the Breeders' Cup Classic. Now Curlin is up for sale. So Wyeth's fen-phen users may get their payday, or at least some of it. Can't make this stuff up.

- Thomas Ginsberg

ViroPharma Inc.'s chief executive officer, Michel de Rosen, who once told an interviewer that CEOs really need to enjoy their work, probably finally had a good day yesterday after his company's recent drubbing on Wall Street and pipeline troubles. Felix and Julian Baker, whose Baker Brothers Advisors hedge fund gets close attention from biotech investors, has told the SEC that it bought $8.8 million worth of ViroPharma stock (NASDAQ: VPHM) last week after having dumped about $11 million worth in April. That partly explains VPHM's 6 percent rise yesterday. Baker now holds about 9 percent of ViroPharma's outstanding shares, according to InsiderScore (reg. required).

ViroPharma spokesman Robert Doody tells us the Bakers' move "is a sign our stock is ridiculously undervalued." So, does that mean the wise Bakers' sell-off in April meant ViroPharma was overvalued then? "I don't want to speculate," Doody says.

- Thomas Ginsberg

Ed Silverman at Pharmalot spotted this from OutSourcing-Pharma.com: The sell-side investment advisory firm Dresdner Kleinwort is predicting in a new analyst report that AstraZeneca PLC, now under the tutelage of ex-Wilmington-based U.S. division chief David Brennan, will wither in the coming eight years if something drastic isn't done. They say their worst-case disaster scenario "has a 50% probability of occurring." Brennan left Wilmington for London a couple a years ago, taking some top people with him. Certainly the reign of ex-CEO and founder Tom McKillop needed a shakeup. But Brennan has struggled since his ascent, reinvigorating the old talk of a merger or buyout with GlaxoSmithKline PLC.

- Thomas Ginsberg

Novavax Inc., the vaccine developer that moved here a few years only to turn and move back to Maryland, soon will have no local operations. A filing says it will close its 24,000-square-foot manufacturing plant on Red Lion Road in Northeast Philadelphia, where it made Estrasorb. The reason? It lost the manufacturing contract with Esprit Pharma Inc., just purchased by Allergan Inc. No word on employees' fate. Its Malvern corporate office has been subleased to Puricore Inc.

- Linda Loyd

Slap, slap, slap.

That could be the soundtrack to a U.S. Senate Finance Committee report last week that blisters GlaxoSmithKline PLC for what it calls "an orchestrated plan to silence" a critic over the diabetic drug Avandia, charges the company strongly disputes.

Back in 1999, John Buse, a University of North Carolina medical professor, suggested that the drug carried cardiovascular risk. In e-mails, executives of the company called Buse an "Avandia renegade" and considered suing him. One executive called Buse's department chairman to complain about him, the report said.

Buse wrote back to the company, saying "Please call off the dogs. I cannot remain civilized much longer under this kind of heat." He later sought money from the company for a continuing medical education program about Avandia.

Grassley, that is, the GOP senator from Iowa. His no-nonsense missives requesting congressional testimony by this or that pharmaceutical executive come often to Philadelphia. Now a Grassley letter is chasing a former Philadelphian to Seattle. GlaxoSmithKline P.L.C.'s former R&D chief, Tadataka "Tachi" Yamada, who is retired from the industry and now works at the Gates Foundation, has been "asked" to testify to Grassley's Finance Committee about alleged intimidation of a researcher who was critical of GSK's diabetes drug Avandia. The story blew open last week when the committee released its report on the John Buse affair and concluded GSK behaved badly.

No indication when, or if, Yamada will comply. But it does show, you can take the man out of Big Pharma, but you can't take Big Pharma out of the man.

- Thomas Ginsberg

The chief executive officers of two Philadelphia pharmaceutical giants -- J.P. Garnier at GlaxoSmithKline P.L.C. and Richard T. Clark at Merck & Co. Inc. -- have cut a deal that may say something about their strategies. They say in a joint statement that Merck had sold to GSK the rights to one of its biggest early blockbusters, the statin Mevacor for high cholesterol. In its heyday, Mevacor enshrined Merck as King of Big Pharma. Later knocked from its perch, Merck sought permission to sell an over-the-counter Mevacor. But Merck didn't succeed (yet, notes Ed Silverman at Pharmalot) and Merck doesn't really do OTC. So passing the drug to GSK -- for undisclosed milestone and royaly payments -- could generate cash for Clark's R&D and lets J.P. keep growing his OTC empire despite the nay-sayers. Win-win, as they say, if the FDA goes along, that is.

- Thomas Ginsberg

Merck & Co. Inc.'s scientists in its research division in West Point and elsewhere have pulled off some amazing feats. In 1987, they developed Mectizan for a terrible disease called "river blindness" in Africa. Strictly in financial terms, the drug has earned little or nothing for Merck in the conventional sense. Merck almost certainly knew before marketing the drug that there would be no real profit in selling it in impoverished Africa, but it kept going anyway. If Merck had shelved the drug, like GlaxoSmithKline P.L.C. and others had to do with with their own low-profit breakthroughs, Mectizan might have become another example of the pitfalls, not successes, of the profit imperative. Remember, this was long before the Gates Foundation was around to help save the drug companies from themselves.

So Merck's marketing division pulled off a stupendous feat of its own. Completely apart from the drug's clear health benefits, the company seems to have treated Mectizan as a charity vehicle and milked it for all it's worth. It has set up and funded sophisticated donation programs and public-health efforts to distribute its drug, and donated the product to the cause. Mectizan has become the basis for corporate promotions, good press and even Merck's routine assertions that it pursues human health above all. We remember hearing Merck's executives try to defend company's handling of Vioxx by trotting out Mectizan, of all products, as if that would prove the company's inner goodness.

In P.R. terms, Mectizan has become an enormous, if immeasurable, asset for Merck. Now on Mectizan's 20th anniversary, Merck is sinking an additional $25 million into this asset. Merck, the World Bank and other aid agencies have announced a joint campaign to raise $50 million to eliminate the disease - half coming from Merck, on top of Merck's donation of the drug itself. By Merck's own reckoning, it has donated $2.7 billion worth of Mectizan since 1987. Forget the tax deductions: Imagine if every drug company had such an asset.

- Thomas Ginsberg

David Stout, the Philadelphia-based chief of GlaxoSmithKline P.L.C.'s pharmaceutical division, is not taking the consolation prize. He is leaving GSK, turning down a board seat and evidently leaving a pile of cash on the table after losing the oddly explicit and distracting managerial showdown with his colleagues to succeed retiring J.P. Garnier of Devon. (See Reuters here and GSK's statement is here.)

The company announced his departure last week in a statement about a board reshuffle as part of the succession plan. No word on Stout's destination. Says a spokeswoman dutifully: "He's evaluating his options."

The London Daily Telegraph had reported earlier (and so did the Times of London) that GSK had offered Stout and Chris Viehbacher, head of GSK's other HQ in North Carolina, the equivalent of about $4 million in stock and cash and board seats as retention bonuses after they lost the CEO race against Andrew Witty. Viehbacher took the board seat. Stout evidently wasn't moved by the money. Ed Silverman at Pharmalot gives some of the board ramifications of Stout's departure here.

Garnier, who apparently devised the competition, said in the statement: "I would like to thank David sincerely for his significant contribution to GSK and for the support he has given me over many years. We wish him well in his future endeavors."

- Thomas Ginsberg

The Philadelphia-based CEO of Shire P.L.C., Matthew Emmens, is getting bounced up to non-executive chairman of the U.K. company. He is being replaced as CEO by Angus Russell, the current CFO. Shire has about 600 people in Chester County, mainly because Emmens (that's him on the left) wanted to plant the company in the middle of Big Pharma territory in what became a kind of "ADHD Alley" in the suburbs, with another maker of attention-deficit hyperactivity drugs, McNeill, in Fort Washington. The Inquirer's business desk's Linda Loyd is working on a fuller story.

- Thomas Ginsberg

December was a fortuitous month for eight Cephalon Inc. executives to make their annual stock sales or exercise their options worth millions of dollars, with the stock trading at a higher-than-usual level. The sales on Monday were posted by Robert P. Roche Jr., executive v.p. of worldwide pharmaceuticals; Carl A. Savini, executive v.p. and chief administrative officer; Lesley Russell, executive v.p. of worldwide medical and regulatory affairs; Kevin J. Buchi, chief financial officer; Jeffry L. Vaught, executive v.p. and president of research and development; John E. Osborn, general counsel and executive v.p.; Peter E. Grebow, executive v.p. of worldwide technical operations; Chairman and CEO Frank Baldino Jr.; and director Martyn D. Greenacre.

Spokeswoman Sheryl Williams noted that the eight officials were "taking advantage" of a five-week window to sell after the company announced its quarterly earnings. "It’s not tied to an event. It’s all about opportunity in the trading window to divest some of their options." Each still has significant holdings in the company.

- Linda Loyd

If only Hemispherx Biopharma Inc. could get this kind of screwup every day. The allegation last week that a former auditor from BDO Seidman L.P., then-director and partner Stephen J. Nardi, had mishandled and then tried to cover up the error on the drug company's 2004 audit, will actually have a positive impact on the company's financials.

Hemispherx says in a statement today that its restatement of 2004 performance, conducted because of questions about the BDO audit, has resulted in an improved report for 2004. It says its fiscal 2004 now shows "a decrease in the net loss applicable to common stockholders of $3.2 million, or $0.07 per share." The BDO audit in question showed a bigger loss.

This all blew open on Friday when, according to the Philadelphia Business Journal, the federal Public Company Accounting Oversight Board filed disciplinary action against Nardi, from Erial, Camden County. It bars him from working with any public accounting firm for a year for his "failure" to properly review a junior member of the firm's audit work, and then allegedly ordering the audit manager to alter the documents to make it appear she had reviewed it properly. The Journal identifies the audit manager as Anne Marie Fitzpatrick.

Nardi, who left BDO in 2006, can appeal the action in a year. We could not reach Nardi for comment. BDO Siedman sent us this statement: "This matter, which took place in 2005, involved two former professionals of the firm. Upon uncovering the conduct, BDO Seidman immediately launched an extensive internal investigation, conducted by outside counsel, and appropriate corrective measures were taken by the firm. The firm will have no further comment on this matter."

Philadelphia-based Hemispherx, for its part, says it had already dropped BDO and hired McGladrey and Pullen L.L.P. as its independent registered accounting firm. The small company could still use the help. Its stock fell to a five-year low last week of 72 cents, then rose only slightly on news of the restatement.

- Thomas Ginsberg

Agence France Presss and the London Daily Telegraph are reporting that GlaxoSmithKline P.L.C., AstraZeneca P.L.C. and Eli Lilly and Co. are being investigated over "bribes allegedly paid to Saddam Hussein's deposed Iraqi regime." (Thanks to Pharmalot's Ed Silverman for spotting this on Sunday).

The reports say the companies have confirmed that they have been asked to hand over documents by Britain's Serious Fraud Office, which AFP says is investigating "possible breaches of the United Nations' oil-for-food sanctions program."

AFP quotes a GSK spokesman in London: "GSK does not believe that its employees or its agents in Iraq knowingly engaged in wrongdoing regarding the oil-for-food programme. ... In fact GSK went to considerable lengths to co-operate with UK government authorities responsible for the UK administration of the programme and to impose anti-corruption measures when dealing with intermediaries in Iraq at a time when the environment was extremely volatile and difficult."

It quotes an AstraZeneca spokeswoman in London: "AstraZeneca has received a request from the SFO for documents as part of its review of the oil-for-food programme in Iraq. The company will be providing the documentation."

Note that the 2005 report detailing problems in the U.N. oil-for-food program concluded the Iraqi regime had demanded kickbacks from many foreign companies, and that bribes actually were paid in connection with "humanitarian" contracts for 2,253 companies, although only a few companies were named in the public report. Neither GSK nor AstraZeneca was among them.

- Thomas Ginsberg

Hemispherx Biopharma Inc. announced a round of executive bonuses New Year's Eve, totalling more than $400,000. The Philadelphia drug development firm said the bonuses amounted to 25 percent of base salary for the five execs. In the case of CEO William A. Carter it meant a tidy $166,156. The more than 30-year-old company has no significant product sales and is unprofitable. But its compensation committee and board determined that "significant progress" had been made in five areas, including preparing a new drug application for its Ampligen drug to file with the FDA and developing a global marketing strategy.

China's WuXi PharmaTech has agreed to buy AppTec Laboratory Services Inc., which is based in St. Paul, Minn. and has a 75,000-square-foot lab and manufacturing operation at the Philadelphia Navy Yard. Deal is valued at $151 million.

Think Merck executives were surprised to hear pitcher Roger Clemens bring up his eating Vioxx "like it was Skittles" during a 60 Minutes' grilling by Mike Wallace? Probably not. The Cy Young award winner, who was named as a steroid user in the Mitchell report, talked at length with the New York Times in 2005 about his use of the pain reliever that Merck pulled in 2004.

When the CEO of a public company leaves, it's easy to measure what he or she meant to it: Watch the stock price. If it goes down, investors may be worried they lost a good manager. If it rises, they're often betting a new regime will turn things around.

Target Corp. named a new CEO Wednesday, and the retailer's stock price rose. Starbucks switched top barristas Monday night and its shares spiked 8 percent the next day during a down trading session.

Yesterday, Teva Pharmaceutical Industries Ltd.'s top U.S. exec left to take a senior post at Cardinal Health Inc.

Both companies operate in the Philadelphia area. Teva, the world's biggest generic drug maker, has its North American headquarters in North Wales and a manufacturing plant in Sellersville. Cardinal has a drug distribution center in South Jersey.

The reaction? Teva's American depositary receipts fell 4.5 percent, or $2.24, to $47.41. Cardinal shares rose 3.6 percent, or $2.12, to $60.69.

After Cardinal Health Inc. announced it was hiring local executive George Barrett from Teva Pharmaceutical Industries Ltd. last week, it was clear from Cardinal's Web site that it did not have as many operations in the Philadelphia area as it once did.

That's because last April Cardinal sold off its Pharmaceutical Technologies & Services business to the hedge fund Blackstone Group for $3.3 billion. That business had its roots in a Philadelphia company called PCI Services Inc. Cardinal acquired PCI for about $200 million in 1996 and proceeded to expand it in a series of other deals.

Now called Catalent Pharma Solutions Inc. and based in Somerset, N.J., the business has quite a footprint in the region. It has a 583,624-square-foot building involved in packaging services on Red Lion Road in Philadelphia. It has two similar operations in smaller facilities in Moorestown and Pennsauken. Cardinal still operates one of its 25 pharmaceutical distribution centers in Swedesboro.

- Mike Armstrong

In a rough week for the stock market, at least one local company put together a decent run higher. ViroPharma Inc. said 2007 sales of its biggest product, Vancocin, will be between $202 million and $208 million. That's 21 percent higher than 2006. The Exton drug developer's shares rose 21 percent to $9.96 last week.

- Mike Armstrong

After buying Merck & Co. Inc.'s central Pennsylvania manufacturing plant, PRWT Services Inc. today is expected to introduce the management team that will lead it. PRWT chairman and CEO Willie F. Johnson has grown his Philadelphia company into one of the nation's largest African-American-owned businesses over the last 20 years. With a supply contract in hand from Merck, the new venture has the potential to triple PRWT's annual revenue, which was $76 million in 2007.

- Mike Armstrong

It's not often that a service company evolves into a manufacturing company. Think of the computer industry. IBM, which once was synomous with "computer," is an information services company, having sold its PC manufacturing business long ago.

But then along comes a company like PRWT Services Inc., the Center City provider of business services, that is suddenly finding itself making bulk chemicals for the pharmaceutical industry.

This morning, the management of the African-American-owned company was celebrating its purchase of a former Merck & Co. Inc. factory in the central Pennsylvania town of Riverside, which is indeed on the side of the Susquehanna River across from Danville. Armed with a five-year supply contract from Merck, PRWT is now a manufacturer and has jumped into the life-sciences business with both feet.

Harold Epps, who was promoted to PRWT's president as of today, said this one acquisition and contract effectively quadruples the revenue base of the 20-year-old company. It is in negotiations with St. Louis-based Sigma-Aldrich for another contract that would expand those revenues even more, he said.

Andrew Witty, the incoming new CEO of GlaxoSmithKline P.L.C. apparently will run the drug giant from London, rather than Philadelphia, as J.P. Garnier has done. The Times of London reports that Witty who lives in London will do so for family reason. Read the report in the Times of London.

For Merck & Co. Inc., midnight can't come soon enough.

The intervening hours are all that's left for former users of its pain-reliever Vioxx to register to accept payment from a $4.85 billion settlement reached between plaintiffs attorneys and the big drug maker in November.

For the deal to go forward, 85 percent of those who have sued Merck over their health problems associated with use of Vioxx must sign up. Merck is confident that will happen, but as of Monday, little more than half of the 60,800 people who have sued have registered.

Don't look for an answer tomorrow on how many actually did register. Merck is saving that cliffhanger for a Jan. 18 federal court hearing.

- Mike Armstrong

The Scientist, a trade publication based in Center City, has long dubbed itself the "magazine of the life sciences."

Its January issue contains a supplement that focuses on the Philadelphia-area's biotechnology and life sciences industries. It's also available on the Scientist's Web site.

Some of the stats tossed around sound familiar ("home to 15 leading pharmaceutical companies"), but others seem to have been statistically forged by BIO ("top life science cluster" behind Boston and San Francisco). Still, the Scientist has covered a lot of what a business reporter wants to know about an industry. I have my reading cut out for me ...

- Mike Armstrong

There are a number of times in a small drug company's development that it faces crucial tests.

Exton-based Adolor Corp. confronts one this week when it goes before a panel of advisors to the Food and Drug Administration over its compound to treat constipation after bowel surgery. That panel will vote Wednesday on whether Entereg should be approved.

Entereg would be Adolor's first drug, and it has been working on it with GlaxoSmithKline, which bought the rights to co-develop and market Entereg for as much as $270 million in 2002.

Shares of Adolor rose 22 cents, or 5.5 percent, to $4.25 Friday on news that FDA reviewers found the drug to be effective. There are currently no drugs approved for this condition. However, the 103-page briefing document also indicates the FDA has questions about the safety of Entereg, including serious heart problems.

Catching up on regulatory filings from Friday:

AmerisourceBergen Corp. , the wholesale drug distributor, issued its proxy statement Friday for its upcoming shareholders meeting.

The company, with its headquarters in the Chesterbrook Corporate Center in Chester County, is one of the nation's three biggest drug distributors behind Cardinal Health Inc. and McKesson Corp. So naturally, AmerisourceBergen would compare itself, and the pay of its top executives, with those companies.

But the compensation committee casts a wider in assembling a 13-member "peer group" for benchmarking purposes. Besides Cardinal and McKesson, AmerisourceBergen believes it competes with the following for executive talent:

Costco Wholesale Corp., CVS Caremark Corp., Home Depot, Inc., Ingram Micro Inc., Kroger Co., Safeway Inc., Supervalu Inc., Sysco Corp., Target Corp., United Parcel Service Inc. and Walgreen Co.

No, those aren't all health care-related. Names like Target, Home Depot and Supervalu (parent of Acme Markets Inc.) might seem odd to benchmark against. But think of it this way: all of these companies have in common national distribution systems and spend heavily on information technology to keep themselves at or near the top of their respective fields.

Given yesterday's market gyrations and Fed rate cut, it wouldn't be a surprise if many people missed these news items yesterday.

DuPont Co. and Johnson & Johnson, two companies that employ 14,400 people in the Philadelphia region, issued fourth-quarter earnings results on Tuesday. DuPont reported lower net income, but managed to beat analysts' estimates. Johnson & Johnson's earnings were 10 percent higher.

These are giants in the chemicals and health-care industries. But their conference calls were drowned out by the wail of worry emanating from the world's stock markets.

At any other time, a 10 percent increase in the worldwide sales of Remicade, the drug developed by Horsham-based Centocor Inc. , would warrant a second look. At $3.33 billion in sales, Remicade is one of the most lucrative drugs to emerge from Philadelphia's life-sciences sector.

Perhaps on another day, investors might have paid attention when DuPont chief executive officer Charles O. Holliday Jr. explained how the Wilmington company has benefited from compound annual sales growth rates of 18 percent in Asia's emerging markets.

It's hard to focus on tales of growth when so many are nervous about recession.

- Mike Armstrong

By a 9-6 vote, a panel of advisers to the Food and Drug Administration has approved Adolor Corp.'s first drug this afternoon. The next step for the Exton drug company is to await a decision by the FDA, which usually follows the advice of its expert panels.

Adolor shares never traded on Wednesday. Trading was halted pending the decision by the Gastrointestinal Drugs Advisory Committee. Adolor shares closed at $4.59 on Tuesday. Look for a small pop in the price on Thursday.

- Mike Armstrong

Doctors are voting with their prescription pads: They're writing fewer scrips for Vytorin and Zetia.

A Mount Laurel, N.J., company that tracks physician prescribing behavior said that primary-care doctors use of Vytorin, a drug marketed by Merck & Co. Inc. and Schering-Plough, has declined from 15 percent of new treatment decisions to 5 percent.

Cardiologists tracked by ImpactRX Inc. reported a decline from 15 percent of new treatment decisions to 8 percent.

Those drops shouldn't be surprised coming 10 days after the release a study by Merck and Schering-Plough that Vytorin, which combines simvastatin, one of the first cholesterol-lowering drugs developed, with Zetia, a newer generation cholesterol fighter, was not more effective than the generic simvastatin alone in lowering reducing build-up of plaque in the carotid artery.

But John Cain, vice president of marketing at ImpactRx, called the declines "puzzling" given that the American College of Cardiology recommended that doctors and patients do no make "major clinical decisions" solely on the basis of the recently released study.

In a statement he says:

The College specifically noted, 'There should be no reason for patients to panic,' but the data certainly indicate a change in attitude towards these drugs has occurred.

A spokesman for Merch and Schering-Plough told the Associated Press the companuies have pulled the "people who look like food" ads that have been running on television. Advertising Age said the latest turns in the Vytorin tale are "fanning the flames of public mistrust for the $5 billion direct-to-consumer drug industry."

- Mike Armstrong

Another Philadelphia-area company that named a new CEO is TargetRx Inc.

The Horsham company tapped Craig H. Scott as president and CEO, succeeding Michael J. Luby. Scott had been president of the Catalina Health Resource division of Catalina Marketing Corp. He left following the $1.7 billion buyout of St. Petersburg, Fla.-based Catalina in October.

Catalina Health has offices in Blue Bell.

Luby, who founded TargetRx, will remain on the board of directors and a full-time employee.

The small privately held company has developed a database to help pharmaceutical companies better under how physicians prescribe drugs. Drug companies use the information in an effort to make their sales and marketing programs more efficient.

Since June 2000, TargetRx has raised $37 million in venture capital from New Enterprise Associates, Domain Associates L.L.C., Acacia Venture Partners, Quaker BioVentures, Montagu Newhall Associates and Wasatch Advisors.

- Mike Armstrong

A Plymouth Meeting company that involved in distributing pharmaceuticals in China will ask shareholders to approve a new name.

Beijing Med-Pharm Corp. wants to be known as BMP Sunstone Corp.

Why? It turns out to be a condition of one of the many acquisitions Beijing Med-Pharm has done over the last few years. In September, it agreed to buy the remaining 51 percent of Hong Kong Health Care, which owns a unit called Sunstone.

Beijing Med-Pharm management tells shareholders in its annual proxy statement that taking the Sunstone name "will better identify the Company and its subsidiaries in" China.

No change for its stock symbol, which will remain BJGP.

- Mike Armstrong

Regular readers of this blog know that one way to measure the worth of an executive to a publicly held company is to watch the stock price.

After the market closed Monday, Endo Pharmaceuticals Holdings Inc. announced that its president and CEO, Peter A. Lankau, would resign as of March 1.

A spokesman had told Inquirer staff writer Linda Loyd last night that Lankau and the board "weren't in total sync." Looks like the market agrees.

Endo shares were up 9 percent, or $2.28, to $26.44 in afternoon trading. So Lankau's decision to resign is adding $300 million to the Chadds Ford drug maker's market value.

- Mike Armstrong

For the second time in less than a year, Neose Technologies Inc. is cutting employees. This time it will eliminate 35 percent of its staff, including its general counsel.

The Horsham biopharmaceutical company is in a cash crunch. Neose also said it was halting development of its key experimental anemia drug, NE-180. Not for reasons of safety or lack of efficacy. Rather, Neose hasn't been able to line up a partner to help it during mid-stage clinical trials.

"This decision allows us to forego $60 to $80 million of incremental spending over the next two years," said George J. Vergis, Neose president and CEO, in a statement.

Last March, Neose launched a restructuring, cutting its 78-person workforce by 40 percent.

Neose said it will focus its research and development operations on two projects with BioGeneriX and Novo Nordisk.

- Mike Armstrong

Peter A. Lankau will receive a payment of $1.94 million in connection with his resignation as CEO of Endo Pharmaceuticals Holdings Inc.

The Chadds Ford drug maker announced Monday evening that Lankau would resign as of March 1. A document filed with the Securities and Exchange Commission Wednesday contains the terms of the "separation agreement" between Endo and its CEO.

The lump sum payment amounts to two times Lankau's base salary of $606,000 and the target incentive compensation for 2008, which is 60 percent of his salary.

The company agreed to accelerate the vesting of 131,379 stock options that it had granted Lankau during 2004 and 2005.

(Those options, which will vest March 1, carry strike prices of either $16.47 or $20.22. At Endo's stock price of $25.79 shortly after noon, those options would be worth more than $755,000 if the options had vested today.)

An additional 256,250 stock options awarded to Lankau that have not vested will lapse. Lankau also has options totaling 168,750 shares that have vested. As of today, those options are underwater, meaning their strike prices are higher than the current market price.

- Mike Armstrong

Merck & Co. Inc. is under investigation by a grand jury over its sales and marketing practices for its withdrawn pain reliever, Vioxx, according to the Wall Street Journal.

The newspaper cites a person familiar with the matter. Merck declined to comment to the paper.

- Mike Armstrong

Before you send your next e-mail, double-check that "To..." field.

There's a lawyer at Philadelphia's Pepper Hamilton firm who wishes she did.

Portfolio.com says that instead of sending client correspondence to another attorney at Chicago-based Sidley Austin, the Pepper Hamilton lawyer e-mailed it to New York Times reporter Alex Berenson.

As Portfolio.com reported on its Web site, that was particularly touchy because Pepper Hamilton's client was Eli Lilly & Co. and Berenson writes about Big Pharma. Portfolio.com cited an unnamed pharmaceutical consultant who said the e-mail was intended for Bradford Berenson at Sidley Austin.

The Conde Nast property said the Times' Berenson received confidential information about settlement negotiations between Lilly and the U.S. Attorney's Office in Philadelphia involving improper marketing of the schizophrenia drug, Zyprexa. Berenson did write a story that appeared Jan. 31 that said prosecutors and Lilly were discussing a $1 billion settlement of a civil and criminal investigation.

Wow, what luck. The story sailed all over the Web. But one blogger was prompted to ask more questions.

The Drug and Device Law blog called Alex Berenson who said he did get an e-mail inadvertently from Pepper Hamilton, but it didn't have details about settlement talks. He got those from sources other than Pepper. (Berenson confirmed the blog's account.)

As for Pepper Hamilton, executive partner Robert E. Heideck said he would not comment because "this involves a firm client."

- Mike Armstrong

Quakertown-based Cellegy Pharmaceuticals Inc. has agreed to be acquired by a California specialty drug developer in a stock transaction.

Adamis Pharmaceuticals Corp. is a privately held firm working on treatments for viral infections, including influenza. Adamis CEO Dennis Carlo will become the head of the combined company.

Carlo is a heavy hitter from the West Coast, having been CEO of Immune Response Corp. and president of Telos Pharmaceuticals.

Cellegy has struggled financially, trying to develop Savvy, a contraceptive gel that has its roots in the West Philadelphia labs of a company called Biosyn.

- Mike Armstrong

The Federal Trade Commission late today sued Frazer, Pa.-based Cephalon Inc. over what it called anti-competitive behavior preventing competition to its sleep disorder treatment, Provigil.

Cephalon is paying four generic drug makers to refrain from selling generic versions of Provigil until 2012. It's a practice other pharmaceutical companies have engaged in.

But the FTC says that practice violates the law. It sued Cephalon in U.S. District Court in Washington, D.C.

In a news release, the commission's Bureau of Competition Director Jeffrey Schmidt said:

Today's suit against Cephalon seeks to undo a course of anticompetitive conduct that is harming American consumers by depriving them of access to lower-cost generic alternatives to an important branded drug.

Provigil, a treatment for narcolepsy and shift-work sleep disorder, has been a big seller for Cephalon.

- Mike Armstrong

You wouldn't think getting sued by a federal agency for unlawful marketing behavior would be catalyst for a company's shares to rise.

But yesterday Cephalon Inc. shares closed at $61.42, up $3.98, or nearly 7 percent.

That increase in value came less than a day after the Federal Trade Commission sued the biotechnology firm over deals it cut with potential generic drug competitors to forego the making cheaper copies of Cephalon's Provigil sleep-disorder drug until 2012.

Cephalon, in defending both its practice and patent validity for Provigil, had this to say after the FTC took action:

We are disappointed that the FTC has determined to challenge these agreements as we believe they fully comply with both the spirit and letter of the antitrust laws. As importantly, our settlements confer a meaningful benefit to U.S. consumers by providing for the entry of generic modafinil three years early.

Several analysts say that federal government has had little success in changing this industry practice. And it looks like the market agreed on Thursday.

- Mike Armstrong