Category Archives: Europe

Dublin Calling

What do companies such as Twitter, Facebook, and Google have in common with Pfizer, Amgen, BioMarin, Alkermes, and Jazz Pharmaceuticals?

All of them have set up international operations in Dublin, in part to reduce their tax bill and access the local, skilled biotech workforce.  The Twitter/Google/Facebook article is here, while biotech in Ireland is summarized here
Most of us know that Ireland has a low 12.5% corporate tax rate, making it an attractive place in Western Europe for an international operation. However, Ireland is…
…even more attractive because of “transfer pricing”. This is a tax law which allow the likes of Google to legally shuttle profit into and out of subsidiaries in Ireland and on to tax havens. Google, which funnels all its European revenues through Dublin, pays 2.4% tax on operations outside the US.
Unlike such as Luxembourg, companies have to have “real” operations in Ireland, and not just letter boxes, to qualify for these arrangements. Regardless, a lower tax rate, coupled with a freedom to move profits to tax havens, means that international companies can have their cake and eat it too. In other words, they can set up an international operation close to Europe in an English-speaking country with a highly skilled workforce AND enjoy lower taxes.
For years, the debate over the repatriation of profits held overseas has raged in Congress, and with unemployment approaching 10%, it may become an election issue in 2012.
Regardless, what Ireland is showing all of us, especially its neighbors in London, Oxford, and Cambridge, is that a business-friendly, tax-friendly environment can attract life science business and growth.

A Rainy Day for Spanish Pharmacists

Yesterday’s Financial Times reported that pharmacists in Spain are struggling to continue operating their businesses due to a lack of payment from the Regional governments.

“We depend 80 to 90 per cent on the health system, and it’s the first time they’ve stopped paying,” says Ms Espinosa, who is president of the regional pharmacists’ federation. The government owes them €150m ($216m) in unpaid bills – and that is only the debt to the pharmacies of one region. “They say there’s no money, that their predecessors spent it all.”

While the article is focused on the region of Castilla-La Mancha, it is likely that pharmacists in other autonomous regions are experiencing the exact same issues.

GSK gets it

As FiercePharma correctly points out, GSK’s Q II report reflects the overall industry trends quite accurately:

The rest of Glaxo’s report, like the rest of Big Pharma’s Q2 results so far, reflect current industry trends; sales in U.S. and Europe are on the wane, thanks in part to pricing pressures from cash-strapped governments. Cost-cutting helped deliver bottom-line improvements, and that drive will continue. The company has already identified another £300 million worth of cuts to annual spending, bringing the restructuring savings to £2.5 billion a year. Plus, GSK is eyeing more cost reductions, some of which mimic Novartis’ efficiency efforts, namely supply-chain and procurement efficiencies, and cash-conversion improvements.

The full GSK report (PDF) is here (link). Reports from Reuters, WSJ, and Fierce are also out there.

Update: Pain continues to be painful

This week we learn that two novel pain medications will never see the light of day:

Novartis had reached the market with the COX-II inhibitor Prexige (rebranded as the unusually positive name of Joicela), until regulators forced Novartis to pull the drug from the market in 2007. Taking a biomarker/ personalized medicine approach did not appear to appease regulators:

Joicela was resubmitted to the European watchdog with its biomarker on Dec. 3, 2009, and at the time of the withdrawal it was under review by the agency’s Committee for Medicinal Products for Human Use (CHMP).

Novartis said it had decided to pull its application because it was unable to provide the additional data requested by the CHMP within the timeframe of the current procedure.

Perhaps more disappointing was the decision by NicOx to withdraw its European application for naproxcinod, an innovative NSAID molecule which was rejected by the US FDA:

NicOx said on Wednesday it was evaluating options for the drug’s “potential further development” in Europe after an EU health expert panel said it would not adopt a formal positive opinion for its approval based on the clinical data provided.

But analysts doubted naproxcinod had any future after its double flop.

“It (naproxcinod) is dead,” says a Paris-based analyst who declined to be identified. “Now it will be wait and see what steps management will take next, how they could approach potential merger partners.”

This is rather unfortunate for chronic pain patients. A gap persists between medications to treat mild pain (acetaminophen, paracetamol) and severe pain (morphine, other opioids). Drugs such as tramadol and tapentadol have stepped into the breach, but nether of these agents are without their issues when used to treat chronic pain.

We are also aware of a highly interesting COX-II derivative with Phase II data that will also never see the light of day for fears of running into regulatory issues.

So where is the innovation in pain management? Until some novel NCEs make it, we will likely continue to see novel drug delivery-based products using established (approved) molecules. As some of our clients can confirm, there is no shortage of interest in this therapeutic area, but who will have the regulatory & clinical courage to enter the breach?

Update (May 10, 2011): There is one bit of good news. QRxPharma has recently completed Phase III enrollment for their interesting morphine / oxymorphone combination product. As mentioned, in the absence of NCEs, we need better drug delivery approaches using previously approved meds in pain management.