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LILLY HALTS XIGRIS TRIAL ENROLLMENT FOR PEDIATRIC PATIENTS; DRUG UNLIKELY TO MEET PRIMARY ENDPOINT ------------------------------------------------------------------------------- Eli Lilly and Co. stopped enrollment in a study of Xigris (drotrecogin alfa [activated]) in pediatric patients with severe sepsis on the recommendation of an independent data monitoring committee (DMC).

Lilly issued a letter to health care professionals informing them that the trial had been halted and noted that Xigris is not indicated for use in pediatric severe sepsis.

The letter said the study's DMC recommended ending the trial after a planned interim analysis demonstrated that the drug was "highly unlikely to show an improvement over placebo in the primary endpoint of 'composite time to complete organ failure resolution' over 14 days."

The DMC also reported an increased rate of central nervous system bleeding in the Xigris group as compared with the placebo group, according to the letter, which was posted on the Food and Drug Administration's Web site Thursday.

During the infusion period, four patients treated with Xigris and one patient in the placebo group experienced an intracranial hemorrhage event. Three of the four events in the Xigris group occurred in patients aged 60 days or younger, Lilly noted.

The rate of serious adverse events, overall serious bleeding events, major amputations and mortality appeared to be similar in the two groups.

Lilly said patients who are already enrolled will continue to be followed for the duration of the 28-day study period. Full data results will be available later this year and will be presented "as soon as possible."

Xigris is currently indicated for the treatment of adult patients with severe sepsis who have a high risk of dying.

In March, Lilly and the FDA issued a warning to health care professionals stating that patients with single organ dysfunction and recent surgery "may not be at high risk of death and therefore may not be indicated for Xigris." Lilly cautioned that these patients may be at an increased risk of death if they use Xigris. -=-

GSK EXPECTS PAXIL, AVANDAMET MAY RETURN TO MARKET BY MID-2005 ------------------------------------------------------------------------------- GlaxoSmithKline Plc said its antidepressant Paxil CR (paroxetine hydrochloride, controlled release) and diabetes treatment Avandamet (rosiglitazone maleate/metformin hydrochloride) could be back on the market by the middle of the year, after being seized by the Food and Drug Administration for failure to meet standards for safety, strength, quality and purity.

The company and the FDA reached an agreement that includes an independent expert review of processes at GSK's plant in Puerto Rico, where the seized drugs were manufactured, to ensure compliance with the FDA's good manufacturing practice. GSK also agreed to a provision requiring it to provide a report on any deficiencies identified in the review.

GSK said the FDA did not impose any fines, although the company could face penalties as high as $10 million if it fails to meet the terms of the agreement.

Additionally, pursuant to a 1996 licensing agreement between GSK and SkyePharma Plc regarding Paxil CR, GSK agreed to make a one-time payment of approximately $10 million to SkyePharma. SkyePharma is also entitled to an increase in the royalty rate to 4 percent on actual net sales of the drug (up from 3 percent), effective as of March 4, 2005, when the drug was taken off the market. GSK also agreed, subject to other terms of the agreement, to pay SkyePharma the same level of royalty on budgeted sales of the drug while the product remains off the market. -=-

SANTARUS SUBMITS NEW DRUG APPLICATION FOR ZEGERID CAPSULES AHEAD OF THIRD-QUARTER TARGET ------------------------------------------------------------------------------- Santarus Inc. submitted a New Drug Application to the Food and Drug Administration for Zegerid (omeprazole) capsules, 20 mg and 40 mg, as the first immediate-release proton pump inhibitor in capsule form for the treatment of heartburn and other symptoms of gastroesophageal reflux disease (GERD), erosive esophagitis, duodenal ulcers and gastric ulcers.

The NDA includes data from two open-label, randomized, crossover, pharmocokinetic/pharmocodynamic (PK/PD) trials, one for the 40 mg capsule and one for the 20 mg capsule, which were completed in November. The trials compared PK/PD profiles of Zegerid capsules and an equivalent dosage strength of delayed-release omeprazole in 36 healthy subjects. The trials demonstrated that Zegerid and delayed-release omeprazole capsules had statistically similar bioavailability, safety profiles and percent decrease in gastric acidity from baseline to day 7. However, as expected, Zegerid had a greater maximum plasma concentration and required a shorter amount of time to reach maximum plasma concentration.

Zegerid is currently available in an immediate-release powder form for oral suspension. The company expects to submit an NDA for Zegerid chewable tablets in the third quarter.

"Completing the Zegerid capsules 40 mg and 20 mg NDA submission ahead of our previously announced third-quarter target reflects our commitment to expanding the Zegerid product family and making immediate-release solid dosage PPI products available for physicians and patients," said Gerald Proehl, chief executive officer of Santarus.

"We believe the commercial availability of our capsule product will broaden Zegerid usage, as capsules may be more convenient for patients taking Zegerid on a chronic basis," he added. -=-

GSK, ASTRAZENECA BEAT ANALYSTS' Q1 EXPECTATIONS ------------------------------------------------------------------------------- GlaxoSmithKline Plc beat analysts' expectations for earnings and turnover in the first quarter of 2005.

GSK reported first-quarter diluted earnings per share of approximately $0.40 compared with approximately $0.34 in the first quarter of 2004. Turnover for the first quarter increased from approximately $9.17 billion in 2004 to approximately $9.51 billion in 2005.

On average, analysts expected earnings of approximately $0.37 per share and turnover of approximately $9.43 billion, Reuters reported.

GSK attributed the positive results to strong performances by its asthma therapy Advair (fluticasone propionate/salmeterol xinafoate) and its diabetes treatment Avandamet (rosiglitazone maleate/metformin hydrochloride).

For 2005, GSK said it expects earnings per share growth in the low double digits.

AstraZeneca Plc also beat analysts' expectations with a strong first quarter. The company reported earnings per share of $0.63, compared with $0.47 per share in the same period last year.

Sales for the quarter increased from $5.07 billion in 2004 to $5.74 billion in 2005.

On average, analysts surveyed by Reuters had anticipated earnings per share of $0.58 and sales of $5.57 billion.

Tom McKillop, AstraZeneca's chief executive officer, said the company's "record profits derive from a strong sales performance, especially for our key growth products, and from ongoing productivity improvements . . . ."

AstraZeneca kept its full-year guidance for earnings per share of $2.35 to $2.50, noting that earnings-per-share growth is expected to be somewhat weaker in the second half of the year.

GSK shares closed at $49.76, up $2.35, or almost 5 percent, in heavy trading on the New York Stock Exchange while AstraZeneca shares closed at $43.60, down $0.11, or 0.3 percent, in moderate trading also on the New York Stock Exchange. -=-

BMS REPORTS FALLING PROFITS BASED ON POOR DRUG SALES ------------------------------------------------------------------------------- Bristol-Myers Squibb Co. reported first-quarter net earnings of $621 million, or $0.32 per diluted share, in 2005, down from $964 million, or $0.49 per diluted share, in the first quarter of last year.

Excluding special items, the company earned $0.34 per share from continuing operations, which is in line with analysts' expectations, according to Reuters Estimates.

However, net sales of $4.53 billion, down from $4.63 billion in the same period last year, were less than the anticipated $4.68 billion.

BMS attributed the decreases in earnings and sales to generic competition and lower sales of its cholesterol-lowering drug Pravachol (pravastatin sodium).

The company's guidance for 2005 remains unchanged. They expect earnings per share from continuing operations of $1.35 to $1.45, excluding special items--a 15 percent to 21 percent decline from last year. Reuters Estimates reported an average forecast by analysts of $1.40 per share for the year.

In separate news, Sunesis Pharmaceuticals Inc. obtained worldwide development and marketing rights to BMS' targeted small molecule cancer compound BMS-387032 (now SNS-032). Under the agreement, Sunesis will give BMS an up-front equity stake in the company worth $8 million, as well as milestone payments of as much as $29 million in cash and equity. Sunesis will also make royalty payments to BMS based on net sales if the drug is successfully developed and approved.

BMS also entered into an exclusive license agreement with Elixir Pharmaceuticals Inc., giving Elixir worldwide development and marketing rights to BMS' growth hormone secretagogue, BMS-604992, and five related compounds, according to Elixir. Elixir said that under the agreement BMS will receive an undisclosed up-front license fee in cash and stock, development-based milestone payments and royalty payments if the compound is approved. Other terms of the agreement were not provided.

BMS shares closed at $27.12, down $0.58, or 2.1 percent, in moderate trading on the New York Stock Exchange. -=-

ELAN POSTS GREATER NET LOSS, DECREASED REVENUE IN Q1 2005; EXECUTIVES HOPE FOR TYSABRI'S RETURN TO MARKET ------------------------------------------------------------------------------- Elan Corp. Plc's net loss increased 86 percent in the first quarter of 2005 following the voluntary suspension in February of multiple sclerosis drug Tysabri (natalizumab), which Elan co-developed with Biogen Idec Inc.

Elan reported a net loss of $115.6 million, or $0.29 per share, for the first quarter of 2005, compared with a net loss of $62.2 million, or $0.16 per share, in the first quarter of 2004.

Analysts polled by Reuters had expected a median net loss of $0.32 per share.

Elan's revenue fell 31 percent in the first quarter to $102.7 million, down from $148.3 million in the comparable period of 2004.

Despite the disappointing earnings, Elan's shares rose 10.4 percent Thursday as company officials remain hopeful that Tysabri might return to the market.

According to Reuters, Kelly Martin, Elan's chief executive officer, said in an interview, "I certainly believe that, given the unmet medical need and given the efficacy of Tysabri, that this will ultimately be back in the hands of patients and their doctors."

In a CNBC interview Thursday morning, Biogen Idec's CEO, James Mullen, said both companies hoped a review of Tysabri's safety profile would allow the therapy to be used by certain patients, MarketWatch reported. Mullen added that company officials will be meeting with regulators in the months ahead and that the safety review should be completed by late this summer.

Biogen Idec and Elan suspended Tysabri sales in late February after one patient died from progressive multifocal leukoencephalopathy (PML) while participating in an MS clinical trial of the drug in combination with Biogen Idec's Avonex (interferon beta-1a). In early March, the companies confirmed a second trial patient's diagnosis of the same disease. Later in March, the companies confirmed that a third patient had developed PML in a clinical trial of Tysabri for the treatment of Crohn's disease; it was determined that this patient died from PML rather than from a brain tumor, as was originally diagnosed.

Shane Cooke, Elan's executive vice president, said the company took "immediate actions" after Tysabri's suspension, including steps to cut its operating cash burn by $100 million to $250 million in 2005. He said these actions, in addition to the strong performance by the company's drug technology operations, "will drive the business, excluding Tysabri, to a targeted break-even on an [earnings before interest, taxes, depreciation and amortization] basis by the end of 2005."

Cooke added that when the safety evaluation of Tysabri is finished, the company will make any additional adjustments to its cost structure deemed necessary.

Elan shares closed at $4.69, up $0.44, in moderate trading on the New York Stock Exchange. -=-

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NOVARTIS AG ------------------------------------------------------------------------------- Novartis AG signed an agreement with Avanir Pharmaceuticals for the development of orally active small molecule therapeutics that target macrophage migration inhibitory factor (MIF); the products are intended to treat inflammatory diseases. Avanir could receive more than $200 million in total up-front and milestone payments, should the company achieve specific development, regulatory and sales objectives. Avanir is also eligible to receive increasing royalties on worldwide sales. In addition, Avanir will receive up to $2.5 million per year for up to four years from Novartis to fund research. Novartis will be responsible for all development expenses, and both companies will contribute intellectual property and expertise. -=-

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GENENTECH INC. ------------------------------------------------------------------------------- Genentech Inc. was licensed exclusive rights to use ImmunoGen Inc.'s Tumor-Activated Prodrug (TAP) technology with therapeutic antibodies to "an undisclosed target." TAP technology uses tumor-targeting antibodies to deliver cell-killing agents to cancer cells, ImmunoGen stated. The current agreement between the companies stems from a previous agreement granting Genentech certain rights to test TAP technology using Genentech antibodies to specific targets. According to the original agreement, Genentech must license the use of TAP technology for each target separately. In return, ImmunoGen will receive a $1 million license payment and is entitled to milestone payments and royalties on sales of products developed under the agreement. Genentech is responsible for developing, manufacturing and marketing the resulting products. -=-

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UNITEDHEALTH GROUP INC. ------------------------------------------------------------------------------- UnitedHealth Group Inc. intends to launch a drug registry that will use its 11-million-member database to identify potential drug safety problems, The Wall Street Journal reported. UnitedHealth anticipates marketing the registry, which will provide virtually real-time claims information, as early as this summer. UnitedHealth plans to sell quarterly and annual reports on the data, as well. According to The Journal, Steven Galson, acting director of the Food and Drug Administration's Center for Drug Evaluation and Research, said his agency has discussed using information from the registry "to the extent we have the funding." -=-

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GENEREX BIOTECHNOLOGY CORP. ------------------------------------------------------------------------------- Generex Biotechnology Corp. said the first set of patients have received AE37, a therapeutic vaccine developed by its Antigen Express subsidiary, as part of a Phase I trial. The trial will enroll 16 to 24 patients and will focus on generating a specific immune response to a target critical to the growth of HER-2/neu tumor cells. The HER-2/neu gene occurs in patients with various cancers and is found in a significant percentage of breast cancer patients, according to Generex. The companies hope the vaccine will stimulate T helper cells to produce an effective, long-lasting immune response that can destroy distant tumor cells in addition to those at the primary tumor site. -=-