Healthcare Brands

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UnitedHealth to acquire PacifiCare for approximately $8.1 billion

UnitedHealth Group Inc. signed a definitive agreement to acquire PacifiCare Health Systems Inc. for approximately $8.1 billion in cash and stock.

PacifiCare shareholders will receive 1.10 shares of UnitedHealth and $21.50 in cash for each PacifiCare share. UnitedHealth said the total consideration for the transaction is a combination of approximately 111.6 million shares and $2.2 billion, or approximately $8.1 billion at UnitedHealth's current stock price. UnitedHealth also said it intends to retire $1.1 billion of PacifiCare debt at the closing.

According to Reuters, UnitedHealth and PacifiCare have approximately 23 million and 3 million health plan members, respectively, bringing the combined total close to WellPoint Inc. and its more than 28 million health plan members.

The transaction, which is expected to close late this year or early in 2006, will help UnitedHealth tackle the growing Medicare market as PacifiCare is one of the largest private administrators of Medicare health plans and plans to play a big role in Medicare's impending prescription drug plan, The Wall Street Journal reported.

UnitedHealth said that it expects its stand-alone earnings per share will increase by at least 15 percent in 2006 compared with 2005, "without consideration of gains from UnitedHealth Group's own Medicare Part D programs or from the acquisition of PacifiCare."

"The transaction combines PacifiCare's extensive network of high-quality health care providers and services across the West with UnitedHealth Group's organized system of care providers and clinical Centers of Excellence programs throughout the United States, its significant capabilities and technologies to support consumers and its leadership role in making the health care system work better for multiple and diverse constituencies, including the uninsured," UnitedHealth said.

"In one noteworthy area of focus, the business combination will improve access to affordable health care services for seniors by creating an expanded company focused on their unique needs," the firm added.

The firm added that the acquisition will immediately boost its earnings upon closing, increasing earnings per share by approximately $0.05 to $0.06 in the first 12 months.

PacifiCare shares closed at $77.09, up $4.41, or 6.1 percent, while UnitedHealth shares closed at $53.50, up $0.27, or 0.5 percent. Both stocks were traded heavily on the New York Stock Exchange.

Healthcare Brands

Trial evaluating Celebrex as lung cancer treatment reactivated

Researchers reactivated a trial studying Pfizer Inc.'s COX-2 inhibitor Celebrex (celecoxib) as a treatment for lung cancer after completing a thorough re-evaluation of the program and adding new patient monitoring guidelines.

Last December, Pfizer and the National Cancer Institute (NCI), the trial's funding source, asked that the University of Texas M.D. Anderson Cancer Center voluntarily suspend the trial until the drug's cardiovascular risks could be assessed. In February 2005, a Food and Drug Administration advisory panel examining the safety of COX-2 inhibitors concluded that Celebrex appeared to be associated with the fewest cardiovascular problems in the drug class, though study-related data were limited.

According to the M.D. Anderson Cancer Center, advisors to the FDA recommended in February that Celebrex continue to be evaluated in the treatment and prevention of cancer. The NCI supported this conclusion, asking that researchers "weigh the risks and benefits of the drug for their specific clinical setting."

To mitigate cardiovascular risks, investigators will now closely track patients' blood pressure and lipid counts for any changes. Participants will receive outpatient tests such as a diagnostic bronchoscopy at the beginning, middle and end of the study. Those who have had myocardial infarctions and strokes will be excluded from taking part in the trial. Participants enrolled before the trial's suspension will have the opportunity to re-enroll so the full protocol can be completed.

Also, treatment with Celebrex will be limited to six months. Initial signs of increased risk of cardiovascular events associated with the drug were previously seen after 12 months during colon cancer prevention studies, the M.D. Anderson Cancer Center said.

"At this point, there is nothing available to deter lung cancer in smokers, even in those who have quit," said Dr. Jonathan Kurie, the trial's principal investigator. "In looking at the data, we believe the potential benefit to the patient is greater than the risk, and we have ample safeguards in place to monitor patients even more closely than they are now. We continue to believe this drug has potential to reduce the risk of lung cancer and that is a tremendous opportunity not to be overlooked.

"Lab studies have shown that COX-2 is expressed at a high level in lung cancer," Kurie added. "They may be triggering inflammation, which we suspect plays a role in lung cancer."

The trial--which Kurie said is approximately two-thirds complete--began in 2003 with the goal of enrolling 200 current and former smokers.

Healthcare Brands

FDA approves Par's Megace ES for treating weight loss among patients with AIDS

The Food and Drug Administration approved Par Pharmaceutical Co. Inc.'s Megace ES (megestrol acetate) for the treatment of anorexia, cachexia or unexplained, significant weight loss in patients with AIDS.

The first branded product developed by Par, Megace ES is an advanced, concentrated formulation of megestrol acetate oral suspension, a commonly prescribed appetite stimulant. Two randomized, placebo-controlled trials showed the product stimulated or improved appetite, increased mean caloric intake per day and increased average weight gain when compared with placebo.

Par said Megace ES uses Elan Pharma International Ltd.'s NanoCrystal Technology delivery system, leading to improved rates of both dissolution and bioavailability when compared with the original megestrol acetate oral suspension. Specifically, Megace ES minimizes the reduced bioavailability of the original formulation that occurs on an empty stomach. Thus, Megace ES may be taken without regard to meals.

Additionally, patients only need to take one-fourth the volume of the original product, or 625 mg/5 mL of Megace ES once daily. A bioavailability study indicated a lower volume of Megace ES achieved maximum blood concentrations quicker than the oral suspension products currently available.

The FDA's approval of the drug was based on pharmacokinetic studies showing that 625 mg/5 mL of Megace ES was the bioequivalent of 800 mg/20 mL of megestrol acetate oral suspension during the fed state.

Par has licensed the trade name, Megace, from Bristol-Myers Squibb Co.

Healthcare Brands

FDA grants priority review to sNDA for OSI's cancer drug, Tarceva

The Food and Drug Administration granted a priority review designation to OSI Pharmaceuticals Inc.'s supplemental New Drug Application for Tarceva (erlotinib) to be used with Eli Lilly and Co.'s Gemzar (gemcitabine hydrochloride) chemotherapy for the treatment of advanced pancreatic cancer in patients who have not received previous treatment.

OSI said the priority review status means the FDA has until Nov. 2, 2005, to take action on the sNDA.

OSI and Genentech Inc. co-market Tarceva in the United States; F. Hoffman-La Roche Ltd. sells Tarceva outside the United States. The FDA's acceptance of the sNDA triggers a $7 million milestone payment by Genentech to OSI.

"Tarceva is the only [epidermal growth factor receptor] therapy shown to provide a statistically significant survival benefit in patients treated in first-line locally advanced or metastatic pancreatic cancer in combination with [Gemzar]," OSI said.

Tarceva is currently approved as a monotherapy for patients with locally advanced or metastatic non-small cell lung cancer after at least one prior chemotherapy regimen has failed.

Healthcare Brands

Seattle Genetics to discontinue development of SGN-15

Shares of Seattle Genetics Inc. fell 3.9 percent after the company said it will discontinue development of SGN-15, a first-generation antibody-drug conjugate (ADC), to focus on its other programs and ADC technology.

Phase II data presented in Barcelona, Spain, at the 11th World Conference on Lung Cancer showed that the administration of SGN-15 three days prior to sanofi-aventis Group's Taxotere (docetaxel) led to greater synergy and drug effect than when both drugs were administered simultaneously.

The two open-label trials were designed to evaluate the optimal dosing schedule of SGN-15 with Taxotere chemotherapy in patients with non-small cell lung cancer who had failed front-line or both front-line and second-line therapies. To measure metabolic activity of the primary tumor before and after therapy, positron emission tomography images were analyzed by quantitative assessment of tumor standard update value. Based on the average decrease in standard update value, both studies suggested that patients who received sequential dosing had an advantage.

"However, given the strength and diversity of the other products in our pipeline, we have decided not to continue development of SGN-15 and instead will evaluate out-licensing opportunities for the program," said Clay Siegall, chief executive officer of Seattle Genetics. "This decision enables us to focus our resources and development activities on advancing the many other promising programs in our pipeline."

These products include SGN-30 and SGN-40, potential therapies currently in clinical trials for the treatment of lymphoma, multiple myeloma and Hodgkin's disease. Also, SGN-33 and SGN-35 are expected to begin clinical trials within one year, and SGN-70 and SGN-75 may be candidates for Investigational New Drug applications in 2007 for the treatment of hematologic malignancies and renal cancer, respectively.

Moreover, the firm is using its second-generation ADC technology in SGN-35 and SGN-75 and in partnerships with other pharmaceutical companies.

Seattle Genetics shares closed at $5.38, down $0.22, in heavy trading on the Nasdaq.

Healthcare Brands

Astellas drops three investigational drugs; QLT gains rights to Aczone

Astellas Pharma Inc. dropped three drug candidates from its pipeline, Reuters reported, allowing QLT USA Inc. to acquire marketing rights to Aczone (dapsone) gel in the Unites States, Canada and Mexico.

Astellas, which was formed through the merger of Yamanouchi Pharmaceutical Co. Ltd. and Fujisawa Pharmaceutical Co. Ltd., dropped its investigational hypotension drug FK352B and psoriasis gel FK506 after the company conducted economic and efficacy reviews of its pipeline, Reuters stated.

By mutual agreement, QLT Inc. and Astellas U.S. LLC also ended their collaboration, licensing and supply partnership, enabling QLT's acquisition of worldwide rights to Aczone for the treatment of inflammatory and noninflammatory acne. QLT is awaiting a response from the Food and Drug Administration regarding Aczone's New Drug Application filing last summer.

"[A]lthough FDA action on the product is imminent, the labeling suggested by the FDA may initially affect the market profile of the product," Astellas said.

Reuters reported that at a news conference, Astellas' President Toichi Takenaka said the firm's pipeline is better this year than last, but it would not be sufficient to offset damage from patent expirations for its blockbuster drugs in 2008 and 2009.

"We will keep accelerating development of our drug pipeline so that we can overcome the 2009 [patent expiration] problem," he said.

Healthcare Brands

Healthcare Brands
Merck & Co. Inc.

Merck & Co. Inc. and Sumitomo Pharmaceuticals Co. Ltd. agreed to collaborate on SM13496 (lurasidone), an atypical antipsychotic compound currently in Phase II trials as a treatment for schizophrenia. Through an affiliate, Sumitomo granted Merck an exclusive, worldwide license for SM13496, excluding Japan, China, Korea and Taiwan. Sumitomo will receive an initial payment, milestone payments and royalties on net sales while also retaining the option to co-promote the drug in the United States. Merck said SM13496 has shown antipsychotic efficacy in early clinical trials conducted by Sumitomo.

Healthcare Brands

Healthcare Brands
Novartis AG

Novartis AG and Procter & Gamble Pharmaceuticals Inc. (P&GP) entered into an agreement to co-promote and further develop Enablex (darifenacin) extended-release tablets for the treatment of overactive bladder (OAB) in the United States. Novartis said it will continue to record revenues for Enablex and will pay P&GP royalties based on the drug's sales performance. The firms will also have the option of collaborating in over-the-counter commercialization if they both choose to do so. Analysts cited by Dow Jones Newswires expect the drug to have revenue, in its best year, of between $185 million and $700 million. Enablex was approved in December 2004 for the treatment of OAB with urge urinary incontinence, urgency and frequency.

Healthcare Brands

Healthcare Brands
BioMarin Pharmaceutical Inc.

BioMarin Pharmaceutical Inc. eliminated 58 positions, most of which were related to the sale of Orapred (prednisolone sodium phosphate oral solution), the company's asthma exacerbation drug. The move was the result of increased generic competition and will save approximately $3 million in operating expenses in 2005. The firm also increased its sales guidance for Aldurazyme (laronidase), used as a treatment for the genetic disease mucopolysaccharidosis I, and reduced its sales guidance for all Orapred products.

Healthcare Brands

Healthcare Brands
Kos Pharmaceuticals Inc.

Kos Pharmaceuticals Inc. began the AIM-HIGH study to evaluate whether or not a combination of Kos' Niaspan (niacin extended-release) tablets and Merck & Co. Inc.'s Zocor (simvastatin) is superior to Zocor alone at preventing cardiovascular events. Specifically, the six-year, 3,300-patient trial will determine whether both Niaspan's treatment of low HDL cholesterol and Zocor's treatment of high LDL cholesterol provide an additional benefit. Kos expects the combination will lead to a 25 percent reduction in cardiovascular events when compared with a statin alone.

Healthcare Brands

Healthcare Brands