About this Author
DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

Chemistry and Drug Data: Drugbank
Chempedia Lab
Synthetic Pages
Organic Chemistry Portal
Not Voodoo

Chemistry and Pharma Blogs:
Org Prep Daily
The Haystack
A New Merck, Reviewed
Liberal Arts Chemistry
Electron Pusher
All Things Metathesis
C&E News Blogs
Chemiotics II
Chemical Space
Noel O'Blog
In Vivo Blog
Terra Sigilatta
BBSRC/Douglas Kell
Realizations in Biostatistics
ChemSpider Blog
Organic Chem - Education & Industry
Pharma Strategy Blog
No Name No Slogan
Practical Fragments
The Curious Wavefunction
Natural Product Man
Fragment Literature
Chemistry World Blog
Synthetic Nature
Chemistry Blog
Synthesizing Ideas
Eye on FDA
Chemical Forums
Symyx Blog
Sceptical Chymist
Lamentations on Chemistry
Computational Organic Chemistry
Mining Drugs
Henry Rzepa

Science Blogs and News:
Bad Science
The Loom
Uncertain Principles
Fierce Biotech
Blogs for Industry
Omics! Omics!
Young Female Scientist
Notional Slurry
Nobel Intent
SciTech Daily
Science Blog
Gene Expression (I)
Gene Expression (II)
Adventures in Ethics and Science
Transterrestrial Musings
Slashdot Science
Cosmic Variance
Biology News Net

Medical Blogs
DB's Medical Rants
Science-Based Medicine
Respectful Insolence
Diabetes Mine

Economics and Business
Marginal Revolution
The Volokh Conspiracy
Knowledge Problem

Politics / Current Events
Virginia Postrel
Belmont Club
Mickey Kaus

Belles Lettres
Uncouth Reflections
Arts and Letters Daily
In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« More Imclone, More Food for Thought | Main | Mirror Stars »

March 10, 2002

Separation Anxiety

Email This Entry

Posted by Derek

Sepracor's really taken a pounding after an FDA "non-approvable" letter for their antihistamine compound. But they haven't been a quiet drug stock to be in, and it isn't a quiet company.

They certainly don't have a quiet business plan, either. As readers who are in the business are well aware, Sepracor doesn't develop any really new drugs. Instead, they look for "improved versions" (pure enantiomers or active metabolites) of existing ones. As the company says:

"In contrast to traditional new drug development, the safety and efficacy of the racemates and parent drugs of Sepracor's pharmaceuticals under development are often well understood before clinical trials begin. Parent drugs have been successfully taken through clinical studies and may have been on the market for years."

Well, yes, but what that leaves unspoken is that someone else did all that. And what it reallyleaves unspoken is that they didn't do it so that Sepracor could cash in with a second-generation compound. Friday's Wall Street Journal article on their stock plunge contained a line about Sepracor helping Schering-Plough develop their successor to Claritin, Clarinex. If you were to ask Schering, they'd probably tell you that Sepracor helped develop that one in much the same way that Blackbeard helped with jewelry shipments. Lilly felt the same way about the single-enantiomer version of Prozac that they ended up licensing.

Both companies were beavering away on these projects when Sepracor showed up with really unwelcome news: They informed Lilly and Schering that they had patent rights for the use of these second-generation compounds. This (as far as one can tell) completely blindsided both companies, who were sure that (as usual) their chemical matter and its uses was covered under their own patents.

Oops. Sepracor had done a more careful job of reading the existing patent claims, it turned out. There was great gritting of teeth at the companies involved (and probably great public flogging of the Legal departments,) but they both went ahead and signed deals. Sepracor got money upfront and a piece of the profits if the drugs made it to market.

They ended up going 1-for-2 on these, but not calmly. The Prozac enantiomer project with Lilly went into the clinic, where it proved, as expected, to be more active. It also proved to be more toxic. Oops. With that one gone, they needed Schering's compound, more than ever. It's finally hitting the market, but not without delays. Schering's problems with the FDA over manufacturing issues have caused Sepracor plenty of trouble. While Schering's stock price felt the pain, Sepracor (with fewer drugs in its portfolio) felt it even more. Clarinex was finally approved last December, and Sepracor went up almost 6% in one day.

They have several other examples of this strategy. The most successful has been licensing the second-generation form of Seldane back to Hoechst (now Aventis), where it's now known to the world as Allegra. So, what went wrongt this time? This compound was an active metabolite of Johnson and Johnson's Hismanal. While that worked with Clarinex, the danger is that active metabolites are new compounds, with new properties all the way. It's not like the single-enantiomer drugs, where at least patients have been getting dosed with the compound already. In this case, there were toxicology problems that Hismanal doesn't seem to have.

And what now for Sepracor? As has been apparent for many years now, their business model is based on a non-renewable resource - incomplete patent coverage. Those loopholes have closed decisively, since everyone now knows what will happen if they aren't. In that way, Sepracor's influence has been a good one on the industry, keeping everyone on their toes.

They've talked over the years about becoming a real, research-driven drug company, but I'll believe it when I see it. That requires costly infrastructure that they don't have, and entails a success rate that (last week's setback notwithstanding) is lower than they're accustomed to. And instead of fishing for drugs from a secluded spot, it would put them right in the big tank with the rest of the sharks.

Comments (0) + TrackBacks (0) | Category: Drug Industry History



Email this entry to:

Your email address:

Message (optional):

The Last Post
The GSK Layoffs Continue, By Proxy
The Move is Nigh
Another Alzheimer's IPO
Cutbacks at C&E News
Sanofi Pays to Get Back Into Oncology
An Irresponsible Statement About Curing Cancer
Oliver Sacks on Turning Back to Chemistry