Stephanie Sutton was an assistant editor at Pharmaceutical Technology Europe.

Stephanie Sutton

Alkermes purchased Elan’s Elan Drug Technologies (EDT) unit in a cash and stock transaction worth approximately $960 million. The two companies will be merged into a new holding company in Ireland under the name Alkermes plc.

 explained that Elan will receive $500 million in cash and $31.9 million in ordinary shares of the new company’s common stock. Alkermes believes that the transaction will be immediately accretive to its cash earnings. The combined company is expected to have annual growing product, royalty, and manufacturing revenues in excess of $450 million.

“The merger will be financially transformative and create a profitable, global biopharmaceutical company with a diversified central nervous system product portfolio and a strong foundation for growth,” Richard Pops, chairman, president, and CEO of Alkermes, said in the statement. “This merger will bring the scale and resources for strategic and balanced investment across the whole product continuum, from [research and development] innovation to clinical development, to world-class manufacturing and commercial expansion.”

, Elan had been trying to find a buyer for its EDT unit since 2008, but ran into problems when the economic crisis occurred. Now that the unit has a buyer, Elan has achieved several of its long-standing strategic and financial objectives. “It enables us to reduce the debt on our balance sheet and further improve our capital structure, increases operating leverage, [and] allows for additional focus and continued disciplined investment in a broad array of opportunities within the neurology space from a scientific, clinical, and product point of view,” explained Kelly Martin, CEO of Elan.

Pops will head the new company, while Shane Cooke, the current executive vice-president and head of EDT, will become president of the new Alkermes. The board will include members of the current board of Alkermes, but Elan will have the right to appoint one independent director if it maintains a 10% stake in the company. The deal requires approval from Alkermes’s shareholders and the regulatory authorities, but is expected to close in the third quarter of 2011.

Articles

Alkermes purchased Elan?s Elan Drug Technologies (EDT) unit in a cash and stock transaction worth approximately $960 million. The two companies will be merged into a new holding company in Ireland under the name Alkermes.

Alkermes Snaps up Elan Drug Technologies

How do you measure innovation in outsourcing? 

Outsourcing can have its benefits, but how often do we bother to measure the actual value of our outsourcing relationships? Or the innovation they deliver? In Europe, at least, the answer is: not very often. 

According to a study conducted by business consultancy services provider, Cognizant and the UK's Warwick Business School, about two-thirds of companies don't attempt to measure the value of innovation gained 

outsourcing. The study encompassed 250 chief innovation officers (CIOs) and chief financial officers (CFOs) in Europe, and examined their attitudes about outsourcing for innovation. 

Ironically, most CIOs and CFOs seem fully aware of the benefits that outsourcing brings. More than 60% of CIOs turn to outsourcing companies for innovation and 50% said they would be willing to pay more for an outsourced service that enables them to maintain innovation within their industry. Threequarters of respondents (70%) also believe that innovation achieved through outsourcing contributes to their organisation's financial performance. The study also notes that more is being spent on outsourcing now than at any other point during the past.  

 in an interview, Sanjiv Gossain, UK MD of Cognizant, explained the problem in greater detail. "While businesses are clearly turning to outsourcers to aid and deliver innovation within their organisations, many are missing a major opportunity to demonstrate the successful impact that this innovation is having within the organisation. This can only mean that money is being wasted by investment into innovation initiatives that are not delivering tangible results." 

So why are so few companies actually measuring the value and innovation that they get from their investment? 

One major hurdle lies in actually finding a method to successfully measure the value of outsourcing and the innovation it delivers. "The problem comes with defining innovation and educating businesses on how to successfully measure it to prove its impact on the company's bottom line," Gossain told 

Ilan Oshri from Warwick Business School explained that the management of innovation is a key weakness in many businesses. However, Warwick Business School is now in the process of conducting qualitative research among C-level executives in more detail to put a figure on the value of innovation and further investigate the links between outsourcing and client organisations. The final findings will be available in a report later this year, available for download at 

This isn't the first time that Cognizant and Warwick Business School have examined outsourcing issues. In 2009, they conducted a study about the benefits of outsourcing beyond the one-time cost saving. The results revealed that less than half of CIOs and CFOs try to calculate the impact of outsourcing on their business. If you missed out on this then you can catch up in the October and November 2009 issues of

"This new research into innovation, and the accompanying academic report due later this year, is a natural extension of our former study," said Gossain. "Modern outsourcing relationships now offer and deliver far more than just cost savings. Clients are now looking for more value from their outsourcing partnerships and innovation is a big part of this. This is a shift we are seeing across the industry." 

Modern outsourcing relationships should help a business to innovate, and metrics should be established at the very beginning. It is also important to appraise any financial benefits that outsourcing for innovation offers.   

"In order to drive repeatable innovation, companies need to establish a framework with their outsourcing partners to determine their objectives and formalise the innovation achieved," said Gossain. "Developing metrics will also help the C-level share the results and prove the worth of outsourcing-led innovation." 

Pfizer has sold Capsugel to Kohlberg Kravis Roberts & Co L.P for approximately $2.4 billion. Capsugel's headquarters will remain in New Jersey and any Pfizer staff dedicated to the business will be transferred to Capsugel. 

Sanofi-aventis has, at last, gained full control over Genzyme, bringing the much talkedabout acquisition deal between the two companies to a close. The deal, which has been under negotiation since August 2010, will give sanofi an extended presence in the field of biotechnology and, in particular, rare diseases.  

AstraZeneca has paid $1.1 billion to settle a dispute with UK and US tax authorities concerning transferpricing arrangements for the company's US business. The amount, however, is lower than the company had anticipated. As a result, AstraZeneca will add $500 million to its first-quarter earnings for 2011. 

The global market for biosimilars is set to grow from $243 million in 2010 to $3.7 billion in 2015, according to Datamonitor. One of the key drivers for growth will be the loss of patent exclusivity for many branded products. More than 30 branded biologics with sales of $51 billion will lose patent exclusivity by 2015.  

Outsourcing can have its benefits, but how often do we bother to measure the actual value of our outsourcing relationships?

News

The EMA has concluded a class review of bisphosphonates, adopted a number of positives opinions for new medicines and revealed more about the ongoing studies regarding GlaxoSmithKline’s Pandemrix pandemic influenza vaccine and a possible link with narcolepsy. The activities were announced in a 

 issued by the EMA following a recent meeting of its Committee for Medicinal Products for Human Use (CHMP). 

The CHMP has concluded that rare atypical fractures of the femur are a class effect of bisphosphonates. However, the committee also believes that the benefits of such medicines in the treatment and prevention of bone disorders continue to outweigh their risks. Following the results of the class review, a warning about the risk of atypical femoral fractures will be added to the prescribing information for all bisphosphonate-containing medicines in the EU. The CHMP added that such warnings had already been included in the product information for alendronate-containing medicines across Europe following a review in 2008.

The CHMP has announced positive opinions for two medicines: Eli Lilly’s Bydureon (exenatide) for the treatment of Type II diabetes in adults and Bristol-Myers Squibb’s Nulojix (belatacept) as part of a combination treatment for prophylaxis of graft rejection in adults receiving a renal transplant. 

 released by the EMA last week, the agency has issued a total of 17 positive opinions so far this year. Looking at marketing authorisation applications, the EMA has started 18 applications so far this year, and finalised a further 18.  

In its meeting highlights, the CHMP also announced that it has concluded a re-examination of Roche’s Avastin, which had previously been given a negative opinion, related to the drug’s use as a first-line treatment in combination with capecitabine in metastatic breast cancer patients. The CHMP has now issued a positive opinion for the drug in such patients in whom treatment with other chemotherapy options is not considered appropriate. 

For some time, the EMA has been examining GlaxoSmithKline’s Pandemrix vaccine losely following a series of potentially related 

. The CHMP has now recommended that the product information be amended to advise prescribers about the preliminary results from epidemiological studies, and to perform an individual benefit–risk assessment when considering the use of the medicine in children and adolescents. 

“The CHMP reviewed all available data, including new findings from Sweden and France on the suspected link between narcolepsy in children and adolescents and Pandemrix,” said a 

 from the EMA. “The CHMP concluded that, following the earlier results of an epidemiological study from Finland, the new evidence strengthened the signal in children and adolescents, but that the data had methodological limitations. The relationship between Pandemrix and narcolepsy is still under investigation.” 

The final review on Pandemrix and narcolepsy is expected to conclude in July 2011. 

The EMA has concluded a class review of bisphosphonates, adopted a number of positives opinions for new medicines and revealed more about the ongoing studies regarding GlaxoSmithKline's Pandemrix pandemic influenza vaccine and a possible link with narcolepsy.

Bisphosphonates, Approvals And Ongoing Studies At The EMA

Johnson and Johnson (J&J) has agreed to pay more than $77 million after being charged for violations of the US Foreign Corrupt Practices Act (FCPA), which include bribing public doctors in several European countries and paying kickbacks to illegally obtain business in Iraq. The charges stem from investigations conducted by the 

US Securities and Exchange Commission (SEC)

 according to an US Securities and Exchange Commission (SEC) 

The investigations have already been publicly disclosed by J&J. The company voluntarily notified the DOJ and SE in 2007 that it believed its subsidiaries had made improper payments related to sales of medical devices. 

“More than four years ago, we went to the government to report improper payments and have taken full responsibility for these actions,” William C. Weldon, chairman and CEO at J&J, explained in a 

. “We have undertaken significant changes since then to improve our compliance efforts, and we are committed to doing everything we can to ensure this does not occur again.”

J&J has agreed to pay $48.6 million in disgorgement and prejudgment interest and a $21.4 million fine to settle the SEC and DOJ charges, respectively. The company has also been ordered by the SFO to pay a Civil recovery Order of approximately $7.9 million. Overall, J&J will have to pay more than $77 million.

, various subsidiaries, employees and agents of J&J rewarded public doctors and administrators in Greece, Poland, and Romania who ordered or prescribed J&J products. Rewards reportedly included cash and inappropriate travel. J&J also acknowledged that kickbacks were paid to Iraq’s former government, on behalf of J&J subsidiary companies, to secure contracts to provide humanitarian supplies.

“The message in this and the SEC’s other Foreign Corrupt Practices Act cases is plain—any competitive advantage gained through corruption is a mirage,” Robert Khuzami, director of the SEC's Division of Enforcement, said in the SEC press release. “J&J chose profit margins over compliance with the law by acquiring a private company for the purpose of paying bribes, and using sham contracts, off-shore companies, and slush funds to cover its tracks.”

However, J&J has also been recognized for its disclosure and cooperation during the investigations. Part of the settlement also includes a Deferred Prosecution Agreement with the DOJ and a Consent to Final Judgement with the SEC. In its press statement, J&J explained: “These agreements reflect the recognition by DOJ and SEC of Johnson & Johnson’s voluntary disclosures and subsequent cooperation, as well as the company’s compliance efforts over the past four years. If the company completes three years of enhanced FCPA compliance undertakings and reporting to the DOJ and the SEC, the charges filed by the DOJ against a subsidiary company will be dismissed.”

Johnson and Johnson (J&J) has agreed to pay more than $77 million after being charged for violations of the US Foreign Corrupt Practices Act, which include bribing public doctors in several European countries and paying kickbacks to illegally obtain business in Iraq.

J&J Announces Settlement for Corrupt Practices

sanofi-aventis has gained full control over Genzyme, bringing the much talked about acquisition deal between the two companies to a close. In a 

, sanofi-aventis announced that approximately 84.6% of Genzyme’s outstanding shares had been tendered for $74 in cash, giving the company ownership of approximately 77% of the shares on a fully diluted basis. The offer was made in 

, after previous offers of $69 failed to finalize the acquisition. 

The acquisition will give sanofi-aventis an expanded presence in the biotechnology field. In the statement, sanofi-aventis CEO, Christopher A. Viehbacher, said, “The addition of Genzyme represents an important milestone in sanofi-aventis’ sustainable growth strategy by adding a meaningful new growth platform and expanding our footprint in biotechnology. Combined, our two companies will bring tremendous expertise, commitment and resources to biotechnology, particularly in rare diseases...” 

sanofi-aventis and Genzyme have been in negotiations since 

. However, Genzyme dismissed sanofi-aventis’s earlier bids of $69 per share as “opportunistic”. After a hostile takeover failed in 

, sanofi-aventis upped its offer to $74 per share, which was subsequently unanimously recommended by Genzyme’s Board of Directors in March 2011.

The $74 offer expired last week; however, sanofi-aventis has opened another offer period spanning 4–7 April to allow remaining Genzyme shareholders to tender their shares. Such shareholders will also receive $74 per share in cash. Upon the expiration of the offer, sanofi-aventis has said it will effect a “short-term merger”, as permitted by Massachusetts law after exercising its top up options under the merger agreement, if necessary. The result will see Genzyme become a wholly-owned subsidiary of sanofi-aventis. Any shares of Genzyme common stock that have not been tendered will be cancelled and converted into the right to receive $74 per share in cash. 

To fund the transaction, sanofi-aventis has sold 

sanofi-aventis has gained full control over Genzyme, bringing the much talked about acquisition deal between the two companies to a close.

sanofi Completes Genzyme Acquisition

This week, the European Commission (EC) began a public consultation in relation to a review of the 'Transparency Directive' (89/105/EEC), which concerns the transparency of the pricing and reimbursement of medicines in different EU Member States.