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A High Dose of News & a Bit of Pharma Funny Business

A High Dose of News

So, let's start with GlaxoSmithKline's Avandia. The stock is rebounding a little bit today after the pummeling it took yesterday. Once again, the New England Journal of Medicine study saw an "embargo break" by another media outlet. That means the news hit in the middle of the trading day yesterday, catching just about everyone by surprise. The embargo was supposed to have lifted at 5 p.m. ET yesterday, which would have given all of the stakeholders -- chiefly Glaxo -- the ability to issue their prepared press releases at the same time.

It also would have given analysts and investors the ability to digest and interpret the news overnight before trading resumed in GSK. The NEJM study says the blockbuster diabetes drug causes a much higher risk of heart attack and death among certain patients. Lawyers and lawmakers are circling the wagons.

As I pointed out on the air yesterday, the news is benefitting Merck and Amylin Pharmaceutcials , among others. MRK hit a new high yesterday and is trading at another one intra-day today. Merck makes the new diabetes pills Januvia and Janumet. AMLN makes the injectable diabetes drug Byetta.

In a research note to clients this morning, Deutsche Bank's big pharma analyst, Barbara Ryan, writes, "We estimate that every additional $100 million in Januvia revenues from the Avandia fallout would contribute about 2 cents in earnings per share for MRK, and believe that by 2010 it could translate into roughly $1 billion in incremental revenues or 20 cents in EPS upside to our current, above consensus EPS estimates for MRK for 2007-2010..."

Deutsche Bank would like to do investment banking for MRK. Meantime, David Kliff, an insulin-dependent diabetic who writes a newsletter called "Diabetic Investor," is telling his subscribers today that it's too early to tell if MRK or AMLN will be the primary beneficiaries of the Avandia news. He thinks doctors might switch their patients onto a much older diabetes drug or put them on insulin.

Speaking of embargo breaks, I have another follow-up to ACC (American College of Cardiology) Embargo-gate. The ACC announced this morning that its Board of Trustees is taking action against Dr. Martin Leon, who allegedly leaked data ahead of an embargo lift at the recent ACC convention in New Orleans about the big study comparing stents to heart drugs.

Dr. Leon has already been punished by the peer-reviewed medical journal that was publishing the study by barring him from reviewing or publishing anything for several years. Well, the ACC says Dr. Leon will be barred from serving as a presenter, reviewer or panelist at next year's ACC meeting in Chicago. Both of those actions are a major smackdown for a rock-star doc like Dr. Leon.

And speaking of stocks hitting new highs, take a look at Celgene today. The biotech revealed that a mid-stage clinical trial of a twice-a-day pill for psoriasis looks good so far. FBR's biotech analyst, Jim Reddoch, is telling clients in a research note that if the Phase 3 test confirms those results that this could be a billion-dollar drug. It's for moderate-to-severe forms of the skin condition. Reddoch thinks the drug could be on the market by the second half of 2010 and he is raising his price target on CELG from $80 to $85 on the news. FDR has done and wants to do more investment banking for the company.

Finally, Pharma Funny Business (with a nod to my colleague Jane Wells' blog)

On Sunday, I was at the American Urological Association annual meeting in Anaheim, CA to do a follow-up story on Dendreon and the FDA's decision on its prostate cancer drug Provenge. Several of the doctors who are on the front lines treating prostate cancer patients told me they're disappointed by the FDA's delay in possibly approving the drug.

Then, Jim Kiefert, chairman of a prostate cancer patient advocacy group called, "Us Too International," told me he and a small delegation of other patients, advocates and doctors have scheduled a meeting with FDA Commissioner Dr. Andrew Von Eschenbach for Monday, June 4th. They want him to explain the FDA's decision.

A spokesman for the Commissioner says, as of yesterday, the get-together has not been formally placed on the calendar yet but adds that it "likely" will take place and that it's not uncommon for FDA chiefs to meet with patient groups.

DNDN is up today, on top of a gain on heavy volume yesterday. The company also announced last week it's laying off 40 employees who were hired to help sell Provenge. It re-released positive clinical trial data at AUA that was presented several months ago at a chemotherapy meeting.

Advocates have also launched a new site asking people to send emails to lawmakers to urge them to get the FDA to reverse its decision. A Dendreon spokesperson says the company has nothing to do with that site or what appears to be the grassroots effort.

So here's the AUA punchline. As I mentioned, the convention is taking place this week in Anaheim, which is part of the OC --beach communities, surfboards, etc. Well, the logo for the urologists' meeting is a Woody with surfboards sticking out of it. Hmmm. Someone's idea of a joke? That artwork is on the cover of the convention program. On the back cover? A Cialis ad.

Questions? Comments? Pharma@cnbc.com

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