Full article reprinted "The Pink Sheet" DAILY July 28, 2009
On May 14, Millennium Pharmaceuticals marked its one-year anniversary as the Takeda Oncology company.
The biotech's acquisition by the Japanese pharma for $8.8 billion freed Millennium from demonstrating to Wall Street regular quarterly earnings at a time when the company was dependent on sales of its only product, the first-in-class protease inhibitor Velcade (bortezomib) ('The Pink Sheet' DAILY, April 10, 2008). Read on...
Full article reprinted "The Pink Sheet" DAILY July 28, 2009
Ironically, in losing its autonomy, Millennium has finally gained the freedom to become a larger player in the oncology space. As part of a global organization, Millennium has a broader business development mandate than it did when it was a self-supporting entity and could only afford to develop drugs for the U.S. market.
In addition, Takeda has kept its promise of providing the company with important financial resources. The Japanese pharma has doubled Millennium's research budget, allowing the biotech to increase its pipeline from five clinical stage programs to 14 in the intervening months. It has also poured additional resources into marketing Velcade, helping to push worldwide sales of the medicine above the $1 billion mark by the end of 2008.
In a recent interview, Millennium Pharmaceuticals CEO Deborah Dunsire assessed the operational changes that have occurred in the year since her company was acquired.
The wide-ranging conversation touched on a variety of topics; in the upcoming second installment Dunsire will offer a thoughtful and pragmatic view of what it means to be a stand-alone within a larger pharmaceutical company.
"The Pink Sheet" DAILY: It's been a little over a year since Takeda purchased Millennium. What's changed now that you are a subsidiary instead of an independent entity?
Deborah Dunsire: When Millennium was an independent company, we were moving forward several information assets - we had Velcade, some early oncology assets and MLN0002, which was just about to go into Phase III trials in ulcerative colitis and Crohn's disease. Today, we are moving forward 14 compounds through preclinical and clinical development, and our R&D budget has more than doubled in the year. The quantum change in resourcing is quite remarkable.
"The Pink Sheet" DAILY: But MLN0002 isn't an oncology asset, so why are you still developing it?
Dunsire: Even though we are the Takeda Oncology company, given the sensitive point for MLN0002 - just initiating Phase III trials globally, Takeda said, 'you should carry on with that.' So we are running the Phase III program for Takeda, and they will market it when it is approved.
"The Pink Sheet" DAILY: And has the development path for that molecule changed now that you are part of Takeda?
Dunsire: We were moving full steam ahead in preparing those pivotal trials [for MLN0002]. But we would have gotten to the point where we couldn't have carried on in the same expeditious way unless we had found a partner. We were in partnering negotiations at the time [of the Takeda offer]. Of course, that constraint went away. As a result, we were able to motor right on ahead and execute our Phase III trial plan and that [study] is accruing well. And in the meantime we are also bringing forward 14 molecules in oncology.
Lessons From The IDM Pharma Acquisition
"The Pink Sheet" DAILY: So you have more financial resources to devote to R&D. Has the group's mandate in terms of deal-making changed?
Dunsire: Let's take the most recent example: our acquisition of IDM Pharma to obtain Mepact . We had looked at that [asset] when we were a stand-alone company, but with the FDA's decision [to issue a non-approvable letter in 2007] on that project it didn't make sense for us to follow up given we were focused on the U.S. [market]. As part of Takeda, we wanted to expand both Takeda's footprint but also access to oncology products around the world. A product that is life saving for osteosarcoma and has an approval in Europe - even if it could not be approved in the U.S. -suddenly became a worthwhile asset to consider. It is keeping with our corporate philosophy of bringing in things that change the lives of cancer patients.
[The acquisition was announced in May ('The Pink Sheet' DAILY, May 19, 2009).]
"The Pink Sheet" DAILY: So how did the deal come about?
Dunsire: We contacted our European colleagues and they were very enthusiastic about the project. We formed a joint team to do the diligence and evaluate Mepact. Our colleagues in Europe brought a lot of health care economics experience for Europe to the table, a great contribution, and they felt that Mepact was worth investing in.
"The Pink Sheet" DAILY: Takeda's European division is commercializing Mepact instead of Millennium. Why?
Dunsire: I look back at my experience in Novartis, and eventually Novartis oncology evolved into a global business unit, but there had to be a critical mass for that to really make sense for that company. When I look at Takeda, they are just building their global footprint [in this therapeutic area]. They have a very strong presence in Japan and a pretty strong U.S. presence, which strengthened considerably when they dissolved the TAP joint venture and moved assets into Takeda, bringing an even more clear presence in the U.S.
But in Europe they are only beginning to expand their presence - they are now in six markets and are looking to add other markets. But they don't yet have a very broad product range. To fragment that even more by separating out oncology didn't make sense.
What we need to do is consolidate and build Takeda's footprint using all the franchise areas to do it. Oncology will get very good attention from the business heads in Europe and indeed in other markets, because they are really looking to grow their presence. As we bring in oncology products that will also enable our Takeda colleagues to expand into new markets to build affiliate companies once the business can support this.
Local Execution And Global Strategies
"The Pink Sheet" DAILY: So we shouldn't take the fact that another group is commercializing Mepact as a signal that you are 'a Takeda oncology company' rather than 'the Takeda oncology company'?
Dunsire: I think the 'the' is quite a deliberate description of the role of Millennium in leading the oncology build and the oncology strategy. Getting the right thing done and choosing the right thing to do and talking about how those actions might get done - that is our mandate. But the local execution of those ideas takes nothing away [from Millennium]. That there are other parts of Takeda involved in oncology is a great model for where the company is today.
"The Pink Sheet" DAILY: But if that's the case - that you are spearheading the oncology strategy - what kind of signal does it send that it's Takeda Japan not Millennium working on an early stage oncology program with Alnylam?
Dunsire: There is a very active oncology group in Japan, but there is also a very early technology group doing most of the work on the Alnylam transaction, which was negotiated prior to the Millennium acquisition. They are trying to understand and utilize the technology that will then go into the therapeutic areas to create drugs. As those drugs move forward into development by those discovery groups any oncology products will be brought into Millennium for further advancement. However, the partnership that comes to my mind that is more illustrative [of Millennium's role] is our partnership with Amgen.
[Takeda is paying Alnylam $150 million for access to its RNA interference therapeutics platform technology for oncology and metabolic disease]
"The Pink Sheet" DAILY: You mean the partnership Takeda brokered in January 2008 for rights to 13 molecules, including worldwide rights to Motesanib (AMG706)?
Dunsire: Yes. We have a global collaboration with Amgen around AMG706, which is an oral VEGF inhibitor. Millennium has taken the leadership role in being the Takeda face to Amgen on this global molecule. There are a number of different molecules partnered just for Japan and those we take a back seat on. We provide advice from the oncology perspective about what could be appropriate in terms of clinical trials and potential development but we are not the people with the deepest Japan experience.
I really believe being a strategic advisor from a cancer perspective to a group who really understands the Japanese regulatory [environment] is a good way of operating. We are not a group who is turf hungry. We - all together within Takeda - are here for the group benefit. We need to provide the strategic leadership and expertise that Takeda purchased us for and count on the expertise of others where they really bring in more than we have. In that way we all win.
- Ellen Foster Licking
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