The Burrill Report


Ranbaxy Laboratories and federal prosecutors in the United States are in talks to settle charges of “systemic fraud” that led the U.S. Food and Drug Administration to ban the company from importing 30 products into the United States, Forbes reported. The settlement could include payments and fines in excess of $1 billion sources with knowledge of the negotiations told the publication. Ranbaxy and the FDA did not comment on the report, but Ranbaxy has long denied any wrongdoing and said it has fully cooperated with federal officials.

Johnson & Johnson’s Centocor Ortho Biotech Products unit said that it has voluntarily withdrawn its application with the U.S. Food and Drug Administration to market its experimental drug trabectedin for the treatment of women with recurrent ovarian cancer. The withdrawal follows a recommendation from the FDA that the company conduct an additional late-stage clinical trial to obtain approval. The company first submitted the application in November, 2008 and 11 months later the agency requested additional information, including overall survival data from the pivotal trial and additional clinical pharmacology studies.

AstraZeneca has decided to not exercise its option to license Targacept's experimental drug TC-5619 being developed to treat symptoms of schizophrenia. As a result, Targacept retains full rights to the compound, a highly selective alpha7 neuronal nicotinic receptor modulator. Targacept recently completed two phase 2 clinical trials of TC-5619, one in patients with schizophrenia and one in adults with attention deficit/hyperactivity disorder. The company is currently conducting additional clinical and non-clinical studies to enable potential additional phase 2 development in Alzheimer's disease. “Our clinical results indicate the unique potential of TC-5619 to treat negative and cognitive symptoms of schizophrenia, a critical need not met by currently available treatments, and we are unwavering in our enthusiasm for the compound,” says Targacept CEO J. Donald deBethizy. Burrill & Company, publisher of The Burrill Report, is an investor in Targacept.

The biopharmaceutical services company Parexel International said it would begin a restructuring program to reduce its early-phase capacity following disappointing earnings and a pared back earnings estimate for the fiscal year. The cost of the restructuring is estimated to total about $15 million with about $4 million reflected in the fourth quarter ending June 30, 2011. The company expects to save 15 to 20 cents a share in 2012 as a result of the restructuring. Parexel CEO Josef H. von Rickenbach says the early phase market is in transition and the company must adapt to changing industry conditions. The company said it expects a profit of 84 to 88 cents a share in fiscal 2011, down from an earlier estimate of $1.17 to $1.23.

Palo Alto-based StemCells said it will cut its U.S.-based workforce by 30 percent in an effort to slow its burn rate and focus on advancing the clinical development of its lead product candidate. The company is developing purified human neural stem cells as a potential treatment for spinal cord injury, myelination disorders, age-related macular degeneration, and other central nervous system disorders. The company is currently conducting a phase 1/2 clinical trial in chronic spinal cord injury in Switzerland, and expects to enroll and dose the first cohort of that trial this year. The company has completed patient enrollment in a phase 1 trial in Pelizaeus-Merzbacher disease, a fatal myelination disorder in children, and results of this trial are expected to be reported in early 2012. In addition, StemCells expects to file for approval to begin human clinical trials of its therapy as a treatment for age-related macular degeneration, which is the leading cause of vision loss in people over the age of 55.

Advanced Life Sciences Holdings said that it has suspended operations and terminated its staff due to its severe lack of liquidity. The Woodridge, Illinois-based biopharmaceutical said it doesn’t have sufficient cash to fund its operations and that its board is considering all strategic alternatives in light of the company's current financial circumstances. The company said its ability to continue as a going concern will depend on the results of the board's efforts, and that a filing under the federal bankruptcy laws is “a distinct possibility.”


May 06, 2011
http://www.burrillreport.com/article-report_ranbaxy_could_pay_more_than_1_billion_to_settle_with_u_s_regulators.html