PHARMACIA & UPJOHN: BACKS OUT OF BLOOD- SUBSTITUTE VENTURE
A joint research venture between Boston-based Biopure Corp.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
and Pharmacia & Upjohn Inc. that was aimed at developing a human
blood substitute for use in surgery has been called off, DOW
JONES NEWS SERVICE/BOSTON GLOBE reports (7/4). While Pharmacia &
Upjohn "had already sunk" more than $114 million into the six-
year venture, WALL STREET JOURNAL reports that the drugmaker
decided to cancel the agreement after concluding that it "was
mired in an open-ended financial commitment with little control
over the research." Pharmacia & Upjohn, which will retain its
stock ownership in Biopure, will take a $69 million charge to
"write down the costs of its investment in the high-risk
venture."
BAD BLOOD?: Analyst Hemant Shah noted that the alliance was
"open-ended" and "enormously lucrative" for Biopure. But
University of California at San Diego blood-substitute researcher
Robert Winslow said the alliance "was a funny kind of deal from
the beginning." He added, "You sense that Upjohn hasn't had
enough control over the development of the product. It's been a
strained relationship" (Burton, 7/5).
THE BIG PICTURE: Pharmacia & Upjohn's Ley Smith said that
the terminating the Biopure alliance is part of a $1 billion
overhaul of the company's research and development program that
was announced in May (see AHL 5/23). More than 20% of the
company's research projects are being terminated in order to
concentrate resources on the "highest priority projects."
Biopure, meanwhile, said it would begin searching for an
"alternative marketing and development partner" (DOW JONES NEWS
SERVICE/BOSTON GLOBE, 7/4). Biopure President Joseph Sobota said
that "a number of candidates have expressed interest" in
exploring a partnership with the company. He added that he
expects advanced clinical trials on its blood substitute to begin
"within 12 months."
RISKY VENTURE: WALL STREET JOURNAL notes that Pharmacia &
Upjohn and Biopure were regarded as "among the leaders" in
developing a human blood substitute. While some experts on Wall
Street and in the medical community "are skeptical" that a human
blood substitute will ever work, others predict that it will
become "a multibillion-dollar annual business" (7/5).
PATCHING THINGS UP: Last week, the Food and Drug
Administration (FDA) approved the first nicotine patch for over-
the-counter sales, AP/BOSTON GLOBE reports. McNeil Consumer
Products, a division of Johnson & Johnson, will market J&J's
Nicotrol patch beginning July 18 (Neergaard, 7/4). The FDA has
yet to approve SmithKline Beecham PLC's version of the patch for
over-the-counter sales. While sales of prescription patches
"reached $600 million annually when they were introduced" in
1991, sales have now dropped to about $250 million a year. But
J&J and SmithKline predict that sales of the patches will grow
once they become available without a prescription, and both
companies are "expected to launch aggressive marketing and
advertising campaigns" (Naj, WALL STREET JOURNAL, 7/5).