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		Back-to-school stress can trigger acne problems
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Healthorbit.ca

Traditional chemotherapy kills tumour cells directly; some newer drugs work instead by cutting the tumour's blood supply. An innovative approach combines these strategies sequentially to pack a double whammy.

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Common drug might treat post-traumatic stress disorder.

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The US Food and Drug Administration badly needs some strong and stable leadership.

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TEVA Pharmaceutical Industries (Netanya, Israel) has signed an agreement to acquire IVAX Corporation (Miami, FL) for approximately $7.4 billion, further cementing Teva’s control of the generics industry.

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PharmTech ePt: pharmtech.com

Scientists have identified genes enabling breast cancer cells to spread to the lungs, a discovery that could improve diagnosis and treatment of the disease.

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		New method shows it is possible to grow bone for grafts within a patient's body
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Leila Abboud. Asian Wall Street Journal New York, N.Y.:Jul 27, 2005. p. M.1

Copyright (c) 2005, Dow Jones & Company Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
WHEN THE TWO strongest generic-drug companies announced that they would combine, it was a tacit acknowledgment that intensifying competition in the sector won't let up soon.

Investors hailed Monday's agreement by Teva Pharmaceutical Industries Ltd. to acquire Ivax Corp. for $7.4 billion. In 4 p.m. composite trading Monday, Ivax shares were 10% higher at $25.17 on the American Stock Exchange, while Teva's American depositary receipts edged up 0.2% to $31.23 on the Nasdaq Stock Market.

Yesterday, Ivax was up 23 cents at $25.40, while Teva gained 52 cents to $31.75 in late morning trading.

Already, many investors in generic-drug companies are excited at the prospect of a wave of patent expirations on blockbuster drugs in 2006 and 2007. But the Teva-Ivax deal could actually buttress an emerging contrarian view that the patent expirations might not translate into big profits and strong stock performance for all the companies. These people say too many generic-pharmaceuticals makers are lined up to make the drugs, pressuring prices and profits.

Branded drugs with annual sales of $21.4 billion are expected to face generic competition in 2006 and those with an additional $17.7 billion in revenue will go generic in 2007, according to a report by Gregory Gilbert, an analyst at Merrill Lynch. In contrast, only $10 billion to $13 billion of drugs went generic annually from 2003 to 2005. Many of the drugs in the generics' cross hairs each have more than a billion dollars in annual sales, including Pfizer Inc.'s antidepressant Zoloft; Sanofi-Aventis SA's sleep drug Ambien and allergy pill Allegra; and two cholesterol-lowering drugs, Merck & Co.'s Zocor and Bristol-Myers Squibb Co.'s Pravachol.

The bulls, including large holders on the buy side such as TIAA-CREF Investment Management, AIM Management Group Inc. and RCM Capital Management, believe that sales and profits will boom in 2006 and 2007. Managed-care companies and the government's new Medicare drug-benefit program will push use of cheaper generics. "Everything seems to be aligning for these guys, as far as I am concerned," says David Sobell, senior research analyst at Pioneer Investments.

The skeptics, including analysts from Merrill Lynch, CIBC World Markets and Banc of America Securities, say those expectations are too high. Generic-drug companies can't escape the problem that plagues all commodity manufacturers: a surge in capacity that pushes down prices. With big profits on the horizon, so many companies will jump in to make the big blockbuster drugs that prices will plummet.

"A lot of people are drinking the Kool-Aid about 2006," Merrill Lynch's Mr. Gilbert says. He rates the generic-drug companies he covers as "neutral" and doesn't hold stock in those companies. "But it may be difficult for generic-drug stocks to perform as well as some people hope they will," he said.

The bears point to the disappointing launch of generic copies of Forest Laboratories Inc.'s Celexa, an antidepressant that once had annual sales of $1.4 billion. Five companies entered the market in the first month, causing prices to drop so much that no one made any money, analysts say. Other crowded launches included generic versions of the antibiotic Cipro, with 13 players, and the antifungal Diflucan, with 12.

Generic drugs are commodities because, according to U.S. law, they must be the same as the original branded drug. Generics made by different manufacturers are interchangeable; only price differentiates them. Profits are driven by being the first to market. By U.S. law, a generics maker that first challenged a patent on a branded drug is granted six months of exclusive sales.

But due to a host of complexities in patent law and court rulings, in many instances no single company is likely to have sales exclusivity on big drugs coming off patent in the next two years. For instance, the U.S. Food and Drug Administration last week ruled that Teva won't get an exclusive sales period on Pravachol. Teva says it plans to sue the FDA.

CIBC analyst Elliot Wilbur, who downgraded the sector to neutral in mid-May and doesn't own shares of generic-drug companies, predicts generic versions of Zocor, Pravachol and Zoloft will be "highly competitive," and "even if someone has exclusivity, it will turn into a bloodbath after six months."

Gross profit margins in the industry have gone down year over year in five of the past six quarters, Merrill's Mr. Gilbert says. Last year, 80 different companies received generic-drug approvals from the FDA, up from 57 companies in 2003.

Selena Chaisson, biotechnology and health-care fund manager at RCM, is optimistic about generics, but argues that companies that win six months of exclusive sales are better positioned than the others. "I don't think everyone will participate in the boom," Ms. Chaisson says. As of the last public disclosure March 31, RCM was Ivax's fourth- largest shareholder. The fund also holds shares of Barr Pharmaceuticals Inc.

The newly combined Teva and Ivax could be a powerhouse. Analysts expect the new company to earn some 40 exclusive-sales periods and to sell higher-margin branded drugs. The smaller Barr is favored by some investors because it specializes in harder-to-make generics with fewer competitors and sells branded contraceptives.

Mylan Laboratories Inc. and Watson Pharmaceuticals Inc. might not fare so well because they are expected to have fewer exclusive-sales periods, analysts say.

A Mylan spokesman says the company has 12 first-to-file opportunities, its highest ever. A Watson spokesman says the company's strategy is to focus on niche products.