J&J, Pfizer Drugs May Reap $1 Billion Fighting Germs -MRSA

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J & J, Pfizer Drugs May Reap $1 Billion Fighting Germs (Update2)By Lisa RapaportNov. 8 (Bloomberg) -- The outbreak of drug-resistant infections in U.S. hospitals and schools may provide both Johnson & Johnson and Pfizer Inc. with a $1 billion windfall in a market that analysts expect will double in five years.J & J, the world's largest health-products company, and Pfizer, the biggest drugmaker, are poised to release new antibiotics next year to treat MRSA, or methicillin-resistant Staphylococcus aureus. The germ sickens about 2 million Americans annually, costs about $20 billion a year to treat, and has reinvigorated the search for new antibiotics.The two experimental drugs, modified versions of older medicines, may create a $2.5 billion market in treatments against MRSA and other drug-resistant bacteria that kill 20,000 Americans a year, analysts say. New York-based Pfizer needs new medicines by 2011 to counter generic competition for drugs that generated about half of 2006 revenue. J & J faces a similar erosion beginning in 2009 of 41 percent of last year's drug sales.....Pfizer and J & J are going to get a survivor benefit from sticking with antibiotics after almost every other big pharmaceutical company cut back in this area,'' said Les Funtleyder, an analyst with Miller Tabak & Co. in New York, in a telephone interview.Wyeth's Tygacil, the first in a new family of medicines for MRSA known as glycylcyclines, was introduced in 2005 and will have peak sales of more than $1 billion, the Madison, New Jersey-based drugmaker projects. Its success, and the rising MRSA menace, has spurred antibiotic research, analysts say...Urgent Need'....Given the urgent need for more effective antibiotics against MRSA, I would expect the new entries from Pfizer and J & J to perform as well as Tygacil, if not better,'' said Danielle Drayton, an analyst with Waltham, Massachusetts-based drug research firm Decision Resources, in a telephone interview.J & J rose 68 cents, or 1.1 percent, to $64.59 at 4:01 p.m. in New York Stock Exchange composite trading, and has declined 2.2 percent this year. Pfizer fell 21 cents to $23.11, and has fallen 11 percent in 2007.Two years ago, Pfizer and New Brunswick, New Jersey-based J & J separately obtained the drugs from biotechnology companies working on rival antibiotics. Pfizer's $1.9 billion acquisition of Vicuron Pharmaceuticals Inc. in June 2005 provided access to dalbavancin, an updated version of a class of medicines known as glycopeptides introduced in 1958.J & J in February 2005 agreed to pay Basilea Pharmaceutica AG, based in Basel, Switzerland, about $308 million to jointly develop ceftobiprole, part of a group of antibiotics known as cephalosporins. First marketed 40 years ago, the group includes Roche Holding AG's Rocephin. J & J won rights to ceftobiprole after Roche, also based in Basel, declined to license it...Strategic Deals'....These strategic deals have positioned Pfizer and J & J to come out ahead as panic over MRSA spins out of control,'' said Funtleyder.MRSA is found in about 4.6 percent of hospital patients, and accounts for almost two-thirds of skin infections in emergency rooms, up from just 2 percent 35 years ago. About one in 20 patients hospitalized with the drug-resistant bacterium dies, according to the U.S. Agency for Healthcare Research and Quality.Because J & J's new antibiotic is in a class that works against a wider variety of germs, it may have an edge over Pfizer's product, said Drayton.....Doctors will use a broad spectrum agent like ceftobiprole early as a single therapy to replace older regimens that included multiple antibiotics,'' she said.Outside the HospitalPfizer's dalbavancin may be chosen to treat patients outside the hospital because it can be injected once a week. Vancomycin, the oldest medicine in this family, must be injected as often as four times daily, requiring costly hospitalization until patients complete treatment.Dalbavancin was delayed by the U.S. Food and Drug Administration in June 2006. The company resubmitted its application to the FDA in June 2007 and expects a decision this year, said Pfizer spokesman Francisco Gebauer.Bacteria frequently mutate into forms that aren't sensitive to existing antibiotics. Staph bacteria typically enter the body through a cut or scrape and cause only minor skin problems. These can escalate into fatal bloodstream infections and pneumonia in children, the elderly and patients whose disease- fighting immune systems are weakened.....As MRSA infections spread from the hospitals into the community we're seeing that the more drugs you use, the more resistance you get,'' said Richard Wenzel, chair of internal medicine at Virginia Commonwealth University School of Medicine in Richmond...Swiss Cheese'When 5 percent of patients stop responding to a medicine for MRSA, hospitals need another option. ....We're talking about patients who present in shock with lungs that look like Swiss cheese,'' said Wenzel. ....If we keep using a drug until one in 10 people can't take it, all we do is breed an even worse strain of MRSA.''The concern that medicines were breeding resistance led doctors to reserve vancomycin for the most critical patients. Now, vancomycin use is growing in response to more deadly germs, and so is resistance to it.....Antibiotics like vancomycin that were kept on the shelf for emergencies for decades are losing effectiveness and we don't have anything yet to replace it,'' said Janice Reichert, a senior research fellow at the Tufts Center for the Study of Drug Development in Boston.Theravance Inc. of South San Francisco, California, is seeking FDA approval for its glycopeptide called Televancin. The agency sent the company a letter last month delaying approval by asking how the drug is made and how the label will be worded, analysts say. Thervance is developing the antibiotic with Tokyo- based Astellas Pharma Inc.Competitors' DrugsTarganta Therapeutics Corp. of Cambridge, Massachusetts, is also in the final stages of human testing for a new glycopeptide, called oritavancin, and plans to seek FDA approval in the first quarter of 2008.New York-based Forest Laboratories Inc. is in the final stages of human trials with another new cephalosporin, called ceftaroline, which the company gained from its $480 million purchase of closely held Cerexa Inc. last year.To contact the reporter on this story: Lisa Rapaport in New York at Lrapaport1Last Updated: November 8, 2007 16:16 EST