Vaccinations — A Multibillion Dollar Industry

Follow The Money!

Vaccines are are 100% about money and 0% about your health!

Financial Statement  |  GlaxoSmithKline Operating and financial review and prospects

Metabolic and gastro-intestinal

Avandia, GlaxoSmithKline’s new treatment for type 2 diabetes, achieved sales approaching half a billion pounds, the majority in the USA, where it was first launched in 1999. Avandia scripts now account for over half of the US thiazolidinedione market, a market which grew by 75 per cent in 2000. In April 2000 the US FDA approved Avandia in combination with a sulphonylurea, having previously approved it both as a monotherapy and in combination with metformin. Avandia will be rolled out into Europe and Rest of the World markets in 2001. In August 2000 Avandia received a positive recommendation in the UK from the National Institute for Clinical Excellence (NICE). Zantac continues to decline in the face of competition from generic products and alternative anti-ulcerant treatments. The rate of decline slowed to 11 per cent in 2000. Zantac’s largest market is now Japan, where sales remained stable.

Lotronex, a treatment for irritable bowel syndrome, was launched in the USA in March 2000 and generated sales of £36 million before being withdrawn in November 2000 following discussions with the US FDA over the interpretation of data relating to gastro-intestinal side effects. The company disagreed with the FDA’s assessment of the safety profile of Lotronex, but agreed to withdraw it from the US market and has also withdrawn all other regulatory submissions worldwide.


Vaccines sales reached £842 million, an increase of 11 per cent. In the hepatitis franchise, Engerix-B declined eight per cent due to lower sales in the USA, Havrix, for hepatitis A, grew slightly and Twinrix, a combined hepatitis A and B vaccine in both adult and paediatric strengths, grew five per cent to £95 million. Infanrix, GlaxoSmithKline’s range of combination vaccines for diphtheria, tetanus, and pertussis (whooping cough), grew 47 per cent. In October 2000 the European Commission approved Infanrix

PeNta, which provides additional protection for hepatitis B and polio and Infanrix HeXa which further adds protection against haemophilus influenzae type b disease.

Oncology and emesis

Zofran, for emesis, a now well-established product and a leader in its sector, benefited from market growth in the USA, where over two-thirds of its sales are generated.

Other therapeutic areas

Cardiovascular sales were stable, with 11 per cent growth in Coreg and recent launches of Pritor for hypertension in European markets offsetting declines in older products. Future sales should benefit from new data showing Coreg’s effectiveness in treating severe heart failure.

The disposal of the anaesthesia franchise in the USA at the end of 1999 contributed to a fall in this therapeutic area of 21 per cent. In October 2000, Glaxo Wellcome’s US company also disposed of its portfolio of dermatological products, contributing to the four per cent decline in this sector.


Sales of anti-bacterial products increased by two per cent, with growth in Augmentin offset by flat sales of Zinnat/Ceftin and Amoxil and a decrease in Fortum. With sales reaching £1.2 billion, Augmentin continued to perform strongly. In the USA sales grew 13 per cent, with a market share of nearly a quarter. Solid growth was achieved in Latin America and South East Asia. In Europe sales were affected by generic competition.

Zinnat/Ceftin declined by seven per cent in its largest market, the USA, but this was offset by growth in the emerging markets of the Middle East, Africa, Latin America and Asia Pacific.


Growth in anti-viral sales of 14 per cent reflects strong growth in the HIV franchise, where the Group markets a range of reverse transcriptase inhibitors (RTIs) and a recently launched protease inhibitor, Agenerase, as well as steady growth in sales of herpes products and continued uptake of new products against other viral diseases.

Sales of RTIs increased by 12 per cent. Combivir again grew strongly, reflecting conversion of patients from its constituent single products, Epivir and Retrovir. In aggregate the three products achieved real growth of five per cent; excluding the effect of oneoff contracts in Brazil in 1999 which were not repeated in 2000, underlying growth was nearer eight per cent.

The newer RTI, Ziagen, grew by 75 per cent, reflecting continued uptake in the USA and in Europe. Trizivir, which combines Epivir, Retrovir and Ziagen, was launched in the USA in December 2000 and in the European Union (the UK and France) in January 2001.

The triple combination tablet simplifies the dosing regimen for patients who are often taking several tablets a day. The new protease inhibitor, Agenerase, also offers some improvement in dosing regimen. The majority of its sales were in the USA, where it has been available since May 1999. European Union approval was received in October 2000, and the product was launched in some markets, including the UK and France, before the end of the year.

The Group’s two herpes treatments, the newer Valtrex and the older Zovirax, grew at a combined rate of five per cent. Valtrex continues to protect the Group’s franchise in this area, with strong increases in all regions and a successful launch in Japan in August. Zeffix, for chronic hepatitis B, achieved sales of £70 million. First launched in the Asia Pacific region, it performed strongly in the Chinese and South Korean markets. Relenza, the new influenza treatment, doubled its sales to £32 million and, following launch in Japan in December, is now available in most major markets.  Go to Page 6

Good Shot…Prevnar Hits a Billion
[Published May 2002 Source Frost & Sullivan]

A novel vaccine for the prevention of pneumococcal disease in infants, entered the U.S market with a bang in February 2000, racking up sales of $461 million in the launch year, the most successful vaccine launch ever. The vaccine, known as Prevnar, is now the first blockbuster of the new millennium, having achieved sales of over $ 1 billion.


Wyeth began development of Prevnar, a pneumococcal 7 valent conjugate in the early 1980s. It differs from other marketed pneumococcal vaccines in its ability to induce immunity in children under two years, who are susceptible to invasive pneumococcal disease.

Approved in 48 countries, Prevnar has thus far been launched in 24 countries, including most European countries. Although granted a coveted spot in the paediatric immunisation schedule in the U.S, European governments have been less hasty to implement a recommendation for mass immunisation of infants. While most paediatric vaccines now cost between $6 and $20 per dose, Prevnar, costs a substantial $60. In Europe, the vaccine commands a similar premium price compared to the U.S. For example, in the UK, the price of one dose equates to approximately $56.

The high price has been stipulated as one reason for the slower vaccine acceptance in Europe, when compared with the U.S and the limited recommendations granted. However, there is future potential for Wyeth as European governments discuss the implementation of recommendations similar to the U.S. And it does not stop there. The possibility of label expansion, covering the prevention otitis media, a highly prevalent ear infection, further boosts the potential revenues of this already highly successful vaccine.

Production Bottleneck

Prevnar sales fall by 29 percent in Q1of 2002. This sales shortfall has been attributed not to product demand, but to the production issues.

Because of expanded capacity and improvements in the actual process, Wyeth is optimistic that by the end of Q2, the gap between supply and demand would have decreased. This problem with production is certainly not a unique one. Many vaccine manufacturers have suffered similar 'interruptions' in production. For example, Merck temporarily ceased production of MMR and varicella vaccines to ensure quality. However, problems are caused when one manufacturer has a monopoly in a particular vaccine market, and supply problems often result in delays to scheduled immunisations.

Development Challenge

Despite production problems, Wyeth's grip on this market will not be threatened, atleast in the near future. Currently, clinical development for pneumococcal vaccines suitable for paediatric use is lacking. The realisation that any new vaccine would need to demonstrate equivalency to Prevnar in large scale clinical trials has led to many pharmaceutical companies shying away from this particular market, despite being highly lucrative. Nearly 38,000 children were involved in Phase III clinical trials and Phase IV post licence studies are ongoing, with a study group of 60,000 children. Because of the nearly 100 percent efficacy and good safety profile demonstrated by Prevnar in Phase III trials, establishment of clinical superiority by other pneumococcal vaccine candidates would be fraught with difficulties.

The unprecedented success of Prevnar in the U.S is set to be mirrored, although to a somewhat lesser scale in Europe. And with no competition on the horizon, Wyeth will continue to reap the success.

PowderJect reports healthy rise in profits
by Philip Howard,1909,121992,00.html
Last update: 09:10, Nov 12, 2002

POWDERJECT Pharmaceuticals, the vaccines specialist, today posted a forecast-beating rise in first-half profit, strengthening its claim that a recent £455m bid approach was opportunistic.

The firm, which is being pursued by US pharmaceutical firm Chiron according to industry sources, said profit before tax leapt more than four-fold to £19.3m in the six months to 30 September, driven by strong sales of its Fluvirin flu vaccine. Analyst forecasts had ranged from £13m-£15m. "These results show what a strong business we've got and I can understand why competitors are interested," the chairman and chief executive, Paul Drayson, said. But he reiterated the bid approaches were "opportunistic", because they came at a time when the share price was at a four-year low.

It has been a roller-coaster year for PowderJect. In March it became only the second British biotech firm in history to post a profit as it cemented its switch from a needle-free drug delivery firm to a vaccines specialist. It then became caught up in a political row in April when it won a contract to supply smallpox vaccine to the UK just weeks after Mr Drayson had donated money to the Labour Party.

Worse came in August, when PowderJect's shares plunged after it withdrew a tuberculosis vaccine used to inoculate school children because it had found some faulty batches. But the shares bounced back last month when the firm said it had received a number of takeover approaches. Mr Drayson said there had still not been a formal offer for the business, and declined to comment on media reports that Chiron had dropped its verbal bid to 450p-per-share and that Shire Pharmaceuticals had pulled out of talks.

"The board will consider any offer properly, and consider whether it is in the interest of shareholders," he said.

Mr Drayson forecast a "modest" second-half profit, adding the company was on target to meet its goal of delivering a full-year pre-tax profit of over £20m. Revenues from PowderJect's Fluvirin flu vaccine are focused on the first-half of the fiscal year. They totalled £76.5m in the six months to 30 September.


Aventis Pasteur is to spend $150 M on increasing its vaccines production capacities in France and USA. The company has vaccine plants at Marcy-l'Etoile in France and Swiftwater in Pennsylvania. A vaccines packaging and distribution depot costing EUR 8.5 M and employing staff of around 1000 has been in operation at Val-de-Reuil since Mar 2002. Aventis Pasteur has vaccines capacity in France of 370 M doses/y which is to be increased to 800 M doses/y by 2005. Pasteur Aventis produced 1.3 bn vaccines doses during 2001. These vaccines give protection against nineteen specific diseases including measles, rabies and poliomyelitis.

DECEMBER 9, 2002


Vaccines Are Getting a Booster Shot

As their profit potential jumps, so does new investment in R

In the pharmaceutical industry, vaccines have long been poor stepsisters to big, glamorous drugs. Immunization campaigns have worked wonders, wiping out scourges such as polio. Yet annual global sales of vaccines are just $6 billion--about $1 billion less than what best-selling cholesterol drug Lipitor generates in one year. And the number of major companies selling vaccines has shrunk from 20 in the 1980s to just 4. For many years, "it wasn't an economic business to be in," says Dr. Paul Drayson, CEO of PowderJet Pharmaceuticals PLC, a vaccine maker in Oxford, England.

No more. In late November, Merck & Co. (MRK ) reported that its experimental vaccine could ward off infection from cervical cancer-causing human papillomaviruses (HPV). And GlaxoSmithKline PLC (GSK ) is working on one for herpes. If proven safe and effective in larger trials, both could become blockbusters, analysts say. And that's just the start. Company research-and-development pipelines are bulging with nearly 100 vaccines against infectious agents, with dozens more being engineered in academic and government labs against everything from Ebola virus to West Nile disease.

The surprising result: Annual growth for the vaccine industry will rise to the mid-teens per year, up from an historic average of 10%, according to a recent report commissioned by the Global Alliance for Vaccines &
Immunization (GAVI). "It's really a good time to be in the vaccine business," says Dr. Thomas P. Monath, research chief at Acambis Inc. (ACAM ) in Cambridge, Mass., which is churning out smallpox vaccine for the U.S. government.

Moreover, vaccines are becoming far more versatile. Traditional immunizations prime the immune system to fight off parasites, bacteria, or viruses such as flu. But increasingly, vaccines are tackling diseases beyond
the infection itself. Merck's HPV vaccine doesn't just prevent infection from HPV--it also holds the hope of eliminating the cervical cancer caused by the virus. Other experimental vaccines are aimed at prodding the immune system to eat away malignant tumors or chew up the brain tangles of Alzheimer's disease. "We are ready for a renaissance in the whole vaccine area," says Stephen A. Johnston, a biochemist at the University of Texas Southwestern Medical Center.

What explains the resurgence of vaccines? Credit a combination of smart policy moves, advances in science, and a big change in the economics of the business. Back in the 1980s, companies bailed out of vaccines because prices--and profits--were low, and because they faced huge legal threats from people harmed by vaccines. Congress largely solved the liability issue with a 1986 bill setting up a program to compensate victims. "That led to increased research, and we are seeing the fruits of that now," says independent drug analyst Hemant K. Shah.

The ability to command premium prices helped, too. In the late 1980s, Merck and SmithKline launched gene-spliced vaccines for hepatitis B. At $30 to $40 per dose, they cost well above what is charged for common childhood vaccines used to prevent measles, tetanus, or whooping cough. That marked the start of "increased interest in vaccines as a business as opposed to a public-health intervention," says Piers Whitehead, vice-president of biotech company VaxGen Inc. (VXGN ) in Brisbane, Calif., and co-author of the recent GAVI report.

Now, vaccines are racking up profits once seen only with blockbuster drugs. The best example is Wyeth Corp.'s (WYE ) Prevnar, a vaccine that helps protect children from the pneumococcal bacteria that cause meningitis. Prevnar's price is a lofty $232 for a four-dose course. Lehman Brothers Inc. analyst C. Anthony Butler predicts that the vaccine, with estimated sales of $625 million this year, could soon be a $1.5 billion product. "Wyeth's success has shown other companies that there is a potential for vaccine blockbusters," says Dr. Stanley A. Plotkin, consultant to Aventis Pasteur Ltd., one of the four big vaccine makers, and professor emeritus at the University of Pennsylvania.

Improved economics have prompted vaccine makers to boost R&D spending. The four industry leaders--Merck, GlaxoSmithKline, Aventis Pasteur (AVE ), and Wyeth--are estimated to spend more than $750 million a year on vaccine R&D--as much as a fivefold jump at some companies since '92. Scientific advances also are helping prompt renewed interest. One hot idea is to develop a basic vaccine that could be customized for a range of diseases. Acambis, for example, is using its yellow-fever vaccine as a way to deliver bits of other viruses--such as West Nile--to the immune system. Other drugmakers are creating vaccines made of DNA that could be spliced quickly with new genes when novel diseases or bioterror agents suddenly emerge (box).

None of this will make vaccines as glamorous--or as profitable--as drugs. For one thing, getting a vaccine approved can take longer than it does for drugs. The Food & Drug Administration wants proof that no serious side effects will appear even when the product is given to tens of millions of people. But that's tough, as evidenced by the current controversy over whether mercury in past children's vaccines could have caused autism.

Finally, scientists caution that they're still a long way from creating vaccines for viruses crafty enough to hide from the immune system, such as HIV. But with a host of important new vaccines now in companies' pipelines, this former poor stepsister is getting ready for the ball.

By John Carey in Washington, with Kerry Capell in London,1204,848541,00.html

Shareholders claim victory as Glaxo mothballs chief's £20m pay deal

Jill Treanor
Wednesday November 27, 2002
The Guardian

GlaxoSmithKline yesterday shelved a potential £20m pay deal for its chief executive Jean-Pierre Garnier after a furious backlash from City investors. Britain's biggest pharmaceutical company was forced to put the controversial plan on hold to avoid a full-scale battle with its shareholders, who do not believe the French-born executive deserves such a large pay rise.

GSK's retreat was heralded as one of the most significant victories by City investors. Two years ago shareholders exerted pressure on telecoms group Vodafone to reduce a £10m bonus for its chief executive Sir Christopher Gent, while earlier this year insurance company Prudential dropped a proposed pay deal for its top executives.

Mr Garnier, who took home £7m last year, demanded the increase to put his earnings in line with rivals in the United States, where he is based and where pay packets are more generous than those given to UK executives. Shareholders in GSK, who had made their opposition clear in a series of secret meetings with company chairman Sir Christopher Hogg last week, were elated.

However, some urged a note of caution amid fears that the company will try to secretly reintroduce the package in the coming months once the furore has died down. This is because GSK said that while it was postponing a decision on the deal, it remained "committed to aligning its incentive plans with those of its pharmaceutical peer group". 

A spokesman for the National Association of Pension Funds, whose members control around £650bn of pension fund assets, said: "Two cheers for Glaxo, one because they bothered to consult and the second because they listened to shareholders. But, we will be keeping a very close eye on them in the future."

At the Association of British Insurers, whose members control a third of the stock market, Peter Montagnon, head of investments, made it clear that any attempt to reintroduce the scheme would meet with further scrutiny from shareholder bodies.

"It remains very important that there must be a link between the remuneration and value generation for shareholders," Mr Montagnon said. The proposed pay deal for Mr Garnier was intricately structured, involving awards of US-listed shares known as American depository receipts, options over shares and "career performance shares".

This pushed the value of the deal to around £20m, according to the Guardian's calculations, after his base salary of £935,000 and other bonuses are added. The timing of the announcement, following a series of top-level crisis meetings at GSK, surprised the City as it appeared to contradict com ments made only yesterday by Sir Christopher Hogg in an interview with the Financial Times.

The planned rise for Mr Garnier was regarded as ill-judged by the City as it came after a 30% fall in the company's share price, a 25% slump in profits and a failure by the company's scientists to develop any
blockbuster drugs. It also came at a time when US-style pay deals are being discredited after a wave of corporate collapses across the Atlantic such as the oil company Enron.

One major shareholder, who asked not to be identified, said: "This is a tactical withdrawal, but in our view JP [Jean-Pierre] is unrepentant and undaunted and they remain committed to the US pay model." The City now believes that Mr Garnier's own job is on the line unless the company, formed through the merger of Glaxo Wellcome and SmithKline Beecham two years ago, starts to improve dramatically.

Monday, December 02, 2002
LAVAL, Que. (CP) - Shire Pharmaceuticals Group PLC will invest $28 million to build a new global vaccine research centre in Laval, where the British-based multinational company already has a research facility. Dr. Randal Chase, president of Shire Biologics, said Monday that federal government support through Technology Partnerships Canada was a significant factor in advancing the company's presence in Canada. Shire is eligible for $5 million in government money under the partnership program. "Our decision also serves to underpin Shire's strategic aim of becoming an even more significant player in the global vaccine market which is expected to grow from $5 billion annual sales to more than $10 billion sales within the next five years," Chase said in a release. Shire Biologics currently provides about half of the influenza vaccine used annually in Canada. The core of Shire's operations in Canada is the former BioChem Pharma Inc. of Laval, taken over by the British company in early 2001. Shire's Laval site is already home to its therapeutic research centre and.
Work on the addition is to begin immediately, with completion planned for mid-2004. Shire shares (TSX:SHQ) traded at $31.47 on Monday morning, off 29 cents. Shire, moving to expand its vaccines business, recently announced an agreement to supply its Fluviral influenza vaccine to Berna Biotech, for sale in international territories excluding Europe and North America. In return, Berna Biotech will supply its hepatitis B vaccines to Shire for sale in Europe.

Shire also has a marketing partnership with Baxter which involves the company's meningitis C vaccine in Canada.

Vaccines Seen a $10 Billion Market by '06
Tuesday January 7, 5:42 am ET

LONDON (Reuters) - Sales of vaccines, once considered a commodity market, are booming with global revenues set to reach nearly $10 billion in 2006 from $5.4 billion in 2001, according to research published on Tuesday. Analysts at Merrill Lynch said the fastest growing section of the market would be for flu vaccines, sales of which are expected to more than double to $2 billion in the next five years.

Much of the flu vaccine market's 16 percent compound five-year growth will be driven by the entry of MedImmune Inc.'s premium priced nasal spray FluMist, which will be co-marketed by Wyeth.

The launch of FluMist later this year, coupled with increasing demand for pediatric jabs, could see the overall vaccine market leap by 20 percent in 2003 alone. Growth is then expected to moderate to an annual 10 percent from 2004 to 2006. Merrill's projection of 13 percent compound five-year sales growth for the total vaccine market compares with global drug sales of just eight percent in the year to October, 2002, according to healthcare information firm IMS Health.

The infant sector currently makes up the largest section of the vaccine market, with 2001 sales of $2.5 billion, but adult demand is growing as governments actively promote flu shots for the elderly and more vaccines are used by tourists. At the same time, the threat of bioterrorism in the wake of September 11, 2001 attacks on the United States has spawned a new business in supplying vaccines against smallpox following fears that the deadly virus might be used as a weapon.

The global vaccines market is currently dominated by four large pharmaceutical companies -- Aventis SA, GlaxoSmithKline Plc, Wyeth and Merck & Co Inc -- which together account for almost 85 percent of sales. But a number of smaller companies are also carving out a niche, including Britain's PowderJect Pharmaceuticals Plc and Acambis Plc, Switzerland's Berna Biotech and Chiron Corp of the U.S.

Merrill said it had initiated coverage of PowderJect with a "buy" recommendation, reflecting its strength in flu and travel vaccines, while Berna Biotech was started as "neutral." Acambis, however, was rated a "sell." The brokerage predicted it would revert to making a loss in 2005, after a period of profitability on the back of U.S. government contracts for smallpox vaccine.

CSR Finance - Market Advice You Can Trust
----- Original Message -----
From: The Investment U E-Letter
Sent: Saturday, December 14, 2002 11:00 AM
Subject: Media Confirms: Make 43% Off Smallpox Bio Terrorism Threat

      From The Desk of Julia C. Guth, Founder, Investment U

Investment Alert for Investment U Readers:

            Our Chicago-based colleague, Bryan Bottarelli, has come across one company positioned to eliminate two of the nation's most high-priority and urgent concerns: The eradication of Bio terrorism and the cure for West Nile Virus.

            The potential payoff for curing West Nile and eliminating the Bio terrorism threat could mean $1.2 Billion added to this small company's bottom line, and it could all start December 16th, the day the US invades Iraq. The profits to be made could be very explosive, so we're passing on the information as soon as we have it ourselves. Don't miss this below immediately.

            The Cure for West Nile virus...
            The Eradication of Bioterrorism...
            And a Safe 43% Gain Per Year, For the Next Three Years...
            Dear Investor,

            Talk about being in the right place at the right time...

            The one company you'll learn about could soon be responsible for eliminating two of the world's most threatening and high-priority concerns:

              1.. The spread of West Nile virus
              2.. The threat of Biological Germ Warfare with Iraq (or any other rogue nation)
            Starting December 16th, for reasons you'll learn about in this letter, this company is poised to rally 43% per year, for each of the next three years. Those who invest in this company now could make handsome returns.

            Thanks to TWO exclusive contracts totaling $431 million with the U.S. Government and the Center for Disease Control and Prevention (CDC), this company has virtually zero competition. No other company is this close to delivering a West Nile virus cure. Plus, Big Pharma elected to abandon the threat of Bio-Terrorism years ago and focus their R&D money on more lucrative markets, like the cure for cancer. Given those facts, you could see why this company is in the best position of any healthcare company in the world.

            Nevertheless, this company maintains an extremely low profile. They've maintained a secretive place on Wall Street because they're based overseas (but trade publicly on the Nasdaq through an ADR, or American Depository Receipt) and have never once asked for a single dollar in venture capital. But this low profile will change starting December 16th, 2002, as you'll soon see.

            Since September 11th 2001, this stock has rallied 30%. Reasonable projections indicate that's just the beginning. The upcoming war with Iraq alone could add $343 million to the company's bottom line. Factor in the West Nile virus cure, and that could mean another $270 million in revenues, which could triple this stock's market cap. But although the market value of this stock could soar by three or four times, I'm estimating shares will increase 43% per year for the next three years. And you'll see it all start later this month.

            This company truly is in a unique position...and offers you a once-in-a-lifetime investment opportunity. The world needs a cure for West Nile virus and a way to eliminate the threat of bioterrorism...RIGHT NOW. This secretive company is the top bet to deliver both of these needs. Once the U.S. starts its assault with Iraq, this stock won't be a Wall Street secret for much longer. The clock is ticking...

            Even though it's Wall Street's "dirty word," you'll soon understand why this company will be the single best stock to actually "buy and hold" over the next three years. Here's their incredible story...

            According to top political insiders, pentagon chiefs have pinpointed a six-week "window of opportunity" in which to launch a war against Iraq. If authorized, all signs point to December 16th. That's exactly why the U.S. Government is so concerned with a smallpox outbreak on U.S. soil. Consider the facts and you'll understand why...

            FACT: According to the CDC, smallpox represents the single largest threat aside from a biological attack.

            Why is smallpox such a threat right now?

            FACT: The New York Times reports that smallpox used to kill one in three poeple who were infected but not vaccinated. Although the highly contagious disease was declared globally eradicated in 1980, the U.S. stopped routine vaccinations in 1972. That means that most people today are considered vulnerable because immunity is believed to diminish with time.

            Does anyone possess smallpox that could potentially use it against us?

            FACT: The New York Times reports that the U.S. Government suspects Iraq of hiding mass quantities of smallpox for a biological germ warfare attack.

            If the U.S. starts attacking Iraq, there's no telling what Suddam Hussein will do. Exposing the U.S. to his stockpile of smallpox is a very legitimate threat. But how would this lead to revenues for this company?

            FACT: Forbes reports that in the wake of September 11th, there's no doubt the U.S. will increase spending on the detection and treatment of biological and chemical threats.

            Just how much money are we talking?

            FACT: The Nation reports that next year's budget for biological defense will increase 319% to $5.9 billion.

            The company you'll learn about will be a direct beneficiary of this increased budget due to the smallpox threat. In fact, a contract with the U.S. Government to provide a new, more powerful smallpox vaccination for every man, woman, and child in the entire country has already been signed.

            FACT: The U.S. Government gave this company a $428 million contract to supply them with a vaccine against smallpox, the number one threat to germ warfare in the U.S., over the next 20 years.

            This company currently has a market cap of $374 million. Their new $428 million dollar contract means this stock is trading below cash. Best of all, this promising company beat out some of the top pharmaceutical companies in the world for this contract. This stock could be in the infancy stages of becoming the next major player in the pharmaceutical and healthcare industry.

            FACT: The U.S. Government elected to issue the $428 million contract to this company, passing over industry giants Merck and GlaxoSmithKline.

            That's right. This company's vaccines are so advanced that the $428 million contract is done, locked up, and finished. The only thing left to happen is the proper media event to bring this company's story to the front pages. And that media coverage will begin the moment the U.S. invades Iraq.

            QUESTION: But what if the U.S. wins the war quickly, and Saddam doesn't release any of his deadly bioterrorism agents? Will this company still have a bright future?

            That's a very legitimate possibility...and if that's the case, this company is STILL a strong buy. Even if their smallpox vaccine never gets used, his company keeps the $428 million, and they still have a West Nile virus vaccine with a $270 million potential waiting in the wings. That's what puts this company in such a special position...

            According to experts at the CDC, West Nile virus is spreading at an alarming rate. In testimony in front of the Senate recently, Dr. Julie Gerberding, director of the CDC, said "our concern for the human toll (from West Nile virus) is enormous." When you consider the facts, you'll see why West Nile virus is fast-becoming such a serious health threat...

            FACT: West Nile virus is spreading faster than any experts expected. It surfaced for the first time in August of 1999...and has rapidly spread across the country...touching 42 states today. Total cases in the U.S. reached 2,072, with 98 deaths.

            What are the possible effects of West Nile?

            FACT: CDC researchers recently discovered that West Nile virus can cause disabling paralysis that resembles polio.

            How does West Nile virus get spread, and how long will it prevail?

            FACT:Experts believe that West Nile virus is here to stay. A mosquito gets the disease from feeding on infected birds, then passes it on when it bites humans or animals.

            How many people could be affected?

            FACT: A recent Business Week article estimates that 500 million people in the world travel each year, with 27 million Americans to tropical areas...all of whom could soon demand this company's vaccine.

            Assuming $10 per vaccination, that's $270 million in revenues from the West Nile virus vaccination per year. But how long will it take before they'll have a cure?

            FACT: Federal scientists told Congress that a West Nile virus cure could be available in three years.

            The same company I'm passing along to you will be a direct beneficiary of this West Nile virus threat. In fact, a contract with the National Institutes of Health to develop a West Nile virus cure has already been signed.

            FACT: The U.S. Government, in conjunction with the National Institutes of Health, gave this company a $3 million grant to develop a vaccine against West Nile virus, an emerging health threat within the U.S.

            It's widely rumored that the West Nile virus grant was to jump-start a fast-track research platform. The simple, sad fact is that vaccine development hasn't been a national priority...until just recently. As a result, the U.S. Government realizes that they have to spend much more on research, possibly underwriting the entire cost, just to get back on track.

            So what you have is a company on the fast-track to developing a cure for West Nile virus at the cost of the Government...while at the same time collecting $428 million over the next 20 years to produce a new smallpox vaccine to protect against a bioterrorism threat. It's truly a unique and unprecedented position.

            Again, this is an analysis on a single company. It trades on the Nasdaq. It has a virtual monopoly developing solutions for two of the world's biggest threats, bioterrorism and West Nile virus. And because of the U.S. military's involvements in Iraq, I can tell you exactly when and why this company's shares will start to rise later this month. What's the downside if I'm wrong? Well, not much, considering that this company has a 20 year gravy train of $431 million from the U.S. Government and the CDC. This could be the simplest, safest, and best stock to "buy and hold" over the next three years. And if that's not enough, get this...

            In 2000, the worldwide market for vaccines was $2.97 billion. That's small potatoes for Big Pharma, which collectively decided to pour most of its research and development funding into cancert. Looking back, that was a huge oversight...

            FACT: Vaccines are currently the fastest-growing field among anti-infectives. With an estimated current market of $37 billion, they're expected to be a major driver of growth in the years ahead.

            Since the vaccine market jumpted from $2.97 billion in 2000 to $37 billion today, Big Pharma has become interested once again. The problem is, they're nearly three years behind. So what does that tell you?

            FACT: Since so many bigger pharmaceutical firms are ill-equipped to meet the challenge od delivering new vaccines, they have to look at smaller companies within this vaccine line of research to fill their gaping void.

            In addition to their two research grants, this company also stands the chance of getting taken over by a Big Pharma company at a steep premium. But here's the best part...

            For argument's sake, how will this company look if smallpox turns out to be harmless, West Nile virus doesn't turn into a health problem for humans, and Big Pharma shomehow gets its act together and catches up with vaccine pipelines without any outside help?

            If everything thus far is completely wrong, this company could still be strong enough to gain 30% per year over the next three years.

            That's right. This company is in such a special position that it'll still be a buy if everything you've read thus far turns out to be 100% wrong. If tomorrow we make peace with Iraq, realize that West Nile virus can be cured by taking two Tylenol, and Big Pharma leapfrogs three years ahead with their vaccine research, this stock will still be capable of returning 30% over the next three years.

            Why? Because no matter what, cattle, horses, sheep, and even goats will all be seriously threatened by West Nile virus. Even if the human West Nile virus vaccine isn't needed, the veterinary application of the West Nile virus vaccine could have a significant effect on this company's earnings...starting this years.

            FACT: The Texas cattle industry, which includes cattle, horses, sheep, and goats, is prepared to spend millions on this company's West Nile virus vaccine to protect their livestock.

            Think about it. People can put on mosquito spray. Animals grazing in fields across the world cannot. That's why this company's veterinary application represents a $100 million market. That alone is enough revenue to push this stock up 15% over the next three years.

            But that's still not the end of this company's potential if everything thus far is wrong.

            In addition to the domestic demand for this company's smallpox vaccine, the overseas demand for this company's smallpox vaccine could provide them with another $343 million in revenue over the next 20 years.

            FACT: The U.S. is not the only country stockpiling this company's smallpox vaccine. The CBW Conventions Bulletin, a Harvard journal on chemical and biological weaponds that is regarded as authoritative, reported that Germany ordered 6 million doses, Ireland ordered 600,000, and Greece ordered 150,000.

            The 6.75 million orders from Germany, Ireland, and Greece are only the beginning. I have a hunch that even more countries across the world will start ordering their smallpox vaccines the moment Iraq starts feeling the heat.

            Factoring in just the estimated $100 million in revenues from the West Nile virus veterinary vaccine and the $343 million in revenues from the increased overseas demand for this company's smallpox vaccine, the stock price could go up 30% over the next three years. But when you also consider the U.S. smallpox contract and the West Nile virus human vaccine, I hope you're realizing that this company's "true" potential is easily ten times as great.

            Let me reiterate this opportunity.

            This company is positioned to solve two of the world's most threatening, urgent, and high-priority concerns: A defense against smallpox and the eradication of West Nile virus. Due to a contract with the U.S. Government and the CDC, this one company has a lock on the market to satisfy both needs.

            Their potential, but expected, revenue stream of $428 million over the next 20 years could conservatively make you 43% per year for the next three years. If all goes as expected, that revenue stream has the potential of topping $1.2 billion.   So, if this is such a great company, why is the stock not up more than 30% over the last year?

            Well for one, we haven't officially started a war with Iraq. Secondly, West Nile virus is still an emerging health threat. Also, Big Pharma spends millions upon millions to hide the fact that they were shortsighted years ago in researching vaccines. And lastly, this company has kept an extremely low profile, due in part to the fact that they operate overseas and have never once asked for a single dollar in venture capital. But if you look close enough, you'll notice that some ultra savvy insiders have picked up on the massive potential of this company.

            FACT: Armada Small Cap Growth Fund and Morgan Stanley Developing Growth Securities, arguably two of the best mutual funds at locating small-cap growth stocks, both own shares of this company's stock.

            FACT: This company ranked at the top of Time Magazine's annual "Europe's 50 Hottest Firms," which rates companies on their future potential, not present hype.

            SO...ARE YOU INTERESTED?
            Before I ask you if you're interested in this information, I must make one thing clear. I'm not a "high-powered" stock analyst. I don't work for any brokerage house. An I'm certainly not getting paid by this company to promote their stock. I'm an options trader who rarely even looks at stocks. But I'm drawing this opportunity to your attention because it's bar none the best positioned stock I've ever come across.

            I also must make it clear that there's no guarantee this stock will continue to go up. The risk that it could go down does exist. That's something for you to decide. But I can guarantee you that this stock is positioned to satisfy two of the world's most urgent needs: Providing a defense against smallpox and developing a cure for West Nile virus. In fact, if you're interested in getting in on this deal, I'll provide you with four special quarterly analysis reports that reveal the name of this company and prove everything you've read above is true. Your first of four reports will get sent to you today, and it'll reveal the name of this company and cover the following:

              a.. Details of the $428 million smallpox contract
              b.. Reports from the CDC about the seriousness of West Nile virus
              c.. Big Pharma's non-factor
              d.. The demand for the smallpox vaccine overseas
              e.. Veterinary West Nile virus vaccine applications
            This is going to be very easy for you. You don't have to follow a fast-moving trading system to make these profits. Nopee. I'll simply give you immediate access to four special reports, sent to you each quarter over the next year, detailing all the backup information you need to verify everything you've read about here. If you're interested, and you think the price is fair, all you need to do is say yes.

            You can start getting this analysis through the order link at the bottom of this page. You'll get instant access to the first report, which reveals the name of this company and tells you everything you need to get positioned for the rise. Then, over the next year, you'll receive quarterly updates via email on the performance of this company. You'll be "in the loop" throughout the entire process. I can't make it any easier for you.

            Let me repeat the offer. Thsi company, up 30% since September 11th, 2001, is in perfect position to solve two of the world's biggest threats: Bioterrorism and West Nile virus. Thanks to exclusive contracts with the U.S. Government and the CDC totaling $431 million over the next 20 years, this company could gain 43% per year for each of the next three years...and it could all start December 16th, the day the U.S. could start a war with Iraq. Savvy investors are getting positioned in this company's shares, and you can join them.

            So, what's this information worth?

            Let's say you follow this advise and it's right on the money. A $10,000 investment before December 16th would be worth $29,242 in just three years. I know that a lot of you can afford to put a lot more than $10,000 on this kind of safe, high return play. But even if you have just $10,000 to invest, you could safely double your money over three years by simply "buying and holding" this stock. There's nothing else you'll have to do.

            So, what price do you think is fair for this kind of information? Many people spend $5,000 for investment trading services. Other services charge $2,500 for "insider trading" tips. Unfortunately, in order to participate in the profits of these trading services, you have to act fast. This offer is much simpler. All you need to do is elect to receive four quarterly reports detailing this special company. But after December 16th, this offer will not be made available again.

            So, what's a fair price? Quite honestly, I have no idea. It all depends on how much you're willing to invest in this company. A $10,000 investment could return $29,242 in three years, or a $100,000 investment could return $292,420 in three years. No matter how much you decide to invest, I'll give you instant access to what you need to know about this company for $299. For a quarterly analysis, that's not cheap. But if this company turns out to be a low-risk, high-return stock to own over the next three years, then it's well worth it.

            To get in on all the information about this company, simply follow this secure link:
            Click Here For The CSR Finance Secure Order Form

            After your order is complete, the first report will be immediately emailed to you within minutes. I hope you decide to use this information to your advantage.

                  Bryan Bottarelli 

            P.S. - As you read about this company in the news, you'll notice that they just hired a new public relations firm. It's no secret that this company wants to get its name out on Wall it won't be unknown for much longer. The clock is certainly ticking. Do yourself a favor and act now!

            Copyright © 2002 CSR Group, LLC. All Rights Reserved.
     <,&s2=ad_right 1_topfin&tp=ad_topright_topfin&refer=topupdn&

VaxGen Shares Rise on Expedited Review for HIV Vaccine
By Angela Zimm

Brisbane, California, Dec. 16 (Bloomberg) -- VaxGen Inc. shares rose as much as 22 percent after the company said U.S. regulators designated its experimental HIV vaccines for fast review.

The shares rose $2.48 to $15.49 as of 12:01 p.m. New York time on the Nasdaq Stock Market after reaching $15.85.

The Food and Drug Administration agreed to consider VaxGen's AIDSVAX B/B and AIDSVAX B/E under a program designed to speed review of drugs for life-threatening diseases, VaxGen said in a statement. VaxGen's vaccines against the virus that causes AIDS are being studied in the last of three stages of human testing generally required for FDA approval. VaxGen may submit portions of its vaccine applications for FDA review instead of having to wait until it compiles complete data. Once VaxGen has turned in complete information, it may ask the FDA to review the applications in six months instead of the typical 12 months, said VaxGen spokesman Jim Key.

``We're confident we'll receive priority review,'' Key said.

Brisbane, California-based VaxGen said it expects to release results of its AIDSVAX B/B study in the first quarter of 2003 and AIDSVAX B/E results in the second half of the year.

Oh, but a drug company wouldn't do this - they really CARE about people's and children's health.
>From Bernie Saunders, Vermont's Independent Representative

For Immediate Release, 1/10/2003
Sanders: Drug Giant Glaxo Moves to Cut Off Supplies to Canadian Pharmacies Selling to Americans

Congressman calls for legislation to end Glaxo’s strong arm tactics

WASHINGTON – In a move that is sure to re-ignite the battle in Congress over Americans’ ability to purchase lower price prescription drugs from Canada, pharmaceutical giant GlaxoSmithKline has informed Canadian pharmacies and wholesalers who sell into the U.S. that they will no longer be able to buy Glaxo products after January 21, 2003. Rep. Bernard Sanders (I-VT) -- the first member of Congress to take constituents across the border to highlight the disparity in prescription drug prices between the United States and Canada -- responded sharply to Glaxo’s threat, calling it a “direct attack on the health of American prescription drug consumers.”

Glaxo sent letters to each of its wholesalers, distributors and retailers in Canada this week threatening to cut off their supply of life-saving drugs if they sell any of Glaxo’s products to U.S. consumers or to any one of 27 Canadian retailers who sell prescription drugs to U.S. consumers. It is rumored that similar letters from other pharmaceutical companies may be imminent.

While difficult to quantify, the Food and Drug Administration estimates that some two million prescriptions will be filled in Canada for American patients this year. Americans are increasingly looking to Canada to fill their prescriptions because drug companies charge consumers in the U.S. the highest prices in the world for the same medications, generally manufactured in the same plants.

Sanders said that Glaxo is trying to cut off Americans from reasonably priced medicines regardless of the impact on their health, “At a time when millions of Americans are struggling to afford the outrageously high price of prescription drugs in the U.S., Glaxo is trying to slam the door on a safe and affordable source of medicine for an increasing number of Americans, namely Canada. The outrage is that for some of these people this really is a matter of life and death. Once again, Glaxo is showing that for the pharmaceutical industry the health of their corporate coffers always comes before the health of American patients.”

In recent years, the U.S. House of Representatives has repeated voted in favor of preserving individual American’s ability to buy prescription medications for their own personal use in Canada. Just this week, Senator Daschle introduced a prescription drug bill that would fully authorize the purchase of prescription medicines from Canada.

Sanders predicted the U.S. House would act to protect Americans who buy medicines from Canada and pledged to introduce legislation to prevent Glaxo and other drug companies from strong arming Canadian pharmacies and wholesalers. “The U.S. Congress cannot sit idly by while Glaxo or any pharmaceutical company cuts off American consumers who are already getting safe, affordable prescription medications from Canada. The first bill I will introduce in the 108th Congress will put an end to this pharmaceutical company bullying.”

A copy of the Glaxo letter is available upon request.

For More Information:
Visit the PENSIONS section.
Joel Barkin at (202) 225-4115 OR (202) 441-5247

Coley Pharmaceutical Group Awarded Defense Department
Contract to Develop CpG Immunostimulatory Oligos for
Enhancement of Vaccines

--DARPA awards $6MM in funding--

Wellesley, MA, USA,

December 13, 2002

Coley Pharmaceutical Group today announced that the US Defense Advanced Research Projects Agency (DARPA) has awarded $6MM to Coley to support the development of Coley’s CpG immunostimulatory oligonucleotides (CpG oligos) to enhance anthrax vaccines.

“This contract builds on our preclinical data showing that CpG oligos protect mice against a broad range of
pathogens, including Anthrax, as well as our human clinical data showing enhancement of the Engerix-B®
Hepatitis B vaccine when combined with our immunostimulatory oligos,” said Robert L. Bratzler, Ph.D., Coley President and Chief Executive Officer. “The DARPA contract and other development agreements with our partners, including Aventis and GlaxoSmithKline, give Coley the opportunity to realize the full potential of its immunostimulatory oligos to prevent or treat a broad range of diseases.” The current anthrax vaccine requires six doses and 18 months to produce immunity. Coley’s CpG oligos, used together with vaccines, have the potential to reduce the number of vaccine doses, induce protective antibody levels more quickly, produce higher affinity antibodies directed against a broader range of anthrax antigens, and to improve duration of protection.

This research at Coley stems from a grant awarded in 1999 to Arthur Krieg, M.D., then a professor of
Internal Medicine at the University of Iowa, a Coley founder and currently the company’s Chief Scientific
Officer. Commenting on this new contract, Dr. Krieg said, “ I am delighted that our progress since we
began this program in 1999 has been so rapid, and that DARPA has selected this program to transition from the preclinical phase to the clinical phase as a high priority.”

About B Class CpG Oligonucleotides Coley has specifically optimized CpG 10103, a B Class oligo for vaccine applications. CpG 10103, acting through the TLR9 receptor present in B-cells and plasmacytoid dendritic cells, potently stimulates human B-cell proliferation, enhances antigen- specific antibody production and induces Interferon-a production, Interleukin-10 secretion, and Natural Killer Cell (NK cell) activity. These broad immunostimulatory actions are required to improve the immune response to vaccines.

CpG 7909, Coley’s lead drug candidate, is also a B Class oligo. CpG 7909 significantly increased antibody
responses when administered to normal human volunteers in combination with Engerix-B, GlaxoSmithKline’s marketed prophylactic Hepatitis B vaccine. The approved dosing of Engerix-B requires three vaccinations over six months but fails to induce protective antibody levels in 5-10% of normal healthy individuals. In a clinical study conducted by Coley in normal healthy volunteers, individuals given the Engerix-B vaccine (without CpG 7909) rarely had any detectable antibody response within two weeks of the first vaccine dose, but almost 60% of subjects given the vaccine together with CpG 7909 had protective antibody levels within just two weeks of the first dose, and 100% of subjects receiving CpG 7909 did within six weeks.


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Drug Makers Battle Plan to Curb Rewards for Doctors

December 26, 2002

WASHINGTON, Dec. 25 - Drug companies and doctors are fighting a Bush administration plan to restrict gifts and other rewards that pharmaceutical manufacturers give doctors and insurers to encourage the prescribing of particular drugs. In October, the Department of Health and Human Services said many gifts and gratuities were suspect because they looked like illegal kickbacks. Since then, a few consumer groups, including AARP, have voiced support for the restrictions. But they are outnumbered by the drug makers, doctors and health maintenance organizations that have flooded the government with letters criticizing the proposal.

In contending that the proposed federal code of conduct would require radical changes, those opposing the change discuss their tactics with unusual candor and describe marketing practices that have long been shrouded in secrecy. Drug makers acknowledged, for example, that they routinely made payments to insurance plans to increase the use of their products, to expand their market share, to be added to lists of recommended drugs or to reward doctors and pharmacists for switching patients from one brand of drug to another.

Insurers, doctors and drug makers said such payments were so embedded in the structure of the health care industry that the Bush administration plan would be profoundly disruptive. Moreover, doctors said that drug companies were a major source of money for their professional education programs, and that the administration proposal could drastically reduce such subsidies. "Without financial support from industry, medical societies would most likely be forced to curtail or stop offering these important educational activities," said Dr. Michael D. Maves, executive vice president of the American Medical Association.

Doctors of all types echoed that concern.

The arguments were made in a public comment period. The administration said it was considering those comments and expected to issue final guidelines in a few months. In its guidance to the industry, the government warned drug makers not to offer financial incentives to doctors, pharmacists or other health care professionals to prescribe or recommend particular drugs. The government said the industry's aggressive marketing practices could improperly drive up costs for Medicare and Medicaid, the federal health programs for 75 million people who are elderly, disabled or poor. But a coalition of 19 pharmaceutical companies, including Pfizer, Eli Lilly and Schering-Plough, said the Bush administration proposal was "not grounded in an understanding of industry practices." The payments and incentives to which the government objects are standard in the drug industry, they said.

Merck & Company said it routinely gave discounts and payments to health plans to reward "shifts in market share" favoring its products. Merck complained that the administration proposal would "criminalize a wide range of commercial conduct" that the industry regards as normal and entirely proper. The Pharmaceutical Research and Manufacturers of America, the chief lobby for brand-name drug companies, acknowledged that these payments created a strong incentive to prescribe certain drugs, or to shift patients from one drug to another. But, it said, that did not make the payments "illegal kickbacks."

Solvay Pharmaceuticals of Marietta, Ga., told the government: "We understand that bribes and other hidden remuneration should be prohibited. However, a policy statement that declares well-established commercial practices potentially criminal creates a chilling effect on commerce and ultimately harms all consumers." The American Association of Health Plans, which represents most of the nation's H.M.O.'s, said the proposed standards "cast doubt on the propriety of many well-established practices undertaken by health plans to develop and administer their drug benefits."

Drug manufacturers said they often encouraged the use of their products by making payments or giving discounts to H.M.O.'s and to the specialized companies that manage drug benefits for millions of Americans. Such companies, known as pharmacy benefit managers, can exert immense influence over what drugs are prescribed and dispensed. H.M.O.'s and pharmacy benefit managers said they typically received money from the manufacturer of a drug if sales of that drug reached a certain level - say 40 percent of all the prescriptions for cholesterol-lowering agents. The manufacturer may agree to a higher payment if the drug achieves a larger share of the market.

While describing such arrangements, the drug companies, doctors and insurers did not divulge who received how much for promoting a specific drug, nor did they provide details of individual marketing campaigns. The Bush administration proposal received support from one H.M.O., the Great Lakes Health Plan, which serves more than 90,000 Medicaid recipients in Michigan.

Eric J. Wexler, general counsel of the Great Lakes plan, said pharmacy benefit managers sometimes sent letters to doctors recommending that they shift Medicaid patients from generic drugs to brand-name medicines. In many cases, Mr. Wexler said, the brand-name drugs cost more, but are less effective.
For each letter sent to a doctor, Mr. Wexler said, "the pharmacy benefit manager receives an administrative fee, and it may get additional remuneration for converting patients from one drug to another." AdvancePCS, a pharmacy benefit manager based in Irving, Tex., confirmed that it received payments from drug companies for letters sent to doctors and patients urging them to use particular drugs.

But it said the payments - typically a flat fee for each letter - were for educational services that could help
control drug spending. Kaiser Permanente, a nonprofit H.M.O. based in Oakland, Calif., said the administration plan would impair its ability to negotiate lower drug prices for its 8.5 million members because it suggested that discounts and rebate payments create "a prosecutorial risk" under the kickback law.  The Blue Cross and Blue Shield Association said the proposal would impede what it described as legitimate cost-control measures.

"Pharmaceutical companies may be less willing to offer large discounts if those discounts cannot be tied to
movements in market share," said Alissa Fox, policy director for the association, whose members insure more than 84 million people.  LaVarne A. Burton, president of the Pharmaceutical Care Management Association, which represents pharmacy benefit managers like Express Scripts and AdvancePCS, said that "manufacturers may cease offering discounts," rather than run the risk of liability under the proposed guidelines.

But the Food Marketing Institute, whose members operate 12,000 supermarket pharmacies, applauded the proposal. "Pharmacy benefit managers routinely refuse to disclose their financial arrangements with drug companies," said Tim Hammonds, president of the institute, "and they do not wish to be subjected to any kind of accountability, such as an annual audit." As a result, Mr. Hammonds said, "it is not possible to know with any certainty whether P.B.M.'s are helping to control drug costs for the federal government or if these middlemen are contributing to skyrocketing drug costs."

The administration proposal says that when drug executives discover evidence of illegal conduct, they should report it to federal authorities within 60 days. Also, it said, drug makers should consider offering rewards to whistle-blowers and should prominently display the phone number for reporting Medicare fraud to the government (1-800-447-8477).

The coalition of drug makers objected to these recommendations, saying they would undercut the companies' efforts to police themselves.  The American Medical Association said drug companies should not be forbidden to give doctors pens, notepads and other items of nominal value that have "no correlation to any service provided by the physician to the pharmaceutical company." Such "giveaway items" are harmless, it said. But the Massachusetts Medical Society suggested that "these items would not be so readily produced if they were not an effective form of advertising."

The society asked: "Is the physician who writes a prescription with a company's logo on the pen more likely
to write a prescription for that advertiser? Are patients more likely to request a certain drug because they see the notepad on the doctor's desk?"

Pricey vaccines for kids still public health bargains

Researchers say advance budgeting for the increased costs of childhood immunization is a wise move.

Susan J. Landers, AMNews staff. Feb. 17, 2003. Additional information

Washington -- The cost of childhood vaccines has risen over the past 26 years from $10 per child in 1975 to $385 in 2001, and those costs could take a giant leap upward when vaccines now in the pipeline become available. The cost per child for recommended vaccines at public-sector prices may triple over the next two decades, warned a new vaccine study published in the December 2002 American Journal of Public Health.

The study was done, not to question the cost effectiveness of vaccines, but to serve as a warning to policy-makers that they should make sure there is enough money in the coffers to continue to cover the price tags of these valuable public health tools. "In the past, vaccines were less expensive, and there may have been some impression on the part of officials that they would remain inexpensive," said Matthew Davis, MD, the study's lead author and an assistant professor of pediatrics and communicable diseases at the University of Michigan Medical School in Ann Arbor.

"Our analysis suggests that vaccines may be more expensive in the future than they have been in the past," said Dr. Davis. "But that's not to say that they are no longer an excellent investment in our children's health." As the number of recommended vaccines for children has grown over the years, the role of the state and federal governments in financing their purchase for children who were in danger of going without has also increased. Currently, state and federal programs buy more than half of the vaccines sold in this country.

Childhood vaccines were 38 times more expensive in 2001 than in 1975.

The study by Dr. Davis and colleagues is the first analysis of vaccine cost trends to try to put some parameters around the possibilities of what lies ahead. It was inspired in part by the introduction in 2000 of the pneumococcal conjugate vaccine for children, marketed by Wyeth Pharmaceuticals as Prevnar.

The drug's cost, at about $46 per dose for four doses, is more than four times that of the DTaP series and was alone responsible for doubling the total cost of childhood vaccines. The high cost of Prevnar is due, in part, to its inclusion of the seven most common serotypes that cause 80% of pneumococcal infections in very young children, said Margaret Rennels, MD, a professor of pediatrics at the University of Maryland School of Medicine in Baltimore. "So, unquestionably it is a more difficult vaccine to manufacture [than a vaccine] which is just one serotype."

Another factor driving up prices is the more stringent regulatory climate in which the new vaccines are being developed, said Dr. Rennels. "The paperwork, the regulatory requirements, the quality monitoring, the time to get something approved by an Institutional Review Board, the length of the  consent forms, everything has gotten more and more complicated," she said. While Dr. Davis' study focused on the costs of vaccines in the public sector, he noted that vaccines purchased in the private sector are usually at least 20% higher.

Worth every penny

Although vaccines may fall under heightened scrutiny by both public and private purchasers, their value can not be overestimated, said Louis Cooper, MD, interim director of National Network for Immunization Information and a past president of the American Academy of Pediatrics.

When asked about the high cost of vaccines, Dr. Cooper responds with additional questions. "How can the public and the profession be so distorted about the value of prevention compared to what they are willing to spend on treatment? Why is it we spend more on Claritin and Viagra than we do on vaccines?"

Dr. Cooper attributes the costs to the fact that there are more and better vaccines now available, and he believes there will be little or no change in the willingness of payers to continue to cover them. "People who make the health decisions at the federal and state levels know that vaccines are a  bargain. There is nothing we do in medicine that matches the return on investment from our vaccines."

And despite the withdrawal of some manufacturers from the vaccine marketplace, there are new vaccines in the pipeline, including a nose spray influenza vaccine, a conjugate meningococcal vaccine and a combination conjugate meningococcal and pneumococcal vaccine, said Dr. Rennels.


Vaccines Seen a $10 Billion Market by '06

      Reuters - Sales of vaccines, once considered a commodity market, are booming with global revenues set to reach nearly $10 billion in 2006 from $5.4 billion in 2001, according to research recently published.       Analysts at Merrill Lynch said the fastest growing section of the market would be for flu vaccines, sales of which are expected to more than double to $2 billion in the next five years.

      Much of the flu vaccine market's 16 percent compound five-year growth will be driven by the entry of MedImmune Inc.'s premium priced nasal spray FluMist, which will be co-marketed by Wyeth.  The launch of FluMist later this year, coupled with increasing demand for pediatric jabs, could see the overall vaccine market leap by 20 percent in 2003 alone. Growth is then expected to moderate to an annual 10 percent from 2004 to 2006.

      Merrill's projection of 13 percent compound five-year sales growth for the total vaccine market compares with global drug sales of just eight percent in the year to October, 2002, according to healthcare information
firm IMS Health.  The infant sector currently makes up the largest section of the vaccine market, with 2001 sales of $2.5 billion, but adult demand is growing as governments actively promote flu shots for the elderly and more vaccines are used by tourists.

      At the same time, the threat of bioterrorism in the wake of September 11, 2001 attacks on the United States has spawned a new business in supplying vaccines against smallpox following fears that the deadly virus might be used as a weapon. The global vaccines market is currently dominated by four large pharmaceutical companies -- Aventis SA, GlaxoSmithKline Plc, Wyeth and Merck & Co Inc -- which together account for almost 85 percent of sales. But a number of smaller companies are also carving out a niche, including Britain's PowderJect Pharmaceuticals Plc and Acambis Plc, Switzerland's Berna Biotech and Chiron Corp of the U.S.
* * *

Aventis Reports Full-Year Results for 2002
Wednesday February 5, 8:00 am ET

* Aventis meets ambitious growth targets for third consecutive year despite a more challenging market and industry environment in 2002: Core business sales activity rises 11.6% and net income climbs 28% Core business EPS rises 27% to 2.62 euros (2.48 USD) [3.31 euros (3.13 USD) before goodwill amortization] U.S. sales activity increases 21.4%, strategic brands sales activity rises 28.3%

* Product leadership reinforced in key therapeutic areas and complemented by successful introduction of future growth drivers: Lantus and Ketek continue successful roll-out in key markets Aventis plans to submit several new drugs for approval in 2003/2004 New products expected to contribute significantly to sales growth between 2002 and 2007

* Aventis expects continued strong earnings growth in 2003 and beyond Financial flexibility to further strengthen the pharmaceutical business of Aventis

STRASBOURG, France, Feb. 5 /PRNewswire-FirstCall/ -- Aventis today reported consolidated group net sales of 20.622 billion euros (19.500 billion USD) for 2002 compared with 22.941 billion euros (21.693 billion USD) in 2001. This decline in group sales is attributable to structural changes and the divestment of non-core activities, mainly Aventis CropScience in the course of 2002. Group net income rose to 2.091 billion euros (1.977 billion USD) compared to 1.505 billion euros (1.423 billion USD) in 2001. Consolidated earnings per share (EPS) for the Aventis group increased to 2.64 euros (2.50 USD) in 2002 compared to 1.91 euros (1.81 USD) in 2001. These consolidated results include contributions from non-core activities.

(16.634 billion USD), an increase of 11.6% on an activity basis (excluding currency effects) compared to 16.576 billion euros (15.674 billion USD) in 2001. Gross margin increased to 74.1% from 73.3% in 2001. EBITA increased by 19% to 4.505 billion euros (4.260 billion USD), while the EBITA margin rose 2.8 percentage points to 25.6%. Net income grew 28% to 2.081 billion euros (1.968 billion USD) from 1.630 billion euros (1.541 billion USD), while EPS grew 27% to 2.62 euros (2.48 USD) from 2.07 euros (1.96 USD). (The core business of Aventis includes prescription drugs, human vaccines and corporate activities and the earnings contribution from the 50% equity interest in the animal health joint venture Merial).

USD) in 2002, an activity increase of 11.1% compared to sales of 15.168 euros billion (14.343 billion USD) in 2001. Sales of strategic brands, a group of key brand-name prescription drugs, rose 28.3% on an activity basis to 8.751 euros billion (8.275 billion USD) and accounted for 54.6% of total prescription drug sales, up from 47.3% in 2001. The human vaccines business generated sales of 1.580 billion euros (1.494 billion USD), representing a sharp increase of 16.3% compared to 2001.

Aventis delivers on ambitious targets for third consecutive year

"2002 was a very successful year for Aventis in a challenging environment: We were able to maintain the strong growth momentum in our core business and to meet our ambitious targets for the third consecutive year since the creation of Aventis. This was the result of the strong performance of our strategic brands and vaccines as well as our success in key geographic markets, led by the United States. At the same time, we transformed Aventis into a pure pharmaceutical company, simplified our structure and formed a new management team," said Igor Landau, Chairman of the Management Board.

Based on the financial results of 2002, which were reviewed by the Supervisory Board at its meeting on February 4, 2003, the Management Board will propose to the Annual General Meeting of Shareholders on April 17, 2003, a dividend of 0.70 euros per share to shareholders of record as of April 22, 2003. The total dividend payment, which is scheduled for distribution on May 22, 2003, would be approximately 560 million euros.

Aventis expects continued strong earnings growth in 2003 and beyond

"For 2003 and beyond, the pharmaceutical industry will continue to face several challenges, such as additional healthcare cost-containment efforts and more demanding approval procedures for new products. However, the mid- to long-term growth trends for the industry are intact: There is a tremendous need for better therapies for serious, chronic or life-threatening diseases -- such as cancer, cardiovascular conditions or diabetes -- while new technologies and a better understanding of many diseases will enable us to offer patients better treatments," said Igor Landau.

"At Aventis, our existing strategic brands and vaccines, which address critical medical needs, have significant potential for incremental growth. A number of new products in key therapeutic areas will also contribute substantially to our future performance. We therefore expect to continue to deliver strong earnings growth in 2003 and beyond. For 2003, sales growth for our core business is expected to be in the high single digits, excluding the impact of currency, while earnings per share for the core business are expected to achieve a growth rate in the mid to high teens. For 2004, we expect a similar profile for growth as in 2003" Igor Landau concluded.

divestments and the deconsolidation of debt associated with the divestedbusinesses led to a significant reduction in net debt to 3.452 billion euros at the end of 2002 compared to 9.196 billion euros at the end of 2001. "In 2003, we are targeting a strong operating cash flow in our core business, supplemented by divestitures of non-core activities. This should help us to further deleverage our balance sheet and provide us with the financial flexibility to strengthen our pharmaceutical business," said Patrick Langlois, Vice Chairman of the Management Board and Chief Financial Officer of Aventis. U.S. sales activity rises 21.4 % and represents 39% of core business sales

In the United States, core business sales rose 21.4% on an activity basis to 6.859 billion euros in 2002 compared to 5.964 billion euros in 2001. The United States accounted for 39% of total core business sales compared to 36% in 2001 and 33% in 2000.

Despite the negative impact of cost containment measures in key European countries, Aventis was able to expand sales, thanks to the growth of its strategic brands in the major markets. This was due to the successful introduction of innovative drugs, such as the novel antibiotic Ketek (telithromycin) in France and the anti-diabetic agent Lantus (insulin glargine) in the United Kingdom. In France, the biggest European market for Aventis, sales activity rose by 4.7% to 2.295 billion euros and in Germany by 2.9% to 1.086 billion euros. In Italy, sales activity increased 7.2% to 628 million euros and in the United Kingdom by 21.4% to 448 million euros.

In Japan, the world's second-largest pharmaceutical market, core business sales activity increased 2.7% to 923 million euros as the performance of the strategic brands more than compensated for the declining contribution of older products.


"Vaccine Contracts Awarded"
Washington Post ( (02/26/03) P. A8; Brown, David

The federal government has awarded Acambis and Bavarian Nordic contracts to develop a safer smallpox vaccine using the "modified vaccinia Ankara" (MVA) virus, which is a very weak version of the microbe used for the smallpox vaccine.  The safer vaccine might even work for immuno-compromised people. The two companies will get $20 million in all to grow and test the virus, and Acambis executive Gordon Cameron says that the work should be completed by the end of the year.  Next year will see tests on immuno-compromised volunteers, but the federal government will probably order 30 million doses of the vaccine to stockpile.  MVA was developed by German researchers who used it to vaccinate people with eczema, but it has not been tested against the disease itself; it is also being tested as a vector for other potential vaccines.


            A message from the Dean

            The John Beale Davidge Alliance

            NFL Star Joins School of Medicine Team in Celiac Campaign

            Center for Vaccine Development Receives $20 Million

            Governor's Cancer Disparity Conference

            New Department of Orthopaedic Surgery

            Quick Studies

            A Publication for the Faculty
& Staff of the University of Maryland School of Medicine

                   is produced by the University of Maryland School of Medicine Office of Public Affairs.
                  Donald E. Wilson, MD, MACP, Vice President for Medical Affairs and Dean, School of Medicine

                  Jennifer B. Litchman, Executive Editor
                  Jennifer L. McGinley, Contributor
                  Concept Foundry, Designer

                  Submitting Information to SOMNews Do you have news or information you would like to see in SOMNews? If so, please e-mail your submission to Jennifer Litchman, Director, Public Affairs, at or fax it to 6-8520.
         Look at the oxymorons on this is almost laughable...celiac and vaccines spoken of together as if they are NOT RELATED!

       September 2000   Volume 2    Number 1

            A Message from the Dean
            Welcome back to a new school year! I trust your summer was enjoyable and productive. This new academic year promises to be an exciting one, and I'd like to provide you with an update on recent news and developments:

            . The Center for Clinical Trials is open for business, and is already assisting our faculty with clinical trials, with an average turn-around time from submission to approval an amazing three weeks.

            . We will break ground on the new Health Sciences Facility II in October, and completion of this state-of-the-art research building is expected late in 2002.

            . We will soon complete and implement our new five-year
            strategic plan.

            . The Division of Orthopaedic Surgery in the Department of Surgery has achieved departmental status. The new Department of Orthopaedic Surgery increases the number of medical school departments to 23.

            . We will complete our New Century Medicine fund-raising campaign well ahead of schedule. To date, more than $63 million - 97% of the $65 million goal - has been raised.

            I am extremely pleased to report that the School of Medicine received $156,398,979 in research funding in FY2000, an increase of $18,325,495 - or 13.3% - over FY1999. This level of funding translates into $500 of external funding for every square foot of research space.

            This level of research productivity places us among the premier medical schools in the country. In addition to that bit of good news, we have recently received word that Myron M. Levine, MD, and the Center for Vaccine Development have been awarded $20.4 million from the Bill and Melinda Gates Foundation. This five-year award will be used to develop and test a "stealth" mucosal measles vaccine that can be used to immunize infants in developing countries, particularly in Africa. This now becomes the largest single grant on an annual basis in School of Medicine history.

            The Liaison Committee on Medical Education (LCME) has submitted its report to the School of Medicine. The review was exhaustive, time intensive, and not a little nerve-racking, but I am pleased to tell you that the School of Medicine received a fair and accurate reporting, and a full seven-year re-accreditation. The LCME listed 18 institutional strengths and just three areas of concern. This was an extremely favorable review. If you would like a complete list of our institutional strengths as outlined in the LCME review, please contact my office.

            Our greatest success is still ahead of us, and I look forward to working with you toward our goals.

            DONALD E. WILSON, MD, MACP
            Vice President for Medical Affairs
            Dean, School of Medicine


            National Football League Pro-Bowl quarterback Rich Gannon has joined the University of Maryland School of Medicine in a nationwide public awareness campaign to tackle celiac disease, a genetic disorder that is far more common than previously thought. Nearly one out of every 150 Americans suffers from celiac disease, according to new School of Medicine research. One of those Americans is Gannon's 3-year-old daughter Danielle.  "Danielle was really sick and at first no one knew what was wrong with her. We went for test after test, until she was finally diagnosed with celiac disease in 1998," says Gannon, who flew to Baltimore to kick off the campaign in a July 6 news conference in the Health Sciences Facility.

            People who suffer from celiac disease are unable to eat foods that contain the protein gluten, which is found in wheat and other grains. The disorder can cause severe intestinal problems, but few people - even those who have the disorder - have ever heard of it.

            "We want people to know that celiac disease is a real problem, but that there is no need to suffer with it," explains Gannon. "A gluten-free diet can eliminate the symptoms." The Oakland Raiders quarterback and his daughter will appear in a public service announcement for television to explain the disease and encourage testing. In conjunction with the public service campaign, the Gluten-Free Pantry, a Connecticut-based company that makes gluten-free foods, is marketing a gluten-free cake mix called, "Danielle's Decadent Chocolate Cake." A portion of the sales will be donated to the University of Maryland Center for Celiac Research.

            "Celiac disease may be one of the most common genetically based disorders," says Alessio Fasano, MD, professor of pediatrics, medicine, and physiology at the University of Maryland School of Medicine, and co-director of the University of Maryland Center for Celiac Research.

            Dr. Fasano has completed a study to determine the prevalence of celiac disease in the US. Using a blood test for gluten antibodies, Fasano and his research team screened 10,000 people for celiac disease. Preliminary results show that as many as one out of every 150 Americans has celiac disease. Originally, celiac disease was thought to affect one out of every 7,000 Americans.

            The findings were presented at the Ninth Annual International Symposium on Celiac Disease, held August 10-13, 2000, at the Marriott Hunt Valley Inn. The University of Maryland School of Medicine and the Center for Celiac Research hosted this year's conference.  Dr. Fasano says more testing for celiac disease is the key to preventing the symptoms. "In Europe, celiac disease is widely known and can usually be diagnosed in three to four weeks. In the US, people often suffer for 12 to 14 years before they are ever even tested for celiac disease," says
            Dr. Fasano.

            "American doctors have the knowledge and the training, but we're not testing for celiac disease. The problem is that the disorder causes many vague symptoms, and we are not used to thinking about celiac disease as the cause." Adds Dr. Fasano, "We need to change our thinking, but we are confident that this awareness campaign and Mr. Gannon's support will encourage people to start looking at celiac disease more closely." (WHY DON'T THEY LOOK AT VACCINOSIS THEN?)
                  School of Medicine Hosts Governor's Cancer Disparity Conference

                  The University of Maryland School of Medicine hosted the Governor's Conference on Cancer Disparities July 19th and July 20th. Hundreds of doctors, public health experts, cancer prevention advocates and policy makers gathered in the Medical School Teaching Facility to discuss ways to improve cancer care in Maryland's underserved communities.

                  Participants identified risk factors and addressed higher cancer rates among African Americans and other minority groups. In Maryland, for example, the mortality rate is higher for African Americans with colon and prostate cancer. And in Baltimore City and on the Eastern Shore, the death rate for breast cancer patients is higher for African American women. Nationwide, according to the National Institutes of Health, African Americans are about 34 percent more likely to die of cancer than whites.  "Recognizing and defining the problem is the first step," said Dean Wilson. "By identifying the barriers to care, we can develop the strategies necessary to diminish the suffering caused by cancer."

                  Congressman Elijah E. Cummings (D-MD) opened the conference with a moving speech. Congressman Cummings spoke of a childhood friend whose mother died at a young age because her breast cancer went undiagnosed until it was too late. "We must improve access to affordable health care so our children can grow up with the support of their parents and grandparents," said Cummings, a key sponsor of the conference.

                  "Baltimore City and every county in the state was represented at the conference," said Claudia R. Baquet, MD, MPH, associate dean for policy and planning and conference organizer. "This meeting will help save lives by improving communication and cooperation among the health care providers who serve urban and rural populations." Work sessions focused on prevention, screening and early detection, reducing tobacco use, and increasing minority participation in clinical trials.
            The John Beale Davidge Alliance             

            This year marks the 22nd anniversary of The John Beale Davidge Alliance, a major gift recognition society for alumni, faculty, and friends of the School of Medicine.  The Alliance, founded in 1978 when the Davidge Hall Restoration Project began, now has 475 members, 44 of whom joined this year. "Impressive numbers," says Larry Pitrof, executive director of the Medical Alumni Association, and manager of The John Beale Davidge Alliance. "We are very fortunate to have alumni, faculty and friends who really care about the School of Medicine and appreciate the education the School of Medicine provides."

            Donald E. Wilson, MD, MACP, vice president for medical affairs and dean of the University of Maryland School of Medicine comments, "The loyalty of our alumni, faculty and friends is demonstrated by their generous donations."

            John Beale Davidge, MD, founded the School of Medicine in 1807, was the School's first dean, and its first private donor.

            Alliance membership may be attained through:

            . A pledge of $10,000 in cash, securities, property, or a gift-in-kind to be fulfilled within ten years.

            . Establishment of a deferred gift of $50,000 or more in a bequest, charitable trust, or gift annuity.

                  Current Faculty & Staff Membership of The John Beale Davidge Alliance

                  Robert A. Barish, MD
                  Joseph W. Burnett, MD
                  Frank Calia, MD, MACP
                  William T. Carpenter Jr., MD
                  John M. Dennis, MD
                  Howard Eisenberg, MD
                  James P. G. Flynn, MD, MPH
                  Eve J. Higginbotham, MD
                  Anthony L. Imbembo, MD
                  Guiseppe Inesi, MD
                  Kenneth P. Johnson, MD
                  John A. Kastor, MD
                  Allan Krumholz, MD
                  Vinod Lakhanpal, MD
                  Garvin S. Maffett, EdD
                  Andrew M. Malinow, MD
                  M. Jane Matjasko, MD
                  Joseph S. McLaughlin, MD
                  Herbert L. Muncie Jr., MD
                  Morton I. Rapoport, MD
                  Stephen C. Schimpff, MD
                  Nathan Schnaper, MD
                  Philip A. Templeton, MD
                  Umberto VillaSanta, MD
                  Debra S. Wertheimer, MD
                  John F. Wilber, MD
                  Donald E. Wilson, MD, MACP
                  Theodore E. Woodward, MD 

            Each new member is presented with a personalized Waterford decanter at the annual John Beale Davidge Alliance luncheon, and names of all members appear annually on the honor roll, published in the winter Bulletin magazine.

            To inquire about honor levels within the Alliance or to request more information, please contact the Medical Alumni Association at 410-706-7454.

            Center for Vaccine Development Receives $20 Million from the Gates Foundation

            The Bill & Melinda Gates Foundation has awarded a $20.4 million five-year grant to the University of Maryland School of Medicine's Center for Vaccine Development to develop a new type of measles vaccine. The goal is to create a safe and effective "stealth" vaccine that, for the first time, would protect infants less than nine months old, and dramatically reduce the suffering and death rate from measles in developing countries.

            Measles is a largely forgotten disease in most wealthy industrialized countries because of the current measles vaccine's success rate. By contrast, measles still commonly causes severe disease and many deaths among infants and young children in poor developing countries. The World Health Organization (WHO) estimates that measles kills more than 900,000 children each year in underdeveloped parts of the world. (COULD IT BE THE DAMN VACCINE DOES NOT WORK??)

            While widespread use of the current injected measles vaccine in the developing world has saved the lives of millions of children, the disease is far from being eradicated because of a window of vulnerability among infants five to eight months old. Newborns are protected against measles by antibodies passed to them from their mother, but those antibody levels drop dramatically after five months (BULL SHIT SCIENCE). At the same time, low levels of the mother's antibodies neutralize the effectiveness of the measles vaccine if it is given before nine months of age. For that reason, the WHO recommends that the current measles vaccine not be administered until children are nine months old.

            "We are pleased that the Gates Foundation has asked us to take on this very ambitious project. It will involve laboratory work as well as clinical testing in Africa and South America," says Myron M. Levine, MD, DTPH, professor of medicine and director of the University of Maryland Center for Vaccine Development. "Our goal is to close the window of vulnerability for infants by developing a safe and effective vaccine, despite the presence of maternal antibodies."

            A new vaccine that is administered orally or as nasal spray would allow an infant to develop protection from the measles virus while avoiding an attack by antibodies inherited by the mother. That is why it is being described as a "stealth" approach, says Dr. Levine, who adds that such a vaccine would be much easier to administer than an injection, especially in the least developed areas of the world.

                  School of Medicine Creates New Department of Orthopaedic Surgery
                  Orthopaedic surgery has been elevated from a division within the surgery department to a full-fledged department of its own. The move will streamline patient care, research, and doctor training by uniting the School of Medicine's world-renowned orthopaedic faculty under one administrative roof.

                  "Creating the Department of Orthopaedic Surgery will improve efficiency and help the University of Maryland continue to recruit and retain the country's most talented orthopaedic surgeons and researchers," said Dean Wilson. "That will benefit our patients and our students."

                  Orthopaedic physicians on the School of Medicine faculty treat patients at health care facilities within the University of Maryland Medical System, including Kernan Hospital, the University of Maryland Medical Center, and the R Adams Cowley Shock Trauma Center.

                  "The new department will consolidate orthopaedic care, education and research," says Andrew R. Burgess, MD, professor of orthopaedic surgery and acting chair. "As a department, we will be better able to attract research funding and maintain our international reputation for excellence in orthopaedics."

                  Orthopaedic programs at the School of Medicine include total joint replacement, hand surgery, spinal reconstruction, and the University of Maryland Sports Medicine Program at Kernan Hospital. Faculty physicians serve as team doctors for the Baltimore Ravens, the University of Maryland, College Park, UMBC, and Coppin State.  "Orthopaedic surgery is the busiest service in Shock Trauma," says Dr. Burgess, who is also chief of orthopaedic traumatology. "In addition to performing more than 2,000 surgical procedures every year, the orthopaedic trauma faculty has pioneered new surgical techniques and published research that has dramatically improved emergency care."

                 Mark your calendars for the 7th Annual Interdisciplinary Women's Health Research Symposium.

                  Smoke Gets in your Eyes, Heart, Ovaries.  A Symposium on Tobacco and Women's Health, will be held on Friday, November 10, 2000, at the Baltimore Marriott Inner Harbor.

                  For more information, contact Pat Hawthorne at or at 6-2866.
            Quick Studies
            Angie Battaglia, MS, administrator, Undergraduate Division, Department of Family Medicine, was recently awarded the John M. Dennis Award from the Western Maryland Area Health Education Center. The annual award was given to Angie for her many contributions to the Center's mission. She has served for the past seven years as liaison among School of Medicine students and preceptors throughout the State.

            Claudia Baquet, MD, MPH, associate dean for policy and planning, was selected to be a Medical Honoree for the Black Living Legends Awards for the year 2000 by the National Juneteenth Museum. The award was given in honor and appreciation of her worthy community deeds.

            Lindsay Black, PhD, professor, Department of Biochemistry and Molecular Biology, was selected as vice chair of the 2002 Summer Conference on Virus Assembly of the Federation of American Societies for Experimental Biology.

            Michael Donnenberg, MD, professor, Departments of Medicine and Microbiology and Immunology, is the new head of the Division of Infectious Diseases at the University of Maryland School of Medicine and the University of Maryland Medical Center. Dr. Donnenberg has also been selected as the national Squibb Award recipient for his outstanding work in infectious diseases. The Squibb Award, granted in recognition of a career of major research and teaching accomplishments, will be bestowed upon Dr. Donnenberg at this year's annual meeting of the Infectious Diseases Society of America on September 7 in New Orleans. This award goes to an individual under the age of 45.

            Amira T. Eldefrawi, PhD, professor, Department of Pharmacology and Experimental Therapeutics, was awarded $1,069,350 by the National Institutes of Health for a five-year study on "Neuro, Aquatic, and Cellular Toxicology/Epidemiology."  Eve J. Higginbotham, MD, professor and chair, Department of Ophthalmology, and Miriam Blitzer, PhD, professor, Department of Pediatrics and chief, Division of Human Genetics, have been selected to participate in the sixth class of the Hedwig van Ameringen Executive Leadership in Academic Medicine (ELAM) Program for Women. The Elam Program is the only in-depth national program that prepares female faculty for senior leadership positions at academic health centers. Eric J. Hodgson, fourth-year student, has been appointed to a four-year term as a member of the National Board of Medical Examiners representing the American Medical Student Association.

            Niharika Khanna, MD, assistant professor, and Kevin S. Ferentz, MD, associate professor, both from the Department of Family Medicine, Nancy R. Lowitt, MD, associate dean for CME/GME, and Virginia A. Keane, MD, associate professor, and Eric Wulfsberg, MD, professor, both from the Department of Pediatrics, were chosen as a team to participate in a faculty development initiative regarding Genetics in Primary Care. The program is sponsored by the Society of Teachers of Family Medicine and funded by the Maternal and Child Health Bureau and Bureau of Health Professions of the Health Resources and Services Administration. The faculty team will attend the Genetics in Primary Care Training Program in Chicago in October. The School of Medicine was one of 20 schools in the United States chosen to receive the funding which will educate primary care providers on how to teach residents more about genetics. The program is co-funded by the National Institutes of Health and the Agency for Health Care Policy and Research.
            Brian Kirkpatrick, MD, professor, Department of Psychiatry, was recently awarded a $100,000 Distinguished Investigator grant by The National Alliance for Research on Schizophrenia and Depression (NARSAD) for his research to study possible neurobiological causes of the "deficit syndrome" of schizophrenia. NARSAD also awarded a young investigator grant to William T. Regenold, MD, assistant professor, Department of Psychiatry. Dr. Regenold will receive a $60,000 grant for research on brain disorders.

            Judith C. Lovchik, PhD, assistant professor, Department of Pediatrics, was elected to the council of the Pan American Society for Clinical Virology. Linda H. Malkas, PhD, associate professor, Department of Pharmacology and Experimental Therapeutics, received an NIH grant for "Unique Model for Evaluating Anticancer Drugs." Her application received a 5.1 from the Scientific Review Group.

            Eric Marshall, MD, third-year resident, Department of Family Medicine, was selected as one of 20 recipients of the 2000 Mead Johnson Awards for Graduate Education in Family Practice. The award, to be accepted by Dr. Marshall at a ceremony in Dallas this month, is given to rising third-year residents in family medicine. It is the highest award a resident can receive and reflects their family medicine, community, and teaching work, as well as being a role model.

            Ligia Peralta, MD, associate professor, Department of Pediatrics, and founder of the Adolescent Medicine Outreach Initiative, recently received the National Collegiate Athletic Association (NCAA) Sports Program Award for community service to the University of Maryland Eastern Shore National Youth Sports Program. Dr. Peralta and volunteers provide pre-participation sports physicals and prevention services for nearly 300 underserved youth from Worcester, Somerset and Wicomico Counties. Stephen C. Schimpff, MD, president and CEO, University of Maryland Medical Center, has been selected to serve as Chair of the Board of Governors of the Magnuson Clinical Center of the NIH.

            Andrew Stolbach, second-year student, had an article published in the Spring 2000 issue of The Pharos, the magazine of the Alpha Omega Alpha Society. His paper, entitled "On dancing and wrestling: Reflections on my grandfather's illness," was an entry in the Alpha Omega Alpha Student Essay Competition.

            Tyson Tildon, PhD, professor, Department of Pediatrics, was recently awarded the Alexis de Tocqueville Society award from the United Way of Central Maryland. The award, created in 1972, recognizes persons who have rendered outstanding service as volunteers in their own community or on a national level.

            Ann Tseng, second-year medical student, has been awarded a Schweitzer Fellowship for this academic year. The Schweitzer Fellowship recognizes graduate students who develop model community service projects to improve Baltimore's health care needs. Ann will be working with the Coalition to End Childhood Lead Poisoning, along with Neil Siegal, MD, assistant professor, Department of Family Medicine.

                  Events Calendar on the Web
                  If you would like to promote your department's events on the School of Medicine website ( events calendar, please e-mail information including the event title, date, time, place and event contact name and phone number to: Jennifer McGinley, Department of Public Affairs, at or fax it to 6-8520. 

  I'm not sure if I mentioned this to you or not but the 33-meric protein recently isolated as the main antigen in gluten, shares close sequence homology to pertactin. Pertactin is an antigen from pertussis that was added to DTaP in the last 10-15 years. Antibodies that bind to this gluten antigen will also bind to pertactin. In other words this component of DTaP may be responsible for gluten intolerance in many individuals.


Wyeth Adding Jobs to Meet Vaccine Demand

POSTED: 9:09 a.m. EDT April 15, 2003

SANFORD, N.C. -- A drug company is expanding production of a children's vaccine and expects to hire 350 more employees this year at its Lee County plant. The new round of hiring for Wyeth Vaccines of Radford, Pa., will push its payroll here to about 1,100 employees.

The new workers will staff a 115,000-square-foot plant expansion as part of Wyeth's plan to sell plants in Cherry Hill, N.J., and consolidate vaccine production in Sanford. Research for the company's new vaccines is being consolidated in a laboratory in Pearl River, N.Y. Much of the increase in production in Sanford is because of the success of Prevnar, a vaccine for pneumonia. Sales of Prevnar have increased from $461 million in 2000 when it was introduced to $648 million last year.

The Sanford plant produces Prevnar and children's vaccine HibTiter, which protects against flu. Wyeth may also base production of FluMist, a nasal spray flu vaccine, in Sanford, if the drug is approved by the Food and Drug Administration later this year. Wyeth's Sanford campus off U.S. 15-501 was opened in 1987 by Praxis
Biologics, a division of American Cyanamid, which was later bought by Wyeth.

Wyeth's expansion will make it nearly as large as Sanford's largest employer. Static Control Components employs people 1,200 making parts used to refresh worn toner cartridges in computer printers.

Debi Vinnedge, Executive Director
Children of God for Life (727) 538-5558

(Clearwater, FL; Front Royal, VA) Pro-life organizations, Children of God for Life and Human Life International charged today that pharmaceutical giant, Merck & Co. has betrayed their stockholders by refusing to include language in Shareholder Proposal No. 7. that would have revealed:

- An organized boycott of all Merck products
- A resolution by the Catholic Medical Association to use alternatives to their vaccines cultivated on aborted fetal tissue and Instruction by investment counseling organization, Pro Vita Advisors, that investors divest their Merck stock.

By using aborted fetal cell lines in vaccine production, Human Life International, President Rev. Thomas J. Euteneuer, who purchased sufficient shares of Merck stock demanded fellow shareholders be informed that Merck has violated its own Statement on Values, which states in part, "We are committed to the highest standards of ethics and integrity".

In a 5-page letter to the SEC, Merck pleaded their case to keep the entire resolution from becoming public, stating that the use of aborted fetal cell lines falls under “ordinary business” and therefore should be excluded from the proxy vote. In addition, Merck refused to acknowledge that they were profiting from the destruction of human life, stating there was no “financial evidence” to prove it. Merck’s net income for 2002 was $7,149.5 million, with $34.6 million in viral vaccine sales. While the SEC agreed to allow the information to be included in this year’s annual meeting, Merck’s attorneys were able to successfully remove most of
the critical language.

“What they have done is deny their stockholders the right to vote on the true language of the resolution”, stated Children of God for Life’s Executive Director Debi Vinnedge, who has organized the boycott and the Campaign for Ethical Vaccines with over 475,000 signatures.  Rev Euteneuer agreed. “Watch for your proxy cards in the mail and if their practice of using aborted fetal cell lines offends you, vote in favor of Resolution 7., to appoint a special committee linking executive compensation with the Company’s ethical performance.”

"What went in and what came out of that resolution are quite different", said Vinnedge. "While we are pleased that the SEC agreed to provide stockholders with the information that aborted fetal cell lines are used in Merck's vaccines, we also believe they should be aware of boycotts, investment warnings and the resolution by the Catholic Medical Association to use alternatives. In effect, such actions by several organizations and parents to boycott all Merck products and use alternatives may eventually decrease their sales numbers and devalue the stock".

To review the Merck Proxy statement being mailed to shareholders for consideration at the upcoming meeting, go to:

To review the unabridged version of this press release with the original language of the Resolution as submitted by Human Life International go to:

God bless always,
Debi Vinnedge, Executive Director
Children of God for Life


Medical Ghostwriting

[Air Date: Mar 25, 2003 Reporter: Erica Johnson Producer: Michael
Gruzuk Associate Producer: Colman Jones. Thanks to Mike Glavic.]

Medical ghostwriting. You may not have heard of it, but you'll probably want to know about it. It's a world that could make your doctor prescribe the wrong drug. For trusted guidance — articles rigorously reviewed in medical journals are the gold standard when it comes to scrutinized, scientific reports. They're what our doctors rely on to make decisions affecting our health. But more and more — we can’t be sure who’s serving up that medical advice. Medical ghostwriting can be as scary as it is spooky. People with scientific backgrounds — often, with PhDs — are paid to stay in the shadows and crank out Medical Ghostwriter can make $100,000 a year writing favourable drug reports favourable reports for drug companies. Then, drug companies get doctors to put their names on the studies — for money, prestige, or perks. Marketplace tracked down ghostwriters in Vancouver, Montreal and Ottawa — one agreed to talk with us, but only if we protected their identity. Their job could vanish if their identity is revealed. We'll call our busy ghostwriter, Blair Snitch.
Blair Snitch: I’m given an outline about what to talk about, what studies to site. They want us to be talking about the stuff that makes the drug look good.

Erica Johnson : They don’t give you the negative studies?
Blair Snitch: There’s no discussion of certain adverse events. That’sjust not brought up.
Blair Snitch is paid to write up positive reports. So bad side effects that could affect patient safety, are sometimes completely ignored. Snitch makes over $100,000 a year as a medical ghostwriter. An article
that makes its way into a prestigious medical journal — like the Lancet,  British Medical Journal, New England Journal of Medicine — will earn up to $20,000. Snitch’s work is brisk and busy, but not problem free.
Erica Johnson: How much pressure is there from the drug company to write something favourable?
Blair Snitch: You’re being told what to do. And if you don’t do it,you’ve lost the job.

'A matter of efficiency'
Snitch works for what’s called a “medical writing” company. There’s a whole industry churning out drug company bumph. It’s partly a matter of efficiency, says Snitch. “Doctors don’t have time to write those articles. The people who have their names on those articles are very busy professionals.” Busy — and usually high-profile. The higher the profile, the greater the credibility for the article.  “What appear to be scientific articles are really 'What appear to be scientific articles are really infomercials..." Dr David Healy, Univ of Wales infomercials of some sort,” says Dr. David Healy of the University of Wales.
Healy’s no stranger to controversy: his job at the University of Toronto was suspended after he criticized the pharmaceutical industry. But he still gets invited to lecture and remembers one in particular. “I said 'yes' to the meeting. To my big surprise I had an e-mail shortly afterwards. 'In order to reduce your workload, we have had our ghostwriters produce a first draft based on your published work. I attach it here.'" Healy wasn’t comfortable with the glowing review of the drug, so he crafted his own article. The drug company wrote back and said he’d missed something key. In the end, the drug company put someone else's name on the article. Healy is spooked by the deception. He says it goes beyond being misleading — it can be dangerous. He’s seen a lot of articles on drugs — like anti-depressants — that don’t mention serious problems.

“People and children, for instance, that have been put on these drugs, actually committing suicide. Or becoming suicidal. But the finished articles actually don’t reflect this at all.” Reason for concern Blair Snitch says the public should be concerned. "Are they being prescribed a drug because it’s the best drug or because it’s the drug most favourably positioned?"

Erica Johnson: Do you have any concerns about what you’re doing?

Blair Snitch: I don’t feel ownership of the product.
Erica Johnson: But you are taking the research and delivering to the drug company something that’s favourable.
Blair Snitch: I expect that all the drug companies are doing it with all the drugs. So I figure  in the end, it’ll be balancing itself out. Healy’s not so sure. He’s seen internal drug company documents. They had lists of scientific papers written up, ready to go. All that was missing, was the name of a high profile doctor to be
listed as author. Healy estimates as much as 50 per cent of the literature on drugs is ghostwritten. Ghostwriters we talked to said they do a good job of taking complicated science and turning it into something understandable. We wanted to ask a doctor why they’d agree to sticking their name on a paper. But it’s tricky getting people to fess up. Some doctors didn’t call back. One we reached said he “couldn’t remember who wrote the paper” his name was on. Then said the drug company “might have” written the first draft. But by the end of our conversation, he’d remembered — he’d written every word. The world’s leading medical journals – say they're trying to ferret out who lurks behind the pen.  When a study is submitted to top journals like the Canadian Medical Association Journal, The Lancet, New England Journal of Medicine, everyone whose had anything to do with the article is listed — like a film credit. John Hoey, the editor of the CMAJ, admits it's a tough rule to enforce. "We have no way of checking. We barely have the resources to do what we’re doing, let alone whether so-and-so is telling us honestly what they did." Hoey says drug companies don't just want positive articles, but positive research results.

But some critics say all this industry influence is a problem because ghostwriters rely on research material that's given to them by drug companies — so it may be biased to begin with. That means even ghostwriters might not know about negative side effects and safety problems. 'Clearly unethical' “I think it is clearly unethical," said Dr. Mohit Bhindari, an orthopaedic surgeon at McMaster University. He’s just penned a report on drug company studies — one that he wrote himself. “If you have funding from an industry sponsor, you are four times more likely to include a positive, pro-industry result which favours that particular industry’s product.” Bhindari says researchers have told him there's pressure to come up with "good results." Dr.
David Healy says that’s dangerous and has to change. “The only way to know whether the articles really are honest is for people, if need be, to be able to get access to the raw data.” Blair Snitch is in a rush to go.
There’s another big drug company contract to work on, with no regrets. Blair Snitch: As long as I do my job well, it’s not up to me to decide how the drug is positioned. I’m just following the information I’m being given.
Erica Johnson: Even though you know that information is often biased? Blair Snitch: The way I look at it, if doctors that have their name on it,that’s their responsibility, not mine.
So for now, keep in mind that medical information you read may be other-worldly. Since people paid big bucks to spin research show no sign of giving up the ghost.

Yep...and they are looking for more ways not to let anyone off the
vaccination hook...just look at this:

Baxter, Acambis in New Smallpox Research Deal

March 26
— PARIS (Reuters) - U.S. healthcare group Baxter and its British partner Acambis have won a new contract from the U.S. government to research smallpox vaccines in preparation for any future "bio-terrorist" attacks, a unit of Baxter said on Wednesday. The deal calls for research into a new generation of smallpox
vaccines designed for people already suffering from AIDS or cancer, for whom available strains can cause severe side effects, Baxter BioScience of France said in a statement. The vaccine, known as MVA (Modified Vaccinia Ankara), would also be better for pregnant women than the shots available now.

The value of the research contract was not disclosed. In 2001 the U.S. government commissioned Acambis and Baxter to supply it with 209 million doses of second-generation smallpox vaccine, or enough to protect the entire U.S. population, with two contracts worth $771 million. Scientists believe smallpox -- a highly contagious disease that kills around 30 percent of its victims and is characterized by blistering of the skin and a fever -- poses the biggest kind of risk from any biological attack.

Wyeth Adding Jobs to Meet Vaccine Demand

POSTED: 9:09 a.m. EDT April 15, 2003

SANFORD, N.C. -- A drug company is expanding production of a children's vaccine and expects to hire 350 more employees this year at its Lee County plant. The new round of hiring for Wyeth Vaccines of Radford, Pa., will push its payroll here to about 1,100 employees. The new workers will staff a 115,000-square-foot plant expansion as part of Wyeth's plan to sell plants in Cherry Hill, N.J., and consolidate vaccine production in Sanford. Research for the company's new vaccines is being consolidated in a laboratory in Pearl River, N.Y. Much of the increase in production in Sanford is because of the success of Prevnar, a vaccine for pneumonia. Sales of Prevnar have increased from $461 million in 2000 when it was introduced to $648 million last year.

The Sanford plant produces Prevnar and children's vaccine HibTiter, which protects against flu. Wyeth may also base production of FluMist, a nasal spray flu vaccine, in Sanford, if the drug is approved by the Food and Drug Administration later this year. Wyeth's Sanford campus off U.S. 15-501 was opened in 1987 by Praxis Biologics, a division of American Cyanamid, which was later bought by Wyeth.  Wyeth's expansion will make it nearly as large as Sanford's largest employer. Static Control Components employs people 1,200 making parts used to refresh worn toner cartridges in computer printers.


: 1001-7).

DRUGS SALES RISE. And the bestseller isn't even required

Drug sales in the USA continue to rise. Last year they grew in the States by 12 per cent to $220bn. The bestsellers remain the cholesterol-lowering statins, described recently by Dr Mathias Rath as "just another marketing story of the pharmaceutical industry". Rath is an interesting man. He worked closely with Linus Pauling and researched with him the benefits of high-dose vitamin C. Rath, who lives in Germany, is now one of the leading campaigners in Europe against the EU directives that look to close down nutritional and alternative medicine. In a recent interview Rath stated: "If high cholesterol would damage the blood vessel wall it would so everywhere along the long pipeline of our blood vessel system. This system would clog everywhere and not just in the heart or in the brain. In other words, we would also get infarctions of the
nose, the ear, the knees, elbows, fingers and any other organ in the body. This is clearly not the case.

"Then I discovered that cardiovascular disease is essentially unknown in the animal world, whereas amongst human beings it is a leading cause of death. Animals manufacture their own vitamin C, which is required to produce the reinforcement molecules of our body and its blood vessel system called collagen."  We human beings cannot produce a single molecule of this vitamin and frequently get too few vitamins in our diet, exposing our blood vessel system to weakness and to the development of deposits." The remedy? High-dose vitamin C. Oh yes, we forgot. They're banning that too.

(Sources: British Medical Journal, 2003; 326: 518; and

What is Sci-B-Vac™?
Sci-B-Vac™ is a third generation recombinant hepatitis B vaccine produced in Chinese hampster ovary (CHO) cells (mammalian cell). It contains purified recombinant pre-S1, pre-S2, and S protein antigens in the glycosylated and non-glycosylated forms.

The pre-S epitopes are known to play an important immunogenic role in:
- eliciting a high titre anti-S response;
- eliciting pre-S directed antibodies relating to viral clearance;
- stimulation of a specific T cell response; and
- overcoming genetic non responsiveness.

What immunisation and conditions are targeted by Sci-B-Vac™?
Sci-B-Vac™ is a vaccine against hepatitis B.

Mammalian cell-derived hepatitis B vaccines such as Sci-B-Vac could be used together with anti-viral agents for the treatment of patients with chronic hepatitis B infection. If proven in clinical trials, this could be a major breakthrough.

What is the global market for Sci-B-Vac™?
The world market for hepatitis B vaccines is estimated at US$800 million with US$350 million in South East Asia, with an annual growth of 20%.

What are the licensing arrangements in respect of Sci-B-Vac™?
SciGen has three license agreements with BTG relating to Sci-B-Vac™.


Chiron created the hep B vaccine, sold it to Merck, etc. Powderject makes smallpox and flu vaccines.

Chiron to Buy PowderJect for 500 Million Pounds, People Say London, May 18 (Bloomberg) -- Chiron Corp., the third-largest U.S. biotechnology company, will buy U.K. rival PowderJect Pharmaceuticals Plc for 500 million pounds ($810 million) in cash to get the British company's vaccine business, people familiar with the transaction said. Chiron will pay 550 pence a share, a 3.8 percent premium to PowderJect's closing price Friday. The offer, which will be announced tomorrow, is 14 percent higher than PowderJect's share price on April 27 when London's Sunday Telegraph first reported the talks.

Chiron, which is the world's fifth-largest vaccine maker, wants PowderJect's Fluvirin, the second-best selling flu vaccine in the U.S. Flu vaccine sales have risen as governments lowered the recommended age for the shot. Chiron already sells vaccinations for rabies, meningococcal C disease and childhood illnesses such as polio, measles and mumps. Fluvirin, which trails Aventis SA's Fluzone in the U.S., had sales of 93.2 million pounds in the fiscal year ended March 31, a 40 percent increase from 2002. PowderJect had total revenue of 158.5 million pounds.

PowderJect spokesman Tim Anderson wasn't available for comment. Chiron spokesman John Gallagher declined comment. The acquisition was reported by the Sunday Telegraph earlier today.


Chiron, which also sells blood-testing products and biotechnology drugs, has made itself into one of the world's top vaccine makers by selling many of the products in Europe and other parts of the world. Only the
company's rabies vaccine is sold in the U.S. Sales of Chiron vaccines reached $357 million last year.

Cambridge, England-based PowderJect supplies smallpox vaccine to the U.K., and is in the running for another smallpox contract with the British government. PowderJect will allow Chiron to add to its offerings outside the U.S., analysts said. The acquisition will also give Emeryville, California-based Chiron experimental technology that allows the injection of drugs in powder form, without the use of a needle.

Last Updated: May 18, 2003 06:46 EDT

Pharmaceutical Profiteers
Drug Companies Net Federal Funds While Developing New Products

By Jackie Judd

W A S H I N G T O N, June 7 — A new report shows taxpayers often foot the bill to help develop new drugs, but it's private companies that reap the lion's share of profits. In one case, the federal government spent $484 million developing the cancer drug Taxol — derived from the bark of Pacific yew trees — and it was marketed under an agreement with Bristol-Myers Squibb starting in 1993. The medical community called it a promising new drug in the fight against ovarian and breast cancer. Since then, Bristol-Myers Squibb has sold $9 billion worth of Taxol worldwide, according the the General Accounting Office report released today.

The National Institutes of Health have received just $35 million in royalties from Bristol-Myers, however.
Bristol did not discover the drug. The federal government did — with taxpayer dollars — and then negotiated a licensing agreement with the pharmaceutical giant. "The federal government repeatedly dropped the ball," said Sen. Ron Wyden, D-Ore. "Or they didn't realize they had the ball when it came to protecting the public's interest in Taxol."

Taxpayers Foot the Bill

So, taxpayers footed part of the original bill and now those who use Taxol are paying a second time.

The Medicare program alone paid nearly $700 million over a five-year period, to buy a drug the government helped develop. "I think this system is dysfunctional," said Wyden, who sought the investigation. "How many times should the taxpayer pay again and again?" NIH argue its mandate is public health — not recouping every dollar it spends. And the agency said that without Bristol-Myers to support  large clinical trials, Taxol never would have reached cancer patients. "We need each other," said Mark L. Rohrbaugh, the director of the Office of Technology Transfer (OTT) at NIH. OTT oversees the patenting and licensing of NIH inventions and helps develop technology transfer policy at NIH and the Department of Health and
Human Services. "They [Bristol-Meyers Squibb] contributed a lot in funds," Rohrbaugh said. "We couldn't do it — neither one of us could do it alone. They contributed a lot of funds, lot of their effort; we did too." The Institutes' defenders also say that when NIH negotiates a royalty with a pharmaceutical, it never knows which drug will fail and which will be a success. It is a risk for each side. Taxol has succeeded in treating cancer patients beyond anyone's expectations. But the definition of success may be questioned in terms of the taxpayers' investment.

Findings could fuel fire of OxyContin's critics

The Associated Press

LEXINGTON - The maker of OxyContin used a sales campaign that focused on doctors to turn the narcotic into a top seller.

Between 1996 and 2001, Purdue Pharma invested more than $500 million deploying a small army of sales representatives around the country to pitch OxyContin, a Lexington newspaper reported Sunday, citing previously confidential corporate records. The company offered the representatives some of the best paychecks in the business. And it gave them sophisticated intelligence about doctors' prescribing practices, the newspaper said, citing documents from an Ohio lawsuit and a closed investigation by Florida's attorney general.

Purdue used the prescribing data to help it break into a rich market: family doctors who were the busiest prescribers of competing pain pills. In Appalachia, residents had a long history of heavy painkiller use.
In 1998, for example, parts of southwestern Virginia, eastern Kentucky and West Virginia received more of OxyContin's competing painkillers per capita than anywhere else in the nation, federal data show.
Purdue's strategy worked. In 2000, national OxyContin sales exceeded $1 billion. In Kentucky, that translated to 9.7 million pills. But illegal users soon tapped that vast reservoir of pills with deadly consequences, especially in rural America. And Purdue was fighting allegations that its sales and promotion were to blame.

Purdue Pharma officials say OxyContin's rapid growth had more to do with widespread untreated pain than with salesmanship.

"You can't sell a billion dollars of anything if you aren't meeting a need," said Robin Hogen, Purdue's vice president for public affairs.

"We go to market the way most companies do," he said.

That's the problem, say some critics.

Purdue should have stressed limited use "rather than encouraging and targeting some physicians to use OxyContin aggressively," said Dr. Robert Anthenelli, a University of Cincinnati medical school associate professor, in an affidavit filed in a lawsuit in Butler County, Ohio, Common Pleas Court.

In 1996, Purdue launched OxyContin with total sales and promotion spending of $40 million. By 1998, it had more than doubled that amount, and in 2001 it laid out $267 million.

Contact: Jeffrey S. Douglas
Virginia Tech
U.S. Army awards veterinary college researcher $1 million grant to develop vaccine Blacksburg, Va. -- A bacteriologist in the Virginia-Maryland Regional College of Veterinary Medicine has been awarded a $1.06 million grant from the U.S. Army to develop a vaccine for tularemia. Thomas J. Inzana, the Tyler J. and Francis F. Young Professor of Bacteriology at Virginia Tech and his research team in the college's Center
for Molecular Medicine and Infectious Diseases have begun a four-year program to develop a vaccine and diagnostic test for tularemia, which is commonly known as "rabbit fever." The etiologic agent of tularemia is
Francisella tularensis, which the Centers For Disease Control (CDC) classifies as a Category A bioterrorism agent.

Tularemia is an infection characterized by ulcers, swollen glands, fever, and flu-like symptoms. The organism can spread through the blood and lymphatic systems to infect the respiratory tract, where it can cause more serious health problems. Pneumonic tularemia may have about a 30 percent mortality rate, according to Inzana. While not uncommon in wildlife throughout the United States, Inzana says, it
is a relatively rare disease in people. Only about 100-200 cases of tularemia in humans are reported every year, Inzana says. The bacteria are transmitted to humans and animals by ticks and biting flies, or can be
ingested by wildlife from drinking water. Humans are also infected through minor cuts or abrasions on the hands by handling infected animals. The military is concerned about F. tularensis because of its heartiness and its virulence. Whereas about 10,000 Bacillus anthracis (anthrax) spores are required to cause disease, only about 10 F. tularensis cells are required to cause disease, according to Inzana. The organism could conceivably be aerosolized and used as a bioterrorism agent at home or abroad; hence, the military interest. A World Health Organization Committee estimated that aerosol dispersal of 50 kilograms of virulent F. tularensis over a city of 5 million people would result in 250,000 inhabitants becoming seriously
infected, including 19,000 deaths. One aspect of F. tularensis that makes it dangerous is its ability to resist
host defenses, Inzana says. Unlike many bacteria, F. tularensis has the ability to survive inside some of the front-line defenders of the body's immune system. As phagocytic cells such as macrophages rush to attack and consume the invading pathogens, F. tularensis actually uses the macrophage as a home and multiplies within it. While scientists do not yet know much about the biology of the organism, they do know that it has a capsule-like substance on its surface. Inzana, who recently developed and patented a vaccine for swine pleuropneumonia by mutating the DNA required for capsule synthesis by Actinobacillus pleuropneumoniae, and selecting for a non-capsulated vaccine strain, plans to apply his expertise in bacterial carbohydrate antigens to the new vaccine and diagnostic test development program. His research team will isolate and characterize both the capsule and the outer membrane proteins that enable the organism to survive inside the macrophage. The key to creating an effective vaccine will be their ability to identify and stimulate the production of proteins that stimulate T-cells of the cellular immune system. It is hoped that antibodies to the capsule will help to clear the bacteria that are not yet in phagocytic cells, and that T cells of the cellular immune system will kill the cells harboring the bacteria.

Inzana is also working with professor of electrical and computer engineering Anbo Wang and research scientist Kristie Cooper of Virginia Tech's Center for Photonics Technology to develop photonic-based bio-sensors to detect the F. tularensis capsule or DNA in the field. Ultimately, that research could lead to the development of rapid pathogen sensing biosensors that could detect multiple pathogens on the battlefield.

Inzana is director of Clinical Microbiology in the Veterinary Teaching Hospital and a professor in the Department of Biomedical Sciences and Pathobiology. He is a diplomate of the American Board of Medical
Microbiology and a Fellow of the American Academy of Microbiology. He has generated $4 million in extramural funding and been awarded three patents for intellectual properties arising out of research that has led to the development of vaccines for economically important agricultural diseases.,1012,1-4-0-0-inp_intelligence_news-0-

Aventis discusses human vaccines business
[Published: 30 September 2003 Source: Pharma Company Insight from Espicom]

At a meeting with securities analysts and investors, Aventis highlighted its human vaccines business, which has achieved double-digit sales growth during the last decade and is expected to continue delivering solid growth in the coming years. Aventis has a competitive vaccine portfolio complemented by targeted research and development efforts on novel agents. In the first half of 2003, Aventis consolidated human vaccines sales were EUR 683 million, a 23 per cent activity increase.

Aventis has tripled its human vaccines sales during the last decade, achieving a growth rate above the industry average thanks to strong growth in North America. The company generates about 50 per cent of its sales in the US and Canada, with the balance roughly equal between Europe (includes 50 per cent of sales from the European joint venture Aventis Pasteur MSD) and the rest of the world. The US will continue to play an important role in fueling sales growth. At the same time, Aventis will continue to deliver vaccines to the developing world, a public health commitment that is part of the company's heritage.

Aventis has a number of major product groups securing growth in vaccines, and the anticipated near-term product launches of the adult booster, Adacel, the paediatric combination vaccine Pentacel and Menactra, against meningococcal meningitis, are expected to become strong sales contributors. These product groups include the following:

Paediatric combination vaccines: Accounting for the largest part of Aventis human vaccine sales, this group of products is led by the trivalent product Daptacel, which was launched in 2002 and has become a strong sales contributor in the US due to its synergy with immunisation schedules. Pentacel is a new vaccine against five diseases that has been shown to have an excellent safety profile. Pentacel has been standard of preventive care in Canada since its launch in 1997, and submission for US approval is expected in 2004.

Influenza: Aventis is the world leader in the production and marketing of flu vaccines, generating EUR 450 million of sales in 2002 with Fluzone and Vaxigrip. Demand for flu vaccines, which accounted for 22 per cent of Aventis' human vaccine sales in 2002, is expected to more than double by 2010 in the US alone due to increasingly broad government immunisation recommendations.

Meningitis: Targeting meningococcal meningitis, Aventis is the only company to offer a quadrivalent vaccine against this disease in the US. The polysaccharide vaccine, Menomune, has grown rapidly due to use particularly among college students and military personnel. Menactra, a conjugated vaccine planned for US submission in late 2003, is expected to offer a longer-lasting immune response against four serogroups (A/C/Y/W-135). Meningitis vaccines currently account for 5 per cent of Aventis' human vaccine sales, but are expected to become a significant growth contributor due to their anticipated future use in infants under the age of two years.

Polio: Aventis is the main manufacturer offering an inactivated polio vaccine (IPV), known as IPOL in the US. As the aim of global polio eradication approaches, the use of IPV vaccines like IPOL will increase. As a result, the company is expanding its production capacity to meet this growing demand. Polio vaccines currently account for approximately 15 per cent of Aventis' human vaccine sales.

Adult and adolescent boosters: A dramatic rise in the number of cases of pertussis in the US, as well as increased awareness about the dangers of vaccine-preventable diseases in general, have led to higher sales of this product group in recent years, which now accounts for 9 per cent of Aventis' human vaccine sales. Adacel, a trivalent booster against diphtheria, tetanus and pertussis, is expected to be submitted for US approval in 2004.

Aventis has a focused R&D strategy characterised by a competitive position  in new target areas, as well as a commitment to strategic assets that will further develop the company's leadership position. One particular area of emphasis is therapeutic vaccines, an emerging area of research that is focusing on the potential of vaccines to be used to fight diseases such as HIV and cancer. Aventis has a number of novel agents:

RSV (respiratory syncytial virus) - Aventis is seeking to be the first to the market with a vaccine to fight the RSV virus, which causes severe respiratory infections and is often associated with mortality. This project is now in Phase II.

Dengue - Aventis has undertaken multiple approaches to develop a vaccine covering the four most prevalent serotypes that cause haemorrhagic fever, which is prevalent in Asia, Africa and Latin America. This project, currently in Phase I, will target people living in affected areas, as well as travellers to these regions.

SARS (severe acute respiratory syndrome) - Aventis has participated in international research efforts since the outbreak as a member of the Canadian SARS Research Consortium and by donating samples of its proprietary cell line to the US National Institute of Health and the US Centers for Disease Control and Prevention for use in isolating and growing the coronavirus thought to be responsible for this disease. This project is currently in early-stage development.

HIV - Aventis has been a pioneer in HIV vaccine research due to its long-standing research programme (20 years), as well as partnerships with leading government agencies and pharmaceutical companies. The company is exploring both prophylactic and therapeutic approaches to developing vaccines to combat HIV. A Phase III trial for a prophylactic vaccine in Thailand is expected to be launched in late 2003, while Phase II trials are under way for a therapeutic vaccine.

Cancer - A development programme is focusing on colorectal and melanoma cancers, seeking to specifically activate the immune system to destroy cancer cells. Phase I studies using the proprietary ALVAC technology in patients with melanoma and colorectal cancer showed a favourable safety profile.


Associated Press

Biotechnology company VaxGen Inc. won an $80.3 million federal contract Wednesday to continue development of a new genetically engineered anthrax vaccine. The company said the new three-year federal contract boosts its chances of winning an even larger contract to manufacture the nation's proposed $1.4 billion anthrax vaccine stockpile.

Biotechnology is poised for hyper-growth in products and profits over the next decade. The Biotechnology Industry Organization reports there are more than 370 biotechnology drug products and vaccines currently in clinical trials targeting more than 200 diseases, including various cancers,  Alzheimer's, heart disease, diabetes, multiple sclerosis, AIDS and arthritis.

The 155 plus biotechnology drugs already approved by the U.S. Food and Drug Administration (FDA) have helped more than 325 million people worldwide. And 70 per cent of these drugs were approved in the last six years.

Currently there are about 1,457 biotechnology companies in the U.S., 342 of which are publicly traded. Their market capitalization stood at $206 billion US as of April 2003. The Biotechnology Industry Organization
claims that revenues within the industry ballooned from $8 billion US in 1992 to $34.8 billion US in 2001.

Since 1998, the number of biotechnology patents granted has averaged around 7,500 per year. The number of drugs being approved by the FDA has grown from single digits in the 1980s and early 1990s to double digits today. In 2000, 2001 and 2002 the FDA approved 32, 24 and 35 new drug and vaccines, respectively. For investors in a biotechnology or pharmaceutical company, the driver of opportunity and risk is product development. The discovery and development of new drugs and vaccines is a long arduous process.

On average it takes $500 million US and 15 years for a drug to move from discovery phase, into animal testing, through clinical trials, past the FDA and into the market. For every 5,000 compounds that emerge from discovery and pre-clinical testing, only about 5 compounds make it to human testing. Of these five,
usually one makes it to market. The five stages of drug development begin with pre-clinical testing which takes about 6.5 years. During this stage experimental tests are performed in test tubes and on animals.
Researchers are looking for safety and a specific result.

The next stage is the first of three human trials, or phase one. The test population consists of 20 to 80 healthy volunteers and takes about 1.5 years. At this stage researchers are again attempting to determine
safety and the correct dosage for phase two. Phase two takes about two years to complete and requires testing on a larger sample population (eg. 100 to 300 patients). Researchers are evaluating the effectiveness and any potential side effects of the drug or vaccine.

Phase three trials take about 3.5 years and represent the final leg of human testing. The test population ranges from 1,000 to 3,000 patients. In phase three researchers confirm the effectiveness of the drug and
look for side effects from long-term use. After this phase, the product is submitted to the Federal Drug
Administration in the U.S. for review and approval. The review process can take anywhere from six months to 1.5 years.

It is impossible to predict which individual companies will be successful in the long run and which will die before ever becoming profitable. The safest play is to invest in a basket of stocks with product candidates in late-stage development.

Neil Murray is an investment adviser with BMO Nesbitt Burns Inc. in London. Reach him at (519) 646-2313 or e-mail Opinions are those of the author and may not reflect those of BMO
Nesbitt Burns. The information and opinions contained herein have been compiled from sources believed reliable but no representation or warranty, express or implied, is made to their accuracy or completeness.
BMO Nesbitt Burns is a member CIPF.


"VaxGen Wins License for Anthrax Vaccine"
Wall Street Journal ( (10/14/03) P. C11

A development agreement between the U.S. Army Medical Research Institute of Infectious Diseases and VaxGen gives VaxGen worldwide rights to the development and marketing of the Institute's recombinant anthrax vaccine candidate. In exchange, the Institute will receive certain fees and royalties. The vaccine, known as rPA102, is currently undergoing the first phase of clinical testing. VaxGen is funding the development with a three-year, $80.3 million contract from the National Institute of Allergy and Infectious Diseases.

From Mary Wolff
Not-So-Public Relations
The standard treatment for sepsis, an infection of the blood, costs $50 per day, but Eli Lilly has a new drug out called Xigris, which may not be any better than older treatments but costs $6,800 per treatment. That’s not exactly an easy sell, but Lilly has hired a PR firm to launch a campaign called "The Ethics, the Urgency and the Potential," whose premise is that it is "unethical not to use the drug." "To reinforce the point,"
writes Carl Elliott, "Lilly has funded a $1.8 million project called the ‘Values, Ethics & Rationing in Critical Care Task Force,’ in which bioethicists and physicians from various American medical schools will examine the ethics of rationing certain drugs and services. It is a brilliant strategy. There is no better way to enlist bioethicists in the cause of consumer capitalism than to convince them they are working for social justice. ... It’s no mystery, then, why pharmaceutical companies want to brand themselves with bioethics. But do bioethicists really want to brand themselves with Pharma? To take only one example: The pharmaceutical sponsors of the University of Pennsylvania Center for Bioethics and its faculty’s projects are now facing multimillion dollar fraud sanctions (AstraZeneca), a Nigerian lawsuit for research abuse (Pfizer), massive class-action payouts (Wyeth-Ayerst), a criminal probe into obstruction of justice (Schering Plough), an ongoing fraud lawsuit (Merck and Medco), and allegations of suppressing research data on suicide in children (GlaxoSmithKline)." Source: Slate, December 15, 2003

  WASHINGTON (Reuters) - A childhood vaccine that has been in short supply in recent years may once again be hard to get, the U.S. Centers for Disease Control and Prevention said Thursday. The CDC said vaccine maker Wyeth was finding that production constraints of Prevnar could cause delays in shipments in the first or second quarters of 2004. "Until full production capacity is resumed, local shortages might occur," the CDC said it in weekly report on death and disease in the United States.

Prevnar is given to infants to prevent a range of diseases caused by pneumococcal bacteria, including meningitis and pneumonia. Babies are supposed to get four doses. Wyeth said in November it was temporarily halting shipments of the vaccine, one of the company's fastest-growing products with annual sales of about $1 billion. For much of the past two years, Wyeth has been unable to produce enough Prevnar to satisfy consumer demand. The shortages ended in April, after Wyeth beefed up its Prevnar manufacturing capacity.

The recent Prevnar shortage coincided with shortages of other childhood vaccines, including jabs that prevent measles, tetanus and diphtheria. The CDC is now watching to see if any outbreaks of disease may have resulted from children missing their shots. "CDC will work with Wyeth Vaccines to help achieve equitable vaccine distribution to the states that order through CDC contracts," the agency said.

Copyright 2003, Reuters News Service

TEXT-S&P affirms Wyeth ratings
2 Sep 2003, 3:30pm ET

(The following statement was released by the rating agency)

NEW YORK, Sept 2 - Standard & Poor's Ratings Services said today that it assigned a preliminary 'A' senior unsecured debt rating to the $2.5 billion shelf filing of pharmaceutical company Wyeth (NYSE:WYE). At the same time, Standard & Poor's affirmed Wyeth's 'A' corporate credit and senior unsecured debt ratings, as well as its 'A-1' short-term corporate credit and commercial paper ratings. The outlook remains stable.

The solid investment-grade ratings on Madison, N.J.-based Wyeth continue to reflect the company's strong position in the high-margin pharmaceutical business, its relatively young and diverse drug portfolio, and its strengthening balance sheet. These factors are partially offset by health issues raised by one of the company's leading drug franchises, the hormone replacement therapies (HRT) Premarin/Prempro, as well as the continued possibility of substantial additional charges for diet-drug litigation.

"The combination of Wyeth's diverse and growing drug portfolio points to an improving business profile for the company," said Standard & Poor's credit analyst Arthur Wong. "However, the major financial uncertainties relating to the diet-drug litigation settlement and the sales decline of the Premarin franchise means that there is no possibility for a ratings upgrade at this time. In the meantime, an improving financial profile and a high level of liquidity mitigate the uncertainties."

Wyeth continues to maintain a deep and diverse drug portfolio, highlighted by several fast-growing products. These include the antidepressant Effexor, the heartburn medication Protonix, and the pneumococcal vaccine Prevnar. Effexor itself may generate more than $3 billion in annual sales next year. Protonix continues to increase its share in the highly competitive proton pump inhibitor market, having achieved a 16% total prescription share. Both Protonix and Effexor are two of the top 10 global products, seeing their greatest absolute growth in sales during the past 12 months.

Wyeth's vaccine business also continues to post strong performance. The company has seemingly resolved manufacturing capacity constraints for Prevnar, and is meeting its U.S. requirements. The company also anticipates launching Prevnar in Canada and several key European markets in the next couple of years, and it is launching its inhaled flu vaccine FluMist this year with the help of partner MedImmune. Unlike several of its major pharmaceutical peers, Wyeth does not face any significant near-term patent expirations.

However, sales of Premarin/Prempro continue to be hurt by the controversy stemming from a federal study on long-term use of HRT. The Prempro arm of the study was halted in mid-2002 after the discovery of an increased risk of breast cancer. Premarin/Prempro generated more than $2 billion in sales in 2001, its last full year before the controversy. The sales decline seems to have slowed, though the long-term impact of the study is unknown. Wyeth has obtained new labeling for both drugs and has received FDA approval for a low-dose version of Prempro and Premarin. Generic competition to the franchise, however, is also a threat. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at All ratings affected by this rating action can be found on Standard & Poor's public Web site at; under Credit Ratings in the left navigation bar, select Credit Ratings Lists. Standard &
Poor's ratings appear alphabetically.

Just part of the above article:

Vaccines net product sales were $678 million for the year 2003, compared to $357 million for the year 2002. PowderJect product sales were $243 million for the year 2003. The gross profit margin on vaccines products was 53 percent for the year 2003, compared to 58 percent for the year 2002, with the decrease primarily due to the one-time effect of additional costs associated with the fair value of inventory acquired during the acquisition of PowderJect. Total vaccines product sales were $262 million for the fourth quarter of 2003, compared to $101 million for the fourth quarter of 2002.

-- Sales of flu vaccines were $332 million for the year 2003, compared to $90 million for the year 2002. Sales of Fluvirin(R) vaccine, the flu vaccine that Chiron acquired with PowderJect, were $219 million for the
year 2003, representing one full season of Fluvirin revenues. Sales of Agrippal(R) S1, Begrivac(TM) and Fluad(R) flu vaccines were $113 million for the year 2003. Flu vaccines sales were $141 million for
the fourth quarter of 2003, compared to $19 million for the fourth quarter of 2002.

-- Sales of Menjugate(R) conjugate vaccine against meningococcal C disease were $66 million for the year 2003, compared to $55 million for the year 2002, with the increase primarily due to sales made to Australia.
Menjugate sales were $34 million for the fourth quarter of 2003, compared to $33 million for the fourth quarter of 2002. -- Sales of Chiron's travel vaccines were $88 million for the year 2003, compared to $64 million for the year 2002. Travel vaccines primarily include Encepur(TM) vaccine for tick-borne encephalitis and RabAvert(R) vaccine for rabies. The increase was primarily due to increased sales of Encepur vaccine in Germany. Travel vaccines sales were $28 million for the fourth quarter of 2003, compared to $6 million for the fourth quarter of 2002.

-- Sales of Chiron's pediatric and other vaccines products were $192 million for the year 2003, compared to $148 million for the year 2002, with the increase primarily due to tender sales of pediatric vaccines and increased sales following the PowderJect acquisition. Pediatric and other vaccines products sales were $59 million for the fourth quarter of 2003, compared to $43 million for the fourth quarter of 2002.,,SB107490570941510570,00.html?mod=b_
(requires paid subscription to read)
Rx for Growth
Merck is moving to bolster its pipeline and forge alliances. Its stock looks cheap


MERCK IS NO STRANGER to medical breakthroughs. In the course of the 20th century, its researchers found treatments for tuberculosis, high cholesterol and river blindness, the leading cause of blindness in
developing nations. Chief executive Raymond Gilmartin was repeatedly reminded of that legacy when he joined the drug giant in 1994. "One Nobel Prize winner said to me, 'There are only three or four research
universities I've advised my top scientists to go to; the other place is Merck,'" Gilmartin recalls.

Lately, however, the past hasn't counted for much with investors. They've been pounding the stock amid increased competition from generic drugs, a shrinking pipeline of new drugs and some notable scientific stumbles. Last year, Merck canceled four planned drugs, two of them in late-stage development, causing its stock to hit a 52-week low of 40.57 at the end of November. Though it has since climbed to 46, that's still far below its peak of nearly 100 just three years ago.

All of which could spell a buying opportunity. Mother Merck, as admirers call the company, is unlikely to stand still for long. It's nurturing new treatments for cervical cancer, diabetes, high cholesterol and lower-back pain. If these come to fruition, they could go a long way to restoring the company's luster. In the meantime, investors stand to reap a hefty $1.48 dividend, for a yield of 3.2%.

Certainly, it's hard to argue with the valuation. The stock, which traded at an average of 23 times earnings over the last 10 years, and a premium to the market prior to the bubble era, now changes hands at just 14.7 times estimated '04 earnings of $3.11 to $3.17. Its peers, by contrast, trade at multiples as high as nearly 25 times this year's earnings, while the Standard & Poor's 500 trades at 20 times.
"After a year where we suffered some setbacks, and didn't meet our earnings targets, execution is everything." -- CEO Raymond Gilmartin

 "Historically, over the last decade, when you've been able to buy a high-quality pharmaceutical company at a well-below-market multiple, you've been very well rewarded," says David Katz, chief investment officer of New York-based Matrix Asset Advisors, with $1.1 billion under management. Katz, who holds close to 800,000 Merck shares, including as a subadviser on the health-care sector to Sector Capital Management, has been "enthusiastically" buying Merck in the past few weeks.

Katz says he used a similar strategy in recent years with Bristol-Myers Squibb (scooping it up in the low twenties in July '02, and holding it now at 30), Abbott Labs (building the position with an average cost in the
mid-to-high thirties and holding it now at 43) and Guidant (buying in July '01 at 27.50, now cashing in some profits at 66).

"When the perception changes about Merck, it will be fairly rapid," he says. "By the time you realize it's happening, it will already be too late." That's because investors tend not to make moves until new drugs are
well along in development -- and at that point they move as a herd.

It wouldn't be the first time Merck staged an impressive comeback. In 1994, investors were raising the same kind of questions as they are now about the firm's research capabilities, CEO Gilmartin recalls. "From that point on, we introduced 17 new medicines and vaccines through 2000," he says. The stock went from a split-adjusted 17 in '94 to over 93 in 2000.

Can Merck pull off a repeat performance? Bulls say yes, but the company clearly will face some big challenges. Merck's all-critical pipeline is now thinner than it has been in years, and the company last fall suffered back-to-back failures of two potential blockbuster drugs in clinical trials. Its Substance P blocker for depression, which was supposed to work by shutting off a stress receptor in the brain, didn't work any better than a placebo. One of its diabetes treatments also was dropped because the company discovered a rare malignant tumor in mice that had been given the drug.

Earnings, meanwhile, have been sagging. Merck is due tomorrow to report fourth-quarter results, which are likely to put full-year earnings at the low end of its guidance of $2.90 to $2.95 a share, about flat with 2002. That's a far cry from an earlier target of double-digit growth for 2003.

Perhaps of greatest concern, Merck's top-selling drug -- the cholesterol-reducing Zocor, with expected sales of $5 billion this year -- is due to lose its patent protection in mid-2006, and already faces stiff
competition from Pfizer's Lipitor and more recently, AstraZeneca's Crestor. Some would argue that Merck bungled the marketing of Zocor, which once had the market to itself but now accounts for just 25% of U.S. sales, behind Lipitor.

Merck might well have done better to join Big Pharma's merger mania. It was through the acquisition of Warner-Lambert, for instance, that Pfizer picked up Lipitor. But Merck, with sales of $21 billion, has steadfastly resisted megamergers, arguing that a big deal would only distract it from the work of drug discovery. In fact, the company has been slimming down -- last year it spun off its high-revenue, low-margin Medco pharmacy-benefits unit.

Contrarian Lure

Whatever the merits of the go-it-alone strategy, Wall Street has been decidedly unimpressed. Among 31 analysts tracked by Multex, only one has a Strong Buy and three have Buys -- equal to the four Sell recommendations. The remaining 23 rate the stock Hold, owing in large part to the absence of imminent new blockbusters. But to contrarians, those views only add to the appeal of the stock. The Street's coolness "assumes all the current negative trends will continue and nothing breaks positive," says Katz of

Merck, he points out, has an exceptionally strong balance sheet -- long-term debt is just 17.4% of capital and the company enjoys a triple-A debt rating. It has no accounting issues, he adds, and continues a
tradition of top-notch science. In the 1950s Merck won Nobel Prizes for its work on cortisone, to treat rheumatoid arthritis, and streptomycin, which can be used against tuberculosis. Its key products today, such as Fosamax for osteoporosis and Cozaar/Hyzaar for high blood pressure, all hold top positions in their markets. And Merck has never had a large-scale product recall.
For Katz and other bulls, the clincher for the stock is the price. "Whether you look at its valuation relative to its peers, the market, or to the historical valuation of the company, the stock looks inexpensive," says
Stephen Atkins, a portfolio manager at Northern Trust Value Investors. Merck, a component of the Dow Jones Industrial Average, is a top-10 holding in the Northern Large Cap Value Fund and a core holding in its separately managed accounts.

Gilmartin, for his part, acknowledges that the failure of two late-stage drugs "was a significant setback." But he notes that they failed for totally different reasons, and not because of any fundamental flaw in the
scientific process. "This is the nature of drug discovery," he says. He points out that losing a drug in Phase III is so rare that the last time it happened was 20 years ago, and that the drug that failed was a precursor to one of Merck's top five drugs now, the asthma medication Singulair.

Indeed, the market may have undervalued the potential for some of Merck's promising treatments, three of which are due to come to market in the next few years. Later this year, Merck expects to win approval for a new combination therapy for fighting cholesterol, Zetia/Zocor, which it will jointly market with Schering-Plough. This product is aimed at both lowering cholesterol, which Zocor does, and inhibiting its production, the function of Zetia. Zetia is already marketed through the joint venture.

The plan has raised questions about why Merck would market Zocor until its patent expiration, but Gilmartin says he views the combination therapy as a new, separate drug that will have its own sales force to promote it. He likens the scenario to Merck's introduction of the blood-pressure medication Cozaar, which it co-marketed with DuPont, at a time when its Vasotec was approaching patent expiration. "Vasotec continued to grow modestly, and Cozaar took off," he says.

Merck also expects approval this year for the arthritis pain medication Arcoxia. Among other things, the drug will target low-back pain, a common condition of aging baby boomers. "A drug like Arcoxia is entering a very
large market," Gilmartin says. Analyst Tony Butler of Lehman Brothers is projecting as much as $5 billion in sales by 2009, though he assumes some cannibalization of Merck's older arthritis pain medication, Vioxx. Merck expects Vioxx and Arcoxia, now available in Europe, to bring in $2.6 billion to $2.8 billion in sales this year.

Then there's Merck's planned HPV vaccine to prevent cervical cancer, a potential blockbuster. The company recently moved up the submission date for FDA review of the drug to the second half of next year. Jami Rubin, a drug-industry analyst at Morgan Stanley, puts the market potential for the HPV vaccine at a minimum of $2 billion a year.

Although rivals like GlaxoSmithKline are working on similar vaccines, Rubin thinks Merck might get there early. She says the product could be especially big if it were required for admissions from middle-school
through college, as other vaccinations are already. In fact, some analysts put potential annual sales at $4 billion.

Heavty-Duty Streamlining

Even as it moves to prime its pipeline, Merck is working to cut costs and increase efficiency. In October, the company announced one of its largest rounds of layoffs ever, cutting 4,400 positions, including 3,200 full-time employees, equal to 5% of the total, for annual savings of up to $300 million. The company also moved to reduce capital spending by $500 million a year, to less than $2 billion.

Though Gilmartin is steering clear of mergers, he's clearly on the lookout to collaborate with other companies. Reflecting this, Merck is the only big drug company to have a chief licensing officer, an executive focused on striking alliances.

Gilmartin says that because of Merck's tradition of attracting top researchers, biotech companies with promising drugs are more interested in partnering with Merck. The company has announced three deals in the past month, including one with Neurogen, to develop pain remedies. Gilmartin says the company has greatly accelerated its external alliances, holding discussions with 70 companies and completing 45 deals last year, compared with only 10 in 1999.

Though some would argue that Merck was late in coming to such deals, Gilmartin says that because of recent improvements in technology, biotech outfits are moving along much quicker with their research, which means that the time between forming an alliance and bringing drugs to market has shortened.
That would be a welcome tonic to Merck. Says Gilmartin: "After a year where we suffered some setbacks, and didn't meet our earnings targets, execution is everything."

As Merck pursues more breakthroughs in the lab, it's probably more than scientific conjecture that its business prospects will pick up, too. Until then, investors are getting a rare bargain to participate in that
eventuality. While it may not come tomorrow, the improvement should prove to be a dose of healthy news for investors.


"Chiron Exploring the Growth Potential in Flu Vaccines"
Los Angeles Times ( (02/02/04) P. C6; Gellene, Denise

After its purchase of PowderJect Pharmaceuticals of England, the biotechnology firm Chiron became the second-largest maker of influenza vaccine in the United States.  The Emeryville, Calif., company sold all of
its flu vaccine stock during the 2003-2004 influenza season, boosting its revenue by $245 million--but Chiron is looking toward a much larger global market, believing that the world's flu vaccine needs could reach $2.6 billion over the coming 10 years, due in part to a U.S. target of 150 million annual flu vaccinations.  Chiron is now putting $100 million into its vaccine research and development program to create a quicker method of producing flu vaccine than the current standard of growing the vaccine
inside chicken eggs, which takes a significant amount of time and cannot be sped up.

Over 4,000 doctors face charges in Italian drugs scandal

John Hooper in Rome and Heather Stewart
Thursday May 27, 2004
The Guardian

One of the biggest inquiries into marketing practices in the drugs industry ended yesterday with Italian police asking for almost 5,000 people to be put on trial, including more than 4,000 doctors and at least 273 employees of the British pharmaceuticals giant, GlaxoSmithKline. Some face up to five years in jail if tried and convicted.

Italy's revenue guard, the Guardia di Finanza, said in a statement that GlaxoSmith- Kline and its predecessor firm had spent €228m (£152m) on "sweeteners" for doctors, chemists and others over four years. The alleged bribes ranged from cameras, computers and holidays to outright cash payments.

The Guardia di Finanza said GlaxoSmithKline "should be held responsible for corporate crime as its managers and other employees acted in the company's interest".

A spokesman for GSK said last night it had been "cooperating closely with the authorities to facilitate their investi gations. GSK is committed to ensuring that all its business practices are of the highest standards and any breach of that is unacceptable", the spokesman added.

But a British-based pharmaceuticals analyst said yesterday the type of activity the Italian authorities allege to have uncovered is common practice among global drug companies.

"In parts of Europe, these things are absolutely rife," he said. "For example, doctors may be given 'research grants' - but there are no limits on how they can spend them." He cited cases in which doctors had been offered cars or holidays as inducements to prescribe a particular brand.

Italy's Adnkronos news agency reproduced what it said was a letter written by a GlaxoSmithKline district manager contained in the 10,000 pages of evidence assembled by the Guardia di Finanza.

The letter urged sales representatives to approach specialists directly to get them to prescribe a cancer drug produced by the company. "The initiative can work well with oncologists who have congresses, invest ments from us ... and who have not given us anything in return," the district manager was quoted as writing. Illicit incentives were said to have been disguised in the firm's accounts under the headings of "field selling", "other promotion" and "medical phase IV".

Of the 4,713 people from all parts of Italy facing charges, 4,440 are doctors. They include more than 2,500 GPs and some 1,700 specialists.

The most serious accusations have been leveled at doctors, pharmacists and sales representatives alleged to have been involved in a programme intended to promote Hycamtin, a drug mainly used in the treatment of lung and ovarian cancers. In some cases, it is claimed, specialists received a pro rata cash payment based on the number of patients treated with the drug.

At a press conference yesterday, a senior revenue guard officer, Giovanni Mainolfi, estimated the investigation was costing GlaxoSmithKline's Italian subsidiary €400m a year in lost sales.

The Killer Vaccines

Doctors Are Third Leading Cause of Death

Vaccines - Five Baffling Vaccination FACTS

When Legal Drugs Kill

Vaccines Are Being Made From Aborted Fetuses

Biblical Support for NOT Vaccinating

Crib Death or Vaccine Death?

Vaccinations Can Kill Your Baby


Drugs and Big Money (The Creation of the Modern Medical Drug Establishment)

$20,000 Offer

Adverse Reactions

The Psycho State (by Congressman Ron Paul)

Vaccines and SIDS

Medical Fascism -FORCED Drugging and Vaccination of Children

Vaccines, by Dr. Len Horowitz | Download (Note: I do NOT endorse Dr. Horowitz' New Age religious beliefs, but I do respect his medical knowledge. This is a frightening 121 Minute MP3 audio presentation, 37.3 MB.  Did you know that public schools receive government money for vaccinating your child?  ...Potentially deadly vaccines that parents are NEVER made aware of or given the option to refuse.  You can LEGALLY refuse vaccinations and Dr. Horowitz tells you how in this presentation.  Dr. Horowitz' own child was forcibly taken by the state government, you'll be shocked why.  He advises people how not to make the same mistake.  If you're a parent, you need to hear Dr. Len Horowitz!)

Emerging Viruses, by Dr. Len Horowitz | Download (Note: I do NOT endorse Dr. Horowitz' New Age religious beliefs, but I do respect his medical knowledge. This is a frightening 204 minute MP3 audio presentation, 114 MB.  Dr. Horowitz exposes the evil conspiracy behind AIDS, Ebola, and other emerging manmade viruses.  Learn how your own government has conspired against you.  AIDS didn't just happen!)

Doctors Against Vaccines...

Dr. Russell Blaylock (Neurosurgeon), Dr. John Martin, Dr. Earl Mindell, Dr. Joseph Mercola, Dr. Sheri Tenpenny, Dr. Viera Scheiber, Dr. David Weldon, Dr. Leonard Horowitz, Dr. Mohammad Ali-albayati, Dr. Rebecca Carley, Dr. Brad Burke D.C., Dr. James A. Shannon, Dr. Robert Jendelsohn, Dr. Archie Kalokerinos, Dr. Mary N. Megson, Dr. F Yazbak, Dr. William C. Torch, Dr. Richard Moskowitz, Dr. Guylaine Lanctot, Dr. Barthelow Classen, Dr. Hadwen, Dr. Allinson, Dr. Glen Dettman, Dr. J. Anthony Morris, Dr. Paul Frame, Dr. Lendon H. Smith, Dr. Buchwald, Dr. Jerome Murphy, Dr. Kris Gaublomme, Dr. Jay Gordon...and so many more!

Vaccinations — A Multibillion Dollar Industry (Follow The Money!)

NOTE: All information posted on this web site is the opinion of the author and is provided for educational purposes only. It is not to be construed as medical advice. Only a licensed medical doctor can legally offer medical advice in the United States. Consult the healer of your choice for medical care and advice.