American Foundation for AIDS Research, July 2001
Dave Gilden

Concentration of HIV drug development and marketing

The June 7 announcement that Bristol-Myers Squibb was purchasing DuPont Pharmaceuticals heralded a further concentration of HIV drug development and marketing. Especially at stake are agents to treat the multidrug-resistant HIV that is the focus of this issue of the Treatment Insider.

If, as expected, the buyout clears regulatory hurdles, two companies, GlaxoSmithKline and the new Bristol-DuPont entity, will dominate the HIV therapy market, each offering a complete range of HIV drugs. Glaxo has already combined its three nucleoside analogs - AZT, 3TC and abacavir - in a single tablet. It probably would add its protease inhibitor amprenavir if only that bulky drug could be made compact enough. Whether or not Bristol's nucleoside analogs d4T and ddI could be physically combined with DuPont's anti-HIV product, the NNRTI efavirenz (Sustiva), the three will surely be marketed together as a single anti-HIV regimen.

DuPont Pharmaceuticals started out as a joint partnership between two industrial behemoths, Merck and DuPont. DuPont bought out Merck's half interest in 1998 with the hope that it would be the chemical company's entrée into the high-profit pharmaceuticals world. DuPont speculated that its new subsidiary would soon reach sales of $10 billion a year.

When efavirenz entered the market in September 1998, the company astounded the community by asking for an unheard-of price for an NNRTI. At the retail level, people with HIV had to pay over $5,000 for a year's supply. At the time, DuPont Pharmaceuticals president Nick Teti argued that the high price was necessary to prove to the parent company's investors that putting their money in drugs, and HIV drugs in particular, was a worthwhile investment. Teti was indeed able to convince DuPont to embark on an ambitious drug development program on the heels of efavirenz.

The June 7 announcement that Bristol-Myers Squibb was purchasing DuPont Pharmaceuticals heralded a further concentration of HIV drug development and marketing. Especially at stake are agents to treat the multidrug-resistant HIV that is the focus of this issue of the Treatment Insider.

Efavirenz became he pharmaceutical division's stellar drug, with sales last year of nearly $400 million, but the division's sales stagnated overall. At $1.5 billion, the year 2000 sales were down 9% from 1999, and income declined 49%. DuPont lost patience with its new venture and has now refocused on its core chemical business.

The DuPont Pharmaceuticals buyout transfers the profit pressures to Bristol, which paid $7.8 billion dollars. That amount is widely considered excessive. Bristol nonetheless considers its acquisition of efavirenz something of a coup. The extra marketing muscle of a three-drug antiretroviral combination might boost Bristol's lagging sales of d4T and ddI. After three years of strong sales growth (accompanied by cumulative price increases of about 15%), the d4T and ddI sales plateaued in 1999 and 2000 with annual sales of $600 million and $200 million, respectively. ddI sales did surge upward 33% in the first three months of this year due to the introduction of the new "enteric-coated" ddI capsules, which are much easier on the digestive track than the old ddI tablets. The price of ddI - which climbed 22% in 1998 and 1999- increased a further 20% with the introduction of the new capsules last fall.

Bristol also thinks that it can save money by combining overlapping activities at Bristol and DuPont. The Financial Times estimated that Bristol could save $600 million a year by eliminating duplicated administration, marketing and research. Bristol, could for example, merge the two companies' research laboratories.

Pruning DuPont's R and D department would be a big setback for that company's experimental drugs. In an analogous situation, the 1995 merger of Glaxo and Burroughs Wellcome slowed testing of the protease inhibitor amprenavir through 1997. The delay this time could be even worse, given the indolent pace of Bristol's past HIV research and development efforts.

It took the company ten years to develop the enteric-coated ddI, for example, and four years to bring Atazanavir, the protease inhibitor it purchased from Ciba-Geigy, into full-scale, phase III testing.

Among DuPont's new drugs are the NNRTI DPC 083 and protease inhibitor DPC 684 mentioned in the article beginning in the accompanying article on experimental drugs able to treat multidrug resistant HIV. DuPont also is investigating candidate nucleoside analogs that, like its other experimental compounds, have activity against HIV with drug-resistance mutations.

DPC 083 would be a valuable successor to efavirenz since it is effective in many people with resistance to efavirenz and the other NNRTIs. DuPont officials planned to seek marketing approval for DPC 083 in 2003, while DPC 684 is further behind - and could end up lagging still further if Bristol's Atazanavir is given priority.

Bristol's commitment to its new HIV drugs is obviously economic. In the financial arena, it faces the same pressures that DuPont Pharmaceuticals did, including the need to squeeze as much profit as it can out of efavirenz. The financial pressures are further complicated by the existence of Bristol's own nucleoside analogs and by its work on Atazanavir, whose market share and investment it needs to protect.

DuPont and Bristol officials say privately that Bristol is very excited about the new line of HIV drugs and is committed to moving forward on them. During a conference call with financial analysts, Bristol officials contended that DPC 083 would still go to market in 2003. But no one is commenting further on Bristol's organizational plans, which are still in the early stages.

DuPont Pharmaceuticals has been the poor stepchild of a huge chemicals manufacturer whereas Bristol's strategy is to devote itself to pharmaceuticals. (It is buying DuPont Pharmaceuticals with the money it received from selling Clairol hair products.) The future of the growing number of people with multidrug-resistant HIV depends on Bristol's ability to succeed where DuPont failed.

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