Tuesday, February 15, 2011

Far From Ordinary: A Danny Boyle Profile (Part 2)

Trevor Hogg profiles the career of Academy Award-winning British director Danny Boyle in the second of a two part feature... read part one here.

28 Days Later“I like extreme films, where you put somebody in the most extreme circumstances you can imagine and see what they can do with it,” explained Manchester-born director Danny Boyle who expanded the opening two lines of a zombie horror script into a dramatic twenty-minute sequence. “A guy wakes up in a hospital and there’s not a single person in the whole city. What a great starting point for a film.” 28 Days Later (2002) follows a small group of survivors trying to find a safe haven four weeks after a mysterious virus spreads throughout the United Kingdom. The $8 million production written by novelist Alex Garland (The Beach) stars Cillian Murphy (Batman Begins), Naomie Harris (Miami Vice), Christopher Eccleston (Elizabeth), Noah Huntley (Event Horizon), Brendan Gleeson (Green Zone), Megan Burns (Liam), Justin Hackney (The Descent), Toby Sedgwick (Safe Conduct) and David Schneider (A Knight’s Tale). Filming desolate landmarks such as Westminster Bridge, Piccadilly Circus, Horse Guards Parade, and Oxford Streets were achieved by closing sections of a street for minutes at a time during the early morning. “He is a big zombie fan,” said Boyle of his screenwriter Garland. “Alex is obsessed with them and I’m not; that’s a good balance to have.” The British moviemaker sheepishly admitted, “There are certain things we did that I didn’t even realize were complete steals from [George] Romero [Night of the Living Dead].”

“It was wonderful to work on digital,” stated Danny Boyle. “I’m very proud of the fact that’s the first proper widely-distributed release on digital, and on a very inferior digital format. It suited the guerrilla nature of the story and that was cool, doing it like that. I began to learn how to contradict film culture just in the way films are made. I got much more into doing it in what you would call an unprofessional way. I’m not a big fan of the tautly professional films that do things ‘the right way.’” Grossing $83 million worldwide, 28 Days Later proved to be so popular that the picture was re-released months after its initial run with an alternative ending. On the awards circuit, the fifth theatrical feature helmed by Boyle won the Saturn Award for Best Horror Film as well as nominations for Best Director and Best Writing at the Academy of Science Fiction, Fantasy & Horror Films; the British Independent Awards nominated it for Best Achievement in Production, Best Director and Best British Independent Film. 28 Days Later was lauded with Best British Film, and received a nomination for Best Newcomer (Cillian Murphy) at the Empire Awards while the MTV Movie Awards and Irish Film and Television Awards respectively nominated Cillian Murphy for Breakthrough Male Performance and Best Actor in a Film. Roger Ebert of the Chicago Sun-Times wrote “28 Days Later is a tough, smart ingenious movie that leads its characters into situations where everything depends on their [and our] understanding of human nature.” The DVD for the film includes three alternative endings. A sequel was released called 28 Weeks Later (2007) as well as a comic book series called 28 Days Later: The Aftermath (2009) which bridges the gap between the two stories.

Millions“It felt very personal, even though it’s not a script I wrote,” remarked Danny Boyle when recounting the origins of Millions (2004). A young boy who has visions of various Catholic saints discovers a mysterious bag filled with money. “All the iconography of the saints in Millions is very familiar to me,” stated the director. “We wanted the saints to have personality; we didn’t want them to be pious or sacred or sanctimonious.” Boyle added, “The spiritual message of the film…has more to do with having faith in people and that goodness can come out of that.” Performing along with James Nesbitt (Bloody Sunday), Daisy Donovan (Death at a Funeral), Christopher Fulford (Scoop), Pearce Quigley (The House of Mirth) and Jane Hogarth (Married 2 Malcolm) are child actors Alex Etel (The Water Horse) and Lewis McGibbon. “You can’t force them to say things the way you want them to be said,” remarked the filmmaker on how he worked with Etel and McGibbon. “You have to let it emerge from them.” The British comedy-drama which earned $12 million worldwide was crafted for mass appeal. “I wanted it to be seen by as many people as possible because I am very proud of it.” At the British Independent Film Awards, Millions won Best Screenplay and received a nomination for Most Promising Newcomer (Alex Etel); while the British Film Critics Association Awards nominated Alex Etel for Best Young Actor. Roger Ebert of the Chicago Sun-Times wrote, “It’s a film about real ideas, real issues and real kids. It’s not sanitized brainless eye candy. Like all great family movies, it plays equally well for adults.”

Sunshine“What interested me was the idea that it could get to a point when the entire planet’s survival rests on the shoulders of one man and what that would do to his head,” said Alex Garland who wrote the screenplay for Sunshine (2007) which stars Cillian Murphy, Rose Byrne (Knowing), Chris Evans (The Losers), Michelle Yeoh (Crouching Tiger, Hidden Dragon), Hiroyuki Sanada (The Last Samurai), Benedict Wong (Dirty Pretty Things), Troy Garity (Bandits), Mark Strong (The Way Back), and Cliff Curtis (Whale Rider). A group of astronauts are sent to re-ignite the dying sun. “It’s funny, most directors only ever seem to make one space movie,” contemplated Danny Boyle when he first agreed to direct the sci-fi picture. “And then you make one and you know why: they are merciless, the demands on you. More than any other genre, it’s really narrow. Your options as a storyteller are incredibly limited, plus you’ve got these technical limitations you’ve got to get right, every detail – how your shoelace behaves in weightless conditions, how your hair behaves. The precision you have to bring is migraine-inducing, and the patience you have to have while you wait for CG [computer graphics].”

Asked how he determined the cinematic colour scheme for the story, the director replied, “The classic look is the James Cameron-Ridley Scott blue/gray/steel look. That’s the diet everyone expects to be fed in a science fiction movie. We deliberately didn’t have anything inside the ship apart from the carrots that were orange or gold. So, when you went outside, it was shocking to have this colour again. It was like going to colour from black and white.” Boyle referenced a number of classic films when making Sunshine. “The three big ones are 2001 [1968], the first Alien [1979] film, and Tarkovsky’s Solaris [1972].” A German World War II submarine tale directed by Wolfgang Petersen (In the Line of Fire) also had a major impact on the British moviemaker. “The obvious thing was to try and make it like Das Boot [1981], the classic claustrophobia film.” Roger Ebert of the Chicago Sun-Times wrote, “The interactions are the weakest elements in Sunshine, which is strongest when it focuses on the sheer enormity of the mission and its consequences.” The $40 million production grossed $32 million worldwide and was nominated for the Saturn Award for Best Science Fiction Film by the Academy of Science Fiction, Fantasy & Horror Films; at the British Independent Film Awards it won for Best Production Design and received a nomination for Best Actor (Cillian Murphy). Empire Awards nominated Sunshine for Best British Film and Best Science Fiction or Fantasy Film while Cillian Murphy was nominated for Best Actor in a Film by the Irish Film and Television Awards. As for Danny Boyle, he competed for British Director of the Year at the London Critics Circle Film Awards.

Slumdog Millionaire“The Beach [2000] was a very interesting stepping stone for me to Slumdog Millionaire [2008], because we went to Thailand and we took a huge crew from the West,” revealed Danny Boyle. “When you take a crew like that, you are an invading army. There is no other way you can be seen by the local population. You are this huge, brute force with big elbows coming in. It didn’t suit me, that. And it was compounded by the fact that the characters, I didn’t get to know them for some reason. I’m a city boy and I find myself making a film about paradise hippies. I tried to shift the film to be more about what Thai people thought of them, but you can’t do that with a $55 million film. It’s a huge oil tanker, you can’t move it around. It just goes steadily on its way. So when I made Slumdog, I took 10 people because I didn’t want to have that role of the invading army again.”

Based on the novel Q & A by Indian author and diplomat Vikas Swarup, Slumdog Millionaire stars Dav Patel (The Last Airbender), Freida Pinto (Rise of the Apes), Madhur Mittal, Anil Kapoor (Taal), Ayush Mahesh Khedekar, Tanay Chheda (My Name Is Khan), Irfan Khan (The Warrior), and Rubina Ali (Bollywood Hero). In an effort to find his lost love, a young man from the slums of Mumbai becomes a contestant on Who Wants to be a Millionaire? “In the book, the spine of the story is the [game] show, whereas in this it’s the love story because that’s his real agenda,” said Danny Boyle who conducted the principle photography for the $15 million production in India. “I was determined to make the film in real places because otherwise how was I going to understand or recreate it as a Westerner?” The country left a lasting impression on the director. “You leave India, but it never leaves you. It’s an extraordinary place and you learn about yourself as a person and as a filmmaker. It’s an incredibly generous place and it’s an incredibly contradictory place. And these contradictions are on a viciously extreme scale: the poverty and the wealth, the nuclear status — no toilets. Half the population of Mumbai have no toilets. I was trying to capture some of that, really, and we did it by some extreme storytelling. People say, ‘How can you go from the deliberate maiming of a child to a big Bollywood song and dance in the end?” Well, you don’t try to smooth the path from one to the other. I was trying to put all the elements into the film that belong to the city, that are a part of that city.”

Slumdog Millionaire Danny Boyle“They tend to film in studios because the crowds get out of hand with the movie stars there,” said Danny Boyle. “We were lucky because none of our actors were known apart from Anil Kapoor who plays the host of the show.” Boyle contrasted the project to his previous cinematic efforts. “A lot of people compared it to Trainspotting [1996] for obvious reasons – there’s a toilet scene, there’s an energy in it.” There is another film of his that comes to mind for the director. “There’s also a fantastical, slightly irrational element to it as well, which we didn’t get quite right in A Life Less Ordinary [1997].” Producer Andrew Macdonald marvels at the creative flexibility of his frequent collaborator. “Boyle takes a subject that you’ve often seen portrayed realistically, in a politically correct way, whether it’s junkies or slum orphans, and he has managed to make it realistic but also incredibly uplifting.” Screenwriter Simon Beaufoy (Miss Pettigrew Lives for a Day), who visited India while conducted research for the script, said, “I wanted to get [across] the sense of the huge amount of fun, laughter, chat, and sense of community that is in these slums. What you pick up is a mass of energy.” A Hollywood Studio had major doubts about the drama. “We had this disaster in post [production] when Warner Bros. abandoned the film, they closed Warner Independent.” A savior was found in Fox Searchlight which agreed to release the picture which won the admiration of Roger Ebert of the Chicago Sun-Times who wrote, “Danny Boyle’s Slumdog Millionaire hits the ground running. This is a breathless, exciting story, heartbreaking and exhilarating at the same time, about a Mumbai orphan who rises from rags to riches on the strength of his lively intelligence.”

Earning $378 million dollars worldwide, Slumdog Millionaire caused Danny Boyle to become one of seven directors to win a Golden Globe, a Directors Guild of America Award, a BAFTA Award and an Oscar for the same movie. At the Academy Awards, the cinematic adaptation won Best Cinematography, Best Director, Best Editing, Best Original Score, Best Original Song, Best Sound, Best Picture and Best Adapted Screenplay; it received a nomination for Best Sound Editing as well as a second nomination for Best Original Song. The BAFTAs lauded Slumdog Millionaire with Best Cinematography, Best Director, Best Editing, Best Film, Best Music, Best Adapted Screenplay, and Best Sound as well as nominations for Best Actor (Dev Patel), Best Production Design, Best Supporting Actress (Freida Pinto), and Best British Film. British Independent Film Awards presented the drama with Best Director, and Most Promising Newcomer (Dev Patel) while handing out nominations for Best Screenplay, Best Cinematography, and Most Promising Newcomer (Ayush Mahesh Khedekar); at the Golden Globes it won Best Director, Best Picture – Dramatic, Best Original Score and Best Screenplay. Slumdog Millionaire was presented with British Director of the Year, British Film of the Year, and Screenwriter of the Year while contending for British Actor of the Year (Dev Patel), and Director of the Year at the London Critics Circle Film Awards; the Young Artist Awards lauded it with Outstanding International Feature Film Ensemble. Danny Boyle was presented with the Extraordinary Contribution to Filmmaking Award at the 2008 Austin Film Festival; at the same event, Slumgdog Millionaire was named the Audience Award winner.

127 Hours poster“What you do is take the power it gives you…and use it to make a film that you believe in,” explained Danny Boyle who was riding a wave of international acclaim. “The danger is that you use it on a vanity project that nobody wants to watch.” The director returned to a project he had been trying to make since 2006, a cinematic adaptation of the autobiography Between a Rock and a Hard Place by mountain climber Aron Ralston who was trapped underneath a boulder for five days until he resorted to a drastic measure to free himself. “[Ralston] wanted to narrate it and be interviewed like in a documentary,” stated Boyle of his initial attempt to film 127 Hours (2010). “The problem is that if you turn it into a documentary you’ll be able to control it and it will be absolutely accurate but the audience won’t feel it other than as a spectator.” Boyle wanted to turn the story into a first-person drama. “The power you get from telling stories with skilled actors is phenomenal; it’s transformational and cathartic.”

“James [Franco] wasn’t an obvious choice,” admitted Danny Boyle who originally planned to select Cillian Murphy as his leading man, “but when he read the script you could hear that he could do it. So we cast him.” To get a better sense of what Aron Ralston went through, the director and Franco watched the actual video messages created by Ralston while he was trapped; the footage had a profound affect on them. “I thought this would be a man on the edge breaking down and crying.” Boyle found himself to be greatly mistaken. “Just what was in his eyes; he was trying to be himself and yet there was this slow inexorable agenda of death going on.” Close attention was paid to recreating the moment when Raltson amputates his trapped arm, using a blunt knife and the weight of the boulder. “I remember reading the chapter and I thought – we’ve got to do it very accurately. We got to reflect the fact that it’s not instant, in reality it took him over forty minutes.” The filmmaker did not regret his casting decision. “What happens in the scene itself is that he occupies these plateaus of pain so brilliantly…that people imagine it’s the sound effects that are [putting them] on the edge – and they obviously contribute to it. But the real issue is that it’s an extraordinary performance by Franco.” The sequence made headlines in the media. “What is astonishing, we did have a few people fainting, early on, but more importantly I don’t remember anyone walking out.” Boyle is quick to point out that the reporting of the fainting incidents was not part of a studio promotional campaign. “Fox Searchlight would have loved to have had the power the studios used to have where they could kill the story. But you can’t now, there are tweeters in the room! It’s out before the paramedics even get there.”

127 Hours Danny BoyleThough James Franco (Howl) spends most of the screen time by himself, other actors in the biopic are Amber Tamblyn (The Ring), Kate Mara (Transsiberian), Sean Bott (Heber Holiday), Treat Williams (Deep Rising), Kate Burton (Stay), and Lizzy Caplan (Mean Girls). “As a director, you like having a real story because that’s what makes it more powerful,” said Danny Boyle. “But it’s also hard because you know you’re dealing with someone’s life.” The director snuck Aron Raltson into the first test screening, “It was incredibly intense. When he cuts his arm off, this being America, they cheered…I looked across at Aron and the tears were pouring down his face. He said what he found hard to cope with was the weird mixture of distance, watching it on the screen, and then sudden engagement, where he gets overwhelmed with it all again.” Aron Ralston was pleased with the cinematic treatment of his story; he remarked, "The movie is so factually accurate it is as close to a documentary as you can get and still be a drama." Roger Ebert of the Chicago Sun-Times wrote, “Franco does a good job of suggesting two aspects of Ralston’s character. (1) He’s a cocky, bold adventurer who trusts his skills and likes taking chances, and (2) he’s logical and bloody-minded enough to cut through his own skin and bone to save his life. One aspect gets him into his problem, and the other gets him out.” Ebert also praised the work of the movie’s film editor, “John Harris achieves the delicate task of showing an arm being cut through without ever quite showing it. For the audience the worst moment is not a sight but a sound. Most of us have never heard that sound before, but we know exactly what it is.”

“This is a film about how precious life is,” declared Danny Boyle. “And it’s only precious because of other people.” Boyle explained further, “He doesn’t survive because he is on his own; he survives because he finally realizes how important it is to get back to the people he cares about.” Made on a production budget of $18 million, 127 Hours was nominated for Best Film at the London Film Festival; it also received nominations for Best Picture, Best Actor (James Franco), Best Director, Best Adapted Screenplay, Best Song, Best Cinematography, Best Editing, and Best Sound at the Broadcast Film Critics Association Awards. At the BAFTAs, 127 Hours was nominated for the Alexander Korda Award for Best British Film, the Anthony Asquith Award for Film Music, the David Lean Award for Direction, Best Actor (James Franco), Best Cinematography, Best Editing, and Best Sound; while the Academy Awards nominated it for Best Picture, Best Actor (James Franco), Best Editing, Best Original Score, Best Original Song, and Best Adapted Screenplay. The real life drama contended at the Golden Globes for Best Actor – Drama (James Franco), Best Original Score, and Best Screenplay; at the Independent Spirit Awards it received nominations for Best Film, Best Director, and Best Actor (James Franco). James Franco also received a Screen Actors Guild Awards nomination for Outstanding Performance for a Male Actor in a Leading Role.

Frankenstein Danny BoyleDanny Boyle next heads back to where he started his career by directing a stage production for the National Theatre in London. “The last time I worked in the theatre was with the writer Nick Dear, who adapted Don Juan. We did it at the RSC [Royal Shakespeare Company], fifteen years ago. Back then we started thinking about doing an adaptation of Frankenstein [2011]. We approached Nick Hytner with it and it all started happening.” On alternative nights, actors Benedict Cumberbatch (Atonement) and Jonny Lee Miller (Endgame) switch between the roles of the creature and Dr. Victor Frankenstein. “It’s from the creature’s point of view, which has never been done before,” remarked Boyle. “In a weird way in the theatre you have a lot less control. You do what you can in rehearsal, but as soon as the actors are in front of an audience they push you away.”

Another project for the Manchester native is one that has international importance as he has been appointed the artistic director for the opening ceremony at the 2012 London Olympic Games. Commenting on the epic approach used by China at the 2008 Olympic Games, Danny Boyle said, “The thing is about the stadium is that it has the same number of seats as Beijing but is half the size. It is a more intimate space…We want to keep it on a human scale.” As for the tone of the opening ceremony, Boyle slyly stated, “What I do know is that after a couple of years of this [British] coalition government we may well be looking for a bit of light relief.”

“I want my films to be life-affirming,” remarked Danny Boyle who does have one overriding concern. “The worry I have is that I’ll make the same film again and again.” Rumours persist that Boyle will do a sequel to Trainspotting as well as turn 28 Days Later into a trilogy. “I would find that really difficult to do [a sequel], certainly not without a long gap. You want to approach it with a fresh set of guidelines or rules for yourself.” However, success is never a guarantee. “When you do one you just hope that you get the chance to do another one.” As for offering advice, the director who counts Apocalypse Now (1979) as his favourite movie, pushes the idea of never taking the easy route creatively. “To be a filmmaker…you need to lead. You have to be psychotic in your desire to do something.”

Read our review of Danny Boyle's latest Academy Award-nominated film 127 Hours, along with a report from its screening at the London Film Festival 2010.

Trevor Hogg is a freelance video editor and writer who currently resides in Canada.

Michelle Pfeiffer in talks for Tim Burton’s ‘Dark Shadows’

Michelle Pfeiffer Tim BurtonTim Burton’s new movie, a big-screen version of the 1960s gothic soap opera Dark Shadows, is set to start shooting in April and we are getting regular announcements regarding the cast.

Michelle Pfeiffer, who played Catwoman in Burton’s 1992 film Batman Returns, is in negotiations to star as Elizabeth Collins Stoddard, the reclusive matriarch of the Collins family. Pfeiffer is currently shooting Welcome to People, the directorial debut of screenwriter Alex Kurtzman (Star Trek, Transformers, Cowboys & Aliens) and written with writing partner Roberto Orci, in which she plays the widowed mother of Chris Pine’s character who returns home for his father’s funeral.

Tim Burton often casts actors he has worked with previously in his films. There are rumours that his partner Helena Bonham Carter may be getting a role in Dark Shadows, which would make it their 7th film together.

Long-time Burton collaborator Johnny Depp is playing the lead character, Barnabas Collins, a self-loathing vampire searching for his lost love. Also confirmed are Jackie Earle Haley as conman Willie Loomis, Eva Green as Angelique the witch and Bella Heatcote as Victoria Winters, a young governess at the Collins estate.

What do you think about Tim Burton regularly casting the same actors in his films, such as Johnny Depp and Helena Bonham Carter?

'Hitler Begins' with Dawn of Evil: Rise of the Reich

Dawn of Evil Rise of the ReichUp-and-coming German actor Tom Schilling (The Baader Meinhof Complex) stars as a young Adolf Hitler in Dawn of Evil: Rise of the Reich, a biopic recounting the early career of the most infamous dictator in history, tracing Hitler's transformation from humble origins as an aspiring art student to a power-obsessed and ruthless egomaniac. Premiering at the Montréal Film Festival back in 2009 under the title Mein Kampf, Dawn of Evil will arrive on these shores with a DVD release later this month.

It is of course rare for German cinema to tackle the rather sensitive subject of the former Führer and while we aren't expecting Downfall: The Beginning, this could still be worth checking out. Let's face it, if anyone could do with a reboot it's this guy.

Take a look at the synopsis and official trailer...

"Rejected by the Vienna Academy of Fine Arts, the young, dictatorial and strikingly untalented Adolf Hitler is befriended by a Jew, Schlomo Herzl who at the time is working on a novel entitled 'Mein Kampf'. Herzl's concern for the sad young Hitler leads him along a new path which will lead to disaster in world history."


Dawn of Evil: Rise of the Reich is released on February 28th.

Sanofi/Genzyme: The End Is Nigh !?!

The blogosphere erupted Tuesday afternoon with the news that – finally! finally! – Sanofi Aventis and Genzyme appear to have reached rapprochement -- and it's only going to cost the French pharma $19.2 billion upfront.

“This is a happy end with a deal that is good for both companies,” Genzyme shareholder Lionel Melka, co-manager of Bernheim, Dreyfus and Co.’s Diva Synergy Fund, told IN VIVO Blog on February 15.

But just how good a deal is it for Sanofi shareholders at $74-a-share?

That’s just one of the many questions swirling ahead of any official disclosure of the acquisition, details of which are expected to be announced in concert with Genzyme’s quarterly earnings call February 16.

Oh, we know that Genzyme provides Sanofi with access to a basket of lucrative marketed products, but these assets are also mature and facing competition from upstarts who have capitalized on the big biotech’s manufacturing missteps. At this undeniably rich price tag, how easy will it be for Sanofi to extract full value from the deal? Given the months of bitter back-and-forth, can the French pharma integrate Genzyme and retain important people like COO David Meeker and Senior VP, Quality, Ron Branning, who are essential to helping Sanofi make the big biotech a successful US subsidiary?

There’s no question this is a good deal for Termeer, who saw his company’s share price slide from a high in August 2008 of $83.25 to around $48 in the wake of 2009 manufacturing difficulties that sent sales of top drugs Cerezyme and Fabrazyme tumbling and, ultimately, resulted in a consent decree. Were the deal not to transpire, it’s highly likely he would have been forced out by activist shareholders like Icahn Partners. Now he can face shareholders with a straight face and tell them he restored a good chunk of the stock's value as a result of this transaction, thereby justifying what’s likely to be a handsome exit package.

But Sanofi shareholders may not be so happy; reports in recent weeks indicate some were less than enthusiastic about the possibility of a sweetened offer, believing the initial $69-a-share tender provided fair value. Viehbacher seemed to be trying to allay their concerns as recently as a month ago when he addressed the biopharma community at the annual J.P. Morgan Healthcare conference. “We will only do a deal if both Genzyme shareholders and Sanofi shareholders feel there is value for both,” he said.

Interestingly, in that same address, Viehbacher also noted during that break-out session that M&A hasn’t generated value for big pharma shareholders, in part because in an era of “cheap debt” it’s not hard to make any deal look accretive to earnings. “We’ve tried to be much more disciplined and we start to evaluate these deals not just on the basis of accretion,” he said.

Those comments may or may not come back to haunt him. In the interim, the onus is on Viehbacher to provide in specific detail an answer to a question Sanofi shareholders are almost sure to ask: how will the nearly $20 billion acquisition of Genzyme position Sanofi, a company trying even now to scale a significant patent cliff, for future growth?

Undoubtedly, Genzyme’s expertise in rare diseases, an area that has become au courant for big pharma, will come up. “As somebody said to me this morning, actually, we’re all ultimately going to be in rare diseases,” Viehbacher told JPMers. “As we develop biomarkers and narrow the population and the price per patient goes up, this is probably a model that we are actually going to see outside of the classic orphan drug business.”

Far be it from IN VIVO Blog to argue with the estimable Viehbacher on that point. However, does expertise in rare disease require spending $20 billion? Can't a company as externally focused as Sanofi claims to be obtain the skills via some other route? Indeed, as GSK’s initiatives in the rare disease space show, another alternative to a costly and time consuming acquisition is an alliance-driven model, where partnerships provide access to products that are now in vogue in part because they are largely protected from health care reform and generic competition, and, as such, have high pricing power.

Let's assume it's better to acquire than ally. Aren't there potentially cheaper acquisition candidates for the plucking? (Alexion and BioMarin are just two possibilities that come to mind.) Viewed alongside the proposed take out of Genzyme, Shire's 2005 acquisition of Transkaryotic Therapies for $1.57 billion and a 31% premium looks like a veritable bargain. And maybe that's the rub; late to the rare disease party, Sanofi has little choice but to overpay to get access to these niche-y products.

Of course there's another reason for Sanofi’s interest in Genzyme: accessing its biologics manufacturing facilities. Every big pharma is amassing greater biologics capabilities, lured by the specialty nature of the products. But building plants is not only expensive – it takes time. (Look how long Genzyme’s been building its Framingham site.) “By acquiring Genzyme, Sanofi gets the manufacturing capability right away,” says Salveen Richter, an analyst with Collins Stewart. “They probably believe they can use their fill/finish and manufacturing expertise to ameliorate the current manufacturing issues at Allston,” the Genzyme manufacturing site currently operating under a consent decree.

Based on Richter’s sum-of-the-parts analysis, which values Genzyme between $72 and $84 a share, she believes the sweetened offer is a fair deal for both sides. In all likelihood, it will be months before that assessment can be made -- and the answer will hinge mightily on how Sanofi manages the integration of Genzyme. Viehbacher and his team would do well to look at recent past history – AstraZeneca/MedImmune, Roche/Genentech, Takeda/Millennium Pharmaceuticals – for some pointers.

-- Ellen Licking and Joseph Haas

Image courtesy of flickrer jasongrahamhowell used with permission through a creative commons license.

Youth Sports - Gymnastics - APEX Sweeps Team Event in Pennsylvania; Sends 3 to Finals at Landover Event

(Feb. 15, 2011) - The APEX gymnastic teams Levels 5, 6 and 7 team completed a sweep of the team gold medals in the Hershey Hug and Kiss Meet in Pennsylvania over Valentine's Day Weekend.

The Level 5 Team won an additional nine gold medals and placed many gymnasts in the top three podium finishes. The level 6 and 7 teams brought home an additional 12 first place medals and topped the all around

News: VHSL Appeals Subcommittee Denies Western Albemarle and Fluvanna County Appeals; Affects Region II Basketball Seeding

Charlottesville (Feb. 15, 2011) - The top-seeded Western Albemarle High School girls basketball team and the top-seeded Fluvanna High School boys basketball teams must forfeit first round victories in the Jefferson District tournament after the school's had appeals denied by the Virginia High School League Tuesday afternoon.

The decision affects Region II tournament seeding as the Division 3 and

The Optics of Health Care Reform


Going over a cliff is one thing. Seeing over it should be much easier.

But, at least for now, Wall Street isn’t ready to take in the view. How else to explain the drumbeat of headlines about the negative impact of health care reform on pharma during the 2011 year-end conference call season?

“No one is really looking beyond the cliff today,” Sanofi Aventis CEO Chris Viehbacher declared during his company’s year-end earnings call at the start of February. “I haven't sensed anybody in the investment community really trying to figure out who's going to win in 2014 and '15. That's just not there.”

Viehbacher made those comments in explaining why he intends to wait until mid-year to offer a longer term outlook, until the company is more completely over its own patent cliff. In Sanofi’s case, that means a full-year of Lovenox generics, resolution of the uncertain status of generic Taxotere, and the end of the line for Plavix. (For more on the company’s overall performance, read "The Pink Sheet" DAILY story, here.)

“I would suspect as we get through a bigger chunk of the patent cliff, and we get closer and closer to 2012 and 2013, I think we're going to have more of a receptive audience to that, and that's why I think we want to do it then. I just think we'd be shouting in the wind a little bit if we tried to do it today.”

It’s not that the patent cliff is unexpected or dramatically worse than predicted. “Two years ago I stood up in front of a lot of you and said 20%-25% of the sales of this company are going to disappear between now and 2013 because of generic competition,” Viehbacher noted.

Rather, there is an overall negative sentiment, he believes.

“This is an industry that tends to focus on the negative. People start worrying about patent expires the day after you launch a new product. If you're any good in R&D, they're not going to give you any value for it in your portfolio. And if you're not any good at it they're not going to like you either.”

That negativity may be overstated, but there is no denying that investors have taken a decidedly glass-half-empty approach when it comes to the impact of health care reform on biopharma companies.

To be fair, the up-front costs of the law are significant—and a real crimp on the profitability of an already challenged sector. (See “Taking Lumps From Health Care Reform,” The RPM Report, June 2010.)

The health care reform implementation also includes a number of elements that further accentuate the negative. It isn’t just the size of the impact from bigger rebates, the new “market share” fee and the Medicare Part D donut hole discount. It's what they do to the P&L statement.

The health care reform impact, essentially, hits the trifecta for what analysts don’t want to see in a quarterly report:

(1) Lower gross margins. The increased Medicaid rebate and the donut hole discount represent an off-the-top reduction in revenues, with no associated reduction in costs. The same number of units are sold, just at lower prices. That makes for reduced gross margins across the board.

(2) Higher SG&A expenses. The market share fee (which begins in 2011) is accounted for as a sales cost and recorded on the expense line. At a time when manufacturers across the board are trying to show their seriousness about cost-cutting, the fee offsets some of those savings. While that is no different in profit terms from an off-the-top-line revenue adjustment, it further clouds the picture for companies trying to show that they are delivering on past promises to downsize.

(3) Higher taxes. The market share fee is (by law) not tax deductible. That means most pharma companies will report an effective tax rate that is at least a percentage point higher than it was in 2010. Again, that doesn’t change the magnitude of the hit, but it makes yet another closely watched variable look worse instead of better. Viehbacher observed wryly that another industry headwind—European price cuts—at least include an associated reduction in tax liabilities. (On the other hand, with corporate tax reform on the table in Washington, this isn't such a bad time for companies to report higher effective tax rates.)

Lower gross margins. Higher expenses. A higher effective tax rate. You can see why Wall Street isn’t loving health care reform right now.

Still, the impact of reform pales in comparison to the impact of the patent cliff. And, unlike a cliff, there is an upside to reform. All those discounts, rebates and fees helped buy an innovator friendly intellectual property system for biologics and biosimilars, improvements in insurance coverage (especially for high drug cost seniors who fall into Medicare’s “donut hole”), and, eventually, a much larger insured population to buy pharmaceuticals.

It is just that that all that happens on the other side of the cliff.

When investors are ready to look that far forward they may be in for a surprise. At least for some companies, what looked like a cliff may turn out to be a valley, with real growth prospects on the other side of the patent expiry period.

image from flickr user andrea trassati used under a creative commons license