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For Mass. drug firms, Calif. event is a must

SAN FRANCISCO — For the makers of drugs, diagnostics, and medical technology, the annual J.P. Morgan Healthcare conference, which drew to a close Thursday, is a kind of family reunion, a gathering that this year attracted more than 8,000 industry leaders. Chief executives of almost every publicly traded US biotechnology and pharmaceutical company, and most of their counterparts from Europe, see it as a must-attend event. Massachusetts has one of largest contingents here, with dozens of companies.

Here are a few nuggets mined from this week’s conference:

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Cubist Pharmaceuticals Inc., known best for its flagship drug, the antibiotic Cubicin, has three experimental drugs in later-state clinical trials, including ceftolozane, a treatment for urinary tract and intraabdominal infections, the Lexington company’s chief executive, Michael W. Bonney, told investors Thursday.

“We believe ceftolozane has blockbuster potential,” Bonney said, referring to the rare therapies that generate more than $1 billion in annual sales.

This week, Cubist reported total revenue of $926 million for 2012, up 23 percent from the prior year. Bonney said the goal is to more than double that, to $2 billion over the next five years, as more products enter the market. Cubist specializes in acute care products for hospitals.

With the rise of bacteria around the globe resistant to multiple drugs, Cubist is well positioned to lead the effort to find cures.

“Antibiotics will continue to be a key part of Cubist’s growth,” Bonney said. “We can deliver value to the health care system overall.”

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Ironwood Pharmaceuticals Inc., the Cambridge company that last summer won approval to sell its first drug in the United States, is moving forward with commercialization of that drug, Linzess, which treats irritable bowel disease with constipation and chronic constipation in adults.

Ironwood is planning an Internet advertising campaign and working with its marketing partner, Forest Laboratories Inc., on educating primary care physicians and gastrointestinal specialists about the treatment.

“They’re operating as a fully integrated, single selling team,” said Ironwood chief executive Peter Hecht, adding that both Ironwood and Forest will disclose initial sales of Linzess at the end of the first quarter.

Because Ironwood is targeting a large primary care market, rather than a smaller specialty disease market where the patient population is more easily identified, company officials expect the growth of Linzess sales will be slower but steady. They estimate 40 million Americans suffer from the conditions that can be treated by their drug. Ironwood is also launching the drug in Europe, where it will be called Constella.

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Sanofi SA, the French drug maker that purchased Genzyme Corp. for $20.1 billion in 2011, has moved research programs from Bridgewater, N.J., to Cambridge, which has become one of the company’s global drug discovery hubs, said Elias Zerhouni, Sanofi’s president of research and development.

Genzyme “gave us a front-row seat in Boston overnight,” Zerhouni said, noting that its work in developing treatments for rare diseases has informed Sanofi’s approach to other diseases. He said Sanofi has changed its entire approach to research and development, opting for more collaboration with biotechs and academic researchers.

“We’re going from a closed system to the modern idea of supply chain R&D, where you go to where the best ideas are,” he said.

Sanofi this week announced that Dr. Gary J. Nabel will be the Cambridge-based chairman of the company’s strategic development and scientific council. Nabel is the husband of Elizabeth G. Nabel, president of Brigham and Women’s Hospital in Boston.

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While companies such as Sanofi are stepping up their research partnerships,others — including Covidien PLC, the medical device company based in Mansfield but incorporated in Ireland — are largely abandoning internal research in favor of buying companies with attractive products.

“We use acquisitions as proxies for research and development,” Covidien’s chief executive, Jose E. Almeida, told investors. He described a strategy in which Covidien, the successor company to Tyco Healthcare, snaps up small companies with higher-than-average profit margins while divesting those with below-average margins.

Almeida also said Covidien is moving aggressively into emerging markets as growth slows in the United States and the European Union.

The company is also paring costs through consolidation, reducing its manufacturing sites over four years to 51 from 67 and eliminating about 1,300 jobs globally.

“We have a significant track record in closing plants and increasing efficiencies,” he said.

Robert Weisman can be reached at weisman@globe.com.
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