Possible migraine drug delay weighs on Teva
- Israeli drugmaker Teva Pharmaceutical Industries Ltd. recorded an operating income loss of $17.5 billion in 2017, reflecting a just-over $17 billion impairment charge as the company recognized significant challenges to its U.S. generics business.
- Teva also disclosed a potential delay in hoped-for approval of fremanezumab in migraine, after its sole source API provider received an FDA warning letter for manufacturing issues. The drug's user fee target action date is June 2018.
- In its earnings report, Teva provided an update on its ongoing major restructure, with a goal to reduce spending by $3 billion before the end of 2019. Teva plans to cut around 14,000 jobs, 12 manufacturing plants, and a number of portfolio drugs. R&D isn't getting off lightly, with over a quarter of its specialty programs and more than a hundred generics programs set to be axed.
Teva's migraine drug, fremanezumab, was riding high, with positive clinical data and potential for monthly or quarterly dosing that could give it the edge against a slate of rivals that includes Novartis AG and Amgen Inc. The FDA accepted the Biologics License Application for review in December, with priority review for prevention of migraine and a target action date of June 2018.
However, a warning letter issued by the Food and Drug Administration last month to Celltrion Inc.'s manufacturing plant in Incheon, South Korea imperils that priority review. Celltrion is the sole-source provider of the active pharmaceutical ingredient for fremanezumab, potentially affecting the FDA's review of the drug. Violations at the facility included poor aseptic practices and inadequate investigation of scores of complaints.
While these violations weren't — according to Teva — in the part of the facility where the API will be manufactured, the letter still could have impact and may set back the drug's timeline.
"We are in active dialogue with the FDA in order to ensure that this warning letter would not affect the supplies of API," said company CEO Kåre Schultz. "We are optimistic that we will be able to prove that the API manufacturing is in good shape, but it of course remains to be settled in a discussion with FDA."
According to Schultz, most warning letters take six to 18 months to close out. Timing is critical in this space, as Teva is up against competition from other late-stage CGRP inhibitor candidates from Eli Lilly & Co., Amgen Inc. and Alder BioPharmaceuticals Inc.
To try to offset the potential manufacturing risk, Teva is planning to bring on board more than one source for the API, including its own in-house capacity. The drugmaker will also continue studies to broaden the application of the drug, including a Phase 3 program in cluster headaches and Phase 2 in post-traumatic headache.
"What we see as a huge advantage is that we are the only ones in this migraine space that has a product that you can take four times a year," said Schultz. "As you probably know, the efficacy on all the products in development are similar. There's no real difference there. So having the same efficacy, but a significant more convenience, we think that will be a key edge for us in the marketplace."
An additional challenge may be that fremanezumab's competitors are likely to launch with auto-injectors, and Teva's product comes in a pre-filled syringe. While the company is developing an autoinjector, it downplayed the importance of that differentiation.
"I don't think it's a huge difference and especially not for that segment who would like to have injections only four times a year," said Schultz.
Contributions from fremanezumab haven't been built into the 2018 guidance with any significance, as the launch wouldn't occur until mid-2018 under the best-case scenario. Schultz sees the drug as having a slow takeoff as it will be in a new market, but with a good long-term potential.
Group-wide, falling income has been a major challenge. Teva plans to mend its faltering finances through a major restructure, with the goal to cut $3 billion from its bills by the end of 2019.
"We have our new organizational structure in place for all levels down in terms of management teams, and it's this new organization that has created our annual operating plan for 2018," said Schultz.
The staff cuts, from 53,000 to 39,000, will be half done by the end of the second quarter 2018, and completed by the close of 2019. The manufacturing consolidation is ongoing, with six plant closures announced, and six more announcements by the end of 2018.
R&D is taking quite a cut, with 25 specialty programs set to be shuttered in areas outside the company's core expertise. More than a hundred generic programs are to go as well, which Schultz describes as a reduction "on a minor scale."
- Teva Pharmaceutical Industries Ltd. Earnings release
- BioPharma Dive FDA warning letter details violations at Celltrion plant
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