Prescribed Reading: AZ sell-off, Merck wins ESMO, generics dominate
A weekly guide to the goings-on in the biopharma industry.
Biopharma is a complex, rapidly evolving industry that is highly regulated and closely watched — and that means there is constant news. Here's a closer look at the clinical trials, M&A, cool science and regulations that are driving the industry this week.
In case you missed it
- Questions are raised about the pharma supply chain.
- Shire is making ophthalmology into an art.
- Insulin companies are facing lower prices and increased competition.
Mergers & analysis
The biggest deals of the week were strangely small, but ultimately significant in other ways. Merck & Co. inked a pay-for-performance deal with Aetna for its massive diabetes franchise. The DPP-4 juggernaut is losing steam (although still pulling in $6 billion annually) and the company is trying to guarantee a place in the crowded diabetes market for Januvia (sitagliptin).
These value-based contract that are based on outcomes for patients are becoming increasingly popular as payers try to help bring more value to patients, while still giving incentive to pharma companies for innovative and effective medicines.
AstraZeneca on the other hand continued its sale of all non-core assets. The British pharma sold off the Chinese licensing rights to its diabetes drugs Byetta (exenatide) and Bydureon, pocketing $50 million upfront from a subsidiary of the Chinese 3SBio. This followed four other such sales last week that resulted in nearly $800 million in upfront payments, pushing the company only slightly closer to the $45 billion in annual revenues that CEO Pascal Soriot once promised.
Now that the dust has settled from the European Society of Medical Oncology (ESMO) conference that was held last weekend, some clear winners and losers have emerged. Merck's Keytruda (pembrolizumab) came out on top of Bristol-Myers Squibb's Opdivo (nivolumab) in the ongoing battle over first-line lung cancer.
While Keytruda showed much stronger results in patients with high-expressing levels of the PD-L1 biomarker, analysts (and Bristol-Myers) are blaming the CheckMate trial designs for the discrepancy. Few people believe that Keytruda is truly superior to Opdivo (or vice versa), but this is likely enough to give Merck the market advantage.
On the flip side, small Massachusetts biotech Tesaro also came out a winner in ovarian cancer with its PARP inhibitor niraparib – an active space that includes the likes of Clovis Oncology, AbbVie and Pfizer's Medivation. Yet, it's not all sunshine and roses for Tesaro – its partner, Myriad Genetics, is not thrilled about the possibility that niraparib might be used in a variety of patients and wouldn't necessarily need Myriad's companion diagnostic test, according to a Bloomberg report. While the expanded patient population would be gangbusters for Tesaro, it would be a hit to its partner.
The big trend this week was revamping clinical trial programs. Several companies made the move this week, mostly in an effort to salvage a program that wasn't performing as expected. After no objective responses were seen in its early-stage program, Adaptimmune decided to add a chemotherapy to the ovarian cancer trial, pushing its shares down. Esperion Therapeutics made changes to its Phase 3 program design for its LDL-lowering cholesterol drug in hopes of accounting for all market eventualities and regulatory pathways in an uncertain environment for drugs with its mechanism of action.
Even as some people are questioning whether productivity is suffering – the Food and Drug Administration has only approved 17 new molecular entities so far this year, compared to 45 in 2015 – generic drugs are thriving.
The FDA released a report recently showing that the regulatory agency has approved 651 Abbreviated new Drug Applications (ANDAs) this year so far, with another 184 tentative approvals on deck. This is well above both the fiscal 2015 and 2014 numbers.
Yet, the agency has also issued more Complete Response Letters through its Generic Drug User Fee Amendments (GDUFA) than those years, with a whopping 1,725 rejections – almost a third more than last year.
The high number of generic approvals (and low number of innovative approvals) comes at a time when drug pricing is an incredibly hot topic and low-cost alternatives are better for patients.
Off the bench
Daiichi Sankyo is teaming up with Dana-Farber Cancer Institute on a preclinical program for patients with lung cancer, leveraging the translational medicine research at the Better Center for Applied Cancer Science.
Allergan is continuing a partnership with the Dystonia Medical Research Foundation, conducting a survey to better understand cervical dystonia and provide education about the symptoms and diagnosis. The work is part of the spec pharma's efforts to promote its market-leading Botox product and its uses as a treatment for the movement disorder.
Meanwhile, the National Multiple Sclerosis Society has committed $10.5 million to 42 MS research projects. The latest monetary commitment is part of the society's ongoing effort to commit a total of $50 million this year.
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