Prescribed Reading: Earnings point to restructuring, not M&A
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.
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The deal-making spree didn't continue through this latest week of earnings. But the talk of restructuring in earnest did. Pharmas big and small are going back to their roots in science and relying heavily on R&D.
Bristol-Myers Squibb Company glossed over an uneventful earnings report by simultaneously announcing the results from a lung cancer study that could open up the market for its immunotherapy Opdivo (nivolumab). The company emphasized a new biomarker called tumor mutation burden (TMB) that it believes will revolutionize the way certain cancer therapies are given to patients. While the company was overly optimistic on the biomarker and its eventual role, the market has been skeptical.
Allergan plc also shifted focus away from its earnings report and toward clinical results for its late-stage oral CGRP inhibitor, ubrogepant. The drug showed positive results in both doses for reducing pain for migraine sufferers. But analysts worried how the entrance of ubrogepant to the market, as well as injectable CGRP drugs meant to prevent migraine, could cut into the migraine indication for the blockbuster Botox (onabotulinumtoxinA).
Elsewhere, Alexion Pharmaceuticals Inc. is trying to focus on its follow-on late-stage drug for paroxysmal nocturnal hemoglobinuria (PNH) as it tries to move past the problems that have plagued it for the last few years. The company is promising it will start some business development to diversify its pipeline, but even executives admitted that effort is going to take some time to get off the ground.
GlaxoSmithKline plc overhauled its entire pharmaceuticals division last year, but CEO Emma Walmsley said during the fourth quarter earnings call that further restructuring is going to be announced in the second quarter.
Like competitor GSK, Merck & Co. sees 2018 as a pivotal year. The blockbuster PD-1 inhibitor Keytruda (pembrolizumab) continues to grow, but data readouts from several competitors this year could make the competitive environment more challenging. The new competition will put Merck's combination strategy to the test, and will put more pressure on its biomarker strategy as well.
Investors of Gilead Sciences Inc. celebrated hepatitis C revenues hitting a bottom, supposedly. For Gilead investors it's like the first signs of spring after a particularly brutal winter. While the uber-blockbuster franchise has been good to the company, it has also been its biggest crutch. Hepatitis C revenues were always expected to decline — and have been for the last several quarters —but investors believe that a bottom is now in sight, and that means they can start focusing on finding new growth.
A few companies decided to throw in the towel on flailing clinical programs this week. The biotech unicorn Intarcia, which has raised billions in private capital on the promise of its diabetes drug-device combo, quietly shut down two late-stage studies of its magical lead candidate, and let go of 60 staffers. The Complete Response Letter the drug received in September showed biotech investors that unicorns might not be real after all.
Elsewhere, Biogen Inc. finally gave up on Tysabri (natalizumab) as a treatment for ischemic stroke. The older multiple sclerosis drug has a storied past with lots of twists and turns. But it seems its journey is not meant to continue with new indications. No one was particularly surprised about the move to end the stroke research, but the move now places even greater emphasis for Biogen on its Alzheimer's disease pipeline paying off.
And it's a big bet.
Boehringer Ingelheim International GmbH announced Friday morning that it will end development of its PDE9 blocker in Alzheimer's disease after the drug failed in mid-stage studies. Alzheimer's has been an increasingly tricky area of development and no company has yet to crack the code. Boehringer will now shift its focus to other projects, including its work in schizophrenia.
A day after posting poor hepatitis C revenues, Gilead reported a win for its HIV franchise by winning a Food and Drug Administration approval for its triplet pill, Biktarvy. The company is anchoring its hopes, in part, on success of its HIV franchise. To answer back, ViiV Healthcare, the GSK-Pfizer Inc. joint venture, filed a patent infringement suit against Gilead on the drug. While analysts don't see this keeping the drug off the market, it will be a minor headache for the big biotech as it moves forward.
Meanwhile, GSK got a reprieve from another competitive threat — Novartis' generic version of the blockbuster respiratory drug Advair. On Thursday, the FDA issued Novartis a CRL. GSK said during its earnings call that the entrance of an Advair generic in 2018 would mean the company wouldn't grow this year; now it has time to put other growth drivers in place.
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