Biopharma is a complex, rapidly evolving industry that is highly regulated and closely watched — and that means 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
- Right to Try headed to Trump's desk
- Q&A with Regeneron's Aris Baras
- Senators call for list prices in DTC ads
Mergers & analysis
Now that the Takeda-Shire dance has reached its conclusion, the Japanese pharma is slimming down ahead of closing the $62 billion deal. In the first divestiture publicly disclosed, Takeda sold its majority stake of Chinese biopharma Guangdong Techpool Bio-Pharma to its joint venture partner, Shanghai Pharmaceutical Holding, for $280 million.
The mega-merger also spurred Leerink analyst Geoffrey Porges to re-evaluate which companies may be takeout targets and which big pharmas have the firepower to pull the trigger on some significant M&A.
"Our analysis finds the potential buyer with the most flexibility is J&J, followed by Merck, Pfizer, Gilead and Amgen," he wrote in a May 24 note to clients. "Potential targets with the most feasible buyers include Astellas, Takeda (pre-Shire), Regeneron and Alexion."
Porges points out that the 20 largest biopharmas have a combined worth of nearly $3 trillion, and "could make substantial acquisitions at prices well above current Street expectations." He speculates the largest companies in the industry have the ability to easily fund $40 billion to $60 billion in acquisitions from their current balance sheets.
"The recent surprise of Takeda's acquisition of Shire and available financing provide further evidence that almost any such potential transaction could be possible," he added.
According to Leerink, the 20 largest biopharmas had $216 billion in cash and marketable securities at the end of the first quarter and about $402 billion in current debt. Pfizer, Johnson & Johnson, AbbVie, and Novartis already have substantial debt, while Allergan, AstraZeneca and Celgene are the most levered.
While 2018 has outshone recent years in dealmaking, the report suggests the industry could see even more M&A brokered in the quarters to come.
Clinically relevant
Two of the biggest results announced this week were from two small hemophilia studies. Both Biomarin and the duo of Spark Therapeutics and Pfizer reported further results from early-stage trials of their gene therapies for hemophilia A and hemophilia B, respectively. The studies both showed that the gene therapies could have long-term staying power, and could potentially change how the diseases are treated.
In the meantime, Roche is capitalizing on its new footing in the hemophilia market, with plans to expand its drug Hemlibra (emicizumab-kxwh) into a wider patient population. This week, the big pharma announced the latest results from its HAVEN studies, showing Hemlibra was effective in hemophilia A patients both with and without inhibitors.
Elsewhere, Esperion Therapeutics wowed investors with positive data from a third Phase 3 study of its LDL-lowering cholesterol drug bempedoic acid. The company anticipates soon receiving the data from two more late-stage studies and expects to file for approval early in 2019. The biotech hopes it can find its niche somewhere between the low-cost generic statins and the pricey PCSK9 inhibitors. Investors and regulators will likely keep a close eye on safety as the submission approaches.
Nabriva Therapeutics is also nearing a New Drug Application submission, now that it has Phase 3 results in hand for its oral antibiotic lefamulin, which beat out a commonly used therapy in patients with community-acquired bacterial pneumonia (CABP).
Highly regulated
The Food and Drug Administration announced the approval of three new drugs over the last seven days. The FDA cleared last Friday AstraZeneca's Lokelma to treat high levels of blood potassium and earlier this week cleared Dova Pharmaceuticals' Doptelet for thrombocytopenia in adult patients with chronic liver disease scheduled to undergo a procedure.
And on Friday, BioMarin Pharmaceutical's Palynziq (pegvaliase-pqpz) won a U.S. OK for a rare genetic disease called phenylketonuria.
On the other side of the ledger, the FDA also sent a Complete Response Letter to Recro Pharma, pushing the company's shares down 50%.
Elsewhere, the ripple effects of President Donald Trump's drug pricing plan continued to be felt in Washington, D.C., as lawmakers reacted and agencies began moving on some of the ideas in the blueprint.
One idea, touted by Department of Health and Human Services Secretary Alex Azar, would involve bringing Medicare Part D-styled negotiation to Part B drugs, which largely are administered in doctor's offices. The administration's blueprint touts the idea of moving some drugs from Part B into Part D.
While the blueprint remains vague, consulting group Avalere says such moves could end actually result in some patients paying more out of pocket — factors like economic status, co-insurance and even other medications could mean a different situation for every patient.
"Looking at the data released by CMS it is not clear that moving the Part B drugs to Part D would save money and based upon an Avalere study it could result in higher cost sharing for beneficiaries," wrote Cowen & Co. analyst Rick Weissenstein in a May 24 note to clients.
"[A] comparison of per beneficiary costs for the leading therapies suggests that there is no obvious or immediate savings from a switch. Nor is there a clear indication in the data of a direct connection between the payment source (B vs. D) and pricing trends. It should also be noted that moving drugs from Part B to Part D would likely mean lower profits for physicians. That could further erode any potential savings as concessions may have to be made to the physicians," he added.
Get ready to hear more about it. The Senate Health Committee announced it will host a hearing June 2 with Azar to discuss the blueprint.