Friday Five – Your weekly pharma review

The industry pulse

'Value' dominated the discussion at this week's Forbes Healthcare Summit in New York, with continued scrutiny of US drug prices providing the most prominent backdrop to this debate.

Allergan CEO Brent Saunders issued a warning to the industry that election of Donald Trump – while potentially a 'better' outcome for pharma versus a Clinton administration – has "created a false sense of relief" within the sector, while leadership from three leading cancer drug manufacturers argued that incentives must remain in place to reward the unprecedented rate of evolution currently occurring in oncology development.

Immuno-oncology therapies may represent "extraordinary," progress, but Regeneron Pharmaceuticals CEO Leonard Schleifer ended the summit on a somewhat controversial note by arguing that pharma's reputation has been damaged by the use of drug price increases to mask shortfalls in innovation.

ViewPoints: Allergan CEO: Trump victory no panacea for drug pricing debate

ViewPoints: As the value debate evolves, incentives to develop "extraordinary" cancer products must remain in place say Big Pharma CEOs

ViewPoints: Regeneron CEO – pharma has increased drug prices to cover gaps in innovation

ViewPoints: Novartis CEO Joseph Jimenez sounds off on value-based contracts


Convincing Clozel – Johnson & Johnson finds a tough nut to crack

If reports this week are accurate, Johnson & Johnson initially sought an approach to acquire Actelion that would have allowed the Swiss biotech to retain some independence, potentially by merging it with components of Johnson & Johnson's pharmaceutical business. The reputation of CEO Jean Paul Clozel clearly precedes him; speaking to FirstWord last year, Clozel had dismissed the constant flurry of M&A speculation around the company he founded with his wife two decades ago by suggesting that Actelion was merely "an adolescent."

Rumours indicate that Johnson & Johnson has found it harder than expected to convince Clozel on the merits of a deal and that a straight cash offer is now the preferred approach. Johnson & Johnson has more cash to spare than any of its peers and some analysts are keen for management to prioritise strengthening of its pharma business over other divisions (ViewPoints: Johnson & Johnson looking to double down on drugs). However, with Clozel reluctant to sell the family silver – and having staunchly opposed the wish of investors in the past – it remains to be seen if Johnson & Johnson can reach a deal that appeases both Actelion's CEO and its own shareholders.

Those concerned that management could overpay for Actelion will also point to comments from the partially-formed administration of US President-elect Donald Trump, which indicate that an offshore cash repatriation tax holiday and reform of corporate tax rates are earmarked as priorities. Could Johnson & Johnson get a better deal shopping closer to home?

ViewPoints: Clozel's mind-set says much about Johnson & Johnson's Actelion pursuit


Pfizer's catch-up in immuno-oncology gathers pace

Pfizer has long-argued that it is well positioned to become a key long-term player in the emerging field of immuno-oncology and confirmed this week that it has received FDA priority review for its PD-L1 inhibitor avelumab as a treatment for metastatic Merkel cell carcinoma.   

Although this is a relatively small indication, a six-month review by the FDA should see approval secured by at least mid-2017 and the agency has frequently approved products in this class ahead of schedule, particularly in novel indications.

Furthermore, a first-pass approval for avelumab would position Pfizer and development partner Merck KGaA as the fourth player(s) to launch a PD-(L)1 inhibitor; relegating AstraZeneca to likely fifth-past-the-post status in the process (ViewPoints: With no crystal ball, AstraZeneca investors get a little jittery).

See also - Spotlight On Interview: IBM, Pfizer discuss plans to leverage supercomputing to tackle immuno-oncology


Arrowhead forced to realign its aim   

Shares in RNAi specialist Arrowhead Pharmaceuticals declined 60 percent Tuesday after the company announced it is terminating development of three assets that use the EX1 delivery vehicle. This decision comes just weeks after a study of lead asset ARC-520 – which is being developed for the treatment of hepatitis B – was placed under clinical hold by the FDA. Arrowhead will also reduce its workforce by 30 percent as it refocuses efforts on the development of preclinical RNAi therapeutics based on the company's subcutaneous and extra-hepatic delivery systems.

Analysts at Chardan described the broad loss of all EX1-related assets as realisation of a 'bear case' scenario, which provides "little visibility, on the company's development programme moving forward. They suggest, however, that as these discontinuations are associated with the dynamic polyconjugate (DPC) platform used in the EX-1 delivery vehicle, and not RNAi drugs, competing RNAi drugs that don't use similar platforms are not burdened by additional safety risks.

With resources depleted, Arrowhead's headcount reduction should extend the company's cash runway to 2019, management said; the recently signed deal with Amgen to develop RNAi therapies for cardiovascular diseases has been well timed.  


Will adherence pass as a value-add in diabetes?

With debate around the value of new drugs unlikely to dissipate soon, Intarcia hopes that its diabetes-treating osmotic mini-pump ITCA 650 can utilise the concept of guaranteed patient adherence as a means to appease payers. Fresh from submitting its new drug application for ITCA 650 with the FDA, CEO Kurt Graves believes Intarcia is well positioned to achieve this goal.

Spotlight On Interview: FirstWord discusses Intarcia Therapeutics' revolutionary diabetes treatment ITCA650 with CEO Kurt Graves

Feedback from endocrinologists and primary care physicians who will have the opportunity to use ITCA 650 once it becomes available suggests cautious optimism for a potentially disruptive product, albeit one where prescribers identify numerous barriers to adoption – Physician Views Poll Results: 130-plus endocrinologists and primary care doctors provide feedback on how Intarcia's implantable GLP-1 therapy could disrupt the type 2 diabetes market

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