Friday Five – Your weekly pharma review

Eli Lilly, Incyte don’t got JAK

To the surprise of many, the FDA decided against approving Olumiant (baricitinib) for the treatment of rheumatoid arthritis (RA) late last week, causing a notable selloff in shares of Eli Lilly and Incyte on Monday, wiping away billions and hundreds of millions from their respective market caps.

The partners were not overly forthcoming about what exactly caused the FDA to issue a complete response letter, disclosing only that the agency wanted more data on Olumiant’s dosing and safety profile, though documents related to EMA’s recent review – which led to the JAK inhibitor being approved in Europe – offers some clues about what the sticking points are for US regulators. (See ViewPoints: EMA’s (positive) review may offer clues about FDA’s (negative) decision on Olumiant.)

Analysts suspect the FDA’s decision could push Olumiant’s launch out into 2019. This would be good news for a long list of companies, though perhaps most notably Pfizer, which sells the only JAK inhibitor on the US market in Xeljanz (tofacitinib). Other beneficiaries include the likes of AbbVie, Amgen and Johnson & Johnson, which sell competing RA drugs, along with other JAK inhibitor developers like partners Gilead Sciences and Galapagos (as well as AbbVie).

Pricing headwinds mounting – selectively

Johnson & Johnson reported 1Q17 earnings that came in shy of what the Street was expecting, causing shares of the diversified US behemoth to shed more than $10 billion in valuation on April 18. (See Johnson & Johnson Q1 Results – Earnings presentation/analyst call highlights.)

The US behemoth suggested was at least in part a reflection of the increased pricing pressures it is feeling in competitive primary care markets like cardiovascular and metabolic diseases, “where the payer community has more influence over rebates and the like,” remarked executive vice president and CFO Dominic Caruso on Johnson & Johnson’s quarterly conference call.

Among the hardest hit pharma products were Xarelto (rivaroxaban) and SGLT2 inhibitor Invokana (canagliflozin), which posted first quarter sales that were off year-over-year by 10 percent and 13 percent, respectively. This phenomenon could have obvious read-through for other companies selling direct-acting oral anticoagulants, such as Bristol-Myers Squibb and Pfizer, as well as the likes of Boehringer Ingelheim, Eli Lilly and Merck & Co. with competing oral diabetes agents.

PARP permutations

The PARP inhibitor universe continues to evolve rapidly, as this week saw the coming out party for one product while another ran headfirst into a major roadblock.

On April 19, Tesaro announced the market launch of its Zejula (niraparib), which was approved late last month for use as second-line maintenance therapy for ovarian cancer. The introduction was highlighted by some confusion about the drug’s newly revealed list price, which at $14 750 per month for the starting dose of 300 mg appeared at first glance to be noticeably higher than both AstraZeneca’s Lynparza (olaparib) and Rubraca (rucaparib), but is actually in-line with the competition because a majority of patients are down-dosed over the first few months of therapy.

Shares of Tesaro were off almost 9 percent on April 20 as the hopes of speculative investors faded that the company might be taken out in the near-term, which they decided is unlikely now that it has embarked on the task of actually selling Zejula.

Tesaro’s temporary pain was nothing compared to that of AbbVie, which reported that its veliparib missed the primary endpoints in two Phase III trials, one in triple negative breast cancer (TNBC) and the other in non-small-cell lung cancer (NSCLC).

Other indications like ovarian and BRCA-mutation breast cancer have proven to be particularly responsive to PARP inhibitors, so AbbVie’s lead tumour types for veliparib may have struck some observers as curious choices, though it likely reflects a decision to branch out in search of more fertile markets. So far, however, the strategy appears to be backfiring. (See ViewPoints: AbbVie’s PARP strategy not going according to plan.)

A KOL who spoke with FirstWord hypothesised that the disappointing results were likely a consequence of AbbVie testing its PARP inhibitor in less ideal tumour types and/or in patient populations not enriched for certain mutation statuses, which he believes could have improved veliparib’s performance.

NASH rivals call détente – for now

Allergan and Novartis are not customarily thought of as the lead horses in the race to sell products in the untapped but supposedly-lucrative market of non-alcoholic steatohepatitis (NASH), but both clearly have big plans for making moves in the space.

This week, the parties set aside their competitive differences and signed a partnership to conduct a Phase IIb trial that will assess Allergan’s CCR2/5 inhibitor cenicriviroc (CVC) and Novartis’ lead farnesoid X receptor (FXR) agonist in combination. (See ViewPoints: Allergan, Novartis look to validate one another’s place in NASH field.)

Both companies have earlier-stage compounds in their in-house portfolio that they may eventually turn to in lieu of outside products, but these are either not ready for primetime or perhaps may not offer the right mechanism for combination. Either way the ‘partners’ could each get something valuable out of the deal, as Novartis may be able to prove that its non-bile acid FXR agonist has best-in-class potential, while Bernstein analyst Ronny Gal said it may validate Allergan’s decision to pay a pretty penny for CVC.

Buy-ogen

Biogen has been mired in an 18-month funk brought on by sooner-than-expected flattening sales from its multiple sclerosis (MS) franchise, which has caused some investors to call for the bellwether biotech to use acquisitive means to get back on a growth kick.

Those looking for signs of life from Biogen’s business development team will thus be heartened by the company’s willingness to ink a big-money deal with Bristol-Myers Squibb late last week in which it paid $300 million upfront to license worldwide rights to BMS-986168, a mAb against tau in the verge of entering Phase II testing for progressive supranuclear palsy and Alzheimer’s disease. (See ViewPoints: Biogen licensing deal with Bristol-Myers Squibb may be a signal of intent.)

The transaction fits nicely into Biogen’s neurology sweet spot, and while some observers suggested the company may have overpaid a bit for a programme that is unlikely to move the needle anytime soon, many investors are hoping it is willing to pony up a whole lot more before too long.

To read more Friday Five articles, click here.

Reference Articles