Friday Five – The week in review

Pfizer and Gilead talk M&A

With Pfizer and Gilead Sciences both reporting first-quarter earnings this week, potential M&A activity was a key topic of discussion.

Gilead's earnings report will have done little to alter assessment of the company's long-term growth trajectory, with hepatitis C revenues continuing to decline and falling just short of consensus expectations. Fuelled by the considerable success that Gilead has enjoyed in this market in recent years, however, the company's cash and cash equivalents swelled to $34 billion at the end of the first quarter.

Investors are impatient for a transformational deal, so some encouragement will at least be taken from the assertion by Gilead's CEO John Milligan that management is not stalling due to uncertainties around US tax reform. Instead Milligan argued that Gilead has invested in greater capacity to assess business development opportunities, a number of which "could play out over the coming year as we start to make progress in getting partnerships and potential acquisitions together." Milligan also indicated clearly that Gilead would like to "build a meaningful franchise in oncology," and "use our resources to accelerate products to market," which incrementally supports the view that any transformational deal is likely to have a cancer focus – Gilead Q1 Results – Earnings presentation/analyst call highlights.

Speaking on behalf of Pfizer, CEO Ian Read is taking a more prudent view of the uncertainties relating to US tax legislation, not to mention ongoing debate around US healthcare reforms and elections in both the UK and France.

Read reiterated that he expects the industry to consolidate over time given "too much redundancy and fragmentation, both globally and the US, for the sector to continually efficiently deliver medicines to society," and anticipates that Pfizer will play an active role in this process.

However, "the current environment needs to stabilise in order to be an advantageous market for big deals," added Read, noting also that "certain large companies (and potential targets) have significant, almost binary, risk embedded within their business and pipelines which could meaningfully alter their values." – Pfizer Q1 Results – Earnings presentation/analyst call highlights.

Merck & Co.'s momentum

Also reporting first-quarter earnings this week was Merck & Co., with current and future performance of its cancer therapy Keytruda dominating discussion. Sales of the PD-1 inhibitor grew to $584 million in Q1, with lung cancer accounting for the biggest proportion – around 40 percent – for the first time.

This performance was fuelled by FDA approval last October for the treatment of high PD-L1 expressing first-line non-small-cell lung cancer patients, where the vast majority of US patients who meet eligibility criteria are now receiving Keytruda ahead of chemotherapy, the company said – Merck & Co. Q1 Results – Earnings presentation/analyst call highlights.

Management appears bullish on the prospect of expanding Keytruda's first-line label in the next week or so, with the FDA expected to make a decision on whether to approve combination use with chemotherapy (irrespective of PD-L1 status) by May 10.

Regarding other combinations, Merck appeared to play down its interest in CTLA-4 inhibition, but R&D head Roger Perlmutter spoke positively about pairing Keytruda with PARP inhibitors; a combination for which there is much enthusiasm and early data should be made available over the coming months – Spotlight On: Optimism for PD-1/PARP combinations remains intact as Tesaro prompts speculation it can play with the big boys.

More novel drugs approved

FirstWord discussed the impressive pace of FDA approvals in 2017 just three weeks ago, and in the past week the agency has approved another five drugs. This brings the total to 19 for the year to date versus 22 approvals in 2016.

The latest haul includes AstraZeneca's Imfinzi which becomes the fifth PD-(L)1 inhibitor to reach the market, initially as a second-line treatment for bladder cancer. This is a smaller and crowded indication where Roche's Tecentriq has established a lead, but three immunotherapies – the other being Bristol-Myers Squibb's Opdivo – are now launched. Tecentriq also recently secured approval in first-line patients ineligible for chemotherapy, but could be joined by Keytruda within the next month or so as it is awaiting FDA approval in both the first- and second-line settings; our latest Physician Views snap poll seeks some clarity on how competitive dynamics will play out here – Physician Views: Can Roche's Tecentriq defend its lead in bladder cancer?

The most significant commercial opportunity for Imfinzi is in first-line NSCLC, where it is being studied as both a monotherapy and in combination with AstraZeneca's CTLA-4 inhibitor tremelimumab. Data from the MYSTIC study is expected in 2017 and represents the sort of binary risk that Pfizer's Ian Read was talking about earlier this week (see above).

Other FDA approvals this past week include Radius Health's Tymlos for post-menopausal osteoporosis – Spotlight On Interview: CEO Bob Ward outlines Radius’ plan to greatly expand the anabolic PMO market with Tymlos.

Novartis' Rydapt for acute myeloid leukaemia – ViewPoints: Why Novartis' newly approved Rydapt could light the fuse for a paradigm shift in AML treatment.

Takeda's Alunbrig for ALK-positive non-small-cell lung cancer – ViewPoints: Takeda ticks one box justifying Ariad deal, but can Alunbrig compete with Alecensa? and KOL Views: How much room is there for a fourth ALK inhibitor in NSCLC, and how might Takeda’s Alunbrig differentiate itself?

BioMarin's Brineura for Batten disease – a launch that has reignited debate around orphan drug prices.

Can TG Therapeutics move into Roche's MS slipstream?

On the subject of 2017 drug approvals, Roche's multiple sclerosis treatment Ocrevus is expected to be one of – if not the – biggest new launches this year; and management provided an encouraging, if very early, assessment of demand last week when it presented first-quarter results.

This week, TG Therapeutics announced promising preliminary Phase II data for its anti-CD20 monoclonal antibody ublituximab in relapsing forms of MS, which will fuel speculation among investors that ublituximab's greater commercial opportunity exists in this setting rather than oncology indications.

FirstWord sat down this week with Robert Naismith – a practicing neurologist and assistant professor of neurology at the Washington University School of Medicine – to discuss where and how ublituximab, which is third in line among B-cell depleting agents for MS, might fit into a rapidly evolving treatment landscape – KOL Views: Ocrevus sets a high bar but dosing differences, long-term safety questions mean room for more B-cell depleting MS drugs, says leading neurologist.

One step closer to an HIV cure?

In response to other promising R&D news this week, shares in Abivax surged as much as 146 percent Tuesday after the company reported that in a Phase IIa trial, the experimental drug ABX464 demonstrated "the first reduction in HIV reservoirs ever observed in chronically infected HIV patients." Results showed that a reduction in viral DNA copies in peripheral blood mononuclear cells was seen in seven of 14 patients who received ABX464, versus no patients given placebo.

Chief medical officer Jean-Marc Steens remarked "these results in patients are a first and very important step in supporting the hypothesis that ABX464 could impact the HIV reservoir." Steens added "the next step will be to evaluate longer treatment duration with ABX464, which could lead to a profound reduction of the HIV reservoir and potentially become part of a functional cure for HIV patients."  

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