Friday Five - This week's key news stories

King Keytruda at the centre of all things Merck

Merck & Co. continues to build up R&D collaborations around its flagship Keytruda franchise in oncology and appears to favour these types of deals over acquisitions. It will pay $300 million upfront as part of a deal to jointly develop Eisai's tyrosine kinase inhibitor Lenvima as both a monotherapy and combination therapy with Keytruda in multiple cancer indications. The collaboration is similar to the one it signed with AstraZeneca last year for the PARP inhibitor Lynparza.

Analysis - ViewPoints: King Keytruda the apple of Merck & Co.'s eye and ESMO Spotlight: PARP Wars

ISI Evercore analyst Umer Raffat noted that the Eisai deal furthers a divergence in strategy between Merck and Bristol-Myers Squibb, its chief rival in the immuno-oncology (IO) market. While the latter has focused on pushing IO-IO combinations into the clinic, Merck's priority has been the combination of Keytruda with chemotherapy and targeted small-molecule agents.

Merck and Eisai have seen promising Phase II data for Keytruda plus Lenvima in second-line renal cell carcinoma, where the combination demonstrated an overall response rate of 63 percent irrespective of PD-L1 status.

Esperion fails to fully inspire

Esperion announced top-line results from the first of a handful of Phase III trials due to read out this year for the dyslipidaemia therapy bempedoic acid. Versus placebo in statin-intolerant patients with atherosclerotic cardiovascular disease (ASCVD) or at high risk of ASCVD with hypercholesterolaemia, bempedoic acid met its primary endpoint by lowering LDL cholesterol by 28 percent versus placebo.

Positive data were expected, however, and shares in Esperion slumped 10 percent in response to the data. Were investors expecting better results? Possibly, while there may be a growing acceptance that any new therapies in this indication need to demonstrate spectacularly efficacious and safe clinical profiles to gain traction against much cheaper drugs that remain the standard of care; despite Esperion's very early disclosure around pricing strategy; it expects to price bempedoic acid at around $10 a day.

Analysis - ViewPoints: Esperion's first big reveal for bempedoic acid is a win – or is it?

The aim - assuming that subsequent Phase III data readouts support use as an add-on therapy to statins - is to position bempedoic acid somewhere between current standards of care and the PCSK9 inhibitors, which lower LDL-C significantly more, but are significantly more expensive. Esperion also argues most patients don't require the cholesterol reduction levels provided by a PCSK9.

In response to Esperion's data, we snap-polled 77 cardiologists - FirstWord Pharma PLUS readers can read the results here. While respondents are generally impressed with the data, they too question whether there is a large commercial opportunity for bempedoic acid.

The physician view  

Our other Physician Views snap-polls this week focused on a recent clinical data release in the diabetes market and a pending regulatory submission in the US.

Last month, Novo Nordisk top-lined positive data from the first of eight Phase III trials for its oral version of the GLP-1 agonist semaglutide. Endocrinologists polled by FirstWord gave a positive response to the results - Physician Views Poll Results: The future looks very bright for oral GLP-1s in diabetes.

We also snap-polled oncologists about current and future practices around TRK fusion testing; Bayer and Loxo Oncology are shortly expected to file their TRK inhibitor larotrectinib with the FDA - Physician Views Poll Results: Oncologist feedback showcases opportunity/challenges ahead for larotrectinib and TRK fusion testing.

Gottlieb tackles the rebate trap

European payers recently told FirstWord that use of biosimilars to reduce costs and expand treatment coverage increased notably last year, and 2018 could prove to be a pivotal year for the European biosimilars market owing to the potential launch of biosimilar Herceptin and Humira products - ViewPoints: European payers gear up for 2018's biosimilar windfall.

In the US, despite the FDA's best efforts in approving biosimilars, they are yet to deliver the commercial impact seen in Europe. This is partly due to patent litigation issues, but also due to rebating strategies on the part of branded competitors; an issue raised previously by Pfizer (ViewPoints: As lawsuit against Johnson & Johnson is filed, FirstWord's new biosimilar report sheds light on Pfizer's Inflectra challenges in US market).

Speaking this week at the America's Health Insurance Plan's (AHIP) National Health Policy Conference, FDA Commissioner Scott Gottlieb tackled the so-called biosimilar 'rebate trap' head on and he didn't beat around the bush.

Noting that pharmacy benefit managers have "a significant financial incentive to limit the uptake of biosimilars to continue the flow of large rebate payments," Gottlieb suggested that "once biosimilar makers see that the system is rigged against them, what's the incentive for a biosimilar maker to pour money into future investments to develop these lower cost alternatives? The rigged payment scheme might quite literally scare competition out of the market altogether. I fear that's already happening."

You can read his full speech here.

See also - Pharma's biggest selling drugs - opportunity knocks for biosimilars

All the big PBMs are now in house  

The three largest US pharmacy benefit managers (PBMs) - which together control around 70 percent of the market - are now all (or will soon be) part of larger insurance companies, following Cigna's announcement on Thursday that it will acquire the PBM Express Scripts for $67 billion. The merger of CVS and Aetna, announced in December, also brings the former's PBM business under the ownership of a larger insurance player.

It remains to be seen whether these long-anticipated manoeuvres, designed to build scale and maintain pricing power in the face of gradual evolution towards value-based healthcare - not to mention, on the part of PBMs, the potential entrance of disruptive players such as Amazon into the healthcare delivery sector - act to spur consolidation within the pharmaceutical sector also.

US tax reform has not triggered the wave of M&A some thought it might - could this? 

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