At the annual Davos meet-up between the globe's movers and shakers, the CEOs of leading pharma firms weigh in on the political headwinds potentially restraining their ability to routinely raise prices.
Novartis' (NVS +0.1%) Joe Jimenez: "The new administration has been pretty vocal about supporting innovation. They understand that when you spend money on research and you develop [IP] there needs to be some level of return for that investment. I believe, based on who the president-elect has put in place around him, that there is a clear understanding of investment and return on investment."
Merck's (MRK +3.7%) Ken Frazier: "Pricing will remain a challenging issue for those of us who are in the research-based pharmaceutical industry, as well as a challenge for the overall healthcare system in terms of what it can afford."
Glaxo's (GSK -0.1%) Andrew Witty: "Clearly, the industry has an obligation to deliver value-creating innovation and it needs to price it at a level that is deemed to be acceptable."
Roche's (OTCQX:RHHBY) Severin Schwan: "If you provide true medical differentiation coupled with a strong [IP] position, I think the U.S. will continue to reward this kind of innovation. If you don't offer that then, frankly, I think it is the right thing that prices should come down."
Sanofi's (SNY +0.3%) Olivier Brandicourt: "It's very difficult to understand what all those comments and tweets will end up being. It's going to probably be very difficult to issue legislation on drug pricing."
Shire's (SHPG -1%) Flemming Ornskov: "I think we are in good position to prove the value of our products but, of course, there will be challenges."
In what many observers and market players hope will clarify the biosimilar approval route, the U.S. Supreme Court has agreed to hear two related lawsuits over certain Obamacare provisions governing biosimilars.
The dispute centers on Novartis (NVS -0.5%) Sandoz unit's marketing application for its biosimilar to Amgen's (AMGN +0.5%) Neupogen (filgrastim), approved in the U.S. in September 2015. Sandoz is marketing the product under the brand name Zarxio.
Amgen sued Sandoz in an attempt to block Zarxio's approval but failed. The ruling by the U.S. Court of Appeals, which set the approval date, was a bit muddled. Amgen and Sandoz both filed suit against portions of the decision.
The Appeals Court said Sandoz was not required to give Amgen information about its biosimilar application, including a description of the manufacturing process. It added that Amgen could file a patent infringement suit instead (it did so, the trial is set to start in December).
Amgen's position is that the law says Sandoz "shall" give the information and the failure to do so warrants an injunction barring Zarxio sales. Sandoz sued over the requirement that it had to give Amgen 180 days' notice after FDA approval before it could start selling the product.
The specific date of the hearing has not been set.
Novartis (NYSE:NVS) is set to commence a 60-subject Phase 2 clinical trial assessing bimagrumab in obese patients with type 2 diabetes. The primary endpoint is the change in fat body mass at week 24 and 48 as measured by an X-ray technology called DXA. According to ClinicalTrials.gov, the estimated study completion date is January 2019.
Bimagrumab is a monoclonal antibody developed with German biotech MorphoSys AG (OTCPK:MPSYF). It binds to a protein found in muscle called myostatin which restrains muscle growth. The product candidate is projected to be a blockbuster, but a Phase 2b/3 study in a rare muscle-wasting disease called sporadic inclusion body myositis was unsuccessful.
Thinly traded nano cap GenVec (GNVC +55.5%) continues its torrid up move on a whopping 186x spike in volume. Shares have rocketed almost 2.4-fold in three days on no particular news.
The company's lead product candidate is CGF166, a gene therapy candidate that is delivered directly to the inner ear for the treatment of hearing loss and vestibular dysfunction. Licensee Novartis (NVS +0.1%) is currently conducting a Phase 1/2 study.
Other pipeline candidates include RSV vaccine GV2311 and immunotherapeutic GV2207.
The company executed a 1:10 reverse split of its common shares last month in order regain compliance with Nasdaq listing requirements.
Lp(a) is a lipoprotein particle assembled in the liver that is associated with an increased risk of coronary heart disease. ApoC-III is a protein produced in the liver that plays a key role in the regulation of serum triglycerides.
Ionis and Akcea will conduct a Phase 2 dose-ranging study for each candidate that will inform Phase 3 studies. Prior to the start of Phase 3, Novartis may exercise its option to license and commercialize each drug.
Under the terms of the agreement, Ionis and Akcea will receive a $75M upfront option payment, a $150M license fee for each drug, up to $315M in development and regulatory milestones for AKCEA-APO(a)Lrx, up to $265M in regulatory and development milestones for AKCEA-APOIII-Lrx and up to $285M and $265M, respectively, in commercial milestones. Novartis will invest $100M in Ionis via the purchase of 1,631,435 shares of common stock at $61.30 upfront and an additional $50M investment in the next 18 months either in IONS or Akcea.
Management will host a conference call this morning at 9:30 am ET to discuss the deal.
IONS closed yesterday at $47.09. Shares are up 8% premarket on light volume. NVS is down a fraction on light volume.
Eli Lilly (LLY +0.7%) announces changes to the structure of its organization that it says will be much better aligned with its growth plans.
Former Novartis (NVS +2.3%) chief of U.S. operations Christi Shaw has been hired to run the Bio-Medicines unit. She resigned from Novartis in April to care for her cancer-stricken sister. She began her career with Lilly in 1989 in sales and marketing.
Effective February 1, the Diabetes, Oncology and Bio-Medicines businesses will add the commercial responsibility for their products in China while maintaining their activities in the U.S., Japan and Canada.
Lilly Diabetes will host the company's human pharmaceutical commercial operations in the U.S, China, Japan and Canada. SVP and President of Lilly Diabetes Enrique Conterno will assume the role of President of Lilly USA.
The Emerging Markets business will combine with Europe to form Lilly International which will manage human pharmaceutical products in these areas. Emerging Markets chief Alfonso Zulueta will lead the organization as corporate SVP and President of Lilly International.
Sue Mahony, Ph.D., will continue her role as corporate SVP and President of Lilly Oncology.
Current President of Lilly USA Alex Azar will resign to pursue other opportunities.
Gilead Sciences (NASDAQ:GILD) has hired Novartis' (NYSE:NVS) oncology chief Alessandro Riva to head its cancer team, filling a top-priority vacancy created by the departure of Philippe Bishop. Putting the company's cash hoard to work via M&A activity should be a key focus.
First off, will M&A pick up after a sharp drop in deals last year? The consensus says "yes," and an uptick is seen by investors as the most important tailwind for the sector this year. "I don't need to tell you what happens if deals don't materialize."
Drug pricing? Normally, Republican control of Congress and the White House would take this concern off the table, but these aren't normal times.
Biotech investor sentiment? It's lousy at the moment, which could be bullish as there may only be one direction for it to go.
Thinly traded nano cap TRACON Pharmaceuticals (TCON +11.2%) jumps out of the blocks this morning on the news that it has reached agreement with the FDA on the protocol design, clinical endpoints and statistical analysis method for its Phase 3 study assessing lead product candidate TRC105 for the treatment of advanced angiosarcoma, a cancer of the inner lining of blood vessels. Enrollment should start shortly.
The 124-subject trial, called TAPPAS, will evaluate the safety and efficacy of TRC105 and pazopanib [Novartis' (NVS +0.2%) Votrient] compared to pazopanib alone. The primary endpoint is progression-free survival. Secondary endpoints include overall survival and objective response rate.
According to ClinicalTrials.gov, the estimated final data collection date for the primary endpoint is September 2018. The estimated study completion date is December 2018.
TRC105 (carotuximab) is a novel clinical-stage antibody to endoglin, a protein overexpressed on proliferating endothelial cells that is essential for angiogenesis. It has Orphan Drug status for the treatment of soft tissue sarcoma and Fast Track status for kidney cancer.
Ligand Pharmaceuticals (LGND +1%) enters into a global license and supply agreement with Novartis (NVS +0.2%) for the development and commercialization of a Captisol-enabled oral liquid formulation of melanoma med Mekinist (trametinib).
Under the terms of the deal, Ligand will be eligible to receive a license fee, royalties from end-product sales and, of course, revenue from Captisol material sales.
Captisol is a chemically modified cyclodextrin (sugar molecule) that optimizes the solubility and stability of drugs.
The FDA approves Alcon's (NYSE:NVS) AcrySof IQ ReSTRO +3.0D Multifocal Toric Intraocular Lens, designed to address presbyopia (age-related farsightedness) and pre-existing corneal astigmatism at the time of cataract surgery in adult patients who want good near, intermediate and far vision and increased potential to leave the eyeglasses behind.
The product is already commercially available in the EU, Australia, Canada and certain countries in Central and South America and Asia.
Novartis (NVS +0.2%) out-licenses the U.S. rights to three treatments for chronic obstructive pulmonary disease (COPD) to Sunovion Pharmaceuticals. The products are: Utibron Neohaler (indacaterol/glycopyrrolate) inhalation powder, Seebri Neohaler (glycopyrrolate) inhalation powder and Arcapta Neohaler (indacaterol) inhalation powder. Novartis will continue to supply the products to Sunovion.
President of Novartis Pharmaceuticals Fabrice Chouraqui says, "Given the evolving market dynamics, we believe these products will have the greatest impact in the U.S. when commercialized by a company with an established presence in the COPD field."
The company will continue to market Utibro Breezhaler (indacaterol/glycopyrronium) , Seebri Breezhaler (glycopyrronium) and Onbrez Breezhaler (indacaterol) ex-U.S.
Thinly traded nano cap Conatus Pharmaceuticals (NASDAQ:CNAT) is up 152% premarket on robust volume in response to its announcement of an exclusive option, collaboration and license agreement with Novartis (NYSE:NVS) for the global development and commercialization of NASH candidate emricasan.
Under the terms of the deal, Conatus will receive a $50M upfront payment, $7M following the exercise of the license option and may borrow up to $15M from Novartis in the form of convertible promissory notes. It is also eligible for future milestone payments and tiered single- to double-digit royalties on net sales of combination products containing emricasan.
Conatus has the option to co-commercialize emricasan in the U.S., including combination therapies, on a cost-sharing and revenue-sharing basis instead of U.S. royalties and with reduced ex-U.S. royalties. It retains limited rights to develop other pan-caspase inhibitors.
Novartis will pay half of Conatus' Phase 2b development costs after the option exercise, including the ENCORE-LF, ENCORE-PH, POLT-HCV-SVR and ENCORE-NF studies. Novartis will be fully responsible for all Phase 3 development.
The capital infusion will be sufficient to fund Conatus' operations through 2019.
Fast Track-tagged emricasan inhibits a family of enzymes that modulate essential cellular functions called caspases. The functions include those involved in apoptosis and inflammation. Caspases 3 and 7 are major players in apoptosis. These enzymes cleave a key protein called CK18 (cytokeratin-18), part of which is the small fragment cCK18, which correlates to the magnitude of hepatocyte apoptosis. Emricasan inhibits apoptosis regardless of the stimuli that causes it.