Consistent with his previously announced plan to reboot the FDA aimed at more timely reviews, Commissioner Scott Gottlieb, M.D. unveils a new plan to eliminate the backlog of Orphan Drug requests in the next 90 days and establishing a benchmark of responding to new requests within 90 days of receipt. Currently, the agency has ~200 applications pending review. Last year, it received 568 requests, more than double the amount received in 2012.
The FDA's tactics will include a "Backlog SWAT team" of senior reviewers with significant expertise in the area. Requests will be reviewed on a FIFO basis (oldest ones reviewed first).
In order to respond to new applications within 90 days, the review staff will be reorganized to improve efficiency and maximize expertise. A new Orphan Products Council will be established to help address scientific and regulatory issues to ensure a consistent approach in regulating orphan drugs and reviewing designation requests.
Biotech stocks (NASDAQ:IBB) were bullish again today, surging another 4.1% and extending this week's sector gain to 8% as sentiment emerges that the Trump Administration's attempt to rein in drug prices might not be as harmful as originally feared.
The sentiment got a boost from a NY Times report which cited a draft of an executive order on drug pricing that appears to focus on easing regulatory hurdles for the industry and "largely leaves the drug industry unscathed."
The draft "is a far cry from what [Trump] said on the campaign trail. I don't see anything there that addresses the drug companies getting away with murder, and it appears that is because pharma has captured the process," Patients for Affordable Drugs founder David Mitchell told the Times.
The American Society of Clinical Oncology annual meeting passed without much of a stir, writes Charley Grant in the WSJ. Naturally, there were exceptions with individual companies, but the biotech sector as a whole barely budged throughout the major conference.
So what? The S&P Biotechnology Select Industry Index is up 19% in 2017, and there are treatment categories outside of oncology. But, says Grant, the majority of stocks in that index aren't profitable, and are thus dependent on things like ASCO to rev up sentiment. In the bull market of 2013-15, ASCO was enough to send the sector sharply higher.
With that catalyst not working this year, all biotech may have to look forward to are blockbuster drug launches, and there's not much going on there - just three drugs are set to come to market this year that are expected to top $2B in annual sales by 2022.
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.
"Think the Era of Drug Price Increases is Over? Think Again?" So goes the title of a new note from Raymond James' Chris Raymond, noting a sizable number of key biotech price boosts on January 1.
Most are in-line with previous patterns, but not Biogen (BIIB +2.1%), which was "measurably more aggressive than norm," he says.
Others which pushed through increases include Acorda Therapeutics (ACOR +1.6%) and AMAG Pharma (AMAG -3.4%). There's also AstraZeneca's (AZN +1%) 5% price boost for Lynparza and a "slew" of increases at Roche (OTCQX:RHHBY +1.2%), including Actemra up 1.5%, Herceptin up 3%, Pegasys up 5%.
Last year turned out to be a disappointing one for new drug approvals with the FDA clearing just 22 new medicines for sale, the lowest number since 2010 and sharply down on 2015's tally of 45.
Several factors led to the decline: Five new drugs that had been scheduled for approval in 2016 ended up winning an early green light at the end of 2015. There was also a decline in drugs being filed for approval and the FDA rejected or delayed more applications in 2016 than in the previous two years.