Download Pfizer Split, Once Decided, Could Happen Quickly, CEO Says

COMPETITION FAILS TO REIN IN
CANCER DRUG PRICES
Competition has lowered costs in the US
of medicines for chronic conditions, it’s
done very little for anticancer drugs (p5)
EXPERT VIEW
STOCKWATCH
R&D collaborations can be a fruitful
way forward, enabling companies to
pool existing knowledge or combine
specialties (p20)
Third week for first quarter earnings
season was different again, with big
pharma restoring some honor to the life
sciences sector (p21)
Scrip
13 May 2016
No. 3802
s cripintell ig e n c e .c om
Ian Read, CEO of Pfizer
Pfizer Split, Once Decided,
Could Happen Quickly, CEO Says
JESSICA MERRILL jessica [email protected]
P
fizer Inc. could complete a business
breakup in about one year if the company decides to move forward with
a split, CEO Ian Read said during the company’s first quarter sales and earnings call
May 3.
“If we made a decision to split in the
fourth quarter, we believe that the transaction could be completed by the end of
2017,” Read said.
The potential breakup of Pfizer was a
hot topic during the quarterly call after the
company abandoned plans to merge with
Allergan PLC in April. After the failed merger, Pfizer said it would move the timeline
for deciding on a split back to the original
timeline, the fourth quarter of 2016. The
company had delayed the decision, which it
has been promising investors it would make
for years, until 2018 when it announced the
merger with Allergan.
“The delay caused by Allergan was just
the structural work that needed to be done
to incorporate them in,” Read said. “That going away put it back on our original timeline.”
The first quarter conference call marked
the first public comments Read has made
outside of a Wall Street Journal op-ed since
Pfizer’s effort to buy Allergan and move to
Ireland for the corporate tax advantages
Pharma intelligence | informa
was thwarted by the US Treasury. Investors were eager to hear more about Read’s
thoughts on a potential breakup, M&A and
Pfizer’s solo growth prospects.
The CEO appeared to put at least one
question to rest – whether or not Pfizer
would pursue another inversion deal with
a company like AstraZeneca PLC or GlaxoSmithKline PLC. The answer is not now.
Given the steps taken by the US Treasury
and the current political climate, Read said,
“We do not see any potential for a transaction involving inversions in the near term.”
“While the outcome was disappointing,
we always viewed the potential Allergan
transaction not as a new strategy but as
a way to accelerate our existing strategy,
which remains unchanged,” he added.
Part of that strategy involves further M&A,
although Read revealed little in terms of
specifics about what kind of assets the
company might be shopping for. However,
he insisted Pfizer doesn’t need to complete
deals to position either side of the business
for a breakup. Both businesses are strong
enough to stand alone, he insisted.
“We will look for assets that we think will
add value to shareholders, that will meet
our returns,” Read noted, adding there is a
bias in favor of assets that bolster the innovative side of the business given recent deal
activity on the Established Products side.
The company completed the acquisition of
Hospira Inc. in September 2015, a substantial boost to Established Products.
A STRONG FIRST QUARTER
The addition of Hospira helped drive Pfizer’s Established Products sales up 17% to
$5.97bn in the first quarter. The legacy Hospira business added $1.2bn to the group’s
CONTINUED ON PAGE 7
IN THIS ISSUE
Two once-promising biotechs are trading
in penny stock territory and seeking
shelter of Chapter 11 bankruptcy
Both parties
intend to
challenge
different aspects
of the original
trial
4
Kastle will give Ionis a 10% stake in the newly
founded, Chicago-based biotech company
from the editor
7
15
COVER / Pfizer Split, Once Decided,
Could Happen Quickly, CEO Says
[email protected]
3 Merck Faces Class Action In $250m Discrimination Case
The great earnings circus is all but over for another
quarter.
We’ve watched Gilead Sciences’ sky-rocketing parabola reach its inevitable vertex as competition and
price discounting took its toll on sales of its phenomenally successful (and phenomenally beneficial) hepatitis C drugs Harvoni and Sovaldi. The latest developments in the lawsuit with Merck &Co (see page 4)
served to take a bit more sheen off the wonder drugs.
Speaking of vertices, we’ve watched Vertex Pharmaceuticals disappoint with sales of its hotly tipped newer cystic fibrosis drug Orkambi flat-lining quarter on
quarter amid a higher discontinuation rate than had
been seen in trials. Recent rejections of Orkambi by
NICE and the Scottish Medicines Consortium merely
rubbed salt into Vertex’s wounds.
Over in the traditional big pharma camp, still
smarting from its epic bid to buy a non-US firm and
carry out a tax inversion, Pfizer had the small consolation of reporting a strong first quarter. Now all eyes
will be on if and how it carries out a business break-up
(see cover story), and whether that will prompt knockon transactions affecting other industry players.
Enjoy this week’s issue.
4 Gilead Makes Headway With Merck ‘Unclean Hands’
Argument
5 Competition Fails To Rein In Cancer Drug Prices
6 Regeneron Revives NGF Inhibitor With Phase II/III Data;
Safety Issue Remains
7 Ionis Sells Kynamro To Kastle After Regaining Rights From
Genzyme
8 More Troubles For Martin Shkreli – That Guy Drug Makers
Despise
9 R&D Bites
10 HR+/HER2- Breast Cancer Market Set To Triple
11 Making Medicare Like Medicaid: High Anxiety For
Drug Makers
12 Shire-Baxalta Deal: A Year In The Making
14 Amgen’s Harper Says Repatha Is Priced Right
15 Biotech Bankruptcies: BIND and NephroGenex
Weigh Options
16 Business Bulletin
17 Biogen Backs Out Of Hemophilia, But Who Benefits?
exclusive online content
Novartis’ Oncology Chief On Sharpening Its
Competitive Advantage
http://bit.ly/1rsRgo2
Bruno Strigini talks about refining the pharma major’s oncology
strategy and its pipeline potential.
Affibody CEO Describes Three-Year Growth Plan
http://bit.ly/1ZwwMWj
Sten Stovall chats with David Bejker about development
progress for the company’s novel class of antibody mimetics
2 | Scrip intelligence | 13 May 2016
18 Panel: Broaden Opioids Risk Plans,
Require Prescriber Training
19 Ten Years On, Access To Biosimilars Still Patchy in EU
20 Expert View: R&D Collaborations: A Legal Route Map
21 Stockwatch: Big Pharma Strikes Back In Earnings War
22 Pipeline Watch
23 Appointments
@ s cri pn e w s
/s cri pi nte l l i genc e
/s cri pi nte l l i g en ce
/s cri pi nte l l i genc e
© Informa UK Ltd 2016
HEADLINE NEWS
Merck Faces Class Action In $250m Discrimination Case
MANDY JACKSON [email protected]
U
S District Court Judge Michael Shipp in New Jersey issued a written opinion on April 27 that granted conditional class action status for Kelli Smith’s 2013 lawsuit,
which was amended in January 2014 to add four plaintiffs. Both
sides’ attorneys must now negotiate the wording of a notice by
May 27 that will give thousands of current and former female
sales representatives about 60 days to opt in as a member of
the class that’s suing Merck for alleged systemic discrimination
against women.
“We remain confident that this case lacks merit – this is a procedural step that is typical in the early stages of lawsuits of this
kind, and it does not mean any employees have been treated
unfairly,” Merck said in a statement after Judge Shipp issued
his decision. “The company will continue to vigorously defend
itself and remains fully committed to providing equal employment opportunities for all employees. Merck has a strong antidiscrimination policy that prohibits discrimination on the basis
of characteristics, such as gender, pregnancy, race, age, disability
and sexual orientation.”
Smith and her co-plaintiffs are suing Merck for 12 different causes
of action: pay, promotion and pregnancy discrimination in violation
of Title VII of the Civil Rights Act of 1964; retaliation and constructive discharge (an employee’s resignation in response to a hostile
workplace) under Title VII; violations of the Family Medical Leave
Act, Fair Labor Standards Act of 1938 as amended by the EPA of
1963, and the New Jersey Family Leave Act; and pay, promotion
and pregnancy discrimination as well as retaliation under the New
Jersey Law Against Discrimination (NJLAD).
TIERED PAY SYSTEM AT HEART OF LAWSUIT
Much of the amended lawsuit stems from alleged discrimination against women under a compensation system that assigned
sales representatives to three different tiers at different wage
rates. The plaintiffs claim that Merck systematically assigns women to lower tiers than similarly experienced men regardless of
employees’ sales performance, especially if female sales reps go
on maternity leave.
“If gender discrimination flows from expectations of what
women are capable of, that’s typically heightened when women
go through pregnancy and maternity leave,” said attorney Deborah Marcuse of Feinstein Doyle Payne & Kravec LLC in Pittsburgh,
Pennsylvania – one of the lawyers representing the plaintiffs in
Smith v. Merck.
Marcuse’s co-counsel David Sanford of Sanford Heisler LLP in
Washington, D.C. represented women who successfully sued Novartis AG for discrimination and won a $170m settlement in 2010.
Marcuse and Sanford also are co-counsels in a lawsuit filed on
behalf of female sales representatives employed by Forest Laboratories Inc., now part of Allergan PLC by way of Forest’s acquisition by Allergan predecessor Actavis. The opt-in period in the
Forest case has closed and about 350 women have joined the
class action. Discovery work to support certification of the class is
ongoing. Specific to the Merck case, Smith, for instance, said that she
scripintelligence.com
came back from maternity leave after the new tiered pay system was
implemented in March 2011 and was automatically assigned to the
lowest tier while a less-qualified male colleague was elevated to the
second tier with a significant salary boost. Smith and other women
said male managers specifically pointed out that they were demoted
or denied raises and promotions because they had been pregnant
and taken maternity leave.
“The information submitted by Plaintiffs shows that sales representatives had similar responsibilities; that named plaintiffs were
paid less than some allegedly similarly situated males; and that
compensation decisions, although based in part on input from
some direct managers, were finalized by a central, common office,”
Judge Shipp wrote.
His memorandum opinion also cites a report that showed, “on
average, between 2011 and 2015, female sales representatives in
the S1 and S2 tiers earned 1.4% less per year than male representatives in those tiers.”
Merck argued that the plaintiffs’ evidence and testimony did not
show a companywide violation of the EPA, but Judge Shipp said
the women made an appropriate case for conditional certification
of a class action, because they were able to present “a modest factual showing that a nexus exists between the manner in which Defendant’s alleged policy affected them and the manner in which it
affected other employees.”
JUDGE FAVORS MERCK ON OTHER
PLAINTIFF REQUESTS
The judge denied the plaintiffs’ request for tolling, otherwise known
as an extension of the statute of limitations for claims against Merck,
which the women asked for because of the pharma company’s alleged efforts to delay the litigation process. Equitable tolling was
not granted for the class, but the judge may consider tolling for individual plaintiffs.
“Women could say they didn’t know about the lawsuit or they
didn’t opt in before, because they were afraid of retaliation,” Marcuse said.
However, Judge Shipp also denied a request for a corrective action regarding a Merck non-disclosure policy that, according to the
women, kept other female sales representatives from joining the
lawsuit out of fear of losing their jobs. Merck argued that the policy
only relates to government investigations and litigation related to
the company’s products, and the judge agreed.
“We are hopeful that women will hear that and come forward,”
Marcuse said.
In its defense, Merck said in a statement provided to Scrip that
it has multiple avenues for dealing with discrimination complaints
and works to make the company a hospitable environment for
women, so much so that Merck has been recognized repeatedly
by Working Mother
magazine and the
CLICK
Read full story at:
National Association
for Female Executives
http://bit.ly/1WizErD
(NAFE).
13 May 2016 | Scrip intelligence | 3
HEADLINE NEWS
Gilead Makes Headway With Merck ‘Unclean Hands’
Argument
DONNA YOUNG [email protected]
4 | Scrip intelligence | 13 May 2016
Shutterstock: eelnosiva
A
federal judge found Gilead Sciences
Inc.’s “unclean hands” argument alleging one of Merck & Co. Inc.’s
patent attorneys had acted in bad faith by
initially not telling the truth during a hearing reasonable enough to reopen a case in
which the two firms have been fighting over
whether the former company infringed on
the latter’s hepatitis C virus (HCV) patents.
Judge Beth Labson Freeman of the US
District Court for the Northern District of
California gave both sides a new opportunity to submit further evidence in the lawsuit, in which Merck asserted its California
rival’s HCV drugs Sovaldi (sofosbuvir) and
Harvoni (ledipasvir-sofosbuvir) infringed
on the New Jersey company’s patents, ‘499
and ‘712.
In March, a jury sided with Merck and
awarded the company $200m, although
that amount was much lower than the 10%
of Sovaldi and Harvoni revenues the firm
sought.
But after that ruling, Gilead asserted that
Merck’s patent attorney, Phil Durette, had lied
during the hearing when he said he wasn’t
on a confidential conference call with Pharmasset Inc. – later acquired by Gilead – where
its investigational compound PSI-6130, the
predecessor to Sovaldi, was discussed.
Notes, however, revealed Durette had indeed been on the call – something he later
acknowledged.
The judge’s concurrence with Gilead was
an “unexpected boost” for the company, said
Leerink analyst Geoffrey Porges.
The judge’s comments in response to
evidence and testimony suggest she increasingly feels inclined to consider this aspect of
the case in Gilead’s favor, potentially revoking
Merck’s patents, Porges said.
But Jefferies analyst Brian Abrahams said
that while the judge’s willingness to consider
more arguments is a sign she is carefully considering the evidence in her decision, he insisted the court is not leaning toward Gilead.
Considering most of the events happened over 15 years ago, Abrahams said
he didn’t view it as unreasonable Durette’s
story had changed during the trial. And
given Durette acted “ethically” when drafting the Merck patents – recusing himself
and not amending the pending applications until the chemical structure was
made public by Pharmasset – Abrahams
contended it’s unclear, even if true, whether the allegations would persuasively meet
the high legal standard needed to establish “unclean hands.”
Gilead also is arguing that Merck had
waived the right to enforce its ‘499 and ‘712
patents because it failed to either license
Pharmasset’s HCV candidates or acquire the
company.
Both parties already have indicated they
intend to challenge different aspects of the
original trial, Leerink’s Porges pointed out.
Gilead had expressed optimism the appeals process would be more favorable to it,
with panels of sophisticated judges – rather
than less experienced lay juries – more likely
to side with it about the complex technical
details and procedural issues underlying the
case, he said.
And Merck has signaled its intention to
appeal the jury’s calculations underlying
the $200m judgment, Porges said. Abrahams pointed out the judge has severed
the decision on the ongoing royalty until
after the appeal, although he noted the
parties were working with an arbitrator in
the meantime to determine an acceptable
royalty rate.
The judge is expected to only intervene if
a resolution cannot be met, Abrahams noted.
Should Merck, which won approval earlier this year of its latest HCV drug Zepatier
(elbasvir and grazoprevir), ultimately prevail
during the appeals process, Porges noted
there are several remaining issues to be addressed, including supplemental damages
on sales of Sovaldi and sofosbuvir-related
products from the beginning of 2016 to the
end of the trial; royalty obligation on future
sales of the drugs and the sales base on
which to apply them; and interest on the
retroactive damages.
As a result – barring an agreement between the two sides, which would likely draw
down Merck’s current settlement – Porges
said he expected the legal battle to continue
for at least a few more years.
Shares of Gilead closed at $89 on May 2, up
79 cents, after gaining as much as 1.4% earlier
in the day, while Merck’s stock ended the day
at $55.30, up 46 cents.
© Informa UK Ltd 2016
HEADLINE NEWS
Competition Fails To Rein In Cancer Drug Prices
DONNA YOUNG [email protected]
W
hile competition has helped
drive down the costs in the US
of medicines for chronic conditions, like hepatitis C virus (HCV), it’s done
very little in recent years to do the same for
the newer anticancer drugs, whose prices
have not only started out high, but have
kept on rising, according to a new analysis.
Indeed, the costs of cancer medicines
increased about 5.2% above inflation each
year from 2007 to 2013 – leaping another
10% per month if the therapy won a supplemental indication from the FDA.
But, researchers reported in the May 2
issue of the public policy journal Health
Affairs, average monthly costs of new anticancer products fell only about 2% when a
direct competitor entered the US market.
Even though many of the newer cancer
medicines can offer substantial health benefits to some patients, the trends in their rising costs may worry policy makers, given the
large market for oral chemotherapy, with the
price increases showing no sign of abating,
said Caroline Bennette, an acting assistant
professor of pharmacy and an AHRQ Patient
Centered Outcomes Research K12 Scholar in
the Pharmaceutical Outcomes Research and
Policy Program at the University of Washington, and her co-authors.
The high prices of prescription drugs
have been at the center of numerous fiery
debates in Washington and most recently
were the subject of hearings held by the
Senate Aging Committee and the House
Oversight and Government Reform Committee, although those panels mostly have
focused on companies like Turing Pharmaceuticals Inc. and Valeant Pharmaceuticals
International Inc., which have been criticized for buying up old sole-source medicines and significantly hiking their prices.
The Democratic ranking member of the
Senate Finance Committee, Ron Wyden
(OR), and Chuck Grassley (R-IO), a member
of the panel, also have kept the heat on
makers of HCV drugs – specifically, Gilead
Sciences Inc.
But before the prices of HCV medicines
and companies like Turing and Valeant
grabbed the attention, the costs of cancer drugs were much of the focus on
scripintelligence.com
Capitol Hill and remain in the bulls-eyes
of some lawmakers.
Policy makers seeking to take action to
bring down the costs of anticancer drugs
should consider implementing policies that
not only affect the prices at launch but also
later, the authors of the Health Affairs analysis said.
They contended that if the supplemental
indication offers a larger clinical benefit for
patients than the original approved use, it
may be reasonable to pay a higher price for
the drug, but if not, the higher prices across
the board for the drug “are not justified.”
Because cancer patients often are treated
with multiple lines of therapy until all options
are exhausted, the choice of one drug does
not necessarily preclude the concurrent or
subsequent demand for other similar drugs.
“Drugs can therefore have whatever prices
the market will bear, which can be extraordinarily high when an insured person faces a
life-threatening illness,” they said, noting that
current regulations largely prevent Medicare
and many health plans that fall under state
regulatory authority from categorizing cancer medicines with related chemical structures and indications as interchangeable,
which further limits competitive pressure in
the oncology treatment market.
Therefore, they said, “competition is unlikely to meaningfully rein in the escalating costs of oral anticancer drugs in the
near future.”
Drugs can have
whatever prices the
market will bear,
which can be high
when an insured
person faces a lifethreatening illness
INDICATION-SPECIFIC
REIMBURSEMENT SYSTEM
Potential policies to address the rising costs
of oncology medicines could seek to link
reimbursement rates or coverage mandates
with a metric of comparative clinical value
or benefit, which would “ensure patients’
access to effective therapies, while leaving
insurers some leverage in negotiations with
manufacturers,” the Health Affairs analysis
authors said.
First, they said, clinical benefit or value of
new cancer treatments must be defined in
a standardized and transparent manner –
a process organizations like the American
Society of Clinical Oncology and Memorial Sloan Kettering Cancer Center have already been hard at work on, with their value
framework and DrugAbacus price calculator
tool, respectively.
The authors argued that policies to link
coverage to the value of cancer treatments
would need to be linked, in turn, to an indication-specific reimbursement system – either at the patient or population level, given
the tremendous range in value of a cancer
treatment across indications.
They noted that pharmacy benefit managers like Express Scripts Holding Co. and
others already have pursued such pay-forperformance strategies in reimbursing cancer medicines, although those efforts are
still in their infancy.
“We believe this area warrants additional
study and attention,” the authors said.
In a separate study published in the same
issue of Health Affairs, researchers at the
London School of Economics and Political
Science found a wide variation in how cancer patients in the different countries benefited from their medicines – with the US
spending more than any of the other eight
nations in the analysis, yet witnessing one of
the smallest improvements in cancer-related mortality.
While net returns from cancer treatment
remain positive under most circumstances,
the authors found that the US obtained a
lower return per drug dollar spent on individual patients than on those in Australia,
Canada, France, Germany, Italy, Japan, Sweden or the UK.
13 May 2016 | Scrip intelligence | 5
HEADLINE NEWS
Regeneron Revives NGF Inhibitor With Phase II/III
Data; Safety Issue Remains
MANDY JACKSON [email protected]
T
arrytown, New York-based Regeneron’s stock initially increased, fell, then rose again on May 2 after it said pain scores
were essentially cut in half for patients treated with the NGFtargeting monoclonal antibody, but the rate of neuro-musculoskeletal adverse events was nearly three times as high as in the placebo
group – 17% versus 6%. Severe joint risks shut down clinical trials for
NGF inhibitors in the past, including fasinumab, so the higher rate of
those side effects wasn’t unexpected, but analysts noted that longer
term confirmatory trials are needed to confirm that safety risks don’t
outweigh efficacy.
Regeneron’s share price increased by about $3 when the stock market opened, but fell almost $7 below the company’s $376.71 per share
closing price on April 29 before closing almost $8 higher, up 2.1%, at
$384.52 on May 2. The stock’s flirtation with the prior trading day’s
value reflected general uncertainty about whether or not fasinumab
could be a meaningful contributor to Regeneron’s bottom line given
the therapeutic candidate’s significant efficacy yet troubling safety.
The company will report more details from the Phase II/III clinical trial
after a 20-week off-treatment period concludes. The preliminary results reflect only initial safety findings and the study’s primary endpoint
of pain relief at 16 weeks – after patients received four once-monthly
subcutaneous injections. Regeneron said fasinumab-treated patients
achieved gains in physical function, a secondary endpoint, but didn’t
offer any specifics.
The study enrolled 421 adults with moderate-to-severe osteoarthritis of the hip or knee who do not have adequate pain relief from or
cannot tolerate acetaminophen plus at least one oral non-steroidal
anti-inflammatory drug (NSAID) and an opioid. Patients were randomized into five different cohorts testing 1mg, 3mg, 6mg and 9mg of fasinumab versus placebo dosed once-monthly.
“There is a real need for new, non-opioid pain therapies that can provide relief to patients without the toxicity and potential for abuse of
currently available opioid treatments,” Regeneron chief scientific officer
and president of Regeneron Laboratories George Yancopoulos said in
a statement.
Yancopoulos noted that the company previously studied an intravenous version of fasinumab and the Phase II/III clinical trial was the first
to evaluate subcutaneous injections of the biologic, which the company already has moved forward into a large Phase III program.
SIGNIFICANT RESULTS COME WITH SOME RISK
Pain, stiffness and physical function were assessed in the Phase II/III trial
via the Western Ontario and McMaster Universities Osteoarthritis Index
(WOMAC) and other measures. WOMAC pain subscale scores were assessed at baseline and week 16. The average pain score at baseline was
6.3; the 16-week averages are detailed in the table below.
“Although patients in the highest dose cohort (9mg) experienced
the greatest improvement in pain, subjects in the lowest cohort (1mg)
had the second greatest reduction in pain. While additional studies
will be required to identify the optimum dose, the relative efficacy of
6 | Scrip intelligence | 13 May 2016
the lower doses are a potential positive, as these cohorts experienced
fewer instances of neuro-musculoskeletal AEs,” Leerink analyst Geoffrey
Porges wrote in a May 2 research note.
Overall incidence of serious, severe and other adverse events was
similar across all of the fasinumab and placebo arms. The neuro-musculoskeletal side effects experience by 17% of patients across all four
fasinumab arms and 6% of people in the placebo group included ar-
Phase II/III Fasinumab WOMAC Pain Subscale Results
PLACEBO
(N=83)
1MG FASI- 3MG FASI- 6MG FASI- 9MG FASINUMAB
NUMAB
NUMAB
NUMAB
(N=85)
(N=84)
(N=85)
(N=84)
Baseline
pain score
6.43
6.33
6.35
6.10
6.53
Week 16
change
from baseline
–2.25
–3.35
–3.33
–3.03
–3.65
0.0025
0.0029
0.0304
0.0001
P-value
thralgia, paresthesia, hypoesthesia and peripheral edema. At baseline
and during the clinical trial, Regeneron used imaging and analysis of
joints to identify subchondral insufficiency fractures (SIF), osteonecrosis (ON) and rapidly progressive osteoarthritis (RPOA). The company
excluded about 2% of participants at baseline based on existing SIF
or ON. There were no cases of ON during the trial, but there was one
case of SIF in the placebo arm of the study, and six cases of RPOA
among fasinumab-treated patients – two in the 3mg arm and four in
the 9mg group.
Regeneron also reported “a minor increase” in bone-specific alkaline
phosphatase, which is a marker of osteoblast activity, but no increases
in liver ALT and AST enzymes.
Sagient Research increased its likelihood of US FDA approval for fasinumab by 9% to 54% – 2% above average for pain drugs in similar
stages of development – based on the statistically significant and consistent WOMAC scores recorded in the study and based on a positive
FDA advisory committee opinion on the anti-NGF class in 2012.
“Although the consistent, statistically significant effect sizes in each
of the four treatment groups are small compared to placebo, the literature shows that placebo has a considerable effect on pain relief
in osteoarthritis clinical trials. Also, the lack of evidence of a dose-dependent effect on the WOMAC score may be due to the limited dose
range tested here,” Sagient said in a May 2 BioMedTracker report. “The
safety data suggest possible increased risks of SIF and RPOA associated with fasinumab use.
These risks, however,
CLICK
are not unexpected
given the regulatory
history of this experimental drug class.”
Read full story at:
http://bit.ly/1T0n4HQ
© Informa UK Ltd 2016
HEADLINE NEWS
CONTINUED FROM COVER
Read appeared to put at
sales, while sales of the standalone Global
Established Pharmaceutical (GEP) business
declined 7% to $4.77bn.
The company said it is on track to achieve
more cost savings from the combination
than originally targeted, $1bn versus $800m
by 2018.
Hospira also gives Pfizer a potential nearterm growth opportunity, Inflectra (infliximab-dyyb), the first biosimilar version of
Johnson & Johnson’s Remicade (infliximab).
The biosimilar was approved by FDA April
5 as only the second biosimilar ever cleared
by the agency.
Pfizer said it is preparing to launch Inflectra in the US in 2016, though the timing remains uncertain given issues around
intellectual property. Read reaffirmed statements previously made by the company
that the earliest the drug could launch is
June 30, the day after a patent covering a
method of using infliximab to treat Crohn’s
disease expires.
least one question to rest –
whether or not Pfizer would
pursue another inversion
deal with a company
like AstraZeneca PLC or
GlaxoSmithKline PLC.
The answer is not now
The Innovative Products business, which
includes Global Innovative Pharmaceuticals
(GIP) and Vaccines, Oncology and Consumer Healthcare (VOC) also turned in a strong
first quarter performance, with sales up 23%
to $7.03bn, driven by growth in GIP, Vaccines
and Oncology. Sales in oncology jumped
90% to $1bn, powered by the strong launch
of Ibrance (palbociclib), which generated
$429m in the first quarter and is on track
to become a blockbuster in its first full year
on the market. The first-in-class CDK4/CDK6
inhibitor launched a year ago for the treatment of certain breast cancer and was one
of the most successful drug launches in
2015.
Consolidated revenues increased 20% to
$13bn, and net income increased 27% to
$3.02bn, helped by the addition of Hospira,
a few extra selling days in the quarter and a
positive currency effect. Excluding the impact of foreign exchange and legacy Hospira
operations, Pfizer’s revenues grew by 15%,
the firm reported. The strong sales and earnings performance outpaced analyst consensus estimates, and led Pfizer to raise its 2016
sales and earnings guidance slightly.
The strong performance was just what
investors were hoping to see after the Allergan roller coaster ride they just got off of.
Pfizer’s stock grew 3% on the news to close
May at $33.74.
Ionis Sells Kynamro To Kastle After Regaining Rights
From Genzyme
MANDY JACKSON [email protected]
K
scripintelligence.com
in 2013, but the drug’s competitor Juxtapid
(lomitapide) from Aegerion Pharmaceuticals
Inc. has struggled to market its oral therapy
since its approval in late 2012. Aegerion cut
its work force by 25% in February due to expected declines in Juxtapid sales, bringing
its head count to 230 employees worldwide.
Shutterstock: SergeyP
astle will give Ionis a 10% stake in the
newly-founded, Chicago-based biotech company and it will pay Ionis
(formerly Isis Pharmaceuticals) $15m up front
plus another $10m in three years and up to
$70m in sales milestone fees. Ionis will earn
royalties in the low to mid-teens beginning in
2017. Sanofi Genzyme is entitled to a 3% royalty on Kynamro sales and 3% of the fees that
Ionis earns from Kastle, which was formed
in 2015 to buy, develop and commercialize
medicines for unmet medical needs.
Kastle President Bryan Stuart noted in a
joint statement from the company and Ionis that Kynamro is an ideal first acquisition
for Kastle, given its use in a rare disease.
The nascent biotech firm is backed by the
private equity firm Flexpoint Ford, which
manages $2.3bn in healthcare and finance
investments. Kastle intends to pursue new
indications and approvals for Kynamro
around the world.
Sanofi never reported quarterly sales for
Kynamro, which was approved to treat HoFH
Global Juxtapid sales totaled $213m in
2015 versus $158.4m in 2014, but Aegerion
expects its total product sales to reach only
$160m to $190m in 2016, including $120m
to $140m from Juxtapid and $40m to $50m
from Myalept (metreleptin) for generalized
lipodystrophy.
Both Kynamro and Juxtapid are facing
competition in the HoFH market from the
two PCSK9 inhibitors approved in 2015 to
treat high LDL cholesterol in people who
can’t tolerate statins or who can’t get to
recommended cholesterol levels on statins
alone, including HoFH and heterozygous
familial hypercholesterolemia (HeFH).
The new monoclonal antibodies are Amgen Inc.’s Repatha (evolocumab) and Praluent
(alirocumab) from Regeneron Pharmaceuticals Inc. and Sanofi – another reason why
Genzyme’s parent company was not keen to
hang on to its interest in Ionis’s Kynamro.
However, even after stealing HoFH market
share from Kynamro and Juxtapid, the PCSK9
inhibitors also have struggled to generate
substantial sales given payers’ resistance to
cover the costs of the new, pricey biologics without cardiovascular outcomes data.
And with the last of the brand-name statins
poised to lose ground to generics, Kynamro,
Juxtapid and the PCSK9 inhibitors have a
new wave of competition coming soon.
13 May 2016 | Scrip intelligence | 7
HEADLINE NEWS
More Troubles For Martin Shkreli – That Guy Drug
Makers Despise
DONNA YOUNG [email protected]
M
8 | Scrip intelligence | 13 May 2016
ticed by members of the House Committee
on Oversight and Government Reform.
Shkreli also quickly became the most
despised person in the biopharmaceutical
industry, with the big trade groups distancing themselves from him and executives like
Merck & Co. Inc. CEO Kenneth Frazier calling
the now-former Turning Pharmaceuticals Inc.
CEO a “hedge-fund manager masquerading
as a pharma company” and an “aberration.”
OversightandReform, Flickr
artin Shkreli – that guy drug makers want nothing to do with – may
be facing more criminal securities
fraud charges, which would be stacked on
top of the seven counts the former hedgefund-manager-turned-pharmaceuticalfirm-CEO was hit with this past December.
At a brief May 3 hearing, prosecutors told
a federal judge that if the government issues
a superseding indictment with additional
charges, it would come sometime over the
next month – at least by Shkreli’s next court
appearance on June 6, which could then
turn into another arraignment. New York
lawyer Benjamin Brafman, Shkreli’s attorney,
however, insisted the standing indictment
“will not change in any way” that would affect the former drug company CEO “in a negative fashion” – declaring it had been a “good
day” at the court “before a judge that understands the complexity of preparing this case.”
Brafman said the charges against Shkreli
were “very defensible.”
No trial date has been set for Shkreli’s case,
but it could come in January 2017. Shkreli
was arrested and indicted this past December on charges he defrauded investors of his
former hedge funds, MSMB Capital Management and MSMB Healthcare, and misappropriated more than $11m in assets from
Retrophin Inc. – a publicly traded firm he
founded and then ultimately was fired from.
Shkreli, who was released from jail on $5m
bond on Dec. 17, 2015 – the same day he
was arrested – faces a potential maximum of
20 years in prison if convicted for the seven
counts against him. He and his alleged coconspirator, Evan Greebel, who initially was
retained as an outside lawyer for Retrophin,
have been accused of constructing what
prosecutors called a “Ponzi-like scheme,” under which Shkreli used money from MSMB
Healthcare to pay off debts from a series of
bad trades he’d made under MSMB Capital.
Officials said Shkreli also had dipped into
MSMB Healthcare’s cash to use for “seed”
money to start Retrophin and lied to investors about how both funds were doing.
Prosecutors said Shkreli used Retrophin as
his “personal piggybank” to pay back the
Martin Shkreli
shareholders at both funds and perpetrated the fraudulent activities in a number of
ways, including backdating documents.
Four months before Shkreli was charged,
Retrophin had filed a lawsuit against him,
alleging, among other things, that he defrauded the company.
THE DARAPRIM SAGA
Shkreli’s criminal charges are unrelated to
what initially made him infamous – the
5,000%+ jacked-up price for Daraprim (pyrimethamine), the only FDA-approved drug
to treat toxoplasmosis, a parasitic infection
often seen in HIV-infected patients, pregnant women and children, which can cause
serious complications in people with weakened immune systems.
Daraprim’s price hike caught the attention of former Secretary of State and
presidential candidate Hillary Clinton, who
when first learning about Shkreli’s action,
declared in a tweet she’d bring him and
other price gouging drug makers down.
That simple Sept. 21, 2015 tweet was attributed to causing a panic on Wall Street –
knocking off $132bn in biotech investment.
Other presidential candidates also piled on
and threatened to take aim at Shkreli. Capitol Hill also wasted no time in making him
a target – issuing a subpoena for Shkreli to
appear at a hearing on drug prices, which
he eventually did in February, although he
invoked his Fifth Amendment rights under
the US Constitution to dodge questions,
but his eye rolls and smirks didn’t go unno-
IMPAX LAWSUIT
Shkreli maneuvered the deal under which
Turing bought Daraprim last year for $55m
from Impax Laboratories Inc., which is now
suing the firm for more than $20m – claiming breach of contract.
Under the deal, Turing had agreed to provide, and certify as accurate, pricing data for
its Daraprim sales activities to Impax by the
25th of each month to ensure it could report
the information to the federal government
under its obligations to the Medicaid program, the latter firm contended in its complaint, which was filed with the US District
Court for the Southern District of New York.
It said Turing also pledged to assume
liability for all Medicaid rebate liability directly arising out of or in connection with
the company’s use, marketing or sales of
Daraprim and to reimburse Impax for the
rebate liability within 30 days of receiving
an invoice from the firm.
In addition, Turing agreed to use best efforts not to do any act that would endanger, destroy or similarly affect the value of
the goodwill pertaining to Impax’s trademarks or national drug code and not to use
the corporate names in any manner that
was inconsistent with their usage by the
previous owner that would otherwise violate the law. But Turing breached all three
of those agreements, Impax asserted. It said
it was given no warning Turing planned to
hike the price of Daraprim to $750 per pill.
“The price increase caused medical costs
to skyrocket for many patients using the
drug, and generated substantial negative
attention from the press and the government,” Impax argued.
© Informa UK Ltd 2016
R&D BITES
Clovis Pulls Plug On
Rociletinib On Expected
FDA Rejection
After the markets closed on May 5, Clovis Oncology Inc. fessed up to what Wall
Street already anticipated as the inevitable: rociletinib was roadkill – mowed
down by the FDA, although the tread
marks looked suspiciously like those belonging to AstraZeneca PLC’s competing
lung cancer drug Tagrisso (osimertinib).
In its quarterly earnings call, Clovis disclosed it was notified by the FDA to expect a complete response letter instead
of the accelerated approval the firm was
eyeing to gain by its June 28 Prescription
Drug User Fee Act (PDUFA) action date
for rociletinib as a treatment for patients
with epidermal growth factor receptor
(EGFR) mutation-positive metastatic
non-small-cell lung cancer who previously have been treated with and EGFR-targeted therapy and have the EGFR T790M
mutation. With rociletinib placed on life
support, Clovis decided to also pull the
plug in Europe – withdrawing its marketing authorization application. Clovis president and CEO Patrick Mahaffy
said the Colorado-based biotech also has
terminated enrollment in all ongoing
company-sponsored rociletinib studies –
including TIGER-3, whose data the firm
had pegged its hopes on for confirming
the drug’s efficacy for its US application.
The study, however, wasn’t due to report
data until the second half of 2018.
Generic Crestor Marks
The End Of An Era
Allergan PLC’s generic version of AstraZeneca PLC’s blockbuster statin Crestor
(rosuvastatin) is likely to need only a few
weeks on the US market to surpass total
sales of the PCSK9 inhibitors to date.
FDA approved the ANDA for rosuvastatin calcium on April 29, marking the first
generic approval of the last statin to lose
patent protection. Allergan – the successor firm to Watson Laboratories Inc. (the
formal ANDA holder) and Actavis – confirmed the launch, which it notes will be
scripintelligence.com
Merck Is Finding PD-L1 Testing Is
Helping Keytruda
Merck & Co. Inc. is heartened by market data showing about 70% of lung cancer patients who test positive for the PD-L1 biomarker are placed on Keytruda
therapy, which could turn into an advantage as the PD-1 inhibitors move into
the first-line setting. Keytruda’s lung cancer approval came with a requirement for PD-L1 expression testing, which was a hurdle that Bristol-Myers
Squibb Co.’s Opdivo (nivolumab) didn’t have. Merck thinks that increased
PD-L1 testing in the lung cancer setting will position its drug advantageously
upon obtaining a hoped-for approval in first-line non-small cell lung cancer,
where the biomarker is expected to play a larger role. Keytruda is in line to
add the first line indication about three months ahead of Opdivo. During
the first quarter of 2016, Keytruda (pembrolizumab) yielded global sales of
$249m, with most of that revenue continuing to derive from the PD-1 inhibitor’s first indication, in melanoma. That, along with what analysts called
a solid launch of the firm’s hepatitis C combination Zepatier (grazoprevir/
elbasvir) at $50m, was a main highlight from a basically flat sales quarter for
the New Jersey pharma. Merck posted total worldwide sales of $9.3bn during
the quarter, down 1% year-over-year.
the largest generic launch in 2016, on
May 2. Under a 2013 patent settlement
with AstraZeneca, Allergan is allowed to
launch 67 days ahead of the date that
Crestor’s patent loses pediatric exclusivity, July 8. In exchange for the early
launch, Allergan must pay a fee to AstraZeneca of 39% of net sales of the generic
during the early market period.
Indian Avastin Versions
Head For Debut
A subject expert committee (SEC), which
advises the Indian regulator on trialrelated permissions as part of a layered
approval process, has recommended for
marketing authorization bevacizumab
versions of Intas Pharmaceuticals Ltd.
and Hetero Drugs Ltd. The Intas product has been cleared in metastatic or recurrent non-small cell lung cancer other
than predominantly squamous cell histology while the Hetero approval is in
the indication of metastatic colorectal
cancer. Both Indian firms had presented
the results of Phase III clinical studies of
bevacizumab (test versus reference drug)
in their respective indications. In both
cases, the SEC (oncology and haematology), at a meeting on April 7, observed that
the efficacy was “similar” between the test
arm and the reference arm.
Discount Prompts
NICE Turnaround on
Sanofi’s Praluent
Sanofi has managed to persuade NICE,
the health technology appraisal institute
for England and Wales, to recommend
its PCSK9 inhibitor, Praluent (alirocumab), by offering a confidential discount
on the drug’s list price. This means that
it will after all compete against Amgen
Inc.’s rival PCSK9 inhibitor, Repatha (evolocumab) in the anticholesterol market.
Back in February, NICE declined to recommend Praluent, claiming it was too
expensive and that Sanofi had failed to
provide robust information on important cardiovascular outcomes. It looked
as though Amgen might come out on top
as NICE had reversed its initial draft no
for Repatha on the back of a confidential
discount. Provided that Sanofi offers the
agreed discount, NICE has now agreed to
recommend Praluent as well.
13 May 2016 | Scrip intelligence | 9
HEADLINE NEWS
HR+/HER2- Breast Cancer Market
Set To Triple
SUKAINA VIRJI [email protected]
T
he hormone receptor-positive (HR+)/
human epidermal growth factor
receptor 2-negative (HER2-) breast
cancer market was worth $3.4bn across the
US, Japan, and five major EU markets (France,
Germany, Italy, Spain, and the UK) in 2015,
according to new Datamonitor Healthcare
estimates. This figure is forecast to steadily
increase, reaching a peak of $10.7bn in 2022
before falling back down to $9.6bn in 2024.
Despite the drop off in the last two years
of the forecast, the market is projected to
increase at a compound annual growth rate
(CAGR) of 12% over 2015–24.
The growth of the HR+/HER2- breast
cancer market will largely be due to the
rapid uptake of the cyclin-dependent kinase 4 and 6 (CDK4/6) inhibitor Ibrance
(palbociclib; Pfizer Inc.) and the approval
of several late-phase pipeline candidates.
Datamonitor Healthcare predicts that 10
new therapies will launch for the indication over the course of the forecast period.
This group of products will feature several
different mechanisms of action, indicating a
potentially segmented treatment space in
the future, Datamonitor Healthcare analyst
Zachary McLellan told Scrip.
GENERIC/BIOSIMILAR ENTRY
Beginning in 2023, the entry of cheaper
generic and biosimilar drugs will offset the
sales generated by branded therapies and
decrease the overall revenue of the HR+/
HER2- market. Datamonitor Healthcare believes uptake of cheaper generic and biosimilar products will result in the HR+/HER2–
breast cancer market decreasing by 9% from
2022–24 as a result. Afinitor (everolimus; No-
vartis AG), Avastin (bevacizumab; Genentech/
Roche/Chugai), Faslodex, Halaven (eribulin
mesylate; Eisai Co. Ltd.), Ibrance, and Ixempra
(ixabepilone; R-Pharm/Otsuka Pharmaceutical Co. Ltd.) are all predicted to face generic or
biosimilar competition in at least one market
over the course of the forecast period.
UPTAKE OF CDK4/6 INHIBITORS
TO DRIVE GROWTH
CDK4/6 inhibitors will see strong uptake
and will drive the growth of the HR+/HER2breast cancer market due to their strong
efficacy in relation to the current standardof-care hormonal therapies, according to
McLellan.
Ibrance has demonstrated its ability to significantly improve upon the progression-free
survival of standard treatments. “It’s likely that
pipeline CDK4/6 inhibitors abemaciclib (Eli
Lilly & Co.) and ribociclib (Novartis/Otsuka)
will also display similar benefits in their ongoing late-phase trials, allowing the class to
become an integral tool in the treatment of
the disease,” believes McLellan.
Ibrance, abemaciclib and ribociclib are
forecast to account for 72% of overall market sales for branded therapies in 2022. Of
the CDK4/6 inhibitors, Ibrance is expected
to have the greatest commercial potential, and will reach estimated peak sales of
$4.8bn across the US, Japan, and five major
EU markets.
CLICK
Read full story at:
http://bit.ly/1T0StgM
Figure 1: PI3K approval timeline in HR+/HER2- breast cancer
Q1 2019: taselisib US approval
Q2 2017:
buparlisib US approval
2015
2016
2017
Q3 2017:
buparlisib Japan and
EU approval
2018
2019
Q2 2019:
taselisib EU
approval
10 | Scrip intelligence | 13 May 2016
Q3 2020:
alpelisib Japan and US approval
2020
2021
Q1 2020:
alpelisib
US approval
2022
2023
2024
Acadia Expects
Broad Nuplazid
Reimbursement;
Pricing Soon
While Acadia Pharmaceuticals Inc.
disappointed investors and analysts
during a May 2 conference call by not
disclosing the price of the firm’s newly
approved Parkinson’s disease psychosis
(PDP) drug Nuplazid (pimavanserin), the
company insisted the medicine, nonetheless, is likely to be covered by the “vast
majority” of payers.
Analysts, however, anticipated Acadia
to reveal Nuplazid’s price as soon as
May 5, when the firm holds its quarterly
earnings call – taking a cue from the
biotech’s president and CEO, Stephen
Davis, who said the company would
divulge the amount “shortly.”
Acadia announced the FDA had approved Nuplazid on April 29 after the
markets closed. It’s the first and only
medicine approved in the US to treat
hallucinations and delusions associated
with PDP.
He explained that PDP generally
occurs in the more advanced stages
of Parkinson’s, when patients already
are contending with significant motor
function issues, such as loss of balance,
rigidity, tremor and difficulty walking.
Left untreated, PDP will typically increase to more severe and more frequent
psychosis – increasing the risk for hospitalization and nursing home placement,
with the latter often ending up being
permanent for those patients, Davis
pointed out. Serge Stankovic, Acadia’s
head of research and development, said
the company received a “very clear” label
for Nuplazid, which “describes well” the
benefits and risks of the drug and provides doctors the information needed to
appropriately and successfully prescribe
the medicine. [email protected]
CLICK
Q1 2022:
taselisib Japan approval
Read full story at:
http://bit.ly/1TyRgtm
© Informa UK Ltd 2016
HEADLINE NEWS
Making Medicare Like Medicaid: High Anxiety For
Drug Makers
DONNA YOUNG [email protected]
W
Shutterstock: Planar
hile it doesn’t look like it could
happen any time soon, if Congress and the White House ever
got together and imposed Medicaid-like
pricing policies on the Medicare program,
drug makers would feel the burn.
Indeed, such a move would translate
into an average earnings per share (EPS)
impact of about -15% for biopharmaceutical companies, with some firms even losing much more, said Bernstein analyst Tim
Anderson.
While there’s no active proposal on the
table for Medicare to adopt Medicaid-like
pricing, given the US election year uncertainties and the current increased focus on drug
pricing, Anderson insisted such a scenario
represented the “most viable, tangible and
feasible action the government could take to
rein in drug spending.”
Medicare is the only federal healthcare
program in which the government doesn’t
intervene on drug pricing, Anderson
pointed out.
If fact, the Medicare Part D prescription
drug program is expressly forbidden under a
2003 law to negotiate prices – the so-called
non-interference clause in the Medicare Prescription Drug, Improvement and Modernization Act (MMA).
When the Part D program was implemented in 2006, the federal government became
the single largest purchaser of drugs in the
US, which raised the specter that at some
scripintelligence.com
point, it could potentially exercise its purchasing power to curb healthcare spending.
Medicare Part D spending on prescription
medicines in 2015 was about $90bn – accounting for about 20% of total US drug
sales, Anderson noted.
The idea of removing the non-interference
clause and allowing the Centers for Medicare
& Medicaid Services (CMS) to negotiate drug
prices for Part D as a way to lower the government’s healthcare expenditures has been
kicked around on Capitol Hill since the MMA
was enacted.
But setting up a framework to negotiate
prices for Medicare would be complex, Anderson said.
His solution: Make Medicare like Medicaid,
which doesn’t rely on negotiating.
Under Medicaid, biopharmaceutical firms
must pay rebates of a minimum of 23% of the
average manufacturer selling prices (AMP) or
the difference between the “best price” it offers any commercial customer and AMP.
In addition, the prices of drugs covered
under Medicaid are only allowed to rise at
the rate of inflation, with companies being
charged a penalty for any increases above the
consumer price index, Anderson explained.
So Medicaid gets substantially better net
pricing than Medicare Part D, he said.
In fact, Anderson pointed out that an
analysis of 2012 data released last year by the
Health and Human Services Office of Inspector General (OIG) found the average drug discount for Medicare Part D was around 15%,
versus 47% for Medicaid.
“This is a significant delta,” Anderson declared.
With the help of the OIG’s data, Anderson and his Bernstein colleagues took
a look at what would happen for nine
companies they cover – AstraZeneca PLC,
Bristol-Myers Squibb Co., Eli Lilly & Co.,
GlaxoSmithKline PLC, Merck & Co. Inc.,
Novartis AG, Pfizer Inc., Roche Holding AG
and Sanofi SA – if Congress changed the
law and mirrored Medicare’s drug spending policies on Medicaid’s.
Assuming the new rebate level on Medicare drugs at 47%, the impact to 2016 EPS av-
erages about -15%, the analysis found. BMS
would have the most to lose, with a -31%
impact to its 2016 estimated EPS, followed by
Lilly with -27%, while Pfizer would have the
least, with -7%.
NOT JUST ELECTION-YEAR
POLITICS
While a heated and polarized presidential
race has again brought unfavorable scrutiny
to the drug industry – “common ground for
both parties to score easy points with voters” – actions by other stakeholders suggest
the possibility of a shifting landscape, although perhaps slowly, Anderson said.
He pointed to the CMS proposal in March
to launch a new experiment testing whether
alternative payment designs may lead to reducing Medicare Part B expenditures, while
preserving and potentially even enhancing
beneficiaries’ quality of care.
The Independent Payment Advisory Board
– a commission, which has yet to convene,
created under the Affordable Care Act that
is supposed to analyze the drivers of excessive and unnecessary Medicare cost growth
and make recommendations to Congress on
policies to curb spending – also could spring
into action, causing a stir in the market, Anderson said.
He also noted that groups like the Institute for Clinical and Economic Review
and the “newly minted” Campaign for
Sustainable Rx Pricing, with WalMart, the
AARP and various health plans, have been
formed to “keep the spotlight shining on
drug pricing.”
Anderson also pointed out that a cadre
of Democrats, including presidential candidate Sen. Bernie Sanders (I-VT), is pushing
to have the patent “busted” on Medivation
Inc.’s and Astellas Pharma Inc.’s prostate
cancer drug Xtandi (enzalutamide), so that
cheaper generics are allowed to enter the
US market.
While concerns over substantial changes
to the US drug pricing environment, at least
in the near-to-intermediate term, are likely
overblown, “gradual change could more reasonably occur,” Anderson said.
13 May 2016 | Scrip intelligence | 11
HEADLINE NEWS
Shire-Baxalta Deal:
JULY
2015
Baxalta Is Born Baxter International spinout company, Baxalta Inc., went public
in summer 2015. Immediately Shire initiated first talks of a buyout, offering a stock-swap that
valued its target at roughly $30bn. Baxalta quickly rejected the offer.
TOTAL PHARMA PRODUCT
SALES IN 2015
SHIRE & BAXALTA’S TOP SELLING DRUGS
Shire
Baxalta
•
•
•
•
Vyvanse for ADHD and BED
Lialda for ulcerative colitis
Cinryze for HAE
Elaprase for Hunter syndrome
•
•
•
•
Advate for hemophilia A
Feiba for hemophila A & B
HyQvia for immuno-deficiencies
Gammagard for immuno-deficiencies
and multifocal motor neuropath
SHIRE
BAXALTA
$6.1bn $6.1bn
(pro forma pharma sales)
AUG
2015
Shire Strikes Again
Shire made another play for newly formed Baxalta with
a $34bn all stock offer, however the acquisition seemed unlikely to sway Baxalta investors.
Shire’s Close Price (£)
Baxalta’s Close Price ($)
60
50
40
30
SEPT
2015
4-Apr
21-Mar
7-Mar
22-Feb
8-Feb
25-Jan
11-Jan
28-Dec
14-Dec
30-Nov
16-Nov
2-Nov
19-Oct
5-Oct
21-Sep
8-Sep
24-Aug
10-Aug
27-Jul
13-Jul
1-Jul
20
Shire Loses Faith?
Speculation emerged that Shire was looking into other
potential targets, including Ariad Pharmaceuticals, Actelion Pharmaceuticals and Radius Health.
Taking financial strategy out of it – putting two complementary portfolios
together doesn't necessarily lead to a stronger company
– Paul Heugh, CEO strategy implementation consultancy Skarbek Associates
12 | Scrip intelligence | 13 May 2016
© Informa UK Ltd 2016
HEADLINE NEWS
A Year In The Making
OCT
2015
Creating Rare Disease Leader
During Shire's 3Q earnings call the Baxalta quest remained the
primary topic of discussion, with Shire claiming that Baxalta
shareholders were becoming more favorable to the deal. Shire
CEO Flemming Ornskov said while some investors and
analysts did not see the value of a merger the deal would
offer synergies in tax, revenues and cost of goods.
We will create the leading global rare disease
biotech company…with the potential to deliver
sales of $20bn by 2020
– Shire CEO Flemming Ornskov
NOV
2015
Shire Buys Dyax Shire acquired hereditary angioedema (HAE) drug developer,
Dyax Corp., for $37.30 in cash per Dyax share, valuing the US biotech at around $5.9bn upfront.
The deal made some analysts question whether Shire had lost interest in courting Baxalta.
SHIRE PIPELINE
DRUG NAME
DISEASE
INDICATION
Apricitabine
Infectious disease
HIV / AIDS
III
Cinryze (IV)
Autoimmune/ immunology
Antibody Mediated Rejection
III
Cinryze (SQ)
Autoimmune/ immunology
HAE
III
Cyramza
JAN
2016
Oncology
Liver Cancer
CURRENT PHASE
Oncology
ONLINE
HTTP://BIT.LY/1XAG2FQ
Bladder Cancer
III
III
shareholders receive $18.00 in cash and 0.1482 Shire ADS per Baxalta share: a total deal value of
$32bn. However Wall Street had its doubts and concerns centered on the long-term viability
of Baxalta's hemophilia franchise and whether the total benefits warrant the price being paid.
DRUG NAME
DISEASE
INDICATION
BAX 817
Hematology
Hemophilia A and B
CURRENT PHASE
III
Biosimilar Adalimumab (Momenta) Autoimmune/ immunology Psoriasis
III
Biosimilar Adalimumab (Momenta) Autoimmune/ immunology Rheumatoid Arthritis
III
Biosimilar Etanercept (Coherus)
MAY
2016
PIPELINE
Deal Is On Finally Shire and Baxalta confirmed a merger that would see Baxalta
Cyramza
BAXALTA PIPELINE
APR
2016
SEE THE FULL
Autoimmune/ immunology Rheumatoid Arthritis
US Treasury Update
Biosimilar Etanercept (Coherus)
Autoimmune/ immunology Psoriasis
SEE THE FULL
PIPELINE
ONLINE
HTTP://BIT.LY/1XAG2FQ
III
III
Shire reassured investors that changes made by
the US Treasury, which derailed Pfizer Inc.'s mega-merger with Allergan, will not affect Shire's
agreement with Baxalta.
Final Vote Will Decide...
Baxalta shareholders are due to vote on the merger with Shire on May 27.
scripintelligence.com
13 May 2016 | Scrip intelligence | 13
HEADLINE NEWS
Amgen’s Harper Says Repatha Is Priced Right
LISA LAMOTTA [email protected]
“I
f you look back even five, seven years
ago, what kept me up at night was,
‘Can we innovate and make stuff that
really matters at a rate that could possibly
keep a company like Amgen afloat?’ Now,
I don’t worry about that,” said Harper in an
interview. “Now, I worry about the fact that
real innovation – that over time is cost-effective to our system and beneficial to society – can’t be paid for because of this affordability issue. Now that keeps me up at
night wondering how we are going to deal
with this.”
Harper should know better than most
people just how much drug pricing can
affect development and impact market
dynamics. “We were the first big threat
after [Gilead Sciences Inc.’s hepatitis C
drug] Sovaldi,” said Harper, speaking
of the company’s recently introduced
PCSK9 inhibitor Repatha (evolocumab).
“The reaction has been, ‘Let’s put in place
[all these roadblocks,] because these
were such a threat from an affordability
perspective.’’
‘I look at Repatha and I
don’t think we’re capable of
making a better medicine
than this as an industry’
The R&D chief contends that Repatha
is actually cost-effective and affordable
when you look at the benefit of the
cholesterol-lowering drug and the actual cost that patients have to pay. Yet,
that’s a hard number to nail down – typically, drugs have a price the manufacturer
charges, a price payers are willing to accept, what the insurance companies actually pay and ultimately, what a patient
pays out of pocket. The wholesale acquisition cost (WAC) of the drug is $542.31
for one 140 mg single-use prefilled syringe, or $14,100 annually, for administration every two weeks.
Amgen’s Repatha (along with the
competing PCSK9 inhibitor from Sanofi
and Regeneron Pharmaceuticals Inc.)
14 | Scrip intelligence | 13 May 2016
Sean Harper
was approved by FDA in the summer
of 2015 for the treatment of adults with
heterozygous familial hypercholesterolemia (HeFH), homozygous familial hypercholseterolemia (HoFH), or clinical
atherosclerotic cardiovascular disease,
who require additional lowering of lowdensity lipoprotein cholesterol (LDL-C)
beyond statins.
Even as a second-line treatment for high
LDL-C, the PCSK9 inhibitors were poised to
reach a market of millions of patients who
can’t tolerate statins due to musculoskeletal side effects or who are on statins and
still can’t achieve recommended cholesterol levels. But with low-cost generic statins
saturating the market, until Amgen and
its competitors report cardiovascular outcomes data later this year to show payers
that the drugs prevent heart attacks and
strokes, adding a lot of healthcare value,
the reach of PCSK9 inhibitors will be limited. Repatha had only $16m in sales in the
first quarter.
Amgen and Repatha have been on the
front lines of the pricing war that began
after the high price of Sovaldi (sofosbuvir)
brought the issue into mainstream conversations. Over the last few years, payers
have been cracking down on high drug
prices and using the competitive market to strike deals with companies. Payers have been making headlines for their
choice to cover either Repatha or Sanofi
and Regeneron’s Praluent (alirocumab), or
both, in their formularies.
The resounding line from the industry
has been that innovation costs money,
with many executives pointing to the high
cost of R&D, and that drugs like Sovaldi
provide a lot of value as functional cures
for millions of people.
“We’re facing an aging demographic
around the world, and on one hand, that
makes our mission very compelling, but
on the other hand that provides a terrible
burden. We’re in this terrible conundrum
right now where people say that the biggest threat to society is Alzheimer’s disease, but then they say they can’t afford
a drug that would slow down the disease.
If you look at Sovaldi, it’s cost effective,
but people don’t want to pay for it,” said
Harper, who believes that both Sovaldi
and the PCSK9 inhibitors are priced right
based on the amount of innovation that
went into them.
“Ultimately, our society has to sort this
out. None of these drugs would be at a
price point that society can’t justify from
a holistic benefit perspective,” he added.
“Unfortunately, there are many drugs on
the market today that don’t reach that
standard, and it’s not just the Turing and
Valeant examples. Those are egregious.
What I’m troubled by is the drugs that
meet that standard, which is very hard to
meet, and you run into this affordability
thing and people just don’t want to pay
for it.”
Turing Pharmaceuticals and Valeant
Pharmaceuticals International Inc. have
been chastised by Congress and many others for buying older drugs and ratcheting
up their prices by astounding amounts.
However, Harper insists that PCSK9
inhibitors are worth the price. He tried
to point out the benefits of the drugs,
pointing to their relatively clean safety
profile, that they are only given to patients who absolutely need them and
have exhausted other options, and they
help treat one of the leading causes of
death in the US.
“I look at Repatha and I don’t think we’re
capable of making a better medicine than
this as an industry,” added Harper.
© Informa UK Ltd 2016
HEADLINE NEWS
Biotech Bankruptcies: BIND and NephroGenex
Weigh Options
LISA LAMOTTA [email protected]
Chapter 11 allows companies
to pay down debt and look for
potential buyers
IN A BIND
Less than a month after announcing it would lay off 38% of its
workforce, BIND has been forced into bankruptcy proceedings as
one of its lenders came calling. The company said that Hercules
Technology III, LP demanded that the biotech repay a $15m loan
on an accelerated timeline.
The company insists it has more cash and assets than the loan
amount and that it’s current on its regularly scheduled payments.
BIND had $36.9m at the end of 2015, according to its filings with
the US Securities and Exchange Commission.
Chapter 11 proceedings are different than Chapter 7 proceedings, which allow a company to slowly unwind its assets as it sells
things off. Chapter 11, meanwhile, allows companies to pay down
debt and look for potential buyers, while lenders jockey for the best
position to allow payoff.
“The protections afforded by Chapter 11 provide for an orderly
process and additional time that enables us to pursue the strategic
and financial alternatives that are in process. The filing minimizes
the impact from the recent demand by our lender,” said BIND CEO
Andrew Hirsch in a statement.
As per its early-April announcement, BIND has been looking into
raising further capital, finding a partner, selling assets or selling the
company – those efforts continue under bankruptcy protection.
The decision comes on the heels of its latest failure of a recent clinical trial, which showed its lead compound had little to no activity in
scripintelligence.com
Shutterstock: pogonici
I
f news out of two small biotechs is any indication, the winds of
change are in the air for the sector, indicating times of plenty are
over. Two once-promising biotechs are now trading in penny stock
territory and seeking the shelter of Chapter 11 bankruptcy as they
explore their options.
Both Bind Therapeutics Inc. and NephroGenex Inc. announced
May 2 that they each were filing for Chapter 11 in the United States
Bankruptcy Court for the District of Delaware. Both companies
once had healthy stock prices on the Nasdaq and promising drugs
in their pipelines, but drug failures and an inability to access capital
has dramatically changed their circumstances.
The last two years have been marked by a high influx of capital
into the biotech sector and a record number of IPOs in the space
with unusually high capital raises. There has been criticism of sector investors for putting their money in companies that have yet to
prove out their business models.
cervical cancer, as well as head and neck cancer. BIND’s only other
compound in the clinic is under a collaboration with AstraZeneca
PLC that the big pharma opted into in late-June 2014. The partners
are developing an Accurin based on barasertib, a selective inhibitor of the Aurora B kinase, which is expressed abnormally in many
cancers. The biotech also has a license agreement with Pfizer Inc.
Yet, milestones from collaborations are not significant enough to
sustain the company.
BIND debuted on the Nasdaq in 2015 at $15 per share. The stock
now trades at about 40 cents.
THE PRICE OF FAILURE
After pausing the development of its lead drug candidate earlier
this year, the kidney disease drug developer is moving into Chapter
11 with the hopes of selling off all of its assets.
NephroGenex has retained investment banking firm Cassel Salpeter & Co., LLC to help with the sale.
The biotech debuted on the Nasdaq in 2014 at a stock price of
$13 per share. It now trades under 20 cents per share. The company
had $11.5m in cash at the end of the year.
The plummeting stock price and subsequent bankruptcy filing
came after NephroGenex was unable to pay for clinical trials of its
lead compound Pyridorin (pyridoxamine dihycrochloride). The drug
was in Phase III testing for diabetic nephropathy and had garnered
a special protocol assessment, as well as Fast Track designation
from FDA.
Yet, NephroGenex hasn’t had much luck tapping the public markets
for cash. After two failed attempts to raise money, the biotech raised
about $7m in a stock offering in mid-2015, but only had enough cash
to get it through the early part of 2016. There is some speculation that
investors are more interested in diabetic nephropathy treatments that
are in the clinic from AbbVie and Johnson & Johnson.
13 May 2016 | Scrip intelligence | 15
BUSINESS BULLETIN
Biotech VC Funding Rises
Public company valuations continue to
slide as stock market investors shift priorities, but private biotechnology firms
are attracting near record-breaking levels
of venture capital with one pretty important caveat: More money is being invested in fewer US companies, especially at
the earliest stages of business formation.
The $1.81bn in venture capital invested
in US biotech firms during the first quarter of 2016 was the sixth highest quarterly total ever, but with 118 companies
raising VC cash, it was far from the highest number of deals in any given quarter, according to the MoneyTree Report
from the National Venture Capital Association (NVCA) and PricewaterhouseCoopers based on Thomson Reuters
data that goes back to 1995.
Brandicourt Not Ready
To Raise Medivation Bid
Following “extensive conversations”
with Medivation Inc.’s “top shareholders,” Sanofi’s CEO Olivier Brandicourt
believes there is “overwhelming support” for the transaction. Brandicourt
is now ramping up the tone of his public communications to Medivation in
a bid to get president and CEO David
Hung to the table. An acquisition of
Medivation is a “priority for Sanofi,”
Brandicourt added. “If you are not prepared to engage with us, we have no
choice but to go directly to your shareholders.” If the Medivation board continues to refuse to engage with Sanofi,
“then we intend to commence a process
to remove and replace members of the
board.” Sanofi made a non-binding
proposal to acquire San Franciscobased Medivation Inc. for $52.50 per
share, an all-cash transaction valued at
$9.3bn, on April 15.
Golden Week For Daiichi
An arbitration tribunal in Singapore is
now said to have asked the Singh brothers, Malvinder and Shivinder, and cer16 | Scrip intelligence | 13 May 2016
Bayer Wary Of Future Competition
In Renal Anemia Market
Bayer AG’s decision, revealed last week, to search for licensees for its Phase
II HIF-PH inhibitor molidustat because of the “competitive environment”
of the anemia associated with chronic kidney disease market, suggests two
things. First, the two US biotech companies, FibroGen Inc. and Akebia
Therapeutics Inc., and their hypoxia-inducible factor prolyl hydroxylase
(HIF-PH) inhibitors already in Phase III, must have impressed the hardnosed R&D executives at Bayer. And second, the high cost of developing
new drugs for this indication, combined with the expected launch of cheap
biosimilar versions of epoetin/erythropoietin over coming years, may have
given even a big pharma company like Bayer pause for thought. Three
Phase II studies of molidustat have been completed and top-line results
have been positive, but that wasn’t enough for Bayer to immediately move
its HIF-PH inhibitor into Phase III studies. As the company’s CEO Marijn
Dekkers said during an analysts’ briefing on its first-quarter results: “Given
the competitive environment, the Phase III program will require large outcome studies and against this background, we are currently evaluating options, including a potential licensing of molidustat.”
tain group firms to cough up damages of
around INR25.62bn ($385m) in the case.
Daiichi Sankyo initiated arbitration proceedings in Singapore in 2013 against
the former shareholders of Ranbaxy
Laboratories, over alleged misrepresentation of critical information concerning the US Department of Justice (DoJ)
and FDA investigations against Ranbaxy
at the time of the 2008 takeover by the
Japanese company. Daiichi was then said
to have sought compensation for losses
arising from the settlement that Ranbaxy reached with the US regulators. In
May 2013, Ranbaxy agreed to pay $500m
towards settlement of the investigation by the DOJ concerning data integrity and manufacturing processes at its
Paonta Sahib and Dewas sites in India.
Hopes Mount On Sun’s ‘Game
Changer’ Psoriasis Asset
The results have raised hopes of significant upsides in the US for India’s
top ranked company, which has initiated market preparatory efforts in anticipation of a potential launch. Sun
said that two pivotal Phase III clinical
trials evaluating the efficacy and safety
of its investigational IL-23p19 inhibitor antibody tildrakizumab (MK-3222)
in patients with moderate-to-severe
plaque psoriasis had met their primary
endpoints for both evaluated doses.
Sun had previously acquired worldwide rights to tildrakizumab from
Merck & Co. Scrip affiliate Sagient Research’s BioMedTracker has placed the
likelihood of tildrakizumab’s approval
at 67%.
Intellia Launch Shows
CRISPR Still Excites While
Others Struggle
Intellia Therapeutics Inc. sold more
shares in its initial public offering than
originally expected and the CRISPR/
Cas9 specialist did so at the top of its
proposed price range, proving that investors remain excited about gene editing, but have less enthusiasm for other
early-stage therapeutics firms. Both Intellia and its CRISPR/Cas9 peer Editas
Medicine Inc. were trading above their
IPO prices as of May 6, as were five other biotech companies that went public
in 2016.
© Informa UK Ltd 2016
HEADLINE NEWS
Biogen Backs Out Of Hemophilia, But Who Benefits?
LISA LAMOTTA [email protected], SUKAINA VIRJI [email protected]
B
scripintelligence.com
players including Bayer AG, Novo Nordisk
AS and Baxalta Inc., with a couple therapies
made by the likes of Pfizer Inc. and CSL
Behring. This means that there were virtually no buyers for Biogen’s hemophilia franchise, since all of these companies already
have competing products on the market
or in late-stages.
Shutterstock: RomanenkoAlexey
iogen CEO George Scangos said in a
conference call accompanying the announcement that the time was right
to spin off the hemophilia franchise, insisting the move will make both companies
stronger. “The business has matured, it’s
profitable, it’s growing, it can stand on its
own, it has a pipeline,” he claimed. It would
have been “premature,” he added, to make
the move six or 12 months ago, which is
why this outcome had not been considered
any earlier.
Premature is likely an accurate description of the hemophilia business, even now.
Eloctate and Alprolix, the hemophilia A and
hemophilia B treatments, respectively, that
the new business will be based around
have only been on the market for a short
time. Both drugs were approved by FDA
in 2014 and have been on the market for
about a year. The two compounds generated combined revenues of $562m in 2015,
about 5% of Biogen’s total sales. Analysts
project the two drugs will reach sales of
$1.4bn combined by 2020.
While Datamonitor analysts believe that
Biogen is strongly positioned with its two
currently marketed therapies to take over
a large share of the hemophilia market as it
grows from $10.5bn in 2014 to $12.9bn in
2023, these two drugs are not enough to sustain a business in a rapidly changing market.
The growth that Datamonitor projects is
from patients switching from on-demand
treatments to preventative therapies. Currently, the market is dominated by infusions
that are given either as-needed or taken
daily, creating an enormous therapeutic
burden for patients. Yet, advances in the
space, including Eloctate and Alprolix, mean
that patients only need infusions once or
twice per week. While this is expected to
expand the patient population, changes in
the science are happening rapidly – gene
therapies could enter the space as early as
2020 and could mean patients only get an
infusion once or twice per year, dramatically
changing the treatment landscape.
It will take significant investment for the
yet-unnamed spin-out to keep up with
these advancements. The hemophilia market is dominated by a small number of
The big three players in the space, as well
as a handful of biotechs, all already have
follow-on long-acting therapies and gene
therapies well into clinical development.
Biogen insists the new company will
have pipeline of its own, and will bring
longer acting therapies using the XTEN
technology into clinical development in
the first half of 2017, as well as work on
the development of bispecific antibodies
and hemophilia-related gene therapy programs – none of which are in the clinic and
all of which are well behind competitors.
RIGHT TIME?
Scangos’ comments may seem positive, but
they really reflect Biogen’s need to focus
squarely on its neurology franchise. It certainly was the right time, but not necessarily
for its still young hemophilia business.
Biogen has been stumbling for several
months now as shares dropped, key management exited and cuts were made to
staff. The big biotech has seen plenty of
trouble in its current portfolio of marketed
products. First quarter earnings were disappointing at best, particularly in its market-leading multiple sclerosis franchise.
Tecifidera continued to struggle, posting
$946m worldwide versus analysts’ expectations of $961m. Despite already being
a blockbuster, the drug has floundered
since reports of a rare brain disease leading to patient deaths. Sales of the company’s interferons, Avonex and Plegridy,
lagged worldwide, bringing in $546m and
$106m, respectively. Biogen blames the
slowdown on patients switching over to
oral MS therapies.
Beyond the issues in its marketed portfolio, the company’s pipeline is one of the
riskiest in the business – albeit one that
would be highly lucrative, should it pan
out. Biogen is currently conducting latestage trials in Alzheimer’s disease, spinal
muscular atrophy, primary progressive MS,
indolent non-Hodgkin’s lymphoma and
diffuse large B-cell lymphoma.
Spinning out the hemophilia portfolio will leave Biogen to focus its resources
solely on these programs.
“We know now that the transaction will
make Biogen more focused, less diversified, more profitable, but slower growing
and more leveraged. We find it hard to understand how it increases or improves their
strategic flexibility. All that being said, we
believe current investors in the stock will
be happy with this outcome, but whether
they still find the remaining company attractive after the spin-off remains to be
seen,” Leerink Swann analyst Geoffrey Porges wrote in a same-day note.
Porges also pointed out that between
2016-2020, Biogen will be losing 7% to 10%
of its incoming revenue (from the hemophilia drugs) and will not be providing investors
with alternative growth opportunities. Scangos said as much during the company’s first
quarter earnings call, noting that it’s unlikely
to focus on M&A in the coming year. The
company had $6.8bn in cash and equivalents
at the end of the first quarter. Without a sale
of the hemophilia franchise, Biogen doesn’t
have the cash to conduct significant transactions that could de-risk its pipeline.
CLICK
Read full story at:
http://bit.ly/1rJULqd
13 May 2016 | Scrip intelligence | 17
HEADLINE NEWS
Panel: Broaden Opioids Risk Plans,
Require Prescriber Training
DONNA YOUNG [email protected]
I
n the midst of a nationwide epidemic of
prescription opioid misuse, abuse and
addiction in the US, a panel of 30 FDA
advisers on May 4 unanimously demanded
significant changes to the current risk evaluation and mitigation strategy (REMS) plans
that govern the use of those products in the
marketplace.
A major change the FDA panelists insisted on is broadening the current classwide
REMS, which covers extended-release and
long-acting opioids, to also include immediate-release (IR) forms of the products –
reconciling what several of the expert advisers said was a mistake made four years
earlier when those drugs were excluded in
the plans.
They said the black-box warning on the
labeling of the IR opioids, which was imposed in March – part of the FDA’s “action
plan” to address the explosion in recent
years of misuse, abuse, addiction, overdose
and death among Americans – didn’t go
far enough to alert prescribers and patients
about the dangers of the products.
According to the Centers for Disease
Control & Prevention (CDC), overdoses
involving opioids, including heroin, killed
28,000 people in 2014.
The advisers also called for mandatory
training for prescribers of opioids – declaring the voluntary continuing education
just isn’t cutting it.
“I don’t think a voluntary effort is going
to reach providers who are causing harm
with opiates,” said panelist James Floyd, an
assistant professor of medicine at the University of Washington in Seattle. “It ought
to be mandatory.”
But panelist Steven Krasnow, chief of
oncology at the VA Medical Center in
Washington and an associate professor of
medicine at Georgetown University, cautioned the length of prescriber education
program should be “restricted to make it
palatable.”
Several of the 30 panelists at a joint
meeting of the FDA’s Drug Safety and Risk
Management and the Anesthetic and Analgesic Drug Products Advisory Commit-
18 | Scrip intelligence | 13 May 2016
tees also said the required prescriber education programs should focus broadly on
pain management and not just on opioids
prescribing and use.
The current ER/LA REMS, which was imposed on manufacturers in July 2012 – with
regulators taking more than three years to
mull it over and finalize the program before
instituting it – is a “manual on how to prescribe opioids when it should be a manual
or blueprint on how to treat pain,” insisted
panelist Mary Ellen McCann, an associate
professor of anesthesia at Harvard University.
‘I don’t think a voluntary
effort is going to reach
providers who are causing
harm with opiates’
Others on the joint committee said education for patients should be revamped
to focus on alternative methods of pain
control.
“We need to be teaching people to use
these drugs sparingly,” added panelist Jeanmarie Perrone, a professor of emergency
medicine and director of medical toxicology
at the University of Pennsylvania in Philadelphia, who also argued the metrics to judge
the use of the products, like patient satisfaction or pain scores, should be eliminated.
Prescriber education programs also
should have no connection to pharmaceutical makers, Perrone contended.
At the meeting, where the committee
heard from companies like Purdue Pharma
Inc., Johnson & Johnson subsidiary Janssen Research and Development and Pernix Therapeutics Holdings Inc., along with
more than 20 public speakers, the panelists
also said the FDA’s assessment methods of
the ER/LA REMS were flawed, so they could
not adequately judge whether the classwide plan was meeting its stated goals of
reducing inappropriate prescribing, misuse
and abuse of the drugs or assured safe use.
Most agreed, however, the ER/LA opioids
REMS was not unduly burdensome on prescribers, pharmacies or patients and that
the requirement of the plans had not impeded access to the medicines.
Floyd also suggested that patients prescribed opioids for long-term use or in high
doses should be required to be included in
a registry so the use of those products can
be tracked.
Several on the joint committee complained there was not enough communication and collaboration among government agencies, like the FDA, the CDC,
the Drug Enforcement Administration,
the National Institute of Drug Abuse, the
Veterans Affairs and the Substance Abuse
and Mental Health Services Administration,
and state and local authorities and medical
groups.
Panelist Alan Kaye, chair of anesthesia at
Louisiana State University in New Orleans,
suggested there needed to be a “drug czar”
to coordinate the efforts among those
agencies and groups.
While some on the joint committee
raised concerns about the REMS and required prescriber education potentially
impeding patient access to opioids, “a far
greater concern right now is it’s clear our
society is flooded with these medications,”
declared panelist Paul Stander, a clinical
associate professor of medicine at the
University of Arizona in Phoenix.
Analogous to the problem of guns in the
US – which has the world’s highest rate of
gun-related deaths – “We have more of
these opioids in circulation in this country
and we have more opioids deaths,” Stander
said, acknowledging he’d used a politically
charged example to make his point.
Nonetheless, he said, “It’s not that different.”
“The focus should be on reducing the
amount of opioids out there,” Stander argued.
He insisted it should be emphasized
that opioid use should be a “small part” of
chronic pain management – “and the last
resort.”
© Informa UK Ltd 2016
HEADLINE NEWS
Ten Years On, Access To Biosimilars Still Patchy in EU
IAN SCHOFIELD [email protected]
A
pril saw the 10th anniversary of the
first biosimilar approval in Europe
–Sandoz International GMBH’s Omnitrope (somatropin) – which was launched
in 2006. But a decade on, even with 20 biosimilar products now available and many
more to come as big biological drugs lose
their patent protection, there are still significant barriers to biosimilar penetration and
wide variations in patient access across the
EU that need to be addressed.
Now that the EU regulatory system for
biosimilars is pretty much firmly established,
attention is increasingly turning to questions
such as why biosimilar drugs are doing so
well in some markets but not others, where
the barriers lie, and what to do about them.
The whole of the first day of the Medicines
for Europe biosimilars conference on April 2829 was given over to issues like lack of physician awareness, an unwillingness to prescribe
biosimilars, uncertainty over extrapolation of
indications, and patient mistrust of changes
to their therapy.
The conference brought together representatives of generics and originator companies, regulators and payers to look at
possible solutions such as incentives and
education for doctors, better communication, listening to patient concerns, biosimilar prescribing quotas, tendering, and discounts. One broad conclusion was drawn:
only collaborative action involving all key
stakeholders would enable the biosimilars
market to fulfil its potential.
At a press briefing before the conference,
Jacek Glinka, president of Medicines for Europe (formerly the European Generic and biosimilar Medicines Association, or EGA), said
there were three key challenges to commercialization of biosimilars. One was awareness:
many stakeholders such as patients, doctors
and payers still had doubts or misperceptions of issues like interchangeability, safety,
and extrapolation of indications.
Another was incentives – without a proper
incentive system, he said, biosimilar uptake
was very slow. But the biosimilars industry
didn’t have the clout to incentivize doctors
and patients on its own. “If it is just up to the
industry to create the uptake I think we are
too weak ourselves to create proper access
for these products. It has to be supported by
scripintelligence.com
a system of incentives for patients and physicians to really prescribe these products.”
Thirdly, he said, sustainable pricing and
reimbursement systems were needed to
give biosimilar firms the opportunity to
invest more and to bring more and more
products to the market and build more experience in Europe.
Carol Lynch, global head of biopharmaceuticals at Sandoz, said incentives were crucial but more needed to be done. “If you look
at other EU countries, incentives alone aren’t
enough – you can put prescription targets in
place with incentives, but often education is
also required. You can’t rely solely on industry
to provide this education – NICE [the National Institute for Health and Care Excellence]
could take part, regulators could engage
in education, and payers have done this in
some countries,” she said.
Another key factor, said Klaus Martin, chief
scientific officer of Polpharma Biologics, was
guidance on interchangeability of biosimilars. Position papers on interchangeability
are increasingly being adopted in the EU, in
countries like the Netherlands, Germany, Poland and Finland, he said. These show that
biosimilars “can be a clinically equivalent alternative to biologics on the market and that
by increasing access to these drugs we can
benefit from savings in hospital savings and
improve access.”
Medicines for Europe is now gathering
data to identify the most sustainable biosimilar policy elements across markets, Martin
continued, adding that there was a need for
more national position statements on interchangeability “as they appear major enablers
to biosimilar uptake in the countries where
they already exist and they need to be expanded to other countries.”
Misinformation by those opposed to expansion of the biosimilars market has often
been raised as a further barrier to biosimilar
usage. Asked whether this was still a problem, Glinka said: “Very much so. If we don’t
have the infrastructure to somehow counter
this communication and perception, then
we need support from regulators and public
authorities and key opinion leaders to speak
up about it and build awareness.”
Medicines for Europe director general
Adrian van den Hoven said the association
was monitoring this kind of misinformation.
“We systematically develop information to
counter it publicly, and we also distribute this
widely to show why this type of information
is inaccurate. Usually the way the scientific
information is structured is designed to be
misleading, so we constantly react to this and
will continue to do so. We are not exclusively
relying on the authorities but are taking it
into our own hands and fighting back.”
THE MARKET
Outlining the state of the EU market for biosimilars, Per Troein of IMS Health, which produced a report on the impact of biosimilar
competition last December at the request
of the European Commission, noted that
overall only about 12% of originator biologics were so far exposed to biosimilar competition and that biosimilar human growth
hormone still had low market value, while
EPOs and G-CSF were doing better.
Uptake of biosimilar infliximab was
“fairly slow” in the five major EU countries,
although the situation was different in
the Nordic countries, which have “almost
totally switched” to biosimilar infliximab.
Part of the reason, Troein said, was that
countries like Norway and Denmark had
“strong national champions and a national process for endorsing biosimilars, anchored in discussions with doctors, with
the savings going to the treating department of the hospital.”
COUNTRY EXPERIENCES
Speakers from the Nordic and other EU
countries presented their own experiences
in terms of increasing biosimilar usage and
making the most of the savings gained on
healthcare budgets.
Denmark, for example, is taking a
proactive approach, with centralized
processes for promoting biosimilar use
among doctors.
Benedicte Lunddahl of the Danish medicines agency said a list of reference drugs
and their biosimilar versions had been established for doctors, and a multi-stakeholder
group had been set up to discuss the “information gaps” and allow patients’ concerns
and misunderstandings about biosimilars to
be discussed.
13 May 2016 | Scrip intelligence | 19
EXPERT VIEW
R&D Collaborations: A Legal Route Map
CHARLOTTE TILLETT, ASTRID ARNOLD
O
n Feb. 1, amid heartrending press pictures
of babies born with the
small heads characteristic of microcephaly, WHO Director General
Margaret Chan declared the Zika
virus an international public health
emergency. As part of its urgent
response, the WHO called for action to expedite the development
of vaccines and, by the beginning
Charlotte Tillett
of April, 18 companies and organizations were reported to be working on a vaccine, including Sanofi,
Bharat Biotech International Ltd., the US National Institutes of Health
and Manchester University.
In projects of this kind, where speed is of the essence, R&D collaborations can be a fruitful way forward, enabling companies to
pool existing knowledge in a particular area or combine different
specialties. In the search for a Zika vaccine, Immunovaccine Inc. is
reported to be working together with Leidos, whilst Inovio Pharmaceuticals Inc. is collaborating with GeneOne Life Science Inc..
Notable pharma collaborations in other areas include ViiV Healthcare , a joint venture between Pfizer Inc., GlaxoSmithKline PLC and
Shionogi & Co. Ltd. specializing in combatting AIDS. The nature
and complexity of such arrangements varies considerably, but,
whatever the size, careful consideration of the structure of the parties’ collaboration, how the results are to be exploited and each
party’s stake in the intellectual property (IPR) arising are important
factors in ensuring success and in avoiding disputes at a later date.
This article highlights some key issues.
SHARING OWNERSHIP OF THE RESULTS
A joint R&D project may be restricted to the R&D work itself or
it may go further and involve joint exploitation of the results, for
example through manufacturing and marketing new products or
processes. It may take the form of a collaboration agreement or a
joint venture company. In all cases, however, the parties are likely
to expect ownership of the IPR in the results to reflect their contributions and will be looking for a solution which allows them
the flexibility to develop and exploit future variations to the technology as well. Where a joint venture company is used the parties may wish the IPR to be owned by the company so that their
interest in the IPR is through their shareholdings. In other cases
joint ownership may, superficially, look like a good solution, but
this is rarely advisable. Unless they agree otherwise, joint owners
are subject to legal rules about exploitation and licensing that differ from country to country, so that an agreement regulating the
parties’ respective ability to exploit, license, assign and mortgage
their shares will be necessary anyway.
In practice it is often preferable for one party to own the rights and
license the other. The license terms will reflect the fact that the relationship between licensor and licensee is more equal than in a typical
20 | Scrip intelligence | 13 May 2016
license. Among the key points here will be who should decide when
to take action against infringers; this is important because an infringement claim always involves a risk that validity will be challenged, so
threatening both parties’ investment. Termination provisions are also
a sensitive issue – the licensee will require the situations in which the
license can be terminated to be very clearly defined. The parties will
also need to agree what will happen if one party wishes to exit.
PROVIDING ACCESS TO THE BACKGROUND
TECHNOLOGY
The technology contributed by each party at the outset is the
starting point for the project. Each party will need a license to
use the other’s background technology. Where a joint venture
company is used, the background technology may be licensed
into the company. The parameters of the background technology must be very carefully drawn to avoid later disputes about
what is included in the results. A further contentious issue is often the extent of the warranties to be given in relation to the
background technology. If it turns out that use of this technology in the project will infringe third party rights or is not valid,
this may significantly impact the commercial value of the results.
However, the parties may be reluctant to give robust warranties
in crowded areas of technology or in relation to the uncertain
area of patent validity.
GOOD HOUSEKEEPING – PROTECTING THE
RIGHTS TO THE RESULTS
In pharmaceutical/biotech projects, commercial funding often depends on patents being available. The patent will be invalid if results
are published (including by presentation at conferences) before the
application has been submitted. Where universities are involved it is
particularly important to ensure that all academics and PhD students
are fully aware of the importance of this issue.
It is also important to ensure that the IPR generated in the project is properly vested in the parties or the joint venture company as
appropriate. Specific assignments of IPR should be taken from consultants and independent contractors. The different national rules
on ownership of employee inventions must also be taken into account, and if employees are seconded to the project, assignments
will need to be taken from their employers.
KEEPING IT CONFIDENTIAL
Keeping the details of the project confidential will usually be essential not only to avoid copycats but also because some aspects of the
technology, for example know-how, do not qualify for specific IPR
protection and can only be protected by keeping them secret. A
particularly sensitive area is the functionality of software – although
the software code itself is protected by copyright, work-arounds
are often easy to achieve. The
functionality of software is not
CLICK
protected by copyright and in
Read full story at:
many cases it will also not be
http://bit.ly/1UQ9bRk
possible to patent it.
© Informa UK Ltd 2016
S T O C K WAT C H
Big Pharma Strikes Back In Earnings War
ANDY SMITH
A
scripintelligence.com
“unremarkable” and their sales as “weak.” Although Merck marginally raised its full-year sales and EPS guidance, the analysts from
Cowen pointed out that this was only due to “less negative foreign
exchange.” I was more interested in the progress of Merck’s recently
launched HCV antiviral combination Zepatier (elbasvir/grazoprevir)
and its I/O antibody Keytruda (pembrolizumab). Like BMS’ Opdivo,
Keytruda beat analysts’ consensus estimates with sales in the first
quarter of $249m, suggesting that for the moment, there are only
Shutterstock: Peshkova
fter a phony first week for first-quarter earnings season, the
second week was one of missed estimates and reduced
guidance at big biotech companies. Last week – the third
week – was different again, with big pharmaceutical companies restoring some honor to the life sciences sector.
Pfizer Inc.’s closely watched earnings announcement did not
disappoint. With sales and earnings that beat analysts’ consensus estimates by 8% and 22%, respectively, Pfizer contrasted the
slew of disappointing earnings announcements from big biotech companies during the previous week. Pfizer even did what
few companies have done so far this earnings season in raising
its full-year 2016 sales and earnings guidance. The analysts from
JP Morgan attributed this revision to “operational and currency
tailwinds.” The analysts from Citigroup described Pfizer’s results as
“a strong quarter” although qualified their report with the observations that the results were “flattered by foreign exchange and
the material financial contribution of extra selling days.” Having
gotten over the shock of Pfizer’s positive earnings report, the attention of analysts then turned to the decision on whether to split
the company into innovative and established drugs companies
towards the end of 2016. As investment bankers vying for a slice
of the fees associated with the split plus whatever acquisitions
are needed to make the two companies more rounded investment propositions focus on this opportunity, critiques of Pfizer
will likely evaporate. Pfizer’s strong results ensured that its shares
finished the week up over 2% in contrast to the NASDAQ Biotech
Index, which finished the week down 4.8%.
Pfizer’s well-received earnings report was not a one-off, although
the consensus sales and earnings estimates beat by Bristol-Myers
Squibb Co. (BMS) seemed to be lost in the previous week’s gloom,
perhaps because the analysts from Jefferies noted that the earnings
beat was driven by other income. The $704m in sales of recently
launched immuno-oncology (I/O) antibody Opdivo (nivolumab)
against a consensus estimate of $617m was, however, very positive and tends to disprove the CEOs of GlaxoSmithKline PLC (GSK)
and Novartis AG, who have repeatedly bemoaned the death of the
blockbuster pharmaceutical product. The CEOs of GSK and Novartis
are probably mourning the death of their own blockbuster pharmaceuticals rather than the extinction of the species since GSK’s
recent sales and earnings beat – which was termed “robust” by the
analysts at Citigroup – was driven by its Consumer Healthcare division. While GSK’s first-quarter results were not as good as those of
Pfizer and BMS, they were by no means the worst so far reported in
the big pharma space.
Sanofi missed analysts’ consensus estimates of sales by 2%
but beat on earnings per share (EPS) by delaying its operational
expense. Unlike companies that report in the US dollar and have
benefitted from its weakness, Sanofi (which reports in euros) left
its 2016 EPS guidance unchanged. Similarly Merck & Co. Inc. reported a 2% miss of consensus sales estimates, but a 5% beat of
EPS estimates which, like Sanofi, was driven by lower operational
expense. The analysts from Citigroup described Merck’s results as
winners amongst the big pharma I/O players. In HCV, the picture
was more mixed, with Zepatier sales of $50m being $10m behind
the estimates of the analysts from Jefferies, but $30m ahead of the
analysts from Cowen who (like me) had low expectations from the
launch. The first-quarter results for all the big pharma companies
that have recently launched HCV antiviral combinations are now in.
While Gilead Sciences Inc. remains by far the market share leader at
about 90%, with three companies competing on price, only HCV
patients were the winners.
Like many big pharma companies reporting this earnings season, Eli Lilly & Co. announced results that appeared superficially to
be fine. Lilly’s results were described by the analysts from Jefferies
as “unremarkable” and beat consensus sales estimates but missed
on earnings largely due to higher operational expense. Like other
companies reporting in US dollars, Lilly raised its full-year 2016
guidance on a tax benefit and foreign exchange not being as bad
as was expected at the start of the year.
The return to mediocrity for earnings reports after the stock market carnage of the previous week might not have been a cause for
relief had it not been punctuated by the more positive first-quarter
results from Pfizer and BMS. However, even mediocrity would be
aspired to by investors in generics and specialty pharma companies, whose cumulative pressures and outlooks make them appear
at best the phantom menace of life sciences and, at worst, a business model facing extinction.
The Magna Biopharma Income fund holdings include Pfizer, BMS
and Gilead.
13 May 2016 | Scrip intelligence | 21
P I P E L I N E WAT C H
Scrip’s weekly Pipeline Watch tabulates the most recently reported
late-stage clinical trial and regulatory developments from the more
than 10,000 drug candidates currently under active research worldwide.
CLICK
Visit scrip intelligence.com
for the entire pipeline with
added commentary.
Late-stage clinical developments for the week 29 April - 5 May 2016
LEAD COMPANY
PARTNER COMPANY
DRUG
INDICATION
MARKET
REGULATORY APPROVAL
Acadia Pharmaceuticals
–
Nuplazid (pimavanserin)
Parkinson’s disease
US
Ferring BV
–
Nocdurna (desmopressin)
nocturia
EU
Flamel Technologies SA
–
Akovaz (ephedrine sulfate)
hypotension/shock
US
Orexigen Therapeutics Inc.
Kwang Dong Pharmaceu- Contrave (naloxone and
tical Co. Ltd.
bupropion)
obesity
South
Korea
SUPPLEMENTAL REGULATORY APPROVAL
Eisai Co. Ltd.
–
Fycompa (perampanel) oral
suspension
epilepsy
US
Teva Pharmaceutical
Industries Ltd.
–
ProAir RespiClick (albuterol
sulfate)
pediatric asthma
US
Eisai
–
Halaven (eribulin)
advanced liposarcoma
EU
Eli Lilly & Co.
–
olaratumab
advanced soft-tissue sarcoma
US
Axsome Therapeutics Inc.
–
AXS-02 (disodium zoledronate) pain with knee osteoarthritis
US
–
Sialanar (glycopyrronium br)
persistent drooling
EU
Enzepi (pancrealipase)
pancreatic insufficiency
EU
Avycaz (ceftazidime plus
avibactam)
intra-abdominal and urinary tract infections,
nosocomial pneumonia
EU
Ono Pharmaceutical
Ongentys (opicapone)
Parkinson’s disease
EU
Johnson & Johnson
Odefsey (emtricitabine, rilpivirine, tenofovir alafenamide)
AIDS/HIV
EU
Imbruvica(ibrutinib)
untreated chronic lymphocytic leukemia
EU
Gazyva (obinutuzumab)
follicular lymphoma
EU
Zinforo (ceftaroline fosamil)
skin and soft-tissue infections, communityacquired pneumonia
EU
Hyqvia (immunoglobulin,
hyaluronidase)
primary and certain secondary immunodeficiencies
EU
AbbVie Inc.
Zinbryta (daclizumab)
relapsing multiple sclerosis
EU
Novartis AG
–
Afinitor (everolimus)
lung or GI neuroendocrine tumors
EU
Novo Nordisk AS
–
Victoza (liraglutide)
type 2 diabetes monotherapy
EU
Roche
–
Avastin (bevacizumab)
advanced non-small cell lung cancer
EU
–
Vyvanse(lisdexamfetamine)
eating disorders
Australia
Narcan (naloxone) nasal spray
opioid addiction
Canada
olaratumab
advanced soft tissue sarcoma
FAST-TRACK STATUS
CHMP NEGATIVE OPINION
Proveca Ltd.
CHMP POSITIVE OPINION ON FIRST APPROVAL
Allergan Inc.
AstraZeneca PLC
Bial-Portela & CA SA
Gilead Sciences Inc.
–
Allergan Inc.
CHMP POSITIVE OPINION ON SUPPLEMENTAL APPROVAL
Janssen-Cilag International
AbbVie Inc.
Roche
AstraZeneca PLC
–
Allergan Inc.
Baxalta Inc.
Biogen
–
REGULATORY FILING
Shire PLC
Adapt Pharma Ltd.
Opiant Pharmaceuticals
PRIORITY REVIEW
Eli Lilly & Co.
–
US
Source: Sagient Research’s BioMedTracker
22 | Scrip intelligence | 13 May 2016
© Informa UK Ltd 2016
APPOINTMENTS
Laboratoris Sanifit S.L. has appointed
Keith R. Leonard, former president and CEO
of Kythera Biopharmaceuticals, to its board
of directors. Leonard brings over 20 years of
industry experience to the Spanish company,
which focuses on treatments for calcification disorders. Prior to co-founding Kythera
Biopharma in 2005, Leonard held various
positions at Amgen Inc., including senior vice
president and general manager of Amgen
Europe. He currently serves on the board of
several other companies, and is the executive
chair of UNITY Biotechnology and Sienna Biopharmaceuticals.
Epizyme, Inc. has appointed Matthew
Ros chief operating officer (COO). Ros joins
the clinical-stage biopharma company from
Sanofi, where he was most recently COO/
global head of the oncology business unit,
overseeing its solid tumour and hematology
franchise. Prior to this, he worked within Genzyme’s rare disease business, where he led
its second-largest franchise, Pompe Disease,
as vice president and franchise head. He has
also previously served on the board of trustees at CancerCARE.
The global specialty pharma company Endo
International PLC has appointed Doug-
Scrip
las S. Ingram and Todd B. Sisitsky to its
board of directors. Ingram brings 20 years of
biotech and pharma experience to the business, and is currently the CEO of Chase Pharmaceuticals Corporation. He was previously
president of Allergan, Inc., a role which he left
last March. Sisitsky is the managing partner of
TPC Capital and a member of the TPB executive committee, co-leading the firm’s investment activities in the healthcare services and
pharma/medical device sectors.
Albany Molecular Research Inc. (AMRI)
has appointed Louis Yu senior vice president
of quality and compliance, a newly created
position within the company. Lu joins AMRI,
a global contract research and manufacturing organisation, from Perrigo Company
PLC, where he was executive vice president,
global quality and compliance. Prior to that,
he was vice president of quality for CV Therapeutics (now a division of Gilead Sciences),
and has also held a number of senior leadership roles at Forest Laboratories, Solvay Pharmaceuticals and Par Pharmaceutical.
OPKO Health Inc. has appointed Douglass
Laidlawvice president of medical affairs.
Laidlawvice brings more than 15 years’ experience in strategic planning, development
and execution of medical education initiatives for various companies including Relypsa, Keryx, Sanofi, Genzyme, Neurocine Biosciences, Serono and Organon. Prior to OPKO,
Laidlawvice was executive director medical
affairs at Relypsa and Sanofi’s national director, medical science liaisons, medical affairs.
Synthetic Biologics, Inc. has appointed
Isaac J. Bright, M.D. vice president of corporate development. Bright brings over
15 years’ of transactional and operational
experience to the clinical stage company,
which focuses on developing therapeutics
to protect the gut microbiome. Prior to joining Synthetic Biologics, Bright was a partner
at US private equity investment practice
Merieux Development, before which he
was vice president, corporate development
and diagnostics at QuantaLife, Inc.
Specialty pharma company, Pernix Therapeutics Holdings, Inc., has appointed
John Sedor chair of the board and interim CEO after the resignation of its former
president, CEO and chair, Doug Drysdale.
Sedor, who is currently a director at Pernix,
will act as CEO until Drysdale’s successor is
appointed, after which he will continue in
his role as chair of the board.
ELEANOR MALONE @SCRIPELEANOR
IAN SCHOFIELD @SCRIPIANS
JOHN DAVIS @JOHN023DAVIS
[email protected]
[email protected]
[email protected]
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ASHLEY YEO @ASHLEYPYEO
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SUKAINA.VIRJI @SCRIPSUKI
LISA LAMOTTA @BIOWRITERCHIK
[email protected]
[email protected]
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courtesy of www.shutterstock.com
unless otherwise stated.
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LUCIE ELLIS @SCRIPLUCIE
[email protected]
[email protected]
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13 May 2016 | Scrip intelligence | 23
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