No. 3992 February 21, 2020

Belviq has not been a big commercial seller in the US, but Eisai had been hoping the positive cardiovascular outcomes trial could mark a new chapter for the troubled weight loss pill. The company reported nine-month revenues of ¥4.61bn ($42m) for Belviq in January.

NAIL IN COFFIN Now, the FDA’s request to remove the drug from the market feels like anoth- er nail in the coffin for a trio of obesity drugs that launched in the early part of the last decade with a lot of fanfare but failed commercially. (Also see “10 Drug Launch Flops Of The Decade “ - Scrip, The last of a trio of obesity drugs that 8 Jan, 2020.) The big problem for the launched early in the last decade to crash drugs was around the perceived modest efficacy and uncertain risks. Belviq was the first of those drugs to reach the market in 2012. It was ini- FDA Requests Belviq Be Pulled From tially developed by Arena Pharmaceu- ticals and partnered with Eisai in 2010. The US Market Due To Cancer Risk (Also see “Arena Scores Hefty Obesity Drug Deal With Eisai Ahead Of PDUFA JESSICA MERRILL [email protected] Date” - Pink Sheet, 1 Jul, 2010.) Arena handed over full commercial rights to he US Food and Drug Adminis- did not improve cardiovascular outcomes the product to Eisai in 2017 to focus on tration has requested that Eisai either. At the time the data was first re- other drugs. T Co. Ltd. voluntarily withdraw the leased in mid-2018, Eisai did not highlight Two other drugs followed behind Bel- obesity pills Belviq and Belviq XR (lorca- cancer as a safety signal. (Also see “Eisai’s viq: Vivus Inc.’s Qysmia (phentermine/ serin) from the US market because of an Obesity Drug Belviq Passes Cardiovascu- topiramate) and Takeda Pharmaceuti- increased risk of cancer. The announce- lar Outcomes Test” - Scrip, 17 Jul, 2018.) cal Co. Ltd../Orexigen Therapeutics Inc.’s ment on 13 February comes after Eisai The FDA had required the cardiovascular Contrave (naltrexone/bupropion). Orex- demonstrated the cardiovascular safety of outcomes trial (CVOT) as a post-approval igen eventually filed for bankruptcy, and Belviq in an outcomes trial, but that same commitment. while Vivus continues to market Qysmia, trial showed an increased risk of cancer “Patients should stop using the medi- it only generated $9.5m in the third occurrence. cation Belviq and Belviq XR and talk to quarter of 2019. The FDA issued an alert in January no- their health care professionals about Published online 13 February 2020 tifying the public that it was assessing the other treatment options for weight loss,” safety of Belviq for a potential increased Center for Drug Evaluation and Research As Belviq Goes Off risk of cancer. In the 12,000-patient CA- Janet Woodcock said in a statement. The India Market, Patent Case MELLIA-TIMI 61 trial, Eisai showed Belviq agency did not recommend special can- May Fizzle: did not increase major cardiovascular cer screening for patients who have taken https://bit.ly/2SSaZgw events compared to placebo, but the drug Belviq outside of routine tests.

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Deal Making Move Over CAR-T Pharma On Coronavirus A good year expected, despite Takeda’s Off-The-Shelf CAR-NK A passing nuisance or a real worry? US election uncertainty (p10) data excite (p14) (p18) IN THIS ISSUE

from the executive editor [email protected]

How worried are you about coronavirus? And if you squarely during the Q4 reporting season and concerns at do have any fears, do they relate more to your per- present are largely confined to China. With the obvious sonal safety, or that of your business? I’m firmly in the caveats firmly in place, most said the disruption was man- not-worried-yet camp; a quick Amazon search for face ageable and expected the outbreak to be relatively short- masks ended with a closed laptop as soon as I saw their lived. And many are joining in efforts to tackle the disease. price, although I do admit to having upped the hand- Still, the arrival of an unknown infectious disease washing (both frequency and thoroughness). evokes deep-seated fears. Just today in the UK press, Three years of studying microbiology at university may amid all the coronavirus updates, was news of the dis- have left me with a healthy respect for viruses, but 20 years covery in rural Lincolnshire of a mass grave of 14th of covering pharma has engendered some faith, at least, in century victims of the Black Death – the findings prov- its ability to Do Something about the current outbreak. ing that it was not just the populous towns where the Fears over SARS, MERS and H1N1 waxed then waned, af- normal systems for burial broke down under the sheer ter all, and hopefully COVID-19 will be no different. volume of bodies as half the population of Europe was Such sanguinity appears shared by pharma heads. As wiped out. A reminder, if any were needed, not to get we report in p18, only a few firms addressed the issue too complacent.

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2 | Scrip | February 21, 2020 © Informa UK Ltd 2020 GlycoMimetics Dr Reddy’s Alzheimer’s Defeats Deal Off New Move Pharma Again Balance

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exclusive online content inside: COVER / FDA Requests Belviq Be Pulled From The US Market Due 89Bio’s NASH Hopes Hang On To Cancer Risk Demonstrating Best-In-Class FGF21 Profile 4 AstraZeneca Returns To Growth, But Coronavirus Likely To Hit JOSEPH HAAS [email protected] China Revenues

5 Teva Edges Closer To Growth, But With A Big Overhang

6 Ipsen Upbeat Despite Palovarotene Program Pain

8 Pfizer Ends Pact With GlycoMimetics After SCD Failure

8 It’s A Deal, Finally: Dr Reddy’s Snaps Up Wockhardt’s Branded Gx Business

10 A Positive Outlook For Deals, With Election Year Caveats

11 Sandoz Optimistic On Biosimilars As It Reprioritizes US Portfolio

13 Novartis And UK Launch Partnership On Groundbreaking Recent entrants, including some big pharma players, Cardiovascular Prevention Trial threaten to make the fibroblast growth factor (FGF) ana- log class another crowded field of clinical development 14 Strong Early Promise For Takeda ‘Off The Shelf’ CAR-NK for non-alcoholic steatohepatitis, but 89bio Inc. thinks its Therapy mid-stage FGF21 analog could prove best in class with less frequent dosing than a Phase II FGF21 candidate at Bris- 15 Another Alzheimer’s Setback As Roche And Lilly Drugs Fail tol-Myers Squibb Co. and offer a better safety profile than 17 Fennec Nears Market For Chemo-Induced Hearing Loss NGM Biopharmaceuticals Inc.’s Phase IIb FGF19 analog. In Children Founded in Israel in May 2018 with the licensing of BIO89-100 (then called TEVA47948) from Teva, 89Bio now 18 Keytruda Closing In On First-Line Metastatic Triple-Negative operates mainly out of San Francisco. It anticipates report- Breast Cancer ing out Phase IIa data for BIO89-100 in NASH during the second half of 2020 – the ongoing Phase Ib/IIa study is 18 Global Catastrophe Or Passing Nuisance? Pharma’s testing once-weekly and twice-weekly injectable dosing Coronavirus Views of the glycopegylated FGF21 analog. The firm also plans to soon initiate a Phase II study of the candidate in severe 21 Stockwatch: Coronavirus Takes A Bite Out Of AstraZeneca’s Guidance, GSK and AbbVie Get Spinning hypertriglyceridemia with data expected during the first half of 2020. 22 Pipeline Watch Published online 11 February 2020 To read the rest of this story go to: https://bit.ly/2uIEBVG 23 Appointments

@PharmaScrip /scripintelligence

/scripintelligence /scripintelligence

scrip.pharmaintelligence.informa.com February 21, 2020 | Scrip | 3 Q4 RESULTS

AstraZeneca Returns To Growth, But Coronavirus Likely To Hit China Revenues ANDREW MCCONAGHIE [email protected]

straZeneca PLC has recorded its (benralizumab), though these were offset Calquence (acalabrutinib) in leukemia, as first full year of revenue growth in by a better-than-expected showing from well as several approvals in China at the Aeight years, bouncing back thanks aging respiratory blockbuster Symbicort end of the year, including Lynparza in first- to its fast-growing new cancer drug portfo- (budesonide/formoterol). line ovarian cancer. (Also see “AZ Closer To lio and expansion in China. But CEO Pascal For 2020, the company is forecasting Second Enhertu OK After Gastric Cancer Soriot warned the Covid-19 virus outbreak revenue growth in the high-single to Success” - Scrip, 27 Jan, 2020.) could have an impact on 2020’s numbers. low-double digits, with core earnings per The company expects two significant As the sixth successive quarter of share expected to increase by a mid- to new drug approvals this year in the US. growth, Q4 2019 marks the completion high-teens percentage. First up is selumetinib is a novel treat- of the long turnaround process for Soriot The revenue forecasts are lower than ment for pediatric patients with NF1 and and his senior team, and AstraZeneca is hoped for by bullish investors, but one symptomatic, inoperable plexiform neu- now tipped by analysts to be one of the headwind being factored into these rofibromas, a rare and incurable genetic standout growth stories in big pharma calculations is the ongoing coronavi- condition. The Food and Drug Administra- over the next five-10 years. rus outbreak. tion is expected to make its decision in the second quarter of 2020. AstraZeneca’s new HQ in Meanwhile AstraZeneca’s partner Fi- Cambridge UK is still not broGen Inc. filed roxadustat with the FDA complete but the business in December, a novel anemia treatment is now set for significant for patients with chronic kidney disease growth with blockbuster potential. Analysts fore- cast the drug could hit $5bn in peak an- nual sales, and the FDA is expected to an- nounce its decision in the fourth quarter. (Also see “AstraZeneca’s Dobber On Ramp- ing In Renal, Expanding In CV And Business Development “ - Scrip, 21 Jan, 2020.) While the company has now returned to growth, it remains well behind the $33bn

Source: AZ Source: annual revenues it earned in 2010 before it headed into steep decline because of Total revenues for the year rose 10% to The virus, which is still not under con- blockbuster expiries. $24.3bn, with more approvals and further trol and has brought China to a standstill, Soriot famously promised to reach sales indications for existing products expected is spreading globally. Given that much of of $40bn by 2023 when the company in 2020. But now that it’s ‘payback time’ for AstraZeneca’s growth is driven by China, was fending off a takeover bid from Pfizer investors, AstraZeneca is under pressure the company says it was keeping an eye Inc. in 2014. Most analysts now believe the to meet those expectations of industry- on developments, and expects to provide company will fall short of this aspiration, leading growth. an update at the time of its Q1 results. “For but Soriot and his team hope to generate Revenue growth for the full year and 2020, we anticipate another year of strong new sources of growth to help them de- Q4 was led by targeted lung cancer drug growth. However, we also need to take into liver on this promise. Tagrisso (osimertinib), up 71% for the 12 account the situation with the Coronavirus The company is still paying off debts, in- months to $3.18bn, with Imfinzi (dur- in China, so we anticipate total revenue to cluding the bill for the construction of its valumab) rising rapidly to $1.46bn and increase by high-single digit to a low-dou- new global headquarters in Cambridge, ovarian cancer therapy Lynparza (olapa- ble digit percentage. And when it comes UK, but says improving its cash genera- rib) breaking through the $1bn annual to core EPS, we anticipate an increase of tion and leverage will be one of its key pri- sales mark for the first time. mid- to high-teens percentage,” Soriot said. orities in 2020. This points to the company Nevertheless, these figures were just shy The latter half of 2019 saw a number gearing up for a possible re-entry to the of analysts’ expectations, as were sales of of significant developments for the com- mergers and acquisitions market, which AstraZeneca’s other current growth driv- pany, including US approval of Enhertu could potentially help it meet its long- ers, diabetes drug Farxiga (dapagliflozin), (trastuzumab deruxtecan) in breast can- held growth target. and severe asthma treatment Fasenra cer (co-marketed with Daiichi Sankyo) and Published online 14 February 2020

4 | Scrip | February 21, 2020 © Informa UK Ltd 2020 Q4 RESULTS

Teva Edges Closer To Growth, But With A Big Overhang

JESSICA MERRILL [email protected]

eva Pharmaceutical Industries Ltd. ezumab). Teva expects Austedo revenues which the company expects will help to is heading into the third year of a to grow from $412m in 2019 to $650m in level the playing field. Tmassive turnaround strategy that 2020 and revenues of Ajovy to grow from “We think now that we have the autoin- began under CEO Kåre Schultz in late $96m in 2019 to $250m in 2020. jector approved, as we prepare for launch, 2017, and while the company made sub- The generics business, however, is ex- which we will do here in the next couple stantial progress on its goal of returning pected to continue its flat to moderate of months, we will have an offering that to earnings growth in 2020, the expecta- growth, with North American generics is really unmatched in the CGRP market,” tion for generic revenues continues to be revenues expected to be flat at around exec VP-North America commercial Bren- moderate and there is a threat to the sta- $4bn. The company pointed to the launch dan O’Grady said. Ajovy will be available in bility from opioid liability litigation. of its first biosimilar – Truxima (rituximab- the prefilled syringe and the autoinjector Teva updated investors on its 2019 fi- abbs), a biosimilar of Roche’s Rituxan – as and can be administered by patients or in nancial results and 2020 forecast on 12 another growth driver. The company did physicians’ offices, and it is the only CGRP February with earnings before interest, not break out sales of Truxima, which only that is available in quarterly dosing as well taxes, depreciation and amortization launched in November, but said its market as monthly. The quarterly dosing option (EBITDA) forecast to be $4.5bn to $4.9bn share is ranging between 12%-15%. represents about 17% of the use and con- in 2020, a range that is slightly below to tinues to grow, he said. slightly above 2019 EBITDA of $4.7bn in With Austedo, Teva is anticipating new 2019. A year ago, Teva had guided inves- data from a Phase III trial testing the drug tors to expect 2019 would be a trough in a potential new indication to relieve year before returning to earnings growth tics in people with Tourette’s syndrome. in 2020, so it remains unclear if Teva will The data will be reported in a few months, actually reach that goal. (Also see “A Teva said. The trial could be a big failure Trough Year For Teva, With A Turning Point “The low end is of or a big success, Schultz said, noting, “it’s Targeted For 2020” - Scrip, 13 Feb, 2019.) course not what we’re anybody’s guess.” Schultz said the guidance reflects nec- Neurocrine Biosciences Inc.’s rival drug essary flexibility. “The low end is of course aiming for ... but Ingrezza failed to show a benefit in To- not what we’re aiming for. That would urette’s syndrome so there is some uncer- never be the case, but it reflects the fact it reflects the fact tainty around Teva’s potential for a more that there’s always uncertainty in any busi- successful outcome. ness,” he told a same-day conference call. that there’s always Altogether, Teva has made notable He pointed out that he has a long man- uncertainty in any busi­ strides in its turnaround strategy, which agement track record of hitting guidance. has resulted in an entire restructuring of “I have not missed the guidance of the ness.” - Kåre Schultz its expenses, reducing its manufacturing company I’ve been working at for 62 quar- footprint, cutting thousands of employees ters in a row. I’m not planning to start do- and paying off billions in debt. ing that now,” he said. Teva has reduced its manufacturing The 2020 forecast also calls for revenues network from 80 facilities to less than 60 that are largely flat, which would be a sub- and is continuing to consolidate, Schultz stantial improvement for Teva. The com- LAUNCH UPDATES reported. Teva has reduced its debt from pany is forecasting revenues of $16.6bn The launch of Ajovy has been slow be- $35bn in 2017 to $24.9bn at the end to $17bn in 2020 compared to $16.9bn cause of the competitive dynamics in of 2019. The company successfully refi- generated in 2019. The 2019 revenues the migraine space, with three similar nanced in the fourth quarter so that it can represented a decline of 8% over 2018. drugs on the market. (Also see “Market manage payments that were coming due The decline was mainly due to the erod- Snapshot: Migraine Prevention Therapies’ in the next three years, he said. ing Copaxone (glatiramer) business and a Slow Road To Blockbuster Status” - Scrip, decline in the US generics business. 23 Jan, 2020.) Teva’s product, adminis- OPIOID RISK OUTSTANDING The growth drivers for 2020 will be tered through a prefilled syringe, is the As Teva makes slow and steady progress two of the company’s newer specialty only one that has not been available in on its financial stabilization, there is one brands, Austedo (deutetrabenazine) for an autoinjector, which has been a limi- big uncertainty that continues to weigh tardive dyskinesia and chorea associated tation. However, the US Food and Drug on the company – opioid liability litigation with Huntington’s disease and the CGRP Administration approved an autoin- and how much Teva could have to pay to migraine prevention drug Ajovy (freman- jector device for Ajovy in late January, settle lawsuits in the US.

scrip.pharmaintelligence.informa.com February 21, 2020 | Scrip | 5 Q4 RESULTS

The chief executive did not have an update on that front, aside from reiter- Ipsen Upbeat Despite ating his comments at the J.P. Morgan Healthcare conference, that he is “cau- tiously optimistic” on the outlook for a Palovarotene Program Pain broad settlement ahead of a case head- KEVIN GROGAN [email protected] ing to trial in mid-March. (Also see “J.P. Morgan Notebook Day 1: No Big Deals, But Plenty Of Pipeline, Commercial High- lights” - Scrip, 14 Jan, 2020.) Teva has proposed a national settlement frame- work that would allow the company to settle much of the ongoing litigation with a $250m upfront payment and a $23bn supply of the opioid addiction treatment Suboxone (buprenorphine/ naloxone) tablets over 10 years. (Also see “J.P. Morgan Notebook Day 1: No Big On balance, 2019 was a decent one Deals, But Plenty Of Pipeline, Commercial for Ipsen Highlights” - Scrip, 14 Jan, 2020.) The opioid liability issue and persistent generic challenges weighed on analysts, he shine has been taken off the dosing patients on the back of a futility even as they acknowledged the substan- strong sales growth at Ipsen in analysis which indicated that the Phase tial progress Teva has made. T 2019 by the regulatory and clini- III FOP trial called MOVE was unlikely to “It is increasingly clear that manage- cal woes of palovarotene, the rare disease meet its primary efficacy endpoint. ment has the business stabilized and has drug the French drugmaker had such high The setbacks in the palovarotene pro- executed remarkably well in eliminating hopes for when it acquired Canada’s Cle- gram led Ipsen to take a pre-tax partial im- the necessary cost structure while main- mentia Pharmaceuticals Inc. last year. pairment of €669m in the fourth quarter. tain exceptional performance in both its It was a year ago that Ipsen agreed to Ipsen also cut its sales estimates in 2022 to launch of Austedo, as well as maintaining pay $1.04bn up front plus an additional around €2.8bn, down from previous guid- the revenue in its various generic fran- deferred amount of $263m to buy Mon- ance of €3.2bn, assuming that there will chises,” Cowen analyst Ken Cacciatore in a treal-based Clementia and get hold con- be no revenues from palovarotene. same-day note. trol of palovarotene. The drug, a retinoic Still Ipsen is not giving up on palovaro- “However, given the share price cor- acid receptor gamma selective agonist, tene just yet, saying it will conduct further rection and current valuation, we believe was touted as a potential treatment for a assessments of the MOVE dataset, address nearly all of these favorable trends are al- number of orphan diseases, especially fi- the FDA’s questions “and define next steps ready factored, and yet this excludes any brodysplasia ossificans progressiva (FOP) for the clinical program to bring palovaro- potential opioid or drug liability risks,” he and multiple osteochondromas (MO). tene to patients as quickly as possible.” cautioned. At the time of the purchase, which com- New CEO Aymeric Le Chatelier, who Bernstein analyst Ronny Gal warned pleted in April last year, Ipsen chief com- took the helm when David Meek left to investors, “We understand the recovery... mercial officer Harout Semerjian told Scrip join FerGene days after the first bit of bad but don’t fall in-love with the model. Teva that palovarotene was “a largely de-risked palovarotene news in December, told needs a sustainable business model and asset with limited competition.” Having analysts on 13 February that “we really it’s not quite there yet.” received fast-track, breakthrough therapy understand this is an important topic and The company’s stock opened up 6% at and rare pediatric disease designations for that there are still many outstanding ques- $13.09 on the positive news. FOP from the US Food and Drug Adminis- tions.” He added, “It is clear that we remain Published online 12 February 2020 tration, a US submission was expected in highly committed to building a successful the second half of last year, for a potential rare disease franchise [and] are extremely launch in mid-2020. determined and motivated to bring the However plans for a filing were con- first therapeutic treatment option to the signed to the dustbin at the end of 2019 FOP patient community.” LET’S GET when the FDA slapped a partial clinical Beyond palovarotene, he highlighted a hold on Ipsen’s palovarotene clinical tri- licensing deal signed in October for Blue- SOCIAL als in FOP and MO in children less than 14 print Medicines Corp.’s BLU-782, an ALK2 years old, due to bone growth concerns. inhibitor in Phase I development for the @PharmaScrip Things got even worse last month when treatment of FOP. It is “addressing the un- the company revealed that it had paused derlying cause of the disease,” Le Chatelier

6 | Scrip | February 21, 2020 © Informa UK Ltd 2020 Q4 RESULTS

said, noting that a Phase II trial is expected Strong Sales For Ipsen to begin later this year. DRUG FY19 SALES €M % CER Ipsen’s enthusiasm is not shared by the investment community. Jefferies issued a Somatuline 1,031.6 18.3 note on 13 February saying, “We see few Decapeptyl 407.4 8.8 opportunities to mitigate pessimistic sen- Dysport 388.3 10.2 timent and relieve pressure on the shares, exacerbated by the recent regulatory and Cabometyx 242.2 63.5 clinical setbacks for palovarotene and the Onivyde 134.7 16.9 departure of CEO David Meek.” Source: Ipsen The palovarotene problems over- shadowed what was a very healthy 2019 vartis AG’s rival product Sandostatin LAR remain strong with a growing specialty on the sales front for Ipsen. Turnover (octreotide), adding that “there has been care franchise and a sound financial struc- was up by 14.8% to €2.58bn, thanks to minimal impact to date and no impact ture including attractive cash flow genera- another strong performance for cancer on pricing so far [but] in 2020, we expect tion. We are committed to the disciplined drugs Somatuline (lanreotide), Cabom- more pricing pressure and additional execution of our strategy, delivering solid etyx (cabozantinib), Onivyde (irinote- launches across Europe.” mid-single digit growth in 2020.” can liposome injection) and Decapep- Somatuline itself could face generic As for the M&A strategy, he noted that tyl (triptorelin), as well as the dermal competition from 2021 in Europe but Le while the last two major deals – Clemen- filler and spasticity treatment Dysport Chatelier pointed out that a new injector- tia and BLU-782 – were in rare diseases, (abobotulinumtoxinA). friendly device continued to be well re- oncology and neuroscience remain areas Ipsen is reliant on Somatuline, ap- ceived by the NET patient community in of interest. “You could expect us to an- proved for neuroendocrine tumors Europe and elsewhere, giving it the edge nounce something in any of these three (NET) and its only billion euro drug. Le over Sandostatin LAR. therapeutic areas going forward.” (Also Chatelier noted that sales in Europe Le Chatelier said 2019 was an excellent see “Ipsen CBO: We Are Seeking Fresh Rare continued to grow in the double digits year and “despite the recent palovarotene Disease Buys” - Scrip, 25 Nov, 2019.) despite the first entry of generics of No- setback, the fundamentals of our business Published online 14 February 2020

Scrip Awards Winner 2019 Executive of the Year – For Large & Medium Cap Companies

Menelas Pangalos has been instrumental in turning AstraZeneca’s R&D around to a point where new medicines formed a big part in the company’s return Winner: Menelas Pangalos, Executive Vice- to growth in 2018. Pangalos has been a key driving President, R&D BioPharmaceuticals, AstraZeneca force behind a near fi ve fold increase in AstraZeneca’s R&D success rate since 2012 by instilling a culture shift that brought back scientifi c rigor to the forefront of the discovery process and implementing the company’s ‘5R Framework’.

This award is a refl ection of all the talented teams and individuals I am lucky enough to work with at AstraZeneca who tirelessly push the boundaries of science to generate innovative medicines. Menelas Pangalos, Executive Vice-President, R&D BioPharmaceuticals, AstraZeneca

JN3134 Scrip Awards 2019 Winner Advert G.indd 1 2020/02/11 12:49 scrip.pharmaintelligence.informa.com February 21, 2020 | Scrip | 7 DEALS

Pfizer Ends Pact With GlycoMimetics After SCD Failure

STEN STOVALL [email protected]

ix months after the failure of a Phase III study evaluating ri- News of Pfizer’s contract exit spooked investors and pulled vipansel for the treatment of vaso-occlusive crisis in sickle GlycoMimetics volatile share price down further, and ana- Scell disease (SCD) patients, Pfizer Inc. has told licensor Glyco- lysts predicted more declines would follow. The company Mimetics Inc. that it will tear up their 2011 agreement to develop does not have revenues and finances its operations through the drug. equity financings. GlycoMimetics in a filing with the US Securities and Exchange Analysts at PriceTarget Research in a note to investors on 5 Feb- Commission dated 5 February said Pfizer’s decision meant it ruary said, “GlycoMimetics is expected to be a major value eraser, would regain all rights to the respective assets and incur no ter- reflecting capital returns that are forecasted to fall short of the mination penalties related to the end of the partnership. Pfizer li- cost of capital.” PriceTarget Research has consequently assigned censed the pan-selectin inhibitor from GlycoMimetics in October its lowest rating to the company. 2011 in a $340m deal. (Also see “GlycoMimetics makes good with SCD is the most common inherited blood disorder in the US, af- $340m sickle cell drug deal with Pfizer” - Scrip, 12 Oct, 2011.) fecting about 100,000 people. In SCD, a gene mutation causes the The NASDAQ-listed biotech said in the SEC filing that it would production of abnormal, flattened, sickle-shaped red blood cells determine “what, if any, next steps” to take with respect to rivipan- that prevent blood flow and cause painful attacks, fatigue, organ sel, its lead drug candidate also known as GMI-1070, after review- damage and stroke. The pain episodes, known as vascular occlu- ing the Phase III data more completely. The collaboration officially sion or VOC, often require hospitalization. ends on 5 April. There are few options for SCD treatment, aside from regular Pfizer’s decision comes after its Phase III RESET clinical trial eval- blood transfusions. But late 2019 saw the launch of the first treat- uating rivipansel in SCD failed in August 2019 to meet its primary ments to address the underlying cause of the disease. and key secondary efficacy endpoints. Global Blood Therapeutics Inc.in late 2019 launched its first GlycoMimetics is a US-based clinical-stage biotech focused on commercial drug, Oxbryta (voxelotor), for the treatment of the discovery and development of novel glycomimetic drugs to SCD after securing FDA approval on 25 November, just ten address unmet medical needs. Aside from rivipansel which was days after Novartis AG’s Adakveo (crizanlizumab) was ap- developed for the treatment of vaso–occlusive crisis in sickle cell proved by the FDA. The two drugs work differently and carry disease, its chief assets comprise GMI–1271, an E–selectin antago- different indications, however. (Also see “Global Blood Thera- nist, which is being evaluated in a Phase I/II clinical trial as a po- peutics’ Oxbryta Approved Broadly For Sickle Cell Disease “ - tential treatment for acute myeloid leukemia and also in a Phase I Scrip, 25 Nov, 2019.) clinical trial for the treatment of multiple myeloma. The Maryland- And there are several gene therapies in the clinic that show based company is also developing a Phase I clinical trial drug can- promise. (Also see “Sickle Cell Disease Market Snapshot: “The Time didate, GMI–1359, a combined CXCR4 and E–selectin antagonist Has Come” “ - Scrip, 31 Oct, 2019.) One is LentiGlobin which US- that has received orphan drug designation and rare pediatric dis- based bluebird bio Inc. hopes can provide a potential cure for pa- ease designation from the US Food and Drug Administration for tients with sickle cell anemia via a single infusion by replacing the the treatment of osteosarcoma, a rare cancer affecting about 900 missing gene for anti-sickling hemoglobin, HbAT87Q. adolescents a year in the US. Published online 12 February 2020 It’s A Deal, Finally: Dr Reddy’s Snaps Up Wockhardt’s Branded Gx Business

ANJU GHANGURDE [email protected]

ockhardt Ltd. has divested parts A deal has long been in the making ner For Wockhardt Deal” - Generics Bulle- of its branded generics business and rumored suitors for the financially tin, 2 Dec, 2019.) Win India and certain internation- strained Wockhardt included private Dr Reddy’s will now acquire selected al territories to Dr. Reddy’s Laboratories equity players such as Apax Partners, divisions of Wockhardt’s branded gener- Ltd. for INR18.50bn ($260m), ending long- Blackstone, Carlyle and KKR, among ics business in India and a few other in- running speculation around an imminent others, at varying points in time. Indian ternational territories (namely Nepal, Sri deal that is expected to help the Mumbai- peer Cipla Ltd. was also thought to be Lanka, Bhutan and Maldives). A portfolio based firm pare debt and provide liquidity interested in certain assets of Wock- of 62 brands in multiple therapy areas in- for its remaining operations. hardt. (Also see “Cipla Rumored Frontrun- cluding respiratory, neurology, dermatol-

8 | Scrip | February 21, 2020 © Informa UK Ltd 2020 DEALS

schedule.” Gross debt-equity ratio as on 31 December 2019 stood at 0.95. Rating agencies have previously highlighted the significantly elevated refinancing risks for Wockhardt in the second half of fiscal year 2020 due to its weak liquidity position to service impending debt maturities. In August 2019, credit rating agency India Ratings and Research noted that in the absence of a “meaningful recovery” in operating performance, Wockhardt had witnessed continuous depletion in cash balances for servicing debt obligations. “Further- more, the agency expects weak free cash flow (FY19: negative INR1.30bn; FY18: INR3.32bn) generation in FY20,” India Ratings and Research said at the time. Wockhardt’s financial troubles came to a head when its debt pile mounted after it made a string of overseas acquisitions and ogy, gastroenterology, pain and vaccines, (Also see “Wockhardt Will Raise Funds then certain currency hedging bets went along with related sales and marketing With Restructuring” - Generics Bulletin, 3 awry in 2008. Wockhardt defaulted on re- teams and a manufacturing plant located Feb, 2020.) payments of its $110m foreign currency in Baddi, Himachal Pradesh, inclusive of all Habil Khorakiwala, Wockhardt’s founder convertible bonds in 2009. The company employees, will be transferred to Dr Red- chair, said that deal was in sync with the approached the corporate debt restruc- dy’s under the deal. firm’s strategic plan to shift from acute turing (CDR) cell through ICICI Bank Lim- The business undertaking is being therapeutic areas to more chronic therapy ited in April 2009 to restructure its debts transferred on a slump sale basis and the segments like diabetes, CNS, etc., and also through the CDR mechanism; it has since transaction is expected to close in the first to its niche antibiotic portfolio of NCEs exited the CDR process. quarter of the financial year 2020-21, the (new chemical entities). companies said. “The divestment will also ensure ad- ‘MORE AND MORE Dr Reddy’s has long hinted that it is equate liquidity to bring in robust growth WITH LESS AND LESS’ looking for acquisition opportunities, with in the chronic domestic branded business, Interestingly, reflecting on the financial a particular interest in emerging markets international operations, investments in setbacks in his recent autobiography, and India. (Also see “Dr Reddy’s Posts Sur- biosimilars for the US market, apart from chairman Habil Khorakiwala maintained prise Q3 Loss But Strong Operating Results the company’s global clinical trials of that what was heartening to note was Boost Shares” - Scrip, 28 Jan, 2020.) breakthrough anti-infectives and R&D ac- that “financial troubles were not a result of Dr Reddy’s co-chairman and managing tivities,” Khorakiwala said. wrong business decisions or faulty trans- director G V Prasad said that India was an Wockhardt had recently received actions but merely of faulty financial man- important market for the firm and the regulatory approval in India for two in- agement.” Wockhardt deal would help in “consider- digenously developed novel antibiotics, Wockhardt had then gone on to divest ably scaling up our domestic business.” essentially broad spectrum anti-MRSA some of its “best” assets and businesses “We believe the portfolio holds a lot of drugs, which it claims provide a far better (including animal healthcare and nutri- potential and will get an impetus under Dr safety profile than existing therapies. tion) to not just restore the firm’s financial Reddy’s,” Prasad said. health but also to take it on a “new growth DEBT PILE path,” chair Khorakiwala noted in the auto- ADEQUATE LIQUIDITY FOR The deal is expected to bring much need- biography, Odyssey of Courage. REMAINING OPERATIONS ed relief to Wockhardt, which has been “The philosophy was simple. Divest The deal has been struck at approxi- grappling with financial turbulence and from non-core business to strengthen mately 3.8 times of annualized revenue manufacturing compliance issues; the core business. I encapsulated this phi- of the business being sold by Wock- firm had a debt pile of INR33.62bn (includ- losophy in the motto: more and more hardt. The business being transferred ing secured, unsecured and preference with less and less,” Khorakiwala said in the reported revenue from operations of capital) for the fiscal year 2019. During the book. Clearly, he will now have to walk the INR3.77bn, which is about 15% of the nine months ended 31 December 2019 talk with what remains of Wockhardt. firm’s consolidated revenue for the the company repaid INR7.68bn towards nine months ended 31 December 2019. various long-term debt obligations “as per Published online 12 February 2020

scrip.pharmaintelligence.informa.com February 21, 2020 | Scrip | 9 DEALS

A Positive Outlook For Deals, With Election Year Caveats

JESSICA MERRILL [email protected]

“I do think low likelihood, but if it does happen, I think we are going to have a very different biotech valuation and a lot of un- happy investors,” Tokat said. If there is a radical political change and a big market correction, it could result in a deal-making reset as biotech will need time to adjust to lower valuations, he said.

FTC SCRUTINY ON DEALS Another lingering uncertainty is around the US Federal Trade he biopharma deals and financing environment is poised Commission and potential for increased scrutiny of deals. Tokat, to be healthy in 2020 despite the uncertainty around a who worked on the Spark/Roche merger that was hung up by an T US presidential election year, according to industry deal- FTC review, said that if the administration flips that will be yet an- making experts at the BIO CEO & Investor conference in New York other element of uncertainty. 10-11 February. “I think people will just be more careful,” he said, but industry is Advancements in science and strong business fundamentals already very aware of anti-competitive hurdles. Still, he said the should continue deal momentum, transaction advisers said dur- FTC’s lengthy review of the Spark deal was a surprise. ing a deals panel, but they did offer some caveats related to the “There was zero discussion in the board room around potential US election in November. risk of antitrust,” he said of that deal. Roche’s acquisition of Spark Financial adviser Eric Tokat of Centerview Partners, which ad- closed in December after a lengthy 10-month investigation into vised Spark Therapeutics Inc. in its merger with Roche last year, how Roche’s marketing of Hemlibra (emicizumab) for hemophilia said the industry is in the midst of a new era of deal-making that is A might have anti-competitive implications for the development being driven by science. of Spark’s gene therapies for hemophilia. “Historically, large pharma mergers were driven by efficiency, J.P. Morgan’s Ross, who advised Celgene Corp. on its merger cost-cutting, cash flow, diversification. In this era, the drivers are a with Bristol-Myers Squibb Co., said similarly Bristol’s move to di- bit different than we have seen in the past,” he said. The science- vest Celgene’s Otezla (apremilast) because of FTC scrutiny was driven nature of deal-making today should continue the momen- somewhat unexpected. “We did all the diligence. We evaluated tum behind smaller bolt-on deals in 2020, he predicted. “I do an- TYK2. It’s a really cool mechanism and asset, but to say all the air- ticipate more of the $1bn-$5bn or $1bn-$10bn deals.” time was taken in the room on Otezla, it wasn’t,” he said. Celgene However, as the election approaches later in the year, there ended up selling Otezla to Amgen Inc. for $13.4bn in August so could be some pullback, he said. But for now, “no one seems that it could get the merger with BMS completed faster. The FTC to have priced in any potential risk of an election year derail- had expressed concerns about overlap with one of Bristol’s late- ing anything.” stage pipeline assets, another inhibitor of tyrosine kinase 2 (TYK2). J.P. Morgan vice chairman Philip Ross agreed that “it’s not priced (Also see “Amgen’s $13.4bn Otezla Buy Helps Bristol/Celgene Merg- in,” but he speculated that more uncertainty could come later in er Close By Year-End” - Scrip, 26 Aug, 2019.) the year when the Democratic nominee is selected. Growing un- In terms of therapeutic areas of focus for deals, it is likely to re- certainty could impact the financing and IPO environment, with main centered around two core areas: oncology and rare disease, activity weighted to the first part of the year, he said. the panelists at BIO CEO said. That is partly driven by supply and “Everyone is kind of lining up right now to say there is less demand, Tokat said, because 50% of the companies with over uncertainty today,” Ross said. “There are a lot of people pushing $1bn in market cap are working in oncology and rare disease. pretty hard.” After the US Labor Day holiday, there will be a small “CNS continues to be interesting. The key theme is disease- window for raising capital before the focus will shift to the elec- modifying, curative, transformative,” he said. tion, he added. A similar sentiment was echoed by investors and Raymond James’ Gitkin said he is also seeing a lot of interest advisers at the J.P. Morgan Healthcare conference in January. (Also around big data, and around manufacturing technology, given see “Finance Watch: Expect A Busy First Half For 2020 IPOs” - Scrip, increased emphasis on gene therapy and cell therapy. (Also see 23 Jan, 2020.) “Gene Therapy Companies Among Top M&A Targets In 2020 “ - Raymond James managing director Andrew Gitkin said, “My Scrip, 2 Jan, 2020.) sense is that boards and executives are trying to manage around “Everyone talks about cell and gene therapy and that is the the election and trying to bring forward financings.” next generation,” said Geoff Meyerson, CEO and founder of Locust “What could derail the positive momentum for biotech this Walk, a transaction advisory firm. “But if you look at the deals that year, according to Tokat, is if the Democrats nominate a far-left are actually getting done, there are still an awful lot of small mol- progressive candidate like Elizabeth Warren or Bernie Sanders, ecule deals getting done and there are a lot of small molecules who could be more likely to advocate for sweeping drug-pricing getting approved by the FDA.” policy changes, and their potential election as president. Published online 11 February 2020

10 | Scrip | February 21, 2020 © Informa UK Ltd 2020 INTERVIEW

Sandoz Optimistic On Biosimilars As It Reprioritizes US Portfolio JESSICA MERRILL [email protected]

andoz International GMBH is shrink- close, with Novartis guiding most recently ing the size of its US footprint as it that it is on track to close in the first quar- Sprioritizes complex generics and bi- ter, pending regulatory approval. osimilars in the region and divests much Once the Aurobindo sale is finalized, of its small molecule generics portfolio to Sandoz’s US portfolio will be focused on India’s Aurobindo Pharma Ltd. US Presi- complex small molecules, biosimilars and dent Carol Lynch talked about the chang- sterile injectables. Global traditional ge- ing dynamics for the US business and the neric drugs will remain core to Sandoz, but Source: Sandoz Source: company’s positive outlook for biosimi- Lynch said the footprint will vary regionally. lars in an interview with Scrip at the BIO The US generics market has been a CEO & Investor conference in New York challenging one for the sector broadly, on 10 February. with fewer big blockbusters going off pat- “We are looking forward to closing the ent and consolidation among purchas- transaction and when that’s behind us, Sandoz US President Carol Lynch ers driving intense price pressure. (Also then obviously we’ve got a smaller business see “Generic Drug Sector Struggles Even in terms of the areas we are focusing on, Novartis, which owns Sandoz, an- As The Need For Cheaper Drugs Grows” - but also a smaller company as well to sup- nounced the deal with Aurobindo in 2018, Scrip, 10 Aug, 2018.) The US business has port that,” Lynch said. “We did most of that agreeing to divest its US dermatology and been dragging down Sandoz global per- restructuring last year, so we are in great generic US oral solids portfolio in a deal formance. In 2019, Sandoz revenues were shape to try to grow as we move forward.” worth around $1bn. That deal is still yet to TURN TO PAGE 12

Scrip Awards Winner 2019

MSD’s Innovation Award

Mogrify has developed a proprietary direct cellular conversion technology that allows the transformation of any human cell type into any other without having to go through a pluripotent stem cell or progenitor cell state. This technology opens up the opportunity to develop and scale up any autologous and allogeneic cell Winner: Mogrify’s direct cellular therapies across every therapeutic area, as well as to conversion technology create a new class of therapies: in vivo reprograming.

Our systematic approach to the discovery of novel cell conversions has the potential to transform cell therapy. Mogrify’s technology opens up the opportunity to develop and scale up any autologous and allogeneic cell therapies, as well as create a new class of therapies: in vivo reprograming and could therefore have a signifi cant impact on the treatment of degenerative conditions and cancers. We are proud to have our innovative platform and pioneering approach recognized by the judges. Dr. Darrin M Disley, OBE, CEO, Mogrify

JN3134 Scrip Awards 2019 Winner Advert I.indd 1 2020/02/11 12:46 scrip.pharmaintelligence.informa.com February 21, 2020 | Scrip | 11 INTERVIEW

CONTINUED FROM PAGE 11 to customers, we are a known entity,” lars Inflectra and Renflexis because of $2.5bn, representing 1% growth; exclud- she said. “We’ve got a great reputation Johnson & Johnsons’s defensive rebating ing the US, Sandoz revenues would have not only for the way we do business, but initiative for Remicade. grown 8%. For 2020, Sandoz sales are ex- also the fact that we’ve got good quality Lynch said payers appear to be trying pected to grow low-single digits, though reliability in terms of our supply chain, to figure out the logistics to resolve the Lynch declined to break out the expecta- and that’s really important when they rebate wall hurdle because their own tions for the US business. are switching patients.” long-term financial forecasts include big The US will represent about 15% of San- The company is also leveraging the savings from biosimilars, and that is moti- doz’ sales after the realignment, but with a commercial experience with Zarxio vating them to make changes. stronger growth trajectory that will begin to invest fewer resources behind the “The conversations actually are not as to materialize in 2021, she said. About 750 launch. This is a critical element of be- difficult as you might imagine in some positions within Sandoz were impacted ing successful in biosimilars, an area cases,” she said. “There is a lot of pressure by the deal, but many of those were in that needs to function differently from generally in the system that people need manufacturing or other technical roles the branded space to be profitable, to do the right thing. There is so much that will transfer to Aurobindo. Lynch explained. discussion ongoing, especially in an elec- “We have less resources behind peg- tion year, around the cost of health care ERELZI AND ZIEXTENZO ARE filgrastim at launch than we had with and here is a solution in biosimilars that is POTENTIAL GROWTH DRIVERS Zarxio because of course that path has available and not being used.” How 2020 unfolds for the US business already been carved now and we can Some policy initiatives have been depends on key catalysts. One of the big just follow our footsteps,” she said. “You put forward in the US to support bio- uncertainties revolves around the poten- have to be judicious about how you in- similar uptake that Sandoz supports. tial launch of a biosimilar version of Am- vest your money and be really clear at One Lynch highlighted, which appears gen’s Enbrel (etanercept). The biosimilar, the time exactly about why you are doing to have some bipartisan support, is a Erelzi (etancercept-szzs), was approved this and to what end.” Medicare change that would increase by the US Food and Drug Administration reimbursement for biosimilars from an but has not launched in the US because AN INFLECTION POINT FOR average sales price plus 6% to ASP plus of patent litigation. A US district court BIOSIMILARS 8% for five years. Another is a proposal ruled against Sandoz and in favor of Am- While the US biosimilar market has been by the Centers for Medicare and Med- gen last year, but Sandoz is appealing slower to get off the ground than many icaid Services that would allow plans to the decision, with an appeals court hear- players had anticipated, Lynch said bio- add a second preferred specialty drug ing slated to begin on 4 March. Sandoz similars appear to be turning a corner formulary tier with lower cost sharing hopes to be the first to market in the US commercially. starting in 2021 to encourage uptake. with a biosimilar version of Enbrel. “I think we are at an inflection point (Also see “Medicare Part D Plans May Add In the meantime, the company is fo- now with the biosimilars in the US,” ‘Preferred’ Specialty Tiers To Lower Costs” - cused on the launch of Ziextenzo (peg- Lynch said. The sheer number of new Pink Sheet, 6 Feb, 2020.) filgrastim-bmez), a biosimilar of Am- biosimilars hitting the market is helping gen’s Neulasta, which was approved by to fuel momentum as payers and phy- WHAT COMES NEXT? the FDA in November. (Also see “Sandoz sicians gain experience with the prod- Another area Sandoz is looking to make Is Satisfied With US Pegfilgrastim Start” - ucts, she said. Several new biosimilars a big entry into is insulins. The company Generics Bulletin, 28 Nov, 2019.) It is the of drugs like Herceptin (trastazumab), announced an agreement in December third biosimilar of Neulasta on the US Rituxan (rituximab) and Avastin (bevaci- 2018 with the Chinese insulin supplier market, so the launch represents an in- zumab) have recently launched. Gan & Lee to bring a portfolio of biosimi- teresting test case for how a multi-bio- “It just means that everyone is gaining lar insulins to market in the US, includ- similar market might unfold. in confidence, whether it is from the payer ing insulin glargine, insulin lispro and Sandoz is hoping to leverage its position side to the buy-and-bill side with how to insulin aspart. in the market with Zarxio (filgrastim-sndz), make it work in your practice to the pa- “This is a space we want to play in,” a short-acting product and the first bio- tients getting familiar with the products,” Lynch said, pointing to the high need for similar to launch in the US, in 2015. With she said. cheaper alternatives. The company has its longer history in the market, Zarxio has Lynch also said payers are starting to not disclosed a timeline for getting bio- been one of the most successful biosimilar broaden the market access to biosimilars. similar insulins to market. launches commercially in the US, having One of the big challenges for biosimilars The FDA is in the midst of reclassifying achieved a number one market share by has been going up against the high vol- insulins as biologics, along with some oth- volume three years after launch, accord- umes, and thus high rebates, that come er protein products that were originally ing to Sandoz. with long-standing mature brands. For approved as drugs, which will open up Lynch said Ziextenzo has already example, Pfizer and Merck & Co. have the biosimilars pathway. (Also see “Count- made some notable inroads when it struggled to make inroads with their re- down To Transition: US FDA Says 91 Drugs comes to market access. “When we come spective Remicade (infliximab) biosimi- Will Become Biologics In March 2020” - Pink

12 | Scrip | February 21, 2020 © Informa UK Ltd 2020 INTERVIEW/RESEARCH & DEVELOPMENT

Sheet, 27 Sep, 2019.) The transition, which has been in the works for years since it was Novartis And UK Launch required under the Biologics Price Compe- tition and Innovation Act (BPCIA) in 2009, will finally go into effect on the 20 March. Partnership On Groundbreaking The change could have implications for some insulin products that have already Cardiovascular Prevention Trial been filed or approved by the FDA, and ANDREW MCCONAGHIE [email protected] Lynch said she is watching closely to see if the agency reclassifies any of those prod- new partnership between Novartis AG and the UK government has been ucts as interchangeable biosimilars. launched, to tap into the country’s expertise in clinical trials and healthcare data, Another area Sandoz may consider Aand to prove the value of Novartis’ next blockbuster-in-waiting, cardiovascular moving into via a partnership or licensing treatment inclisiran. arrangement is in the oncology space be- The Swiss big pharma company acquired the RNA interfering therapy along with its yond supportive care products like Zarxio developer The Medicines Company for $9.7bn last year, and is betting big on its potential and Ziextenzo, where Lynch said Sandoz to transform the treatment of cardiovascular disease. has a portfolio gap it is looking to fill. Inclisiran has produced some impressive results in Phase III trials, showing it cut “bad” Sandoz markets versions of Rituxan LDL cholesterol in patients with atherosclerosis, and is administered by injection just once outside the US but backed out of a plan to every six months. commercialize the cancer drug in the US in November 2018 after the FDA requested additional information on the application. The company said it believed the market- place needs would be satisfied before it could generate the necessary data. (Also see “Novartis Gives Up On Rituxan Biosimi- lar For US Market” - Scrip, 5 Nov, 2018.) More recently, the company announced in February that it will discontinue devel- opment of an Advair (fluticasone/sal- meterol) generic, a small molecule drug combination that is considered complex because it is delivered through a device to the lungs. Sandoz had been working on the product for nearly 10 years but so far only one generic version of GlaxoSmith- Kline’s Advair has reached the market, The opening of Novartis UK’s new headquarters in White City, London. L-R: Vas Narasimhan, Mylan’s Wixela Inhub. (Also see “Mylan Novartis CEO; Mari Scheiffele general manager UK & Ireland, Novartis Oncology; health Launches Advair Generic Wixela At 70% secretary Matt Hancock; Haseeb Ahmad, Managing Director, UK, Ireland and Nordics, Novartis Discount To GSK’s Branded Drug List Price” Pharmaceuticals and country president, Novartis UK. - Scrip, 12 Feb, 2019.) Novartis filed with the US Food and Drug Administration in December with approval Lynch said Sandoz is still interested in expected later this year (with approval in Europe to follow that) but its biggest test will be the respiratory therapeutic area because cardiovascular disease prevention trial (CVOT) trials, which must prove compelling if the of the high bar to market and the big need drug is to be the heart disease game-changer Novartis thinks it can be. in asthma and chronic obstructive pulmo- Meanwhile the UK, newly departed from the European Union, is keen to promote itself nary disease for affordable treatments. as a global destination for biopharma investment, and struck the deal with Novartis last “This is what we like, things that are re- year to prove its credentials. ally hard to do, because it means that few Novartis is planning to make the UK its global center for a primary prevention study people can do it,” she said. “We will have with inclisiran, building on the methods used to recruit 500,000 patients into the UK Bio- some hiccups along the way, but we will bank and to conduct ORION-4, the ongoing study for patients who have already had a have successes.” Working in biosimilars heart attack or stroke. means acknowledging the higher costs The ORION-4 study will see the UK as the global trial co-ordinator, with Novartis work- and risks in development and mitigating ing in partnership with the Nuffield Department of Population Health at Oxford Univer- those risks as much as possible, she said. sity, the NHS and the National Institute for Health Research (NIHR) as part of this program. “It’s part and parcel with the business. You The innovative collaboration between the pharma company and the country’s national don’t win on everything.” health system (NHS) also pioneers the use of a world-first, population health model to a Published online 14 February 2020 large at-risk patient population with atherosclerotic cardiovascular disease.

scrip.pharmaintelligence.informa.com February 21, 2020 | Scrip | 13 RESEARCH & DEVELOPMENT

The plan is that once the drug gains marketing approval, and presuming a Strong Early Promise For Takeda positive recommendation by England’s cost watchdog the National Institute for Health and Care Excellence (NICE), an am- ‘Off The Shelf’ CAR-NK Therapy bitious proposed population-level agree- IAN HAYDOCK [email protected] ment would commence. This would provide access to treatment he outcomes of a small Phase I/IIa tion of response was confirmed out to for secondary prevention in patients with trial with a novel type of chimeric one-year post-infusion, and five of the atherosclerotic cardiovascular disease T antigen receptor (CAR) therapy are responding patients received discre- (ASCVD) as part of a program for those generating excitement from investigators tionary post-remission therapy after the not reaching their LDL-C target on statins and licensee Takeda Pharmaceutical Co. 30-day assessment. alone – something which the partners say Ltd., given the potential practical benefits Any side-effects were seen to be re- could help to significantly cut deaths due over existing CAR-T treatments. lated mainly to the prior lympho-de- to cardiovascular disease. The major Japanese firm last No- pleting therapy and no patients expe- The plan was hatched last year by the vember entered in an agreement with rienced cytokine release syndrome (a UK’s life science leader Sir John Bell with the University of Texas’s MD Anderson well-known risk with standard CAR-T Novartis CEO Vas Narasimhan, and first Cancer Center to develop cord blood- therapy that can require specialist care), unveiled at the J.P. Morgan healthcare derived, CAR-directed natural killer (NK) neurotoxicity or graft-versus-host dis- conference in San Francisco in January. cell therapies “armored” with interleu- ease, and there was no increase in in- They came together again on 11 Febru- kin-15, for B-cell malignancies and other flammatory cytokines. ary in London to launch the project, with cancers. (Also see “Asia Deal Watch: Am- MD Anderson’s lead developer of the Novartis also announcing investment in brx, NovoCodex Partner On Second ADC CAR-NK platform, Dr Katy Rezvani, said its digital health ‘Biome’ project, and with Candidate, For CD70-Positive Cancers” - investigators were “encouraged by the UK health secretary Matt Hancock on Scrip, 6 Nov, 2019.) results” and that further larger trials are hand to officially open the company’s new Results from an initial 11-patient trial now being planned. At present, Takeda UK headquarters in West London. in relapsed/refractory CD19-positive and the program’s partners have said “As a company working to improve and non-Hodgkin’s lymphoma (six patients) TAK-007 will move into multi-center piv- extend human life, we’re optimistic about and chronic lymphocytic leukemia (CLL; otal studies in 2021. today’s announcement and what this could five patients) have just been published mean in the ongoing battle against car- in the New England Journal of Medicine MULTIPLE PRACTICAL BENEFITS diovascular disease—the world’s leading (2020; 382:545-553), and build on the Promising efficacy and safety aside, the cause of death and disability. We see the company’s optimism around the thera- CAR-NK approach has a number of other UK, with its deep commitment to life sci- py (designated TAK-007) at its US inves- important potential benefits over stan- ences, as an attractive place to reimagine tor day last year. dard CAR-Ts. medicine,” commented Vas Narasimhan. As they are isolated from cord blood The Novartis CEO says the potential HIGH RESPONSE RATE from healthy donors, the allogeneic NK of the NHS tie-up is considerable, with Patients in the trial had received three to cells can be prepared and stored in ad- around 1.8 million patients in the UK who 11 lines of prior therapy and nine were vance of therapy, independent of the re- would be eligible from a secondary pre- given a form of the CAR-NK therapy par- ceiving patient and thus allowing “off the vention standpoint from launch. tially matched to individual HLA (human shelf” use. The real test will be the results of the leukocyte antigen) type. There was no The lack of a need for HLA matching outcomes study in 2024. If this proves such matching for the other two, as al- avoids the requirement in CAR-T therapies the efficacy of inclisiran, Novartis believes lowed by protocol. to make a “tailored” product for each indi- there is a potential to further expand be- The single infusion involved three doses vidual patient. yond this initial population. (1x105­, 1x106 or 1x107 cells per kg) after This involves the more complex and But the partnership will not just be a lympho-depleting therapy (fludarabine time-consuming extraction and ge- test of Novartis’s medicine, but also of the and cyclophosphamide). netic modification of a patient’s own T UK’s ability to create a modern healthcare Eight patients (73%) responded, of cells needed in existing CAR-T therapy, system and a pharma-friendly environ- which seven (four with lymphoma and which can take weeks of manufacturing ment post Brexit. three with CLL) had a complete response, processes. Published online 14 February 2020 with no evidence of disease at a median Novartis AG’s Kymriah (tisagenlecleu- follow-up of 13.8 months. One CLL patient cel) and Gilead Sciences Inc./Kite Pharma had remission of the Richter’s transforma- Inc.’s Yescarta (axicabtagene ciloleucel) are @PharmaScrip tion component but persistent disease. already approved in a number of markets Responses in all the eight patients as anti-CD19 CAR-T therapies for various were evident within a month and dura- lymphomas.

14 | Scrip | February 21, 2020 © Informa UK Ltd 2020 RESEARCH & DEVELOPMENT

“This may pave the way for a truly “may pave the way for a truly off-the-shelf product that could increase treatment accessibility for many more patients,” they off-the-shelf product.” said in the NEJM article.

UP TO FOUR CANDIDATES Under its deal with MD Anderson, Takeda has the exclusive rights In the reported trial, the NK cells were transduced with a ret- to develop and commercialize up to four CAR-NK programs, in- roviral vector expressing genes encoding for the anti-CD19 CAR, cluding the CD19 therapy and B-cell maturation antigen (BCMA)- “armored” with immunocytokine interleukin-15 (which improves targeted CAR NK cells. proliferation and survival of the CAR-NK cells) and used inducible The CD19 (TAK-007) program has already been designated as caspase 9 as a “safety switch” to trigger CAR-NK cell apoptosis with the company’s lead cell therapy candidate in oncology, R&D head rimiducid in the event of serious side effects. Andy Plump has said. In addition, “Due to the nature of the [CAR-NK] therapy, The Japanese firm will be responsible for development, manu- we’ve actually be able to administer it in an outpatient setting,” facturing and commercialization, and MD Anderson is eligible for Rezvani said. Potential provision of the new CAR-NK immuno- undisclosed milestones and tiered sales royalties in addition to therapy in this or a community care setting would simplify the upfront fee. considerably the hospital-based process required for current The newly reported trial was funded by The Leukemia & Lym- CAR-T therapies. phoma Society, MD Anderson’s Lymphoma Moon Shot program The researchers said they showed that more than 100 dos- and the US National Institutes of Health. es of CAR-NK cells can be produced from a single cord blood unit. This along with the minimal HLA matching requirements Published online 10 February 2020 Another Alzheimer’s Setback As Roche And Lilly Drugs Fail

KEVIN GROGAN [email protected]

he theory that beta-amyloid (Abe- Amyloid hypothesis under ta) is the main cause of Alzheimer’s the microscope again T has taken yet another bashing af- ter a closely watched trial evaluating Eli Lilly & Co.’s solanezumab and Roche’s gan- tenerumab in people in the early stages of a rare, inherited form of the disease yielded disappointing results. The Phase II/III Dominantly Inherited Alzheimer Network Trials Unit (DIAN-TU) study run by Washington University eval- uated the two drugs, which have both suffered failures in a variety of disease set- tings, in 194 people with autosomal domi- nant Alzheimer’s disease who come from families that carry a genetic mutation analysis indicated that neither drug met He argued that the trial’s innovative de- that causes early-onset Alzheimer’s de- the primary outcome of the study, the sign, developed with a consortium of mentia. Such people experience declines slowing of cognitive decline as mea- pharmaceutical companies, the National in memory and thinking skills starting in sured by “multiple tests of thinking and Institutes of Health, regulatory agencies their 50s, 40s or even 30s and researchers memory.” Details of DIAN-TU will be and academic leaders, yielded new insight noted that people who inherit the muta- presented in April at the Advances in which can inform future research into the tion were “all but guaranteed to develop Alzheimer’s and Parkinson’s Therapies disease, including the more common symptoms at about the same age their meeting in Vienna, Austria. form that typically strikes after age 65. parents did.” “Although the drugs we evaluated were The results of the trial, which was The participants were randomly as- not successful, the trial will move us for- conducted at 24 sites in Australia, signed to receive solanezumab, gan- ward in understanding Alzheimer’s,” said Canada, France, Spain, the UK and the tenerumab or placebo and the initial principal investigator Randall Bateman. US, has not come as a great surprise,

scrip.pharmaintelligence.informa.com February 21, 2020 | Scrip | 15 RESEARCH & DEVELOPMENT

given that the Alzheimer’s space is lit- extension studies have lent support to Evercore ISI analyst Umer Raffat does tered with failures, not least for the this thesis.” (Also see “Open-Label Exten- not think there will be any effect. He said two anti-Abeta antibodies used in the sions The Key To Gantenerumab Success, in an investor note on 10 February that study. Investors had pretty much writ- Stresses Roche” - Scrip, 26 Apr, 2019.) the readout “does not change our opinion ten off the chances for both subcutane- As for Lilly, the firm said that it would of Biogen’s aducanumab approval odds,” ous gantenerumab and intravenous so- not pursue a regulatory submission for adding that while the aducanumab data lanezumab but interest in the amyloid solanezumab for autosomal dominant Al- “has major issues…I do think FDA approv- hypothesis was renewed at the end of zheimer’s, but stressed that the outcome al is likely.” last year when Biogen Inc. announced a of DIAN-TU would not impact the ongo- William Blair analyst Matt Phipps is- stunning about-face to pursue US Food ing solanezumab Anti-Amyloid Treatment sued a note saying that while the DI- and Drug Administration approval for in Asymptomatic Alzheimer’s (A4) study. AN-TU results are discouraging for the its previously discontinued Abeta drug That trial is in older individuals who have amyloid hypothesis, “at this point we be- aducanumab. (Also see “An About Face evidence of amyloid in their brains, but do lieve the effect on aducanumab will be As Biogen Says It Will File Aducanumab In not show symptoms of memory impair- minimal given the regulatory review will Alzheimer’s “ - Scrip, 22 Oct, 2019.) ment. (Also see “Lilly To Bring Forward Al- come down to the FDA’s interpretation Despite the DIAN-TU miss, Roche re- zheimer’s Readout “ - Scrip, 19 Dec, 2019.) of the subgroup analysis from the EN- mains bullish about the prospects for its Analysts at Mizuho Securities noted that GAGE and EMERGE trials and any politi- drug. Chief medical officer Levi Garraway while Alzheimer’s had been “an extremely cal pressures that come into play during argued that given the “experimental na- difficult disease for successful drug devel- the review process.” ture” of the study, “we are unable to draw opment and we do not have any revenues He added, “Biogen will argue adu- firm conclusions about the impact of for solanezumab in our Lilly model, we be- canumab has shown a different clini- gantenerumab in autosomal-dominant lieve some investors had been cautiously cal profile than solanezumab and gan- Alzheimer’s,” which only accounts for less optimistic on a positive outcome.” How- tenerumab across all studies to date, and than 1% of all cases of the disease. ever, “we were not optimistic on this trial therefore no comparisons can be made. He added that “this outcome does not given it was a relatively small trial and in a We do believe solanezumab has a much reduce our confidence in the ongoing more severe form of the disease.” different binding profile and mecha- Phase III GRADUATE clinical program.” That In addition, the broker also pointed nism of action, and therefore has little consists of two large global Phase III stud- out the higher dose was not imple- read-through to aducanumab, but gan- ies in the broader population of people mented until mid-late 2017, after an ear- tenerumab, if dosed properly, has poten- with disease that is not directly caused lier solanezumab trial failed, “and it turns tial to result in similar target engagement by gene mutations, sporadic Alzheimer’s, out only about 25% of the dosing in the in the cerebrospinal fluid.” and they are due to read out in 2022. trial was done with the higher dose.” Over at Baird, analyst Brian Skorney Roche noted that every person who Mizuho said that while the news was a pulled no punches. In a 10 February note, received gantenerumab in DIAN-TU-001 disappointment, “we are encouraged by he said, “We now need more than two started on a lower dose and only started the multi-pronged approach Lilly is tak- hands to count the number of times a titrating to a five-fold higher target dose ing in Alzheimer’s,” citing donanemab, a beta-amyloid antibody has failed to slow halfway through the trial. However, the humanized IgG1 monoclonal antibody Alzheimer’s progression in Phase III, as GRADUATE studies “have been designed targeting N3pG-amyloid beta for which the DIAN-TU study failed to benefit from from the outset to maximize exposure to Phase II data are expected late 2020 or a more homogeneous patient population gantenerumab, bringing all patients to early 2021, and zagotenemab a tau an- despite the administration of much higher target dose with minimal or no dose inter- tibody, Phase II results for which should than previously tested doses over longer ruption within the study period,” the com- read out next year. durations than ever explored.” He noted pany added. that the EMERGE trial “is the only result Analysts at Jefferies issued a note in 10 ANY IMPACT ON BIOGEN’S with an argument of positivity and we February saying that while DIAN-TU was a ADUCANUMAB FILING? would dispute it is even that.” small trial “and initially used perhaps sub- Now the focus will return to Biogen and The negative results seen for solaneu- optimal doses,” the trial “again suggests partner Eisai Co. Ltd.’s aducanumab. Ob- zumab and gantenerumab, as well as the ongoing gantenerumab Phase III stud- servers will be keen to see whether the Roche and AC Immune SA’s crenezumab ies are high risk.” They added that although DIAN-TU blow to the amyloid hypothesis and Pfizer Inc. and Johnson & John- the Scarlet RoAD Phase III trial evaluating will have much of an influence on how the son’s bapineuzumab nearly eight years subcutaneous gantenerumab in prodro- FDA responds to the submission of the ago “are just more reason to believe mal Alzheimer’s was stopped early for conflicting clinical trial data on the contro- EMERGE’s faux-positivity is just random futility, “subsequent exploratory analyses versial drug that is set to land on the agen- noise,” Skorney concluded. (Also see “AC suggested a dose-dependent effect on cy’s desk in the near future. (Also see “Bio- Immune/Roche Drop Crenezumab After clinical and biomarker endpoints, indicat- gen Is Putting Its Money Where Its Mouth Phase III CREAD Alzheimer’s Failure” - ing that higher dosing could be required Is – Behind The Launch Of Aducanumab “ Scrip, 30 Jan, 2019.) for clinical efficacy. Data from open-label - Scrip, 30 Jan, 2020.) Published online 10 February 2020

16 | Scrip | February 21, 2020 © Informa UK Ltd 2020 RESEARCH & DEVELOPMENT

Fennec Nears Market For Chemo-Induced Hearing Loss In Children KEVIN GROGAN [email protected]

ennec Pharmaceuticals Inc. has completed submissions CEO Rosty Raykov said the completion of these regulatory on both sides of the Atlantic for Pedmark, a drug to pre- submissions to the FDA and EMA (which has approved a pe- Fvent hearing loss in pediatric cancer patients caused by diatric investigation plan) “are the culmination of many years chemotherapy. of hard work.” He added that “we are well underway with com- The Research Triangle Park, NC-based group has completed its mercialization readiness activities to support the potential rolling submission to the US Food and Drug Administration and a launch of Pedmark and our transition to becoming a commer- filing with the European Medicines Agency for Pedmark, a unique cial-stage organization.” formulation of sodium thiosulfate, to counter the ototoxicity in- News of the submissions has gone down well with the invest- duced by cisplatin chemotherapy in cancer patients up to the age ment community. Analysts at Wedbush issued a note on 11 Feb- of 18. Cisplatin is a very effective treatment but around two thirds ruary saying, “We would expect a quick turnaround to NDA ac- of children treated with the drug are left with some hearing loss; ceptance [as the] FDA was only waiting on manufacturing and while cisplatin is rapidly removed from the body following treat- stability testing data.” ment, it is retained in and damages the cochlea. They added that “we fully expect approval around August, and an initial, limited-scale commercial launch early Septem- Many children on ber.” Wedbush believes that the key catalyst for Fennec remains platinum-based the eventual label for Pedmark “and whether it is broad (includ- chemo need hearing ing all localized pediatric cancers treated with cisplatin-based aids after chemotherapy) or narrow (only a subset of tumors treated in the clinical trials).” Analysts at Laidlaw & Co described Pedmark as “a highly de-risked asset on the regulatory side. This, coupled with the significant unmet medical need and the lack of competition, comprise three pillars of its key value proposition.” In the US and Europe, it is estimated annually that over 10,000 children may receive platinum-based chemo and many of them require lifelong hearing aids; only “expensive, technically difficult and sub-optimal cochlear implants have been shown to provide some benefit,” Fennec noted. For Europe, Laidlaw estimated the potential approval and prod- uct launch could occur around the second half of 2021 depending on how discussions for potential partnering are going. In the US, The submissions are based on two Phase III trials. In the most Fennec will launch Pedmark by itself, “given the small number of recent, the SIOPEL-6 study published in the New England Journal reps needed and relatively concentrated target physicians.” of Medicine in June 2018, 109 children with hepatoblastoma were In September, Fennec appointed Shubh Goel as chief com- treated with cisplatin and then, six hours later, with either Ped- mercial officer, saying she was “a proven leader with nearly 20 mark or placebo. Of the children treated with cisplatin alone, 63% years of global commercial experience successfully building suffered hearing loss, compared with 33% of children given the and executing the launch of several oncology products.” She combination, a 48% risk reduction. joined from Odonate Therapeutics LLC and previously served Armed with data from an earlier 2016 trial, the Children Oncol- in multiple leadership positions at Celgene Corp., where she ogy Group ACCL0431 study, and following discussions with the oversaw the US launch of Abraxane (nab-paclitaxel) in pan- FDA in December 2018, Fennec initiated a rolling new drug ap- creatic cancer. plication. However the US submission hit a bump in March 2019 The timing of the submission in the US has been key for Fen- when the company announced that its filings were delayed due nec’s financial future. In February it entered into an agreement to bringing a new substance manufacturer onboard. with Bridge Bank which agreed to loan $12.5m to the company Fennec believes its application should now satisfy the FDA but the loan was contingent on Pedmark getting FDA approval by which has a 60-day review period to decide whether the Pedmark no later than 30 September this year. NDA is acceptable for filing. It has already been granted orphan Getting priority review from the agency should mean that drug, breakthrough therapy and fast track designations from the Fennec will meet that deadline. The firm ended the third quar- agency so is expected to get a priority review and a prescription ter of 2019 with $15.2m in cash and no debt. drug user fee act (PDUFA) action date in the third quarter of 2020. Published online 12 February 2020

scrip.pharmaintelligence.informa.com February 21, 2020 | Scrip | 17 RESEARCH & DEVELOPMENT/CORONAVIRUS OUTBREAK

Keytruda Closing In On First-Line Metastatic Triple-Negative Breast Cancer JOHN DAVIS [email protected]

closely watched clinical study in- CLINICALLY MEANINGFUL volving Merck & Co. Inc.’s anti-PD-1 In KEYNOTE-355, pembrolizumab was Atherapy Keytruda (pembrolizum- Pembrolizumab has used in combination with either nab-pa- ab) has reported promising results at an clitaxel, paclitaxel or gemcitabine/carbo- interim analysis, in combination with che- considerable ground to platin, and was associated with a statisti- motherapy as a first-line therapy for meta- make up with Roche’s cally significant and clinically meaningful static triple-negative breast cancer. improvement in PFS compared with che- The pivotal Phase III KEYNOTE-355 study check­point inhibitor, motherapy alone, Merck reported, al- met one of its dual primary endpoints, im- though the company did not go into fur- proving progression-free survival in meta- Tecentriq. ther details. static triple-negative breast cancer in pa- Following an open-label part one of tients whose tumors express PD-L1 with a the study evaluating tolerability in 30 pa- combined positive score (CPS) of >10. tients, part two of KEYNOTE-355 enrolled The results follow positive early data 847 patients who received either pembro- from KEYNOTE-522 involving the use of lizumab 200mg iv, or placebo, on day one pembrolizumab in addition to chemother- of each 21-day cycle of therapy with either apy in the neoadjuvant/adjuvant setting in nab-paclitaxel, paclitaxel, or gemcitabine/ early triple-negative breast cancer patients carboplatin. Triple-negative breast cancer reported last year. However, also reporting tumors test negative for estrogen recep- last year was a negative study of pembro- tors, progesterone receptors and human lizumab when used as a second- or third- epidermal growth factor-2 (HER2), and the line monotherapy in such patients. tive breast cancer, based on the results of condition is diagnosed in around 15-20% Pembrolizumab has considerable the IMpassion130 study. of breast cancer patients. ground to make up with Roche’s check- Nonetheless, the results go some way The study will now continue to evaluate point inhibitor, Tecentriq (atezolizumab), to dispel the disappointment earlier this the other dual primary endpoint, overall which was approved last year in the US year from mixed top-line final Phase III re- survival. and EU for use in combination with nab- sults from KEYNOTE-604 in small cell lung paclitaxel for the treatment of triple-nega- cancer (SCLC). Published online 13 February 2020 Global Catastrophe Or Passing Nuisance? Pharma’s Coronavirus Views

IAN HAYDOCK [email protected]

he main issue with the ongoing hit business were thus completely ab- riding message though, it is that the fo- coronavirus outbreak is that even sent at many company results briefings, cus is on adapting to ensure business as T global health experts remain un- where the issue was also not a major fo- usual as far as possible, while planning clear on how things are going to play out cus of analysts in Q&A sessions. Of those for contingencies. in terms of disease spread and severity. firms that did face questioning or which With the help of Scrip global edito- Given all the unknowns over whether the chose to address the issue, the respons- rial team members Kevin Grogan, Sten now officially named SARS-CoV-2 virus es were mixed. Stovall, Andrew McConaghie, Vibha Ravi, will go fully global or fizzle out, pharma Anju Ghangurde, Alex Shimmings and companies are also having a hard time CHINESE EXPOSURE Jung Won Shin, who have scoured brief- predicting the precise future impact. Perhaps surprisingly, the most vocal were ings and spoken directly to companies, Specific comments on how the out- the European majors, some of which now here is a collation of corporate corona- break, originating from the Chinese have substantial business exposure in virus sentiment as the COVID-19 disease city of Wuhan, are affecting and may the Chinese market. If there is one over- spread continues to evolve.

18 | Scrip | February 21, 2020 © Informa UK Ltd 2020 CORONAVIRUS OUTBREAK

EUROPEAN FIRMS STRESS “Right now the impact is on it. In terms of manufacturing and supply CONTINUITY chain, we right now feel comfortable that UK-based AstraZeneca PLC, which now re- mainly our sales people we can continue doing that again as this ex- lies on the China market for around a fifth tra week of vacation [after Lunar New Year] of its global sales, said in its 14 February cannot easily visit the is over. So for the time being, it’s business as call that it still expects to outperform in usual, but we’re watching it very carefully.” emerging markets including China, de- hospitals” – Leon Wang spite the impact of the outbreak. API SUPPLIES WORRY Ruud Dobber, executive vice-president INDIAN FIRMS of the Biopharmaceuticals Business, said Given that two-thirds by value of its total that despite the impact of the coronavirus [global] revenue to increase by high-single API imports come from China, the Indian in China, “we generally anticipate to con- digit to a low-double digit percentage.” pharma industry is facing a difficult situ- tinue outperforming the long-term trends Sanofi CEO Paul Hudson’s comments to ation if China’s factories remain below with every sales growth in the emerging investors on 6 February seemed applica- full production for several months, de- markets to be as high as low double-digit ble to companies in general. He said “It is spite having two to three months of in- percentage per year.” He pointed in par- difficult to predict what will happen over ventory on hand. ticular to the “resilience of the [company’s] the next few weeks and I think it would be Investors quizzed managements of leadership oncology” in China. a bit naïve of us to say ‘no disruption’ or try several leading Indian firms on the wor- Commenting more specifically on Chi- and put a percentage around it. rying and long-standing dependence for na, Leon Wang, EVP for Emerging Markets “We feel well placed, we don’t see busi- APIs/intermediates on China in the wake including China, added: “I think the situa- ness risk, but of course as it evolves, we’re of the SARS-CoV-2 outbreak. Most front- tion outside Wuhan, Hubei province is im- just going to have to recalibrate that. I line Indian firms, which appear to have proving. I think we cannot speculate how don’t think any company has a choice on stocks to tide over the supply crunch for long would this epidemic last. I think it will that. So we’ll update as we go along.” some time, are keeping close watch on still be the next few months.” On 6 February, Lundbeck Inc.’s chief the evolving situation. As for the impact on the company, his financial officer Anders Götzsche said: Cipla Ltd.’s global CEO and managing view was that, “Right now, the impact is “Following the coronavirus outbreak, director, Umang Vohra, said on the firm’s mainly our sales people cannot easily visit Lundbeck sees increased uncertainty on Q3 earnings call on 5 February that a lot of the hospitals and access the health care product distribution and sales in China for the pharma value chain is linked to China professionals because doctors, especially 2020. China is Lundbeck’s second biggest not just for the company, but for the entire some of the specialty, are focusing on market and the potential impact is diffi- pharmaceutical industry. fighting the epidemic. So I think all these cult to quantify at this point of time.” “A lot of us in the pharmaceutical indus- disruptions are quite temporary. Revenues are around DKK1bn ($147m) try have some stock cover available. But I “And patients now really, instead of vis- a year in China, he noted. “We have seen think if this coronavirus thing continues iting hospitals, they go to the pharmacy to no impact so far, but it’s also fair to say that for more than a month or 45 days, that will refill prescriptions, and also they go online our employees, we take their safety first begin to create a huge amount of issues to consult their doctors and also to get and therefore they’re working from home for the pharma sector, for those supplies their prescription refills.” like many other companies.” which are dependent on China,” Vohra Given recent positive developments for CEO Deborah Dunsire added that many said. But he added that “not everything” is the company in terms of reimbursement Lundbeck brands “are promotionally sen- dependent on China. inclusion, approvals and its strength in sitive and when our sales force is not in the Others also underscored the overall rural community hospitals, digital pro- field, we believe it will have some impact.” China link. Sun Pharmaceutical Industries motion and online pharmacy collabora- Another Denmark-based company, Ltd.’s founder and managing director Dilip tion, the China subsidiary is aiming to Novo Nordisk AS, had executive vice- Shanghvi referred to the firm’s high depen- minimize business disruption while en- president and head of International dence on the country for intermediates for suring employee safety. “So even during Operations Mike Doustdar say during its API business. “In our formulation busi- the epidemic…the logistics side, supply a 5 February Q4 analyst call: “The main ness, our dependence on China would be chain side, manufacturing, the head of- priority is to protect the health of our relatively lower. But to some extent many fice people and a lot of functions are re- employees and the public. Until Monday of the raw materials, which we may be ally working starting from the beginning [10 February] we are working from home buying in India may have dependence on of last week [6 February],” Wang noted. and not visiting the physicians and the the Chinese intermediate. So, we think we The UK-based firm’s China sales for the hospitals. Hospitals are geared on try- are buying from India, but there is a China year surged by 29% to $4.88bn, accounting ing to solve the coronavirus and chronic link,” Shanghvi said on Sun’s third-quarter for 21% of the group total. CEO Pascal Sori- disease treatment has become priority earnings call on 6 February. ot noted at the briefing that “we anticipate number two right now. But he added that Sun believes the another year of strong growth” despite the “We have to see how long this situation geography in which the majority of the coronavirus situation. “We anticipate total continues before we can put some impact pharma manufacturing sites are located

scrip.pharmaintelligence.informa.com February 21, 2020 | Scrip | 19 CORONAVIRUS OUTBREAK

(in China) are physically different from ates sourcing because they may get af- $600m). It highlighted growth and the centers where coronavirus is a bigger fected in the future. Inventory situation launches and did not touch at all on challenge. “So hopefully, we will not have depends on the molecule, but we are business risks from the outbreak. any significant impact. But...we are not covered from 60-90 days.” Answering a question on the Wuhan getting any reliable and dependable in- outbreak at its results briefing, Roche- formation. But we carry some ‘significant LOW EXPOSURE FOR JAPAN? owned Chugai Pharmaceutical Co. inventory’ for most of the raw material as Despite having at the time of writing Ltd. confirmed at its 31 January annual well as intermediate that we consume,” the second-highest number of cases of results briefing it is “not developing treat- the executive explained in response to an COVID-19 (the official name of the dis- ments nor vaccines for the new coronavi- analyst’s question. ease caused by SARS-CoV-2) globally rus” but - like most companies - is taking Sun’s chief also noted that, in general, – albeit mainly confined to a visiting steps to protect employees. there are some raw materials where indus- try’s dependence on China is almost 100% “If this coronavirus thing continues for more than - for instance in the case of azithromycin it would likely be around 80-90% - and a month or 45 days, that will begin to create a penicillins and cephalosporins too have a significant dependence on China. huge amount of issues for the pharma sector” – Shanghvi maintained that the current Umang Vohra spurt in prices of some finished goods as reported in the local press is not justified and “only speculated buying, which would have raised prices.” quarantined cruise ship – pharma com- SOUTH KOREA PLAYING SAFE Among other Indian firms, Lupin panies in Japan appeared generally un- Hanmi Pharmaceutical Co. Ltd. told Scrip Ltd. executives said in a 6 February results concerned about potential business im- on 14 February that its Chinese subsidiary briefing that “We buy only a couple of pact at the time of their early February Beijing Hanmi is mainly producing essen- APIs from China and certainly buy some quarterly briefings. (These were mostly tial drugs such as drugs for cough, cold intermediates specifically for antibiotics third quarter, given the standard fiscal and antibiotics, and is operating its factory like cephalosporins. Based on our inven- year end of 31 March.) under Chinese government’s rules. tories and what we have in WIP [work-in- Generally, most pharma firms in the The company, in common with most, is progress] we don’t see a disruption in this country have a relatively low exposure thoroughly checking for any symptoms of quarter if the situation sorts out in the to China as a market, given that the main coronavirus infection in its local employees next few weeks.” strategy historically has been to build and if anyone has these they should report Unfortunately, they added, “there is no strength in the US and Europe. For in- and self-quarantine in principle. So far, no visibility on shipments because obviously stance, Asia as a whole (mainly compris- employees have entered self-quarantine, the country is in a state of lock-down. If ing China) accounts for only around 5% of although marketing staff in China are do- the situation eases out in the next three post-Shire Takeda’s global revenues. ing their jobs mostly online from home. to four weeks we will be able to manage Even so, Takeda Pharmaceutical Co. Hanmi’s holding firm Hanmi Science without any significant disruption. If it is Ltd. faced questioning at its 4 February (whose CEO also heads the Korean bio- three to four months there will definitely results briefing on the possible impact on tech industry association) is currently dis- be a disruption in some APIs specially for its ex-Shire China plasma-derived therapy cussing possible new drug development Rest of World geographies.” (PDT) business of local donors staying with association member companies but The company noted that Penicillin G away from collection centers. no details are available yet. is one of the key supplies potentially af- However, CEO Christophe Weber clari- To date, close to 70,000 infections fected and that “everybody buys from fied that “We are not collecting plasma in with SARS-CoV-2 have been confirmed China” and so there would not be the China…so we will not be impacted by any in China and around 500 in 30 other ability to respond to acute shortages diminished capacity.” countries globally, with around 1,000 very quickly. “Right now we’re good on The company is importing albumin into deaths in total. supplies but it can’t continue indefinite- the country but Weber conceded that “we Published online 17 February 2020 ly,” the company cautioned. don’t know what the impact on demand Zydus Group’s Cadila Healthcare will be” from the outbreak. “We have a lim- Ltd. said on 5 February that: “On the API ited exposure in China for our PDT busi- Coronavirus Notebook: China Focuses On front we don’t have a significant expo- ness,” he stressed. Antivirals As Death Toll Passes SARS: sure to China because a lot of our APIs Among other firms, in its investor call https://bit.ly/39z0LIC are backward-integrated or sourced on 31 January, Eisai Co. Ltd. remained Coronavirus Notebook: China Parachutes Top from other markets so we don’t see a generally bullish on its prospects in Physicians To Wuhan, Allows WHO Expert Visit: major impact on APIs, but we are still China, where its sales surged by 32% in https://bit.ly/2SxMLJw evaluating the impact on the intermedi- the nine months, to JPY65.6bn (around

20 | Scrip | February 21, 2020 © Informa UK Ltd 2020 STOCKWATCH

Stockwatch: Coronavirus Takes A Bite Out Of AstraZeneca’s Guidance, GSK and AbbVie Get Spinning ANDY SMITH

he first month of fourth-quarter 2019 earnings season was looking Treasonably benign until AstraZen- eca PLC owned up to the downside of strong emerging market sales that in- cluded China in its results. AstraZeneca is the first to warn that growth can be vulnerable when coronavirus depresses the Chinese economy. While the first month of the fourth quarter of 2019 earnings season had a few more misses than hits, nothing cast a cloud over the pharmaceutical sector at the start. A case in point was Allergan Inc. reporting at the start of the fourth week. Allergan’s impending $63bn acquisition by AbbVie Inc. made its financial results largely academic. Nevertheless, Aller- Investors were probably spot on in being­ concerned gan’s revenues of $4.35bn rose by just about these costs. under 7% in a year and easily beat ana- lysts’ consensus estimates of $4.10bn. Allergan’s adjusted earnings per share (EPS) of $5.22 also trounced estimates of $4.61 and were helped by R&D expenses GSK: NOT TOUGH ON SPIN- The management consultants and in- falling by 4.9%. The key revenue driver, OUTS BUT TOUGH ON THE vestment banking fees incurred during Botox (onabotulinumtoxinA), grew 7.9% COSTS OF SPIN-OUTS the separation will not be cheap, nor will year-on-year generating $1.02bn in the The results season overall seems to lend the costs of a new management team and fourth quarter. itself to an exercise in compare and con- board that sign off on those invoices so Allergan reports Botox sales in both trast: pharmaceutical companies look to there may be an element of cumulative cosmetic and therapeutic segments be competing to do some of the same back-scratching there. But as those of us and AbbVie announced plans to move things, while also making some oppo- who worked in the predecessor company aesthetic Botox into a separate busi- site moves. SmithKline know, there is virtually no ness after the merger during its results Allergan’s 20% reduced R&D expense in overlap in manufacturing, R&D and com- presentation the previous week. (Also 2019, for example, was mirrored by GSK’s mercialization infrastructures between see “Countdown To The Allergan Merger, proposed 16% increase in 2020. A poten- Pharmaceutical and Consumer divisions And More From AbbVie’s Q4 Earnings” - tial spin-out of AbbVie’s yet-to-be-formed so investors were probably spot on in be- Scrip, 7 Feb, 2020.) A separate aesthetics aesthetics business would be similar to ing concerned about these costs. In a simi- business unit in a pure-play big phar- GSK’s proposed spin-off of its Consumer lar move to AbbVie, GSK also announced maceutical company like AbbVie may Healthcare joint venture. Unlike Allergan, that its prescription dermatology busi- be an odd choice and perhaps the an- GSK’s £33.8bn revenues in 2019 were in ness, Stiefel – which has always been a nouncement was a prelude to yet an- line with analysts’ estimates but its 4% slightly odd bedfellow – was under “strate- other spin-off the like of which have increase in 2019 EPS to 123.9p missed gic review”. The costs and timelines for this spun out of the results announcements consensus estimates of 125.0p. The main- particular move have yet to be disclosed. of Pfizer Inc., Merck & Co. Inc. and Glaxo- tenance of GSK’s dividend did nothing to SmithKline PLC this earning season. Al- support the stock price in the face of the ASTRAZENECA’S GUIDANCE lergan’s results announcement did the announcement of the two-year £2.4bn CATCHES CORONAVIRUS company no harm as its stock price only cost of splitting of the Consumer joint The UK’s two largest pharmaceutical com- finished down 0.9% for the week against venture with Pfizer. It was almost certainly panies GSK and AstraZeneca often report the NYSE ARCA Pharmaceutical Index’s this hefty separation bill that led to GSK’s their financial results in the same week (DRG) 1.6% fall. stock price falling 4% that day. TURN TO PAGE 23 scrip.pharmaintelligence.informa.com February 21, 2020 | Scrip | 21 PIPELINE WATCH

Scrip’s weekly Pipeline Watch tabulates the most recently reported Pipelinelate-stage clinical Watch trial and regulatory - 7-13 developments February from the more 2020 Click here for the entire pipeline than 10,000 drug candidates currently under active research worldwide. with added commentary: http://bit.ly/2mx4jY3 Phase III

PIPELINESearch WATCH, 7–13 FEBRUARY 2020

Change Lead LOA Event Type Drug Name Indication Comments To LOA Company/Partner (%) (%) Phase III Protalix pegunigalsidase BRIDGE; Improved Updated Fabry's Disease 0 63 BioTherapeutics/Chiesi alfa Kidney Function Results Phase III relugolix LIBERTY Ext; Met Top-Line Myovant Sciences Ltd. Uterine Fibroids 0 79 combination Primary Endpoint Results Phase III Crescita Therapeutics, Met Primary Top-Line MiCal 1 Psoriasis 0 59 Inc. Endpoint Results Phase III Breast Cancer, Keytruda w/chemo, KEYNOTE- Top-Line Merck & Co., Inc. Metastatic Triple- 0 45 (pembrolizumab) 355; Met Primary Results Negative Endpoint Alzheimer's Phase II/III Disease, DIAN TU-001; Top-Line Roche Holding AG gantenerumab -3 39 Inherited Early- Missed Primary Results Onset Endpoint Phase II/III Alzheimer's Top-Line Eli Lilly & Company solanezumab DIAN TU; Missed -1 16 Disease Results Primary Endpoint Phase II/III Sporadic Encouraging Top-Line Orphazyme A/S/CytRx arimoclomol Inclusion Body 0 59 Results Results Myositis Phase III CALCIPHYX; Calciphylaxis In Trial Laboratoris Sani�t S.L. SNF472 Combined With 34 47 Kidney Disease Initiation Hemodialysis Phase III ARQ-151 Arcutis Open-Label Trial (ro�umilast) Plaque Psoriasis -- Biotherapeutics, Inc. Extension Study Initiation topical

Source = Biomedtracker; LOA = Biomedtracker's opinion on likelihood of approval.

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CONTINUED FROM PAGE 21 (olaparib) for ovarian cancer which not ready guided for the full year 2020, and but with AstraZeneca’s fourth-quarter only reached blockbuster status for the those who have yet to report, will have 2019 report coming just over a week after first time in 2019, but also put into the no choice than to follow AstraZeneca’s GSK’s, AstraZeneca was probably hoping shade GSK’s Zejula (niraparib). Zejula was lead. Pharma firms are not the only mul- to miss the market fall-out that accompa- the main reason for GSK’s $5.1bn acquisi- tinational companies with significant nied GSK’s separation cost announcement. tion of Tesaro Inc. but generated revenues exposure to China and if AstraZeneca’s AstraZeneca’s total revenue increased 4% of £66m in the quarter, barely up from early warning turns out to last for more to $6.66bn in the fourth-quarter of 2019 £64m in the third quarter of 2019. than for a few months, we may be in for compared with the fourth-quarter of 2018, AstraZeneca’s stock price was holding a coronavirus-induced earnings reces- but missed analysts’ estimates of $6.71bn. its own with the DRG index in the first sion in 2020. In addition, the 20% total revenue growth four days of the week before its results an- Andy Smith gives an analyst and former that was lauded as the turnaround point nouncement on the morning 14 February, investor’s view on life science companies. at the end of the third-quarter 2019, but subsequently ended the week down He joined the independent research house drastically dipped in the three months to 4%. The reason for this reversal was para- Equity Development in October 2019 hav- December 2019. AstraZeneca’s full-year doxically the other star of AstraZeneca’s ing previously been an analyst at Edison core EPS of $3.50 was unchanged from results announcement − its 29% and 25% group and a Senior Principal in ICON PLC’s 2018 but also missed analysts’ estimates revenue growth in China in the year and Commercialization, Pricing and Market of $3.57. The externalization revenue that fourth quarter, respectively. Access consulting practice. Smith has results from selling off cash-generative but China is AstraZeneca’s fastest-growing been the lead fund manager for four life older pharmaceutical assets was also less region and comprises 60% of its emerg- science–specific funds, including 3i Bio- supportive than usual in the last quarter of ing market sales, so when AstraZeneca science, International Biotechnology and 2019, falling 36% to $414m. (Also see “As- warned that their guidance assumed an the AXA Framlington Biotech Fund, was traZeneca Returns To Growth, But Coronavi- “unfavourable impact from China last- awarded the techMark Technology Fund rus Likely To Hit China Revenues” - Scrip, 14 ing a few months as a result of the coro- Manager of the year for 2007 and was a Feb, 2020.) navirus” the market naturally assumed global product manager at SmithKline AstraZeneca has a class-leading oncol- a greater impact. Moreover, the big Beecham Pharmaceuticals. ogy product in its PARP inhibitor Lynparza pharmaceutical companies that have al- Published online 17 February 2020

Company Move

APPOINTMENTSSearch

Effective Executive To Company New Role From Company Previous Role Date Kenji Crescendo Chief Medical O�cer Roche Associate Clinical Director 3-Feb-20 Hashimoto Biologics Ltd Joel W. Vice President, Vice President, Corporate Eisai Inc Celgene Corp 3-Feb-20 Beetsch Corporate Affairs Affairs/Patient Advocacy Vice President, Specialty Scott R. Vice President, Market Eisai Inc Sano� Pharmacy, Trade and Retail, 3-Feb-20 Steuart Access Market Access David Enterprise Novartis Venture Chief Medical O�cer Managing Director 10-Feb-20 Morris Therapeutics Ltd Fund Theresa Freeline Chief Executive O�cer Alnylam Head, CEMEA and Senior 4-Feb-20 Heggie Therapeutics and Director Pharmaceuticals Vice President Bruce Deer�eld Passage Bio Chief Executive O�cer Venture Partner 28-Jan-20 Goldsmith Management Portola Chief Medical O�cer Adamas Rajiv Patni Pharmaceuticals and Executive Vice Chief Medical O�cer 3-Feb-20 Pharmaceuticals Inc President

Click here for all appointments: https://bit.ly/2oHWRYn Source: Medtrack | Informa, 2020

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