invivo.pharmaintelligence.informa.com DECEMBER 2018 Scrip 100 Invol. 36 ❚ no. 11 Vivopharma intelligence ❚ informa Pharma intelligence | OUTLOOK Biopharma | Generics | Medtech OUTLOOK 2019 Contents SPONSORS OUTLOOK 2 SCRIP 100 12 BUSINESS 26 LEADERSHIP 40 MEDTECH 48 R&D 54 CLINICAL TRIALS 64 CELL & GENE THERAPY 74 REGULATORY 88 CONTRACT MANUFACTURING 100 GENERICS & BIOSIMILARS 110 OUTLOOK EDITOR EUROPEAN TEAM CONTRIBUTORS Lucie Ellis Neena Brizmohun, Francesca Bruce, Catherine Longworth John Davis,Kevin Grogan, Ian Schofield, Amanda Micklus EDITORS-IN-CHIEF Vibha Sharma, Joanne Shorthouse, Ed Silverman Eleanor Malone (Europe) Sten Stovall and David Wallace Denise Peterson (US) Ian Haydock (Asia) US TEAM Michael Cipriano, Bowman Cox, All stock images in this publication IN VIVO EXECUTIVE EDITORS Derrick Gingery, Joseph Haas, courtesy of www.shutterstock.com William Looney Emily Hayes, Mandy Jackson, unless otherwise stated. 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Brian Yang Gayle Rembold Furbert ISSN 2160-9861 December 2018 | In Vivo | 1 OUTLOOK The Harsh Light Of Hard Facts: Valuing Pharma In A Made-To- WILLIAM LOONEY Measure World EXECUTIVE EDITOR, PHARMA, US With a challenging new decade of scientific discovery looming, 2019 is the positioning year for biopharma to make value, transparency, information and culture work seamlessly to achieve innovations that matter to patients, payers and society. For the past decade, biopharma has been character- CULTURE AT THE CROSSROADS ized as an industry in perpetual motion, beset by an Looming again is the larger question: does big pharma unruly mix of scientific, economic and social forces culture have that true grit to succeed in markets where that compel it to constantly reevaluate its model, competitive advantage is fleeting? Or do the times mission and purpose. The adage is to go boldly: trans- demand companies abandon the cultural affliction form, take risks, move fast – or fall behind. McKinsey & Co. calls “change fatigue,” and challenge Thus, it is striking that 2018 stands out as a year peers to stand out, act fast and disrupt? when urgency seems to have taken a vacation. The An informal survey of the In Vivo Editorial Advisory predicted turn toward price regulation went south, Board (EAB) suggests that circumstances likely to with the standard year-on-year rise in list prices dominate in 2019 favor the latter course. E Squared remaining the norm for the majority of marketed Capital health portfolio lead Les Funtleyder observes products; episodes of Trumpian public shaming still that “2018 turned out to be a flop for the fear factor.” left CEO reputations intact; while a big cut in corpo- But the reprieve will be short-lived. “There remain rate tax combined with offshore profit repatriation many latent pressures on the industry that have been went mainly to boost share prices – a safe, if decid- masked by a strong economy, sloganeering prior to edly non-strategic, response to a windfall of historic the November mid-term congressional elections and proportions. The big pharma mega-merger, hailed as the continuing indecision on what defines the future “transformational” by CEOs only a few years ago, fell commercial space in health care.” further into disfavor as Takeda Pharmaceutical Co. A stronger US dollar, global trade disputes and Ltd.’s $62 billion takeout of Shire PLC failed to please geopolitical impacts such as Brexit on the stabil- investors. It underscores the more prosaic virtues of ity of the pharmaceutical supply chain are poised to bolt-on acquisitions that do not attract regulatory dampen industry macroeconomic prospects in 2019. and geopolitical attention. Another negative is the erosion of government finances And despite continuing claims that the commercial throughout the industrialized and emerging market R&D model is broken, science did not disappoint: countries. The US will post its first trillion-dollar bud- the industry’s benchwork on cancer immunology get deficit in fiscal-year 2019; for the first time, interest was recognized in October with a Nobel Prize, while on federal debt will exceed outlays for Medicaid, the innovation returned to the chronic care space with health entitlement program that delivers care to nearly FDA approvals for the first treatments in decades for a quarter of the US population. migraine. There is more to come in 2019, with excite- It is no longer wise to be complacent about the US as ment around new therapeutic platforms like T-cell the pricing gift that keeps on giving. Prospects are good engagers for cancer and drugs that attack the many for some incremental, administrative-led breaches to co-morbidities of diabetes. the ban on negotiation of Medicare drug prices. It will Calm is not always complacent. Out of the lime- add to uncertainty about the long-term prospects for light, a roster of new CEOs spent much of 2018 re- market-led pricing in the US. That is because, whereas viewing company drug portfolios. In favor is a more government and commercial business are separate, disciplined strategy focused on fewer therapeutic the latter has a history of following precedents set by categories and compounds that can lead with a well- the major drug entitlement programs. differentiated profile against the competition. The fin de siècle sentiment is confirmed by a key in- The paring down of pipelines is a trend that over dustry pulse-taker, the Life Science Capital Confidence time may help resolve the prioritization dilemma Barometer produced by EY’s Transactions Advisory generated by all the great new science: where best Service. Group principal Arda Ural tells In Vivo that do we play? 43% of executives surveyed expect disruptions to the 2 | In Vivo | December 2018 OUTLOOK biopharma business model in 2019. “The Mayo Clinic and the US Veterans Admin- majority see regulatory and policy uncer- istration to underwrite a new company, tainty as the top near-term investment CivicaRx, which launched in September risk, with changes to the US drug price with a mission to manufacture 14 generic system – especially in the Medicare Part drugs deemed essential to hospital supply B and D programs – being top of mind.” chains. Its first shipments of product are He also cites the prospect of more digital due in mid-2019. disruption to biopharma’s standard busi- By and large, biopharma has opted not ness practices as well an underlying pes- to join this industry-wide race to diversify simism induced by lack of confidence in and scale up. Overall, the industry’s re- R&D productivity, which the survey group solve to remain focused on the commer- believes will not be sufficient to outweigh cialization of drugs, diagnostics and OTC the external headwinds facing commercial products has remained firm – and there is teams in positioning new products for A big issue facing a strong thread of opinion that this makes success. strategic sense. “The biopharma and payer For that reason alone, Funtleyder con- industry in 2019 landscape is still highly fragmented com- tends the revamp of pipeline portfolios pared to other industries,” says Michael in 2018 has been time well spent. “A big and beyond is the Ringel, EAB member and senior partner issue facing industry in 2019 and beyond is and managing director for life sciences at the slowdown in post-launch performance slowdown in post- the Boston Consulting Group. “The real – more and more new market entries are issue is not whether biopharma should not meeting expectations, due at least launch performance consolidate – there are significant oppor- partly to a failure of researchers to lead tunities for greater scale and reach – but with something not just new, but useful – more and more how it chooses to do it.” to payers, providers and patients in the Ringel contends that size is still going to contemporary clinical setting.” new market entries be necessary to capitalize on the big ana- Even the most clinically compelling lytical datasets that will power advances products face take-up issues. Biogen Inc.’s are not meeting in drug development and furnish the evi- Spinraza (nusinersen), the first-ever treat- dence required to succeed in the new world ment for spinal muscular atrophy (SMA), expectations. of value-based reimbursement. “These approved in December 2016 by the FDA and other underlying factors will persuade after a record-fast review, was launched biopharma companies to continue to look with strong buy-in from practitioners and Les Funtleyder for combinations that reinforce the exist- patients alike. But in the past 12 months ing R&D business model – making and new patient starts on the drug have dipped marketing medicines – rather than seeking by half as the SMA market awaits the to dominate the entire supply chain, as arrival in 2019 of a gene-based therapy few weeks it took for the entry of a second other health care entities have done.” With competitor offering the prospect of a one- PCSK9 therapy in 2015 for individuals no big pharma controlling more than 10% time cure. The trend is important because whose cholesterol could not be controlled of global drugs sales, Ringel expects CEOs many new technology products are heavily with older statins. to continue to pursue deal-making of all subsidized by manufacturers at launch, Datamonitor’s conclusions are rein- sizes, including the mega-deal, the latter if either by giving patients the drug for free forced by the launch, beginning in May, of not in 2019 then certainly in the decade to or relying on government entitlement not one but three drugs for migraine in the come.