Medivation in the cross-hairs
US presidential hopeful Bernie Sanders – with 11 other members of congress – this week sent a letter in support of an earlier petition asking the National Institutes of Health (NIH) to hold a hearing on exercising 'march-in' rights on the prostate cancer treatment Xtandi. They are calling on the NIH to revoke patent protection for Xtandi in order to lower its price, citing government funded research at UCLA that led to the drug's discovery. UCLA recently sold its royalty rights in Xtandi for $520 million.
Based on precedent, the NIH is unlikely to buy this argument, having previously reasoned that lower pricing of the same drug in a different country does not meet the statutory requirement for invoking its march-in rights. Furthermore, the Obama administration has recently rejected a proposal that march-in rights be used more aggressively.
News of the letter was, nevertheless, sufficient to spook Medivation shareholders and with good reason; the company generates all of its current revenues from Xtandi or related milestone payments from marketing partner Astellas. Investors – and the industry – have also been left questioning why the latest political salvo to be fired in the ongoing drug pricing debate is aimed squarely at an individual company rather than various components of the broader US pricing system. Xtandi, much like Gilead Sciences' hepatitis C treatment Sovaldi, can be considered one of the industry's more innovative new product launches of recent years. Targeting such drugs on the frontline would appear, in the long term, to be counterproductive.
Bloomberg also reported this week that Medivation has hired defence advisers in response to receiving preliminary interest from potential buyers, with AstraZeneca, Johnson & Johnson, Roche and Sanofi cited as a possible acquirers. Medivation, which has a market cap of around $6 billion, reportedly wishes to remain independent.
Acadia's Nuplazid edges towards US approval
Acadia Pharmaceuticals' first public interaction with the FDA – an advisory committee meeting held this week to discuss its Parkinson's disease psychosis therapy Nuplazid – did not deliver as definitive an outcome as some investors would have hoped. However, Acadia did walk away with a 12-2 vote in favour of approval; the FDA is scheduled to make a final decision by May 1.
With a lack of available therapies for psychosis associated with Parkinson's disease, sell-side consensus suggests that Nuplazid will become a blockbuster product by the end of the decade; such an outcome would transform Acadia and presumably position it as an M&A target.
However, the highest and lowest forecasts for Nuplazid vary considerably, which reflects in part some uncertainty about the drug, with safety emerging as a pertinent issue during the AdCom. A black-box warning looks like a near-certainty, while one of the key points of debate leading up to potential approval will be how labelling is worded and how broadly applicable Nuplazid can be used. Furthermore, sentiment from some AdCom panellists has prompted a number of analysts to become more cautious on potential future approval of Nuplazid for the treatment of Alzheimer's disease (further analysis: ViewPoints: Two steps forward for Acadia’s Nuplazid, but one possible step back
Enthusiasm grows for new class of migraine treatments
Considerable excitement is growing around a new class of drugs that are being developed for the treatment of migraines. Focus sharpened on Alder Biopharmaceuticals' anti-CGRP antibody ALD403 this week, following the publication of positive Phase II data in patients who are chronic migraine sufferers.
Enthusiasm for the anti-CGRP MAbs is being driven not only by the efficacy that this drug class has demonstrated to date, but a lack of alternative approaches for the treatment of migraine currently in development, Nathaniel Schuster – neurologist at the Montefiore Headache Center of the Albert Einstein College of Medicine – told FirstWord this week – KOL Views: Neurologist weighs in on how the race among anti-CGRP mAbs is shaping up
Pent up demand for a new migraine therapy has seen four companies race to push their anti-CGRP MAbs into late-stage testing; alongside Alder, Amgen, Eli Lilly and Teva are all developing drugs in this class for the treatment of both chronic and episodic migraines.
Cross-study comparisons are difficult to make, and although Alder appears to be slightly behind the competition, the once-quarterly dosing schedule of ALD403 could prove favourable, says Schuster. Payers are also likely to benefit from the competitive nature of the anti-CGRP development space; assuming late-stage data is on par with efficacy demonstrated to date, it may prove challenging for the respective manufacturers to differentiate on grounds other than price.
Shire's salary surprise
Given the slump in biopharma valuations since mid-2015 – which has intensified since the beginning of the year – it is unsurprising that 2016 has not been a vintage year to date for M&A. Indeed, the biggest deal consummated – Shire's $32 billion acquisition of Baxalta – was first pursued by the UK drugmaker back in July.
At around the same time, Shire was concerned enough about losing CEO Flemming Ornskov to a competitor that it increased his salary by 422 percent, it was revealed this week. In its recently-published annual report, Shire noted that "it was appropriate to make the salary increase in July 2015 despite the uncertainty surrounding the outcome of a possible transaction with Baxalta."
Ornskov's total compensation increased to $21.6 million, including $16.8 million in long-term incentive awards. The Shire CEO now earns more than his counterpart at UK rival AstraZeneca, Pascal Soriot – whose salary has been the issue of some debate in recent weeks – but his salary will now be frozen for three years, the company confirmed.
Ornskov has overseen considerable growth in Shire's market value since assuming the position of CEO in mid-2013 with increasingly sizeable acquisitions his primary weapon of choice. However, near to medium-term focus will now shift to the integration of Baxalta and approval of lifitegrast for dry eye disease. Analysts remain cautious in particular about Baxalta's long-term outlook in the haemophilia market with competition set to intensify markedly.
Investors will be hoping that Ornskov earns his bread.
GlaxoSmithKline's Andrew Witty – out of the running but ahead of his time?
With Andrew Witty's retirement as GlaxoSmithKline CEO next year recently confirmed by the company his legacy has fallen under the spotlight.
From a corporate perspective it is perhaps telling that Witty will leave the nest as GlaxoSmithKline's long-term dependency on the Advair/Seretide franchise reaches a long-awaited endgame, with generic competition now on the horizon and sales already in steady decline as a result of US pricing dynamics. Failure to broadly diversify GlaxoSmithKline's revenue base with notable new product launches will tarnish the Witty era, as will high-profile marketing indiscretions in the US and China.
The counter argument is that Witty has done more for patients and the industry's reputation at large than for GlaxoSmithKline shareholders. Confirmation of his retirement earlier this month prompted former FDA commissioner Margaret Hamburg to suggest that as one of the first pharma CEO's she met in the role she mistakenly thought most chief executives to be as compassionate as Witty.
Witty's recent argument that pharma could do more to un-couple drug pricing to R&D costs may have received short shrift in some quarters, but his legacy in terms of access to medicines looks poised to be cemented by a new initiative announced on Thursday, whereby GlaxoSmithKline will no longer seek patent protection on its medicines in low-income countries.
Witty's promotion of drug affordability has been described in various quarters as courageous and ambitious and pre-dates the current debate around drug pricing. Whether the industry at large will follow this lead in his absence remains to be seen.
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