Friday Five – The pharma week in review (5 February 2021)

Pfizer firms up COVID revenue expectations

Pfizer said this week that in conjunction with BioNTech it expects to book revenues worth at least $15 billion from COVID-19 vaccine sales this year.

This forecast is based on existing contracts for around 780 million doses, although Pfizer recently confirmed that it anticipates having the capacity to produce 2 billion doses in 2021. Analysts were quick to note that actual full-year sales could be closer to $30 billion.

How durable this revenue stream becomes is a matter of debate, though Pfizer sounds increasingly confident that the annual sales opportunity from COVID-19 could be similar to that for influenza vaccines, resulting from a need to potentially tailor vaccines on a regular basis to combat emerging variants of the SARS-CoV-2 virus.

The company expects to increase its margin on vaccine sales over time with price increases anticipated once the "pandemic phase" is over.

Elsewhere on the COVID-19 vaccine front, new preliminary data supportive of longer dosing intervals for AstraZeneca and the University of Oxford's vaccine were published this week. Positive results should prove encouraging for UK health authorities who have recommended the use of a longer dosing interval to accelerate the country's national vaccination programme. AstraZeneca also noted it is working on a follow-up vaccine to address emerging variants.

Biogen lays out its cards for '21

Late last week, the FDA announced that it has extended by three months the deadline for its review of Biogen and Eisai's regulatory application for the investigational Alzheimer's disease therapy aducanumab.

The agency's decision to push out a verdict until June at the latest avoids the worst-case scenario of an outright rejection, which many had predicted following the unanimous recommendation in November by a panel of experts convened by the FDA not to approve the application for aducanumab (see ViewPoints: Biogen/aducanumab “So you’re telling me there’s a chance?”).

Announcing its fourth-quarter results this week, Biogen did not shy away from the uncertainty of this decision, but announced lower than anticipated revenue and earnings guidance for 2021, which are based on an assumption that aducanumab will be approved in the US by mid-year.

Despite a recently announced collaborative agreement with Sage Therapeutics to co-develop a number of late-stage assets, including a novel treatment for depression, Biogen's guidance reveals just how reliant the company now is on the FDA's willingness to approve aducanumab. 

Further reading - Physician Views Results: More Alzheimer’s docs want aducanumab approved than not

A new era at Merck & Co.

Merck & Co. announced on Thursday that CEO Kenneth Frazier will retire from the position at the end of July to be replaced by current chief financial officer Robert Davis. Frazier became CEO at the beginning of 2011, two years after Merck had acquired Schering-Plough for approximately $41 billion.

Frazier's early tenure was beset by some challenges. The company was struggling to bring innovative new drugs to the market and in 2014 spent a further $12 billion to acquire Idenix Pharmaceuticals and Cubist Pharmaceuticals, with the former designed to push Merck into the rapidly growing market for novel hepatitis C therapies. Both deals turned out to be duds.

In the meantime, a novel cancer therapy integrated into Merck's pipeline via the Schering-Plough deal was approved by the FDA for the treatment of myeloma in late 2014, positioning Keytruda as the first PD-1 inhibitor to reach the US market.

A key moment in Frazier's decade as CEO occurred the following year when competing data readouts from Merck and Bristol Myers Squibb provided the first evidence that Keytruda would become the dominant drug in class for treating metastatic non-small-cell lung cancer. Alongside approvals in other tumour types, this opened up a considerable revenue stream for Merck, with global Keytruda sales growing 30% to reach $14.4 billion in 2020, the company said on Thursday.

Acknowledging the role of serendipity in shaping such narratives, Frazier conceded on Thursday's fourth-quarter earnings call that when Merck bought Schering-Plough "none of us was really smart enough to know that among the assets we were acquiring was pembrolizumab (Keytruda)."

One of Davis' tasks as CEO will be to find ways to placate investors who are concerned that Merck is becoming overly dependent on this one product. Keytruda now accounts for a third of the company's pharmaceutical sales.

Jazz acquires GW Pharma

Jazz Pharmaceuticals is no stranger to M&A and announced this week that it will acquire the cannabinoid drug specialist GW Pharmaceuticals for $7.2 billion. The deal will expand Jazz's focus from sleep disorders and oncology to include CNS conditions; GW Pharma's marketed therapy Epidiolex is indicated for treatment-resistant seizures associated with a number of rare conditions.

Analysts reacted positively to the announcement and Jazz's decision to move value from its balance sheet to income statement, with revenues from Epidiolex expected to more than double in the mid-term and prove durable. One opportunity for growth could be geographical expansion; the vast majority of Epidiolex sales ($510 million in 2020) are generated in the US market and it has been launched in only two European countries. Jazz is confident that other cannabinoid agents in GW Pharma's pipeline offer long-term upside, have been de-risked by the successful development of Epidiolex and face a relatively limited threat in terms of future competition.

Mixed pipeline news for Amgen

Phase II results for Amgen's sotorasib stole the headlines at last weekend's virtual World Conference on Lung Cancer (WCLC) meeting.

These mid-stage data in KRAS G12C mutation lung cancer patients, which have already been submitted to the FDA, are on par with earlier results that are viewed by oncologists as being compelling. Once approval is secured, our research suggests sotorasib should be adopted quickly in eligible second- and third-line patients, pressing home its first-in-class status.

On another positive note, more data have come to light for Amgen and AstraZeneca's investigational severe asthma treatment tezepelumab, suggesting that its effectiveness in a broader cohort of patients (including those with lower eosinophil counts) should be compelling enough to drive adoption if approved by regulators.

Sotorasib and tezepelumab both provide Amgen opportunities to bring novel, first-in-class agents to market, an achievement investors will appreciate in light of some disappointing updates for its pipeline of bi-specific cancer therapies announced when the company unveiled its Q4 results earlier this week.  

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