JP Morgan 2019 day three roundup – Abbvie rekindles the takeover flame

Day three of the biotech dog and pony show saw one pharma company that unequivocally wants and needs to buy.

Big pharma companies presenting at JP Morgan have tended to pay lip service to making big acquisitions, accepting that they were ready to do deals if these presented themselves, but stressing discipline and patience.

Today Abbvie broke the gentlemen’s agreement, stating in no uncertain terms that it would put its strong cash position to use. As luck would have it, there was no shortage of small biotechs preening themselves in front of the conference’s attendees, though sceptics might ask why, if their successes have been so notable, they had not already been acquired.

One example is Amarin, whose purified fish oil drug Vascepa scored a surprising success last year in the huge Reduce-IT cardiovascular outcomes trial that could open up what the company terms a “multi-billion opportunity”. A US filing for this additional use is to be made by the end of the first quarter, and Amarin is preparing for the possibility of an advisory panel review.

For this year the group expects Vascepa sales to grow 50% to $350m, a figure that excludes the new, broader use. However, the group hinted at the possibility of bigger numbers, saying it had capacity with suppliers to sell over $1bn in 2019. “Think of this as somewhat analogous today to where statins were 25 years ago,” said its chief executive, John Thero. “And statins grew to over $30bn in revenues before going generic.”

How Vascepa will be priced for the broad market – it costs some $300 a month in the niche indication – is not yet known, but Mr Thero pointed to the fact that statins made money by being affordable and treating millions. Though he did not rule out a PCSK9-type high-price model, he stated his preference for low price and high volume.

Of course, this company probably does not fit specifically into Abbvie’s sweet spot. But this is not to say that the big pharma group does not have an urgent need to acquire – a need driven by genericisation of its mega-blockbuster Humira in Europe and from 2023 in the US.

Abbvie’s president, Michael Severino, said oncology would be a major growth driver for 10 years and beyond, and did not beat around the bush about the group’s needs, stating: “We’ll use our strong balance sheet to continue to augment our pipeline through strategic licensing, acquisition and partnering activity.”

This is despite touting total non-Humira 2025 sales expectations of $35bn – a hugely ambitious target – and the unavoidable fact that Abbvie’s biz dev team has yielded such duds as Stemcentrx, which recently had a write down of $4bn of its $5.8bn value. A wide range of small, medium and large opportunities will be pursued, and if something with a strong strategic fit is found then Abbvie has the firepower to pursue it, it told JP Morgan.

Targeted anticancers

The reason that every big company presenting at JP Morgan is being asked about acquisitions is Monday’s takeout of Loxo by Lilly, coming hot on the heels of Bristol-Myers Squibb’s $74bn move on Celgene.

One biotech in the Loxo mould of small-molecule targeted cancer therapies is Mirati, whose stock is up 19% since last week. At JP Morgan Charles Baum, its chief exec, talked up its lead asset, the Trk, Ret and DDR inhibitor sitravatinib, though unlike Loxo’s larotrectinib this is being positioned in checkpoint-refractory patients.

A phase III NSCLC study due to begin this year could yield an interim analysis by the end of 2020 that is good for accelerated approval, or failing that a final survival analysis is due in 2021. Further back in development are two inhibitors of the highly undruggable KRAS oncogene, focused on its G12C and G12D mutations.

Like Mirati, Jounce stressed the growing importance of the second-line NSCLC setting in patients who have failed PD-(L)1 blockade. Unfortunately for its investors its fortunes since IPO have diverged from those of Mirati: while Mirati is up sixfold Jounce is off 70%.

Jounce is focused on the Icos pathway with JTX-2011, and among the phase II trials it will start imminently is anti-CTLA-4 combo work in PD-1-inhibitor-experienced NSCLC and bladder cancer.

The rationale is that JTX-2011 works best in an Icos-high CD4+ T cell population, something that CTLA-4 – but not PD-(L)1 – blockade promotes. The company also has an anti-PD-1, JTX-4014, but like Lilly’s LY3300054 and Boehringer Ingelheim’s BI 754091 this is being developed only as a “tool” compound to allow combinations.

The year of Nash

The Nash player Intercept also said it was on the lookout for more assets, having this week acquired US rights to the PPAR agonist bezafibrate from Aralez. Intercept initially intends to combine bezafibrate with its FXR agonist Ocaliva in primary biliary cholangitis (PBC), in which the latter is currently approved.

The combo could also have potential in Nash, where Intercept is testing Ocaliva monotherapy in the pivotal Regenerate study. Intercept’s chief executive officer, Mark Pruzanski, said on Wednesday that bezafibrate looked “as good if not better than any other PPAR”.

One company that might take exception to this is Cymabay, which is developing its own PPAR agonist, seladelpar. This group is also set for a big 2019, with phase IIb Nash data due mid-year; seladelpar is also in phase III for PBC, but data here are not due until 2021.

Cymabay reckons that seladelpar could have improved efficacy and tolerability over Ocaliva, which can worsen severe itching, a symptom of PBC. And the company contended during today’s JP Morgan breakout session that Intercept’s move into PPARs was not so much a threat as a validation of its own asset.

Still, by the time Cymabay reports its Nash data, Intercept will already have pivotal results: data from Regenerate are now due this quarter, versus the previous first-half expectation. This could put Intercept ahead of Gilead, which expects pivotal Nash data in the first half of this year with its Ask1 inhibitor selonsertib.

Positive readouts could spur acquisitions of late-stage Nash developers, Cymabay’s chief executive, Sujal Shah, suggested today. Perhaps it is no wonder that some people – including Cymabay’s chief scientific officer, Charles McWherter – have dubbed 2019 the “year of Nash”.

Another company not shy about letting investors know that a takeover could underpin its investment case is Galapagos, which rounded off its JP Morgan session with a slide that, under the heading “Our challenges”, stated: “Stay independent.”

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