Snippet roundup: Alcon's sluggish turnaround, Novo cuts guidance and down goes Dipexium

Welcome to your weekly roundup of EP Vantage’s snippets – short takes on smaller news items.

This week, October 24-28, 2016, we had thoughts on the following: Astellas makes a paper unicorn of Ganymed; Diabetes pricing wars weigh heavily as Novo cuts guidance; Novartis Q3 stumble puts all eyes on Alcon; Game over for Dipexium; DBV maintains lead in peanut race; Tecentriq bladder cancer rivals advance, but the battle is elsewhere.   

These snippets were previously published daily via twitter.

Astellas makes a paper unicorn of Ganymed

October 28, 2016

With strong evidence of efficacy in phase II, it was maybe only a matter of time before a big partner would put a 10-figure valuation on Ganymed Pharmaceuticals’s gastric cancer project IMAB362. Astellas put €422m ($461m) on the table to acquire the private German biotech and pledged milestone payments of up to €866m ($939m) to yield more than $1bn in bio-dollars. IMAB362, or claudiximab, is a novel agent targeting a tight junction protein called claudin-18.2, which is frequently overexpressed in gastrointestinal and pancreatic tumours and not known to be expressed in healthy tissue. At Asco, Ganymed presented data showing that a combination of IMAB362 and chemotherapy significantly extended disease-free progression, achieving 7.9 months compared with 4.8 months for the patients taking chemotherapy, along with overall survival, 13.2 months versus 8.4 months.

Diabetes pricing wars weigh heavily as Novo cuts guidance

October 28, 2016

Novo Nordisk shares tumbled 14% today after the Danish group cut its profit guidance in half. Novo executives said the revised goal of 5% long-term operating profit growth was set because of fierce pricing pressures in the US diabetes market. The launch of new long-acting insulin Tresiba has coincided with an effort by US payers to tighten payments for diabetes treatments with therapeutic equivalents, which has resulted in such actions as formulary exclusions. Eli Lilly’s Basaglar, a biosimilar of Sanofi’s Lantus, is set to be launched in the US in December, and because payers have already begun adding it to formularies it is expected to only increase pricing pressure. Analysts from Bernstein said the new guidance makes it appear that Novo is anticipating 10% shrinkage in long-acting insulin prices and a flat or declining market share that will partly offset steady growth of GLP-1 agonist Victoza. This negative announcement has been presaged by such actions as an executive reshuffle and cuts of 1,000 jobs.

Novartis Q3 stumble puts all eyes on Alcon

October 25, 2016

Investor patience with Novartis’s efforts to turn around its Alcon eye care business is wearing thin. Although the unit, which it purchased for $48bn, dragged down the Swiss group’s third-quarter earnings – in particular hitting its margins – the company seems determined to keep investing in its recovery. Executives on a conference call were reluctant to say when things might get better, but added that it would take longer for the surgical versus the consumer business. And with head of Alcon Mike Ball admitting that the company is still losing share in intraocular lenses, this could take a while. With Alcon looking like a black hole, it is no wonder that Novartis shares were down 4% this morning. Chief executive Joe Jimenez had previously given Alcon until Q4 to improve, but it now looks like it will take longer – and the latest results will have done little to assuage fears that there could be worse to come.

Game over for Dipexium

October 25, 2016

If past failure can be considered an indicator of future success, investors should not have touched Dipexium with a proverbial grubby stick. However the New York company managed to raise $38m in an IPO in 2014 to fund another round of trials on a 20 year old asset with a dubious history. The topical antibiotic, formerly known as pexiganan and reformulated and rebranded as Locilex, has now spectacularly failed its second pivotal programme, suggesting that there were reasons it was left on the shelf for so long. Not only did Locilex miss the primary endpoint of proving superiority to standard wound care in patients with mild diabetic foot ulcer, it failed to show any difference in wound closure rate or demonstrate a higher rate of bacteria eradication. To top this, more serious adverse events were seen in the Locilex arm, namely osteomyelitis and cellulitis. It is true that diabetic foot ulcer trials have thwarted many a company. Unfortunately the crash and burn of another recent IPO will do nothing to stem the flow of funds currently exiting the biotech sector, seeking safer harbour.

DBV maintains lead in peanut race

October 25, 2016

The latest success for DBV Technologies’ peanut allergy project was widely anticipated – but positive data from the long-term Olfus Vipes trial still pushed the group’s stock up 6% this morning. Investors are now no doubt eagerly awaiting results from the phase III Pepites and Realise trials of Viaskin Peanut, due in the second half of next year. The company is slightly ahead of Aimmune, which is expecting top-line phase III data with its peanut-allergy treatment AR101 in Q4 2017, and is yet to start its real-world trial, Ramses. At present, the sellside is ascribing more value to Viaskin Peanut, with consensus predicting 2022 sales of $750m and giving it an NPV of $1.6bn; there are currently no forecasts for AR101. Leerink analysts point to a more favourable safety profile to date with Viaskin Peanut, but believe that the peanut allergy market may accommodate both products.

Tecentriq bladder cancer rivals advance, but the battle is elsewhere

October 24, 2016

Roche’s Tecentriq was the first checkpoint-blocking antibody to gain US approval in urothelial bladder cancer, but just months later its monopoly looks set to end. On Friday two immuno-oncology competitors advanced in this indication, with Opdivo’s filing being accepted for US propriety review, and Keytruda’s Keynote-045 trial halted early for efficacy. Further behind, Astrazeneca’s durvalumab and Pfizer’s avelumab are in larger phase III programmes – by the time these read out the potential presence of several marketed competitors would render a small, uncontrolled trial insufficient for approval. That said, bladder cancer was just an initial way in for Tecentriq, and EvaluatePharma consensus sellside forecasts see it accounting for under a quarter of the Roche anti-PD-L1 MAb’s 2022 sales. The real battle lies in the much bigger indication of lung cancer, where Tecentriq joined its rivals with US approval last week.

To contact the writers of this story email news@epvantage.com or follow  @EPVantage on Twitter

Share This Article