Snippet roundup: Christmas comes early for Pfizer’s bankers and Mannkind
Welcome to your weekly roundup of EP Vantage’s snippets – short takes on smaller news items.
This week, November 7-11, 2016, we had thoughts on the following: small NASH players have another big competitor to contend with; rumour mill grinds down Pfizer’s consumer health unit; Sanofi shows its cuddly side with Mannkind lifeline; no Alexion takeover after all; Abbvie bests Coherus as biosimilar siege intensifies.
Small NASH players have another big competitor to contend with
November 11, 2016
Bristol-Myers Squibb’s licensing deal with Nitto Denko not only endorses a novel approach to treating the liver disease NASH, it also sees the entry of the fourth big hitter into this promising space. Bristol’s interest in NASH comes hot on the heels of Gilead’s decision to advance GS-4997 into phase III NASH studies, Allergan’s knockout $534m purchase of the NASH player Tobira in September, and Astrazeneca’s prioritising of AZD4076 in this indication last year. This could put further pressure on the smaller NASH players such as Intercept, Genfit and Conatus, which have all built up a significant investor following, but which lack the clout of a big pharma or big biotech group. The Nitto asset for which Bristol has paid $100m up front is ND-L02-s0201, an siRNA therapy targeting heat shock protein 47; while this looks to be a unique approach to targeting NASH, Astra’s AZD4076 is also an advanced therapy – specifically a microRNA oligonucleotide. ND-L02-s0201 is in an open-label phase I study in NASH or hepatitis C fibrosis.
Rumour mill grinds down Pfizer’s consumer health unit
November 10, 2016
After years of agonising over its structure and several aborted acquisition attempts Pfizer is rumoured to have come up a new portfolio plan – spinning out its comsumer healthcare division. If this is the extent of the group’s strategy deliberations then it is frankly disappointing. But with this business looking increasingly non-core it does play into industry trends to slim down. And this would not be the first time that Pfizer has attempted to cast out consumer health. In 2006 it sold its then consumer health division to Johnson & Johnson, for $16.6bn, only to seemingly regrow the business to what it is today. Last year, consumer health reported sales of $3.4bn. The $14bn Pfizer is reported to be asking would provide handy cash for the big acquisition many believe it needs to prop up its pipeline after the failed $160bn bid for Allergan. However, the possible brakes to a spin-out include the recent election of Donald Trump as US president, which could provide Pfizer with a cash bonus if he implements a one-off "tax holiday" for overseas profits, negating the need for a sale to pay for M&A. Secondly, while a Republican clean sweep might have allayed some of the industry’s fears over pricing pressure from politicians, pressure still remains from payers. As such, retaining a business that payers cannot touch might not be such a bad idea.
Sanofi shows its cuddly side with Mannkind lifeline
November 10, 2016
Sanofi’s almost inexplicable decision to hand over $100m to its former partner Mannkind throws an unexpected lifeline to the infamous inhaled insulin outfit. The company, which is attempting to resurrect the long-tainted Afrezza off its own back, had $222.5m in debt outstanding at the end of September, a figure that dwarfs its $35.5m in cash on hand and third-quarter product sales of $600,000. Sanofi’s gesture not only erases $70m from that debt pile, it also provides some cash in hand and allows the sale of a facility in California to proceed, which could provide a further lump sum. Mannkind shares surged 36% higher in early trade on the news, but this is far from the end of its troubles. The company has more than $100m in other loan notes due for repayment at various points over the next three years, is on the hook for $100m in insulin purchases under an agreement with a manufacturer and owes The Mann Group a further $50m. Unless the company can pull off a swift resurrection of Afrezza – a feat that looks nigh on impossible – the French pharma giant’s benevolence merely kicks the threat of default down the road.
No Alexion takeover after all
November 10, 2016
Anyone still hoping for an acquisition of Alexion will be disappointed – the company has revealed a more prosaic reason for delaying the filing of its third-quarter report, namely an investigation into its sales practices. But, after widespread speculation about what might have befallen Alexion, the news could have been worse. Various potential explanations for the 10-Q delay had been put forward, including the possibility that the group might have to restate its results or pay an impairment charge relating to its purchase of Synageva. Instead, claims by a former employee about improper sales practices with Soliris look like more of the same following last year’s announcement of an unconnected Department of Justice investigation. However, the group still did not file its 10-Q form by yesterday’s deadline; it now has a five-day grace period to do so. While this is not good news – Alexion’s stock was down 2% in premarket trading today – based on the scant information released so far investors should ultimately not have too much to worry about. However, a resolution could take weeks, rather than days, Leerink analysts believe.
Abbvie bests Coherus as biosimilar siege intensifies
November 7, 2016
Abbvie has succeeded in delaying the launch of another Humira biosimilar, Coherus Biosciences’ CHS-1420 – although whether it will keep Humira copycats at bay until 2022, as hoped, is another matter. Leerink analysts are saying 2020, which would still be quite a feat for Abbvie as the key US composition-of-matter patent for Humira falls in December 2016. So far, attempts to reduce its reliance on Humira have fallen flat – the drug made up 64% of Abbvie’s Q3 sales, and a strong defence against biosimilars has become a key feature of its strategy. Abbvie’s stock was up 5% yesterday, albeit on a day when most other big caps also rose. Coherus, meanwhile, was down 9%, emphasising the importance of being first in the increasingly crowded biosimilar market. This looks unlikely now after Coherus’s request for inter partes review of a key formulation patent for Humira was denied. The company does have the option to formulate around the ’166 patent or challenge the decision in a district court. It is also due a ruling on another review request, on a dosing patent, in May 2017. But it looks likely to be beaten by Amgen’s contender Amjevita, which was approved in September, although the launch timing is still uncertain.
These snippets were previously published daily via twitter.