Welcome to your weekly roundup of EP Vantage’s snippets – short takes on smaller news items.
This week, March 19-23, 2018, we had thoughts on the following: Lokelma gets a late reprieve in Europe; NIH in line for budget boost in 2018 spending measure; Sun’s gamble to move away from generics scores its first success; Boston tucks Nxthera in; fresh £100m funding round ramps up Oxford Nanopore; Regeneron relief as Eylea’s Panorama widens; SelectMDx selected for guideline inclusion.
These snippets were previously published daily via twitter.
Lokelma gets a late reprieve in Europe
March 23, 2018
Many might already have written off Astrazeneca’s $2.7bn takeout of ZS Pharma as an expensive mistake, but the EU regulator just gave the UK company a reprieve by approving ZS’s lead asset, Lokelma (ZS-9), for hyperkalaemia. The spotlight now falls on the US, where Lokelma got a first complete response letter in May 2016, just six months after the ZS takeover, and a second a year ago. Investors might view the EU green light as a good omen for the latest US verdict, expected by the mid-year, but they should also remember that it is not particularly rare nowadays for the two regulators to take opposing views on a subject. Both CRLs had concerned manufacturing deficiencies. Either way, the damage has already been done: Lokelma’s delay has enabled much of the hyperkalaemia market to be seized by its rival Veltassa, developed by Relypsa and now owned by Vifor Pharma (formerly known as Galenica). Lokelma and Veltassa were once expected by the sellside to share $1.4bn of 2022 sales equally, but the balance has now swung in the latter’s favour.
NIH in line for budget boost in 2018 spending measure
March 22, 2018
The US National Institutes of Health will be getting its first big boost in funding this decade under omnibus federal spending legislation agreed by congressional leaders yesterday. The $3bn increase will take the institutes, which fund basic science research that leads to developmental pharmaceutical projects, to a total budget of $37bn for fiscal 2018. Priorities cited by congressional leaders include a 30% increase in Alzheimer’s disease research, to $1.8bn; a 26% increase in precision medicine research, to $290m; a 67% increase in research into a universal influenza vaccine, to $100m; and a fivefold increase in regenerative medicine research, to $10m. The federal government has been funded by a series of temporary measures in line with the 2017 budget since the beginning of the 2018 fiscal year on October 1. Congress needs to pass the omnibus measure, which funds the government through the rest of fiscal 2018, by the end of the day on March 23 to avoid a government shutdown due to expiry of the existing temporary spending measure.
Sun’s gamble to move away from generics scores its first success
March 22, 2018
Mounting competition and price pressures have turned generics into a tough business over the past two years, making Sun Pharmaceutical’s foray into patent-protected brands look particularly prescient. Yesterday the strategy reached a milestone, with the US FDA making Ilumya, a psoriasis drug, Sun’s first non-generic to be approved in the West. Sun’s other moves to increase sales of innovative, “value-added” products include deals with Novartis and Astrazeneca to sell branded prescription products in Japan and India respectively. Sun gained Ilumya four years ago from Merck & Co, which was likely put off by competition and the advent of generics in the psoriasis market. Still, the Indian group financed but did not carry out Ilumya’s late-stage development – that work fell to Merck – suggesting that it still has some way to go to establish a US brand presence. And Ilumya itself is unlikely to shake up the psoriasis market; still, the desire of a company the size of Sun, which by 2017 sales is the fifth-largest global generics player, to distance itself from its core expertise should give competitors something to think about.
Boston tucks Nxthera in
March 21, 2018
The acquisition of Nxthera, maker of a transurethral radiofrequency thermal therapy for benign prostatic hyperplasia, is the fourth tuck-in deal Boston Scientific has struck this year. The up-front fee of $306m puts the deal squarely in Boston’s recent range; it has not done a deal worth more than $1bn since it bought the men’s health unit of American Medical Systems back in August 2015. Boston already had a minority investment in Nxthera, having led a $40m funding round back in December 2015, so the up-front payment will actually net out at around $240m. Potential milestone payments by Boston could be worth up to $85m over the next four years. Nxthera’s device, called the Rezūm system, uses water vapour to remove excess prostate tissue during a minimally invasive procedure performed in the doctor’s office, and was approved in the US in 2015. The technology will slot neatly into Boston’s existing urology franchise, which brought it revenues of $1.1bn last year.
Fresh £100m funding round ramps up Oxford Nanopore
March 20, 2018
With Oxford Nanopore’s latest £100m ($140m) round of venture funding potentially valuing it at £1.5bn the UK sequencing company looks rapidly to be moving from unicorn status to ubercorn. This hefty valuation is attached to a company that last year reported orders of $23.5m. To justify its price tag Oxford Nanopore will need to show that its technology, which it claims is cheaper and faster than rivals’, can indeed open up emerging markets and edge out larger, less nimble players. And while its chief executive, Gordon Sanghera, has previously poured scorn on companies that sell out to rivals too early, investors who have so far happily sunk £441m into Oxford Nanopore will want their exit at some point. By the sounds of things Mr Sanghera’s preferred route would be an IPO, but the group might also attract interest from groups including Illumina, which has so far focused on bigger, more expensive desktop machines. As such, the handheld machines, with nanopore technology, that Oxford Nanopore offers could be a welcome addition to Illumina’s portfolio. The US sequencing group is also one of Oxford Nanopore’s investors, so is well placed to make a move but, as has previously been shown by other former unicorns, turning mythical beasts into profitable companies can run up against reality.
Regeneron relief as Eylea’s Panorama widens
March 19, 2018
Regeneron finally has something to cheer about. A win in a franchise-extension trial of Eylea should keep sales of its best-seller growing – at least until 2021, when it will be hit by competition from Novartis’s brolucizumab. Eylea’s victory came in the Panorama trial in diabetic retinopathy without diabetic macular oedema; the drug is already available for the more severe diabetic retinopathy with macular oedema indication. If approval follows it could add US sales of $700m by 2023, Leerink analysts estimate. Panorama met its first co-primary endpoint, with 58% of patients achieving a two-step or greater improvement from baseline on the diabetic retinopathy severity scale at week 24, versus 6% with sham injection (p<0.0001). The other co-primary endpoint evaluates the same measure at 52 weeks. The result will be a relief to Regeneron, whose efforts to expand the Eylea franchise through combinations have fallen flat. Still, in the drug’s main indication, wet age-related macular degeneration, Eylea will soon be facing Novartis’s blockbuster-in-waiting brolucizumab. Both are looking for a 12-week dosing schedule, so the battle will come down to efficacy and perhaps cost. Regeneron, whose stock climbed just 1% this morning, will have to make the most of Eylea while it still can.
SelectMDx selected for guideline inclusion
March 19, 2018
Having a product included in heath society guidelines can be an important contribution to the fortunes of smaller medtech companies, and Mdxhealth has received just such a boost from the European Association of Urology. The group has recommended Mdxhealth’s SelectMDx, a urine test that helps identify patients at increased risk of aggressive prostate cancer, for use in asymptomatic men who have a high prostate-specific antigen (PSA) score. The company’s stock is up 12% on the Brussels exchange so far today. The decision will almost certainly increase sales of the test in Europe, and it will also help drive payer adoption, Mdxhealth says. It might spur SelectMDx’s inclusion in US guidelines at some point, too, and the US is the larger market – last year the company performed 8,600 SelectMDx tests here compared with 3,100 in Europe, according to Berenberg. The analysts add that around two million abnormal PSA test results occur in Europe each year and model a price for SelectMDx of around €300 ($368) per test.