Welcome to your weekly roundup of EP Vantage’s snippets – short takes on smaller news items.
This week, July 17 to 21, 2017, we had thoughts on the following: Tissue Regenix bones up; Lingo lingers on; Vosevi becomes Gilead’s saving grace as first hep C salvage pill; J&J hopes for a year of two halves; Nerlynx approval raises more questions than answers; Sickness signal could scupper Paratek’s antibiotic; Astrazeneca – ‘nothing to see here, move along’ as Soriot stays.
These snippets were previously published daily via twitter.
Tissue Regenix bones up
July 21, 2017
Cellright, which is to be bought by Tissue Regenix for $26m up front, has been growing at 61% annually for the last three years – but intriguingly Tissue Regenix is forecast to grow much faster: 98% out to 2022, EvaluateMedTech’s sellside consensus shows. Tissue Regenix is conducting a £40m ($52m) equity raise to finance the deal; the rest of the cash will go towards boosting growth of the enlarged group and supporting existing work. Cellright sells several types of osteoinductive bone grafts, and last year generated $5.4m of revenues and $1.5m of Ebitda. There is little overlap between the companies’ portfolios as Tissue Regenix specialises in soft tissue applications, primarily with its dCELL technology. But Cellright has a FDA-approved manufacturing facility in Texas to which Tissue Regenix could transfer manufacture of its Dermapure wound graft, allowing it to quit its existing contract manufacturing agreements. The UK company will sell 400 million shares at 10p each; its stock has fallen 13% so far today to 10.75p.
Lingo lingers on
July 21, 2017
The double failure of Biogen’s anti-Lingo-1 antibody opicinumab has not halted the group’s development of this multiple sclerosis asset, though the sellside has turned distinctly lukewarm since the heady days when Credit Suisse suggested it might be worth $10bn. This week an entry for the phase II Affinity trial went up on Clinicaltrials.gov, with an expected start date in October. Evercore ISI’s Umer Raffat points out several key differences between Affinity and Synergy, the study whose flop prompted a 13% crash in Biogen stock a year ago: the two-arm, 240-patient Affinity trial is better powered than Synergy, and uses fixed rather than weight-based dosing, with a slightly different primary endpoint and criteria that could recruit milder patients. The second and fourth points seem designed to play into the positive aspects seen in Synergy, including a bell-shaped response curve and promising effect in younger patients. While sellside forecasts reflect average expectations as well as differing opinions on a potential launch date, analysts’ loss of confidence is inescapable. EvaluatePharma’s 2022 consensus now sees opicinumab generating sales of just $51m, versus $408m in April 2016, before the Synergy flop.
Vosevi becomes Gilead’s saving grace as first hep C salvage pill
July 19, 2017
With the hepatitis C market near saturation Gilead Sciences must be grateful to have Vosevi – one of just three hep C drugs forecast to see sales growth. And yesterday’s US approval puts the drug, a once-daily sofosbuvir-containing triple therapy, on track to achieve this. Vosevi has secured the FDA’s green light as the first pill for hep C patients who have not been cured after treatment with an NS5A inhibitor regimen. It can be used in patients with genotypes 1a and 3 previously treated with a sofosbuvir-based regimen that does not include an NS5A, and in genotypes 1-6 in patients previously treated with a NS5A. Approval was based on the results of the Polaris-1 and 4 studies in this population, in which 96-97% of patients taking Vosevi were virus free 12 weeks after concluding treatment. Vosevi sales are forecast to reach $1.3bn by 2020 before declining, according to EvaluatePharma sellside consensus, and the drug joins Abbvie’s Maviret and Merck & Co’s Vanihep as the revenue-appreciating trio.
J&J hopes for a year of two halves
July 18, 2017
Flat pharmaceutical sales in Johnson & Johnson’s second quarter mean that the company will need the business to accelerate in the second half of 2017 if it wants to meet its bullish full-year guidance. But management stressed multiple times during its earnings call that this is exactly what it expects, saying it was optimistic on several counts, including moving Darzalex into earlier lines of multiple myeloma therapy, launching its psoriasis drug Tremfya, and expanding the anticoagulant Xarelto into new indications. However, its chief executive, Alex Gorsky, seemed to dodge a question on whether there was “light at the end of the tunnel” on pricing for the diabetes drug Invokana, whose sales fell 23% in the second quarter. And 2018 could see J&J face the full impact of Remicade biosimilars – with a new copycat from Samsung possibly due to enter the market this year – and generic competition for Zytiga, which is facing an inter-partes review. While J&J waits for its pipeline to deliver, the tough times look set to continue.
Nerlynx approval raises more questions than answers
July 18, 2017
FDA approval of Puma’s breast cancer therapy Nerlynx has come in a broad patient population and without a black box warning on diarrhoea, but it is still hard to see how the product will achieve the $6bn peak sales that some analysts are estimating. EvaluatePharma sellside consensus is a more conservative $891m in 2022, giving Nerlynx a net present value of $2bn – not too far off Puma’s $3.3bn market cap, suggesting that it is more realistically valued than many of its peers. Puma has not yet given pricing details – it has previously said the cost would be similar to that of other breast cancer drugs – or said when Nerlynx will hit the market, but investors were confident enough to push its stock up 9% this morning. However, are still reasons to be cautious about Nerlynx, including prominent warnings on the label about diarrhoea and hepatotoxicity, as well as interactions with other agents including proton pump inhibitors, which could all make doctors think twice before prescribing it. And the cost – both of the drug itself and the management of its side effects – will also be an important consideration for payers.
Sickness signal could scupper Paratek’s antibiotic
July 18, 2017
High rates of nausea and vomiting could dent commercial hopes for Paratek Pharmaceuticals’ oral antibiotic omadacycline, in spite of a win in the phase III Oasis-2 trial in acute bacterial skin and skin structure infections. The company hopes that pooled rates of these adverse events across three trials – Oasis-1, Oasis-2 and Optic – will assuage any safety concerns: the incidence of nausea and vomiting across these studies was 15% and 8% respectively, versus 30% and 17% respectively in the Oasis-2 study alone. And Paratek bulls seemed unconcerned, pushing the group’s stock up 6% in post-market trading yesterday amid hopes that the company might soon be acquired. The group plans to submit a US NDA for oral and IV-to-oral omadacycline regimens as early as the first quarter of 2018. It is also awaiting data from another study of IV-to-oral dosing in community-acquired bacterial pneumonia – no doubt the incidence of gastrointestinal side effects will be watched closely.
Astrazeneca – "nothing to see here, move along" as Soriot looks set to stay
July 17, 2017
The "is he, isn’t he?" drama surrounding Pascal Soriot’s rumoured departure from Astrazeneca to Teva drew to a quiet conclusion on Friday after Bloomberg reported that Mr Soriot would after all be staying at Astrazeneca. Despite the drama and intense speculation, which ran as far as a possible second approach from Pfizer, Astrazeneca continued to stonewall, refusing to comment on either Mr Soriot’s intentions or the original report from Calcalist that wiped billions off the group’s share price. With Astra’s stock back up and the group projecting business as normal, Mr Soriot will be under even more pressure to live up to his promises. Mystic still looms large, and despite the drug/combo becoming less relevant to the treatment landscape it remains Astra’s biggest catalyst in years. The group’s shares have done well under Mr Soriot and there has been some pipeline improvement in Lynparza, but Brilinta has failed to be saviour he promised and a lot of Astra’s topline growth has been flattered by externalisation. As such, if Mystic disappoints Mr Soriot might wish he had taken the chance to jump ship. As for Teva, the perception that it tried and failed to attract a high-profile pharma chief executive will only make it harder to get a leader that will steady its floundering vessel.