Snippet roundup: Wins for Amgen, cuts for Novo and confusion over Cabometyx
Welcome to your weekly roundup of EP Vantage’s snippets – short takes on smaller news items.
This week, September 26-30, 2016, we had thoughts on the following: Threshold back to the future with tarloxotinib setback; Lupus data release helps Aurinia recover; Novo swings the axe cutting 1,000 jobs as pricing pressure bites; Mixed emotions on Cabo’s first line prospects; Amgen looking good for first-to-market in new migraine class; Boston makes a generous offer for EndoChoice; Smoking hot GW could spark takeover interest; Pain to persevere with Remoxy; GE Healthcare spreads its net wider; Humira biosimilar approved, but launch no clearer.
These snippets were previously published daily via twitter.
Threshold back to the future with tarloxotinib setback
September 30, 2016
Threshold Pharmaceuticals will be pursuing a modified plan A after plan B has also suffered a setback. The California based group saw shares fall 44% in morning trading today after it announced that phase II data showed that EGFR inhibitor tarloxotinib failed to show sufficient activity in squamous cell head and neck or skin cancer and EGFR-mutant, T790M-negative non-small cell lung cancer to continue development. In both cases, stable disease was reached in some patients, but a lack of partial responses failed to justify more investment in the project. Just one partial response was achieved in 29 patients in the skin and head and neck trial, and none in the lung cancer trial. Threshold’s new strategy involves testing evofosfamide in combination with checkpoint inhibitors. That agent missed in soft-tissue sarcoma last year, which battered the shares badly – following today’s share loss, Threshold is now worth one-fifth what was before the evofosfamide failure.
Lupus data release helps Aurinia recover
September 30, 2016
Shares of Aurinia Pharmaceuticals rose 32% in early trading today with release of more data from the Aura-LV trial of voclosporin in lupus, offsetting previous concerns about a safety signal. Both a low 23.7mg twice daily and a high 39.5mg twice daily dosage of voclosporin achieved five pre-specified secondary endpoints with statistical significance over placebo at 24 weeks. Those measures were time to complete remission, partial remission, time to partial remission, reduction in disease activitiy and urine protein: creatinine ratio. The main flaws in Aurinia’s lupus programme were contained in a topline data disclosure made in August: a miss for the high dose in the primary endpoint, complete remission, and the 12 deaths recorded in the active treatment arms compared with the one in the placebo arm. In an analyst presentation today Canada-based Aurinia emphasised that 11 of the deaths occurred in regions with compromised access to standard of care, and that the study’s chief investigator and data and safety monitoring board determined that none of the deaths were related to the treatment. In a note after the August release of the topline data that included a discussion of the deaths – after which the shares crashed 56% – HC Wainwright analyst Ed Arce also noted that studies of off-label CellCept and other drugs used in this indication have revealed similar imbalances in death rates.
Novo swings the axe cutting 1,000 jobs as pricing pressure bites
September 29, 2016
Until recently Novo Nordisk’s diabetes franchise looked unassailable. Today the Danish group announced it would be cutting 1,000 of its 42,000 workforce. Like others in the diabetes space Novo has been hammered by payers, particularly in its core insulin business. Novo is also facing the looming threat of biosimilars – further destabilising the insulin division. Luckily, it has its GLP-1 franchise to fall back on. The company’s primary focus will now be getting cardiovascular benefits on the label of Victoza and its other GLP-1 products, an event that could enable it charge premium prices and hopefully offset the falls in the insulin business. However, today’s job cuts will be across the board and there is a danger that by reducing its R&D function the group will not be able to create innovative products like once-weekly semaglutide that will be central to defending itself from price cuts.
Mixed emotions on Cabo’s first line prospects
September 29, 2016
Investors are clearly both optimistic and anxious about the potential of Exelixis/Ipsen’s Cabometyx in renal cell carcinoma. The 13% fall in Exelexis’ stock price yesterday, which wiped over $400m from its market capitalisation, was prompted by the disclosure in the ESMO abstracts of early clinical data on a possible competitive threat in first line use. But wait, surely data on Cabometyx in the first line setting has not even been revealed yet? Indeed, those data are among the late breakers at the very-same cancer conference. But Exelixis’ stock has trebled since the US biotech reported a PFS win over Sutent – the shift to first line use has already been being priced in. The competitive threat: it came from an initial study with Keytruda and Inlyta, a combination that being tested by Merck in the Phase III Keynote-426 trial. Exelixis’ investors could be in for more turbulence in the coming weeks.
Amgen looking good for first-to-market in new migraine class
September 29, 2016
The first look at phase III data from the anti-CGRP class changes little for the outlook of this hotly contested new migraine approach. Top-line data on AMG 334, or erenumab, showed the Amgen drug reduced monthly episodic migraine days by a statistically significant, placebo-adjusted 1.1 days, repeating the result seen in phase II. A second phase III study called Strive testing a higher dose and measuring the response over a longer time period will report before year end. Amgen and partner Novartis will be hoping to see some differentiating qualities emerge – the data generated to date by the four competitors in this space looks very similar although the others have yet to report pivotal results. So unless rivals produce something substantially different, erenumab’s edge will remain largely an issue of timing. In a crowded, undifferentiated market, this is not to be sniffed at.
Boston makes a generous offer for EndoChoice
September 27, 2016
Following $112m of venture funding and a $95m IPO, EndoChoice has finally hooked itself a buyer. The endoscopy group is being taken out by Boston Scientific for $210m, with the $8 per share offer representing a 90% premium over the price at close yesterday. Sales of endoscopy technologies are growing fast – EvaluateMedTech’s consensus forecasts put this segment’s annual growth rate at 6.8% – so Boston’s move to augment its endoscopy business with EndoChoice’s portfolio might be smart. EndoChoice had sales of around $75m last year, whereas Boston’s endoscopy unit sold $1.2bn-worth of devices, but this is the type of small tuck-in deal that ought to give hope to medtech start-ups.
Smoking hot GW could spark takeover interest
September 26, 2016
GW Pharma’s third trial win with anti-epilepsy drug Epidiolex is likely to have two consequences. The first, and most important for the company, will be further de-risking its most valuable asset. The second will be further fanning the flames of the rumours that the company is gearing up to be taken out. Certainly another clinical win in a rare disorder that has no current treatments is bound to make some specialty pharma companies salivate. But GW is no longer the bargain it used to be. Today's results from a second study in Lennox-Gastaut syndrome pushed the shares up to record highs, valuing the UK biotech poster boy at about £2.4bn ($3.1bn). GW is also in a unique position to continue walking its path alone, given the small sales force needed to sell Epidiolex. Additionally, the onerous requirements of managing the regulatory process for products that are made from cannabis might be a deterrent for a larger company. That said, if GW continues to look this good none of that will be unsurmountable and the investment bank the group is rumoured to have called in earlier this month might get a lot busier.
Pain to persevere with Remoxy
September 26, 2016
After a third complete response letter for its opioid Remoxy, Pain Therapeutics is determined to continue development of its supposedly abuse-proof oxycodone. On the positive side, problems with manufacturing and stability, raised in the previous CRLs in 2008 and 2011, are behind it, chief executive Remi Barbier believes. But the FDA is now focused on Remoxy’s abuse-deterrent label claims and has requested new studies exploring three possible routes of abuse: injection, inhalation and snorting. The former two could be completed in a matter of months, Mr Barbier said during a conference call, but the snorting study in humans would take longer – it is possible that Pain might focus on the first two label claims if it wants to refile Remoxy quickly. All three studies would take a year and around $5m to carry out, the company estimates – and with almost $25m in the bank at the end of June, it has the resources needed. If Pain does succeed, an attractive market beckons, fuelled by the growing opioid crisis in the US. But another setback might finish the group off. Its stock was down as much as 67% in premarket trading this morning.
GE Healthcare spreads its net wider
September 26, 2016
GE Healthcare has one of the more active corporate VC operations in the medtech industry, but generally restricts its venture investments to US and Israeli companies (see table). It is thus reassuring to see the imaging group branch out into emerging markets with a new incubator programme, including a potential $50m investment fund. Cost pressures in the West are making it harder to sell expensive imaging machinery, so GE is perhaps wise to look at cheaper technologies that appeal to a new customer base. Called five.eight, the programme is intended to aid development of – among other things – low-cost healthcare technologies and digital applications, and will begin by choosing 10 start-ups which will be eligible for investment of up to $5m apiece. The first target is Bangalore-based Tricog, which uses cloud-connected electrocardiographs to help speed diagnosis of myocardial infarction.
Humira biosimilar approved, but launch no clearer
September 26, 2016
The approval of Amgen’s Humira biosimilar, Amjevita, was widely predicted following a positive panel vote in July. But what is harder to forecast is when the product, previously known as ABP 501, might be launched. The earliest possibility looks like March 2017, 180 days after Amgen gives Abbvie notice that it intends to commercialise a competitor, which can only be done upon approval. But Abbvie hopes to hold off biosimilar competition for longer and has said it has patent protection up to 2022. This seems optimistic, as the key composition-of-matter patent falls in December 2016 in the US. The truth is likely to lie somewhere in between – EvaluatePharma consensus has Humira sales peaking at $18.2bn in 2018 before declining thereafter, and Amjevita sales beginning at $45m in 2017.