Snippets

Vantage Snippets are short summaries of breaking news stories.

Novartis brushes off Zolgensma questions

A strong first quarter helped Novartis recoup the losses it suffered last week after reporting two deaths with its big pipeline hope, the spinal muscular atrophy gene therapy Zolgensma. But the project’s safety profile is clearly on investors’ minds before an FDA approval decision next month. Questions about this, Zolgensma’s price and how broad its label might be, dominated Novartis’s earnings call today. The group’s chief executive, Vas Narasimhan, brushed off toxicity concerns, pointing out that one death had already been deemed unrelated to therapy and highlighting the life-threatening nature of SMA. Patients with type 1 SMA usually die within a few years, but any concerns could hold back Zolgensma’s use in less severe type 2 and 3 disease. The therapy has been filed for type 1 only, and while investors hope that the label will be broader Mr Narasimhan refused to speculate on the chances of this. Results from the Strong trial, in type 2 patients, are due at the American Academy of Neurology meeting in May. Mr Narasimhan again mooted a $4-5m price for Zolgensma, but added that Novartis would take into account the view of the US watchdog Icer that this would be too expensive.

SMA market outlook
      WW sales ($m)
Product Company Mechanism 2019 2020 2022 2024
Spinraza Biogen SMN 2 antisense 2,001 2,156 1,816 1,655
Zolgensma Novartis SMN gene therapy 125 563 1,446 1,635
Risdiplam Roche SMN 2 gene splicing modifier - 49 464 797
SRK-015 Scholar Rock Myostatin inhibitor - - 25 306
LMI070 Novartis SMN 2 gene splicing modifier - - 5 13
    Total market 2,126 2,768 3,755 4,406
Only includes products with sellside sales forecasts. Source: EvaluatePharma.

Coming late to the party, Boston looks set to struggle in valve space

It is often said “better late than never”, but any celebrations surrounding yesterday’s US approval of Boston Scientific’s Lotus Edge transcatheter aortic valve are bound to be muted. Investors had been hoping for a mid-2018 launch, but a series of manufacturing and performance issues saw the product recalled from sale in Europe in 2017 and then have its US filing yanked in the same year. The delays to approval have only served to help Boston’s aortic valve rivals Medtronic and Edwards Lifesciences further entrench their leadership positions. And while Lotus Edge has previously demonstrated superiority over Medtronic’s Corevalve in head-to-head trials – beating its rival on the primary efficacy measure of the Reprise III study – 2024 sales forecasts from EvaluateMedTech show that Lotus is destined to remain in third place in this space. Sales of Lotus Edge are likely to be hit further by last month’s readout from the year-long Partner 3 study showing Edwards’ Sapien 3 valve outperformed surgery when it came to aortic stenosis; the result increases the likelihood of Sapien 3, which is currently used in patients with a high risk of death from surgery, replacing surgical valve replacements in low-risk patients.  

Transcatheter aortic valves – the major players
    WW annual sales ($m)  
Company Aortic valve franchise 2018e 2020e 2022e 2024e CAGR
Edwards Lifesciences Sapien 2,221 2,731 3,197 3,662 +9%
Medtronic* CoreValve 1,896 2,349 2,803 3,269 +10%
Boston Scientific Lotus 97 378 745 1,135 +51%
Abbott Laboratories Portico 86 151 242 281 +22%
Microport Scientific VitaFlow - 4 10 22 N/A
*Note: this also includes revenues from Medtronic's mitral and pulmonary valves.
Source: EvaluateMedTech.

Aducan’tumab, but that won't stop Biogen

It was clear that the abject failure of aducanumab was not going to deter Biogen from pursuing the development of Alzheimer’s disease projects, and today the group shed a little more light on its strategy here. On its first-quarter analyst call Biogen justified having pressed on with aducanumab despite the failure of every other preceding beta-amyloid project, arguing that “we followed the science”, and highlighted five Alzheimer’s assets that were very much still in development. As far as strategic changes go, the group said it would no longer run large Alzheimer’s trials with subjective endpoints, instead seeking out a more targeted approach. While the growing focus is now on targeting tau, another anti-beta-amyloid MAb, BAN2401, remains in development, and bizarrely entered a registrational study the day after aducanumab flunked its two phase III trials (Eisai and Biogen throw good money after bad, March 22, 2019). Today Biogen left open the possibility that the decision to advance BAN2401 had been taken not by it but by its partner Eisai, pointedly refusing to answer analysts' questions about just how much control it retained over its joint Alzheimer’s projects.

Biogen's remaining Alzheimer's portfolio
Project Mechanism Status Note
Elenbecestat BACE inhibitor Phase III Partnered with Eisai
BAN2401 Anti-beta-amyloid MAb Moving into phase III Partnered with Eisai
Gosuranemab Anti-tau MAb Phase II  
BIIB076 Anti-tau MAb Phase I Partnered with Eisai
IONIS-MAPTRx Tau antisense oligonucleotide Phase I Partnered with Ionis
Source: Q1 2019 presentation.

Gamma-delta work makes cautious inroads into the clinic

TC Biopharm’s treatment of the first patient cohort in a study of OmnImmune (TCB002) marks only the fourth human trial of gamma-delta cells in the West. There might be more, as the UK company stresses that the trial is intended as a prelude to going into the clinic with a gamma-delta CAR-T cell product – possibly a first – later this year. Gamma-delta T cells have T-cell receptors comprising gamma and delta, rather than the more common alpha and beta, subunits. Since alpha-beta T-cell receptors are responsible for autoimmunity, gamma-delta T cells have low propensity to cause graft-versus-host disease, and might therefore be used off the shelf. Indeed, TC says the purpose of the OmnImmune study is merely to demonstrate the safety of injecting expanded but unmodified, donor-derived gamma-delta T cells into nine acute myelogenous leukaemia subjects. Other clinical trials include those of Gadeta’s TEG001 and an academic trial of OmnImmune, while an Innate Pharma study at Rennes University Hospital was terminated 10 years ago. Clinical work is also under way in China, and the space has seen deals too (Gamma-delta follows financing with consolidation, July 20, 2018).

Selected γδ T-cell players
Company Based in Genetic modification? Notes Lead asset
Gadeta Netherlands Yes: αβ T cells expressing engineered γδ T-cell receptor €7m series A (Baxalta) in 2016; Gilead exclusive buyout option in 2018 TEG001 (phase I)
TC Biopharm UK Not yet, but allogeneic CAR-engineered γδ T cells are planned Deal with Bluebird, $16m up front OmnImmune (phase I)
Incysus US No: expanded allogeneic γδ T cells Leukaemia study filed in May 2018, not under way yet EAGD-T cells (phase I starting May 2019)
Gammadelta Therapeutics UK Not clear; possibly CAR-engineered γδ T cells $100m financing (Abingworth, Takeda); bought Lymphact in 2018 DOT-Cells technology
Immatics Germany Yes: allogeneic engineered T-cell receptor γδ T cells $58m funding 2017, $54m Genmab deal covering bispecifics in 2018  ACTallo technology
Puretech Health US Not clear Formed Nybo Therapeutics subsidiary in 2017 Unknown
Medinet Japan Not clear Contract manufacturer carrying out γδ T-cell expansion, named in patents Unknown
Source: company filings.

Asco 2019 – not a Marker of excellence

Marker Therapeutics yesterday narrowly avoided becoming the first casualty of this year’s Asco. The group quietly slipped into an SEC filing that the conference had rejected an abstract covering its MAPP T-Cell Therapy in pancreatic cancer, initially prompting an 11% share price fall, but after some sellside firefighting the stock ended the day off only 4%. As far as Asco abstracts that have been accepted go, only their titles were unveiled yesterday, but already some will have piqued investors’ interest. Mirati bulls will nervously await Amgen’s first phase I data on the KRAS inhibitor AMG 510, billed as best in class, while Roche’s entrectinib, awaiting US approval for NTRK fusion-positive tumours and Ros1-mutated NSCLC, features in a study in children with mutated CNS cancers that has been selected for inclusion in the meeting’s press programme. Meanwhile, investors looking at the Celgene contingent value rights (CVRs) set to be issued to Bristol-Myers Squibb will get little solace from abstracts featuring Liso-cel; one of the CVR’s three triggers is Liso-cel’s approval by the end of 2020, but efficacy data from the asset’s lead indication, lymphoma, do not feature. Asco takes place from May 31 to June 4.

Selected Asco 2019 abstracts
Project Company Mechanism Detail Asco abstract
Entrectinib Roche (ex Ignyta) Kinase inhibitor CNS tumours with gene mutations 10009
Liso-cel Celgene/BMS Anti-CD19 CAR-T CLL study 7501
Liso-cel Celgene/BMS Anti-CD19 CAR-T CRS & neurological toxicity 6637
AMG 510 Amgen KRAS G12C inhibitor First phase I data 3003

Catalent puts down a bet on the future of gene therapy

As the number of cell and gene therapies in development increases so must manufacturing capacity, leaving biopharma with a crucial decision; buy or build? With yesterday's $1.2bn all-cash takeout of the manufacturer Paragon Biosciences, Catalent is betting on companies opting for buy. And Catalent is not alone in seeing the promise of hoovering up available gene and cell therapy contract manufacturing businesses; in March Thermo Fisher bought Brammer Bio for $1.7bn. Catalent’s move on the private equity-backed Paragon came days after Paragon opened a new manufacturing facility in Baltimore, and on the same day that it announced the extension of an existing relationship with Sarepta to build more gene therapy manufacturing capacity. Both events bode well for Catalent, which clearly has an eye on the long-term forecast claiming a $40bn addressable market for gene therapy. As for the near term, one rationale for the deal comes in the form of the $200m Paragon is expected to bank this year from manufacturing contracts and the promises of much more to come in future. Catalent is getting in early on gene therapy consolidation, and with reports of demand for gene therapy manufacturing outstripping supply there could be more such deals.

Selected cell and gene therapy manufacturing deals
Date Aquirer Target Deal type Price
Apr 2019 Catalent Paragon Bioservices Acquisition $1.2bn
Mar 2019 Thermo Fisher  Brammer Bio Acquisition $1.7bn
Jan 2019 Hitachi Chemical Apceth Biopharma Acquisition $86m
Oct 2018 Lonza Octane Biotech Controlling stake -
May 2017 Lonza Pharmacell Acquisition -

Clovis’s bladder cancer failure hints at need for targeted approach

It is remarkable that Clovis’s discontinuation of Rubraca’s bladder cancer study, Atlas, caused a 12% share price decline this morning: bladder cancer was not expected to become a major use for the Parp inhibitor, and Clovis slipped out Atlas’s futility analysis failure in a late Friday SEC filing. Still, some analysts had been talking up Atlas, even if most attributed no value to it. And, though checkpoint blockade has made inroads in urothelial bladder cancer, options for patients who have failed platinum chemo and immuno-oncology are limited. Leerink analysts stressed that Atlas had not preselected for BRCA mutants or HRD-positive subjects, though as a reason for its failure it is hard to square this with Clovis’s earlier claim that as many as 60% of bladder cancers might carry HRD positivity. The need to understand bladder cancer’s underlying cause was highlighted by the approval, coincidentally also on Friday, of Johnson & Johnson’s Balversa (erdafitinib), for second-line patients with FGFR2 or FGFR3 alterations. FGFR inhibitors are thought also to have promise in another rare cancer, cholangiocarcinoma. The US FDA on Friday called Balversa the first targeted therapy for metastatic bladder cancer.

Selected bladder cancer projects
Product Company Status Setting
Keytruda Merck & Co Approved 2L or 1L chemo-ineligible
Tecentriq Roche Approved 1L chemo-ineligible
Imfinzi Astrazeneca Approved 2L
Opdivo Bristol-Myers Squibb Approved 2L
Bavencio Merck KGaA/Pfizer Approved 2L
Balversa (erdafitinib) Johnson & Johnson/Otsuka Approved 2L, FGFR2/3 alterations
Enfortumab vedotin Seattle Genetics/Astellas Phase III 2L (post platinum & PD-(L)1)
Vicinium Sesen Bio Phase III 2L (post BCG)
UGN-101 (mitomycin C) Urogen Pharma Phase III Not specified
Qapzola (apaziquone) Spectrum Pharmaceuticals Phase III Not specified
Sacituzumab govitecan Immunomedics Phase II ≥2L
RX-3117 Rexahn Pharmaceuticals Phase I/II ≥2L
Source: EvaluatePharma & clinicaltrials.gov.

Tracon’s latest oncology failure leaves little to excite investors

After flunking in renal cell carcinoma at the end of last year and in gliblastoma multiforme in 2017, success in angiosarcoma represented one of Tracon Pharmaceuticals' last hopes of keeping its oncology dreams alive. Tracon's near-50% share price fall on Friday shows how that worked out. The phase III Tappas trial, which evaluated its lead product, TRC105, in combination with Votrient in advanced or metastatic angiosarcoma was terminated for futility, with the group saying it would also cease further enrolment into company-sponsored oncology trials of TRC105. While Tracon tried to accentuate the positive, pointing to the cost savings of terminating the Tappas trial early, future catalysts for the shares appear to be few and far between. Some investors hope that TRC253, Tracon’s joint venture with Johnson & Johnson for prostate cancer, could see the US big pharma group buy the asset, but J&J is unlikely to move before phase I/II data read out at the end of the year. Tracon’s novel partnership with the Chinese biopharma company I-Mab over immuno-oncology projects is certainly interesting, but very much a longer-term play. For now Tracon looks like it could be stuck in the stock equivalent of the doldrums.

Helius collapses after FDA turns down Pons

Helius Medical Technologies has vowed to continue its quest to obtain de novo 510(k) clearance of its neuromodulation device, but having lost two thirds of its value yesterday when the FDA declined its application the path ahead will not be easily navigated. The portable neuromodulation stimulator, or Pons for short, is intended for patients with balance disorders caused by traumatic brain injury. It sends electrical impulses to the tongue via an electrode array that the patient holds in their mouth; according to Helius, this stimulates cranial nerves and then the brain stem, which controls sensory perception and movement. Helius said the FDA turned Pons down for lack of evidence that the system, rather than physical therapy, was responsible for patients’ approvals in clinical trials. The silver lining, such as it is, is that Helius raised $18.3m in a share offering last November, and with $25.6m in the bank at the end of fiscal 2018 it could theoretically try again. That said, its net loss in 2018 was $28.6m. There is a small amount of revenue coming in, since the device is approved in Canada. A CE mark application is pending.

Indivior’s problem isn’t generics, and it might ensnare Reckitt, too

Indivior stock had already fallen 75% over the past 12 months on fears over generic threats to its opioid addiction drug Suboxone Film. But the real bombshell hit last night: the US Department of Justice was indicting the company, alleging that it had illegally overprescribed Suboxone Film, and the news sent the shares crashing 70% today. That Indivior had worked so hard to fight off generics to a product that now threatens to be its undoing is just one irony. Another is that Suboxone Film is not a painkiller, so cannot be said to have contributed to the US opioid crisis that has resulted in increased scrutiny over all related drugs. Indivior insists that it will fight the allegations, which it says are self-serving and “almost exclusively based on years-old events from before Indivior became an independent company in 2014”, when it was demerged from Reckitt Benckiser. The point is of crucial importance: Reckitt is capitalised at over $50bn, and for litigation purposes has far deeper pockets than Indivior, which today is worth a mere $250m. Tellingly, Reckitt stock was off 6% in early London trading today.

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