ackman warned valeant exclusive stockwatch ‘rome was

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20 May 2016 No. 3803

Ackman Warned Valeant ‘Rome Was Burning,’

Bill Ackman emailed Valeant warning that it had waited too long and had let the situation become a “conflagration” (p3)

Exclusive

Bayer’s UK CEO believes that life science companies would face a long period of uncertainty if Britain were to leave the EU (p20)

Stockwatch

If this downbeat first-quarter earnings season has claimed a scalp, it is the business model of specialty pharma (p21)

Takeda Turnaround In Full Flow As New Products Deliver On PromiseSUKAINA VIRJI [email protected]

T akeda has refocused its business on three core areas – gastrointestinal dis-ease, oncology and central nervous

system disorders – and has also been work-ing to boost its emerging market presence. It has signed a series of deals exiting non-core areas and in addition, it entered a deal with Teva Pharmaceutical Industries Ltd. in No-vember last year to create a joint venture to supply generics to the Japanese market.

All this led to a fiscal 2015 operating profit of ¥130.8bn, in line with guidance, compared with a deficit of ¥129.3bn at the end of fiscal 2014.

On the changes Takeda has made over the past 12 months, Weber provided some insight.

In December 2015, it outlicensed Daxas (roflumilast), along with other respiratory assets, to AstraZeneca PLC for $575m.

“We decided to sell [the] respiratory [business] because, frankly, we were not performing well in respiratory. And be-cause we were not performing well, we were investing a lot of resource behind this product,” the CEO said. Takeda decided to put that resource behind newer products such as the ulcerative colitis and Crohn’s disease drug Entyvio (vedolizumab).

“Also, because we were not performing well, we were facing impairment every year that [now] we will not face. That’s why this deal is EPS accretive. In fact, every sin-gle deal [we have done over the past year] is EPS accretive for us.”

The same rationale was given for the re-cent exit by Takeda from its alliance with Orexigen Therapeutics Inc. for the obesity drug Contrave (naltrexone/bupropion).

“We did try. We had a good launch. But we believe that for $1 investment, we can get a better return [with other products],” Weber said.

However Entyvio, which fits into Take-da’s GI focus, continues to live up to ex-pectations.

“We said that Entyvio will generate more than $2bn sales, but we didn’t say when. Now we are saying that by 2018, so four years after launch, Entyvio will pass $2bn. And it’s positive not only in the US; we are seeing very strong uptake in Europe and also in emerging markets. And we are de-veloping the product to launch it in Japan as soon as possible.”

December saw the US launch of Ninlaro (ixazomib), a once-weekly oral proteasome inhibitor for multiple myeloma.

Weber said it was “a bit too early” to pro-vide a lot of detail, “but we are very pleased so far with the signal that we are getting in the US market.” Takeda is in “dialogue with EMEA on the EU approval.” It also received an orphan designation in Japan. “And we have very significant Phase III development programs to generate data in all segments of the multiple myeloma market.”

Weber predicts that “Ninlaro will also be the fastest global launch for Takeda in the future.”

On the Takeda-Teva JV, Weber had this to say: “Instead of letting our long listed products decline to a zero level, we de-cided to partner with Teva to have 49% of future generic business. And this is also EPS and cash flow accretive… This is a real win-win deal.”

BRINTELLIX, OR RATHER TRINTELLIX, STILL IN THE WORKSThe firm has hit a setback with another planned new drug launch. The US FDA is-sued a surprise complete response letter for Takeda’s Brintellix (vortioxetine) in March, deviating from its advisory committee’s rec-ommendation on the first cognitive func-tion claim for an antidepressant.

CONTINUED ON PAGE 7

Christophe Weber

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I N T H I S I S S U E

Sociologist Professor Donald Light spoke this week at the London School of Economics & Political Sci-ence about a “Good Pharma Model” for “developing better medicines at lower costs and prices”.

Most people would love to see a model that could deliver meaningful advances in medicines develop-ment with costing/pricing options that didn’t leave drug developers at loggerheads with those who pay for treatments. Light’s answer is to do away with the patent system and publicly fund research, taking the Mario Negri Institute in Italy as a blueprint for cre-ating medical breakthroughs that society actually needs, independently of industry influence.

His arguments about the industry exploiting the patent system to push out marginally beneficial or even downright harmful “me-too” drugs while keep-ing the FDA and EMA in its pocket and effecting a biased control of the data flow were neither new nor particularly nuanced. The real value in incremen-tal innovation was ignored. But with pricing tactics like Valeant’s (see p3) making headlines so regularly, such views could gain currency among the public as pharma’s ailing reputation once again overshadows its positive contributions.

COVER / Takeda Turnaround In Full Flow As New Products Deliver On Promise

3 Ackman Warned Valeant ‘Rome Was Burning,’ Begged ‘Tell The Truth’

4 ‘No Meaningful Change’ In Pricing Environment, Teva Says

5 ABPI And Top Pharma Execs Come Out Against Brexit

6 Spain’s Ferrer To Rescue Floundering US Biotech Alexza

7 BMS’ Opdivo Is Too Expensive, Says NICE

8 Patent Win For Sofosbuvir In India But ‘Tortured’ Ruling Faces Appeal

9 The Medicines Co Sells CV Products To Fund Pipeline

10 Business Bulletin

11 Aptinyx Cashes In Post-Naurex Cache With $65m Series A

12 IP Commercializer PureTech Enters CAR-T With Vor BioPharma Start-Up

13 NewLink’s HyperAcute Program In Limbo After Pancreatic Trial Blow-Up

14 R&D Bites

15 Preventative Stroke Treatment A ‘Postcode Lottery’ In England

16 French Police Search Drug Regulator’s Premises Over Phase I FAAH Study

17 Papa’s Exit Highlights Perrigo’s Shortcomings

18 Policy & Regulation Briefs

19 GE’s Murphy On Off-The-Shelf Biopharma Factories

20 Exclusive Interview: ‘We Cannot Afford To Be An Island’: Bayer’s UK CEO Shares Anti-Brexit Opinion

21 Stockwatch: Specialty Pharma Falling

22 Pipeline Watch

23 Appointments

17 11 6

10 Things You Want To Know About Alzheimer’s Drug Research http://bit.ly/24Uvkka Scrip has compiled a list of 10 facts industry bods interested in the space – and the wider public – might want to know about ongoing drug development for Alzheimer’s disease, the leading cause of dementia.

Who’s Afraid Of A Tweet And A Pin? Strategies To Start Engaging Onlinehttp://bit.ly/1srgGU3 Lubna Ahmed explores how pharma can benefit from using social media, where the industry is at now and the different ways it could make the most out of the tools that have become centerpieces of our world’s communication.

exclusive online content

Grupo Ferrer has sweetened its latest move to acquire cash-depleted Alexza Pharmaceuticals

Aptinyx has closed a $65m series A round, capitalizing on the cache gained from the sale of Naurex to Allergan

While some worry that the company will change course, a change might be exactly what Perrigo needs to get back to former highs





http://bit.ly/24Uvkka

http://bit.ly/1srgGU3

scripintelligence.com 20 May 2016 | Scrip intelligence | 3

H E A D L I N E N E W S

Ackman Warned Valeant ‘Rome Was Burning,’ Begged ‘Tell The Truth’DONNA YOUNG [email protected]

As Valeant Pharmaceuticals International Inc.’s world was col-lapsing around it this past October over the revelation about its shady-appearing relationship with specialty pharmacy Ph-

ilidor Rx Services Inc., activist shareholder Bill Ackman was furiously emailing the drug company, warning the firm it already had waited too long while “Rome was burning” and had let the situation become a “conflagration” – begging it to “tell the truth” without further delay.

Shareholders, who once accepted Valeant’s “complexity” because they felt there was an understanding the company would be “ex-tremely transparent” with them, no longer trusted the answers they were being given after the Philidor surprise, Ackman asserted in an Oct. 27, 2015 email to the Canadian drug firm’s leadership, adding that it took a “crooked short seller” – Andrew Left’s Citron Research – to bring the specialty pharmacy deal to light, which he said had “destroyed management’s compact with shareholders.”

“As things stand, the torpedoes are in the water and the sharks are circling. They will kill the company,” Ackman said. He warned that Valeant had become “toxic,” doctors would stop prescribing its products, it would lose complete access to the credit markets and its credit line would suddenly become unavailable, while regulators around the world would “start investigating and competing to find problems with every element of your business.”

The emails from Ackman – the founder and CEO of Pershing Square Capital Management Inc., which holds the second largest stake in Valeant – were among the nearly 820 pages released late on May 6 by the Senate Aging Committee, which has been inves-tigating the company and other biopharmaceutical firms for their significantly jacked-up drug prices.

The Aging Committee’s most recent hearing focused specifically on Valeant, where Ackman, now-former CEO Michael Pearson and former chief financial officer Howard Schiller, who served as the acting CEO for a time earlier this year, testified – expressing regret and pledging to change the firm’s practices.

In the chain of Oct. 27, 2015 emails – which may serve as another cautionary tale for biopharmaceutical makers, in that you never know whose eyes may eventually see such exchanges – Ackman told Valeant’s management they had gotten “very poor advice” from their lawyers and public relations advisers about the compa-ny’s use of a scripted conference call with investors and analysts a day earlier, in which the firm’s leaders took limited questions.

“The only people that need scripts and limited questions are crooks,” Ackman contended.

He warned Valeant was on the “brink of catastrophe that will dra-matically affect the lives of everyone involved in a negative way.”

In another email later that day, Ackman told Pearson “I don’t think you are handling this correctly and the company is at risk of getting into a death spiral as a result.”

Ackman urged Pearson to immediately hold another conference call with “unlimited” duration and an open line “to address every remaining question from shareholders, short sellers and the me-

dia,” where the company should “answer the questions honestly no matter how embarrassing the answers are and no matter what the legal implications are. Just tell the truth. The truth will set you free.”

On second thought, however, Ackman told Pearson to not do a call, but instead rent a hall and hold an in-person meeting with that audience, at which all of Valeant’s directors and senior man-agement would be present.

But that didn’t happen, and two days later, Ackman scolded Pear-son in another email.

Ackman, however, said that although he was disappointed, he didn’t want Pearson to confuse that for a lack of “confidence in you as CEO.”

“I just want you to know that I am totally supportive of you as CEO of Valeant,” the Pershing chief declared.

But that support had evaporated by the time the April 27 Sen-ate hearing had rolled around – with Ackman holding up the fact that Valeant’s board had “replaced” Pearson with Joseph Papa, the now-former chief of Perrigo Co. PLC, as among one of the signs the Canadian company was serious about making improvements.

Valeant finally filed its long-awaited 10-K with the Securities and Exchange Commission on April 29, although the document revealed new investigations into the firm’s pricing and business practices.

The company on May 9 said it planned to file its also-very late 10-Q for its first-quarter earnings on June 10 and anticipated its second-quarter and other future earnings reports to be on time going forward.

OTHER REVELATIONS Included in the Senate committee documents released on May 6 was a copy of the contract details between Valeant and Philidor – revealing the drug company agreed to pay the pharmacy $25m when it achieved net sales of just over $524m in any four consecu-tive calendar quarters.

Philidor would earn another $25m each for any four following consecutive quarters if it reached $1.037bn, $1.75bn and $3.5bn.

Additional emails from Ackman also revealed he and Pearson in a Nov. 2, 2015 exchange had discussed the possibility of Valeant sell-ing its dermatology business and using the proceeds to “delever” the company.

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‘No Meaningful Change’ In Pricing Environment, Teva SaysSUKAINA VIRJI [email protected]

T eva Pharmaceutical Industries Ltd. used its May 9 earnings call to play up the impact of the pending acqui-

sition of Allergan PLC’s generics business and reassure investors that the pricing envi-ronment remains sound.

Sigurdur Oli Olafsson, head of Teva’s ge-nerics business, was scathing about some of his competitors during the first quarter sales and earnings presentation.

Other companies have suggested that “consolidation of customers” is having an impact on the pricing environment, Olafs-son noted. While this does have an impact, he sees “no meaningful change” over the past six months.

“Teva has not seen any fundamental change or worsening in the pricing envi-ronment,” he stated. “Teva experienced ap-proximately 4% price erosion in the US last year, and our guidance for this year is that it will remain the same. In fact, Allergan PLC and Mylan Pharmaceuticals Inc., two oth-er companies with broad and diversified portfolios and high-quality products, have also reported similar trends.”

The $40.5bn deal to acquire Allergan’s generics business, announced last August, is on track to close in June. Teva has re-ceived regulatory clearance in Europe and other international territories. “We are close to finalizing the divestiture list with the FTC [Federal Trade Commission in the US] and agreeing on the remedies. We have identi-fied the buyers for the majority of the prod-ucts,” Olafsson reported.

Following the acquisition, Teva will have “the world’s largest medicine cabinet with more than 1,000 molecules,” CEO Erez Vi-godman touted during the call, as he out-lined the transformation that the company will undergo during 2016.

“Before the end of 2016, which is a transi-tion year for us, Teva will be an even stron-ger company with a solidified foundation, a significantly enhanced financial profile, more diversified revenue sources and profit streams, strong product development en-gines in both generics and specialty, and [will be] positioned to continue the transfor-

mation of our business model,” he said. Vi-godman also stated that the combined free cash flow would allow new Teva “to pursue acquisitions of attractive branded and pipe-line assets as well as ones that would ex-pand our footprint in key growth markets.”

A GENERICS MASTER CLASSThe expanded generics business will remain core, and management believes its portfolio and strategy insulate it from the pressures facing other firms. Olafsson reviewed three factors that make Teva different from other generics companies and ensure a better performance than some of its peers.

“First, the companies with older portfo-lios seem to complain much more loudly. Companies with older portfolios will tell you that the pricing environment is wors-ening. But this is not an environment; this is purely a reflection of their portfolios, some of which are concentrated in one or very few therapeutic classes but are experienc-ing normal competition.”

The second factor, according to Olafs-son, is to do with new product launches. “When companies don’t have new prod-uct launches and the business is declining, they tend to talk about the market more than anything else. This is not a reflection of the environment, but rather again a re-flection on a company’s portfolio.”

The third factor is to do with companies trying to grow their market share. Com-panies go after market share for a variety of reasons, said Olafsson. These include to “utilize excess capacity with relatively cheap

volume. But in order to do that, you have to drive down price. Buying new market share in price will cost you on the bottom line. We, on the other hand, are seeing our volumes go down deliberately, net approximately 1% a year, because we think that is better for our business. We would rather reduce capacity then fill it with less profitable products.”

Teva is operating on a simplified busi-ness model formula: around 10% growth from new products minus around 5% erosion, “which includes price erosion of approximately 3% to 4% and volume decline of approximately 1% to 2%.” This comes to about 5% growth in Teva’s ge-nerics business.

The model may seem simple, but it is not easy to duplicate, Olafsson said. “Teva needs to grow by 10% every year with new prod-uct launches. And this is the key, this is the basis of any good generic business model.”

And how will Teva do that? “It comes down to the right portfolio selection and smart investment,” he said.

Teva and Allergan’s generics businesses each invest around $425m in generic R&D and regulatory affairs. Will the combined company have an annual generics R&D budget of $850m? No, said Olafsson. But he maintained “the spend level will still be both significant and industry-leading, en-abling us to achieve 10% growth a year.”

The key to growth in generics “has been and always will be new product launches, which are the only true life source for suc-cessful companies.” Teva had approximate-ly 450 global launches in 2015. For 2016 on a full-year pro forma basis with Allergan, “we see over 1,000 new product launch-es, growing to approximately 1,500 new launches in 2017,” said Olafsson.

In 2016, that includes the launch of the first generic version of AstraZeneca PLC’s Crestor (rosuvastatin), which is part of the Allergan portfolio.

Erez Vigodman

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ABPI And Top Pharma Execs Come Out Against BrexitIAN SCHOFIELD [email protected]

T he Association of the British Pharmaceutical Industry has for-mally come out in support of the UK remaining part of the EU, saying that a vote to leave in next month’s referendum would

lead to delays in the availability of new drugs, have a detrimental effect on collaboration in European drug research, and discourage inward investment by international drug firms.

“Our members are overwhelmingly supportive of remaining in the EU,” said Mike Thompson, CEO of the ABPI. “We believe that stay-ing in the EU will also encourage global pharmaceutical companies to continue to invest, employ, research, manufacture and export in the UK, rather than elsewhere.”

The May 9 statement comes the day after the Observer news-paper published a letter signed by GlaxoSmithKline PLC chief executive Sir Andrew Witty and “92 other leading life sciences figures,” in which they said that leaving the EU would “bring added complexity and uncertainty, which is bad for business and research.”

Given what’s at stake in the referendum, it’s no real surprise that the ABPI has decided to come out against a Brexit, although it has done so rather later than some other stakeholders. In February the European industry federation EFPIA showed its hand, as did Sir An-drew and AstraZeneca PLC’s Pascal Soriot.

The UK BioIndustry Association took a similar stance in its evi-dence earlier this year to the UK House of Commons Science and Technology Committees’ inquiry into the influence of EU regulation on the UK life science sector. And at the committee’s latest hearing, Ian Hudson, chief executive of the Medicines and Healthcare Prod-ucts Regulatory Agency (MHRA), expounded the merits of being in close contact with the EU drug regulatory network and particularly with the London-based European Medicines Agency, which would have to relocate in the event of a Brexit.

NEW DRUG DELAYSEchoing concerns that have been widely expressed about the po-tential effects of a UK departure on drug approval and other regu-latory processes, Thompson said the ABPI believed that staying in the EU meant UK patients “will be more likely to get faster access to new medicines than if we left.”

The EMA, he said, gave pharma firms a “one-stop-shop for cen-tralized licensing of new medicines and treatments across Eu-rope. If we left the EU this would mean that the licensing of new medicines would have to be handled by a UK agency as well as

a European agency.” He said the ABPI member companies had confirmed that applications for a UK drug license “would come after the European license due to the smaller patient population in the UK.”

The detrimental effects of a Brexit on innovative pharmaceu-tical research both in the UK and across the EU have also been widely discussed, with prominent members of the research com-munity pointing out that collaboration and cross-border move-ment of researchers would be impaired, as would the ability of the UK to get access to EU research funding such as that available under the Horizon 2020 program and to the Innovative Medicines Initiative run by EFPIA and the European Commission.

Thompson said the UK “currently holds an enviable position as one of the premier European destinations for ground-breaking re-search and clinical trials. An EU exit risks the breakdown of interna-tional collaboration between scientists, doctors and industry which could slow down access to new drugs for patients in the UK.”

As a nation, “we benefit hugely from EU R&D funding – more than any other country – and this has helped drive medicines re-search across a whole range of diseases, including cancer, demen-tia and diabetes,” Thompson continued. “An EU exit would create a funding gap which would need to be filled if the UK is to continue punching above its weight globally in research and development of new treatments.”

LIFE SCIENCE LEADERS’ LETTERIn their letter to the Observer, the life sciences figures say that remain-ing in the EU would allow the UK’s £60bn life sciences sector to “con-tinue operating within an established and harmonized regulatory approval system, ensuring that UK patients benefit from medicines more quickly, and that medicines researched and manufactured in the UK are available across the EU sooner..

“UK researchers and small businesses would continue to benefit from access to EU funding and from collaborations with cutting-edge science across the continent. This would help the UK to continue to attract investment for the R&D activities that would help to discover and develop the next generation of treatments for cancer, respiratory disease, and Alzheimer’s, and to continue pioneering work in new vac-cines and antibiotics.”

In contrast to Brexit supporters’ claims that the UK would be better placed to forge free trade deals once outside the EU, the letter said that the life science sector benefits from EU advocacy on international trade issues to ensure fair trade for UK companies. “Staying in would be better for the health and wealth of the UK,” it concludes.

The letter was signed by executives from a whole swathe of lead-ing pharmaceutical companies, including AstraZeneca, Pfizer Inc., AbbVie Inc., Allergan PLC, Novartis AG, Sanofi, Bayer AG, Boehringer Ingelheim GMBH, ReNeuron Group PLC and Bristol-Myers Squibb Co. . Other signatories include MHRA chair Sir Michael Rawlins and Professor Sir John Bell, chair of the Office for Strategic Coordination of Health Research.

The referendum on the UK’s membership of the EU is to be held on June 23, 2016.

“An EU exit risks the breakdown of international collaboration between scientists, doctors and industry which could slow down access to new drugs in the UK”





Spain’s Ferrer To Rescue Floundering US Biotech AlexzaJOHN DAVIS [email protected]

T he Barcelona-based, privately held mid-sized European pharmaceutical company, Grupo Ferrer Internacional

SA, has sweetened its latest move to acquire cash-depleted Alexza Pharmaceuticals Inc., announced May 10, by granting contingent value rights (CVRs) as well as $0.90 in cash for all of Alexza’s shares, as the US biotech nears the end of its cash resources.

But it’s still an untidy turn of events for Mountain View, California-based Alexza that was founded by biotech pioneer and serial company entrepreneur Alejandro Zaffaroni, and is now being acquired by the ex-US licensee of its only marketed product Ada-suve, an inhaled formulation of the antipsy-chotic loxapine. Zaffaroni, who died in 2014, founded a series of firms including Alza Corp., DNAX Ltd., Affymax Inc. Affymax and Maxy-gen Inc. that were later snapped up by big pharma companies.

Ferrer might well be protecting its invest-ment in Adasuve, but it is also acquiring an interesting research effort that could help ex-tend its international ambitions that already include manufacturing and marketing phar-maceuticals, fine chemicals and generics in Europe, Latin America, Asia and the US.

In a May 10 statement, Ferrer CEO Jordi Ramentol expressed interest in continuing the development of Alexza’s pipeline of development products: “We firmly believe the Staccato technology will change the lives of patients with severe mental and neurological disorders. At the same time it will help healthcare professionals to im-prove their management in the increasing-ly digitalized and personalized healthcare context,” Ramentol said.

According to Citeline’s drug development database Pharmaprojects, Alexza’s R&D pipe-line includes the following projects, most of which use Alexza’s “vapourizer” technology to create a mist of the drug substance that is then inhaled.

NON-BINDING LETTER OF INTENTThe current move follows Ferrer’s signing of a non-binding letter of intent to acquire Alexza in February 2016. But the US compa-ny continued to explore two options for its future viability, either a buyout by Ferrer or the finding of a new US commercialization partner for Adasuve, after Alexza reacquired the rights from Teva Pharmaceutical Indus-tries Ltd. during 2015.

But with only around $7.8m in cash and equivalents at the end of 2015, no new US licensee, and Adasuve only bringing in reve-nue of $5m during 2015, Alexza was expect-ing crunch time for the business to come at the end of April.

Analysts at Datamonitor Healthcare noted the labelling for Adasuve that includes a boxed warning about acute bronchospasm

restricted its use to hospital in-patients with acute agitation and limited its market po-tential. That’s despite Adasuve’s non-invasive nature and rapid onset of action giving it po-tential advantages over competing products administered by intramuscular injection. Agi-

tation is only a brief phase within the bipolar disorder cycle, but Adasuve is not approved for additional phases of the disease, the ana-lysts commented.

Adasuve was approved in Europe in Febru-ary 2013 and is now available in 21 countries, with Ferrer pursuing further launches and expansion of the labelling. The company is Alexza’s commercial partner for Adasuve in Europe, Latin America, the Commonwealth of Independent States (CIS), the Middle East and North Africa countries, Korea, the Philip-pines and Thailand.

LICENSING AND REVENUE MILESTONE EARNOUTSThe share offer of $0.90 per share and one contingent value right per Alexza share en-titles the holder to receive a pro rota share of up to four payment categories making the offer worth in aggregate up to a maximum amount of $35m if certain licensing and rev-enue milestones are met.

Ferrer’s cash offer is at a 210% premium to Alexza’s closing share price on Feb. 26, 2016, the last trading day before Ferrer’s non-bind-ing letter of intent. The offer is also a 177% premium to the volume-weighted average trading price over the previous 30 days be-fore Feb. 26, and a 67% premium to the clos-ing price on May 9, 2016. The transaction is expected to close in the second quarter of this year.

Alexza’s R&D Projects

PROJECT CODE TARGET CONDITION STATUS

alprazolam Staccato AZ-002 epilepsy Phase II

ropinirole Staccato AZ-008 restless legs syndrome preclinical

ropinirole Staccato AZ-009 Parkinson’s dIsease preclinical

fentanyl Staccato AZ-003 pain suspended

zaleplon Staccato AZ-104 insomnia suspended

loxapine Staccato-2 AZ-104 migraine suspended

nicotine Staccato – nicotine addiction suspended

Source: Data xyz

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“We were of course very disappointed, but it wasn’t entirely surprising in the sense that this is an entirely new area. It’s an en-tirely new indication. The FDA looked at this as precedent setting and they weren’t quite ready to make that jump,” explained Weber.

However, Takeda is not giving up. “We know that we have a medicine that’s effec-tive in enhancing cognition in patients who have major depressive disorder, and we are in an active dialogue with the FDA to figure out how we can push this into label.”

The drug will also carry a new name in the future. Starting in June, the antidepres-sant will go by Trintellix, a change prompt-ed by name confusion with AstraZeneca’s anticoagulant Brilinta.

The company still has major changes coming from its decision to focus R&D on the three core areas, Weber noted, which it believes will help it develop more com-petitive novel drugs. “There will be a lot of change coming in our R&D organization to align our capability and capacity based on that choice. We believe this is the right choice,” the exec added. “When we look at the pharmaceutical market, the stringency of the market for innovation is very high, and it is getting higher and higher. So unless we are able to bring truly innovative products to the US, to Europe, to Japan, in the future ac-cess would be difficult.”

CONTINUED FROM COVER BMS’ Opdivo Is Too Expensive, Says NICEFRANCESCA BRUCE [email protected]

NICE, the health technology appraisal institute for England and Wales, looks set to decline Bristol-Myers

Squibb Co.’s Opdivo (nivolumab) for some non-small cell lung cancer patients. Despite offering a confidential discount and prom-ising to pay for the PD-1 inhibitor after one year of treatment, the firm failed to convince the institute that the drug is cost-effective.

But while BMS may struggle to win a posi-tive recommendation in the full non-squa-mous indication, Datamonitor Healthcare analyst Brandon Goode believes that it may have a better chance in securing recommen-dations for different subgroups that present certain levels of PD-L1 expression. “While data showed overall survival in subgroups with >1%, >5%, and >10% PD-L1 expression, the study was not driven to analyze its clini-cal benefit by PD-L1 expression,” he said.

In draft guidance published 12 May NICE, declined to recommend Opdivo for treating locally advanced or metastatic non-squa-mous non-small-cell lung cancer in adults whose disease has progressed after chemo-therapy. NICE acknowledged that the drug was a clinically effective treatment compared with docetaxel, nintedanib (Boehringer In-gelheim’s Vargatef ) plus docetaxel, and best supportive care. However, BMS failed to make the case that Opdivo was a cost-effective treatment option compared to these other options. “The treatment was recognised as promising but the cost could not justify a positive recommendation. NICE already rec-ommends alternative treatments for locally advanced non-squamous non-small cell lung cancer – docetaxel and nintedanib – that are more cost effective than nivolumab at its cur-rent pricing,” said the institute.

“BMS has offered a number of pricing proposals to NICE and the department of health, which we are confident provide value to the NHS in lung and for nivolum-ab uses in other cancers,” said Johanna Mercier, general manager of Bristol-Myers Squibb UK & Ireland. However, NICE was not impressed with the offer, which would have seen the NHS pay for up to 26 cycles of treatment with the company picking

up the bill for any subsequent cycles. NICE said the scheme was complex and that it would constitute an administrative bur-den for the NHS. The guidance is open for consultation until 3 June, and BMS could put another deal on the table. A BMS spokesperson said the firm was mindful of NHS budget limitations and added that it was still working with the department of health. It is the department of health that approves patient access schemes that NICE is able to consider.

Opdivo’s list price, excluding VAT, is £439 per 40 mg vial, which equates to an estimat-ed cost of £31,960 for a course of treatment (assuming 12.6 doses on average). Accord-ing to NICE’s appraisal committee, the most likely incremental cost-effectiveness ratio (ICER) for Opdivo compared with docetaxel was £91,100 per quality-adjusted life year (QALY) gained. And the most plausible ICER for Opdivo compared with nintedanib plus docetaxel was £93,400 per QALY gained. The drug qualified for NICE’s end-of-life consider-ations, which allow the institute to consider a higher cost-per QALY beyond the usual £20,000-£30,000 per QALY, but NICE still thought the drug was too costly. NICE also had issues with BMS’ modeling relating to survival rates, as well as the utility values the company used, which led to a more favor-able incremental cost-effectiveness ratio.

Opdivo won Promising Innovative Medi-cine (PIM) status in 2015 for patients with squamous and non-squamous advanced lung cancer, which meant that UK patients could access the drug through two separate Early Access to Medicines Schemes. Howev-er, the programs have now closed.

Opdivo was recognized as promising but the cost could not justify a positive recommendation

We were very disappointed, but it wasn’t entirely surprising

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Patent Win For Sofosbuvir In India But ‘Tortured’ Ruling Faces AppealANJU GHANGURDE [email protected]

India has approved a Gilead Sciences Inc. patent that claims the active metabolites of sofosbuvir amid allegations by oppo-

nents of “external pressures” on the patent office and that the decision “weakens” Sec-tion 3(d) of India’s patent regulation.

The latest decision comes after the previ-ously rejected application covering sofosbu-vir metabolites had been remanded by the Delhi High Court for a fresh decision by the patent office. Opponents such as the US-based not-for-profit group, Initiative for Med-icines, Access and Knowledge (I-MAK) and the Delhi Network of Positive People (DNP+) have already announced their intent to ap-peal the latest sofosbuvir patent decision.

In an order dated May 9, Dr Rajesh Dixit, deputy controller of patents and designs, held that Gilead’s claimed compounds are “novel, inventive and patentable” under the Patents Act and that the application be allowed to proceed for grant with finally amended claims.

Dixit noted that the claimed compounds are “outside the prohibition” of Section 3(d) and also referred to a clutch of previous rul-ings including the Novartis case [pertain-ing to Gleevec].

Section 3(d) of India’s patent regulation broadly deals with incremental inventions that are not patentable unless they show improved efficacy or unless a known pro-cess results in a new product or employs at least one new reactant.

Dixit noted that Section 3d was not a provision that merely bars certain subject matter from patentability. Instead, it pro-vides that if the new form of the known substance is formed despite structural sim-ilarity to demonstrate a better functional-ity, it would qualify for assessment under Section 2(1)(j) as if it were a new product involving an inventive step and it would be up to the patent applicant to demonstrate the patentability of the substance in accor-dance with sections 2(1) (j) and (ja).

“A new chemical entity (NCE) that is structurally dissimilar but functionally simi-lar to an existing chemical entity is thus merely a substance under section 3(d). If

the substance has an added layer of en-hanced efficacy, then it will be treated as a new product and would be eligible for as-sessment under Section 2(1) (j) to ascertain whether its formation involved an inven-tive step. If the new product involved one or more inventive step, then it will qualify as a pharmaceutical substance,” Dixit said.

The deputy controller said he was “satis-fied” that the claimed compound has “add-ed layer of enhanced efficacy.”

With reference to the Gleevec case, Dixit noted, among a string of comments that the Supreme Court had also observed that the explanation to Section 3(d) requires the derivative to “differ” significantly in proper-ties with regard to efficacy.

“What is evident therefore is that not advantageous or beneficial properties, but only such properties that directly relate to efficacy, which in case of medicine, as seen above, is its therapeutic efficacy. Applicant [Gilead] has shown the differences of their case from Novartis case in a tabulated form,” Dixit said.

Gilead welcomed the decision and said that the recognition of intellectual prop-erty is central to investment in pharmaceu-tical R&D and the decision underlines the scientific innovation involved in the devel-opment of this breakthrough treatment for chronic hepatitis C.

Gilead added that the decision served to further strengthen its partnership with the “innovative” Indian manufacturing industry - a partnership which has shown to be a “prov-en and effective” approach to expanding access to treatment, leveraging each com-pany’s expertise for maximum benefit of patients living in resource-challenged coun-tries. In September 2014, Gilead entered into licensing deals with several India-based firms to develop sofosbuvir and the single tablet regimen of ledipasvir/sofosbuvir for distribution in 91 developing countries.

OPPONENTSBut opponents like I-MAK believe that the “unfounded” May 9 decision conflicts with the original intention of India’s 2005 patent

law, and linked it to the “harmful impacts” of trade pressure from the US.

Tahir Amin, co-founder and director of intellectual property at I-MAK, claimed that sofosbuvir is not deserving of a patent and was developed using previously published techniques that have been used repeat-edly in other antiviral drugs.

“In fact, Gilead’s unjustified patents on sofosbuvir have already been rejected by China, Ukraine and Egypt. Unfortunately, the Indian patent office’s decision ignores the scientific facts about sofosbuvir and fails to uphold the standards of Indian pat-ent law,” Amin said.

Amin told Scrip that the deputy control-lers interpretation of Section 3d is “tortured and lacks any clear reasoning or justification” as to why Gilead’s patent application does not fall under a Section 3d assessment.

“The Controller has disregarded key evi-dence which shows that Gilead failed to show in its application at the time that there was any enhanced efficacy for the claimed uridine analog that is the metabolite in so-fosbuvir. Instead he has simply reasoned that because the claimed invention has been a breakthrough treatment for HCV and the medicine has been approved in the US and India it has enhanced efficacy,” Amin said.

He added that it was an “incorrect” ap-plication of the law as compared to the Novartis decision, as regulatory approval has no bearing on interpreting therapeutic efficacy for patent applications.

“The efficacy data has to be as compared with known forms at the time the applica-tion was made,” Amin said.

He believes that the decision could po-tentially open a new window for patenting incremental innovations and weakens Sec-tion 3d considerably.

Gilead did not immediately comment on the ruling’s references to Section 2(1) (j) and 3d telling Scrip it was still reviewing the judgment.

I-MAK also added the other key patent pertaining to the sofosbuvir prodrug is still pending and is the subject of several pre-grant oppositions.




The Medicines Co Sells CV Products To Fund PipelineLISA LAMOTTA [email protected]

T he Medicines Co. is selling off three cardiovascular products to Italy’s Chiesi Farmaceutici SPA in an effort to raise funds to pay for R&D as top-seller Angiomax continues to decline.

The company announced May 9 that Chiesi will pay a total of $792m for three already-marketed drugs, including the newly-approved Keng-real (cangrelor). The other drugs included in the deal are the antihy-pertensive Cleviprex (clevidipine) and the rights to the injectable direct thrombin inhibitor Argatroban.

“Today’s announcement is strong evidence of our commitment to delivering on our strategic goals, and the transaction itself is a major step in the execution of that strategic plan. We see this trans-action as a spring board for further progress and growth. And as we increasingly focus on our highest value R&D assets, we anticipate delivering exciting news throughout the remainder of 2016,” said TMC CEO Clive Meanwell on a May 9 call with analysts, noting the sale is in-line with the restructuring plan the company announced last November.

The deal with Chiesi Comes at a good time for TMC. The Italian drugmaker will pay $260m upfront, as well as $480m in sales-based milestones. Chiesi will also assume the payment of $50m in mile-stone payment obligations and $2m for product inventory. The deal is expected to close in the third quarter.

TMC’s best-selling product Angiomax (bivalirudin) lost patent protection in July 2015, opening it up to generic competition. Due to the influx of low-cost generics, the drug only brought in $16.9m in sales during the first quarter, down from $100.7m in the year-earlier period. More than half of TMC’s revenue stream has been lost through the patent expiry.

The company believes the sale of these “non-core” assets will al-low it to control costs and fund pipeline development. TMC said the divestiture will allow it to save between $65m to $80m in R&D costs and SG&A expenses.

The antiplatelet Kengreal was approved last June by FDA as an adjunct to percutaneous coronary intervention (PCI) to reduce the risk of myocardial infarction, repeat coronary revascularization and stent thrombosis, but only in patients that had not been treated

with a P2Y12 platelet inhibitor and are not being given a glycopro-tein IIb/IIIa inhibitor (GPI).

The drug faced a hard road to approval, going in front of two advisory committees. After an advisory committee raised ques-tions about the potential for bleeding risks, FDA approved Kengreal with a label for a limited patient population instead of the broader population The Medicines Co. was hoping to reach.

TMC said in early-2015 that it would be adding 400 reps to its sales force in an effort to properly launch Kengreal and further promote its other cardiovascular products, including Cleviprex. Things haven’t gone as planned – this drug made up less than 30% of the company’s 2015 revenues (although TMC did not break out sales).

The divestiture to Chiesi comes just a few months after the De-cember divestiture of three hemostasis products to Mallinckrodt PLC, including Recothrom, a recombinant topical thrombin; Prev-eLeak, a flexible surgical sealant; and Raplixa, a powder fibrin seal-ant made from human plasma-derived fibrinogen and thrombin. Mallinckrodt paid $175m upfront and agreed to $235m in mile-stone payments.

The payments from Mallinckrodt and Chiesi will help fund TMC’s pipeline, including its PCSK9 inhibitor, which recently started Phase II. Results from the trial are expected before the end of the year and the company expects to start a second Phase II trial. TMC also has three other products in its pipeline that it believes could be block-busters if they are successful.

“I think our best opportunities are within our own pipeline and portfolio. We are extremely focused on PCSK9 synthesis inhibitor, which we think has the potential to be a game-changing block-buster in the dyslipidemia space. We’re very excited about the progress of ApoA-1 MILANO or MDCO-216. The beginning of the work in Phase II for ABP-700 is really going quickly and aggressively. And then, finally, of course, the Carbavance data review for Phase 3 will be coming up quite soon,” said Meanwell.

“So, I think those four blockbuster R&D projects give us some very exciting shots on goal, and that is where we should be putting our money right now. As to longer-term views of business develop-ment and in-licensing, I think that’s something we’ll review through the year. But right now, we’re very focused on capital deployment against these existing assets,” he added.

The company believes the sale of these “non-core” assets will allow it to control costs and fund pipeline development, potentially saving TMC between $65m to $80m in R&D and SG&A

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B U S I N E S S B U L L E T I N

Hepatitis C Market Feeling Zepatier LaunchWhile Zepatier – a combination of the protease inhibitor grazoprevir and NS5A inhibitor elbasvir, approved by FDA and launched in January – may not represent a great threat to Gile-ad’s Harvoni (sofosbuvir/ledipasvir) and AbbVie’s Viekira Pak (ombitasvir/paritaprevir/ritonavir/dasabuvir) on its own merits, the impact of a third and clearly cheaper regimen is weighing on both companies, especially with chang-es coming to the US HCV market. Ac-cess is being broadened to less-sick pa-tients, which means more patients but shorter durations of therapy, as well as to VA and Medicaid patients, where steep discounts come into play. Zepati-er was approved by FDA on Jan. 28 and Merck immediately changed the game in terms of pricing. It set a wholesale acquisition cost (WAC) of $54,600 for a 12-week course of therapy, approxi-mately a 30% discount to Gilead’s pric-ing for Harvoni, which has carved out a dominant market share position in HCV since its 2014 launch.

Cigna’s Bradbury Talks PCSK9 Contracts And Value Versus VolumeCigna Corp. has signed value-based con-tracts for the two PCSK9 inhibitors on the market for high cholesterol, linking reimbursement to LDL-C reduction, but the insurer also hopes to analyze data for cardiovascular outcomes. Cigna announced the new contracts for Am-gen Inc.’s Repatha (evolocumab) and Sa-nofi/Regeneron Pharmaceuticals Inc.’s Praluent (alirocumab) May 11. The con-tracts represent the first time an insurer has unveiled a value-based agreement for its commercial business with both PCSK9 marketers, Amgen and Sanofi/Regeneron. The contract with Cigna is the third value-based reimbursement ar-rangement Amgen has made for Repa-tha and the first Sanofi/Regeneron have publically disclosed for Praluent.

Korean Gliptins Loom Amid Signs Of Shifts In IndiaA clutch of new dipeptidyl peptidase-4 (DPP-4) inhibitors including LG Life Sciences Ltd’s gemigliptin and Dong-A ST Co. Ltd ‘s evogliptin have either just hit the Indian market or are on the ho-rizon amid what some industry watch-ers say are early signs of a shake-up in volumes in the highly competitive do-mestic gliptins market. First the new entrant. Last month Sa-nofi quietly launched gemigliptin on the Indian market, opening up anoth-er prong in its quest for dominance in the diabetes segment. “We have very recently (in April 2016) expanded our offering, by launching Zemiglo (gemi-gliptin). We have also added another incretin, Lyxumia (lixisenatide, an in-jectable GLP-1A). In India, Sanofi is the only healthcare company to have a balanced portfolio of insulins and orals, including gliptins,” the French multinational told Scrip. The two ad-ditions to its India diabetes portfo-lio, Sanofi said, are yet another step

towards bringing “new solutions” for people with type 2 diabetes.

Mylan Beefs Up Topical Derm Business Mylan NV is bolstering its generic der-matology business with a small deal that adds to the value of its previous-ly-announced acquisition of Sweden’s Meda AB, allowing the generics com-pany to make up for its lost Perrigo Co. PLC opportunity. The generics gi-ant announced May 13 that it would be picking up the topical dermatology business from Renaissance Acquisition Holdings, a private holding of Round-Table Healthcare Partners, for $950m in cash plus another $50m in contin-gent payments. The deal is expected to close in the third quarter. The deal gives Mylan a much larger presence in gener-ic topical dermatology products – for-mer acquisition target Perrigo has 50% of its generics portfolio in this space. The new portfolio includes more than two dozen topical products, as well as another 25 compounds in the pipeline.

Allergan’s Fishing For Deals, But Don’t Expect A Big CatchAllergan PLC will use its $36bn in after-tax cash and equity from the sale of its generics business to Teva Pharmaceutical Industries Ltd. to reduce debt, buy back shares of its stock, and to acquire companies or assets, but don’t expect Allergan to catch any big fish in its dealmaking net. Allergan Presi-dent and CEO Brent Saunders told investors and analysts during the com-pany’s first quarter earnings conference call on May 10 that Allergan hasn’t ruled out a transformational deal, if an opportunity that suits the com-pany’s “growth pharma” strategy presents itself. However, Allergan’s main transactional focus is “tuck-in acquisitions” – transactions that Saunders later described as “stepping stones to growth” – to boost the company’s brand-name product portfolio. After Teva and Allergan close their $40.5bn transaction in June, Allergan will use $10bn for stock repurchases, starting with $4bn to $5bn in buybacks during 2016; set aside $8bn to pay down debt, saving the company $125m per year in interest; and spend $10bn to buy assets that may provide long-term growth and expand Allergan’s footprint in its seven core therapeutic areas: eye care, aesthetics and medi-cal dermatology, central nervous system, gastrointestinal, women’s health, Botox (onabotulinumtoxinA) Therapeutic, and anti-infectives.



Aptinyx Cashes In Post-Naurex Cache With $65m Series AMANDY JACKSON [email protected]

Aptinyx Inc., a biotechnology firm de-veloping small molecules that mod-ulate the NMDA receptor to treat

neurological disorders, closed a $65m Series A round, capitalizing on the cache that its management team gained from the sale of Naurex Inc. to Allergan PLC.

Evanston, Illinois-based Aptinyx will use its Series A cash to begin a Phase I clinical trial for its first drug candidate in mid-2016, to start multiple proof-of-con-cept studies during the first half of 2017, and to continue preclinical development for other programs. All of those wholly-owned programs are separate from Aller-gan’s option to license a limited number of NMDA receptor modulators for depres-sion and certain other indications from the Naurex spinout.

Aptinyx launched in September after Allergan paid $560m up front for Naurex, laying claim to that company’s two lead drug candidates, which modulate the NMDA receptor to treat depression. While Allergan still has an option to in-license certain Aptinyx assets, the biotech firm still may pursue programs in traumatic brain injury, neuropathic pain, Parkinson’s disease and other neurological diseases on its own. “The Allergan transaction defi-nitely validated the technology,” Aptinyx

president and CEO Norbert Riedel told Scrip.

That validation combined with the fact that Aptinyx retained the same manage-ment team, and is working with the same mechanism of action, helped the company raise a large Series A round that brought in new investors and will fund the company through proof of concept for its lead drug candidate.

New Leaf Venture Partners, a new inves-tor, led the Series A financing with partici-pation from other investors that backed the management team for the first time: Frazier Healthcare Partners, Longitude Cap-ital and Osage University Partners. Adams Street Partners, LVP Life Science Ventures, PathoCapital, Goudy Park Capital, Beecken Petty O’Keefe & Co. and Northwestern Uni-versity – Naurex investors who provided seed capital for Aptinyx – also backed the Series A round.

“I wasn’t interested in investors with a short-term view,” Riedel said, noting that the company isn’t planning to sell its technology in the near term to provide a quick return to investors. Instead, Aptinyx is working to build a pipeline of drug candi-dates and the company may have another NMDA receptor modulator ready to enter the clinic in 2017.

But first, now that Aptinyx has closed its Series A financing, it is on track to execute its development plan for its initial – and still unnamed – clinical candidate. The compa-ny said last fall that it would begin its Phase I study in healthy volunteers by the sum-mer of 2016.

However, Riedel said Aptinyx still is try-ing to figure out which indications will be studied in two or three proof-of-concept studies that are expected to launch dur-ing in the first half of 2017. Neuropathic pain, traumatic brain injury and Parkin-son’s disease all are potential indications, among others, for next year’s studies, he said. The company could have its first set of data from patients with one of the cho-sen neurological diseases in 2018.

Scotland Fails To Recommend Orkambi The Scottish Medicines Consortium (SMC) on May 9 published advice mirroring that of its neighbor NICE failing to recommend the use of Ver-tex’s Orkambi on the UK’s NHS for the treatment of cystic fibrosis. This comes despite positive reimbursement decisions in other European countries. However, Scotland’s New Medicines Fund should ensure there is a route available for patients to access the medicine, Vertex believes.

In March, NICE, the HTA body for England and Wales, said it recognized the clinical benefits of Vertex Pharma-ceuticals Inc.’s Orkambi (lumacaftor/ivacaftor) in the treatment of cystic fibrosis (CF) but treatment costs in rela-tion to its health benefits were not suf-ficient to recommend its use. The SMC says it agrees with NICE’s conclusion on Orkambi and will also not be recom-mending the use of Kalydeco (ivacaftor) in younger children.

Orkambi is used to treat cystic fibrosis in patients aged 12 years and over who have the F508del mutation. “The Committee was unable to recom-mend [Orkambi] as there was too much uncertainty around the overall clinical benefits it may bring in relation to its cost,” it said. The decision was taken “after consideration through PACE,” the SMC’s patient engagement panel.

The SMC said it was unable to rec-ommend Kalydeco in children below six years of age with CF as “considerable weaknesses in the company’s economic case raised uncertainties around the longer-term clinical benefits of the treatment in relation to its cost.” This decision was also undertaken after go-ing through the PACE process.

[email protected]


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IP Commercializer PureTech Enters CAR-T With Vor BioPharma Start-Up STEN STOVALL [email protected]

Boston, Mass.-based but UK-listed PureTech Health PLC says its Vor Bio-Pharma start-up is advancing a novel

approach to chimeric antigen receptor (CAR) T-cell therapy that has the potential to broaden the science’s applicability and suc-cess rate in other cancers – but it’s not will-ing to say exactly how it will do that.

Its platform technology has been li-censed from the lab of Vor’s scientific co-founder, Siddhartha Mukherjee, who is as-sistant professor of medicine at Columbia University in New York City, and the Pulitzer Prize-winning author of The Emperor of All Maladies: A Biography of Cancer.

“Vor is developing an entirely new ap-proach to CAR T-cell therapy that seeks to broaden its applicability in other cancers, particularly those with limited therapeutic options, by removing key barriers gener-ated by current modalities. Initially the goal is to expand within a subset of hematologi-cal malignancies. We potentially see solid tumors as a target, but initially we aim to just go beyond treating cancers outside of B-cell cancers,” said David Steinberg, execu-tive vice president at PureTech Health and Vor co-founder.

HOPES TO MOVE CAR-T BEYOND B-CELL CANCERSIn an interview with Scrip, Steinberg noted that although the human body can func-tion safely without B-cells, using CAR T-cell therapy to treat other cancers “remains elu-sive” because that would involve targeting cells needed for the patients’ survival. CAR T-cell therapy has also shown more limited results in treating solid tumors.

“The idea behind Vor is therefore to cre-ate some innovative solutions in an area that still has significant limitations. Sid Mukherjee has been working in this space for a long time and he’s generated some new approaches to expanding the opera-bility of these CAR T-cells but the opportu-nity here is to go beyond just treating each B-cell malignancy,” Steinberg said.

Most of the CART therapies have so far been focused on B-cells. The problem is

when you target B-cells, these typically are not tumor specific antigens that are being targeted with CARTs but rather both can-cerous and healthy B-cells, thus depleting the entire B-cell population.

“You can live without your B-cells but there are many other hematological ma-lignancies where that strategy is not viable. So we’re developing a CAR-T approach where we’re targeting cancers outside of B-cells. One effort is likely to target increased development of resistance, and also pre-serving cell functionality of the other cell population that you’re targeting, which represents a huge gap right now but one which we think we can overcome,” Stein-berg said.

“So the technology differentiators there are of course identifying the appropriate cellular antigens and employing the ap-propriate therapeutic cell populations. That’s an area where we believe we can differentiate ourselves; and we are looking into novel CAR-T constructs as well, and then probably developing tools to main-tain normal cell functionality. So there are three or four areas of innovation that we think will allow us to do these things and we are pursuing each of these prospects aggressively,” Steinberg said.

Asked whether Vor aimed to use pa-tients’ own t-cells or offering an “off the shelf” approach, he replied: “The approach we’re looking at now is based on autolo-gous transplantation, albeit there are op-

portunities to expand beyond that but our platform doesn’t necessarily depend on one or the other.”

Steinberg sidestepped the question of how Vor’s CAR-T platform differs from that of other players in the space, ex-plaining only that “this is novel work that Sid and his colleagues are working on that isn’t published yet, so there’s poten-tial for academic scooping at this stage, and also commercial considerations pre-vent me from speaking about the spe-cific underlying technological element of the platform.”

Asked what data supporting the busi-ness premise exists in the public domain, Steinberg said “there is data, but it is not yet published, which is why we’re not disclosing it. It will be published in due course. We’re not giving a timeframe for that though. There is animal data that shows it works in this approach, but no human data.”

He said the underlying premise to Vor BioPharma’s CAR-T novel approached is to some degree using proof of concept and data that has already been achieved by other players, including academics and corporations - data for which already exists in the public domain.


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David Steinberg, Executive Vice President Of Puretech Health

And Co-Founder Of Vor Biopharma


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NewLink’s HyperAcute Program In Limbo After Pancreatic Trial Blow-UpEMILY HAYES [email protected]

NewLink Genetics Corp. is evaluating what to do with its Hy-perAcute development program, which is active in a number of tumor types, following the failure of its algenpantucel-L

vaccine in the Phase III IMPRESS study of resected pancreatic cancer.NewLink’s HyperAcute Cellular Immunotherapies platform al-

lows development of off-the-shelf active cancer vaccines made up of tumor cell lines engineered to express the carbohydrate alpha-gal, but which do not require use and modification of patient tissue or cells. Programs have been in development for a range of tumors including pancreatic cancer, melanoma and lung cancer.

On May 9, the company announced that its HyperAcute pancre-atic cancer candidate algenpantucel-L vaccine missed the overall survival endpoint in the IMPRESS study.

The 722-patient study tested the standard of care – gemcitabine chemotherapy alone or with 5-FU chemoradiation – plus or minus algenpantucel-L. Median overall survival was actually worse for the arm that included the HyperAcute candidate, at 27.3 months versus 30.4 months for the control, though this was not a statisti-cally significant result. Furthermore, the company reported three-year survival rates of 41.4% vs. 42.1% and four-year survival rates of 32.6% vs. 32.7% for the control and study groups, respectively.

During a May 10 investor call, the company said that the differ-ence between the study arms was no greater than what would be expected based on chance. Looking at the survival curves, the test drug and control groups crossed six times during the study period – both arms had slightly superior though statistically meaningless sur-vival differences at different times during the trial, executives said.

The hazard ratio was not disclosed, but the company said that the similar long-term survival rates suggest it is probably pretty close to 1.

UNPRECEDENTED SURVIVALNewLink noted that the 29.3 months median overall survival for the study overall represented a “significant increase compared with prior trials and may be due to multiple factors, including the emergence of more effective treatment regimens for recurrent or metastatic disease.”

During the call, company executives mentioned Celgene Corp.’s Abraxane (nab-paclitaxel) and the FOLFIRINOX chemotherapy combination regimen in particular. These therapies may have been used after disease progression as salvage therapies and could have influenced the outcome.

Including the six week period after surgery, the median overall survival approached 31 months, which is “unprecedented” in the US population, execs said.

The company’s stock fell from a close of $16.50 on May 9 to a close of $11.45 on May 10.

The news is also another blow for development in pancreatic can-cer. Researchers had expressed optimism about the late-stage pipe-line at the American Society of Clinical Oncology annual meeting in 2015, noting the volume and breadth of drugs in development. But there have been setbacks in recent months. Incyte Corp.’s Jakafi

(ruxolitinimb) failed in Phase III and OncoMed Pharmaceuticals Inc. stopped dosing of its anti-Notch 2/3 inhibitor tarextumab in the Phase II ALPINE study of first-line pancreatic cancer, after a negative interim analysis found the drug was unlikely to improve survival.

NewLink is now evaluating what to do with its HyperAcute de-velopment program, which includes a second Phase III study in pancreatic cancer called PILLAR in unresected patients, as well as ongoing studies in other tumor types.

NewLink plans to accelerate analysis of the PILLAR study and within weeks will disclose the results of its analysis of development overall.

The development program also includes a study evaluating a HyperAcute melanoma vaccine with Bristol-Myers Squibb Co.’s CTLA-4 inhibitor Yervoy (ipilimumab) and PD-1 inhibitor Opdivo (nivolumab), as well as with Merck & Co. Inc.’s PD-1 inhibitor Key-truda (pembrolizumab).

NewLink had started to develop vaccines for breast and prostate cancer but has not been advancing those programs in favor of fo-cusing on other indications.

The next steps for NewLink could include cost reduction. The company has a total of 220 employees and execs said it was dif-ficult to say how many were tied to the HyperAcute program be-cause of crossover in duties across development programs. The company ended the first quarter with $178m in cash.

ALL EYES ON IDOThe company said that it will now be focusing on “other promising opportunities in our pipeline,” notably its IDO checkpoint inhibitor programs. Indoximod is in Phase I/II or II for breast, brain, melanoma, lung and pancreatic cancers.

NewLink’s other IDO inhibitor GDC-0919 (NLG919), which is partnered with Roche per a high-value 2014 deal, is in Phase I for solid tumors.

NewLink stressed that it has a number of data releases coming up. At the ASCO meeting in June, it plans to present interim Phase II data for a study of indoximod with gemcitabine and Abraxane in metastatic pancreatic cancer, as well as mid-trial results from a Phase II study of indoximod with Yervoy or PD-1 inhibitors in ad-vanced metastatic melanoma. In the second half of the year, it plans to release Phase II data for a study of indoximod in brain cancer.

During the May 10 investor call, chief medical officer Nicholas Vahanian said that the company is not prioritizing one indica-tion over another at this point, rather it will follow the lead of the data.

The company also anticipates that Roche subsidiary Genentech Inc. will release Phase Ib data for a combination study of GDC-0919 with its PD-L1 inhibitor atezoli-zumab in solid tumors at the European Society for Medical Oncology meeting in October.

Click here to see NewLink Genetics’ HyperAcute Programs:

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R & D B I T E S

Marketing Partners Giving Obesity The Slow GoodbyeThere was a point in time – late 2014, early 2015 – that analysts and inves-tors still held hope that Orexigen Therapeutics Inc.’s Contrave (naltrex-one/bupropion)would outperform the disappointments that had come before: Vivus Inc.’s Qsymia (phenter-mine/topiramate) and Arena Phar-maceuticals Inc.’s Belviq (lorcaserin). That hope has faded. All three drugs continue to flounder and analysts don’t believe there are enough market-ing dollars or that enough physician education could be done to save these products from obscurity. All signs are pointing to a mass exodus from the obesity market. Orexigen told the world on March 15 that its Japanese pharma partner Takeda Pharmaceuti-cal Co. Ltd. is exiting the partnership as it transitions the product back to the biotech over the next six months. Takeda isn’t merely giving the drug back though; Orexigen will pay $60m upon closing of the deal plus another $15m in the first quarter of 2017. The biotech has also agreed to pay out an-other $10m, $20m, $30m, $40m and $50m in milestone payments should Contrave exceed $200m, $300m, $400m or $500m in sales, respective-ly, in any given year (unlikely since the drug only brought in $53m dur-ing 2015). Some might see this as the biotech saving face in hopes of gar-nering another partner – something CEO Mike Narachi said the company was open to – but it’s never positive when a company gets a drug back.

There’s A Pharma Waiting In The Sky: Lilly In SpaceNASA’s orbiting laboratory on the In-ternational Space Station has allowed researchers from drug manufacturers like Eli Lilly & Co. to find solutions in space to certain obstacles they’ve struggled with on Earth, potentially helping the firms get their investiga-

tional medicines to the marketplace sooner. Eli Lilly & Co. is an innova-tor engaged in a constant hunt for new therapeutic discoveries aimed at improving human life on Earth. Late-ly, however, it’s been pursuing that mission more than 240 miles above the Earth with a set of experiments aboard the International Space Sta-tion (ISS) under a partnership with the National Aeronautics and Space Administration (NASA) and the Cent-er for the Advancement of Science in Space Inc. (CASIS), which manages the ISS US National Laboratory. The orbiting lab’s microgravity environ-ment, said Kris Gonzalez-DeWhitt, a scientist in the Structural Biology

Group at Lilly, allows the company’s researchers to get around certain obstacles they’ve struggled with on Earth, potentially helping the firm get its investigational medicines to the marketplace sooner. Gonzalez-DeWhitt and his colleague Michael Hickey, a senior scientist at Lilly’s San Diego lab, had related, but dis-tinctively different, crystallization ex-periments on the ISS – the samples of which both returned to Earth on May 11 aboard the SpaceX Dragon space-craft, which carried more than 3,700 pounds of cargo, including samples from numerous other scientific and technology demonstration projects.

Studies Suggest Safety Ahead Of Lipocine’s Oral Testosterone PDUFAWhile Lipocine Inc. is at the nail-biting stage of development for its oral testosterone Tlando (LPCN 1021) – awaiting a US FDA approval deci-sion – urologists continue to study testosterone therapy to determine whether treatment of hypogonadal men is safe with appropriate moni-toring. To assure urologists that Tlando can safely raise low testosterone levels, 52-week data for the drug were presented for the first time for during the 111th Annual Scientific Meeting of the American Urological Association (AUA) from May 6 to 10 in San Diego alongside several un-related studies that suggest testosterone therapy generally is safe. That’s good news for Salt Lake City, Utah-based Lipocine, whose Tlando will be the only oral testosterone in the US if approved by the product’s June 28 Prescription Drug User Fee Act (PDUFA) date. “Patients are looking for something that’s convenient and effective, and if the cost is appro-priate, I think many patients will look at [Tlando] as a reasonable op-tion,” Baylor College of Medicine associate professor Mohit Khera told Scrip in an interview during the AUA meeting. Safety also is a major con-cern, since the FDA outlined a requirement in 2015 that testosterone therapy sellers add warnings to their product labels about the potential for increased risk of heart attacks and strokes. Manufacturers also must conduct a long-term study to confirm or refute the feared risks. Khera, who presented the 52-week Tlando data on May 10, said Lipocine’s oral testosterone is just as safe as the testosterone gels and injections as well as the buccal and pellet products that already are on the market in terms of cardiovascular, liver and other systemic effects. He noted that liver issues associated with Andriol, the Merck & Co. Inc. oral testosterone that’s approved outside of the US, aren’t a concern for Tlando, which is absorbed mostly outside of the liver. And while both pills must be taken with fatty meals, the urologist noted that Lipocine’s drug can be consumed with a low fat meal, or about 15 grams of fat. A handful of trail mix has 18 grams of fat.



Preventative Stroke Treatment A ‘Postcode Lottery’ In EnglandLUCIE ELLIS [email protected]

T he total cost of stroke to the UK, including lost productivity and benefits payments as well as direct

National Health Service costs is estimated at £11.3bn a year, according to the report One year on – why are patients still having un-necessary AF-related strokes?, which comes from the ABPI’s Stroke in Atrial Fibrillation Initiative (SAFI) and was funded by Bayer AG, Boehringer Ingelheim GMBH, Bristol-Myers Squibb Co., Daiichi Sankyo Co. Ltd. and Pfizer Inc. AF affects around 1 in 50 (or 2.4%) of people in England, resulting in ap-proximately 7,000 strokes and 2,000 prema-ture deaths that could be avoided each year with effective treatment. Recent data show there were over 16,000 strokes in people with AF in the UK in the 12 months from June 2014 to June 2015 – fewer than half of patients were taking anticoagulants.

Despite a change in treatment guidelines in 2014 – in which the National Institute for Health and Care Excellence (NICE) recom-mended that patients with the most com-mon type of AF (non-valvular) at high risk of stroke should, unless otherwise indicated, receive an anticoagulant – SAFI has found that in some parts of England only 4.2% of patients are prescribed the suggested drugs.

In 2014 NICE also recommended that non-vitamin K antagonist oral anti-coagu-lants (NOACs) should be considered as an alternative option to warfarin for doctors to discuss with patients at risk of stroke from non-valvular AF. In addition, in a significant change to established practice, the health technology appraisal body stated that aspi-rin should not be used on its own to prevent AF-related stroke, due to being ineffective in preventing the condition. Despite this, data included in the SAFI report from the Senti-nel Stroke National Audit Programme over one year later show that less than half of patients admitted to hospital with a stroke were taking anticoagulants (despite being known to have AF) and over a quarter were still taking aspirin.

NICE had estimated NOAC uptake of ap-proximately 20% in the first year after pub-lication of NICE technology appraisals (2012

and 2013) but by June 2015 almost three quarters of Clinical Commissioning Groups in England (73%) had NOAC uptake below 20% of all oral anticoagulants. NOAC prod-ucts included in the data are: BMS’s Eliquis (apixaban; approved in 2012), Boehringer’s Pradaxa (dabigatran etexilate; approved in 2010) and Johnson & Johnson/Bayer’s Xarel-to (rivaroxaban; approved in 2011).

Compared to other countries in Europe the UK’s use of NOACs as anticoagulant therapies is more than 25% less than total use in Germany and Greece. In fact, the UK is at the bottom of the table with Finland, the Netherlands and Hungary – where NOAC usage as a percentage of total anticoagu-lant market share is less than 10%.

Now SAFI and the ABPI are calling for consistent adoption of NICE guidance on management of atrial fibrillation (AF) and widespread distribution of best practice in anticoagulation.

Commenting on the report’s findings Pro-fessor Martin Cowie, professor of cardiology at Imperial College London, said: “It is worry-ing that despite the NICE guidance of June 2014 on NOAC use for AF just a handful of CCGs have a third or more of patients using these therapies.”

Professor Cowie also noted that the con-tinued use of aspirin for this indication is “dis-turbing.” He said: “Aspirin is poorly effective against AF related stroke and it increases the

risk of bleeding. Some doctors seem to have a low awareness of this issue and this needs to improve.”

Dr Berkeley Phillips, medical director of SAFI, said in a statement about the report, which was released on May 9, that fairer dis-tribution and prescribing of innovative new medicines could be achieved in England by sharing experiences and best practices.

The SAFI report also recommends allo-cating a leader within each CCG for stroke treatment – as currently one in four com-missioning bodies do not have an allocated champion. The report also suggests the implementation of agreed protocols across primary and secondary care for initiation of NOAC therapy.

A spokesperson for NICE told Scrip: “It is disappointing that, despite NICE recom-mending anticoagulants, including NOACs, to help prevent strokes in people with AF, too many people with this condition who could benefit are not being given them.”

The spokesperson for the HTA added that it is “equally disappointing that too many people with AF are still being given aspirin even though the evidence shows that it is not as effective as anticoagulants at pre-venting stroke in people with AF, and is also not as safe in terms of causing bleeding. This needs to change if we are to reduce the numbers of people with AF who die need-lessly or suffer life-changing disability as a result of avoidable strokes.”

When NICE published its recommenda-tions in 2014 it also published a Patient Deci-sion Aid alongside it to help patients weigh up the possible benefits, harms, advantages and disadvantages of the different options for treatment. “We also recently endorsed a new online AF decision support tool to help healthcare professionals and people with AF make informed decisions about the most appropriate treatments,” NICE said.

CCGs, created in April 2013 to replace Pri-mary care Trusts in the UK, are clinically-led statutory NHS bodies responsible for the planning and commissioning of healthcare services for their local area. There are 209 of them in England.

‘It is disappointing that, despite NICE

recommending anticoagulants, too many people who

could benefit are not being given them’





French Police Search Drug Regulator’s Premises Over Phase I FAAH StudyIAN SCHOFIELD [email protected]

T he French regulatory agency ANSM has come under scrutiny after it confirmed that police from the public prosecutor’s of-fice in Paris searched its premises as part of the judicial inves-

tigation into the Phase I trial that resulted in the death of a volunteer and the hospitalization of several more with neurological damage earlier this year.

It’s not clear exactly what the police were looking for. ANSM told Scrip that they took away “mainly some computer data” following the visit on April 19-20, but added that such a move was “an inherent part of any judicial procedure.” As a public body it said it intended to “con-tribute actively to demonstrating the truth” about the first-in-human study of Portuguese company Bial’s FAAH inhibitor, BIA 10-2474.

The agency, which authorized the Phase I trial, has come under clos-er scrutiny after France’s Le Figaro newspaper revealed that it had seen a “confidential” document produced by ANSM as a result of an “internal investigation” at the agency.

This document, the newspaper said, showed among other things that a reviewer examining the preclinical dossier as part of the trial authorization procedure had reported an effect of the drug on the central nervous system in the form of neurological lesions in dogs, mice, rats and monkeys, but that ANSM nonetheless gave the Phase I trial the go-ahead on the grounds that BIA 10-2474 “was not an at-risk product,” a conclusion that “today is widely contested,” Le Figaro stated.

ANSM said it had ordered a review of its internal processes and produced a report following that review, but that this related to ad-ministrative and procedural matters and did not address the sub-stance of the Phase I study. It said the report would not be made public, but that it had been submitted to the police and to the Gen-eral Social Affairs Inspectorate (IGAS), which is conducting its own inquiry into the circumstances surrounding the Phase I study and has yet to publish its final report.

Biotrial, the CRO that was running the trial, told Scrip that it did not perform the preclinical toxicology studies and that, as required by “international standards,” it received from Bial only the investiga-tor’s brochure “with a toxicological certificate about the non-toxicity of the product at the doses used in the clinical trial.” There was no reason, it said, to mention any neurological risks at the doses to be used in the trial.

It said it was “important to keep in mind that those preclinical studies aim to use massive doses of products in order to reach high levels of toxicity,” and that “this is how non-toxic levels are determined.”

ANSM SCIENTIFIC INQUIRYA separate inquiry has been conducted by an independent tempo-rary specialist scientific committee (CSST) set up by ANSM to look at the data behind the study. In its final report published last month, the committee said that the preclinical dossier “generally appears to be of good quality” and that “no aspects of the data that the CSST has studied constituted a signal likely to contraindicate administration in humans.”

It did note that some neurological toxicity was seen in animals, with “central nervous system and autonomous nervous system dam-age having affected a small number of animals treated at the highest doses,” but added that the “initially non-alarming nature of the neu-rological damage observed was confirmed by examination of the slices of tissue concerned by the CSST’s experts.”

It said, however, that while the preclinical dossier contained no data to suggest that the product should not be moved into human stud-ies, there were “quite a large number” of errors and inaccuracies that in places made it difficult to understand.

Biotrial pointed out that these errors and inaccuracies “were in the investigator’s brochure prepared by Bial,” which had been submitted “in due time to the ANSM and to the IRB [ethics committee] before the authorization to proceed with the study.”

It added that “within the context of the many inquiries that have been conducted, 12 CSST experts worked for 600 hours to conclude that ‘the data provided, especially the Investigator Brochure, did not contain information, especially data on toxicology, suggesting a spe-cific risk during first-in-human use’.”

CAUSE OF SYMPTOMS IN VOLUNTEERSAs for the adverse events seen in the volunteers in the Phase I study, the committee said that these were headache (severe in one volun-teer), “cerebellar signals” (three volunteers), problems of conscious-ness (varying from a slowdown in psychomotor function to coma in the volunteer who died), and memory problems (two).

The most likely explanation, it said, was a direct but off-target toxic effect of the substance “via its attachment to other cellular ce-rebral structures.” This, according to the committee, could have been caused by the drug’s weak specificity for the target enzyme, the use of repeated doses well above those that (at least in humans) result in complete and prolonged inhibition of FAAH, and its likely progres-sive accumulation in the brain.

As to why the product should have exerted its adverse effects only in the later stages of the study, the committee found that dispropor-tionate increases in dosage in the later multiple ascending dose (MAD) stages of the BIA 10-2474 trial “probably played an important role” in the neurological damage.

The trigger for the accident “could have been the choice of too strong a test dose” as well as “a dose progression that accelerated in the potentially at-risk zone,” the committee said. This kind of geometric progression “should, as far as possible, be avoided,” it advised.

The committee has made a number of recommendations that it said would be presented to European and international regula-tors, including wider publication of data relating to Phase I stud-ies, conducting neuropsychological evaluations of volunteers before beginning trials with new drugs acting on the CNS, and basing dose adjustments on pharmacokinetic and pharmacody-namics data from volunteers who have previously taken the test drug in the trial.




Papa’s Exit Highlights Perrigo’s Shortcomings LISA LAMOTTA [email protected]

W ith Perrigo Co. PLC’s CEO moving on to murkier waters, questions have arisen about the health of the company’s own business. While some worry that the company will

change course, a change might be exactly what Perrigo needs to get back to former highs.

The maker of generic and over-the-counter drugs has seen a slip of 55% in its stock price from its 52-week high of $200 and now trades at only $90 per share. While some investors see this as a buy-ing opportunity, there are indications that Perrigo has yet to hit bottom.

The stock has been dropping ever since Mylan NV withdrew its $26bn offer in November. While Mylan may not have been a good fit for Perrigo, the seven-month saga highlighted some issues in Papa’s management style and the weakness in the base business at Perrigo.

The company reported first quarter earnings on May 12, the same day that newly appointed CEO John Hendrickson took his place at the helm of the company. Hendrickson was promoted in-ternally from the position of president after long-time leader Joe Papa left the company on short notice to assume the top job at scandal-plagued Valeant Pharmaceuticals International Inc.

“Our recent track record of performance against our own expec-tations is unacceptable. I understand that. Our team understands that,” admits the new CEO.

The company’s earnings report has been widely-anticipated due to a revision of its guidance earlier this year. Investors have been looking for transparency from the company as it navigates some turbulent times. The company announced previously that adjusted EPS for 2016 is expected in the range of $8.20 to $8.60 versus the company’s estimate in February that EPS for the year would come in between $9.50 and $9.80, beating out 2015 earnings of $7.59.

Perrigo’s guidance revision is just one indicator that there are deeper issues at the company that investors should be con-cerned about. Perrigo execs freely admit that the downgrade in EPS was largely due to “competitive price pressure in its prescrip-tion business.” Translation: Perrigo is like Valeant-lite and has been relying on price increases to drive sales in the segment. “During the quarter, we experienced 24 competitive launches against our

portfolio, producing sharp price erosion in a number of topical products we sell. These factors, combined with continued pricing pressure due to the consolidation of the large buying coopera-tive groups, and the absence of significant new products in the quarter, further impacted our ability to execute on our planned pricing strategies,” said Perrigo CFO Judy Brown during the May 12 earnings call.

Perrigo reported a first quarter loss of $133m, based on generally accepted accounting principles (GAAP), a wider loss than the $95m posted in the year-prior quarter. The generics drug maker reported adjusted income of $251m for the quarter. Businesses also often present a non-GAAP, or adjusted earnings report. Brown explained that Perrigo’s adjusted earnings exclude “such items as acquisition-related matters such as non-cash acquisition-related amortization expenses, restructuring charges and related tax effects.”

The company is also excluding its vitamins, minerals and sup-plements business from its adjusted earnings since it hopes to sell the unit.

Perrigo, like Valeant, is a business driven largely by acquisition and not organic growth – the company conducted a total of 27 bolt-on acquisitions or tuck-in deals over the last nine years. Again, like Valeant, Perrigo only spends about 3% to 4% of its revenues on R&D, well below the industry average of 17% to 20% (although in Perrigo’s defense, generics and OTC products don’t often require a lot of R&D spend).

Despite shareholder issues with Papa’s growth strategy, Hendrick-son seems like he will continue down the same path. “As always, we will continue to evaluate ways to refine and enhance our portfolio of products to customers and consumers. We will continue to look at synergistic, bolt-on acquisitions that fit strategically within our core infrastructure, and we will continue to evaluate methods of returning capital to our shareholder base,” he said on the call.

Yet, returning capital to shareholders might not be on the agen-da. Brown added during her remarks that these initiatives will be constantly reassessed.

“We intend to fund our previously-announced share repurchase program, which runs out until late calendar 2018, through operat-ing cash flow. To the extent the use of those cash flows for share repurchases would impede our deleveraging goals or any tuck-in acquisitions, we would slow or suspend the program for a period of time. Quarterly, given the cash generated and our commitment to delever, we will evaluate cash available for M&A and/or share repos,” she said, noting cash flow from operations in the quarter was $170m.

Beyond all these issues, Perrigo has faced performance issues in a few of its business segments, including its branded consumer healthcare (BCH). As one of his first moves as CEO, Hendrickson replaced the head of the unit. He said the unit is prioritizing new geographies, assessing the current pipeline and will be divesting underperforming assets.

Expect Hendrickson to sell off the company’s royalty rights to the multiple sclerosis drug Tysabri that it acquired from Elan a few years ago if Perrigo needs some quick cash.

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P O L I C Y & R E G U L AT I O N B R I E F S

Biopharma’s Narrowed Patent Protection May Find Relief A new law intended to better secure trade secrets may also help biophar-maceutical companies safeguard their intellectual property in situations where protection isn’t available under the patenting process or the scope of a firm’s patent was narrowed because of

recent Supreme Court rulings. While recent Supreme Court decisions have narrowed certain patent protections for pharmaceutical manufacturers and oth-er life sciences companies, drug makers, particularly biotechs, may find relief in a new law intended to prevent the theft of trade secrets. The Defend Trade Se-crets Act (DTSA), signed into law on May 11 by President Barack Obama, is aimed at better securing manufactur-ing processes, formulas and customer lists – intellectual property (IP) that’s critical to drug companies and other in-novators. According to the independent bipartisan Commission on the Theft of American Intellectual Property, the US loses about $300bn annually due to trade secrets theft. The DTS The law has several provisions important to the biopharmaceutical industry, said Phila-delphia lawyer Rob Baron, a partner in the litigation and intellectual property departments at Ballard Spahr LLP. But one of the law’s benefits that hasn’t gotten a lot of attention is its ability to preserve IP in situations where protec-tion isn’t available under the patenting process or the scope of a firm’s patent

was narrowed because of the Supreme Court’s rulings in cases like Association for Molecular Pathology v. Myriad Genet-ics and Mayo Collaborative Services v. Pro-metheus Laboratories Inc., Baron pointed out. Indeed, for the first time, firms that traditionally have looked to patenting their discoveries, like methods of manu-facturing, to safeguard their IP may now turn to the broad federal strength of the DTSA as a remedy on which to rely in the face of those recent rulings – that is, as long as the companies have kept the details of their innovations secret, he said. Baron noted that while the biop-harmaceutical and high-tech industries

have generally been on opposite sides of the debate over issues involving IP, the two sectors came together in agree-ment on the DTSA, which was backed by companies like Eli Lilly & Co., John-son & Johnson, Pfizer Inc., Adobe Inc. and Siemens Corp. A key thing the law does is establish a uniform federal standard for trade secret misappropria-tion and theft – allowing companies to craft one set of nondisclosure policies. Unlike other areas of IP, the protection of trade secrets in the US previously was a matter left to the states – result-ing in a hodgepodge of laws through-out the nation.

How To Solve The Pricing ProblemCompanies need to offer new pricing models if they want stay in business and keep innovating, and payers too need to think outside the box if they want to deliver innovative new treatments to patients. Companies bringing game changing drugs to the market are facing a problem – how to convince payers to pay. Payers want value and companies want a fair price – but it may be time to move on from the value discussion and think about pricing differently. According to delegates at the Pharma Pricing & Market Access Congress 2016, the solution could be an international list price, or pay-ing regular, mortgage like-instalments based on outcomes underwritten by real world data. Payers and companies have long debated what consti-tutes a fair price and what represents value for money. But the discussion doesn’t seem to have helped much and there has been little change over the years in the way that medicines are priced. The time has come to “think outside the box,” according to Omar Ali, formulary development pharma-cist at Surrey and Sussex NHS Trust, and member of the Adoption and Impact Panel at NICE, the health technology appraisal institute for Eng-land and Wales. The solution is not to argue about price and value, but to work around the system and think about paying for outcomes rather than a pill or an injection. “When someone comes up with a genomic treatment to cure blindness, it is going to cost more than a house. No one will be able to pay that,” according to Ali. Instead of a one-off lump sum that no-one could afford, he suggests a mortgage-like structure that would see payers pay a deposit and annual sums based on outcomes. And this is where real world evidence comes in. It can do what randomized control trials cannot: offer a test drive. “RCTs say it can work, real world evidence says it does work,” according to Ali. So in theory, rather than paying for a drug, you would pay for each year of good eyesight that the patient enjoys, thanks to the product. Another idea, proposed by a payer from the audience, was a cap on turnover. For example once a drug makes $3bn – enough to make back the $2bn industry says it takes to develop a new drug, plus $1bn prof-it – the price of the drug should be lowered to near the cost of production. Patents used to ensure companies could make a fair return on investment but they now enable “undue profits” because prices are so high, he said.Read full story at: http://bit.ly/24UGO7k

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GE’s Murphy On Off-The-Shelf Biopharma FactoriesANJU GHANGURDE [email protected]

As the first GE “factory in a box” was opened this week in China for JHL Biotech, GE Healthcare Life Sciences (GELS) president and CEO Kieran Murphy said GE expected to “break ground” on more such facilities there this year.

While GE is in dialogue with several regions in China around “creating more capacity,” Murphy noted that Korea’s ambition in the biosimilars space was “impressive.”

“All countries in Asia need to be aware… [Korea is] going to be a for-midable supplier in the biosimilars space. China and India are going to be huge domestic markets. Getting the capacity in the right format for these markets is going to be incredibly important,” Murphy told Scrip in an exclusive interview in Mumbai.

GELS, he hopes, can help speed up the development of Indian bio-pharmaceuticals.

ANJU GHANGURDE: GE chair and CEO Jeff Immelt noted in the Q1 2016 earnings call that healthcare is “rebounding”; segments like healthcare, power etc. are expected to have substantially better growth than 2015, more than offsetting headwinds in oil, gas and transportation. In the life sciences segment, was it largely China-led growth?

KIERAN MURPHY: That’s not necessarily right. We have a great busi-ness in China; it has grown strong double digit for the past few years. We’ve a strong global business. We had very good growth across Asia; we do good development in India. Our European and US busi-ness is doing extremely well.

In the case of biopharmaceuticals, this is a globally driven business. A lot of our customers are global players. In any one year, they can decide to create capacity in Europe or Asia and that can make a big difference to the way our revenues get reported, even though those decisions might be made in New Jersey.

The fastest growing part of our business is bioprocessing. Last year those revenues increased by more than 15% and we see that trend continuing for the foreseeable future. The underlying growth in biopharma drugs is such that the world will need more capac-ity and given the trend towards biosimilars, especially capacity and productivity will become the critical drivers of this business. There is no company better positioned to drive productivity and create capacity than GE.

AG: These are probably exciting and yet challenging times for biopharma in India – PM Modi’s Make In India, Start-up India, an improving IPR situa-tion but also evolving regulations, run-ins with the FDA etc. What is GELS’ take on the Indian business opportunity in this scenario?

KM: Anything that’s going to give people a more stable political en-vironment as a backdrop that’s positive. But the fundamental is that you have huge a population here in India. We had meetings with cli-nicians here where we are told the incidence of cancer, Alzheimer’s, neurological disorders, in general, are on the increase. There is no question that the demand of insulin, inflammatory-based treatments is going to increase. There are very few places in the world where the demand is going to increase at the rate that it will do in India over the next 20-30 years.

The challenge is going to be to create capacity that’s going to get the balance right between serving global markets and the domestic market. I think it’s a massive opportunity and we are extremely well placed to work with the Indian companies to create that capacity.

AG: Big Pharma is already entrenched in emerging markets. Is GE consider-ing a scale up in markets like India, and China as clients wedge deeper in the Asian region?

KM: We increase our capacities and services right across Asia. We’ll do it here in India. Of course we are doing it in China. Our first fast track center for improving the productivity of processes was actually here in India. We have a fast track center in China now. We are expanding our facilities in Singapore and in Korea. We will respond to market demand.

The ambition of Korea in the biosimilars space is impressive. All countries in Asia need to be aware - they are going to be a formidable supplier in the biosimilars space. China and India are going to be huge domestic markets. Getting the capacity in the right format for these markets is going to be incredibly important.

Getting output from the least unit cost possible and still making margins for pharmaceuticals companies and our customers that is core business to GE across every industry we serve.

AG: There’s a lot of optimism around Chinese R&D. Biopharma R&D fund-ing is expected to reach $25-30bn by 2025 according to McKinsey. Are op-portunities improving for firms like GELS?

KM: We have a fast growing business in China. We have just com-pleted the development of the KUBio facility for JHL Biotech. We will break ground on more KUBio type facilities this year. We are in discussions with several regions in China with a view to creating more capacity.

We see a huge opportunity for the big global pharma compa-nies to pay more attention to the needs of the Chinese market. We are local in China. We have manufacturing facilities right across our healthcare business including life sciences; we have great relation-ships with government agencies because we’ve been in China for a long time. We are a big Chinese company as well as being a big US company.

AG: The first of GE’s KUBio factory opened in China, setting new bench-marks in terms of time, costs of setting up biopharma manufacturing. What’s the build versus deploy GE’s KUBio equation like?

KM: The facility itself was built over a period of few months. From start to finish the whole thing took probably around 18 months.

For most markets cost is probably half, may be even more favorable than that. It’s probably between a third and a half of the traditional cost. But it depends, it would be a lot different in India than it would be in China or Singapore. It depends on the land/building cost. But it’s cheaper and faster. It’s half the time. The water consumption in a facility like that is a lot less, probably 50% less than it is in a standard facility, maybe more. The energy costs are a lot lower. The econom-ics are such that on a per unit basis you are ending up with a very cost effective product offering.

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E XC L U S I V E I N T E R V I E W

‘We Cannot Afford To Be An Island’: Bayer’s UK CEO Shares Anti-Brexit OpinionALEXANDER MOSCHO

Britain is a powerful trad-ing nation with a dynamic economy and has always

been at the center of world af-fairs. The EU is its major trading partner, and as things stand now, we have a clear role in in-fluencing the way that partner-ship operates.

As a life sciences company with a strong pharmaceuti-cal portfolio, including many class-leading medicines, Bayer AG is among many in the UK and throughout Europe which stand strong when measured up against the global giants in this trading environment.

However, we believe that life science companies would face a long period of uncertainty if Britain were to leave the EU. In pharma and crop science our products require at least 10 years of research and development and up to more than £1bn of invest-ment to see their launch into markets. Such significant upfront investments require stable regulatory and economic situations as well as acceptable levels of predictability. Any prolonged pe-riod of uncertainty after a potential Brexit will impact companies’ willingness to invest locally. Our entire existence is built around being able to provide innovative products locally at reasonable price levels that serve patients and health providers in pharma – as well as our customers in crop science, consumer or animal health – fairly and effectively. Any inflation caused by new import or export duties, or restrictions to pan-European research, may compromise this balance.

I am also concerned about job mobility and the free movement of vital skilled talent. As well as being able to offer job opportunities to British talent, our UK business offers employment for almost 40 nationalities, a large proportion of which are European.

Brexit will, without doubt, make it more difficult for companies that want or need to employ people from across the EU. This in-cludes the NHS, the healthcare industry’s biggest customer and one of the biggest employers in the world – which relies heavily on workers from the EU to serve patients on an appropriate level.

Scientific research, including crucial clinical trials, could be threatened due to a reduction in research funding from initiatives such as Horizon 2020, the EU’s €79bn program for research and innovation, and the Innovative Medicines Initiative, Europe’s largest public-private initiative to speed up the development of better and safer medicines for patients.

Without access to these, we risk a flight of academics from the UK to countries that have easier access to collaborative international research projects. There has been a long road to the creation of harmonized clinical trials regulation, a single portal for trials, and

an EU-wide trials database. Clearly, any restrictions to such EU-plat-forms could affect patients too. For example, if the UK no longer has access to the single portal, this could deny patients the opportu-nity to take part in clinical trials. This would erase opportunities for early access to innovative medication and might even slow down the process of developing life-saving new treatments.

ACCESS TO MEDICINES COULD BE DENIED – MOVING BACKWARDS NOT FORWARDSThe European Medicines Agency (EMA) is the hub of EU pharma-ceuticals regulation – and it is based in London. There would be a question-mark over whether centralized marketing authorizations would still apply in a post-Brexit UK.

We want to move forward in terms of treating patients and access to life saving medicines, not backwards. If a Brexit hap-pened, potential consequences for the regulatory side could be another reason why it would take far longer for patients and clinicians to have access to innovative medicines, and the in-creased administrative burden from renegotiations and duplica-tion of arrangements for developing and regulating medicines and contract renewal, as well as data management, would cost us all dearly.

I am continually impressed by the UK government’s clear com-mitment to life sciences, with a dedicated minister and govern-ment strategy for the sector. It concerns me that this strategy may be less achievable if an EU exit tips the scale against investment in the UK. All investors need certainty in terms of trade conditions to determine investment decisions. Being part of the Single Market and its 500 million consumers makes the UK much more attractive to investors. Reduced attractiveness would affect production and manufacturing jobs.

People may rightly suggest that Switzerland, which has a world-class pharmaceutical industry, for example, seems to get on while being outside of the EU/EEA jurisdiction. But their industry has built up around very different structures over a very long period of time and required several years of negotiations that were based on the principle of free movements. The UK economy is not structured in the same way; it would take years and a great deal of expense to switch to that kind of model, and even if this worked out it is un-clear whether the result would address some of the currently vital concerns around EU membership.

We know that the EU is not perfect: there is still major room for improvement and modernization, but Britain will be far stronger for being able to influence decisions made by its biggest trading partner, than if it left the negotiating table. These days, no coun-try, least of all, Britain – ironically – can afford to be an island. The EU will benefit just as much from the UK’s membership as the UK will from remaining a member. I passionately believe that it is important that the UK remains “in” for all of us – society, patients and industry.

Dr. Alexander Moscho, CEO Bayer UK & Ireland


S TO C K WAT C H

Specialty Pharma FallingANDY SMITH

If this downbeat first-quarter earnings sea-son has claimed a scalp, it is the business model of specialty pharmaceutical com-

panies. Last week the analysts from Jefferies described the specialty pharmaceutical sec-tor as being in freefall.

The specialty pharmaceutical business model typically falls between those of bio-technology companies that market com-plex drugs to a small number of hospital based physicians and big pharmaceutical companies that have historically marketed mainly small molecule drugs to more gen-eralist physicians.

In recent years, while big pharmaceutical companies have migrated with gusto to-wards the biotechnology business model, specialty pharmaceutical companies have transformed. Pure-play specialty pharma-ceutical companies such as Shire PLC typical-ly spend less on R&D than big pharmaceuti-cal or biotechnology companies, market mainly branded drugs to specialist physi-cians (who may be community based), and dread the patent expiry of their drugs. At the other end of the spectrum are the pure-play generics companies, many of which have more recently developed their own branded (specialty pharmaceutical) businesses either as the result of successful patent litigations or as a defense against the declining num-ber of blockbuster patent expiries. Ironically, having developed into one of the bigger generic companies, Allergan PLC is in the process of divesting its generics businesses in favour of a purer specialty pharmaceutical model (Also see “Teva to buy Allergan Gener-ics; Mylan off the hook but Perrigo still wrig-gling” - Scrip, 27 Jul, 2015.).

The mixed specialty pharmaceutical business model is under attack from both generic and branded sides. The destruc-tion of about 90% of the value Valeant Pharmaceuticals International Inc. since last summer has been due to the focus on its gratuitous price increases follow-ing the acquisition of branded drugs that could be substituted by generics but were dispensed through its Philidor captive spe-cialty pharmacy. Last week, the analysts from JP Morgan pre-empted Valeant’s still to be announced first-quarter 2016 results by highlighting the further impact of more

normal revenue recognition via Walgreens Boots Alliance Inc., continued channel de-stocking and pricing negotiations. These are the factors that, together with Vale-ant’s $30bn debt mountain, are ultimately likely to lead to the demise of Valeant as it exists today. While its broken promises to discount its drugs and the various govern-ment agency investigations are likely to add further pressure to Valeant, a wider concern of investors is that Valeant is not an isolated case.

When Endo International PLC reported its first-quarter results, this concern ap-peared to be entirely justified. Endo re-ported sales that beat analysts’ consensus estimates, earnings that missed estimates and a drastic downward revision to its 2016 guidance. The analysts from Citigroup not-ed that the guidance cut was due to “low-ered expectations across the Branded and Generic divisions”. With the analysts from Cowen wondering if “Endo can stabilize its operations” the generic end of the special-ty pharmaceutical space seemed to have firmly fallen from grace. That fall appeared to reach terminal velocity when Perrigo Co. PLC pre-announced its first-quarter con-sensus-missing results and lowered 2016 guidance. According to the analysts from Jefferies the pre-announcements “were far lower than Street estimates” because of “generic prescription headwinds”. Perrigo’s poor results and guidance reduction was made in conjunction with the departure of its CEO to take up a similar role at Vale-ant. In leaving the wreckage of Perrigo in his wake for similar pressures at Valeant a phrase that includes the words ‘frying pan’ and ‘fire’ came to mind (Also see “Papa’s Exit Highlights Perrigo’s Shortcomings” - Scrip, 12 May, 2016.). The share prices of Valeant and Perrigo finished the week down about 12% and 5.8%, respectively.

With generic drug price deflation and the political focus on branded drug price inflation being the two jaws currently crush-ing the specialty pharmaceutical business model, the analysts from JP Morgan last week published a timely note examining these “key topics and controversies follow-ing a volatile earnings season”. While the JP Morgan analysts found that “the near-term

set up [for specialty pharma] remains chal-lenging given poor sentiment, high levels of leverage and less than stellar fundamental results”, they pointed to the results of Aller-gan, Teva Pharmaceutical Industries Ltd. and Mylan NV as highlights with the latter two only seeing “low-to mid-single digit [generic price] erosion”. While I was happy to see the share price of Allergan finish up over 10% in a week when the NASDAQ Biotech Index finished down 1.6%, the announcement of a $10bn share buy-back rather than its first-quarter results was probably the main rea-son for its share price strength.

Like Allergan, Teva narrowly missed ana-lysts’ consensus sales estimates and re-iter-ated its 2016 guidance. Without the boost-er of a $10bn buy-back, though, Teva’s share price fell over 5% on the week, ironi-cally also due to the inter parties review on the patent covering the 40mg version of Teva’s largest branded product, Copaxone (glatiramer acetate). Mylan’s third-quarter results were remarkably similar to Teva’s with a modest sales miss, an earnings beat and reiterated 2016 guidance but the (al-beit stable) low- to mid-single digit generic drug price deflation included in its results commentary hung heavy over the com-pany and its share price finished the week down over 3%.

The answer to what ails specialty phar-maceutical companies is more branded products, probably biosimilars, and fewer price-deflating generics. This is easier said than done when consolidation of generic pharmaceuticals has been the recent raison d’être for companies like Mylan and Teva.

The Magna Biopharma Income fund holdings include Allergan.

Andy Smith is chief investment officer of Mann Bioinvest. Mann Bioinvest is the in-vestment adviser for the Magna BioPharma Income fund which has no position in the stocks mentioned, unless stated above. Dr Smith gives an investment fund manager’s view on life science companies. He has been lead fund manager for four life science–spe-cific funds, including International Biotech-nology Trust and the AXA Framlington Bio-tech Fund, and was awarded the Technology Fund Manager of the year for 2007.



P I P E L I N E WAT C H

Scrip’s weekly Pipeline Watch tabulates the most recently reported late-stage clinical trial and regulatory developments from the more than 10,000 drug candidates currently under active research worldwide.

CLICKVisit scrip intelligence.com for the entire pipeline with

added commentary.

Late-stage clinical developments for the week 6-12 May 2016

LEAD COMPANY PARTNER COMPANY DRUG INDICATION MARKET

REGULATORY APPROVAL

Biofrontera AG – Ameluz (5-aminolaevulinic acid) actinic keratosis US

Bristol-Myers Squibb Co. AbbVie Inc. Empliciti (elotuzumab) multiple myeloma EU

CSL Ltd. –Idelvion (albutrepenonacog alfa)

hemophilia B EU

Ono Pharmaceutical Co. Ltd.

Bristol-Myers Squibb & Co.

Opdivo (nivolumab) melanoma, non-small cell lung cancer Taiwan

SUPPLEMENTAL REGULATORY APPROVAL

Bristol-Myers Squibb & Co. –Opdivo (nivolumab), Yervoy (iplimumab)

advanced melanoma EU

AbbVie Inc. – Imbruvica(ibrutinib)chronic lymphocytic leukemia, small lym-phocytic leukemia

US

Theravance Biopharma Inc. – Vibativ (telavancin) concurrent S aureus bacteremia US

ACCELERATED/CONDITIONAL APPROVAL

Pfizer Inc. – Ibrance (palbociclib) advanced breast cancer Canada

REGULATORY FILING ACCEPTED

PharmaEngine Inc.Merrimack

Pharmaceuticals Inc.Onivyde (irinotecan liposome injection)

pancreatic cancerSouth Korea

ORPHAN DRUG DESIGNATION

Celgene Corp. – Bb2121 multiple myeloma US

Akari Therapeutics PLC – Coversin Guillain-Barre syndrome US

AstraZeneca PLC – selumetinib thyroid cancer US

Caladrius Biosciences Inc. – CLBS03 type 1 diabetes US

Scynexis Inc. – SCY-078 invasive candida infections US

FAST-TRACK STATUS

KemPharm Inc. – KP511 moderate-to-severe pain US

REGULATORY FILING WITHDRAWAL

Santen Pharmaceutical Co. Ltd.

– Opsiria (DE-109) uveitis EU

PHASE III TRIAL INITIATION

Foamix Pharmaceuticals Ltd.

– FMX101 (minocycline 4% foam) acne –

Source: Sagient Research’s BioMedTracker

intelligence.com


A P P O I N T M E N T S

Takeda Pharmaceutical Company Lim-ited has appointed James Kehoe chief fi-nancial and corporate officer. Kehoe joins the global, R&D-driven pharma company from the consumer goods sector, where he most recently was chief financial officer (CFO) at Kraft Foods Group in the US, having previ-ously held senior positions at Mondelez and Gildan Activewear. Prior to this, he had over 20 years of experience working in finance, with assignments based in Germany, Swit-zerland and Italy.

The molecular diagnostics company Agen-dia Inc. has appointed Dr M. William Au-deh chief medical officer. Audeh brings nearly 30 years of clinical experience to the company, having previously been a medi-cal oncologist, clinical researcher and faculty physician at the Cedars-Sinai Cancer Centre in Los Angeles, where he was also a director prior to joining Agendia.

Relmada Therapeutics Inc. has promoted Michael D. Becker, former senior vice presi-dent of finance and corporate development, to chief finance officer. Becker has been with the chronic pain treatment special-ist since 2014, having previously founded and presided over the consulting firm MDB Communications LLC. Prior to this, he held positions of increasing responsibility at the

biotechnology company Cytogen, before being appointed president and CEO in 2002.

Codiak Biosciences Inc., a world leader in the field of exosome biology, has appointed Dr Jan Lötvall chief scientist. Lötvall is a spe-cialist in clinical pharmacology and clinical allergy, and joins Codiak from Göteburg Uni-versity in Sweden, where he was professor of allergy and chair of the Krefting Research Cen-tre. He was also the first elected president of the International Society of Extracellular Vesi-cles (ISEV), which he helped to found in 2011.

Seres Therapeutics Inc., a microbiome therapeutics company has appointed Thomas J. DesRosier chief legal officer and executive vice president. He will also act as secretary for Seres’ leadership team and its board of directors. With over 30 years’ expe-rience in the biopharma industry, DesRosier was chief legal and administrative officer at ARIAD Pharmaceuticals and prior to this he held the same position at Cubist Pharma-ceuticals, where he led the team during its acquisition by Merck. Previously, he was sen-ior vice president and general counsel, North America of Sanofi.

The Medicines Company has appointed Tony Kingsley president and chief oper-ating officer and prior to this position, he

was executive vice president, global com-mercial operations at Biogen. Before this, he was senior vice president and general manager of the gynecological surgical products business at Hologic Inc.

Highland Therapeutics’ US subsidiary, Ironshore Pharmaceuticals Inc. has named Craig S. Lewis president. Currently, Lewis is on the board of directors of IPA and pre-viously was senior vice president (SVP), chief marketing strategy officer for Assurex Health. Prior to this, Lewis was SVP, global business insights and commercial operations at Shire Pharmaceuticals. During his 12 year run at the company he was also SVP, US marketing, SVP and ADHD business unit leader.

Bellicum Pharmaceuticals Inc., has ap-pointed Jim Daly to its board of direc-tors. Daly brings more than 30 years’ of experience in the biopharma industry to the company and is currently director of ACADIA Pharmaceuticals, Halozyme Thera-peutics, and Chimerix Inc. Most recently Daly was executive vice president and chief commercial officer at Incyte Corpora-tion and previously, he held various lead-ership positions at Amgen Inc. including senior vice president, North America com-mercial operations, global marketing and commercial development.

ELEANOR MALONE @[email protected]

ALEXANDRA SHIMMINGS @SCRIPALEXS [email protected]

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MANDY JACKSON @SCRIPMANDY [email protected]

JOANNE SHORTHOUSE @SCRIPJO [email protected]

FRANCESCA BRUCE @SCRIPFRANCESCA [email protected]

STEN STOVALL @STENSTOVALL [email protected]

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