An­a­lysts as­sess the dam­age — and next steps — af­ter Re­gen­eron/Sanofi get slammed in court

A fed­er­al judge’s de­ci­sion to or­der Re­gen­eron and Sanofi to pull their PC­SK9 drug Pralu­ent from the mar­ket man­aged to stun some of the most griz­zled ob­servers of the biotech world.

These patent dis­putes are not at all un­usu­al and are al­most al­ways set­tled with a share of the roy­al­ties when there’s a case to be made. And the court ac­knowl­edged that cre­at­ing a mo­nop­oly here was not in the pub­lic’s best in­ter­est. But the judge came down square­ly for Am­gen, say­ing:

(P)lain­tiffs have demon­strat­ed ir­repara­ble harm, as well as the in­ad­e­qua­cy of mon­ey dam­ages.

In­vestors clear­ly didn’t like the sound of any of this. Re­gen­eron’s shares $REGN dropped 7% — about $3 bil­lion in mar­ket cap — and Sanofi saw its stock slide 3%, about the same in mar­ket cap. Am­gen’s stock, mean­while, jumped 4.5%.

The first re­sponse, which every­one an­tic­i­pat­ed, was word from Re­gen­eron/Sanofi that the part­ners would ap­peal the de­ci­sion. But the very re­al pos­si­bil­i­ty ex­ists that an ap­peals court may not be quick to over­turn a rul­ing that came af­ter Re­gen­eron/Sanofi’s los­ing ar­gu­ment was flat­tened by the court. And the pos­si­bil­i­ty that Am­gen will pre­vail here got some top an­a­lysts think­ing over­time about the im­pli­ca­tions and pos­si­ble out­comes. We’ve gath­ered a few be­low.

Ge­of­frey Porges, Leerink

Sales of these new cho­les­terol drugs have not been im­pres­sive. But de­spite the slow take­off, a num­ber of an­a­lysts still be­lieve that these drugs will grad­u­al­ly build up a mar­ket worth bil­lions. Ge­of­frey Porges at Leerink crunched the num­bers if Am­gen’s win sticks:

As­sum­ing that AMGN cap­tures the ma­jor­i­ty of the fu­ture ~$2bn US Pralu­ent sales and main­tains a sim­i­lar mar­gin struc­ture with these in­cre­men­tal sales, our DCF val­ue for AMGN in­creas­es by $13, or 8%. This rep­re­sents a cash flow in­crease of $600mm in 2020E grow­ing to a $950mm ben­e­fit in 2025E, which AMGN could use for con­tin­ued div­i­dend growth, share buy­backs, or fu­ture ac­qui­si­tions.

Bri­an Sko­r­ney, Baird an­a­lyst

Bri­an Sko­r­ney at Baird be­lieves a roy­al­ty deal is the most like­ly out­come. He writes:

Though the rul­ing does in­di­cate that if Sanofi/Re­gen­eron do not file to ap­peal the de­ci­sion with­in 30 days, Pralu­ent will be pulled from the mar­ket, we doubt that will be the re­al­i­ty in the long run. The U.S. Court sys­tem is clear­ly cre­at­ed to in­still com­pe­ti­tion, not cre­ate mo­nop­o­lies. The Judge’s opin­ion clear­ly notes that “the pub­lic gen­er­al­ly is bet­ter served by hav­ing a choice of avail­able treat­ments. There­fore, the court finds it­self be­tween a rock and a hard place…tak­ing an in­de­pen­dent­ly de­vel­oped, help­ful drug off the mar­ket does not ben­e­fit the pub­lic.” The Judge al­so clear­ly hopes fur­ther pro­ceed­ings with “en­cour­age the par­ties to each an ap­pro­pri­ate busi­ness res­o­lu­tion.” As a re­sult, we think a hefty set­tle­ment is like­ly, pos­si­bly to the tune of 20%+ roy­al­ties to Am­gen. As a re­sult, we are rais­ing our price tar­get to $165.

If it does go to an ap­peals court, Biren Amin at Jef­feries doesn’t like the odds for Sanofi/Re­gen­eron.

Re­call in Ju­ly, we wrote about AMGN’s fil­ing an ap­peal case WBIP v. Kohler in­volv­ing low-emis­sion house­boat gen­er­a­tors in which the Ap­peals Court va­cat­ed the judg­ment of the Dis­trict Court deny­ing WBIP a per­ma­nent in­junc­tion. In this case, the Dis­trict Court felt that a PI would de­prive the con­sum­ing pub­lic “a po­ten­tial­ly life-sav­ing prod­uct.” The Ap­peals Court ar­gued that the pub­lic in­ter­est ar­gu­ment alone was not suf­fi­cient to de­ny a PI for a life-sav­ing good and specif­i­cal­ly cit­ed phar­ma­ceu­ti­cal drugs as an ex­am­ple in its rul­ing. If the Ap­peals Court is con­sis­tent with the WBIP v. Kohler rul­ing, it would mean a low like­li­hood that an ap­peal will be grant­ed.

 

Hal Barron, GSK

Break­ing the death spi­ral: Hal Bar­ron talks about trans­form­ing the mori­bund R&D cul­ture at GSK in a crit­i­cal year for the late-stage pipeline

Just ahead of GlaxoSmithKline’s Q2 update on Wednesday, science chief Hal Barron is making the rounds to talk up the pharma giant’s late-stage strategy as the top execs continue to woo back a deeply skeptical investor group while pushing through a whole new R&D culture.

And that’s not easy, Barron is quick to note. He told the Financial Times:

I think that culture, to some extent, is as hard, in fact even harder, than doing the science.

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UP­DAT­ED: Stay tuned: Bio­gen’s num­bers are great — it’s their wor­ri­some fu­ture that leaves an­a­lysts skit­tish

Biogen came out with an upbeat assessment of their Q2 numbers today, discounting the arrival of a key rival for its blockbuster Spinraza franchise. But the top execs remain grimly determined to not say much anything new about the sore points that have dragged down its stock, including the future of its big investment in Alzheimer’s or how it plans to invest the considerable cash that the big biotech continues to reap.

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Why wait? Cel­gene re­struc­tures a big Jounce pact — ze­ro­ing in on new I/O path­way with $530M deal and bump­ing ICOS

Celgene’s business team isn’t waiting for the big merger with Bristol-Myers Squibb to go through before syncing its strategy with the new mother ship.

Tuesday evening the big biotech unveiled a $530 million deal — $50 million in upfront cash — to amend their alliance with Jounce Therapeutics $JNCE to gain worldwide rights to JTX-8064, an antibody that targets the LILRB2 receptor on macrophages. Their old, $2.6 billion deal is being scrapped, leaving Jounce with a pipeline that includes the lead drug, the ICOS-targeting vopratelimab.

PACT Phar­ma says it's per­fect­ed the tech to se­lect neoanti­gens for per­son­al­ized ther­a­py — now on­to the clin­ic

At PACT Pharma, the lofty goal to unleash a “tsunami” of T cells personalized for each patient has hinged on the ability to correctly identify the neoantigens that form something of a fingerprint for each tumor, and extract the small group of T cells primed to attack the cancer. It still has a long way to go testing a treatment in humans, but the biotech says it has nailed that highly technical piece of the process.

UP­DAT­ED: My­ovan­t's uter­ine fi­broid drug looks com­pet­i­tive in PhI­II — but can they van­quish mighty Ab­b­Vie?

Vivek Ramaswamy’s Myovant $MYOV has closely matched its positive first round of Phase III data for their uterine fibroid drug relugolix, setting up a head-to-head rivalry with pharma giant AbbVie as the little biotech steers to the market with a planned filing in Q4.

Here’s how Myovant plans to prevail over the AbbVie $ABBV empire.

In the study, 71.2% of women receiving once-daily relugolix combination therapy achieved the clinical response they were looking for, compared to only 14.7% in the control arm. The data comfortably reflected the same outcomes in the first Phase III — 73.4% of women receiving once-daily oral relugolix combination therapy achieved the responder criteria compared with 18.9% of women receiving placebo — which will reassure regulators that they are getting the carefully randomized data that qualifies for the FDA’s gold standard for success.

Lit­tle Mar­i­nus sees its shares eclipsed as the Sage ri­val fails to com­pare on PPD in PhII

The executive team at Sage $SAGE have skirted another potential pitfall on its way to racking up a big future for its depression drug Zulresso.

Little Marinus Pharmaceuticals $MRNS had sought to challenge the Sage drug with an IV formulation — followed by an oral version — of ganaxolone for postpartum depression. But researchers say their Phase II study failed to positively differentiate itself from a placebo at 28 days — leaving them to hold up “clinically meaningful” data within the first day of administration compared to the control arm.

Roche cuts loose Tam­i­flu OTC rights, hand­ing Sanofi the keys as the phar­ma gi­ant dou­bles down on Xofluza

Roche set out to make a better flu medicine than Tamiflu as that franchise was headed to a generic showdown. Now they’ll see just how well Xofluza stacks up against the mainstay drug after handing off over-the-counter rights in the US to Sanofi.

Sanofi $SNY says it will now step in to negotiate a deal with the FDA to steer Tamiflu into the OTC market, a role that could well involve new studies to ease passage of the drug out of doctor’s hands and into the consumer end of the market. And the French pharma giant will have first dibs over “selected” OTC markets around the world as they push ahead.

Aca­dia is mak­ing the best of it, but their lat­est PhI­II Nu­plazid study is a bust

Acadia’s late-stage program to widen the commercial prospects for Nuplazid has hit a wall. The biotech reported that their Phase III ENHANCE trial flat failed. And while they $ACAD did their best to cherry pick positive data wherever they can be found, this is a clear setback for the biotech.

With close to 400 patients enrolled, researchers said the drug flunked the primary endpoint as an adjunctive therapy for patients with an inadequate response to antipsychotic therapy. The p-value was an ugly 0.0940 on the Positive and Negative Syndrome Scale, which the company called out as a positive trend.

Their shares slid 12% on the news, good for a $426 million hit on a $3.7 billion market cap at close.

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Some Big Phar­mas stepped up their game on da­ta trans­paren­cy — but which flunked the test?

The nonprofit Bioethics International has come out with their latest scorecard on data transparency among the big biopharmas in the industry — flagging a few standouts while spotlighting some laggards who are continuing to underperform.

Now in its third year, the nonprofit created a new set of standards with Yale School of Medicine and Stanford Law School to evaluate the track record on trial registration, results reporting, publication and data-sharing practice.