As a promi­nent an­a­lyst pre­dicts (even­tu­al) drug price con­trols, bio­phar­ma braces for a blow while Trump balls his fist

Some­time this week, no one is sure when, Pres­i­dent Don­ald Trump is ex­pect­ed to give his long-await­ed speech on drug pric­ing. And a long line­up of key play­ers in the field has been scratch­ing their heads, anx­ious­ly try­ing to de­ter­mine just how far the na­tion’s most un­pre­dictable pres­i­dent could go.

Trump, of course, has been free with his pop­ulist brand of an­ti-in­dus­try rhetoric for more than a year now, af­ter es­tab­lish­ing the base­line with re­peat­ed as­ser­tions that phar­ma com­pa­nies have been get­ting away with mur­der for years. 

But there’s been lit­tle di­rect ac­tion, be­yond the work at the FDA to hus­tle up new gener­ic ap­provals while try­ing to use the pub­lic spot­light to whip up some fresh com­pe­ti­tion for the price gougers. 

FDA com­mis­sion Scott Got­tlieb like­ly tipped the ad­min­is­tra­tion’s hand on one point in a pre­view he of­fered on pric­ing last week, in­di­cat­ing that in­dus­try prac­tices in fight­ing a de­lay­ing ac­tion against gener­ics and biosim­i­lars will face some di­rect chal­lenges. But while sig­nif­i­cant, that by it­self won’t bend any longterm trends on pric­ing in fa­vor of pay­ers.

Mean­while, pub­lic anger over drug pric­ing is re­peat­ed­ly stoked with an un­end­ing se­ries of high pro­file as­saults on cer­tain play­ers that have used their pric­ing pow­er to jack up rev­enue from old drugs.

Just last night, Mallinck­rodt was back in the spot­light with Ac­thar, which has gone from $40 a vial in 2001 to $40,000, threat­en­ing the ba­sic po­lice and fire ser­vices pro­vid­ed by the town of Rock­ford, IL.

For­mer Rock­ford May­or Lar­ry Mor­ris­sey set the stage for a 60 Min­utes seg­ment with this quote: “‘Why is health­care so ex­pen­sive? Be­cause the fix is in. That’s the an­swer. That’s the short an­swer.”

And it’s not the kind of an­swer bio­phar­ma wants to hear right now, es­pe­cial­ly on 60 Min­utes.

The in­dus­try is still dis­grun­tled over the ad­min­is­tra­tion’s de­ci­sion to get phar­ma to cov­er part of the donut hole in Medicare drug prices. But they can live with that. There’s been a steady fo­cus at PhRMA on try­ing to shift the fo­cus from the man­u­fac­tur­ers to the in­sur­ers and PBMs that man­age the ben­e­fit. But it hasn’t worked. And re­cent­ly that tac­tic has pro­duced some painful­ly awk­ward sal­lies on so­cial me­dia that tends to at­tract as much spon­ta­neous laugh­ter as dis­cus­sion.

With pub­lic anger per­co­lat­ing at an un­prece­dent­ed rate — a ma­jor­i­ty told Kaiser Health that re­duc­ing drug pric­ing should be a top pri­or­i­ty of pol­i­cy mak­ers — some an­a­lysts be­lieve that what­ev­er Trump comes up with it won’t be enough to stop the one strat­e­gy that would make the bio­phar­ma in­dus­try reel: Price con­trols.

Se­nior Wells Far­go an­a­lyst David Maris put it in blunt terms a few days ago.

We be­lieve the US is on a longer-term arc to­ward price con­trols and low­er mar­gins, as there is an up­ris­ing that has been per­co­lat­ing for years against high drug prices. While the caus­es are many and the prob­lem much more com­pli­cat­ed and nu­anced than many oth­ers would lead read­ers to be­lieve, there is a re­bel­lion at hand. Ar­gu­ments about the cost to de­vel­op a drug or how oth­er sup­ply chain con­stituents are to blame are not ap­pre­ci­at­ed by the par­ent stand­ing at a phar­ma­cy counter aban­don­ing their child’s pre­scrip­tion be­cause they can­not af­ford it due to an out­ra­geous de­ducible or high co-pay. And ex­am­ples of un­con­scionable drug price in­creas­es have fur­ther hard­ened many con­sumer opin­ions. 

That day prob­a­bly won’t ar­rive this week. But if that’s the path we’re on, Trump is faced with ei­ther sat­is­fy­ing the anger with some grand com­pro­mis­es, or stok­ing it by pulling his punch­es.


Im­age: Pres­i­dent Don­ald Trump at a speech in Oc­to­ber, 2017. AP IM­AGES

The FDA sets a reg­u­la­to­ry speed record, pro­vid­ing a snap OK for Ver­tex's break­through triplet for cys­tic fi­bro­sis

The FDA has approved Vertex’s new triplet for cystic fibrosis at a record-setting speed.

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UP­DAT­ED: Clay Sie­gall’s $614M wa­ger on tu­ca­tinib pays off with solid­ly pos­i­tive piv­otal da­ta and a date with the FDA

Back at the beginning of 2018, Clay Siegall snagged a cancer drug called tucatinib with a $614 million cash deal to buy Cascadian. It paid off today with a solid set of mid-stage data for HER2 positive breast cancer that will in turn serve as the pivotal win Siegall needs to seek an accelerated approval in the push for a new triplet therapy.

And if all the cards keep falling in its favor, they’ll move from 1 drug on the market to 3 in 2020, which is shaping up as a landmark year as Seattle Genetics prepares for its 23rd anniversary on July 15.

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That $335M JV Bay­er set up on CRISPR/Cas9? They’re let­ting the biotech part­ner car­ry on

Bayer committed $300 million to set up a joint venture on CRISPR/Cas9 tech with CRISPR Therapeutics $CRSP. But they’re handing off control now to the smaller biotech while retaining a couple of opt-ins for programs nearing an IND.

Bayer $BAY made much of the fact that they were going all-in on gene editing when they did their deal 3 years ago with CRISPR Therapeutics, which pitched $35 million in on their end. This was the cornerstone of their plan to set up new JVs that could make some serious leap forwards in hot new R&D spaces. Now CRISPR will have full management control of Casebia as they pursue programs in hemophilia, ophthalmology and autoimmune diseases.
Samarth Kulkarni, the CEO at CRISPR, made it sound like a natural progression.

IM­brave150: Roche’s reg­u­la­to­ry crew plans a glob­al roll­out of Tecen­triq com­bo for liv­er can­cer as PhI­II scores a hit

Just weeks after Bristol-Myers Squibb defended its failed pivotal study pitting Opdivo against Nexavar in liver cancer, Roche says it’s beat the frontline challenge with a combination of their PD-L1 Tecentriq with Avastin. And now they’re rolling their regulatory teams in the US, Europe and China in search of a new approval — badly needed to boost a trailing franchise effort.
Given their breakthrough and Big Pharma status as well as the use of two approved drugs, FDA approval may well prove to be something of a formality. And the Chinese have been clear that they want new drugs for liver cancer, where lethal disease rates are particularly high.
Researchers at their big biotech sub, Genentech, say that the combo beat Bayer’s Nexavar on both progression-free survival as well as overall survival — the first advance in this field in more than a decade. We won’t get the breakdown in months of life gained, but it’s a big win for Roche, which has lagged far, far behind Keytruda and Opdivo, the dominant PD-1s that have captured the bulk of the checkpoint market so far.
Researchers recruited hepatocellular carcinoma — the most common form of liver cancer — patients for the IMbrave150 study who weren’t eligible for surgery ahead of any systemic treatment of the disease.
Roche has a fairly low bar to beat, with modest survival benefit for Nexavar, approved for this indication 12 years ago. But they also plan to offer a combo therapy that could have significantly less toxicity, offering patients a much easier treatment regimen.
Cowen’s Steven Scala recently sized up the importance of IMbrave150, noting:

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J&J's block­buster Ste­lara wins US ap­proval for ul­cer­a­tive col­i­tis

J&J’s Stelara, which is set to be in the top ten list of blockbusters come 2025, is now cleared by the FDA for use in ulcerative colitis (UC), an inflammatory disease of the large intestine.

The biologic targets interleukin (IL)-12 and IL-23 cytokines, which are known to play a key role in inflammatory and immune responses. Stelara, which generated about $4.7 billion in the first nine months of 2019, is a key player in the crowded marketplace of drugs to treat autoimmune disorders such as psoriasis, rheumatoid arthritis and Crohn’s disease. AbbVie’s star therapy, Humira, continues to dominate, despite its looming patent cliff in the United States, while others including J&J’s $JNJ own anti-IL23 Tremfya, Lilly’s $LLY anti-IL-17 Taltz and AbbVie’s $ABBV recently approved anti-IL-23 antibody Skyrizi carve out a slice of market share.

Drug com­pa­nies reach $260M set­tle­ment just ahead of opi­oid tri­al; Oys­ter Point set terms for $85M IPO

→ Hours before the first federal opioid trial was set to begin, three drug distributors and an opioid manufacturer agreed to a $260 million agreement settlement, the Wall Street Journal was the first to report. The deal — which will see McKesson, Cardinal Health and AmerisourceBergen pay $215 million to Summit and Cuyahoga counties, and Teva deal out $35 million in cash and addiction treatments — does not resolve the pending, nationwide litigation that may result in a settlement worth upwards of $40 billion. Negotiators in that case, brought by 2,300 tribes, counties and cities nationwide and led by several states’ attorneys general, worked through much of Friday without success. Josh Stein, the attorney general for North Carolina, said they were trying to put together a $48 billion deal.

GSK of­floads two vac­cines in $1.1B deal as it works to re­vive the pipeline

GlaxoSmithKline is leaving the deep dark woods and its viruses behind.

GSK has agreed to divest its vaccines for rabies, RabAvert, and tick-born encephalitis vaccine, Encepur, to Bavarian Nordic, part of the company’s broader efforts to narrow its pipeline and focus on oncology and immunology.

The deal is worth up to nearly $1.1 billion, with a $336 million upfront payment. GSK acquired the vaccines from Novartis as part of an exchange for their late-stage oncology programs in 2015 under former chief Sir Andrew Witty.

Pfiz­er gets some en­cour­ag­ing PhI­II news on a fran­chise sav­ior, but is a dos­ing ad­van­tage worth the $295M up­front?

Close to 3 years after Opko tried to defend itself as shares tumbled on the news that its long-acting growth hormone had failed to outperform a placebo, the Pfizer partner $PFE is back. And this time they’re pitching Phase III data that demonstrate their drug is non-inferior — or maybe a tad better — than their well-known but fading standard in the field.
The comparator drug here is Genotropin, which earned a marginal $142 million for Pfizer last year — down 9% from the year before. Approved 24 years ago, biosimilars are now in development that Pfizer would like to stay out in front of. The market leader here is Norditropin, a growth hormone from Novo Nordisk that uses the same basic ingredient as Genotropin, which the Danish company sells with a kid-friendly self-injectable pen. That would also present some big competition if the new therapy from Opko/Pfizer makes it to the market.
The new data, says researchers, underscore that a weekly injection of somatrogon performed as well or slightly better than Genotropin (somatropin) in young children with growth hormone deficiency. Investigators tracked height velocity at 10.12 cm/year, edging out the older drug’s 9.78 cm/year. That 0.33 difference may not prove compelling to payers, though, who have been known to overlook dosing advantages in favor of lower costs.
That message may have weighed on the stock reaction this morning, with a 30%-plus hike $OPK giving way to more marginal gains.
Back in late 2016, Opko had to defend itself against a devastating Phase III setback as their initial late-stage trial failed against a sugar pill. Opko later blamed that setback on outliers in the study, though it wasn’t able to expunge the failure.

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As­traZeneca's Farx­i­ga scores FDA nod to cut risk of hos­pi­tal­iza­tion for heart fail­ure in di­a­bet­ics

While the FDA recently spurned an application to allow AstraZeneca’s blockbuster drug Farxiga for type 1 diabetes that cannot be controlled by insulin, citing safety concerns — the US regulator has endorsed the use of the SGLT2 treatment to reduce the risk of hospitalisation for heart failure in patients with type-2 diabetes and established cardiovascular disease or multiple CV risk factors.