Co­herus looks to dis­rupt Am­gen’s $4B Neu­las­ta fran­chise as an­a­lysts look for a deep dis­count on its copy­cat price

De­spite be­ing the run­ner-up in the race to a US ap­proval for a biosim­i­lar of Neu­las­ta, an­a­lysts are watch­ing to see if lit­tle Co­herus could gain quick trac­tion if they sell theirs at a big dis­count to My­lan’s ri­val.

On Fri­day, Co­herus said it had se­cured the FDA’s nod for a copy­cat ver­sion of Am­gen’s block­buster prod­uct — com­ing sec­ond to My­lan $MYL and In­di­an part­ner Bio­con in the race to mar­ket a biosim­i­lar for Neu­las­ta in the more lu­cra­tive US mar­ket. Co­herus’ biosim­i­lar, Uden­cya, was grant­ed Eu­ro­pean ap­proval in Sep­tem­ber.

Ken Cac­cia­tore

Neu­las­ta, which is used to thwart in­fec­tions in can­cer pa­tients, ac­count­ed for near­ly a fifth of Am­gen’s net prod­uct sales in the third quar­ter, bring­ing in about $1.05 bil­lion but this ap­proval has added more pres­sure to the drug’s al­ready weak­en­ing rev­enue out­look. Mean­while, No­var­tis $NVS is al­so plan­ning to re­sub­mit an ap­pli­ca­tion to mar­ket its once-re­ject­ed Neu­las­ta biosim­lar next year.

Out­side of the US, Neu­las­ta on­ly rep­re­sents a rough­ly $500 mil­lion op­por­tu­ni­ty, which mean the core fo­cus is on the sig­nif­i­cant­ly more lu­cra­tive $4 bil­lion US mar­ket and even mod­est pen­e­tra­tion with this as­set alone could mean­ing­ful­ly stem Co­herus’ cash burn — and/or po­ten­tial­ly lead to prof­itabil­i­ty, said Cowen an­a­lyst Ken Cac­cia­tore in a note. “Even at a 40%+ price dis­count, on­ly 10% of the mar­ket would al­low Co­herus…to turn cash-flow breakeven while still sup­port­ing a ro­bust de­vel­op­ment pipeline.”

The FDA ap­proval for Co­herus’ Uden­cya comes lat­er than ex­pect­ed as the reg­u­la­tor de­clined to ap­prove the drug last June, ask­ing the com­pa­ny to con­duct a re-analy­sis of ex­ist­ing da­ta with a more sen­si­tive as­say. De­tails on the drug’s com­mer­cial­iza­tion plan will be pro­vid­ed on the com­pa­ny’s Nov. 8 quar­ter­ly earn­ings call, the Red­wood City, Cal­i­for­nia-based com­pa­ny said in a state­ment.

“The list price of Neu­las­ta has near­ly tripled since ap­proval in 2002 and now rep­re­sents a $4 bil­lion an­nu­al cost bur­den in the U.S…and Udeny­ca will play an im­por­tant role in curb­ing that spend when launched,” said Co­herus chief Den­ny Lan­fear.

Jim Has­sard

In Co­herus’ sec­ond quar­ter con­fer­ence call in Au­gust, se­nior VP of mar­ket­ing Jim Has­sard not­ed that the list price of Neu­las­ta is about $6200 per pre-filled sy­ringe, and its av­er­age sell­ing price — as pub­lished by CMS — is about $4200. My­lan came to the mar­ket with a price that is about 6% low­er than the av­er­age sell­ing price, he said, and an­a­lysts con­curred that My­lan’s launch had thus been fair­ly ane­mic due to its mod­est dis­count.

Over­all, Co­herus man­age­ment has in­di­cat­ed Uden­cya could be in a po­si­tion to cap­ture rough­ly 10-20% of the cur­rent US mar­ket fol­low­ing the first full year of launch, not­ed Cowen’s Cac­cia­tore. “Al­though there still re­mains some con­tro­ver­sy about po­ten­tial pen­e­tra­tion rates and pric­ing/con­tract­ing strate­gies, we be­lieve this is a rea­son­able ex­pec­ta­tion. We con­tin­ue to find it dif­fi­cult to be­lieve that if the sup­ply is con­sis­tent, and if there is a per­cep­tion that the qual­i­ty of the prod­uct is high, that there will not be mean­ing­ful share that would be will­ing to move to a sig­nif­i­cant­ly dis­count­ed prod­uct (40% +).”

Ge­of­frey Porges, Leerink

Al­though Co­herus’ pric­ing strat­e­gy is un­clear, they have been in ac­tive dis­cus­sion with pay­ers and oth­er stake­hold­ers, and ap­pear to have more than enough sup­ply in place in tan­dem with a man­u­fac­tur­ing ca­pac­i­ty that is pow­ered to sup­port a mar­ket share of 28%, Leerink’s Ge­of­frey Porges wrote in a note, adding that an­oth­er per­ceived ad­van­tage Co­herus has is that all its prod­ucts are man­u­fac­tured in the US, un­like My­lan’s Neu­las­ta copy­cat Ful­phi­la that is made by Bio­con in In­dia.

“Co­herus al­so learned the les­son from Am­gen to pro­vide billing and co-pay as­sis­tance to physi­cians and pa­tients, re­spec­tive­ly, and is aim­ing to match the ‘white glove’ ser­vice Am­gen pro­vides…they could con­tribute to greater-than-ex­pect­ed ear­ly share gains for Co­herus, should they match Am­gen’s sales sup­port,” he said.

Am­gen last year sued Co­herus, ac­cus­ing the com­pa­ny of a mas­sive con­spir­a­cy by poach­ing its em­ploy­ees and spurring them to use their trade se­crets to stim­u­late the de­vel­op­ment of Co­herus’ slate of biosim­i­lars. Lan­fear pre­vi­ous­ly served as Am­gen’s VP of mar­ket de­vel­op­ment, while Co­herus’ chief sci­en­tif­ic of­fi­cer and chief tech­ni­cal of­fi­cer have al­so both worked at Am­gen. Co­herus de­nied the charges.

Co­herus’ shares were up about 5.7% in pre­mar­ket trad­ing on Mon­day.

Vlad Coric (Biohaven)

In an­oth­er dis­ap­point­ment for in­vestors, FDA slaps down Bio­haven’s re­vised ver­sion of an old ALS drug

Biohaven is at risk of making a habit of disappointing its investors. 

Late Friday the biotech $BHVN reported that the FDA had rejected its application for riluzole, an old drug that they had made over into a sublingual formulation that dissolves under the tongue. According to Biohaven, the FDA had a problem with the active ingredient used in a bioequivalence study back in 2017, which they got from the Canadian drugmaker Apotex.

Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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H1 analy­sis: The high-stakes ta­ble in the biotech deals casi­no is pay­ing out some record-set­ting win­nings

For years the big trend among dealmakers at the major players has been centered on ratcheting down upfront payments in favor of bigger milestones. Better known as biobucks for some. But with the top 15 companies competing for the kind of “transformative” pacts that can whip up some excitement on Wall Street, with some big biotechs like Regeneron now weighing in as well, cash is king at the high stakes table.

We asked Chris Dokomajilar, the head of DealForma, to crunch the numbers for us, looking over the top 20 deals for the past decade and breaking it all down into the top alliances already created in 2019. Gilead has clearly tipped the scales in terms of the coin of the bio-realm, with its record-setting $5 billion upfront to tie up to Galapagos’ entire pipeline.

Dokomajilar notes:

We’re going to need a ‘three comma club’ for the deals with over $1 billion in total upfront cash and equity. The $100 million-plus club is getting crowded at 164 deals in the last decade with new deals being added towards the top of the chart. 2019 already has 14 deals with at least $100 million in upfront cash and equity for a total year-to-date of over $9 billion. That beats last year’s $8 billion and sets a record.

Add upfronts and equity payments and you get $11.5 billion for the year, just shy of last year’s record-setting $11.8 billion.

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