First Cel­gene, now Gilead can’t ac­cu­rate­ly fore­cast drug sales rev­enue. How bad is this?

On the same day Cel­gene was get­ting shel­lacked af­ter cut­ting longterm rev­enue fore­casts for the com­pa­ny, Gilead man­aged to keep the in­vestor herd in a state of alarm with fresh ev­i­dence of the fast-de­te­ri­o­rat­ing mar­ket for hep C drugs.

Bri­an Sko­r­ney

Giv­en its dom­i­nant po­si­tion in HIV, Gilead was able to boost rev­enue for that big chunk of its busi­ness. But its hep C busi­ness de­clined $1.1 bil­lion for Q3 com­pared to the same pe­ri­od a year ago. What re­al­ly sent the mar­ket over­board was a move to trim the pro­ject­ed top end of an­nu­al sales while in­di­cat­ing that Q4 could be very painful, re­flect­ing price com­pe­ti­tion in the field.

Both com­pa­nies are blind­sid­ing the in­vest­ment com­mu­ni­ty af­ter be­ing un­able to pre­dict the near-term im­pact of ri­val pric­ing. For Gilead it’s in hep C, for Cel­gene it’s Ote­zla. What has been a re­li­able and con­fi­dent march up­wards to an of­ten un­cer­tain date with gener­ic com­pe­ti­tion is be­gin­ning to look like a dis­rup­tive era of far more ag­gres­sive price com­pe­ti­tion, which will have a va­ri­ety of ef­fects on bio­phar­ma man­age­ment as they work in a more con­strained en­vi­ron­ment.

What hap­pens to bio­phar­ma if Cel­gene’s ex­ec­u­tive crew starts to feel that they have to use more mon­ey for div­i­dends and less for deals?

For stocks, the im­me­di­ate ef­fect of a sud­den loss of faith was se­vere. Cel­gene’s shares $CELG end­ed down 16.4% for the day. Gilead, look­ing to rev up its new CAR-T busi­ness, saw shares $GILD slide more than 4% in pre-mar­ket trad­ing. And it could get a lot worse be­fore it gets bet­ter. Much of the mar­ket is trans­lat­ing that star­tling, un­ex­pect­ed turn of af­fairs in­to an in­dus­try-wide prob­lem that could bring down the whole sec­tor.

Ge­of­frey Porges

For some of the an­a­lysts, that un­der­ly­ing weak­ness was clear cause for alarm.

Baird’s Bri­an Sko­r­ney:

Even at the high end (of pro­jec­tions for Gilead), this calls for on­ly $1.36B in world­wide HCV sales in Q4 (com­pared to $2.2 bil­lion in Q3), an al­most 40% se­quen­tial de­cline, and a run rate of on­ly $5.0B-$6.0B in­to 2018. Con­sen­sus is cur­rent­ly mod­el­ing $7.9B in 2018 HCV sales. What we think is more con­cern­ing than just mar­ket share ero­sion is com­men­tary on the call around net pric­ing, which man­age­ment in­di­cat­ed is now sta­bi­liz­ing for all ther­a­pies around gt. 1 eight-week pric­ing. Head­ing in­to con­tract­ing for 2018, we aren’t en­cour­aged by the rhetoric here.

Umer Raf­fat:

I see a whole­sale re­set of 2018 and 2019 ex­pec­ta­tions based on to­day’s (Gilead) re­sults. My new EPS es­ti­mates are 12-22% be­low pub­lished con­sen­sus for next cou­ple of years.  The stock may like­ly go through a pe­ri­od of cool­ing off while Street process­es the num­bers.

Keep in mind that while Gilead has been man­ag­ing a fast-shrink­ing mar­ket in hep C, it still gets high marks for over­all per­for­mance. Cel­gene has been a dar­ling of in­vestors for years. But rep­u­ta­tions can turn on a dime these days.

Leerink’s Ge­of­frey Porges says that in one week we’ve seen Gilead and Cel­gene — two ma­jor league op­er­a­tors — un­able to re­li­ably fore­cast rev­enue 12 months out, “let alone con­vey­ing any con­fi­dence about the out­look 4 or 5 years in­to the fu­ture.”

Wall Street hates un­cer­tain­ty of any kind, and bio­phar­ma just de­liv­ered a dou­ble dose of nasty sur­pris­es.

It’s fi­nal­ly over: Bio­gen, Ei­sai scrap big Alzheimer’s PhI­I­Is af­ter a pre­dictable BACE cat­a­stro­phe rais­es safe­ty fears

Months after analysts and investors called on Biogen and Eisai to scrap their BACE drug for Alzheimer’s and move on in the wake of a string of late-stage failures and rising safety fears, the partners have called it quits. And they said they were dropping the drug — elenbecestat — after the independent monitoring board raised concerns about…safety.

We don’t know exactly what researchers found in this latest catastrophe, but the companies noted in their release that investigators had determined that the drug was flunking the risk/benefit analysis.

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Lisa M. DeAngelis, MSKCC

MSK picks brain can­cer ex­pert Lisa DeAn­ge­lis as its next CMO — fol­low­ing José Basel­ga’s con­tro­ver­sial ex­it

It’s official. Memorial Sloan Kettering has picked a brain cancer expert as its new physician-in-chief and CMO, replacing José Baselga, who left under a cloud after being singled out by The New York Times and ProPublica for failing to properly air his lucrative industry ties.

His replacement, who now will be in charge of MSK’s cutting-edge research work as well as the cancer care delivered by hundreds of practitioners, is Lisa M. DeAngelis. DeAngelis had been chair of the neurology department and co-founder of MSK’s brain tumor center and was moved in to the acting CMO role in the wake of Baselga’s departure.

Penn team adapts CAR-T tech, reengi­neer­ing mouse cells to treat car­diac fi­bro­sis

After establishing itself as one of the pioneer research centers in the world for CAR-T cancer therapies, creating new attack vehicles to eradicate cancer cells, a team at Penn Medicine has begun the tricky transition of using the basic technology for heart repair work.

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Tal Zaks. Moderna

The mR­NA uni­corn Mod­er­na has more ear­ly-stage hu­man da­ta it wants to show off — reach­ing new peaks in prov­ing the po­ten­tial

The whole messenger RNA field has attracted billions of dollars in public and private investor cash gambled on the prospect of getting in on the ground floor. And this morning Boston-based Moderna, one of the leaders in the field, wants to show off a few more of the cards it has to play to prove to you that they’re really in the game.

The whole hand, of course, has yet to be dealt. And there’s no telling who gets to walk with a share of the pot. But any cards on display at this point — especially after being accused of keeping its deck under lock and key — will attract plenty of attention from some very wary, and wired, observers.

“In terms of the complexity and unmet need,” says Tal Zaks, the chief medical officer, “this is peak for what we’ve accomplished.”

Moderna has two Phase I studies it wants to talk about now.

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It's not per­fect, but it's a good start: FDA pan­elists large­ly en­dorse Aim­mune's peanut al­ler­gy ther­a­py

Two days after a fairly benign review from FDA staff, an independent panel of experts largely endorsed the efficacy and safety of Aimmune’s peanut allergy therapy, laying the groundwork for approval with a risk evaluation and mitigation strategy (REMS).

Traditionally, peanut allergies are managed by avoidance, but the threat of accidental exposure cannot be nullified. Some allergists have devised a way to dose patients off-label with peanut protein derived from supermarket products to wean them off their allergies. But the idea behind Aimmune’s product was to standardize the peanut protein, and track the process of desensitization — so when accidental exposure in the real world invariably occurs, patients are less likely to experience a life-threatening allergic reaction.

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Rit­ter bombs fi­nal PhI­II for sole lac­tose in­tol­er­ance drug — shares plum­met

More than two years ago Ritter Pharmaceuticals managed to find enough silver lining in its Phase IIb/III study — after missing the top-line mark — to propel its lactose intolerance toward a confirmatory trial. But as it turned out, the enthusiasm only set the biotech and its investors up to be sorely disappointed.

This time around there’s little left to salvage. Not only did RP-G28 fail to beat placebo in reducing lactose intolerance symptoms, patients in the treatment group actually averaged a smaller improvement. On a composite score measuring symptoms like abdominal pain, cramping, bloating and gas, patients given the drug had a mean reduction of 3.159 while the placebo cohort saw a 3.420 drop on average (one-sided p-value = 0.0106).

Ear­ly snap­shot of Ad­verum's eye gene ther­a­py sparks con­cern about vi­sion loss

An early-stage update on Adverum Biotechnologies’ intravitreal gene therapy has triggered investor concern, after patients with wet age-related macular degeneration (AMD) saw their vision deteriorate, despite signs that the treatment is improving retinal anatomy.

Adverum, on Wednesday, unveiled 24-week data from the OPTIC trial of its experimental therapy, ADVM-022, in six patients who have been administered with one dose of the therapy. On average, patients in the trial had severe disease with an average of 6.2 anti-VEGF injections in the eight months prior to screening and an average annualized injection frequency of 9.3 injections.

Alex Ar­faei trades his an­a­lyst's post for a new role as biotech VC; Sanofi vet heads to Vi­for

Too often, Alex Arfaei arrived too late. 

An analyst at BMO Capital Markets, he’d meet with biotech or pharmaceutical heads for their IPO or secondary funding and his brain, trained on a biology degree and six years at Merck and Endo, would spring with questions: Why this biomarker? Why this design? Why not this endpoint? Not that he could do anything about it. These execs were coming for clinical money; their decisions had been made and finalized long ago.

Arde­lyx bags its first FDA OK for IBS, set­ting up a show­down with Al­ler­gan, Iron­wood

In the first of what it hopes will be a couple of major regulatory milestones for its new drug, Ardelyx has bagged an FDA approval to market Ibsrela (tenapanor) for irritable bowel syndrome.

The drug’s first application will be for IBS with constipation (IBS-C), inhibiting sodium-hydrogen exchanger NHE3 in the GI tract in such a way as to increase bowel movements and decrease abdominal pain. This comes on the heels of two successful Phase III trials.