Re­gen­eron, Sanofi show re­straint on Dupix­ent price hike, but Pfiz­er’s hard charge con­tin­ues to spur calls for a rad­i­cal change-up

BIOREG­NUM — the view from John Car­roll

With the price of drugs front and cen­ter in Wash­ing­ton DC these days, Re­gen­eron and Sanofi are at­tract­ing ku­dos for their de­ci­sion to hold back the price hike on Dupix­ent to a mere 3%, which the phar­ma gi­ant notes is well with­in the rate of med­ical in­fla­tion — their cap on price in­creas­es.

Len Schleifer

Both of these com­pa­nies went through the ringer on PC­SK9 pric­ing — which have come down — and Re­gen­eron CEO Len Schleifer has been a con­sis­tent coun­sel for avoid­ing the big an­nu­al price in­creas­es that is at­tract­ing so much crit­i­cism these days.

Still, note that the over­all price trend is still point­ed up, not down, which is what Pres­i­dent Don­ald Trump promised re­cent­ly with his com­ment that the big chains were about to trig­ger “vol­un­tary mas­sive drops in prices.” That com­ment a month ago was a stumper for the phar­ma in­dus­try, which has promised no such thing. It’s al­so left it to HHS Sec­re­tary Alex Azar to ex­plain that that is not ex­act­ly the case.

And how.

Yes­ter­day’s news that Pfiz­er was in­creas­ing prices across a broad range of drugs has fo­cused at­ten­tion once again on a stan­dard in­dus­try prac­tice: look­ing to please in­vestors with a grow­ing bot­tom line that re­lies heav­i­ly on jack­ing up the cost of its port­fo­lio ther­a­pies. In Pfiz­er’s case, the Fi­nan­cial Times re­port­ed that the av­er­age price in­creas­es for 100 prod­ucts were around 9%, fit­ting un­der a 10% cap that most man­u­fac­tur­ers are hap­py to com­ply with.

That’s not mak­ing con­sumer ad­vo­cates very hap­py, as we saw yes­ter­day with a sug­ges­tion from the Pew Char­i­ta­ble Trusts that states could tax the rev­enue that phar­ma com­pa­nies bring in through tax hikes. So when Ab­b­Vie rais­es its price on Hu­mi­ra, an ag­ing stan­dard of care that ranks as the biggest mon­ey mak­er in the in­dus­try, a state like Cal­i­for­nia could levy a tax on the gain above the in­fla­tion rate.

Last year, re­marks Pew, av­er­age list prices for drugs jumped 6.4% and over­all in­fla­tion was lim­it­ed to a tiny frac­tion of that. They’re sug­gest­ing that states can claw back the cost of an in­crease by tax­ing any­thing over an in­fla­tion-ad­just­ed price — just the way pay­ers can re­quire a re­bate on the in­flat­ed cost.

For ex­am­ple, if a man­u­fac­tur­er in­creas­es the price of a drug from $100 to $115, but in­fla­tion is on­ly 2 per­cent, the in­fla­tion-ad­just­ed price is $102 and the man­u­fac­tur­er must pay Med­ic­aid a $13 in­fla­tion re­bate. A state tax on drug price in­creas­es could be de­signed to mir­ror the cal­cu­la­tions that de­ter­mine the Med­ic­aid in­fla­tion re­bate, re­duc­ing the com­pli­ance bur­den on drug man­u­fac­tur­ers.

The law cur­rent­ly al­lows man­u­fac­tur­ers to price drugs at will, giv­ing the feds no con­trol at all. States, says Pew, don’t have to stand idly by.

Look for the in­dus­try to bat back any­thing like that as fast as they can. The lob­by­ing groups rep­re­sent­ing the in­dus­try far pre­fer a self-polic­ing mech­a­nism while the Trump ad­min­is­tra­tion has tak­en a name-and-shame ap­proach to the most egre­gious price hikes — such as Cel­gene’s 20% hike on Revlim­id with­in one year.

Re­gen­eron and Sanofi — which have scored a slate of new ap­provals to push rev­enue growth — may yet win out with their ap­proach, but many of the biggest play­ers clear­ly don’t want to be bound by any such re­stric­tions. Not every­body has Re­gen­eron’s de­vel­op­ment skills, and some­body has to pay to make up for the in­no­va­tion gap. And with prices still climb­ing north, the de­bate over drug prices just con­tin­ues to heat up.

 

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Turned back at the FDA, Im­muno­Gen is ax­ing 220 staffers, sell­ing pro­grams and hun­ker­ing down for a new PhI­II gam­ble

After being stymied by FDA regulators who were unconvinced by ImmunoGen’s $IMGN desperation shot at an accelerated OK based on a secondary endpoint, the struggling biotech is slashing its workforce, shuttering R&D projects and looking for buyers to pick up some of its experimental cancer assets as it goes back into a new Phase III with the lead drug.

We found out last month that the FDA had batted back their case for an accelerated approval of their antibody-drug conjugate mirvetuximab soravtansine, which had earlier failed a Phase III study for ovarian cancer. Now the other shoe is dropping.

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Bridge­Bio takes crown for biggest biotech IPO of 2019, as fel­low uni­corn Adap­tive rais­es of­fer­ing size and price

Bridge­Bio Phar­ma and Adap­tive Biotech­nolo­gies have not just up­sized IPO of­fer­ings — the pair of uni­corns have al­so raised their of­fer­ing prices above the range, haul­ing in a com­bined $648.5 mil­lion.

Neil Ku­mar’s Bridge­Bio Phar­ma, found­ed in 2015, has a sta­ble of com­pa­nies fo­cused on dis­eases that are dri­ven by de­fects in a sin­gle gene — en­com­pass­ing der­ma­tol­ogy, car­di­ol­o­gy, neu­rol­o­gy, en­docrinol­o­gy, re­nal dis­ease, and oph­thal­mol­o­gy — and can­cers with clear ge­net­ic dri­vers. The start­up mill birthed a pletho­ra of firms such as Ei­dos, Navire, QED Ther­a­peu­tics and Pelle­Pharm, which func­tion as its sub­sidiaries.

As­traZeneca chal­lenges Roche on front­line SCLC af­ter seiz­ing an in­ter­im win — and Mer­ck may not be far be­hind

The crowded playing field in the PD-1/L1 marketing game is about to get a little more complex.

This morning AstraZeneca reported that its CASPIAN study delivered a hit in an interim readout for their PD-L1 Imfinzi combined with etoposide and platinum-based chemotherapy options for frontline cases of small cell lung cancer, a tough target which has already knocked back Bristol-Myers’ shot in second-line cases. The positive data  — which we won’t see before they roll it out at an upcoming scientific conference — give AstraZeneca excellent odds of a quick vault to challenging Roche’s Tecentriq-chemo combo, approved 3 months ago for frontline SCLC in a landmark advance.

“This is the first trial offering the flexibility of combining immunotherapy with different platinum-based regimens in small cell lung cancer, expanding treatment options,” noted AstraZeneca cancer R&D chief José Baselga in a statement.

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

Af­ter rais­ing $158M, this up­start's founders have star back­ers and plans to break new ground in gene ther­a­py

Back in 2014, Stephanie Tagliatela opted to take an early exit out of her PhD program after working in Mark Bear’s lab at MIT, where she specialized in the synaptic connections between neuronal cells in the brain. She never finished that PhD, but she and fellow MIT student Kartik Ramamoorthi — who was on the founding team at Voyager — came away with some ideas for a gene therapy startup.

Today, fully 5 years later, she and Ramamoorthi are taking the wraps off of a $104 million mega-round designed to take the cumulative work of their preclinical formative stage for Encoded Therapeutics into human studies. They’ve now raised $158 million since starting out in Illumina’s incubator in the Bay Area, and they believe they are firmly on track to do something unique in gene therapy.

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Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three major buyouts announced: Takeda/Shire; Bristol-Myers/Celgene and now AbbVie/Allergan. And with this latest deal it’s increasingly clear that the sharp fall from grace suffered by high-profile players which have seen their share prices blasted has created an opening for the growth players in big pharma to up their game — in sharp contrast to the popular bolt-on deals that have been driving the growth strategy at Novartis, Merck, Roche and others.

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Sanofi/Re­gen­eron mus­cle ahead of a ri­val No­var­tis/Roche team, win first ap­proval in key rhi­nos­i­nusi­tis field

Re­gen­eron and their part­ners at Sanofi have beat the No­var­tis/Roche team to the punch on an­oth­er key in­di­ca­tion for their block­buster an­ti-in­flam­ma­to­ry drug Dupix­ent. The drug team scored an ac­cel­er­at­ed FDA ap­proval for chron­ic rhi­nos­i­nusi­tis with nasal polyps, mak­ing this the first such NDA for the field.

An­a­lysts have been watch­ing this race for awhile now, as Sanofi/Re­gen­eron won a snap pri­or­i­ty re­view for what is now their third dis­ease in­di­ca­tion for this treat­ment. And they’re not near­ly done, build­ing up hopes for a ma­jor fran­chise.

Two biotech uni­corns swell pro­posed IPOs, eye­ing a $600M-plus wind­fall

We’ve been wait­ing for the ar­rival of Bridge­Bio’s IPO to top off the wave of new biotech of­fer­ings sweep­ing through Nas­daq at the end of H1. And now we learn that it’s been sub­stan­tial­ly up­sized.

Ini­tial­ly pen­ciled in at a uni­corn-sized $225 mil­lion, the KKR-backed biotech has spiked that to the neigh­bor­hood of $300 mil­lion, look­ing to sell 20 mil­lion shares at $14 to $16 each. That’s an added 5 mil­lion shares, re­ports Re­nais­sance Cap­i­tal, which fig­ures the pro­posed mar­ket val­u­a­tion for Neil Ku­mar’s com­pa­ny at $1.8 bil­lion.