Top biotech an­a­lyst projects a gloomy out­look for Pfiz­er's JAK port­fo­lio

Many in the phar­ma world are hop­ing — bet­ter yet, ex­pect­ing — JAK in­hibitors to pro­vide one of the next big boons for the in­dus­try. Few have in­vest­ed as heav­i­ly in this area as Pfiz­er, which boasts a port­fo­lio in­clud­ing Xel­janz and at least five mid-to-late stage can­di­dates in the pipeline.

But a top Wall Street an­a­lyst is pump­ing the brakes on just how much good for­tune is in store for the Big Phar­ma.

Ge­of­frey Porges

Ge­of­frey Porges of SVB Leerink, one of the mar­quee names in biotech, wrote in a let­ter to in­vestors this week that Pfiz­er is far be­hind the com­pe­ti­tion in the JAK race. Per Porges, “near­ly all in­di­ca­tions” sug­gest that Pfiz­er’s can­di­dates could be beat­en to mar­ket, or by bet­ter clin­i­cal da­ta, by oth­er oral­ly ad­min­is­tered JAK chal­lengers.

“At this stage Pfiz­er’s JAK op­por­tu­ni­ties ap­pear too lit­tle or too late,” Porges wrote. “Based on the low ma­te­ri­al­i­ty and risks to our fore­cast, we do not see the im­munol­o­gy port­fo­lio as a sig­nif­i­cant dri­ver of Pfiz­er’s stock per­for­mance in the near-term.”

Porges went on to say that Pfiz­er’s de­pen­dence on JAK in­hibitors and the bumpy road Xel­janz has faced in re­cent years, with black box warn­ings slapped on the en­tire JAK class by the FDA, will com­pli­cate the phar­ma’s fi­nan­cials. Xel­janz is cur­rent­ly ap­proved to treat rheuma­toid arthri­tis, pso­ri­at­ic arthri­tis and ul­cer­a­tive col­i­tis, but Pfiz­er had to sus­pend tri­als on its use for atopic der­mati­tis and Crohn’s dis­ease and end­ed up pulling high­er dos­es from shelves af­ter safe­ty risks arose. Porges al­so writes that giv­en the drug’s slow up­take in IBD, it might quick­ly be re­placed by oth­er JAK in­hibitors in this area.

Those black box la­bels that stunt­ed Xel­janz sales will al­so es­sen­tial­ly rel­e­gate Pfiz­er’s up­com­ing abroc­i­tinib to sec­ond-line AD treat­ment be­hind Re­gen­eron’s Dupix­ent. Porges specif­i­cal­ly men­tions two ri­vals that could out­do Pfiz­er and fur­ther hin­der the phar­ma gi­ant’s suc­cess: Ab­b­Vie’s Rin­voq and Bris­tol My­ers Squibb’s loom­ing TYK2 in­hibitor.

Porges said he ex­pects Rin­voq to be pre­ferred by sec­ond-line AD pa­tients due to its “sub­stan­tial­ly” high­er ef­fi­ca­cy than abroc­i­tinib in a cross-tri­al com­par­i­son. This damp­ens find­ings from oth­er tri­als that have shown promis­ing da­ta when com­par­ing abroc­i­tinib to Dupix­ent, the lead­ing first-line treat­ment for AD, Porges writes.

Pfiz­er is hop­ing abroc­i­tinib can even­tu­al­ly re­place Dupix­ent as the Re­gen­eron drug is an in­jectable, which caus­es some pa­tients to dis­con­tin­ue use, and Porges notes physi­cians may ul­ti­mate­ly choose to pre­scribe the can­di­date as they be­come more com­fort­able.

Mean­while, Bris­tol has gone all in on its up­com­ing TYK2 in­hibitor, BMS-986165, af­ter sell­ing off its high­ly suc­cess­ful pso­ri­a­sis drug Ote­zla when the com­pa­ny merged with Cel­gene. The can­di­date has shown “more than dou­ble the ef­fi­ca­cy” of Ote­zla with com­pa­ra­ble safe­ty in tests pub­lished by the phar­ma, Porges writes, and Phase III re­sults are ex­pect­ed in late 2020. This would ef­fec­tive­ly place Pfiz­er’s TYK2 pso­ri­a­sis can­di­date, cur­rent­ly in Phase II clin­i­cal tri­als, “rough­ly two years” be­hind Bris­tol’s.

Per Porges’ most op­ti­mistic fore­cast, over­all sales of JAK in­hibitors are es­ti­mat­ed to grow from $2.7 bil­lion in 2019 to $19.3 bil­lion by the end of 2024. But giv­en the cur­rent po­si­tion of Xel­janz, the black box FDA warn­ing and heavy com­pe­ti­tion, Pfiz­er “might on­ly get a small share” if such growth ma­te­ri­al­izes.

“Com­pared to oth­er large cap com­pa­nies in our cov­er­age uni­verse, we see more op­por­tu­ni­ty else­where,” Porges wrote. “At best we ex­pect the op­er­at­ing mar­gin to be flat from 2020, and this means our EPS es­ti­mates are al­so be­low con­sen­sus by 15 to 20 per­cent be­yond 2020.”

Cell and Gene Con­tract Man­u­fac­tur­ers Must Em­brace Dig­i­ti­za­tion

The Cell and Gene Industry is growing at a staggering 30% CAGR and is estimated to reach $14B by 20251. A number of cell, gene and stem cell therapy sponsors currently have novel drug substances and products and many rely on Contract Development Manufacturing Organizations (CDMO) to produce them with adherence to stringent regulatory cGMP conditions. Cell and gene manufacturing for both autologous (one to one) and allogenic (one to many) treatments face difficult issues such as: a complex supply chain, variability on patient and cellular level, cell expansion count and a tight scheduling of lot disposition process. This complexity affects quality, compliance and accountability in the entire vein-to-vein process for critically ill patients.

Phase III read­outs spell dis­as­ter for Genen­tech’s lead IBD drug

Roche had big plans for etrolizumab. Eyeing a hyper-competitive IBD and Crohn’s market where they have not historically been a player, the company rolled out 8 different Phase III trials, testing the antibody for two different uses across a range of different patient groups.

On Monday, Roche released results for 4 of those studies, and they mark a decided setback for both the Swiss pharma and their biotech sub Genentech, potentially spelling an end to a drug they put over half-a-decade and millions of dollars behind.

DFC CEO Adam Boehler and Kodak CEO Jim Continenza (Kodak)

Covid-19 roundup: Cure­Vac beefs up its uni­corn IPO dreams as bil­lion­aire own­er takes this Covid-19 mR­NA play­er on a forced march to Nas­daq; Ko­dak's $765M deal is put on hold

When CureVac initially jotted down $100 million for its IPO raise a couple of weeks ago, it seemed small. The German mRNA player, after all, had jumped into a Covid-19 race that swelled the sails of Moderna and BioNTech by tens of billions. And after raising $640 million in a slate of deals, $100 million in a hot market like this seemed like a pittance in the bigger scheme of things.

Today, we got a look at a figure that probably comes closer to the game-changing number the top execs probably have in mind. Selling 15.3 million shares at the high end of their $14 to $16 range would net a $243 million bounty. Majority owner Dietmar Hopp is putting in another €100 million, bringing the total to around $350 million. And what are the chances they want to do even better than that?

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Eric Shaff (Seres)

UP­DAT­ED: Af­ter a 4-year so­journ, strug­gling mi­cro­bio­me pi­o­neer Seres claims a break­out PhI­II come­back. And shares re­spond in fren­zied spike

Almost exactly 4 years ago, Seres Therapeutics $MCRB experienced one of those soul-crunching failures that can raise big questions about a biotech’s future. Out front in their pursuit of a gut punch to C. difficile infection (CDI), the Phase II test was a flat failure, and investors wiped out a billion dollars of equity value that never returned in the years that followed.

Seres, though, pressed ahead, changing out CEOs a year ago — bidding Merck vet Roger Pomerantz farewell from the C suite — and pushing through a Phase III, hoping that amping up the dosage would make the key difference. And this morning, they unveiled a claim that they had aced the Phase III and positioned themselves for a run at a landmark FDA OK.

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Warren Huff, Reata CEO

Rea­ta sug­gests Friedre­ich's atax­ia pro­gram could be de­layed, send­ing stock plung­ing

Reata Pharmaceuticals $RETA made waves last October when its drug omaveloxolone produced positive trial results in treating a rare neurological disorder, but the candidate’s path forward became much murkier Monday.

In a report of quarterly earnings, the biotech divulged that the FDA is considering delaying omaveloxolone’s NDA pending completion of a second trial. That could push back approval by at least a year given that the target population, individuals with Friedreich’s ataxia, is limited and progression of the hard-to-treat illness is notoriously slow. The Covid-19 pandemic would also hinder Reata’s ability to complete an additional trial.

Michel Vounatsos, Biogen CEO (via YouTube)

UP­DAT­ED: Bio­gen scores a pri­or­i­ty re­view for its Alzheimer's drug ad­u­canum­ab, mov­ing one gi­ant leap for­ward in its con­tro­ver­sial quest

Biogen scored a big win at the FDA today as regulators accepted their application for the controversial Alzheimer’s drug aducanumab and gave it a priority review.

The PDUFA date is March 7, 2021.

Significantly, Biogen says it did not use its priority review voucher to win special treatment at the FDA. The agency handed that out gratis.

That’s the ideal scenario Biogen was looking for as disappointed analysts wondered aloud about the delayed application earlier in the year.

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Vi­da Ven­tures co-leads Dyne's $115M megaround for next-gen oli­go ther­a­pies aimed square­ly at mus­cles

Dyne Therapeutics started out last April with a modest $50 million to mine targeted muscle disease therapies from its in-house conjugate technology. The biotech has now convinced more investors that it’s got gems on its hands, closing $115 million in fresh financing to push its next-gen oligonucleotide drugs into the clinic.

Vida Ventures and Surveyor Capital led the round, joined by a group of other new backers including Wellington Management Company, Logos Capital and Franklin Templeton.

Eli Lil­ly teams with Pieris on HER2+ tu­mors; Op­di­vo + Yer­voy best chemo in mesothe­lioma

Despite the FDA putting a partial clinical hold on its lead program only a few weeks ago, Boston-based Pieris Pharmaceuticals is plowing forward with a new collaboration.

Pieris will work with Eli Lilly to further advance studies on PRS-343, a 4-1BB/HER2 bispecific for HER2-positive tumors, in combination with the latter’s ramucirumab and paclitaxel for the second-line treatment of patients with HER2-positive gastric cancer in a single-arm, Phase II study.

In­novent and Eli Lil­ly chal­lenge Mer­ck­'s mega-block­buster Keytru­da in non-small cell lung can­cer field

China-based Innovent Biologics and its multinational ally Eli Lilly shared Phase III evidence that their PD-1 inhibitor combo can delay the progression of nonsquamous non-small cell lung cancer.

But the drugmakers will face stiff competition in China from Merck’s Keytruda, the ruling PD-1 which is already approved to treat both squamous and nonsquamous NSCLC and boasts positive overall survival rates.

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