Thumbs Up/Down

Trump nukes biopharma, and the fallout is radioactive

Endpoints assesses the big biopharma stories of the week, with a little added commentary on what they mean for the industry.

thumb down The cheap shot heard around the biopharma world

Make no mistake, Donald Trump dropped a nuke on JP Morgan in more ways than one when he suddenly went off on an unscripted tangent in his press conference and slimed the biopharma industry for its murderous pricing practices.

We’ve heard some snippets before from Trump as he stoked populist anger over drug prices. There were suggestions about Medicare negotiations and he clearly promised Time that as president he will rein in prices. Essentially promising to use the full force of the federal government to accomplish that, though, was the nightmare scenario that the industry feared was coming.

Can nasty tweets directed at individual drug prices be far behind?

thumb And JP Morgan was going so well…

I’ve been a regular at JP Morgan long enough to know the drill. It’s a great way to start the year with a lift — no matter what. If trends are awful, you’ll get plenty of hype of better times to come. If they’re great, the news flow will convince you that good times will not be ending soon.

Sure, there are plenty of complaints. But Americans complain the most when we’re winning. And few analysts would deny that most of the basics in biopharma have been great — numerous caveats and individual defeats aside.

This year was distinctly different, and that was apparent even before Trump dumped all over the industry.

Business as usual is over in biopharma, and we all know it. I had a chance to discuss this with a panel that included Brent Saunders, Richard Pops, Joaquin Duato, Steven Pearson and Stephen Ubl. I even snagged Bob Hugin at the Westin for a few minutes. And the primary topic was about change and how to manage it.

The industry has a narrow opening left to regulate itself in ways that will protect the need for aggressive pricing on new drugs. I think we would all be happy to see the price gougers (Turing, Valeant, Mylan) lined up against a wall and figuratively shot for inciting online rioting over drug prices. Portfolio price hikes on patented therapies will now be reined in, with much thanks to Saunders for laying out the guidelines.

Look over the price hikes you’ve seen over the past two weeks and you’ll see that Saunders’ pledge push has proven enormously influential.

Now the industry has to follow up with an unapologetic, please-look-at-the-data approach on new drug prices. If there’s a landmark event in drug development, you can and should expect a steep price. That’s paying for the industry’s R&D bill. The industry, though, has to do a much, much better job of explaining why real advances are worth paying for. Gilead provided a classic example of how not to do that when it rolled out Sovaldi with its Death Star PR team at the forefront.

The hidden side to all of this is that once you strip away the remarkable annual portfolio price hikes, the industry will be left to rely on innovation for its future success. And can anyone doubt that some of the biggest companies are the least prepared for what’s to come?

thumb JPM kicks off with plenty of deals, priming the pump for 2017

This time a year ago we all expected that 2016 would be a great year for M&A. I know I did. That proved to be flat wrong, but the consensus now is that 2017 has to be big for M&A. And the first round of deals announced in and around JP Morgan indicates that premiums are still over the top.

Like a number of players, Ipsen has a new CEO interested in making a rep for the company. So he started by buying out a Merrimack drug that has underperformed since launch. That $1 billion deal sets the stage for what will be a busy year in acquisitions, as Takeda proved with Ariad (paying a 74% premium). And we all know that Pfizer plans to be active.

Sanofi, Gilead, Biogen and many others are all but required to perform this year, if they want to get a pack of unhappy analysts off their backs.

thumb Merck surprises us all once again, in a good way

Once again the amazing immuno-oncology team at Merck is breaking new ground and completely wrecking all the expectations of their rivals and analysts. This week the wrecking ball came in the form of a swift FDA embrace of their application for Merck’s combo therapy for lung cancer.

Merck has consistently been shoved into second place with Keytruda, and Roger Perlmutter’s crew has consistently proven that they won’t accept that.

Upsetting expectations in R&D has become a habit for a Big Pharma outfit that was once so moribund that it could never figure out how to jump off the tracks ahead of a fast-approaching train. They’re on a roll now, and this time no one will underestimate what the Keytruda group can accomplish.

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Head of Business Development
Wren Therapeutics Boston, MA
Life Sciences Venture Professional
Northpond Ventures Washington, DC
Senior Drug Discovery Oncologist
Schrödinger New York, NY

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