Biopharmaceutical News Week # 2016.44/45

Biopharmaceutical News Week # 2016.44/45

Author: Jean-Claude Muller, 穆卓Executive Editor at BtoBioInnovation

US Elections

Editor’s Note

Republican Donald Trump’s unexpected victory for many analysts, combined with the Grand Old Party (GOP) retention of control of the US Senate and the House will force the healthcare industry to re-asses its future development model.

First the Trump Presidency, with strong backing of the GOP, will enable conservatives to repeal or at least roll back the Affordable Care Act (ACA or Obamacare) and end the expansion of Medicaid to the 19 states that have not yet implemented it and put the expansion in the other 31 states on hold and leave most decisions to “able bodied” adults. Just a few days prior to its election Trump promised to immediately repeal and replace the ACA if elected. “When we win on Nov. 8 and elect a Republican Congress, we will be able to immediately repeal and replace Obamacare. We have to do it,” Trump said. “I will ask Congress to convene a special session so we can repeal and replace,” he added. “And it will be such an honor for me, for you and for everybody in this country because Obamacare has to be replaced. And we will do it, and we will do it very, very quickly. It is a catastrophe.” Some conservative policy analysts believe that under a Republican-controlled government, the ACA probably would be shrunk rather than completely abolished, would receive a new name and that Trump will hand off the entire health policy portfolio to House Speaker Paul Ryan, whose white paper is seen by conservatives as the blueprint for the incoming Republican administration's policy. The Trump administration may also press hard to transform Medicare into a so-called premium support program, in which the government makes fixed per-capita contributions and beneficiaries use those payments to get their care from either traditional Medicare or private plans and making the privatized Medicare Advantage program more of a competitive bidding system.

Second On Medicaid, Trump wants to convert that low-income health coverage program into a system of capped federal contributions to the states and give state leaders enormous freedom to set eligibility, benefits and program structure and at the same time letting Medicare negotiate prescription drug pricing. Republican leaders argue that giving states more flexibility would enable them to cover their population more cost-effectively. Many healthcare providers do not share this approach. “I distrust the intent of 50 different states to appropriately support people who need healthcare coverage to do that through the complete freedom of block grants, said Dr. William Conway, CEO of the Henry Ford Medical Group.

Third, an issue on which all American agreed consists in a mounting pressure to address the drug prices which should be on the President “to do-list” although many are betting that Trump, and the GOP will not push as hard on this topic as Democrats would have done. Trump has been considering one cost-saving move which he would include in the ACA reform: drug reimportation, in particular from Canada, Mexico and even Europe where prices are considerably lower than in the USA. A US President has more authority to act directly in international trade than on some domestic actions and Congress has less power to interfere on such trades and Trump has repetitively stated that he will withdraw from the World Trade Organization. O Kathleen Brooks, research director at City Index, told Sky News: “This is a major concern for the markets, as it could completely change not just US politics, but also the global economic norm.” Obviously the biopharmaceutical industry wants more free trade not less and will strongly fight such actions rather than accommodate to such big changes. In that context it is of more than passing interest to note that Proposition 61, which was strongly supported by Democratic Senator Bernie Sanders, and which required the state of California to negotiate with drug companies for drug prices that are no more than is paid for the same drugs by the US Department of Veteran Affairs, was rejected by 53.8 percent of Californian voters. Analysts have claimed that the biopharmaceutical industry has been shelling out nearly $110 million to defeat Proposition 61 in California. But there are also clear divisions between conservatives amongst this issue and several GOP congressional leaders have already rejected a price controlling policy, preferring to focus on reforms to speed the US FDA approvals for new drugs and devices, that they say, will reduce costs. Speed does not always equate with quality, and getting more treatments onto the market more quickly worries many,but it is something broadly popular with the American public, who intrinsically want the latest drugs available as soon as possible

On a related topic and also worth noting, earlier this month, the latest results of US Medicare's Hospital Value-Based Purchasing program were disclosed and were dismal but unsurprising. The program's use of financial incentives to motivate 3,000 U.S. hospitals to provide better care resulted in more hospitals getting assessed for poor performance in 2017. In fiscal 2017, roughly 1,600 hospitals—200 fewer than in 2016—will receive performance-based bonuses, and about 1,300 hospitals will be penalized, according to data posted November 1. The program, which took effect in October 2012, is one of several established by the Affordable Care Act to tie Medicare fee-for-service payments to the quality and efficiency of care provided. Its effectiveness is diminished by a variety of factors—chief among them its limited financial consequences and the fact that hospitals have other major issues to tackle. As a direct consequence an increasing number of policy experts are beginning to wonder if the program should be shelved.

Now it remains to be seen just how all of this will happen, and whether Trump and his new administration with the support of a strong majority in the US Congress would implement a major untangling on a strongly integrated international process and how the biopharmaceutical industry will position itself on these massive changes.

Like many others we believe “Trump should be given the chance to succeed” prior to making critical assessments.

Zika Virus

The Walter Reed Army Institute of Research, in collaboration with Sanofi Pasteur, is moving its Zika vaccine candidate into the clinic making it the third candidate to enter human testing in the last months.

Research conducted at York University and Xi’an Jiatong University (China) suggests that vaccinating against dengue fewer could increase outbreaks of Zika.

Mergers, Acquisitions and Joint Ventures

Astellas acquires Ganymed Pharmaceuticals (Mainz, Germany) in a deal worth $1.4 billion and gets access to a portfolio of new class of cancer drugs called ideal monoclonal antibodies

Celldex Therapeutics (Hampton, NJ, USA) acquires Kolltan Pharmaceuticals (New Haven, Conn, USA) in a deal worth $235 million and adds seven drug candidates consisting of antibody-drug conjugates, therapeutic antibodies and immune system modulators to Celldex's portfolio.

Business

Lexicon Pharmaceuticals (The Woodlands, TX, USA) acquires exclusive rights to Bristol-Myers Squibb’s BMS-986176, a preclinical candidate for neuropathic pain, for up to $115.5 million.

Nestlé Health Science (Lausanne, Switzerland) invests $145 million in Aimmune Therapeutics (Brisbane, CA, USA), a maker of food-allergy therapies, and secures exclusive rights of first negotiation on any licensing opportunities in the next two years

Celgene and IBM Watson are partnering on a new patient safety monitoring platform to improve pharmacovigilance methods throughout the drug development process. The platform will combine Watson’s cognitive computing chops with Celgene’s experience in drug safety and risk management and provide an outcome- and evidence-based drug safety decision support system.

Siemens intends to further develop its healthcare business, Siemens Healthineers and is planning to publicly list this business. Analysts expect a valuation of Siemens Healthineers at around $15 billion depending on the market environment but according to Ralf Thomas the Group CFO, Siemens may want to retain a majority share in the company.

Ninlaro is the first orally active proteasome inhibitor to reach the market and is highly competitive versus injectables such as Takeda's Velcade (bortezomib) and Amgen's Kyprolis (carfilzomib). "I would like to stress our belief in Ninlaro's potential, that it will be a much bigger product than … Velcade is today," said Christophe Weber, Takeda's CEO, adding he believes firmly that Ninlaro is on track to become a "$3 billion-plus product" and "one of the backbones of multiple myeloma treatment in the future."

Approval of drugs and vaccines

The European Commission has approved Pfizer’s Ibrance or palbociclib, a cyclin-dependent kinases 4 and 6 (CDK4 and CDK6) inhibitor, in combination with a aromatase inhibitor, as a treatment of locally advanced or metastatic breast cancer that is hormone receptor (HR) positive and human epidermal growth factor receptor 2 (HER2) negative. The drug is the first treatment approved for such type of indication, in a first-line setting, in nearly 10 years. Patients with this type of breast cancer were usually treated with hormone therapy.

China FDA has approved Pfizer’s vaccine Prevenar 13, used primarily for infants to help prevent pneumococcal disease, a bacterial infection that can lead to illnesses such as pneumonia, meningitis and sepsis, a year after it was forced to shut its vaccine business in the country. Pfizer has announced that it now moved back its vaccine business into the Chinese market following Prevenar 13’s approval.

Drugs at clinical stage

US FDA grants orphan status to:

Eloxx Pharmaceuticals’ (Nes-Ziona, Israel)ELX-02, a synthetic aminoglycoside, as an investigational treatment for the genetic disorder mucopolysaccharidosis type 1, a chronic, progressive genetic disorder caused by an enzymatic deficiency of alpha-L-iduronidase (IDUA).

…and to AbbVie’s veliparib, an oral poly (adenosine diphosphate [ADP]-ribose) polymerase (PARP) inhibitor, as an investigational treatment for advanced squamous non-small cell lung cancer to be used in combination with chemotherapies or radiation.

Pfizer and Gilead discreetly exit from developing program.

Pfizer, from PCSK9 boccizumab, after noticing a higher level of immunogenicity than with other PCSK9 inhibitors.

Gilead Sciences from selonsertib, an ASK1 inhibitor for the treatment of non-alcoholic steatohepatitis (NASH), pulmonary hypertension and diabetic kidney complications , from simtuzumab for the treatment of NASH and primary sclerosing cholangitis and from GS-5745, an anti-MMP9 antibody, for the treatment of Crohn's and ulcerative colitis as well as GS-6615 (eleclazine) for ventricular tachycardia/fibrillation.

Science & Technology

NHS England has announced the first med tech/app innovations to join a new fast track payment scheme designed to accelerate uptake of cutting-edge technologies. The first six areas to benefit from the new NHS Innovation and Technology Tariff target women giving birth, patients with chronic lung problems, men having urological surgery, and acutely ill inpatients.

Cost, Pricing and Market Access

The UK National Institute for Health and Care Excellence has endorsed:

Eisai’s Halven, or eribulin as treatment option for patients with for patients with locally advanced or metastatic breast cancer that has spread after undergoing at least two chemotherapy regimens

…and Eli Lilly’s Talz, or ixekizumab, as an option for treating severe plaque psoriasis in patients who cannot take or do not respond to standard systemic treatments.

But has turned down Amgen’s Kyprolis, an intravenously irreversible proteasome inhibitor, in combination with Celgen’s Revlimid with dexamethasone as a non cost-effective treatment.

Miscellaneous

In newsweek # 42 we had indicated the first case of chronic traumatic encephalopathy (CTE) death of a Mixed Martial Arts cage fighter, 25 years of age. The Boston Globe now reports that former Patriots running back Kevin Turner, who died in March, at age 46, supposedly from amyotrophic lateral sclerosis, or ALS, commonly known as Lou Gehrig’s disease, in fact died from a severe case of football-related CTE.

Pfizer announces the closure of two of its three UK sites (Park Royal in London and Portsmouth) four years after it sold its flagship facility in Sandwich. The company insists that the decision is not related with Brexit.

In a third verdict this year the US court in St Louis ordered Johnson & Johnson to pay $67.5 million to a woman who argued that her ovarian cancer was linked to routine use of J&J’s Imerys Talc America.

Bioevents

BIO Latam on November 29-30 in San Juan (Puerto Rico)

Biofit 2016 on November 30-December 1 in Lille (France)

9^th Biotech Showcase Investor Conference on January 9-11, 2017 in San Francisco (USA)

BIO-Europe Spring on March 20-22, 2017 in Barcelona (Spain)

IMPORTANT NOTICE

This document has been prepared by btobioinnovation and is provided to you for information purposes only. The information contained in this document has been obtained from sources that btobioinnovation believes are reliable but btobioinnovation does not warrant that it is accurate or complete. The views presented in this document are those of btobioinnovation’s editor at the time of writing and are subject to change. btobioinnovation has no obligation to update its opinions or the information in this document.

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