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Author: Jean-Claude Muller, 穆卓Executive Editor at BtoBioInnovation  jcm9144@gmail.com

SPECIAL REPORT #9

European Pharma R&D focus on Specialty Care

In an article published in the May 2018 issue of MedNous entitled  “European pharma plans new strategies for R&D” we wrote “It will be some months before the details of the R&D strategies are known” and concluded: “One thing is clear the new R&D executives will have a lot on their plates in the coming months.”

The recent published 2018 fourth quarter presentations have provided a clear response: focus, with a strong shift in focus to specialty care and mainly oncology. Such strong and unanimous focus does not come without the cull of ongoing projects, staff reallocation or even staff reduction but also with the decision to enter new alliances and partnerships.

In November of last year Novartis had already indicated that it was focusing its activity on six therapeutic domains, while reducing its R&D programs by 20% from 430 to 340.

In January of this year, AstraZeneca announced an organisational change with two dedicated business units: one for Oncology and one for Biopharmaceuticals with disappearance of the MedImmune name. The Oncology unit consists of a Research and Development unit responsible for discovery through late stage development, mirrored by a commercial unit.  José Baselga was appointed as head of the R&D unit and Dave Fredrickson was nominated as the head of the commercial unit; both are directly reporting to the Pascal Soriot, AstraZeneca’s CEO. Oncology sales already represent 49% of AstraZeneca’s global sales.

John Reed, new Head of R&D at Sanofi, has announced a rigorous strategic pipeline review leading to the discontinuation of 38 projects: 13 in clinical development and 25 in research. He also mentioned a prioritisation in specialty care and vaccines with a long-term objective of having up to 70% of all the new projects being internally derived.

GlaxoSmithKline has redirected its focus towards oncology and taken the first steps towards spinning off its consumer health products it acquired from Novartis. The recent announcements of the acquisition of Tesaro for $5.1 billion, followed, on 5 February, of a global alliance with Merck KgaA to jointly develop and commercialise M7824, an investigational bifunctional fusion protein immunotherapy, in a deal worth up to $4.2 billion, are clear signs that Hal Baron, GSK’s head of R&D, has triggered a major change in bringing his company back into the oncology field. Emma Walmsley, GSK’s CEO has announced “We now have 16 oncology assets in clinical development, this is double the number we had in July 2018”. The company also surprised the investor community by announcing the termination of a series of investigational drugs predominantly from its respiratory pipeline and analysts wondered if GSK wanted to exit its respiratory R&D altogether.

Bayer, which needs to expand its portfolio as Eylea, an eye treatment, and Xarelto, an anticoagulant, will soon lose exclusivity, has already initiated a huge R&D restructuring and has announced to take full control of two Loxo Oncology drugs: Vitrakvi and LOXO-195. Loxo has been acquired by Eli Lilly earlier this year, but Bayer had the option to fully acquire the two mentioned cancer drugs under its 2017 Loxo partnership. Vitrakvi is a “tumour-agnostic” (mechanistic rather than organ based) therapy to treat tumours with a neurotrophic receptor tyrosine kinase (NTRK) gene fusion. LOXO-195 is designed as a follow-on therapy for patients resistant to an initial tyrosine kinase therapy.

Three established European specialty company have reported different fates

Novo Nordisk reported flat sales in 2018 following an ongoing impact of price lowering of insulins in the US. Lars Fruergaard Jørgensen, Novo’s CEO, has pronounced “2018 a year of change” and announced a R&D shifting away from insulins as the main core business into areas such as cardio-metabolism and stem cells. Already in September the company had announced the setting up of new research units in Denmark, the UK and the US with an increase of external collaborations but also a restructuring resulting in the reduction of 1,300 jobs.

For several years Lundbeck, which focuses on CNS drugs, has been in an extensive restructuring mode and Deborah Dunsire, the new CEO could now claim “the company best financial result ever”. Nevertheless, the setback of Lu AF35700, in a late stage Phase 3 trial for the treatment of resistant-schizophrenia, has sustained the importance of the ongoing external collaborations with Otsuka and Takeda and the acquisition of Prexton Therapeutics.

Ipsen, a company specialising in the area of oncology, neurosciences and rare diseases has presented outstanding results with overall sales growth of 16.6% driven by specialty sales growth of 24.7% and consumer healthcare at 2.7%. David Meek, Ipsen’s CEO, has indicated that oncology now represents 68% of sales, growing at 29.9% in 2018, and he announced the commitment of the company to enter systemic radiation therapy programmes.

It is understandable that most company allocate refocus their efforts into specialty care and mainly oncology where growth, profitability and the rate of new active substances and/or indications approval are high. These massive efforts will sooner or later trigger the discovery of new drugs, new combinations, new therapies and new solutions to treat deadly cancer diseases, similar to recent progress in the treatment of melanoma, lung and renal cancers, as well as some rare cancers. Nevertheless, we feel that this unprecedented strong allocation of resources to oncology is being made at the detriment of other major unmet medical needs.

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.