The Friday Five – Five of this week's pharma stories you can't afford to ignore...

PD-L/PD-L1 bandwagon rolls out of ASCO the clear winner

News flow from the ASCO meeting has been dominated by the PD-L/PDL-1 compounds being developed by Bristol-Myers Squibb, Merck & Co., Roche and AstraZeneca. Data presented at the annual oncology event confirmed Bristol-Myers Squibb's current leadership in this race, but also boosted sentiment for Merck's product with the company indicating aggressive timelines for next-stage clinical trials.

Writing for The Street, Adam Feuerstein highlighted five charts that demonstrated why Bristol-Myers Squibb's nivolumab and Merck's lambrolizumab 'won' at ASCO. Feuerstein cites the long survival 'tail' of these therapies, tumour shrinkage rates, durability of response and the sheer size of the lung cancer market as key reasons why enthusiasm for the PD-L/PD-L-1 products is so high.

There are a number of sub-texts attached to the PD-L/PD-L1 development race – a notable one being the slightly different approach taken by current race leaders Bristol-Myers Squibb and Merck – and the long standing oncology research leader Roche. FirstWord’s own analysis of this dynamic suggests it is too early to write the Swiss player off – but should Roche lose further ground to its US rivals it will be interesting to see what impact this has on investor sentiment. Likewise, Merck's new head of R&D – Roger Perlmutter – has entered centre stage with investor expectations low. Nevertheless, it looks like Perlmutter should be strapping himself in for an interesting few years ahead as he oversees development of one of the industry's most eagerly anticipated products.

Do new drugs work better than old ones?

Somewhat offsetting the positive sentiment surrounding potential breakthrough treatments at ASCO, results of a new study published in the Health Affairs journal suggest that older medications are often not only cheaper (by virtue of being available generically), but are often more effective than modern therapies. The study analysed 315 placebo-controlled studies that were published in four of the leading medical journals between 1966 and 2010. On average, earlier drugs were more effective versus placebo compared to newer therapies.

As the industry moves away from the blockbuster model that dominated Big Pharma growth strategies of the past two decades, drug companies are not only producing less me-too therapies, but seeing the requirement to develop more innovative products shaped by the growing influence of the payer. The FDA's approval rate for new chemical entities in 2012 triggered much enthusiasm, but it remains to be seen if the industry can deliver a sustained trend. See FirstWord Lists: The drugs that will shape 2013 – new/recent launches.

This week also saw AstraZeneca and Sanofi both end the development of drug candidates in late-stage testing, illustrating that costly setbacks are still occurring. Management rhetoric would suggest that Big Pharma understands a 'kill early' strategy is necessary to both reduce its number of later-stage setbacks and maintain steadily improving innovation rates. However, whether such a lesson is yet ingrained, remains conjecture. For further analysis see ViewPoints: As AstraZeneca, Sanofi scrap late-stage assets, Big Pharma gets a reminder that not everything goes to plan.

FDA looks to improve product development process via data sharing initiative

Missed by most in light of the ASCO buzz, argued Alexander Gaffney of Regulatory Focus, was a proposal from the FDA that asks for industry and public input regarding a proposal to make de-identified and masked data taken from medical product applications available to select members of the public. This is a massive change in policy, notes Gaffney, which the regulator says is driven by its desire to improve the product development process. Full details of the proposal can be found here.

Dispute over Biogen Idec Tecfidera TRx numbers weighs on share price – as does delay to European launch

One product that demonstrates a positive image when it comes to R&D success, is Biogen Idec's oral multiple sclerosis treatment Tecfidera, which has delivered better than expected uptake in the US market since launching two months ago.

Or has it? – there was some suggestion this week from analysts at Cowen that IMS data being used to track performance of the product was culpable of some double-counting – a claim that has weighed on Biogen Idec's share price.

Also potentially concerning investors, is the decision by Biogen Idec to delay launch of Tecfidera in the EU to allow for ongoing negotiations regarding regulatory data protection (RDP) – which is analysed by FirstWord in a recent post on Forbes.

David Grainger – CEO at the drug development consultancy TCP Innovations – suggests that outdated intellectual property guidelines are in this instance acting as a barrier to innovation. "Do Biogen [Idec] deserve less credit, or less financial return, because they made this great new medicine available to MS sufferers using a compound that happened already to be used elsewhere? Absolutely not. They invested in the development programme, and they delivered something of value. Their return should be judged by the clinical effectiveness gain not by the chemical novelty," says Grainger.

Maximising the commercial longevity of Tecfidera in the EU is clearly a key priority for Biogen Idec – this week's FirstWord Physicians View poll indicates that neurologists in the region are keen to use the product with a similar level of patient warehousing expected to that seen in the US pre-launch.

Relations between Elan and Royalty Pharma sour

Some have suggested that exchanges between Elan and its potential would-be acquirer Royalty Pharma now represent little more than mud-slinging. At an operational level, the two companies appear to disagree over two issues – the value of the Tysabri franchise (in which Elan already owns royalties) and the value of Elan's proposed deal to acquire royalties in four respiratory products being co-developed by Theravance and GlaxoSmithKline.

Speaking at a Jefferies conference on Wednesday, Elan CEO Kelly Martin provided some fairly bullish projections for the Theravance/GlaxoSmithKline products that he believes could rapidly (i.e. within five years) hit peak revenues. According to Martin, combined peak revenue of $4 billion for the Breo and Anoro brands justifies Elan's $1-billion investment. Advair already generates sales double this figure, and Anoro should expand the market, argues Martin. The issue, notes Jefferies analyst Corey Davis, is that the deal requires Elan investors to put a lot of faith in longer-term sales projections, whilst some may argue that Martin is downplaying some barriers to uptake – such as the entry of substitutable generic competition for Advair and the payer-push back dynamic.

The jury remains out on whether shareholders will back the deals – or whether confirmation that Martin has "plans B, C and D" up his sleeve (as also revealed at the conference) will boost confidence in his ability to rebuild the company or simply undermine plan A.

To read more Friday Five articles, click here.