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

Momentum growing for Roche's Gazyva

Having secured FDA approval late last week for its would-be Rituxan successor Gazyva (see ViewPoints: Roche ticks another box in biosimilar defence/cancer domination strategy as FDA approves 'son of Rituxan' Gazyva), Roche delivered more compelling data for the therapy in the chronic lymphocytic leukaemia (CLL) setting on Thursday. This came via abstracts released ahead of the ASH meeting in early December, which demonstrated an impressive performance versus Rituxan.

Critically, when prescribed in combination with chlorambucil, Gazyva demonstrated a median progression-free survival (PFS) of 26.7 months versus 15.2 months for Rituxan and chlorambucil. Taking into account that Gazyva will be priced at a relatively modest premium to Rituxan in the US ($41,000 versus $35,000 per course of therapy), these latest data from the second stage of the CLL11 study will provide a "significant boost" to Roche's marketing efforts, noted analysts at Bloomberg Industries. They add that the PFS rate is superior to what would have been previously estimated on the back of available data, and also pointed to Gazyva's impressive complete response rate (CRR) of 21 percent (versus a 7 percent CRR in the Rituxan arm).

FirstWord will be looking to poll US-based oncologists over the next week to ascertain how they expect to use Gazyva in the CLL setting.

Poll results indicate retained bolus of MS patients awaiting EU Tecfidera launch

Analysts are already calling an impending decision on European regulatory data protection (RDP) for Biogen Idec's multiple sclerosis drug Tecfidera "make or break." Should European regulators not grant new active substance (NAS) status to Tecfidera, there is a strong likelihood that Biogen Idec will withhold a launch in order to protect revenues of its other MS therapies from potential short-term generic Tecfidera entrants.

This binary event has more significance given the commercial opportunity attached to any launch of Tecfidera in the region. Based on responses from 100 EU5-based neurologists polled by FirstWord earlier this week, a significant bolus of diagnosed but as yet untreated patients remain 'warehoused' for treatment assuming Tecfidera is launched.

This suggests that any European launch could mirror the rapid uptake of Tecfidera as seem in the US. But should the product not launch, competing therapies – particularly Novartis' oral treatment Gilenya – should be set for a patient windfall.

For full results and analysis from the poll please click here.

Non-financial events dominate AstraZeneca's Q3 results

AstraZeneca was one of the last Big Pharma players to report its Q3 earnings and delivered at the end of last week two potentially intriguing bits of news.

The company's search for a new CFO (following Simon Lowth's departure) has been resolved quickly, but the appointment of Marc Dunoyer as his replacement is surprising, argued analysts at Citi Group.

Recent roles for Dunoyer include head of Japanese operations and head of orphan drugs at GlaxoSmithKline, while his initial appointment at AstraZeneca was in the role of executive vice president for global portfolio and product strategy. Citi analysts noted "while we have no doubts Mr. Dunoyer is a talented and experienced industry executive, investors may be concerned that his lack of recent direct CFO responsibility could increase risk to both near-term EPS and AZN's current dividend commitment."

Other analysts have noted that AstraZeneca's commitment to increased R&D spend may have some impact on its near-term earnings performance, but CEO Pascal Soriot looked to assure investors on the company's Q3 call that it is committed to the current dividend policy.

Analysts at Society Generale suggest that even accounting for recent acquisitions and an emerging pipeline, forecast growth is still insufficient to offset generic-driven revenue declines. Their prescription is more (and potentially larger) acquisitions, suggesting that Dunoyer may have little time to take stock in his new role.

...Brilinta investigation – only downside from here

The other important non-financial disclosure made by AstraZeneca was an announcement that the US Department of Justice is conducting an investigation into the PLATO trial, which was used to secure approval of Brilinta. The company has so far provided no further details, but suggests its marketing of the drug in the US is at this stage not impaired by the probe.

In a note to investors, Bernstein analyst Tim Anderson suggested that this disclosure is most likely connected to well documented controversies about the PLATO study, whereby a small number of experts have questioned the data. Thus, the allegations are not new and have largely been written off by investors and analysts given that global regulators used PLATO to approve Brilinta.

Anderson cautions, however, that despite a low probability of any negative outcome – should any investigation validate claims of data falsification - it would be conceivable that regulators would demand Brilinta be withdrawn from the market.

Given the pressures that AstraZeneca faces across other high-value elements of its marketed portfolio, such an outcome would be materially negative. The exact financial implications really depend, however, on how successful the company is in accelerating sales growth for the product. Bloomberg prescription data suggests an improved performance since the early part of the year in the US, but Brilinta sales are yet to reach an inflection point that would provide sufficient momentum to drive the franchise towards blockbuster status. That said, consensus models currently retain global forecasts of $1.2 billion in 2018. See Physician Views Poll Results – Can AstraZeneca's US-centric Brilinta strategy learn from European cardiologist perspectives? and Physician Views Poll Results – AstraZeneca facing long road ahead for Brilinta redemption?

Novo faces up to pricing headwinds

Novo Nordisk's Q3 results – not to mention a number of recent interviews with CEO Lars Sørensen – have confirmed that pricing pressure will intensify as a notable headwind for the Danish diabetes specialist in Q4 and 2014 - see Spotlight On: Pricing pressures redefine diabetes market expectations.

Efforts by payers to reduce the price of diabetes treatments will continue to occur says Sørensen, not only in the EU, but also the US where Novo Nordisk earlier this year lost a significant contract with the pharmacy benefits manager Express Scripts - see ViewPoints: As Novo Nordisk finds to its loss, price is now king in the US diabetes market.

In a note to investors this week, Bernstein analyst Ronny Gal highlighted that management from Express Scripts have cited in a number of interviews that "several of their customers (employers) who keep an independent formulary were asking about joining in on the product selection (and rebate) associated with this latest formulary restriction." Should this approach be successful, added Gal, Express Scripts and its competitors can be expected to further increase momentum with such a strategy in 2014.

Sørensen has been in bullish mode, suggesting that Novo Nordisk will price its drugs to reflect and fund innovation where it sees fit. Specifically, he said that Novo Nordisk "could have priced ourselves into the (Express Scripts) contract had we wanted to, but we believe Victoza is a better product and therefore demands a premium."

The company faces a similar conundrum in Europe where there is some resistance to the 60-70 percent price premium for Tresiba versus Sanofi's competing (and very well established) long-acting basal insulin Lantus. Sørensen expects uptake of the drug to expand once physicians and patients become more experienced with its advantages versus existing long-acting insulins, and Novo Nordisk can point to a 9 percent volume share of the Japanese market some 35 weeks post-launch.

FirstWord will be looking next week to poll endocrinologists in countries where Tresiba has launched in order to ascertain their views towards Tresiba and its clinical profile versus Lantus.

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