Friday Five - 5 questions raised this week in pharma

Can Soriot silence the doubters?

It seems AstraZeneca investors were happier when management was providing no indication when the company would return to growth.

CEO Pascal Soriot reiterated on Thursday that 2017 revenues would be broadly in line with those recorded for last year, an assertion he had previously made last month at the JP Morgan Healthcare conference. Coupled with lower than expected revenue guidance and a worse than expected hit to earnings for 2014, this appeared to spook investors however, with shares down 3 percent in early trading.

"AstraZeneca trades more on being a 'turn around' story, with an eventual rebound in the numbers," noted Bernstein's Tim Anderson, suggesting that it is the long-term outlook that investors remain unconvinced by, despite the company reporting that it has doubled the number of products it has in late-stage development.

The pipeline may be growing, but investors and analysts alike appear to have less confidence that AstraZeneca can deliver the 2017 revenues that it is promising; particularly with the competitive diabetes market (where Bristol-Myers Squibb was recently happy to cut its losses) integral to the company's growth aspirations – see ViewPoints: Talk of diabetes JV split illustrates divergent paths of AstraZeneca, Bristol-Myers Squibb.

They have had their fingers burnt before, with Soriot's predecessor having overpromised and under-delivered, noted analysts in unison last month when the current CEO benchmarked 2017 as the start of the recovery. Soriot has drawn his line in the sand; can he deliver?

Lantus or bust for Sanofi?

Diversity of portfolio, the performance of its Genzyme division, a strong rebound in emerging markets and a pipeline that comprises 80 percent biologics are all reasons to suggest that Sanofi is on the road to recovery, suggested CEO Christopher Viehbacher on Thursday when the company unveiled its Q4 results.

Perhaps, but Sanofi's diabetes treatment Lantus still dominants both the marketed portfolio and late-stage pipeline.

Sales of the long-acting insulin grew by around 20 percent in 2013 to reach $7.7 billion, equal to around 21 percent of Sanofi's pharma sales. The drugmaker's Genzyme division acted as the other notable growth driver, with sales up at $2.9 billion, providing the company an increasingly robust position in the market for rare diseases.

Among its Big Pharma peers, Sanofi has embraced rare diseases arguably more than any other company. Such niche focus fits less comfortably in the diabetes space, however, where Sanofi will be looking to switch as many patients as possible to a new formulation of Lantus (U300) before competition intensifies.

ViewPoints: Delay to biosimilar Lantus – let the pricing party continue.

Will Gilead Sciences' Sovaldi break all records in 2014?

Gilead Sciences' Q4 results – announced Tuesday and probably the most eagerly anticipated across the sector – provided answers but also posed many questions. Initial sales of the hepatitis C therapy Sovaldi, which was rolled out in early December, confirmed the view (alongside closely watched prescription data trends) that the drug could be a truly historical launch; analysts are now suggesting in unison that sales could exceed $5 billion for the year.

Spotlight On: History in the making – How does Gilead manage lofty Sovaldi expectations?

But has the horse bolted? - Investors appeared concerned at Gilead's lack of Sovaldi guidance for the full year, while a number of other factors were cited by analysts for weakness in the company's share price in its immediate trading post-Q4 results. Are expectations for Sovaldi now simply too high and how sustainable is the 'tail' of revenues that Gilead's hepatitis C franchise can generate beyond the next few years, given that its rapid uptake is heavily shaped by its curative effect on the disease?

See also ViewPoints: AbbVie delivers strong hepatitis C data but is it enough?

Will the next key immuno-oncology player emerge from Europe?

France may not be typically associated with cutting-edge biotechnology, but Marseille-based Innate Pharma was cited as a "hidden gem" in immuno-oncology this week by analysts at Goldman Sachs.

Innate is probably better known to immuno-oncology enthusiasts, its platform having been validated by a collaborative alliance signed with Bristol-Myers Squibb in 2011. However, Goldman Sachs analysts suggest that Innate's anti-KIR antibody lirilumab remains an overlooked opportunity in the immuno-oncology space, despite recent proof-of-concept data presented at the ASH annual meeting in patients with acute myeloid leukaemia.

The next key catalysts for Innate will be the demonstration of additive efficacy for lirilumab when dosed in combination with Bristol-Myers Squibb's nivolumab and Yervoy products; data should emerge in 2014 and 2015.

Innate is not resting on its laurels; the company also announced this week that it has acquired the full rights to an anti-NKG2A antibody from Novo Nordisk, which is ready to progress into Phase II oncology studies. The antibody is another first-in-class product and reinforces the view that Innate is the "name to own in European biotech," opined Goldman Sachs.

See also ViewPoints: More shots on goal – Merck & Co. steps up combination deals for MK-3475 and ViewPoints: Nanobody know-how – Perlmutter returns to Ablynx as Merck & Co. steps up its collaborative efforts in immuno-oncology.

Are Teva's Copaxone targets really that aggressive?

Q4 results announced on Thursday demonstrated that Teva's Copaxone continues to deliver a robust performance, despite the rapid uptake of Biogen Idec's Tecfidera and other oral competitors.

Such reliance will be needed if the company is to meet the guidance it has projected assuming that generic versions of the multiple sclerosis drug launch in mid-2014.

Positively for Teva, neurologists polled by FirstWord this week appear to hold a place close to their heart for Copaxone, and suggest a high conversion rate to a new formulation of the drug approved by the FDA. Whether less frequent dosing is sufficient to offset the lure of cheaper generic versions remains to be seen, however.

Physician Views: Teva's confidence in Copaxone switching justified, but neurologists unfazed by prospect of generic launch.

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