Friday Five – the pharma week in review

A promising start to 2019

The annual JP Morgan Healthcare Conference wound down on Thursday, but looks to have served its purpose by boosting investor sentiment in the pharmaceutical market for the year ahead.

Matters have been helped by two notable acquisitions since the turn of the year - Bristol-Myers Squibb's proposed $74 billion takeout of Celgene and Eli Lilly's $8 billion acquisition of Loxo Oncology - which will fuel optimism that more deal making for the year ahead has been primed by conversations that took place in downtown San Francisco over the past week.

JP Morgan 2019 as it happens...Day 1

JP Morgan 2019 as it happens...Day 2

JP Morgan 2019 as it happens...Day 3

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Sage continues to deliver

Positive data for Sage Therapeutics' depression therapy SAGE-217 also contributed to the feel good factor at JP Morgan, while simultaneously positioning the neuroscience company as a potential takeout candidate itself.

Read our earlier interview with chief scientific officer Al Robichaud to learn more about how Sage is beating the odds to develop new depression therapies.

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Eli Lilly in for Loxo

With its acquisition by Eli Lilly, Loxo becomes one of the most notable biotech success stories for some time. Established a little over five years ago, the company has shown remarkable early success with its two most advanced cancer drugs, one of which has already been approved by the FDA.

Vitrakvi is marketed in the US for cancers (irrespective of location) that harbour NTRK mutations. While these are rare - occurring in less than 0.5 percent of all solid tumours - Vitrakvi has been shown to be extremely effective in these patients.

See Physician Views Poll Results: Challenges ahead, but oncologists impressed with Vitrakvi's efficacy

A second drug from the Loxo stable - the RET inhibitor LOXO-292 - is accumulating equally impressive data as it moves toward a possible regulatory filing before the end of 2019.

Analysis - ViewPoints: Eli Lilly embraces precision medicine with Loxo acquisition

Eli Lilly's $8 billion wager requires Loxo's R&D prowess to continue, for the impressive efficacy of agents such as Vitrakvi and LOXO-292 to spur efforts in identifying eligible patients and to maintain high prices for effective differentiated drugs; Vitrakvi, for example, costs around $30,000 a month.

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A proactive regulator

Pharma innovation is certainly not in short supply, with key updates at JP Morgan focused on gene and cell therapies, and RNAi helping to boost investor sentiment.

And though Commissioner Scott Gottlieb could not be there in person due to the ongoing US government shutdown, he unveiled plans to create a new office at the FDA that will be dedicated to advancing innovation in drug development and known as the Office of Drug Evaluation Science. Its role will be to help reduce the cost and risk associated with development of novel therapies with a focus on areas such as patient reported outcomes data and biomarkers.

This week the FDA also unveiled a draft regulatory framework to test new approaches for the review of digital health applications.

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Pricing remains the big challenge

That is not to say it is all hunky dory in pharma-land; US drug pricing, macro political and economic issues and how the industry goes about effectively commercialising new therapeutic modalities such as gene and cell therapy are issues that cannot be ignored.

In the case of the latter, pharma is at least being proactive. At JP Morgan, bluebird bio CEO Nick Leschly outlined a potential outcomes-based pricing scheme for LentiGlobin BB305, its experimental gene therapy for transfusion-dependent β-thalassaemia. Bluebird is proposing five equal payments over five years for the one-time treatment, with costs in the last four years dependent on patient response, with the company noting its willingness to put a majority of its pricing at risk.

Analysis - 2019 Preview: Key trends to watch

The proposal has reportedly been well received by payers, though Leschly concedes that challenges do stem from the current system not being set up for one time, potentially curative therapies. It also remains to be seen what total price is set for LentiGlobin BB305, though the company said this would not exceed a calculated intrinsic value of $2.1 million.   

CEO Vas Narasimhan said Novartis is considering a similar pricing proposal for its spinal muscular atrophy (SMA) gene therapy AVXS-101, which could be approved by the FDA later this year. He caveated that "the industry needs to put forth those models and then the payer systems need to adapt to be able to use those models and that is a very different conversation."

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