Friday Five - The pharma week in review (18 Apr 2019)

Bristol-Myers Squibb/Celgene deal gets go-ahead

The merger of Bristol-Myers Squibb and Celgene was finally approved by shareholders late last week.

For the new company, it is now imperative that an enhanced late-stage pipeline - heavily populated by Celgene assets - delivers against investor expectations.

The necessity for success is considerable, shaped by pending loss of exclusivity for Celgene's cash cow Revlimid franchise (expected from 2022 onwards) and reduced momentum for Bristol-Myers Squibb's Opdivo (with commercial opportunity limited by competition from Merck & Co.'s competing product Keytruda).

These two products accounted for around 63 percent and 30 percent of Celgene and Bristol-Myers Squibb's revenues last year, respectively.

Analysis - ViewPoints: The hunted goes hunting – for liberty and a late-stage pipeline

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Ocrevus re-shapes the multiple sclerosis market

Among the Celgene products Bristol-Myers Squibb hopes to shortly bring to market is ozanimod, initially for multiple sclerosis (it was recently refiled with US and EU regulators) and later for inflammatory bowel disease.

Ozanimod has been pitched as a potentially differentiated oral therapy in MS, similar to Novartis' blockbuster Gilenya, but likely not requiring patients to undergo such onerous initial monitoring.

Investors may be looking at the continued stellar performance of Roche's Ocrevus, however, and wondering whether ozanimod will be entering a rapidly shrinking oral market.

Ocrevus is administered intravenously by healthcare providers, but only once every six months. Offering more impressive efficacy than current orals and a comparable safety profile, its performance in the US market since launching two years ago has caught even Roche by surprise, the company suggested during its first-quarter sales call this week (see below).

Ocrevus has already grabbed a 16 percent share of the US market (just behind Biogen's best-selling oral Tecfidera) and is picking up 37 percent of new patient starts and patients switching from other therapies, Roche said Wednesday.

As the launch progresses Roche has seen more encouraging signs; not only is earlier-line use increasing, but patients are largely receiving therapy every six months as per Ocrevus' label. Some concerns that treatment gaps would emerge owing to Ocrevus notable efficacy therefore appear wide of the mark.

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Gilead prioritises early-stage partnerships in NASH

With the recent annual meeting of the European Association for the Study of the Liver (EASL) providing a backdrop, the non-alcoholic steatohepatitis (NASH) landscape has seen a number of recent developments, including this week's early-stage collaboration between two notable players in Gilead Sciences and Novo Nordisk.

Analysis - ViewPoints: Novo and Gilead team up to take on the NASH crowd

Gilead also announced a three-year partnership with insitro to develop therapies for patients with NASH using the insitro Human (ISH) platform. According to the companies, the ISH technology "applies machine learning, human genetics and functional genomics to generate and optimise unique in vitro models and drive therapeutic discovery and development," as well as predict patient responses to potential therapeutic interventions.

Gilead's early-stage deal making, presumably reflecting a tweaked strategy in NASH under the stewardship of new CEO Daniel O'Day, may reduce investor expectations that a larger acquisition in this disease area is imminent.

See also - ViewPoints: EASL19 - Viking reaches lower for its NASH aspirations

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Johnson & Johnson, Roche report Q1 results

Pharma's first-quarter earnings season will kick into play during the next month, with proceedings started this week by Johnson & Johnson and Roche.

The key narrative for Johnson & Johnson's pharma division is whether growth for newer products (i.e. Darzalex, Imbruvica and Tremfya) can offset declining sales for older franchises (such as Zytiga, Remicade and, to a lesser extent, Xarelto).

See Key takeaways from Johnson & Johnson's Q1 earnings and investor call

The company has a decent track record with new launches; its recently approved depression therapy Spravato will provide the next opportunity to demonstrate this - see Physician Views Results: Psychiatrists outlook on esketamine mixed, though off-label ketamine use provides an interesting case study with potentially positive implications.

A similar scenario is occurring at Roche, where impressive growth for new launch products such as Ocrevus (multiple sclerosis) and Hemlibra (haemophilia A) is allowing the Swiss company to grow its revenues despite exposure of key cancer legacy brands to biosimilar competition in Europe.

See ViewPoints: Q1 results - How Roche is bucking the biosimilar threat in five charts

Up next is the threat of biosimilar Avastin, Herceptin and Rituxan launches in the US, with Roche expecting approval of biosimilars for all three by the end of the year. Though to what extent US biosimilar competition will have on Roche's top-line even in the short- to medium-term is hard to predict.

Privately held Boehringer Ingelheim also released its full-year 2018 results this week.

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GlaxoSmithKline in for the long haul in HIV

At GlaxoSmithKline, the company's growth aspirations are closely tied to renewed investment in oncology R&D and efforts to compete with Gilead in HIV. Gilead and GlaxoSmithKline command respective 53 percent and 22 percent shares of the global market.

Data to be published later this year will showcase whether the former is achievable, but in the case of HIV, GlaxoSmithKline can point to a more immediate catalyst; the recent approval of Dovato for treatment-naïve HIV patients.

Dovato represents a key component of GlaxoSmithKline's strategy - via its majority stake-hold in ViiV Healthcare - to introduce two-drug, one-tablet treatment regimens for the treatment of HIV. Clinical data show these combinations are as effective as three-drug regimens - such as Gilead's newest therapy Biktarvy - but provide reduced toxicity.

One of the components in Dovato - a drug called Tivicay - has proven extremely popular with physicians and patients since its initial launch six years ago; global sales in 2018 amounted to around $2 billion, while revenues from a Tivicay-based, triple-drug combination - Triumeq - were $3.4 billion. GlaxoSmithKline says that around 650,000 patients globally use a Tivicay-based regimen.

The company concedes, nevertheless, that persuading physicians to move from three- to two-drug based regimens will take time, primarily as they are concerned about the threat of disease resistance. GlaxoSmithKline hopes that the publication of more clinical data refuting this risk will see adoption increase.

With HIV for many patients now managed like a chronic condition, GlaxoSmithKline argues there are considerable benefits in taking fewer doses of medication over a long period if the disease can be effectively managed.

Our latest Physician View snap-poll backs up these narratives, with prescribers agreeing that more patients would be inclined to ideally move to two-drug regimens. Their own concerns about disease resistance remain notable, however.

ViiV will present Phase III data for Dovato in patients switching from other HIV medications later this year.

See also - KOL Views Results: Resistance fears will weigh on Dovato but TANGO switching study could be big boost, says leading HIV expert

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