Friday Five - 5 questions raised this week in pharma

Will Norway set the European tone for biosimilar pricing...?

Biosimilar Remicade (infliximab) has secured status as the recommended anti-TNF therapy for use in Norwegian hospitals for 2014, it was recently announced.

"The tendering results show both the potential for biosimilars to reduce costs and make it possible to treat more patients," an enthusiastic Steiner Madsen – medical director for the Norwegian Medicines Agency (NoMA) – told FirstWord. Preferred status was granted for biosimilar infliximab products marketed by Celltrion and Hospira by virtue of sizeable pricing discounts. Versus branded Remicade, both products will be around 40 percent cheaper.

The Norwegian market will be keenly observed over the next 12 months by those with a vested interest in biosimilar market dynamics. NoMA is running a study designed to encourage the switching of patients from Remicade to biosimilar infliximab and in a year's time it will be interesting to see how Merck & Co. prices their branded product when the 2015 tender is announced.

For further analysis - Spotlight On: Norway unveils near 40 percent discounting for biosimilar infliximab – can it pave the way for a broader European trend?

...And how will branded players respond?

With biosimilar competition for its Herceptin franchise now a reality in the Indian market and a similar threat steadily nearing in the European (and dare we say) US markets, the tone of comments from management at Roche towards biosimilars will be watched closely over the course of 2014.

Intriguingly, when he discussed the company's Q4 earnings on Thursday, chief operating officer Daniel O'Day suggested that Roche will be "prepared to respond" on pricing when biosimilars reach the market.

Suggestions by O'Day that biosimilar Herceptin and Rituxan products may emerge in 2015 and 2016, respectively, provided a cautious view (from Roche's perspective) of how quickly the market could develop, but simultaneously were somewhat dismissive of Biocon's pending launch in India.

The Indian market may represent only a fraction of global Herceptin sales, but it could act as a testing ground for any pricing strategies that Roche chooses to subsequently implement in more commercially significant territories.

See also Physician Views Poll Results - Indian oncologists ambivalent about biosimilar Herceptin, reactionary pricing from Roche likely to dent Biocon's market share aspirations.

Pricing, of course, does not represent Roche's only biosimilar defence strategy, particularly in the European and US markets where Kadcyla, Perjeta (HER2+ breast cancer) and Gazyva (chronic lymphocytic leukaemia) are expected to raise the bar-to-entry for biosimilar Herceptin and Rituxan products.

In emerging markets, Roche's strategy is also based around delivering innovative products and innovative access programmes, said O'Day, citing the 40 percent increase in Chinese sales of Herceptin during 2013.

A tripartite agreement involving the government of Jiangsu province, patients and Roche has helped to fuel such growth. The Jiangsu government reimburses a portion of the Herceptin cost, while patients pay another smaller part of the cost. The rest is covered by a donation from the Herceptin Patient Assistance Program sponsored by Roche. As a result, a patient in Jiangsu only pays 10 percent of the total Herceptin cost out of pocket.

In India, Roche has prioritised improved access to HER2 testing and the launch of a cheaper, licensed Herceptin product (Emcure's Herclon) as a means to broaden access to its drug. The arrival of CANMAb may prove that pricing is king, however.

Is Bristol-Myers Squibb losing its leadership grip in the $35 billion immunotherapy race?

Not quite, but a less than bullish tone towards its key combination of nivolumab and Yervoy in non-small-cell lung cancer (NSCLC) patients was enough to spook investors when Bristol-Myers Squibb discussed its Q4 results last Friday - ViewPoints: Bristol-Myers Squibb looks for biomarker benchmark in immunotherapy race.

Coupled with Merck & Co.'s recent confirmation of a rolling FDA submission for MK-3475 in Yervoy-refractory melanoma patients (which could allow Merck to deliver the first PD-1 inhibitor to market), some analysts have been forced to tone down their expectations that Bristol-Myers Squibb is poised to run ahead into the immunotherapy sunset.

Analysts at Jefferies labelled the lack of clarity towards a nivolumab/Yervoy combination in NCSLC as a "flashpoint for the market," citing investors as being "over optimistic." They suggest that Bristol-Myers Squibb remains in pole position, given its "front-runner status with a combination regimen in melanoma and overall lead in both mono and combination therapies in NSCLC."

That said, the sheer breadth of clinical studies being undertaken and the proactive nature of the FDA towards barrier-breaking cancer therapies is likely to see more twists and turns over the coming months. Roll on the ASCO annual meeting for greater clarity (or confusion) on the immunotherapy race.

Elasticity in US multiple sclerosis market to tighten in 2014?

Approval of a three-times weekly version of Teva's multiple sclerosis treatment Copaxone this week is viewed as a key event for the company as it looks to defend the franchise from potential generic competition later this year - ViewPoints: Do Teva's Copaxone sums add up?

However, the impact of generic Copaxone arrivals is likely to affect all MS players, opined analysts from Bank of America Merrill Lynch, who suggested that payers will be keen to pressure pricing given historically large increases in this disease area.

Speaking on the company's Q4 earnings call on Wednesday, Biogen Idec's Stuart Kingsley – executive vice president of Global Commercial Operations – noted that launch of generic Copaxone would "add to the toolkit that the payers have to put some pressure on the credit category."

Diabetes emerged as a target for US payers in 2013, will multiple sclerosis follow this year? - Spotlight On: US price hikes for MS drugs continue ahead of potential generic Copaxone launch

Does a higher chance of regulatory success = commercial success for cancer products?

If you want to increase your chances of regulatory success with the FDA, join the crowd and develop a cancer treatment.

Data compiled by International Strategy & Investment strategy analyst Mark Schoenebaum and shared with investors this week illustrates that over the period 2000-2012, new molecular entities (NMEs) developed for oncology indications had the highest first-cycle approval rate at the FDA – at 72 percent. With 61 applications, cancer accounted for the most NME submissions over this period, followed by metabolic diseases (45) and neurology (42).

The first-cycle approval rate across all NME submissions during 2000-2012 was 50 percent and the overall NME approval rate was 74 percent over this period, added Schoenebaum.

As Sanford C. Bernstein analyst Geoffrey Porges noted last week, however, regulatory success for cancer drugs does not guarantee blockbuster returns.

Having analysed the commercial performance of 60 anticancer drugs approved by the FDA between 2001 and 2013, Porges identified 13 blockbusters (quarterly sales that reached $250 million) and 10 'bust' products (quarterly sales that failed to reach $50 million); a bust-to-blockbuster ratio of 1:1.3.

Porges concludes: "This bust-to-blockbuster ratio suggests that the probability of a cancer drug being a 'home run' in terms of revenue performance, is no higher than the probability of it being a disappointment that barely covers its cost of development and commercialisation. Broad adoption across multiple indications, earlier lines of therapy and increased duration of therapy seem to be the main ingredients for the achievement of blockbuster status."

No wonder Medivation shares closed Wednesday up 11 percent; full data from the PREVAIL data confirmed that its prostate cancer treatment Xtandi had pretty much ticked off each of these criteria - ViewPoints: Medivation's Xtandi excels – 5 key takeaways from the PREVAIL study.

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