The Friday Five – The week in pharma

Will Alexion's acquisition of Synageva spur or delay orphan drug consolidation?

If the specialty/generics sector has dominated pharma's recent run of acquisitions, could Alexion Pharmaceuticals' bold move to acquire Synageva BioPharma now spur consolidation among those players targeting ultra-orphan diseases?

Such rare disease-focused players are cited as perennial M&A targets and Shire, for one, appears poised to make an acquisition. Such deals will not come cheap, however, reflected by the price that Alexion agreed to pay for Synageva.

At $8.4 billion, the deal is valued at more than twice the market value of Synageva and represents a 135 percent one day premium, the highest of any $5 billion-plus pharma or biotech acquisition over the past decade.

Alexion has justified the price by saying that it is difficult to identify late-stage ultra-orphan drug assets, such as Synageva's Kanuma, which is currently under US and EU review for the treatment of LAL deficiency. Analysts applauded the strategic fit, but had reservations about the price. Alexion is hoping that its expertise can significantly enhance the commercial opportunity of Kanuma above and beyond current expectation (ViewPoints: Alexion calls for trust in its rare disease playbook).

Will combinations retain Roche's cancer crown?

Spending on cancer drugs continues to sky rocket and shows no sign of slowing down, according to a new report published by the IMS Institute for Health Informatics.

A groundswell of progress in the immuno-oncology development arena will play a key role in this trend, although how such therapies interact when used in combination with targeted products and chemotherapies will heavily dictate evolution of the cancer market over the next decade.

An overlooked finding from the IMS report is the significant lead that Roche maintains over its rivals in terms of potential mid- to late-stage cancer combinations, which could launch by 2021. Not only does the Swiss cancer specialist have more than double the number of developments in its pipeline, but a significant number comprise two in-house products; a factor that could prove critical, especially if the pricing of cancer treatments comes under greater scrutiny (ViewPoints: If cancer combinations are to be king, then Roche is first in line to the throne).

GlaxoSmithKline banging the drum alone?

At present, oncology remains insulated from the increase in pricing pressure that is occurring across other therapy areas; a characteristic that continues to render GlaxoSmithKline's decision to exit the cancer market earlier this year as confusing, a number of analysts remarked in response to the company's investor day this week.

In sketching out GlaxoSmithKline's refined growth strategy, CEO Andrew Witty highlighted a stronger presence in vaccines and consumer healthcare as offering greater stability against uncertainty in the prescription pharmaceutical market.

Exemplified by examples such as the recent progress in immuno-oncology, however, Witty's view of the sector does not appear to correlate with the industry at large, remarked Bernstein analyst Tim Anderson. Is the CEO's view of pharma's challenges shaped through an industry or company lens? A recent analysis by Credit Suisse suggests that GlaxoSmithKline has the second least unique portfolio of marketed drugs amongst the industry's 20 largest players (ViewPoints: Can AstraZeneca escape from the rebate trap?).

Ownership of poorly differentiated products causes exposure to pricing pressure and the requirement of higher rebating in the US market, note analysts, which GlaxoSmithKline has experienced first-hand with its respiratory portfolio over the past year. Now forecast to effectively deliver a flat revenue performance over 2015-2020, GlaxoSmithKline has, for the first time, conceded the threat of US generic competition to its multi-billion dollar Advair franchise. Upside could come if Breo Ellipta delivers positive data from the upcoming SUMMIT study read-out.

Novo Nordisk exec jumps ship to Lundbeck

Having appeared to part company with ex-CEO Ulf Wiinberg somewhat reluctantly in November, Lundbeck has ticked all the boxes in naming his successor as ex-Novo Nordisk chief operating officer Kare Schultz.

Frequently cited as a successor to Novo Nordisk CEO Lars Rebien Sørensen (until his recent departure), Schultz not only brings a pedigree in his new role at Lundbeck, but has been appointed some time ahead of an August deadline set by the company. International experience coupled with a previous leadership role within a European company had been deemed essential for any candidate, and while being Scandinavian was not viewed as being so important by the Lundbeck board, Schultz also ticks this box.

Analysts at Jefferies described Schultz's appointment as a "coup," noting encouragement at previous suggestions he was being lined up to take the hot seat at Novo Nordisk. Furthermore, they argue, Schultz brings "significant pharma experience to Lundbeck," encompassing both commercial and operational functions.

With Lundbeck in the process of rolling out a new generation of pharmaceutical brands, this experience is likely to prove invaluable. Earlier this year, analysts at Credit Suisse argued that it remains too early to judge the long-term potential of these new products, such as Brintellix for depression, although a lack of material investment in the central nervous system market from Big Pharma could provide Lundbeck the opportunity to grow these franchises.

Biosimilar players team up to target US market

Shaped by approval of Zarxio in the US and the broader launch of biosimilar Remicade in the EU, biosimilars have becoming increasingly recognised as providing a more prominent near-term competitive dynamic over the past few months.

Comments made by Merck & Co. management during the company's first-quarter investor call indicate that price discounting for biosimilar Remicade may be more aggressive than some were anticipating, although educating physicians about the use of biosimilars arguably remains the biggest potential barrier to uptake.

Little surprise then that a handful of prominent biotech developers in the US market have formed a coalition designed to provide improved patient access to biosimilars. FirstWord will be taking a closer look at the new forum next week.

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