Friday Five – The pharma week in review (24 July 2020)

COVID-19 vaccine data accumulates

As of this week, there is compelling data to plausibly suggest that three advanced COVID-19 vaccine programmes could work at preventing infection altogether or significantly reduce the burden of disease. The caveat – there is no guarantee that any of the candidates will work in late-stage studies.

See Early data show AstraZeneca, Oxford vaccine elicits dual immune response against SARS-CoV-2 and Pfizer, BioNTech's mRNA-based COVID-19 vaccine shows promise in second study.

This would appear to be make the inevitable comparison of promising data for each of the three vaccines (being developed by AstraZeneca/University of Oxford, BioNTech/Pfizer and Moderna) somewhat futile; more so as each development team has used different assays to measure increases in neutralising antibodies.

Most pertinent of all is the reality that the world would be best served by all three of the vaccines working, potentially enabling use of one followed by another if this was to represent the best vaccination strategy (i.e. use of both an adenovirus vector vaccine, such as AstraZeneca/Oxford’s, and an mRNA vaccine, such as BioNTech/Pfizer’s or Moderna’s).

That we have three candidates ready for late-stage evaluation six months on from the pandemic starting should not be overlooked.

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To profit or not – that is the question

Governments are moving concurrently to secure access to these vaccines in the event they are shown to work, with both the UK and US authorities confirming this week that they have pre-ordered a supply of BioNTech and Pfizer's mRNA candidate. The US will pay just shy of $2 billion for 100 million doses, whilst BioNTech and Pfizer will supply 30 million doses to the UK government for an undisclosed amount.

Pfizer expects to make a profit on supply of the vaccine, but said the price it will sell for will reflect the "extraordinary times" of the pandemic, a hearing of the US House Energy and Commerce Oversight and Investigations Subcommittee was told this week. Executives from Moderna and Merck & Co. indicated that they will also set prices exceeding their manufacturing costs, while AstraZeneca and Johnson & Johnson confirmed that if approved, they will sell their COVID-19 vaccines at the cost of production, at least until the COVID-19 pandemic subsides.

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Second-quarter earnings reveal pandemic impact

As expected, impact of the COVID-19 pandemic was felt by the pharmaceutical industry during the second quarter of 2020.

See COVID-19 Physician Views: New treatment starts, drug switching remain commercial casualties of the pandemic.

At the time of writing, four large cap bio-pharma companies had released their Q2 results, with each reporting a sequential decline in branded drug sales versus Q1 (see chart below).

Roche's pharmaceutical sales fell from $13.2 billion in the first quarter to $11.8 billion in the second, a sequential decline of 10.8%. Year-on-year, its second--quarter sales fell 6% with revenue in May hit particularly hard at the height of the pandemic, suffering a 15% contraction versus pharma revenues recorded in May 2019.

Analysts at Bernstein noted "Roche is one of the more COVID exposed pharma names given the heavy physician administered product base, but given the essential nature of their medicines, we are not overly concerned."

Each of the companies to have reported their Q2 results so far has suggested that a recovery in sales has become apparent since June, whilst sequential growth performances for Biogen and Novartis need to be caveated by their acknowledgement of stocking tailwinds in Q1 to the tune of approximately $100 million and $400 million, respectively. Johnson & Johnson also previously confirmed an undisclosed uptick in Q1 sales due to customer stockpiling.

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Biogen faces the crowd

Biogen's second--quarter earnings call was notable for discussion about the impact of COVID-19 taking a back seat to other matters. The company had spooked some investors by announcing (after the markets had closed on Tuesday) that IQVIA's Michael McDonnell will replace Jeffery Capello as chief financial officer next month.

Coming weeks ahead of a decision by the FDA on whether or not to accept Biogen's recently filed regulatory application for the investigational Alzheimer's disease treatment aducanumab – which looks increasingly like a 'make or break' opportunity for the current senior management team – analysts were looking for more clarity about the reshuffle on Wednesday's earnings call, which was not forthcoming.

Biogen also refused to clarify whether they have used a priority review voucher as part of their regulatory application for aducanumab, which would shorten the FDA's review time to around six months.

Hope that the FDA will accept a regulatory application and then ultimately approve the controversial drug has become increasingly desperate, with key brands in Biogen's marketed portfolio facing revenue declines. The company recently lost a district court battle that could pave the way for generic versions of its multiple sclerosis treatment Tecfidera to enter the market earlier than previously expected. On Wednesday, management conceded that adoption of a follow-up agent called Vumerity has been slower than expected.   

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Wannabe pharma disruptor EQRx makes some public in-licensing moves

One of the more intriguing business models being pursued in pharma was unveiled in January when the private start-up EQRx emerged.

Backed with initial funding worth $200 million, EQRx describes its approach as 'fast follow' medicine, which focuses on the development of treatments that "emulate the biological function of existing drugs, but have unique enough molecular structures to garner their own patent protections."

Whilst this concept is not new, argues EQRx – citing Pfizer's Lipitor and AbbVie's Humira as highly successful examples of such a strategy – "no company until now has used it as a means of competing on price." The ultimate goal is to develop medicines that are equally as effective as or better than marketed drugs in the same class, but priced as much as two-thirds lower.

On Thursday, EQRx said it has in-licensed two investigational agents: G1 Therapeutics' Phase I/II CDK4/6 inhibitor lerociclib (for the potential treatment of ER+/HER2- breast cancer) and the Phase III EGFR inhibitor almonertinib (for EGFRm positive non-small-cell lung cancer), which is being developed by Hansoh Pharmaceutical. FirstWord understands that EQRx has also in-licensed a number of other undisclosed assets since January.

At this stage, EQRx is not sharing further information on its development plans for either compound or whether it perceives them as offering a comparable or superior efficacy/safety benefit in comparison to drugs in these classes that are already on the market. FirstWord spoke to G1 Therapeutics four years ago about their perception of lerociclib's best-in-class potential, owed in part to a shorter half-life, which would allow continuous dosing (something that is not the case for Pfizer's market leading CDK4/6 inhibitor Ibrance). However, Phase I/II data presented last year showing median progression free survival of 15 months for lerociclib is in-line with marketed drugs in class.

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