4
KEY INDUSTRY TRENDS THAT WILL IMPACT BIOPHARMA IN 2015
by
Sy Mukherjee
BioPharma
Dive covered the 33rd annual JP Morgan
Healthcare Conference and the 7th annual Biotech Showcase. At JPM15 one thing is clear: Less than a full month into the new year,
biopharma professional and executives are already having trouble stifling
their enthusiasm about the industry's prospects over the coming years.
There
was also plenty of news and insight to come out of the events, panels, and
discussions, including updates on clinical trials, drug launches, partnerships,
and big-time announcements from payers that promise to heat up the
already-scorching pharma marketing wars. Here are the most important things you
need to know from this year's JP Morgan and the Biotech Showcase conferences:
1. Express Scripts and biosimilars: The pricing wars will reach Biblical
proportions
It's
been a distinct possibility ever since Express Scripts made its stunning
decision to strike an exclusive deal for AbbVie's hep C combo Viekira Pak
over Gilead's Sovaldi and Harvoni (in exchange for a significant discount)—but
Scripts CEO George Paz left no room for doubt early on during JPM15 that
hepatitis C therapies were just the first major battle in the new pricing
wars.
Speaking
to attendees from his perch as the head of the largest benefits manager in the
U.S., Paz told JPM15 that Express Scripts will continue
to pursue a cost-centered strategy, and that PCSK9s and cancer drugs
will be among the next major therapeutic classes on the price-chopping block.
"The big one, of course, is these cholesterol-lowering drugs that are
coming to market," he said.
As
BioPharma Dive noted earlier, this means that the biggest new and
anticipated launches of this year, including PD-1 inhibitors like Keytruda and Opdivo and PCSK9 therapies from Regeneron/Sanofi, Amgen, and Pfizer, will have to duke it out in
the payer marketplace. Since Express Scripts' original decision, payers have
splintered their support for pricey therapies, with benefits manager CVS and insurance
companies such as Anthem and Aetna striking deals with Gilead while
AbbVie picked up a partnership with AIDS insurance programs.
Several
companies explicitly mentioned this pricing dynamic during their presentations
and it was the focus of many panel sessions. For
instance, Regeneron CEO Leonard Schleifer told
investors that Sanofi/Regeneron's LDL-lowering PCSK9
candidate alirocumab would have an advantage
over Amgen's evolocumab because the latter product will not have
as many dosing options. In an exclusive interview with BioPharma Dive,
Sanofi EVP Pascale Witz said that the company has incorporated
pricing and access into its marketing strategy for alirocumab from the
beginning, and that Sanofi has already been in talks with payers and aims to launch
an education campaign for doctors and patients.
And
other companies that are prepping for the price wars? For one,
Kite Pharma CEO Arie Belldegrun told
Reuters during an interview at JPM15 that the company is already
planning for discussions with payers over the cost an investigational
cancer immunotherapy that may cost as much as $300,000 per treatment,
even though Kite has yet to launch its biggest clinical trials.
This
is all a manifestation of a new era in which payers wield an increasing amount
of power, as Avalere Health CEO Dan Mendelson said during a lunch plenary
session last week. With the continued implementation of the Affordable Care Act
and the fiscal imperative of controlling national health care spending, drug
companies must increasingly weigh bottom lines and margins against patient
access and payers' ability to simply strike a deal with a competing
company—potentially even if it's for an inferior product.
Biosimilars
could also add to the cost-cutting equation. But the question is: By how much?
Novartis/Sandoz is likely to win final FDA approval for its biosimilar of
Amgen's Neupogen soon, setting the stage for more generic biologics' approval
under the new 351(k) pathway. Initial estimates have pegged drug cost savings
at 20-30% in other countries that already have approved biosimilars, and one
RAND study estimated that the U.S. could save $44 billion over the next decade
thanks to the products.
What
remains to be seen is who, exactly, will garner most of those savings. In other
words, will biosimilars save patients money, or just payers? We'll know soon
enough.
2.
The lines between biotechs and pharmas will continue to blur
The
worlds of biotech and big pharma have been on a collision course, and many
conference attendees predicted that trend to continue, with last year's massive
valuations and blockbuster deals likely to continue into 2015 and beyond.
There
was plenty of evidence of that during the conferences themselves. For instance,
red-hot mRNA biotech firm Moderna won another $50 million in funding from
pharma giant Merck early last week, adding to its gargantuan haul from big-name
companies like AstraZeneca and Alexion.
Continued
consolidation and collaboration between the industries even led some investors
to question if a truly out-of-left-field merger or acquisition could be on the
horizon. During one JPM breakfast session, Aisling Capital's
Dennis Purcell pondered whether a big biotech like Gilead might make a
move for a big pharma like Bristol-Myers Squibb or Eli Lilly sometime
soon.
3.
Big players will enhance their most promising platforms and franchises in
surprising ways
Drug
development watchers have plenty to look forward to in the coming years as
several major pharma companies announced they would be enhancing existing platforms—some
in rather surprising ways.
One
major announcement came from AbbVie, which said that it still wasn't quite done
with its flagship Humira, the current best-selling drug in the world. The
company is pursuing new indications for the therapy in phase III studies and
could announce data later this year. And having forcefully entered the hep C
fray, AbbVie announced that the firm would potentially unveil data from phase
IIb trials of the investigational HCV compound ABT-493 at
the AASLD meeting later this year, with the ambitious goal of developing a
once-daily, pangenotypic HCV regimen.
Gilead
and Pfizer also told attendees that they would be exploring franchise
expansions for some of their most anticipated and well-regarded products. The
former company is testing out cocktails of Sovaldi with other investigational
compounds (GS-5816 and GS-9857) in phase III and II studies, respectively (the
former for all virus genotypes). And as if there weren't already
enough PCSK9 drama out of the conferences, Pfizer told
Reuters it is pursuing a "franchise" approach to its
own PCSK9 line, including plans to begin human trials this year on a
new oral drug that directly targets PCSK9 and is being dubbed a
"PCSK9 vaccine."
4.
Is biotech a kinder, gentler bubble?
This
was one of the most important questions being debated between investors and
pharma execs at JPM: Is biotech a bubble? And if it is, just how worried should
the industry be about the inevitable pop?
Experts
seemed to widely agree that the sector is, in fact, over-valued. During a
breakfast panel hosted by FierceBiotech last Tuesday, Abingworth partner
Kurt von Emster said that he was "reminded a little bit of '99"
when it came to biotech stocks and valuations.
But
what was striking about the bubble-related conversations is that no one seemed
particularly worried despite a fairly widespread consensus that there's been
quite a bit of speculation underway in the industry. von Emster himself said
later on during the panel that there is more cash, more knowledge, and more
collaboration in biopharma these days, and that many of the products coming out
of the sector actually deserve the hype considering patient outcomes. "So
I don't see a huge crash," said von Emster. "We're going to see
companies we never thought of in spaces we've never heard of."
Experts
at several other panels, such as Merck EVP Iain Dukes and Canaan Partners'
Stephen Bloch, echoed those sentiments, pointing out that biotechs present
a much higher value proposition than a lot of other technology-related
companies with sky-high valuations (particularly Internet companies). At the
final lunch plenary session of the Biotech Showcase last Wednesday, Atlas
Venture's Bruce Booth put a finer (and more quantitative) point on the
argument, asserting that venture capital in biotech has a lower loss ratio
than almost any other sector and still represents a safe investment.
Source: BioPharmaDIVE
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