The Business Cocktail

Novartis takes on Regeneron with AMD drug that needs fewer doses than Eylea

Last year, U.S. sales of Regeneron’s drug to treat age-related macular degeneration (AMD) came in at $3.3 billion—68% of the company’s total revenues—so it’s no wonder investors have been expressing some concerns about potential rivals moving through the pipeline. Among those hoping to cut into Eylea’s market is Novartis, which is in phase 3 testing with its AMD candidate, RTH258. And if the latest data from those trials is any indication, Regeneron investors have good reason to worry. Novartis announced that in two head-to-head trials, RTH258 was as effective as Eylea, but in more than half of patients it could be injected in the eye every three months, versus monthly or every two months for Regeneron’s drug. The rate of side effects was comparable for the two drugs. Some analysts predicted Novartis would gain a competitive edge over Regeneron and the other major player in the field, Roche’s Lucentis.

Hospira recall of vials adds to woes of sodium bicarbonate shortage

Citing sterility concerns, Hospira, a subsidiary of pharma giant Pfizer, is voluntarily recalling vials used to inject sodium bicarbonate during surgery and in critical events. The nationwide recall adds to the ongoing shortage of the drug. The voluntary recall was announced on the FDA’s website and covers sodium bicarbonate and succinylcholine chloride vials that were found to have microbial growth. Such contamination can lead to sepsis. As part of the action, 42 lots of sodium bicarbonate vials were recalled along with five lots of succinylcholine chloride. Hospira said it is unaware of any reports of adverse events associated with the drug. In a separate statement, the regulatory agency said it is aware of the ongoing shortage situation affecting several injectable drugs manufactured by Hospira. Those include sodium bicarbonate injection (vials and syringes), dextrose 50% injection (vials and syringes), as well as emergency syringes of other drugs, including epinephrine, calcium chloride and atropine sulfate.

Takeda wraps up construction of new $111M solid dosage plant near Berlin

Japanese pharmaceutical giant Takeda said it has completed construction of its new $111 million manufacturing plant on the outskirts of Berlin in Oranienburg, Germany. Construction of the facility was announced by Takeda in 2014 as part of the company’s plan to streamline the global manufacturing of its solid dosage form pharmaceutical products from its plant in Osaka to the Oranienburg facility and Hikari plant in Japan, the company said. The 21,400-square-meter Oranienburg plant is scheduled to open by the end of the year and has already created 180 new jobs. Production at the new facility is expected to supply about 100 countries globally and will include drugs used to treat diseases for in the areas of gastroenterology, central nervous and cardiovascular systems. Germany has been the focus of a lot of Takeda manufacturing investment. In November, the drugmaker said it would “immediately” begin construction on a $106 million plant at its manufacturing site in Singen, Germany. That plant, which is expected to be completed in 2019, will focus on Takeda’s big push into a vaccine to treat dengue.

FDA bans imports of Ipca Lab drugs

The FDA has banned the import into the U.S. of drugs manufactured at three facilities in India operated by Ipca Laboratories as a result of ongoing concerns about data manipulation and falsification of records. The facilities include Ipca’s API plant in Ratlam, its formulations plants in Pithampur in Madhya Pradesh and Piparia in Silvassa, which have been under U.S. regulatory scrutiny for several years. The company halted product shipments from the trio of plants after the FDA put them on an import alert list in 2015 following inspections conducted in 2014. In the stock exchange filing, Ipca said it received notification from the FDA that drugs manufactured at three facilities won’t be allowed into the U.S. until the company can demonstrate that products from the sites are in compliance with prescribed norms. The news sent Ipca’s stock down 15% last Friday.

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Sanofi investing around $2B into biologics production over next 3 years

Following the recent approval of two new biologics, Dupixent and Kevzara, and a pipeline stuffed full of large-molecule drugs, Sanofi will invest as much as €2 billion on its biologics manufacturing network over the next several years. The disclosure came today during a media event and was confirmed by a spokesman for the French drugmaker. Philippe Luscan, executive VP of global industrial affairs, said at the event that the company will plow €600 million ($673 million) a year on its biologics production over the next two to three years. The investments will reinforce three major hubs in the U.S., Germany, and France, where Sanofi is doing the production of biologics like monoclonal antibodies (mAbs). The investments will be for capacity expansion and hiring at different sites in those hubs. With about 72% of its R&D projects made up of to biologic drugs, many made from cells, the French drugmaker, like its peers, has shifted its spending to concentrate on production of these more complex drugs.

ICER pitches lower price for Amgen PCSK9

PCSK9 drug makers and their pharma peers have hit out at the Institute for Clinical and Economic Review, arguing that the self-appointed cost watchdog uses flawed methods to assess new medications. Now, ICER is going even further on its claim that Amgen’s new cholesterol fighter isn’t worth what the company’s charging. ICER previously determined a value-based price benchmark of $5,404 to $7,735 for Repatha, compared with a list price of $14,100 per year. On Wednesday, based on new cardiovascular outcomes data Amgen released since that assessment, the nonprofit said that target is too high. Amgen has said its net price after rebates ranged from around $7,700 to $11,200 annually, which it sees as good value for money. The group’s previous assessment, released in 2015, assumed a mortality benefit for the med that was not seen in the much-anticipated Fourier trial results unveiled by Amgen at the American College of Cardiology annual meeting in March.

University of Maryland team lands $6M in NIH funding for novel HCV vaccine

Next-gen hepatitis C drugs, notably Gilead’s Sovaldi and Harvoni, have cured many patients in the last few years, but we’re still short of a prophylactic vaccine. Hoping to change that are scientists at the University of Maryland, who have secured funding from the NIH to work on a new candidate. The National Institutes of Health awarded the school’s Institute for Bioscience and Biotechnology Research (IBBR) $6 million to work on a hep C vaccine from so-called structure-based design over the next five years. Like many viral and bacterial pathogens, hep C mutates and evolves rapidly to evade the human immune system, a feature that poses major challenges for vaccine development, explained Thomas Fuerst, Ph.D., director of IBBR and lead principal investigator on this NIH-supported study. These so-called smart viruses could develop immunology decoys to trick the body while hiding some critical features deeper inside. By re-engineering vaccine immunogens at the atomic level, a structure-based design could stabilize the antigen, expose its key epitopes and disable other distracting features, thus achieving optimal responses.

Pfizer, Roche cancer drug pricing under investigation in South Africa

Two of the world’s top drug companies and a local pharma are in the hot seat in South Africa as competition officials launched a probe into “excessive pricing” on lifesaving cancer meds. South Africa’s competition commissioner Tembinkosi Bonakele announced that his agency would probe pricing on cancer drugs from Roche, Pfizer, and Aspen Pharmacare. Roche is under investigation for breast cancer drug pricing, according to the commission, while Pfizer’s lung cancer drug pricing is included in the inquiry. The probe comes at a time when drug pricing has become a contentious issue in the U.S. and patient advocates debate the varying cost of drugs in countries around the world. In announcing the probe, the South African Commissioner pointed to patents as a driver of high drug prices, echoing concerns in developing countries such as India.

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AstraZeneca offloads headache drug Zomig to Grünenthal to raise $300M cash

AstraZeneca had some positive news to announce at ASCO about its PARP Lynparza for treating breast cancer, but all in all, the U.K. company continues to struggle and so will sell yet another asset to raise cash while CEO Pascal Soriot works to right the ship. The U.K drugmaker today said that it has a deal to sell Germany’s Grünenthal rights to its migraine treatment Zomig for all markets outside of Japan. AZ will get $200 million when the deal is done and up to $102 million in additional payments if targets are hit. The arrangement includes rights to the drug in the U.S. where it has been licensed to Impax Pharmaceuticals since 2012. Impax will continue to market Zomig in the U.S. AstraZeneca will continue to manufacture and supply it, during the transition.  Grünenthal’s experience with pain drugs puts them in a good position to serve patients that rely on the headache med, Mark Mallon, executive VP of global product & portfolio Strategy at AstraZeneca said in a statement.

Pfizer’s $14B Medivation deal’s now a cautionary M&A tale, thanks to ASCO

The annual ASCO meeting often throws new light on old drugs—and old dealmaking. This year, it’s last summer’s most ballyhooed M&A deal—Pfizer’s $14 billion buyout of Medivation—that doesn’t look so impressive anymore, thanks to data rolled out over the weekend. Big pharma and big biotech bidders swarmed on Medivation back then, partly because of its pipeline med talazoparib, a PARP inhibitor then-Medivation chief David Hung touted as a best-in-class med. The other big draw was Xtandi, the blockbuster-to-be prostate cancer drug, and its present-day cash flow. The two together added up to offers from Pfizer and Sanofi, plus a range of other bidders rumored to include Amgen and Gilead Sciences. Thing is, Xtandi competes head-to-head with Johnson & Johnson’s Zytiga, and while Xtandi put up disappointing data in a study that might have helped grow sales, Zytiga racked up a couple of study wins at ASCO that analysts now say could help the J&J med zoom ahead on the indication front.

Takeda starts work on €40M plant to produce multiple myeloma drug Ninlaro

Japanese drugmaker Takeda has started work on a new plant to produce its oral multiple myeloma drug Ninlaro, a first-to-market active proteasome inhibitor, and expects the facility will be ready to ship the potential blockbuster next year or in early 2019.  The company says construction begins this month on the €40 million ($42.8 million) facility at its Grange Castle site in Dublin to manufacture Ninlaro. The plant is slated to be completed in the second quarter of 2018 and be operational to ship secondary packaged product in the second half of fiscal 2018, which ends on March 31, 2018. Ireland development authorities boasted in December that Takeda was expanding in the country, but the drugmaker is now offering up more details on the project. It said the 5,672-square-meter (61,053-square-foot) production facility will house the API, formulation, primary and secondary packaging and quality-control processes. The company will add 40 jobs at the site as a result of the expansion.

Germany’s doc payment transparency effort relies on honesty

In the U.S., the Open Payments database lays out pharma’s payments to doctors for all to see. In Germany, where disclosure isn’t mandated as it is in the U.S., a nonprofit is trying transparency based on the honor system. German doctors will be able to voluntarily disclose contributions from pharma in a database compiled by the nonprofit journalism organization Correctiv, according to Germany’s DW. About 71,000 doctors in the country received €575 million in cash or in-kind contributions from the drug industry last year, a Correctiv investigation found in December. That’s far less than the $7.52 billion that drug and device makers funneled to doctors and healthcare providers in the U.S. in 2015, the most recent data available, but slightly more than the £345 million that changed hands in the U.K. Making those payments public at the doctor-by-doctor level is important, advocates say, because studies show financial relationships between drug makers and doctors can affect physicians’ prescribing habits.


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Tesaro and its new med Zejula are on the block, but bidders aren’t rushing in

Just ahead of the year’s biggest download of cancer data, the maker of a closely watched drug has put itself up for sale, according to The Wall Street Journal. That’s Tesaro, whose PARP inhibitor Zejula won FDA approval in March. That med launched soon after at a price of $118,000 per year, which Tesaro touted as lower than its head-to-head rivals in ovarian cancer, AstraZeneca’s Lynparza and Clovis Oncology’s Rubraca. Analysts have pegged Zejula, or niraparib, as one of 2017’s biggest launches, with 2022 sales of $1.9 billion. That’s an enticing prospect for bigger companies looking to beef up their oncology businesses, but that very fact could make it an expensive prospect, too. Thanks to a big stock runup since Tesaro rolled out top-line Zejula data last July, the company’s market value as of Thursday morning was $8 billion. Tesaro has requested offers from a variety of potential bidders over the past few weeks—but they also say potential acquirers aren’t exactly falling over themselves to pursue a deal. Price is potentially one reason, obviously. Another? Would-be buyers might be waiting for the American Society of Clinical Oncology meeting this weekend, where AstraZeneca will present data on Lynparza and Tesaro will post data on a Zejula combination with Merck’s blockbuster PD-1 therapy Keytruda. Still another reason for the supposedly lukewarm interest: Pfizer’s $14 billion deal for Medivation—and its PARP med talazoparib—has come in for criticism lately.

Mylan lowballed Medicaid on EpiPen by $1.27B

Mylan quickly agreed to a $465 million settlement with the U.S. government last fall in a move to put some of its EpiPen problems in the past. Now, it appears that figure is far short of taxpayer harm resulting from the injector’s misclassification on Medicaid, news that comes as the deal has yet to be finalized. The Department of Health and Human Services’ Office of Inspector General reports that EpiPen’s Medicaid misclassification cost taxpayers $1.27 billion from 2006 to 2016, far exceeding the U.S. government’s settlement agreement with the drugmaker. Under heavy scrutiny for years of price hikes on the lifesaving epinephrine injection, Mylan struck a deal with the government to resolve fresh allegations of Medicaid misclassifications back in October. Pushing to learn more about the misclassification, Sen. Grassley on Wednesday said Mylan still isn’t cooperating with the investigation. Mylan is withholding communications between it and the Centers for Medicare and Medicaid Services, which notified the company several times about the misclassification, according to the senator.

Ohio sues drugmakers for marketing fraud

After seeing drug overdoses become the state’s leading cause of accidental deaths, officials in Ohio have had enough. In a new lawsuit filed on Wednesday, Ohio Attorney General Mike DeWine is going after Teva, Allergan, Johnson & Johnson, Purdue and Endo for alleged “fraudulent marketing practices” on powerful opioid painkillers. Ohio’s 101-page lawsuit says the pharma companies, individually and together, broke pharma marketing rules and “helped unleash” an opioid epidemic that has had “far-reaching financial, social, and deadly consequences” in the state. The companies did that, according to the suit, by spending millions to widely market the meds while downplaying risks. Similar to a host of other lawsuits filed against opioid makers, Ohio’s suit says that to push their painkillers, the companies borrowed a page from the “Big Tobacco playbook.” They worked to convince “key opinion leaders” and professional societies of the benefits of opioids in treating chronic pain. For its part, Teva said it’s reviewing the complaint and can’t comment until that review is complete. Endo said it couldn’t comment on ongoing litigation; Allergan also declined to comment.

ATUM, Horizon Discovery Announce cross-license agreement

ATUM and Horizon Discovery have announced that they have signed a cross-license agreement for Horizon’s CHO SOURCE platform and ATUM’s vector technology to speed development of highly productive stable cell lines for drug development. ATUM has licensed Horizon’s CHO SOURCE platform, including the Glutamine Synthetase (GS) Knock-Out CHO K1 (Chinese hamster ovary) line, and will use its proprietary Leap-In® Transposase Technology to offer cell line development services.  Horizon has exclusively licensed a vector suite developed by ATUM for the CHO SOURCE platform, to provide a complete cell line solution to its customers. Together, these technologies enable expression of complex biologics for customers of both ATUM and Horizon. ATUM is also offering Horizon customers a no-fee evaluation license for the transposase system.


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Merck’s Remicade discounting put squeeze on biosims—and broke U.K. law, officials say

Under biosimilar assault in Europe, Merck rolled out cut-rate deals on Remicade to defend its brand from cheaper options, then-brand-new to the market. Now, the U.K.’s competition authority claims the pharma giant “broke competition law” by lowering the med’s price. In a statement of objections issued on Tuesday, the U.K.’s Competition and Markets Authority (CMA) says Merck abused a dominant position through a discount scheme for Remicade that was likely to restrict competition from ‘biosimilar’ versions of infliximab that were new to the market. Merck is known as MSD outside of the U.S. Discount deals are among the tactics Big Pharma is using to counter competition from biosimilar rivals—and increasingly so, as more of the knockoff drugs launch. Johnson & Johnson, now facing a Remicade biosimilar in the U.S., has said its own aggressive deals with payers will help the brand preserve sales. That sort of attempt is possible with biosimilars, as opposed to ultra cheap small-molecule generics, because the more complex knockoffs tend to be priced around 15% lower than the brand, within the realm of payer deal making.

Sanofi, Regeneron set Kevzara up for tough rheumatoid arthritis turf battle with $39K list price

Sanofi and Regeneron just added another building block to a nascent immunology franchise expected to bring in $5 billion or more by 2022. But to get there, their new Kevzara will have to go up against a host of other rheumatoid arthritis meds already on the market—and a few still on their way. One way Kevzara can do that is through a lower price. And Kevzara will have a list price of $39,000 per year, the companies say, 30% lower than the two most widely used TNF-alpha drugs, which will be among its chief competitors. Kevzara’s nod comes more than six months after the FDA turned back the drug on manufacturing problems at a Sanofi plant where drugs are filled and finished. The two companies worked with the agency to fix them, and after a successful inspection earlier this year, the Kevzara approval was widely expected. Kevzara (sarilumab) is Sanofi and Regeneron’s second entry into the immunology field, after the approval of Dupixent, a treatment for severe eczema, in March.

Novartis to sever 250 U.S. workers days after announcing 500 cuts in Switzerland

Just days after announcing plans to ax 500 jobs in Switzerland, Novartis said another 250 jobs will be eliminated in the U.S., most at its headquarters in New Jersey with some of those headed to a service center in India.  The company filed a WARN notice with the state indicating that 204 jobs would be trimmed from its East Hanover, New Jersey, operations effective July 28. The company confirmed the cuts in an email today, saying the other 45 or so jobs will be eliminated from various U.S. locations including Fort Worth, Texas, and Cambridge, Massachusetts.  The job losses follow the company’s creation last year of the Global Drug Development function intended to streamline drug development across all of its units, except for its Alcon products division. The company is also adding and subtracting jobs around its global headquarters in Basel, Switzerland, but on a larger scale.

Teva officially puts women’s health, cancer on divisions on sale

he Teva divestment rumors are true. The company plans to shop its women’s health and European oncology and pain businesses to potential buyers, hoping to snag some cash to pay down its debt. As interim CEO Yitzhak Peterburg told investors on the company’s first-quarter conference call, Teva expects the sale processes to “commence in the coming weeks,” and the Israeli drug maker thinks it can close out both transactions by the end of the year. Proceeds from those sales—as well as additional asset sales to come—will be “significantly in excess” of the $1 billion Teva previously predicted. Unfortunately for Teva’s workforce, though, as the company continues to look for ways to wring out costs, more jobs hang in the balance. Since the Allergan generics deal closed last summer, Teva has reduced headcount by approximately 5,000 people and expect further reductions through the end of 2017.

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Key Humira patent goes down via IPR—but biosims makers shouldn’t celebrate yet

One of AbbVie’s Humira patents bit the dust late Tuesday, marking a win for biosimilars makers. But they still have a long way to go before they’ll really be able to celebrate. The U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) handed down a verdict in Coherus BioSciences’ favor, striking down AbbVie’s ‘135 methods patent on its top drug after an inter partes review. Barclays analysts had previously referred to the shield as “one of the cornerstones of the Humira IP estate,” which AbbVie needs to keep intact if it wants to keep copycats away from Humira’s billions in revenue. AbbVie’s ‘619 patent, which is also being challenged through the IPR process, is still several months away from a decision, and all these IPR decisions are subject to appeal. Not only this, AbbVie has already prevailed in the IPR space with a few formulations patents, including some that expire in 2022. With those factors at play, either a biosimilar needs to wait till 2022, or try to work around the upheld patents.

Teva laying off 500 at struggling sterile injectables plant in Hungary

Teva is giving up on its sterile injectables plant in Godollo, Hungary, that halted production last year after the FDA found manufacturing failings. The generics maker is laying off hundreds of workers in the next few months and will sell or close the plant by the end of next year. A Teva spokesperson confirmed reports citing its plans to shed the facility on the outskirts of Budapest. About 500 workers are at risk of losing their jobs as the company winds down production at the site with the intent of selling or closing the plant by the end of 2018. The reduction is part of the company’s global network operations strategy to align production capacity with market and patient demand globally. The announcement comes just weeks after Israeli media reported that the financially struggling and management-challenged drug maker was looking to cut up to 6,000 jobs.

GlaxoSmithKline aims for the whole consumer-health portfolio with $10.3B Novartis JV buyout

By March 2018, GlaxoSmithKline will have the option to buy out Novartis’ stake in the pair’s industry-leading consumer health JV. And it may already be getting prepared. The British drug maker is preparing for an £8 billion ($10.3 billion) offer for its partner’s 36.5% share. Industry watchers say Novartis could use this to help fund a mega takeover—and word is, the potential target is AstraZeneca. The one-two deal punch may seem far-fetched, with Novartis pledging to eschew such enormous mergers. But the GSK consumer JV move lines up with the company’s previous statements, and its new CEO, Emma Walmsley, headed up that venture until her promotion in March. The news follows just a couple of days after one key GSK investor, Neil Woodford, walked away from the stock. Glaxo has said it aims to hang onto the business, and confirmed that strategy on the company’s first-quarter earnings call.

Patheon, built on a series of acquisitions, gets acquired by Thermo Fisher in $7.2B deal

Thermo Fisher Scientific is acquiring Patheon, which has been at the center of the consolidation that has swept through contract manufacturing in recent years, in a deal valued at $7.2 billion. Waltham, Massachusetts-based Thermo Fisher announced late Monday it would pay $35 a share for Patheon, a sum that amounts to about $5.2 billion, and assume another $2 billion in debt for the Durham, North Carolina-based CDMO. Thermo Fisher said it was a logical deal for a company that provides services and equipment to the biopharma industry, and offers it entry into the high-growth contract manufacturing business—a market which it estimated to be worth about $40 billion. Patheon went public only last summer, but had revenues of about $1.9 billion in its last fiscal year, compared to the $18 billion in sales Thermo Fisher racked up in 2016. Thermo Fisher expects the deal to be “immediately and significantly accretive” adding about $0.30 a share to its earnings in the first full year on the books. It also expects to realize about $90 million in cost savings by the third year and $30 million in adjusted operating income benefits.

Johnson & Johnson’s new black-box warning on Invokana

No company in a competitive market wants to land a serious new safety warning. But that’s exactly the position Johnson & Johnson is in with Type 2 diabetes med Invokana. The FDA recently concluded that the SGLT2 drug—along with related combos Invokamet and Invokamet XR—caused an increased risk of leg and foot amputations, and it mandated that J&J update its labels accordingly. Regulators are requiring the New Jersey drug maker to add a black-box warning, the agency’s most serious, to describe the risk. The FDA’s decision follows a MedWatch safety alert from this time last year, which regulators issued after finding that patients in the Invokana arms of J&J’s two cardiovascular outcomes studies for the med were about twice as likely to experience amputations as were those in the placebo groups. J&J’s Janssen unit, for its part, said in a statement that “patient safety is our highest priority” and that it was “working with FDA to include this information in the prescribing information” for Invokana.


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Shadowed by nearly $30B in debt, Valeant’s $50M guidance raise looks pretty paltry

Faced with a crippling pile of debt, Valeant on Tuesday slightly increased its 2017 earnings guidance, one small positive development as it works to rebound from its noted downfall. The Canadian drugmaker reported first-quarter revenues of $2.11 billion on Tuesday, missing FactSet consensus estimates of $2.19. But the company sees things going well enough to increase its 2017 earnings guidance to between $3.6 and $3.75 billion, slightly increased from a previous range of $3.55 billion to $3.7 billion. The move triggered a 20% run-up in share price by mid-morning Tuesday, but at least one analyst urged caution. Wells Fargo’s David Maris pointed out that “that the $50 million raise is relative to approximately $28.88 billion of total debt.”

Sanofi vows to limit 2017 price hikes to 5.4% as part of new policy

Sanofi may be late to the pricing-pledge party, but it’s come up with some benchmarks that could have other drugmakers defending their own. Rather than limiting price hikes to less than 10%, the French drugmaker promises to keep any price increases at or below an official health inflation measure that’s projected to hit 5.4% in 2017. The company will also report numbers on its aggregate price increases annually, disclosing hikes to gross prices and net prices, which reflect rebates and discounts granted to payers. Sanofi’s policy follows more than a year of intense scrutiny on pharma pricing in the U.S. as high-profile hikes turned a spotlight on the entire industry. Prompted by leaps in the cost of Mylan’s EpiPen, a set of Valeant Pharmaceuticals’ bought-in drugs, and, notoriously, a massive price hike on Daraprim engineered by then-Turing Pharmaceuticals CEO Martin Shkreli.

Top pharmas team with Express Scripts to gin up savings for cash-paying patients

As pharmacy benefit managers and drug makers continue to clash over their respective roles in controversial drug-price hikes, eight top pharmas and leading PBM Express Scripts have teamed up to offer cheaper meds to patients forced to pay cash for their prescriptions. Through a collaboration that comprises drug companies, Express Scripts, 40,000 pharmacies and tech partner GoodRx, the program is designed to make drugs affordable for patients with high-deductible insurance plans, or no insurance at all. The effort could help quell public outcry over drug pricing by limiting the hit to patients’ pocketbooks. For instance, Mylan’s EpiPen pricing scandal hit after parents buying back-to-school EpiPens faced big increases in their out-of-pocket costs—and those parents took to social media to air their grievances. So far, the Inside Rx program has attracted a who’s who among drugmakers, mostly weighted toward those headquartered outside the U.S.

PhRMA expels 22 members with new R&D rules as it works to burnish its image

Industry lobbying group PhRMA has cleared its decks of nearly two dozen members as it tries to distance itself from those companies most likely to catch heat over drug pricing practices. While not all of those who were dropped have price-pushing reputations, the practices of some are particularly notorious for their methods. The organization did this with new bylaws that mandate members meet minimum R&D investment requirements, a move that was expected to force out smaller companies whose business model is built more on buying drugs and then jacking up prices significantly. The move comes as the lobbying group works to portray its membership as serious drugmakers that are investing heavily in innovative new medications.

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Merck beats Q1 estimates as Keytruda sales double

Merck is the victim of its own success, judging from its first-quarter report. The company beat sales and earnings estimates, and it upped its guidance for the year, despite some significant suffering from generic competition. Sales of its hit immuno-oncology drug Keytruda skyrocketed 134% to $584 million during the quarter. Merck’s sales were up 1% to $9.4 billion and its net income was flat at $2.4 billion or 88 cents per share on a non-GAAP basis—beating the consensus estimate of 82 cents. Merck is combining Keytruda with other drugs in multiple ongoing clinical trials. And if Merck gets the FDA’s approval, its market for Keytruda could significantly expand to include all patients with nonsquamous NSCLC sans EGFR or ALK mutations.

Looking for a reputation rehab, Valeant is eyeing a name change

Valeant might actually take some of Bill Ackman’s advice, the hedge fund investor, who recently bailed out of his longtime Valeant stake, suggested last year that the scandal-ridden company change its name to make a fresh start in the reputation department. According to CEO Joe Papa, that’s exactly what Valeant might do. At the company’s annual meeting Tuesday, Papa said, given Valeant’s prominent public beating—for huge price hikes, iffy specialty pharmacy relationships, federal and state probes and Congressional hearings—the company is “looking at alternatives” to its current corporate brand. One of the options floated last year, according to CNBC’s sources, was dropping “Valeant” in favor of the more high-quality name of its eyecare division Bausch & Lomb. Several other names were in discussion at the time.

Is Pfizer really weighing a BMS buy?

CEO Ian Read hinted at the possibility on Tuesday’s first-quarter earnings call—but investors shouldn’t expect any immediate action, he cautioned. As Read told shareholders on the call, “we … believe we have the ability, should the opportunity arise and should the value be there, to do a large deal.” He noted, though, that “certain large companies have significant, almost binary risks … which could immediately alter their values,” which is one reason the company won’t be rushing into anything. Bristol-Myers, whose status in the immuno-oncology field was compromised last year by a flopped first-line immonotherapy trial in non-small cell lung cancer, certainly fits that bill. Its lung cancer hopes are now resting on a combo of PD-1 med Opdivo and a CTLA-4 drug—an approach that’s not shared by Merck’s rival Keytruda and Roche’s Tecentriq, which are going after checkpoint inhibitor/chemo pairings.

Amgen puts Repatha outcomes data to work in refund deal

On the heels of highly anticipated cardiovascular outcomes data for PCSK9 med Repatha, Amgen has signed a money-back guarantee with Harvard Pilgrim. Through the first-of-its-kind contract, if a patient on Repatha has a heart attack or stroke, the drugmaker will provide a full refund. As the partners note, it’s a novel contract based on data from Amgen’s Fourier study, presented in March at the American College of Cardiology in Washington, D.C.—and if Amgen has its way, it will be the first of many. That study showed that Repatha cut heart attack risks by 27% and stroke risks by 21% over a two-year period. Together, patients saw a 19% risk reduction against heart disease and stroke in the first year and 33% afterward, SVP of global development Elliott Levy explained at the time. The deal with Harvard Pilgrim builds on a previous pay-for-performance contract signed by the companies back in 2015. In that exclusive arrangement, the two agreed on specific cholesterol targets for various patient groups, and if Repatha doesn’t help patients hit those goals, the insurer can collect additional rebates.

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Merck sells biosimilars business to Fresenius

Merck has divested its biosimilars business to fellow German drug maker Fresenius in a deal potentially worth 670 million euros. The drug maker said the move is aligned with a strategy of focusing on innovative medicines while enabling it to exploit its biosimilars portfolio – which is focused on cancer and anti-inflammatory medicines – to full potential. Merck will bank an upfront fee of 170 million euros and milestone payments of up to 500 million euros under the deal, as well as royalties on future product sales. The parties have also agreed to enter into supply and services agreements, which include drug development support and manufacturing services. Separately, Fresenius also announced its intent to buy US generic drug maker Akorn for $4.75 billion.

AbbVie’s PARP inhibitor fails in Phase III trials

AbbVie’s experimental PARP inhibitor veliparib has failed to meet key targets in two late-stage studies testing its potential in lung and breast cancer. The studies were assessing veliparib in combination with the chemotherapy regimen carboplatin and paclitaxel in patients with squamous non-small cell lung cancer (NSCLC) and triple negative breast cancer (TNBC). In the lung cancer trial, the primary endpoint was improvement in overall survival in a group of patients who had smoked within the past 12 months and had more than 100 smoking events in their lifetime. In the breast cancer study, the primary endpoint was complete pathologic response to treatment, while secondary endpoints included breast conservation rate, overall survival and event-free survival.

Pharma heads call for decision on EMA relocation

Pharma chiefs in Europe are calling on heads of state to reach a prompt decision on the new location for the European Medicines Agency, which is to depart from the UK as a result of Brexit. The Agency was set up in 1995 to act as a central point for the evaluation and monitoring of medicines for member states and countries in the European Economic Area. In an open letter on its proposed relocation, the region’s pharmaceutical industry heads of research and the European Federation of Pharmaceutical Industries and Associations (EFPIA) stress that “it is a stark and alarming reality that such fundamental activities would undoubtedly be impeded were the operations of the agency to be disrupted as a result of the United Kingdom’s exit from the EU. To put it concisely: in the event of obstruction or failure, Europe possesses no backup option.”

Biogen looks to M&A to overcome competition to its MS franchise

With its multiple sclerosis medications under pressure, Biogen is looking to M&A to boost its future. It hopes to do deals that would build on the success it’s enjoyed with neurology drugs, while also looking at new areas, like it did with its new and pricey rare-disease drug Spinraza. Biogen kicked its efforts off this month when it agreed to pay Bristol-Myers Squibb $300 million upfront and up to $410 million in milestones to get its hands on BMS-986168, an anti-tau antibody seen as a treatment for progressive supranuclear palsy (PSP) and Alzheimer’s disease. In addition to supplementing its neurology expertise, the Cambridge, Massachusetts-based biotech is looking at buying some pipeline help in the areas of eye diseases and chronic pain. He pointed at Biogen’s late 2016 approval of Spinraza, a treatment for the lethal muscle disease spinal muscular atrophy as an example of what it might do.

The Business Cocktail

Prescription drug supply shortages fuel price hikes, new research shows

According to research published by the New England Journal of Medicine and reported by the Wall Street Journal, shortages of prescription drug supplies in the U.S. in recent years resulted in price increases for some drugs. In 2014 and 2015, a shortfall of the bladder-cancer drug BCG triggered a sharp increase in prices for mitomycin, a less effective alternative, according to research published online in the medical journal last week. Mitomycin, a generic produced by Accord Healthcare, saw its price for a single vial nearly double to $869.59 in the summer of 2014 following reports of the BCG shortage. The price for a lower dose of mitomycin jumped 146% to $165.60 during the same period. The shortage of BCG continued into 2015 due to manufacturing quality problems with Sanofi and Merck, driving the costs for mitomycin to $1,415 for the high-dose vial and $272.46 for the lower dose, the research indicated.

Fujifilm invests $116M in U.S. as it races competitors for biologics contract work

Japan’s Fujifilm is relatively new to the drug manufacturing realm and has yet to crack $1 billion in sales from its small-molecule operations. But it believes it can grow exponentially by concentrating on biologic drug production and is investing close to $130 million in plants in the U.S. and U.K. to make that happen. Fujifilm Diosynth Biotechnologies has now completed a $93 million Texas manufacturing facility it acquired several years ago, the company announced Tuesday. But with contracts for work rolling in, Fujifilm said it will invest another $23 million to expand that operation, as well as spend about $9 million on its facilities in Billingham, U.K. All of this is with the goal of hitting about $1 billion in biologics contract work by 2023 as it races competitors to capture the burgeoning biologics CDMO business.

Cobra Biologics to pump $19M into its U.K. and Swedish production facilities

Cobra Biologics will inject $19 million into facilities located in the U.K. and Sweden to help the CDMO meet increased demand from gene and immunotherapy companies. The expansion is expected to take place over a two-year period to support the company’s R&D activities in developing faster and more cost-effective viral vector and DNA plasmid production platforms. The first phase is slotted for its plant in Keele, England, and will expand the facility’s viral vector phase 3 and commercial manufacturing capabilities. Phase two is scheduled for its plants in Matfors and Södertälje, Sweden, to double the capacity for high-quality DNA plasmid production and characterization, which is used by CAR T-cell therapy companies targeting acute lymphoblastic leukemia and chronic lymphocytic leukemia to support early clinical phase adeno-associated virus and lentivirus production. The last phase will expand Cobra’s clinical and commercial capabilities for GMP DNA production.

The world’s most pricey drugs, from a $1.2M gene therapy to a $450K lymphoma med

When Biogen announced the price on its new rare disease drug Spinraza—$750,000 the first year and $375,000 after that—critics popped up immediately. Biogen and its partner Ionis saw their shares drop. Since then, despite the complaints, analysts have raised their expectations for the drug, based on conversations with doctors and payers. But the pricing questions linger, if only in the context of the public debate—and political pushback—pharma’s been facing on its price-setting and price hikes for more than a year now. In a recent accounting of the world’s most expensive drugs, compiled by Reinsurance Group of America, the ranking includes some familiar faces farther down the list—Alexion’s Soliris, for instance, in sixth place at $542,640—and some less-familiar brands as well.