Major themes that defined the pharma industry in the first half of 2018 carried into the third quarter. Drug pricing remained the hottest of hot-button issues, biosimilars are still threatening blockbuster brands, and restructurings revived some investor optimism — albeit at the expense of many jobs.
One theme that did see a shift was dealmaking. While the year started off with a solid dose of M&A, transactions have cooled down in recent months. In fact, Credit Suisse analyst Vamil Divan told BioPharma Dive the chances of a deal worth more than $10 billion happening in the near term aren’t great.
«I don’t think there’s any reluctance or change in their willingness to do smaller deals,» he said, «but I think the likelihood of large-scale M&A is pretty low, especially between now and the election. And then maybe depending on how things play out on pricing, maybe then that changes next year.»
In typical fashion, Johnson & Johnson will kick off the biopharma earnings season when it reports on Tuesday. The rest of the big players will follow suit in the coming days and weeks, with these seven potentially providing some of the most significant updates.
Novartis — Oct. 18
Wall Street expects a lot out of Novartis’ Cosentyx (secukinumab) and Entresto (sacubitril/valsartan), boosted by the company’s confidence in each. Yet investors should also watch for the Swiss pharma to devote some of its third quarter earnings call to therapies and investments that aren’t lifting growth right now — but could farther down the line.
Novartis noted during last quarter that manufacturing snafus impacted sales of its Kymriah (tisagenlecleucel) CAR-T treatment, which have so far been disappointing. Executives will likely provide updates about the company’s plans to remedy those issues and compete against rival therapy Yescarta (axicabtagene ciloleucel) in lymphoma.
Elsewhere, investors will want to check in on Novartis’ foray into gene therapy. In April, the company acquired AveXis in an $8.7 billion deal that came at a high premium. Much of that value is tied to a single asset, a treatment for spinal muscular atrophy called AVXS-101. Novartis expects to file for approval this year, so any updates will be a point of interest.
Gilead Sciences — Oct. 25
Gilead’s hepatitis C business has been in free fall. Third quarter earnings will shed light on whether it’s bottoming out or still on the descent.
Execs, however, will try to keep the focus on the company’s HIV portfolio. There, brands with an emtricitabine and tenofovir alafenamide backbone like Biktarvy and Genvoya are helping to offset the hep C declines.
Biktarvy is a particular bright spot, with prescription volume increasing rapidly despite the overhang of patent infringement lawsuits from ViiV Healthcare, an HIV drug company in which GlaxoSmithKline holds majority ownership. Data from Iqvia cited by Leerink found Biktarvy’s total prescriptions for the week of Sept. 28 were at 10,647 while new prescriptions were at 4,367, an increase of nearly 4% from the prior week.
Yescarta will also get some attention. While its sales have outpaced Novartis’ rival CAR-T therapy over the past couple quarters, the treatment’s returns haven’t yet impressed Wall Street.
Speaking of deals, the biotech and its $31.7 billion in cash and marketable securities could very well get questions on M&A.
With hep C waning, there’s pressure on Gilead to pump money into a new therapeutic area. The company could delve further into oncology on the heels of Yescarta. It also has one of the more advanced candidates for non-alcoholic steatohepatitis, though the jury is still out on whether its approach is best. Gilead has a footing in immunology too with filgotinib, a late-stage Janus-kinase inhibitor that has shown promise across multiple indications.
Amgen — Oct. 30
Expect two topics to dominate this call: biosimilars and migraines.
It’s an ironic combination, given the former is causing some of the latter for Amgen. The California biotech is entwined in a high-stakes court case against Novartis’ Sandoz, with patent protection for its top seller Enbrel (etanercept) on the line.
Meanwhile, Mylan recently launched its version of Neulasta (pegfilgrastim), which could erode sales from Amgen’s second biggest brand. Analysts don’t anticipate the copycat, called Fulphila (pegfilgrastim-jmdb), to do much damage in the near-term, yet Amgen may face questions about growth drivers that can offset future declines.
To that point, the company will undoubtedly tout the impressive launch of Aimovig (erenumab), a migraine prophylaxis targeting CGRP, or calcetonin gene related peptide. Aimovig had first-mover advantage in the CGRP class, but recent approvals of similar treatments from Teva Pharmaceuticaland Eli Lilly will nudge Amgen to defend how its product will maintain a upper hand.
Pfizer — Oct. 30
Pfizer stirred up controversy during the third quarter. Following talks between President Donald Trump and CEO Ian Read, the company said it would pull back on price increases for the rest of the year. It was an unusual move, but one quickly followed by a handful of other drugmakers.
The big pharma also found itself leading a charge against reference product manufacturers like Amgen and Roche’s Genentech for using «scare tactics» to keep biosimilars at bay.
And if those stories didn’t grab enough attention, Pfizer just this month announced that Read would be stepping down and replaced by Chief Operating Officer Albert Bourla at the start of next year.
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Investors shouldn’t expect Bourla to make substantial moves in his first few months at Pfizer’s helm, according to Credit Suisse’s Divan. Rather, choosing now to swap CEOs suggests the company is trying to give the new chief some acclimation time before headwinds start to blow through.
«If you think about the company, they have last big patent expiry in the middle of next year with Lyrica, and they’re having some good success with some of their recently launched products and pipeline,» Divan told BioPharma Dive. «You don’t want to change CEOs right as Lyrica is going off patent; [so this will] give him a chance to take over and put his stamp on it.»
Even if uneventful, the passing of the torch may provide some noteworthy moments on the Oct. 30 call.
GlaxoSmithKline — Oct. 31
The overhaul at GSK continued in grand and — for many — devastating fashion during the third quarter.
Layoffs were aplenty, with headcounts falling by 1,000 at a plant in Bangladesh and 650 across multiple R&D locations. GSK also made the controversial decision to backtrack on its prior commitment not to pay doctors to promote its products.
Restructuring has been the defining theme for GSK under CEO Emma Walmsley and R&D head Hal Barron. Looking to revitalize revenue, the company chose to focus on four core therapeutic areas: respiratory diseases, HIV, immuno-inflammation and oncology.
Respiratory and HIV treatments are essential to GSK’s near-term growth, yet they also come with hurdles. In respiratory, the British pharma was recently knocked down trying to get its asthma drug Nucala (mepolizumab) approved for chronic obtrusive pulmonary disorder. Sales of its flagship brand Advair (fluticasone propionate) are on the decline as well due to competitive pricing pressures.
Competition is also stiff in the HIV space. GSK hopes its experimental two-drug regimen is more attractive than Gilead’s Biktarvy, a three-drug treatment. But physicians are taking well to Biktarvy. Additionally, Johnson & Johnson recently gained an FDA OK for Symtuza (darunavir/cobicistat/emtricitabine/tenofovir alafenamide), further crowding the market.
Amid all those moving cogs, GSK leadership will need to reaffirm its revamp remains on course.
AbbVie — Nov. 2
Biosimilar competition to Humira (adalimumab) hits European markets on Oct. 16, providing a narrow window of insight into the impact copycat biologics will have on the world’s best-selling drug before AbbVie reports its latest earnings.
«We’ll have a couple of weeks. Not much, but a little bit of an exposure,» Divan told BioPharma Dive. «Certainly over the next couple of quarters we’re going to be watching that very closely.»
At least at the moment, it will be several years before Humira biosimilars take root in the U.S., the source of most of the drug’s sales. Still, the looming threat has put AbbVie’s feet to the flames to add new blockbuster products to its portfolio.
The company thinks it has three of those with its recently approvedendometriosis drug Orilissa (elagolix) and late-stage immunology assets risankizumab and upadacitinib.
«Those do need to be approved next year and pretty successful launches,» Divan said of risankizumab and upadacitinib. «Not much they can say on this call, but I think over the next year those will be watched very closely.»
Regeneron Pharmaceuticals — Nov. 6
There were already five FDA-approved drugs targeting PD-1 or PD-L1 by the time 2018 rolled around. Yet Regeneron remained confident there was space for its candidate, cemiplimab.
The biotech’s chief scientific officer said the hope was that cemiplimab showed «Keytruda-like data» in first-line cancer studies. Executives also argued that, if approved, the drug would be more of a third-to-market contender because only Merck & Co.’s Keytruda (pembrolizumab) and Bristol-Myers Squibb’s Opdivo (nivolumab) also inhibit the PD-1 receptor.
The time has come to follow through on those high expectations. Cemplimab, now Libtayo, received a thumbs up last month as a treatment for advanced cutaneous squamous cell carcinoma. It wouldn’t be surprising to see Regeneron pressed for more details about the Libtayo rollout strategy.
Also on the commercialization front, Regeneron in August launched a direct-to-consumer campaign for its top-seller Eylea (aflibercept), in good part to carve out a stronger position for the drug in diabetic macular edema. Company leadership could give updates on how well that effort is going.
A Product Manager with expertise in pharma marketing and sales operations