Tax reform means more cash for big pharma – albeit with an up-front fee

Tax reform means more cash for big pharma – albeit with an up-front fee

Source

EP Vantage

Company

PfizerCelgeneAmgenJohnson & JohnsonMerck & CoAbbVie 

Tags

Analysis, USA, Corporate Relations, Share Repurchase, Company Strategy, Acquisition, Free Content

Date

December 14, 2017


As US corporate tax cut legislation reaches a critical stage in its progress, it is a useful time to ask just how close to zero taxation profit-making big pharma groups could get.

Looking at the large cap pharmaceutical makers with the lowest effective rates in 2016 reveals that dropping the corporate levy by 14 points could in theory get some well into the single digits, though maybe not immediately. Uncertainty surrounding treatment of overseas income means it is difficult to say how low biopharma’s taxes might go, but the tables below suggest that many companies could end up paying less than the average American.

35% to 21%

Congressional leaders announced Wednesday that they had reached a compromise that blends separate bills passed by the Senate and House of Representatives. For biopharma groups, the big news is that the compromise legislation will lower the corporate tax rate from 35% to 21%, rather than the 20% passed in both the House and Senate bills. What is not clear yet is how overseas profits will be taxed.

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Tigenix draws closer to European nod

Tigenix draws closer to European nod

Source

EP Vantage

Company

TiGenixTakedaMesoblast 

Tags

Free Content, Comment, Europe, Gastro-Intestinal, Patent, Filing & Registration

Date

December 18, 2017


With Friday’s positive opinion from European regulators Tigenix  is on track for an early 2018 EU approval for  Cx601 , its cell therapy  for complex anal fistulas in Crohn’s disease.

While the company is trumpeting Cx601  as potentially the first allogeneic  stem cell therapy  to be approved in Europe, it will be hoping that a change of therapy focus, orphan drug status and more importantly growing comfort in the reimbursement of cell-based therapies will prevent  Cx601  going the way of its last cell-based product,  Chondrocelect .

The 15% jump in Tigenix  shares on Friday appears to indicate that investors believe that  Cx601  will live up to its promise as one of the few new treatments for Crohn’s-related anal fistulas in years.

Onwards and westwards

If the group does clear the final European regulatory hurdle it will help set up expectations for the more important US market, where Tigenix  holds full rights. In Europe  Cx601  is licensed to  Takeda

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Vantage View – Latest checkpoint failure gives regulators a fresh headache

Vantage View – Latest checkpoint failure gives regulators a fresh headache

Source

EP Vantage

Company

Merck & CoRegeneron PharmaceuticalsBristol-Myers SquibbMerck KGaARocheSanofiPfizerISA Pharmaceuticals 

Tags

Trial Results, Free Content, Comment, Revised Labelling, Immunology, Monoclonal Antibody, Oncology, Clinical Setback

Date

December 18, 2017


As of last week critics of the US FDA’s generous approach to approving cancer drugs have another reason to wonder what it will take for the agency to revoke a conditional approval: the failure of Keytruda ’s gastric cancer trial Keynote-061.

This result, in a second-line setting, comes hot on the heels of Bavencio ’s flop in the third-line Javelin Gastric 300 trial, providing strong evidence that checkpoint blockade alone simply does not work in this cancer type. And yet Keytruda , having secured a flimsy accelerated third-line US approval less than two months ago, looks safe in its market niche.

Part of the issue lies in patient demand, of course. With doctors increasingly speaking of patients clamouring for anti-PD-(L)1 therapy, for approved as well as unapproved cancer types, it would harm regulators’ image to start restricting access to these drugs, which in some settings have clearly proved revolutionary.

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A Spark for gene therapy in the US

A Spark for gene therapy in the US

Source

EP Vantage

Company

Spark TherapeuticsBioMarin Pharmaceutical 

Tags

Trial Results, Free Content, Comment, USA, Company Strategy, Filing & Registration, Phase II, Phase I, Gene Therapy, Sensory Organs, Blood, Event - Open

Date

December 19, 2017


The US FDA capped off a fairly stellar year for drug approvals by giving the green light to Spark Therapeutics’s inherited blindness treatment, 24 days before the decision deadline. Luxturna  will become the first bona fide gene therapy to be launched in America.

Developer Spark Therapeutics will be thankful for some good news after disappointing data on its highly touted haemophilia A projectSPK-8011 , caused shares to fall. This month's stock price collapse has taken the shine off 2017 but a recovery could build next year if more mature data emerge to put SPK-8011  in a better light.

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Bristol swings for the fences and strikes out

Bristol swings for the fences and strikes out

Source EP Vantage
Company Bristol-Myers SquibbAstraZenecaMerck & CoOno PharmaceuticalRoche 
Tags Comment, Company Strategy, Trial Results, Phase III, Launches, Monoclonal Antibody, Immunology, Oncology, Free Content, Clinical Setback
Date August 05, 2016


Since the first anti-PD-1 agents secured approvals the first-line lung cancer indication has represented the biggest prize on offer. Today Bristol-Myers Squibb  paid the price for overreaching with  Opdivo  and trying to knock  Merck & Co ’s Keytruda , which had a slight time advantage, out of the park.

The failure of Bristol’s Checkmate-026 trial is a huge blow for the group, whose stock crashed 17% this morning – losing $20bn of market cap – while Merck  climbed 7%. Bristol now awaits results of a  Yervoy  combo study in this setting, after what looks like immuno-oncology’s biggest upset so far.

It is very easy to say in hindsight, but the problem with Checkmate-026, an open-label trial testing Opdivo in 535 first-line NSCLC patients, was its design. Bristol had moved aggressively, recruiting relatively low PD-L1 -expressing patients, and the first analysis concerned 5% or higher expressers, with the primary endpoint set at progression-free in preference to overall survival.

Perhaps it was just bad luck, or maybe Bristol had feared falling behind Keytruda . The Merck  drug’s first-line NSCLC trial,  Keynote-024, rendered a positive topline result in June, hitting both co-primary endpoints of PFS and OS – but in patients expressing PD-L1  at 50% or above.

Until today the battle was playing out exactly as the sellside had expected. Keytruda  was to be first to yield positive first-line NSCLC data in a narrow patient population, before  Opdivo  regained the upper hand with a benefit in lower  PD-L1  expressers.

Indeed, on its second-quarter conference call just a week ago, Bristol was still boasting how Checkmate-026 could allow it to broaden the patient population further: if >5% expressers yielded positive data the company could look at the effect in those with PD-L1  at >1%, representing 70% of first-line patients.

Moreover, a positive PFS benefit could be backed up by OS data, a secondary endpoint. “And we can still file without a positive OS result,” said Bristol’s chief scientific officer, Francis Cuss.

Now, with Bristol today saying Checkmate-026 was a bust, failing to show a PFS benefit in the 5% or greater PD-L1 -expressing population, the rulebook has been torn up.

Early worries

Still, there had been worries among some analysts about an initial reliance on PFS. On Bristol’s fourth-quarter call Citi’s Andrew Baum specifically raised the issue of so-called “pseudoprogression” – a known problem with some previous immuno-oncology trials that had obscured a potential benefit by making it seem like active patients were progressing as fast as the control group.

But realistically Bristol probably had little choice but to go with PFS. Waiting for an OS benefit to mature would have been unrealistic in a first-line study with the breadth of Checkpoint-026.

As it is Bristol might now try to cut the patient population down, looking at only the 50% or higher expressers, but since this had not been specified in the design of Checkmate-026 it would be exploratory, and would hold little water as regards regulatory filings.

Most likely Opdivo  will for now be restricted to second-line use, an approved indication, with first-line reserved for  Keytruda  in its biomarker subgroup.  Checkmate-227, a complex first-line NSCLC trial involving several combinations as well as Opdivo  monotherapy, is under way but does not read out until 2018.

Anti-PD-1/PD-L1 MAb approvals in major Western markets 
Approval  date  Region  Therapy  Indication  Notes 
Tecentriq  (Roche) 
18 May 2016  US  Monotherapy  2nd-line urothelial  carcinoma  IMvigor 210 study 
Opdivo  (Bristol-Myers  Squibb /Ono ) 
17 May 2016  US  Monotherapy  3rd-line classical Hodgkin lymphoma   CheckMate-205 & 039 studies 
11 May 2016  EU  Yervoy  combo  1st-line melanoma regardless of Braf status  Checkmate-067 & 069 studies 
6 Apr 2016  EU  Monotherapy  2nd-line renal cell carcinoma  Checkmate-025 study 
6 Apr 2016  EU  Monotherapy  2nd-line non-squamous NSCLC  Checkmate-057 study 
23 Jan 2016  US  Yervoy  combo  1st-line Braf-positive melanoma   Checkmate-067 study 
23 Jan 2016  US  Monotherapy  1st-line Braf-positive melanoma   Complete response letter on 27 Nov 2015 
24 Nov 2015  US  Monotherapy  2nd-line renal cell carcinoma  First anti-PD1 to show OS benefit in renal cancer 
24 Nov 2015  US  Monotherapy  1st-line Braf-W/T melanoma  Checkmate-066 study 
9 Oct 2015  US  Monotherapy  2nd-line non-squamous NSCLC  Checkmate-057 study 
1 Oct 2015  US  Yervoy  combo  1st-line Braf-W/T melanoma  1st I-O combo in cancer; Checkmate-069 
20 Jul 2015  EU  Monotherapy  2nd-line squamous NSCLC  – 
19 Jun 2015  EU  Monotherapy  1st & 2nd-line melanoma regardless of Braf status  Checkmate-066 & 037 studies 
4 Mar 2015  US  Monotherapy  2nd-line squamous NSCLC  Checkmate-017 study 
22 Dec 2014  US  Monotherapy  2nd-line melanoma  First US approval ; Checkmate-037 study 
Keytruda  (Merck  & Co) 
2 Aug 2016  EU  Monotherapy  2nd-line PD-L1 -positive NSCLC  Keynote-010 
18 Dec 2015  US  Monotherapy  1st-line melanoma regardless of Braf status  Keynote-006 study 
2 Oct 2015  US  Monotherapy  2nd-line PD-L1 -positive NSCLC  Keynote-001 study 
22 Jul 2015  EU  Monotherapy  1st & 2nd-line melanoma regardless of Braf status  Keynote-001, 002 & 006 studies 
4 Sep 2014  US  Monotherapy  2nd-line melanoma  First anti-PD-1 agent to get US approval ; Keynote-001 study 

As well as Merck  making strong gains,  AstraZeneca  and  Roche  shares spiked today, up 6% and 2% initially, though the UK group quickly faded (Therapy focus – First-line lung cancer is an Opdivo vs Keytruda showdown, June 10, 2016).

Until now EvaluatePharma’s consensus of sellside forecasts saw Bristol generating 60% of 2022  Opdivo  sales in NSCLC, across all lines of therapy. Evercore ISI’s Mark Schoenebaum put the size of the first-line NSCLC market at over $12bn, and neatly summed up the Checkmate-026 failure, calling it “possibly the biggest clinical surprise of my career”.

The consensus-based NPV of Opdivo  in all forecast uses amounted to a staggering $71bn, or 57% of Bristol’s market cap; little wonder that the selloff was so extreme today.

In terms of market cap gains and losses there have been other immuno-oncology rollercoaster moments, including Opdivo  snatching  Keytruda ’s early lead away from it, and Bristol reporting underwhelming and somewhat confusing biomarker data in a second-line NSCLC trial at last year’s Asco meeting; in hindsight perhaps this was the canary in the coalmine.

While much more work still needs to be done to elucidate the importance of various biomarkers, the Checkmate-026 disappointment has triggered a massive shift in sentiment.