GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

24
We are tweeting, chatting, liking and sharing the latest industry news and insights from our global team of editors and analysts, join us! LET S GET SOCIAL /scripintelligence @scripnews Turn to page 7 Merck Gets $200m In Gilead Patent Case, But Who Wins? A jury in the US District Court for the Northern District of California, which decided earlier in the week that Gilead Sciences Inc. infringed two of Merck & Co. Inc.’s hepatitis C drug patents, determined on March 24 that Gilead should pay its rival $200m – a sum much lower than what Merck sought when the companies’ patent dispute began in 2013. The jury’s March 22 validation of patents held by Merck and co-inventor Ionis Pharmaceuticals Inc., which is entitled to 20% of any damages, paved the way for a monetary award that the panel granted on March 24. The $200m sum is equal to 4% of $5bn in Sovaldi (sofosbuvir) and Harvoni (sofosbuvir and ledipasvir) sales through the end of 2015. However, Merck originally pursued a 10% royalty, begging the question: Is the financial judgment a true victory, considering the legal fees and other resources that both companies have poured into the dispute so far and will spend on appeals in the future? “Since Merck made no contribution and assumed none of the risk in the discovery Turn to page 8 Lucie Ellis: What were the key things that shaped you growing up? Kathy Rouan: I lived in three different continents by the time I was 11 – I was born in Malawi, and then moved to North Carolina where I lived until I was 10, before travelling to Ireland. I am British by nationality but I didn’t live in England until I was 13. I had an early introduction into learning how adapt to new situations. That experience helped to build up my resilience, my ability to seek Dr. Kathy Rouan, a veteran member of GlaxoSmithKline plc’s management team and current senior vice president and head of R&D for its dermatology business unit Stiefel, has experienced the big pharma’s growth through two major mergers and various changes in management, environment and mission. Rouan, who has been at GSK since 1989, joined Stiefel in December 2013 but was previously head of biopharmaceutical development and the medicine development leader for the now marketed cancer drug Arzerra (ofatumumab). She initially joined the pharmaceutical development department at GSK focusing on formulation development of protein pharmaceuticals, but in 1993 moved into a project management role in the inflammation, tissue repair and oncology unit. In the latest instalment in Scrip’s executive profile series, Rouan talks to Lucie Ellis about managing career moves within a big pharma company, the benefits of leading a more specialized business and her experience of GSK’s recent reputational upheaval and ethical revamp. GSK’s Rouan Tells Inside Scoop On Surpassing Scandal There are endless examples of the ways medicines have changed lives but the economics of our industry seem to be at the forefront April 1st 2016 No 3796 scripintelligence.com iaodesign/shutterstock.com

Transcript of GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

Page 1: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

We are tweeting, chatting, liking and sharing the latest industry news and insights from our global team of editors and analysts, join us!

Let’s getSocial

/scripintelligence@scripnews

Turn to page 7

Merck Gets $200m In Gilead Patent Case, But Who Wins?A jury in the US District Court for the Northern District of California, which decided earlier in the week that Gilead Sciences Inc. infringed two of Merck & Co. Inc.’s hepatitis C drug patents, determined on March 24 that Gilead should pay its rival $200m – a sum much lower than what Merck sought when the companies’ patent dispute began in 2013.

The jury’s March 22 validation of patents held by Merck and co-inventor Ionis Pharmaceuticals Inc., which is entitled to 20% of any damages, paved the way for a monetary award that the panel granted on March 24. The $200m sum is equal to 4% of $5bn in Sovaldi (sofosbuvir) and Harvoni (sofosbuvir and ledipasvir) sales through the end of 2015. However, Merck

originally pursued a 10% royalty, begging the question: Is the financial judgment a true victory, considering the legal fees and other resources that both companies have poured into the dispute so far and will spend on appeals in the future?

“Since Merck made no contribution and assumed none of the risk in the discovery

Turn to page 8

Lucie Ellis: What were the key things that shaped you growing up?

Kathy Rouan: I lived in three different continents by the time I was 11 – I was born in Malawi, and then moved to North Carolina where I lived until I was 10, before travelling

to Ireland. I am British by nationality but I didn’t live in England until I was 13. I had an early introduction into learning how adapt to new situations. That experience helped to build up my resilience, my ability to seek

Dr. Kathy Rouan, a veteran member of GlaxoSmithKline plc’s management team and current senior vice president and head of R&D for its dermatology business unit Stiefel, has experienced the big pharma’s growth through two major mergers and various changes in management, environment and mission.

Rouan, who has been at GSK since 1989, joined Stiefel in December 2013 but was previously head of biopharmaceutical development and the medicine development leader for the now marketed cancer drug Arzerra (ofatumumab). She initially joined the pharmaceutical development department at GSK focusing on formulation development of protein pharmaceuticals, but in 1993 moved into a project management role in the inflammation, tissue repair and oncology unit.

In the latest instalment in Scrip’s executive profile series, Rouan talks to Lucie Ellis about managing career moves within a big pharma company, the benefits of leading a more specialized business and her experience of GSK’s recent reputational upheaval and ethical revamp.

GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

There are endless examples of the ways medicines have changed lives but the economics of our industry seem to be at the forefront

April 1st 2016 No 3796scripintelligence.com

iaodesign/shutterstock.com

Page 2: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

2 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

contents/editor’s letter

Eleanor Malone, Editor, scrip intelligence

1 GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

1 Merck Gets $200m In Gilead Patent Case, But Who Wins?

3 Valeant: Seeking Disaster Expert To Run A Hot Mess

4 Amgen: Zarxio Lawsuit ‘Poor Vehicle’ To Interpret BPCIA

6 Sanofi India Chair Falls On His Sword

6 What Did Changing Sales Rep Compensation Do For GSK?

7 NICE Finally Swayed On Janssen’s Zytiga

10 Teva’s Cinqair OK’d, But Narrower Use Than GSK’s Nucala

10 NICE Fails To Recommend Vertex’s Orkambi In CF

11 R&D Bites

12 FDA OK’s Lilly’s Taltz; Rival To Novartis’ Cosentyx

12 IQWiG: Roche’s Melanoma Combo Offers ‘Minor’ Benefit

13 Valeant Vilified Over ‘Death’ Drug; Fund Managers Vexed

14 Sage Burned By Short Report

14 Merck Wins In Gilead Patent Case

15 Business Bulletin

16 Evotec Spin-Off Eyes Early Clinical POC With Immune Tolerance Platform

16 Value Unlocked: BMS Buying Padlock For Up To $600m

18 Policy & Regulation Briefs

19 Federal Circuit: Generic Cos. Can Be Sued Where They Compete

19 Zydus Overhauling Vaccine Site Amid WHO Notice

20 expert View: The Art Of Creative Deal Making

21 stockwatch: Natural History Confounds Surrogate Endpoints

22 Pipeline Watch

23 Appointments

21

6

scripeditor: [email protected] editor: [email protected] editor: [email protected] Asia editor: [email protected] editor: [email protected] West coast editor: [email protected] editor: [email protected] reporter: [email protected] Analysts: [email protected]; [email protected]; [email protected]: [email protected] content reporter: [email protected] Assistant: [email protected]: [email protected] data editor: [email protected] content director: [email protected] stock images in this publication courtesy of www.shutterstock.com unless otherwise stated.customer servicesTel: +44 (0)20 7017 5540 or (US) Toll Free: 1 800 997 3892 Email: [email protected] subscribe, visit scripintelligence.comto advertise, contact [email protected]

scrip is published by informa UK limited.©informa UK ltd 2016: All rights reserved. issn 0143 7690.

Picture the scene. After a brief presentation about Scrip’s editorial process, followed by a lively Q&A, the audience pounce on copies of the weekly newsletter, falling over each other to get a peek inside its pages. Those who manage to get their hands directly on a copy read extracts out loud to fellow attendees. Others beg the meeting organizers for fair access to the magazine. The prize-giving photos from the Scrip Awards are particularly closely scrutinized, occasioning whoops of delight.

No, that’s not the desperate fantasy of a pharmaceutical news editor. That was the wonderful reaction from the as-yet untapped potential readership of pre-teens at my local primary school, where my brief was to talk about my work to help pupils think about their own future careers.

The children’s questions were varied and challenging:

“If you became queen and got really rich, how much money would you donate to invent a medicine that makes people live longer?”

“Which of these would you include in your magazine? Batman, Superman, Flash, Wonder Woman, Aquaman, Cyborg or Green Lantern?”

“Do you work with any rude people?”“Have you ever met anyone famous?” Funnily enough, Archie the Inventor on

the BBC children’s show Balamory (AKA comedian Miles Jupp) hosted last year’s Scrip Awards, which redeemed Scrip from what was shaping up to be an unflattering comparison with Match of the Day magazine, Marvel Comics and something called Toxic that I’d never heard of (unforgivably, from my embarrassed son’s point of view).

As it happens, we are preparing to launch a revamped version of Scrip. Unfortunately, it’s too late for my latest market research to influence the new look – so you’re unlikely to get the free toys, prize quizzes, pull-out posters and coloring pages favored by Generation Z. Rather, we will bring you all our regular news, comment and analysis enlivened by fresh fonts, clearer signposting and more attractive lay-outs. Still, it looks so much better, I’d venture to say it’s going to be sick.

Oh, and for those of you who are interested, today’s youngsters mostly want a pill that will enable them to live forever, although some still want to die before they get old (and sick).

We would love to hear your comments about Scrip’s coverage. Feel free to tweet us or post a discussion on our linkedin group, for your chance to interact with editor Eleanor Malone and the rest of the Scrip Intelligence team.

Join us at: linkd.in/scripintelligence

Follow us at: @scripnews

La1n/shutterstock.com

Sophie McA

ulay/shutterstock.com

Page 3: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

© Informa UK Ltd 2016 @scripnews scripintelligence.com April 1st 2016 3

heAdline neWs

It’s the stuff Shakespearian plays, or lately, serial television dramas are made of – accusations of greed, government investigations and a few knives to the back, with high-drama narratives arising and weaving their way through the ongoing storyline that is Valeant Pharmaceuticals International Inc.

While the stock got slashed on the “Ides of March” after Valeant reported its sales and earnings for 2016 would be substantially lower than expected, its 10-K for 2015 would be delayed, potentially risking default of its credit agreements, and said it had discovered accounting errors that might force an earnings restatement – which resulted in the firm’s stock losing 51% of its value – the company’s board waited until March 21 to terminate CEO Mike Pearson, who actually won’t be leaving until a successor can be found, and take out former chief financial officer Howard Schiller, who was accused of “improper conduct” and told to get off the board.

Schiller, however, refused to fall on his sword – declaring in a statement released by his lawyers that “at no time did I engage in any improper conduct that relates to any restatement of revenue the company is

considering” and that “at no time did I ever provide any incorrect information to the audit and risk committee or the company’s outside auditors regarding this accounting issue.”

Schiller dug in his heels, declining to resign from the board.

When Valeant’s board substituted Schiller in January for Pearson – whose hospitalization for severe pneumonia in late 2015 turned into a longer-than-expected and opaque medical leave – investors were somewhat skittish at first, but ended up embracing the idea.

Valeant’s other big news of the day was that activist shareholder Bill Ackman, founder and CEO of Pershing Square Capital Management LP, was joining the company’s board.

Ackman made it clear he didn’t want just anybody filling the CEO’s role – It’s got to be a “world-class healthcare executive.” Analysts, however, said that person better come with crises management skills.

Nomura Equities Research analysts had a few suggestions to replace Pearson, including former Allergan PLC CEO David Pyott, current Allergan CEO Brent Saunders, and former Sanofi CEO Chris Viehbacher. “We believe the naming of any of these potential candidates

as Pearson’s successor would enhance Valeant’s credibility,” the Nomura analysts said, although they acknowledged it was likely some would flat-out have no interest.

Indeed, Pyott immediately made no bones about the fact he didn’t want the job – telling CNBC he was instead involved in writing a book about Allergan’s 2014 battle to fend off Valeant in its hostile takeover campaign. And Saunders may already be looking forward to potentially reining over the mega combined Allergan-Pfizer at some point down the road – so why step into Valeant’s troubles?

In an 8-K filing with the Securities and Exchange Commission (SEC), Valeant said that management was continuing to assess the company’s disclosure controls and procedures and internal control over financial reporting, and that as part of that assessment, it had determined the “tone at the top of the organization and the performance-based environment” at the firm, “where challenging targets were set and achieving those targets was a key performance expectation, may have been contributing factors resulting in the company’s improper revenue recognition” and the improper conduct. [email protected]

Valeant: Seeking Disaster Expert To Run A Hot Mess

Page 4: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

4 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

heAdline neWs

The US Supreme Court should decline Sandoz Inc.’s request to review a ruling by the US Court of Appeals for the Federal Circuit involving the Biologics Price Competition and Innovation Act (BPCIA) because the case is a “poor vehicle” for the high-court’s first interpretation of the 2010 biosimilars law, Amgen Inc. argued in a new brief.

If the Supreme Court decides to hear the case, the outcome could be a disruptor for the future of the US biosimilars market, although it also would help clarify some of the messiness Congress created in setting out the pathway for getting there – what one Federal Circuit judge described as “A riddle wrapped in a mystery inside an enigma.”

The lawsuit involves a long-running battle between Amgen and Sandoz involving the latter company’s Zarxio (filgrastim-sndz) – the first biosimilar approved for the US market. The product is a biosimilar of Amgen’s Neupogen (filgrastim).

But Amgen has asserted that Sandoz failed to fulfill its obligations under the BPCIA – specifically, the 180-day notice before first commercial marketing of its biosimilar.

Last July, a three-judge panel from the Federal Circuit ruled 2-1 the disclosure and negotiation procedure requirements of the BPCIA – the so-called patent dance – was optional and biosimilar makers could choose not to disclose their application and manufacturing details, which was a win for Sandoz. But the court also ruled 2-1 that when a biosimilar applicant does not dance, 180 days notice of commercial marketing of biosimilars is mandatory and may only be given after FDA licensure, which was a win for Amgen.

Both sides sought a rehearing en banc by the full appeals court, but the Federal Circuit denied both firms’ petitions. But Sandoz was unwilling to let the decision on the 180-day notice stand and filed a writ for certiorari in February with the Supreme Court, asking it to overturn that portion of the Federal Circuit’s ruling – arguing the lower court gave innovators “an extra-statutory exclusivity windfall” of an added six months of exclusivity protection against biosimilars on top of the 12 years Congress granted in the BPCIA.

In its brief in opposition, however, Amgen insisted there are issues “that are not ripe here” that are currently being litigated in the lower courts – many of those involving biosimilars of its medicines – including at the Federal Circuit, which is set to hear oral arguments in the company’s lawsuit against Canadian firm Apotex Inc. on April 4.

Unlike Sandoz, Apotex had engaged in the patent dance with its biosimilar of Amgen’s

Neulasta (pegfilgrastim) and had provided a notice of commercial marketing to the innovator in April 2015.

But Amgen said that notice came too early, since the FDA had not licensed the pegfilgrastim biosimilar – a decision that’s still pending, even though the agency was expected to act by this past October.

Sandoz accused of wrongly framing the debate as urgent

because of the need to put low-cost medications in the hands

of prescribers and patientsAmgen insisted the Supreme Court should

allow the issues raised in the Apotex lawsuit and other cases to further percolate before attempting to interpret the BPCIA.

Cross-PetitionConcurrently with its brief in opposition, Amgen also filed a “conditional cross-petition” with the Supreme Court calling for the justices to also review the other portion of the Federal Circuit’s ruling, in which it said the patent dance was optional and biosimilar makers could chose not to disclose their application and manufacturing details.

If the court grants Sandoz’s petition, “it should grant Amgen’s cross-petition, too, and should consider the correct interpretation of the BPCIA provisions together, rather than interpreting each provision of the statute separately,” the California innovator demanded.

But if the justices deny Sandoz’ cert petition, Amgen asked them to also reject the cross-petition as well.

Don’t Touch ThisAmgen argued that the Federal Circuit accurately answered the question about notice of commercial marketing – holding it

is effective only if given after FDA licensure of the biosimilar.

“That decision was correct, was consistent with the statutory text and purpose and does not conflict with any decision of this court,” and therefore, “there is no reason to grant Sandoz’s petition to hear this issue,” Amgen said.

If Sandoz’s argument was correct that notice of commercial marketing may be given as soon as an applicant files its 351(k) biosimilars application with the FDA, that would “render other statutory provisions unworkable,” Amgen contended.

If the notice could be given as soon as the 351(k) is filed, the 180-day period could elapse before the patent exchanges have been completed and before the patents could even be identified, the company argued.

Under Sandoz’s proposal, a biosimilars maker would file its 351(k) on a product that might never be approved, seeking approval for indications that it might never obtain, Amgen said.

Meanwhile, the reference product sponsor would have to seek a preliminary injunction to prevent the sale of a product which may not happen for years – or ever, the company argued.

“The courts would face entirely unnecessary applications for injunctive relief, and presumably would deny some or all of them as not being ripe,” Amgen said.

On the other hand, requiring a biosimilar be licensed before notice of commercial marketing “ensures the existence of a fully crystallized controversy regarding the need for injunctive relief. It provides a defined statutory window during which the court and the parties can fairly assess the parties’ rights prior to the launch of the biosimilar product,” the firm asserted.

No Cost-Savings UrgencyFinally, Amgen argued Sandoz had wrongly framed the debate as urgent, because of the need to put low-cost medications in the hands of prescribers and patients.

But, Amgen contested, “The need is not urgent and the cost is not meaningfully lower,” because Zarxio is the only biosimilar approved in the US and was priced at only a 15% discount from Neupogen – “a far cry” from the much greater price reductions of up to 85% typically seen with generic small-molecule drugs.

“The impact on consumer costs from this court waiting for the issues to develop further in the lower courts and at the FDA would be minimal, while the benefit to the court of further developments in the law would be significant,” Amgen concluded.

[email protected]

Amgen: Zarxio Lawsuit ‘Poor Vehicle’ To Interpret BPCIA

jaboo2foto/shutterstock.com

Page 5: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

© Informa UK Ltd 2016 @scripnews scripintelligence.com April 1st 2016 5

heAdline neWs

Sources: 1, 2, 3 Rock Health, 4, 8Scrip Intelligence, 5Forbes, 6AT Kearney, 7Quintiles

Total venture capital funding in US digital healthcare space in 20151

$4.5bn 7%Total venture funding last year

32%CAGR from 2011-2015

187

in disclosed activity2$6bn

M&A deals announcedin 2015

creating an $8bn market cap3

1.4bn raised in 5 IPOs

IPO

2020

The year traditional pharma business model will be turned on its head, according to consultancy Arthur D. Little.4

US digital healthcare spend in 2015

Each month 19 million people search the health information website WebMD6

Patient behavior is changingMobile health app adoption doubles in 2 years.5

Searching for healthcare information is the third most common activity taking place online7

13%

2013

32%

2015

WebMD

– Forbes

Those without a transformer mindset will be left behind.

The pharma value chain of the future must have the patient at the epicenter,customer-centric, integrated and multichannel8

Investment in the digital healthcare space has never been greater than in 2015, and looks set to continue

its upward trajectory in 2016. Healthcare delivery models are changing, placing empowered

patients at the center of the traditional pharma ecosystem. Now pharma must fully embrace

digital opportunities or risk losing a huge piece of its own future.

Digital HealthDisruption

Page 6: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

6 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

heAdline neWs

Across the pharmaceutical industry there has been a lot of talk about improving reputation and building a “patient-centric” business model. GlaxoSmithKline wanted to put its money where its mouth is and prioritize patients by changing the way it compensated it sales reps. After a “bumpy road” the new model has worked well for both customers and for business as better sales calls with doctors drives new product growth, says Victoria Williams, GSK’s vice president and sales director, France.

Companies that want to build trust and truly deliver better value for their customers will adopt the model, according to Williams. “Selling should not be a dirty word. Great selling in this model should be celebrated,” she said, speaking at eyeforpharma Barcelona 2016. “I can guarantee that anyone who has been a sales manager or rep has had that moment where you squirm on your chair because the rep has nudged the doctor and said ‘come on, do a few more boxes for me, I’m a bit low on my bonus this month’. That is not patient focused and not what we want to see happen in this industry. We are ensuring that will no longer happen in GSK. What we want to drive across industry is high quality conversations,” she said.

From January 2015, sales reps working for GSK across the globe ceased being evaluated on sales targets. Part of a sales rep’s salary is made up of a bonus, which is now removed “well away” from personal performance, said Williams. One part of the bonus is linked to GSK’s overall performance in a given geographical region, while the other part is linked to a rep’s ability to drive good sales calls; his scientific knowledge and whether it is good enough to support GSK products; and his ability to identify the customers who can benefit the most from the product. Meanwhile, their managers are also evaluated on their scientific knowledge and whether they can coach their teams to deliver the type of calls that GSK wants to see,

and whether they can help select the most appropriate customers. The US was the first market to start making the change back in 2011. Then in 2013, GSK announced that the rest of the world would follow suit, and by January 2015 every GSK had implemented the new approach in every market. Nevertheless, Williams emphasized that the core role of the sales rep remains the same: to sell medicines and vaccines for appropriate patients who will benefit most from them.

Williams believes the move has been good for business and that sales performances have been maintained. “In GSK France we had a great year, we exceeded our plan, and the same in GSK Europe.” Sales of GSK’s Seretide/Advair are in decline in Europe and the company is trying to grow its business with new products, she explained. “How do you grow new products? With great sales calls and we are doing that. We are seeing great growth of our new products.”

Thanks to the changes, within sales divisions there is greater focus on driving quality and commercial excellence as conversations are no longer focused on talking about targets. “It is almost liberating when you no longer talk about whether the sales target is right or fair and whether a rep in my territory was ill for six months – you talk about different things now, about quality and how you can drive quality. We changed the agenda of conversations,” said Williams. More time is now given to improving the value of sales calls and implementing initiatives like coaching villages. “As a sales director, that has been a really big advantage for me.”

Removing sales targets has also led to more room for maneuver, for example, decoupling reps from their targets means they can be transferred to a different product or sector. There are advantages for reps too. For example, uptake of medicines in the south of France is quicker than in the north where prescribers take longer to adopt new drugs. Under the new system, reps who have driven good sales calls in areas with slower uptake have been better recognized for their work and are no longer penalized by the “randomness of sales targets,” explained Williams.

Nevertheless, the transition was not plain sailing. At GSK France, the average age of the sales force was 50 while the average tenure of service with GSK was 20 years and “driving change was a significant challenge,” said Williams.

[email protected]

What Did Changing Sales Rep Compensation Do For GSK?

Sanofi India Chair Falls On His SwordBeleaguered Sanofi India chair Vijay Mallya, currently in a storm over his defunct airline firm, will not stay on at the French multinational.

On March 23, Sanofi India announced that long-standing chair Mallya has conveyed his decision to “not seek re-election” as a director at the ensuing annual general meeting (AGM).

Sanofi India will appoint Aditya Narayan, ex-ICI Ltd (now Akzo Nobel) head and currently independent director of Hindustan Unilever Limited, among other firms, as the next chair of the board, subject to his election as an independent director at the AGM, and other compliance conditions.

Sanofi gave no specific reasons for Mallya’s decision, though most industry watchers say a gentle nudge by the French multinational following the goings on was not improbable. Mallya had been chair of the board since December 1983.

Sanofi’s statement quoted Mallya as saying that he was privileged to have presided over the board of the company, which started as Hoechst Pharmaceuticals Ltd, and to have participated in its “phenomenal” growth and prosperity over such an “extraordinarily long period of time.”

“Today, Sanofi India Limited is not only financially strong but with an impeccable track record. It is gratifying to me that the company continues to serve needy patients in India with world-class medication whilst ensuring consistent returns to all stakeholders,” Mallya said. Analysts say that Mallya’s exit was probably inevitable following the regulatory actions underway against him and few would expect unconnected firms to risk any spill-over effects on their business or reputation.

The Securities and Exchange Board of India (SEBI), indicated that it would come down hard on “wilful defaulters” restricting access to Indian capital markets for raising funds from the public and other such checks.

Sanofi then told Scrip that its board would study the implications of the SEBI notification when it was published, and “take action as deemed necessary.”

Mallya, whose been left with few sympathisers, faces multiple cases in India. The board of Sanofi India has recommended the election of Aditya Narayan and Usha Thorat from April 30, 2016.

[email protected]

La1n/shutterstock.com

‘Selling should not be a dirty word. Great selling in this model should be celebrated’

Page 7: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

© Informa UK Ltd 2016 @scripnews scripintelligence.com April 1st 2016 7

heAdline neWs

NICE Finally Swayed On Janssen’s ZytigaNICE, the health technology appraisal institute for England and Wales, has at last recommended the use of Janssen’s Zytiga (abiraterone) for the treatment of metastatic castration-resistant prostate cancer (mCRPC) before chemotherapy, three months after initially rejecting its use on the publicly funded National Health Service, due to inadequate cost-effectiveness and efficacy data.

The institute’s volte face followed a reconsideration of the therapy’s application after the Johnson & Johnson division submitted extra data on the drug’s efficacy. Janssen had already offered to cut the list price of Zytiga by 20% and pay for treatment after ten months but the oral drug was nonetheless rejected in preliminary guidance in December 2015.

Explaining its change of heart, the National Institute for Health and Care Excellence (NICE) on March 21 said, “Initial evidence submitted by the manufacturer to NICE failed to demonstrate the quality of life and long-term survival for patients receiving abiraterone, meaning NICE could not recommend the drug as indicated. When requested, Janssen submitted new evidence focusing on a large group of patients treated with abiraterone in the US. The data showed that 14% of the patients were still taking abiraterone after 4.4 years. The [NICE] appraisal committee expressed some concerns about whether these results could be generalized to the UK, but they recognised that the new data supported the case for some patients taking abiraterone for long periods of time. As such the committee has now concluded that abiraterone is a cost-effective treatment option,” NICE said.

Carole Longson, who heads the Centre for Health Technology Evaluation at NICE said: “There are few treatments available for patients at this stage of prostate cancer, so this is very good news.”

NICE’s decision means that eligible NHS patients in England will for the first time, be entitled to routine access to abiraterone before chemotherapy.

Janssen was relieved over NICE’s decision but expressed frustration over the drawn out process that led to Zytiga’s approval. Read full story at: http://bit.ly/1USARFs

[email protected]

and development of sofosbuvir, we do not believe Merck is entitled to any amount of damages. We continue to believe the Merck patents are invalid. In the event the judge maintains the jury’s verdict, we will appeal,” Gilead said in a statement following the jury’s $200m award decision.

District Court Judge Beth Labson Freeman will determine at a separate hearing whether to adopt the jury’s recommended 4% royalty rate for future sales of Sovaldi and Harvoni or any other one-pill combinations that contain sofosbuvir. Future combo pills include a sofosbuvir-velpatasvir combination that’s under US FDA review and a late-stage, experimental three-drug regimen that includes both compounds plus GS-9857.

“The jury’s verdict upholds patent protections that are essential to the development of new medical treatments,” Merck said in a statement about the jury award.

Gilead’s likely appeal will keep Merck and Ionis from receiving

any royalties for at least two more years – after many millions of dollars are spent on legal fees

The company also noted – perhaps in response to Gilead’s assertion that “Merck made no contribution” to the development of Sovaldi – the value of its hepatitis C virus (HCV) research with Ionis, which led to the two patents that the companies say Gilead infringed: “The compounds and methods at issue in this case facilitated significant advances in the treatment of patients with HCV infection and were appropriately granted the patents nos. 7,105,499 and 8,481,712. Achieving these advancements required many years of research and significant investment by Merck and its partners.”

Value Of Merck’s Patents In FluxJefferies analyst Brian Abrahams pointed out in a March 24 research note that the jury’s damages award applied a 4% royalty rate to 100% of Gilead’s Sovaldi sales in the US and 89% of US Harvoni sales minus the company’s $15bn investment in developing the drugs. If the full $23.1bn value of the two drugs’ US sales since late 2013 was factored in, the jury award would have given Merck $925m.

Ionis will pocket $40m if the jury award related to $5bn in past sales stands, but would’ve taken in $185m based on the full 2013-2015 US sales total.

In terms of future sales, Gilead said earlier this year that it expects Sovaldi and Harvoni sales to stabilize in 2016. Combined Sovaldi and Harvoni sales totaled $19.1bn worldwide in 2015, including $12.5bn in the US, which – if sales are similar to 2015 levels – would give Merck $500m in US royalties in 2016 under the jury’s 4% royalty rate or $1.25bn under the company’s preferred 10% rate, less $100m to $250m for Ionis.

The odds may be in Merck’s favor, according to statistics cited by Abrahams, which show that “Federal District Courts award an ongoing royalty that exceeds the jury’s determined royalty 71% of the time by an average multiple of 2.4x, so it is very possible the rate will be higher than 4% (but adjusted downward for Harvoni and likely sofosbuvir/velpatasvir).

Regardless of Judge Labson Freeman’s determination of a fair royalty rate on future sales of Sovaldi-containing products, Gilead’s likely appeal will keep Merck and Ionis from receiving any royalties for at least two more years – after many millions of dollars are spent on legal fees.

Abrahams said an appeal is likely to take 12 to 18 months or longer and he noted that “there were many issues discussed in this case that, on appeal, could either warrant a lowering or increase of damages, a jury or court to retry certain aspects of the case, or partial or full reversal by the appeals court. We await future case briefs to see which, if any, issues are addressed on appeal. … Settlement is also an option that could occur throughout the appeal process.”

[email protected]

Merck Gets $200m In Gilead Patent Case, But Who Wins? (Continued from page 1)

Michelangelus/shutterstock.com

Page 8: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

8 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

interVieW

change and to weather adjustments when it’s not a choice I have made personally. Experiencing so many cultures had a big impact on me growing up and made me brave about going into new situations.

LE: At what point did you realize you were going to make a career in the pharmaceutical industry?

KR: I did an undergraduate degree in pharmacy at the London School of Pharmacy and I loved that course – it was very varied and covered a lot of different pharmaceutical business areas. I also spent a year at Queen’s Medical Centre in Nottingham doing a rotation through different fields of medicine and pharmacy in manufacturing, dispensing and retail. I had a lot of exposure to different components but it was at this point in my studies that I really wanted to go back into education because I didn’t see myself remaining in a retail environment for ever. After doing a rotation at Boots Pharmacy I felt I could have more of an impact being involved in the industry that was developing these medicines. So after doing my PhD in the US, the next logical step for me was to move into the pharmaceutical industry.

LE: What was your favorite subject at school?KR: I was quite good at a lot of things,

which meant I wasn’t fixated on just one topic, but one of my favorite subjects was history. However, I have always been a great pragmatist and felt that a career in history would be quite challenging. I also loved biology and in the UK further education system you specialize quite quickly. When I came to a fork in the road between history and languages or science, I ultimately tipped towards science. I was quite good at chemistry and biology but I was lousy at physics; this helped to set me on the trajectory towards pharmacy.

LE: You have risen to a leadership position in your field. What aspects of your personality have helped you get here?

KR: I am a rare extrovert in a technical field where there are a lot of introverts, meaning I am quite a social being focused heavily on forming relationships and building diverse and invested teams. My parents instilled a great deal of self-confidence into me and encouraged me to express my opinion and to be assertive. These are qualities that have allowed me to have my views heard. I am also a risk taker, prepared to try totally new things.

LE: What key learnings from your various roles at GSK have you brought with you into your current position at Stiefel?

KR: In my career I have held positions that have allowed me to run drug development projects over a broad range of therapy areas – including neurology, rheumatology and oncology – which has given me a strong understanding and foundation in the different moving parts needed to develop a new medicine. Also, running these programs without necessarily the expertise in the clinical area has taught me a lot about identifying what it is you don’t know and when to seek out experts in a field. From all of my years in pharma I am able to marry together the clinical know-how and the nuts and bolts of drug development for success.

At Stiefel we are in a new era of trying to develop more transformative medicines for dermatological disorders. This really requires an understanding of the continuum of drug development – from a novel chemical entity, target selection to progression into early trials and beyond. My foundation from various roles at GSK has helped me to guide my team in Stiefel towards a defined strategy and focus.

When I first moved to Stiefel there were a large number of projects with varying degrees of promise and this was diluting effort. Very early on we looked at the portfolio and evaluated projects that would reach the most successful outcomes, ultimately providing the most value to patients. That was an exercise I sponsored early on. In addition to focusing on core capabilities, I think it is important in any kind of constrained resource environment to have a real clarity around what are the skills, capabilities and talents you need for development.

LE: What has been the proudest moment of your career?

KR: I have been at GSK in its various forms for 27 years and what is perpetually motivating about this industry is the mission of bringing new medicines to patients. I had the privilege of leading the development of Arzerra for chronic lymphocytic leukemia, in collaboration with Genmab. Standing in front of the European Medicines Agency’s scientific committee, the CHMP, and presenting the case as to why our medicine warranted approval was the ultimate prize. Of course we experience failures along the way in this line of work, so when you get to be a part of a successful product it is a memorable high point.

GSK’s Rouan Tells Inside Scoop On Surpassing Scandal (Continued from page 1)

Kathy Rouan, senior vice president and head of R&D at Stiefel

Page 9: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

© Informa UK Ltd 2016 @scripnews scripintelligence.com April 1st 2016 9

interVieW

LE: What has been the most difficult moment in your career?

KR: I have survived two mergers in my career and fusions between two large companies, no matter how friendly, are challenging. After the merger with GlaxoWellcome plc, I was at a career crossroads and there was tremendous uncertainty about what my next step would be amongst lots of alterations in leadership at the company. It was such a grand scale of change it was very difficult to navigate but I gained great learning from this experience and I was able to route my way through to end up in a role essentially equivalent to the job I had in the former company. It was hard but the tougher moments are some of the most substantial opportunities for learning.

LE: Who do you admire in the industry, and why?

KR: I have a terrific admiration for Sir Andrew Witty. It is sad to me that within our industry, inevitably, the isolated incidents of bad choices and bad behavior are what make the news. I feel Sir Andrew has set out a model of value-based leadership that is conveyed throughout our company. Employees feel liberated to do the right thing and to make the right choices – and this is very motivational. Yet, he is someone in the spotlight at the moment for reasons that don’t relate to those elements of his leadership. He has encouraged employees to get involved in not-for-profit organizations, he has established partnerships with charities and has encouraged us to move into areas of business that might not be obvious for a large pharma company. I also think Sir Andrew understands how important it is to establish trust. We know trust is very hard to build and very easy to break and I really admire his focus and authentic belief in advocating an industry that is worthy of the public’s confidence.

GSK is a big company so the message from the top is very important. Last year was a difficult year for us and a number of people lost their jobs. For some that have been at the company for a long time action like that inevitably can erode trust. However, it was a normal consequence in what was an important time of change for GSK. As a company though we are through the major portion of this evolution and we have seen new opportunity arise. Change is hard but as a company we have set forth a vision and we have to keep people motivated to continue on this journey.

LE: As a woman holding a senior title in a pharma company, a sector that has been criticized for gender inequality at the

higher ranks, what has your experience been like?

KR: I personally don’t feel like I have ever been at a disadvantage because I am a woman. I have had the benefit of both male and female mentors who have encouraged me every step of the way. However, I recognize in the most senior ranks that there is a disproportionate number of male and female senior leaders and this is not desirable. I have thought about this and what the contributing factors are and I think we need to start at where our industry recruits. We as an industry seek out experts in science, technology, engineering and mathematics (STEM), and although there is progress we still don’t see in the academic ranks a degree of equity. So the concern perhaps starts here.

However there are clearly hidden biases that we need to think about and actively address within the industry. There was one point in my career that I was encouraged to move into a role that was more operational and functional, that I was capable of doing, but I was very much motivated to stay in positions leading the science and choices around technical aspects of development. We see a trend in the industry of women being encouraged into or gravitating towards what I would call more functional roles. What we need to do is really seek talented woman for positions that are clear scientific leadership positions, on the back of this evolving progress of more women entering the STEM fields of further education. I personally don’t feel disadvantaged but we do still have a problem that we need to be active about addressing. As an industry we are starting to recognize the benefits of gender equity for business but my experience has been that women who succeed have to check an awful lot of boxes, where there has been a bit more forgiveness for male successful leaders when they don’t check all the boxes. We need to recognize some of these biases and be prepared to address them.

LE: What is it like working in a more specialized business unit such as Stiefel?

KR: Stiefel has the best of both worlds. We are a discreet specialized unit – which gives us a very clear focus – and we have a committed cohesive feel of a small company. But this is not so different from the ambition GSK has at large, which is to create the smaller discovery groups focused on a specific mission with a specialized set of capabilities. Stiefel is an extension of a model GSK is very connected to that sees the big pharma company very connected

and focused for success in a variety of therapy areas. However, being a specialized unit of a big pharma company, Stiefel has access to what we call the “treasure chest” that includes GSK compounds and capabilities that wouldn’t normally be accessible to a smaller company. Stiefel is organizing itself to take full advantage of this opportunity.

LE: A lot of companies appear to be taking this specialist pharma route, why do you think this trend is increasing and what are the benefits?

KR: There is a great ability in a specialized format to focus resource, effort and capability and there is a real risk when you dilute your efforts across too many approaches that you will lose the ability to build depth. However, if you want to be successful in a specialist area you have to make sure you have the critical mass and expertise to deliver. One key benefit is that in a smaller company you can more easily create a culture that sees the whole business very engaged in a discrete mission. Our mission at Stiefel is to deliver transformative medicines to patients with a very core set of dermatological conditions. History has shown you can be more successful if you build a unique capability in a few areas rather than distributing yourself more broadly. Obviously within big pharma we are trying, particularly in the discovery area, to replicate what has is seen in smaller biotech companies – this incredibly focused, energized and committed group of people who can really align around a goal.

LE: What is the best piece of advice you’ve ever been given?

KR: My mother says: “If you are not in a role where you are producing product then your value to an organization is your opinion, so make sure you express it and make sure it is your own.” I think that is really good advice and should be encouraged.

LE: Tell us one myth about the industry that you’d like to set straight.

KR: I have been in the industry for a long time and I am very invested in its mission to help people live healthier lives and to make a difference to people who have need. I am clearly saddened by the failure in this instance to be understood and trusted. There are endless examples of the ways medicines have changed people’s lives but unfortunately the economics of our industry seem to be at the forefront as opposed to the worthwhile mission.

[email protected]

Page 10: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

10 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

heAdline neWs

Teva Pharmaceutical Industries Ltd. gained US approval on March 23 to market Cinqair (reslizumab) as an add-on maintenance treatment for adults 18 years or older with severe asthma with an eosinophilic phenotype. But the FDA turned the Israeli firm down on use of the drug in the adolescent population – meaning it’s going to have a tougher time competing against GlaxoSmithKline PLC’s Nucala (mepolizumab), which won the broader use.

There are several similarities between Cinqair and Nucala.

For instance, both drugs are monoclonal antibodies that inhibit interleukin-5 (IL-5), the main promoter of eosinophil growth, activation and survival.

The labels for both products emphasize they are not approved as treatments for other eosinophilic conditions or for the relief of acute bronchospasm or status asthmaticus.

And both of the FDA panels convened to examine the applications for Cinqair and Nucala advised against use of the drugs in adolescents 12-17 years – declaring there was a lack of data in that population for both anti-IL-5 medicines. But in Nucala’s case, the FDA decided to overrule the Pulmonary-Allergy Drugs Advisory Committee when the agency this past November approved the drug – the first anti-IL-5 treatment OK’d in the US for severe asthma – and gave its blessing for use of the product in the younger age group. Regulators, however, didn’t do the same for Cinqair.

Both Cinqair and Nucala are administered every four weeks, but Teva’s drug is given as an intravenous infusion over 20-50 minutes, whereas GSK’s product is administered subcutaneously.

Teva has not revealed the price of its drug, but spokeswoman Michelle Larkin told Scrip Cinqair’s cost would be “similar to other asthma biologics and largely reflective of investments made to research, develop and commercialize a safe and effective biologic treatment.”

Nucala was priced last fall at $2,500 per vial.“It is important to Teva that this product

is priced fairly, so patients may be able to access this medication,” Larkin said, adding the company would not discuss details about pricing until closer to commercial availability, which is expected in the second quarter.

She said Teva has created a “biologic-specific” sales force to focus on specialists treating the severe asthma patient population and to support staff at the infusion sites where Cinqair will be administered.

Teva’s Support Solutions program will provide personalized support, training and education to healthcare providers and patients who have been prescribed Cinqair, the company said.

Asthma often is characterized by an accumulation of white blood cells, or eosinophils, in lung tissues. In general, eosinophil levels correlate with severity and frequency of exacerbations of asthma.

Patients with eosinophilic inflammation, which makes up only about 3% of the 25 million

Americans with asthma, but account for about 50% of the direct healthcare costs related to the disease, are a very difficult population to treat.

The FDA approved Cinqair based on the data from five placebo-controlled studies, which demonstrated the efficacy and safety profile in a population of 1,028 adult and adolescent asthma patients treated with the drug at the 3mg/kg dosage who were inadequately controlled with inhaled corticosteroid-based therapies.

Three of Teva’s studies constituted the Phase III program in patients with asthma and elevated blood eosinophils, the company said.

The trials also demonstrated that treatment with Cinqair was associated with reduction in asthma exacerbations of up to 59%, in addition to significant improvement in lung function, symptoms and asthma-related quality of life, Teva reported.

The most common adverse reaction with an incidence greater than or equal to 2% in patients treated with Cinqair was oropharyngeal pain.

Anaphylaxis was reported at a rate of 0.3% in the placebo-controlled studies, Teva said.

In addition, an imbalance in malignancy was observed in the Phase III trials of 0.6% for Cinqair, versus 0.3% for placebo.

Teva said the observed malignancies were “diverse in nature and were diagnosed within less than six months of exposure to Cinqair.”

Teva’s shares took a slight hit on March 23 – falling 1.46%, before closing at $54.05, down 73 cents, or 1.33%. [email protected]

Teva’s Cinqair OK’d, But Narrower Use Than GSK’s Nucala

Vertex Pharmaceuticals Inc. says it is “not surprised” that NICE has issued draft guidance not recommending Orkambi (lumacaftor/ivacaftor) for use on the NHS in England.

“Since the beginning of our discussions with NICE, Vertex has made clear our belief that the single technology appraisal process is not appropriate for assessing medicines, such as Orkambi, for rare diseases like cystic fibrosis, as it does not take into account the full benefits these medicines can bring to patients,” said Simon Bedson, senior vice president and international general manager at Vertex.

The product was approved in the EU in November 2015 for people with cystic fibrosis (CF) aged 12 and older who have two copies of the F508del mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene (around half of all CF patients). It is the first approved drug to treat the underlying cause of CF in people with two copies of this mutation.

NICE noted that the cost of Orkambi is £8,000 per 112-tablet pack. The cost of a one-year course of treatment is £104,000. NICE’s committee discussed the clinical evidence from the TRAFFIC, TRANSPORT and PROGRESS trials in its evaluation.

The committee concluded that the reductions in pulmonary exacerbations seen with Orkambi treatment were clinically significant and important for the management of cystic fibrosis. However it also concluded that the acute improvements in ppFEV1 (percent predicted forced expiratory volume in one second) seen with Orkambi were modest and unlikely to be clinically significant.

“Vertex is pleased that NICE has recognized the significant clinical benefits of Orkambi and, in particular, that the reductions in pulmonary exacerbations were ‘clinically significant and important for the management of cystic fibrosis.’ We are not surprised that despite this

recognition, NICE has not recommended its use in their draft guidance,” said Vertex’s Bedson.

The committee discussed the treatment cost of Orkambi used in Vertex’s pricing model. It noted that the company had assumed an arbitrary reduction of 89% in the price of Orkambi after 12 years because of patent expiry, however, it felt “there was no robust basis for making this assumption.” NICE has not considered price reductions resulting from the potential introduction of generics or biosimilars previously “because this is speculative, and the timing and impact of their introduction is unknown.”

NICE noted that when the company’s “arbitrary” price reduction for Orkambi was removed, the company’s base-case ICER increased from £218,000 to £349,000 per QALY gained for Orkambi plus standard of care compared with standard of care alone.

[email protected]

NICE Fails To Recommend Vertex’s Orkambi In CF

Page 11: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

© Informa UK Ltd 2016 @scripnews scripintelligence.com April 1st 2016 11

r&d bites

Brilinta No Better Than Aspirin In Stroke TrialTopline data from the SOCRATES trial of Brilinta (Brilique; ticagrelor) provided more ammunition for those pushing for AstraZeneca’s CEO Pascal Soriot to have his pay linked to performance. The SOCRATES trial evaluated a 90-day treatment with Brilinta (90mg tablets twice daily) compared to aspirin (100mg once daily) in patients with acute ischemic stroke or transient ischemic attack (TIA). The primary efficacy endpoint of time to first occurrence of an event such as stroke, heart attack or death was not met. “Fewer events were observed with Brilinta but the trend did not reach statistical significance,” said an AstraZeneca spokesperson. “We set the bar high when we designed the trial, at 20% risk reduction compared with aspirin, so we knew it was a high risk study,” added the spokesperson. The bar had to be high owing to the availability of cheap generics which are used to help prevent blood clotting in stroke patients. It was too early to say whether the SOCRATES data was the end of Brilinta in stroke, added the spokesperon. Data were being analyzed and would be discussed with experts and regulators and presented at an upcoming conference. Meanwhile, the impact on Brilinta sales was “not material.” For one, the SOCRATES trial enrolled a patient population that differs from the currently-approved indications of the drug. In addition, Brilinta had a “narrow treatment time of 90 days” when administered in stroke patients, the spokesperson noted, so “not a massive financial opportunity.” Analysts had estimated additional revenues of around $500m.There was no change to AstraZeneca’s forecasts for this year or for its 2023 targets, they added.

Positive Data For Amgen/UCB’s Romosozumab Amgen and UCB have demonstrated the efficacy of their osteoporosis treatment romosozumab in men in the Phase III BRIDGE study. This follows Phase III FRAME data in women which will form the basis of a US filing later this year. “While the focus of managing osteoporosis is often on women, osteoporosis in men is also a serious health issue,” said Dr Sean Harper, M.D., executive vice president of R&D at Amgen. “One in three women and one in five men over the age of 50 will experience an osteoporosis-related fracture in their lives,” added Professor Iris Loew-Friedrich, chief medical officer at UCB. Romosozumab, if successful in gaining regulatory approval, will become the second fully-human mAb for use in osteoporosis patients, following in Amgen’s own

Prolia’s (denosumab) footsteps. However, Amgen’s marketed product is usually reserved for more serious cases. Speaking to Scrip recently, UCB’s CEO Jean-Christophe Tellier said that his company has made “no projections” for potential sales of romosozumab but he would like to see its price “be a component of its benefit – the reduction of fracture risk.” ARCH, a second Phase III pivotal trial for romosozumab, is expecting top-line data in 2017. This data “in more serious patients” will be needed before a European filing can be considered, said Tellier. Romosozumab targets the product of the sclerostin gene, a protein expressed by osteocytes that downregulates osteoblastic bone formation. Its utility as a drug target was identified when a small group of people in South Africa was found to have dense bones due to a knockout of the sclerostin gene. “It’s a single gene knockout for a single protein. That’s quite rare,” explained Tellier. “Linking something like this to nature reduces the risk [in drug development]. We’re looking for more examples.” Romosozumab was originally discovered by UK biotech Celltech, which was acquired by UCB in 2004. Celltech had signed the partnership with Amgen in 2002. The BRIDGE study met its primary endpoint of a significant increase in bone mineral density (BMD) at the lumbar spine (as assessed by dual energy x-ray absorptiometry) in men with osteoporosis treated with romosozumab compared with placebo at 12 months. A total of 245 men were randomized 2:1 to receive either 210 mg romosozumab subcutaneous (SC) every month or placebo. In February Amgen and UCB reported the results of the Phase III FRAME study which tested romosozumab in 7,180 postmenopausal women with osteoporosis. The study met its co-primary endpoint of reducing the incidence of new vertebral fracture through months 12 and 24. However, a secondary endpoint of reducing the incidence of non-vertebral fractures through months 12 and 24 was not met. Radius Health released Phase III data in late 2014 showing a significant reduction for both vertebral and non-vertebral example fractures in patients treated with its drug, abaloparatide. “While this comparison will not affect the likelihood of approval of romosozumab, it could have implications for romosozumab’s clinical uptake,” said BioMedTracker analysts. ARCH, a second Phase III pivotal trial of romosozumab in women, is expecting top-line data in 2017. “ARCH enrolled a less healthy cohort of patients (postmenopausal women with at least one vertebral fracture). It will

be interesting to see if romosozumab will reduce non-vertebral fractures in this population,” said the BioMedTracker analysts.

Another Betrixaban Blockage For PortolaIt’s been a long, trying road for Portola Pharmaceuticals’ oral anticoagulant betrixaban and that path got a little rockier even as a regulatory filing is in sight. The company announced topline results from its Phase III APEX trial of 7,500 patients who were hospitalized for serious medical conditions like heart failure, stroke and pulmonary embolism. The trial compared a 35 to 47 day regimen of oral betrixiban to a four to 16 day regimen of the standard-of-care, the already generic version of Sanofi’s injectable Lovenox (enoxaparin). The data was analyzed for efficacy using three cohorts. The first cohort analysis was patients with elevated D-dimer levels, an indication of whether patients are developing deadly blood clots. If betrixaban was below a certain threshold compared to Lovenox, the company would analyze data from the other two cohorts – one that included patients over the age of 75 with elevated D-dimer levels and the other that included the overall patient population. Much to the company’s dismay, the late-stage trial missed its primary endpoint and didn’t show statistical significance in the first cohort. Investors weren’t pleased with the data, which remains the last hurdle for the drug before pursuing a regulatory approval. The stock quickly lost a chunk of its value, dropping 28.95%, or $8.28, to $20.34.

Praluent’s ODYSSEY Reduces Apheresis NeedAdding Sanofi/ Regeneron’s Praluent to existing treatment regimens can reduce or even eliminate the need for expensive and cumbersome apheresis in patients with heterozygous familial hypercholesterolemia (HeFH), top-line data from the first Phase III study in this setting show. The data, from the ODYSSEY ESCAPE trial, look set to give Praluent a marketing edge over its rival PCSK9 inhibitor Amgen’s Repatha (evolocumab) in these severe patients. Apheresis is an invasive procedure in which LDL-cholesterol is removed from the blood over three hours or more, in a process similar to kidney dialysis. The trial in 62 HeFH patients whose cholesterol levels required chronic, weekly or bi-weekly apheresis therapy, met its primary endpoint by reducing the frequency of apheresis by 75% in Praluent patients (150 mg sc every two weeks) compared with placebo, when added to existing treatment (p<0.0001). Furthermore, 63% of Praluent patients no longer required apheresis, compared with 0% of placebo patients. The double-blind treatment period comprised two intervals: for the first six weeks, patients remained on their established apheresis schedule at baseline, and for the following 12 weeks, apheresis frequency was adjusted based on the patient’s LDL cholesterol response to treatment. The most common adverse events seen that were higher in the Praluent arm in the study were fatigue (15% Praluent; 10%), diarrhea (10% vs 0%), myalgia (10% vs 5%) and headache (7% vs 5%). The full data from the trial which forms part of the 25,000-patients Phase III ODYSSEY program, will be presented at a future medical meeting.

R&D Bites

wavebreakm

edia/shutterstock.com

Page 12: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

12 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

heAdline neWs

In giving its blessing to Eli Lilly & Co. on March 22 to market Taltz (ixekizumab) as a treatment for adults with moderate-to-severe plaque psoriasis, the FDA created a new rivalry for Novartis AG’s medicine Cosentyx (secukinumab).

Both drugs are antibodies that belong to a new class of medicines, known as interleukin (IL)-17A inhibitors.

Taltz is seeking to take a bite out of the sales of Cosentyx, which was the first US approved monoclonal antibody that selectively binds to IL-17A, a naturally occurring cytokine involved in normal inflammatory and immune responses and plays a role in the pathogenesis of plaque psoriasis, one of the most common human skin diseases, which affects 7.5 million Americans and up to 125 million people worldwide.

Novartis’ drug, however, has had more than a year lead ahead of Taltz in entering the psoriasis space, which already provided a thriving market for Celgene Corp.’s Otezla (apremilast), Amgen Inc.’s Enbrel (etanercept) and Johnson’s and Johnson Inc.’s Stelara (ustekinumab). So Lilly’s success may come down to how it prices Taltz – details the firm is keeping mum on for now.

“Lilly doesn’t comment specifically on pricing prior to the product being launched,” a spokeswoman told Scrip. “Lilly plans to work with insurers, health systems and

providers to ensure patients are able to access this treatment.”

She said Taltz will be available in the US beginning in the second quarter.

Lilly declined to disclose details on its sales force and marketing strategy.

Alex Azar, president of Lilly USA LLC, however, insisted there was room for the company’s product in the marketplace – declaring in a statement “many people living with psoriasis are still looking for a treatment that will successfully manage the magnitude of this disease”

In Europe, Lilly gained a positive recommendation in February from Committee for Medicinal Products for Human Use for Taltz, all but assuring the drug’s entrance into the market there.

Lilly said its US approval for Taltz in plaque psoriasis was based on the findings three Phase III trials, which involved more than 3,800 patients from 21 countries – claiming it was the largest program in with moderate-to-severe plaque psoriasis to date.

The three double-blind multicenter Phase III studies – UNCOVER-1, UNCOVER-2 and UNCOVER-3 – evaluated the safety and efficacy of Taltz 80 mg every two weeks, following a 160-mg starting dose, versus placebo after 12 weeks. UNCOVER-2 and UNCOVER-3 included an additional

comparator arm, in which patients received US-approved Enbrel 50mg twice a week for 12 weeks.

UNCOVER-1 and UNCOVER-2 also evaluated response rates with Taltz during the maintenance period through 60 weeks.

In all three studies, 87% to 90% of patients treated with Taltz saw a significant improvement of their psoriasis plaques at 12 weeks. In addition, 81% to 83% of patients treated with Taltz achieved static Physician’s Global Assessment 0 or 1.

The majority of patients treated with Taltz, 68% to 71%,achieved virtually clear skin and 35% to 42% of patients saw complete resolution of their psoriasis plaques

Lilly also reported that Taltz was statistically superior to Enbrel at all skin clearance levels.

While Novartis and Lilly are the new kids on the block in psoriasis, there’s a new class of drugs coming – anti-IL23s, which Boehringer Ingelheim, Merck & Co. Inc. and J&J all have in development.

Shares of Lilly gained $1.99, or 2.8%, on March 22, before closing at $71.92, up $1.67, or 2.4%.

Novartis investors weren’t bothered by the new approval – pushing shares of the company up $1, or 1.35%, before ending the day at $74.39, a gain of 71 cents, or about 1%.

[email protected]

FDA OK’s Lilly’s Taltz; Rival To Novartis’ Cosentyx

Genentech Inc.’s and Exelixis Inc.’s Cotellic (cobimetinib), a MEK inhibitor, has an “indication of minor added benefit,” according to Germany’s HTA body IQWiG.

Cotellic was approved in Europe in November 2015 in combination with Zelboraf (vemurafenib) for the treatment of adults with advanced, i.e. metastatic or unresectable, melanoma with a BRAF V600 mutation. Cotellic plus Zelboraf is expected to compete with Novartis’s Mekinist (trametinib) plus Tafinlar (dabrafenib).

That combination is looking much better placed to be granted reimbursement having been granted “an indication of a considerable added benefit” for men on March 15, adding to the previous indication of a “major added benefit” for women which was granted at the end of 2015.

Zelboraf was co-developed under a 2006 license and collaboration agreement between Roche (Genentech’s parent company) and Plexxikon Inc., which is now part of Daiichi Sankyo Co. Ltd. Zelboraf is approved as a monotherapy. Germany’s Federal Joint

Committee (G-BA) will make a final decision on whether to reimburse the product in June.

IQWiG said it found positive and negative effects for several patient-relevant outcomes, “which did not completely outweigh one another.” This led to the recommendation of a minor added benefit of the new drug combination compared with vemurafenib monotherapy, according to IQWiG.

Roche cited the coBRIM study, which was decisive for the approval, in its dossier to the G-BA. In this study, cobimetinib in combination with vemurafenib was directly compared with vemurafenib.

Advantages Participants in the combination arm of the study survived significantly longer than in the vemurafenib arm: an indication of an added benefit of cobimetinib plus vemurafenib, noted IQWiG. There were also indications of lesser harm with the combination compared with vemurafenib monotherapy for three outcomes in the category of adverse events, namely neoplasms, alopecia and hyperkeratosis.

DisadvantagesIQWiG believes these advantages were offset by indications and hints of “greater harm” including diarrhea, nausea, vomiting and serous retinopathy/retinal detachment.

“The certainty of results was greater for the advantages, particularly overall survival, than for the disadvantages,” said IQWiG. “Hence the considerable negative effects did not outweigh the considerable positive effects, but only resulted in a downgrading of their extent. Overall, there is an indication of a minor added benefit of the combination cobimetinib plus vemurafenib compared with vemurafenib monotherapy.”

This assessment is part of the early benefit assessment according to the Act on the Reform of the Market for Medicinal Products (AMNOG) supervised by the G-BA. After publication of the dossier assessment, the G-BA conducts a commenting procedure (which closes on April 5) and makes a final decision on the extent of the added benefit (due in June of this year).

[email protected]

IQWiG: Roche’s Melanoma Combo Offers ‘Minor’ Benefit

Page 13: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

© Informa UK Ltd 2016 @scripnews scripintelligence.com April 1st 2016 13

heAdline neWs

SCRIP’S LIFETIME ACHIEVEMENT AWARDWINNER: SIR GREGORY WINTER

Sir Gregory is a genetic engineer best known for his research and inventions around therapeutic antibodies, which have changed the face of pharmaceutical R&D. Sir Gregory invented techniques to humanize rodent antibodies, and later to develop fully human antibodies against human self-antigens. Moreover, he has demonstrated the entrepreneurial skills needed to translate these inventions into pharmaceutical products. In 1989, he founded Cambridge Antibody Technology, which co-developed the world’s first fully human antibody drug, Humira. He was also a founder of Domantis and Bicycle Therapeutics.

I am proud to have received this award. The Scrip Awards showcase some of the UK’s best biotech and pharma business; it was exciting to be present and see in detail how science and business are being used to generate pioneering new medicines. The award means a lot to me personally, and to the early stage companies, such as Bicycle Therapeutics, with which I work.

“ “

CATEGORY SPONSORED BY

There’s hardly a day that goes by anymore without more fallout from the recent blowup of Valeant Pharmaceuticals International Inc., which has become the “poster child” of how not to run a drug company.

Another eye-opener involving the Canadian firm’s pricing practices emerged, along with the revelation Robert Goldfarb, CEO of Ruane, Cunniff & Goldfarb and co-manager of the Sequoia Fund – Valeant’s largest investor – had resigned after the mutual fund said its investment in the drug company “diminished a record that we have built over two generations and in which we take great pride.”

Sequoia reportedly lost as much as 28% over the past year.

The news earlier in the week that Valeant’s CEO Mike Pearson had been fired, although he’s sticking around until a replacement can be found, had not even cooled before the company again became the center of attention on social media after a Northern California public radio station, KQED – part of National Public Radio – reported the firm had hiked up the price of a drug used off-label in physician-assisted suicides. KQED reported Valeant had doubled the price of the

drug, Seconal, after the company bought the medicine in February 2015 – hiking its cost from $1,500 to $3,000 – a month after California lawmakers had proposed legalizing physician-assisted suicide, which the state indeed did this past October, becoming the fifth state to allow the practice. But after KQED’s report made its way around Twitter and Facebook, Valeant was quickly scorned and reviled.

The company, however, fought back – declaring in a late-day statement on March 23 “the suggestion that Valeant raised the price to take advantage of a law that had not yet passed, for a use for which the drug is not even indicated, defies common sense.”

Valeant made clear Seconal sodium is indicated for short-term insomnia, epilepsy and pre-operative anesthesia.

“If it is being prescribed for off-label uses, it is not something for which the product is manufactured or intended,” the company said.

Valeant insisted Seconal’s price increase occurred shortly after the firm acquired it “and months before California’s assisted suicide law passed.”

The company said it has sold about 1,000 units of Seconal, which is intended only for

short-term use, since acquiring it and does not actively promote it and is expecting less than $3m in total sales this year. Valeant also said a coupon for Seconal that had been making its way around the Internet was not being circulated by the company.

Valeant has been trying to distance itself since October of being labeled a price hiker after coming under investigation by prosecutors, the Securities and Exchange Commission and Congress – again repeating in its March 23 statement that while it may raise prices from time to time, “we expect those price increases to be much more modest and within industry norms.”

Pershing Square Capital Management CEO Bill Ackman, who joined Valeant’s board on March 21, also disclosed to his hedge fund’s investors in a March 24 letter in an annual report he was “fully” cooperating with a request from the US Senate Aging Committee in its investigation into the pricing of off-patent drugs.

Valeant is among the committee’s targets for its probe, which senators last week said was going to delve more deeply into the entire biopharmaceutical industry’s pricing practices.

[email protected]

Valeant Vilified Over ‘Death’ Drug; Fund Managers Vexed

Page 14: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

14 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

heAdline neWs

Sage Burned By Short ReportSage Therapeutics faced the wrath of finicky investors on March 23 as its shares dropped more 20% in early morning trading in response to a scathing report from a hedge fund that has a short positions on the stock. The overblown reaction is a good indicator of market climate.

The biotech’s shares dipped precipitously in morning trading, but recovered slightly as the trading day went on. Shares were down 14.63%, or $4.89, to trade near $28.56 around the close of the market.

Kerrisdale Capital released a report on Sage entitled “Overhyped Lead Drug Headed For Failure.”

The report attributes Sage’s value to a single drug in a single indication – SAGE-547, which is being studied in Phase III for a seizure disorder dubbed super-refractory status epilepticus (SRSE). It then goes on to say that the drug has nothing more to offer than the standard-of-care in the indication, that the company has “inflated” the market size and that it’s paving the way for Phase III failure.

“We believe that, in Phase 3, SAGE-547 will fail to outperform placebo to a statistically significant degree, throwing Sage’s future into question,” said Kerrisdale Capital.

“Thus, even if SAGE-547 does manage to produce passable data, its commercial prospects are far murkier than the market appreciates,” the report continued.

Sage isn’t a one-drug company doing clinical trials in a single indication. The company has multiple drugs in its pipeline – albeit, SAGE-547 is certainly the furthest along. The biotech is studying the drug in question in several indications, including the Phase III study in SRSE, as well as mid-stage studies in postpartum depression and essential tremor.

Beyond SAGE-547, the company has a Phase I compound SAGE-217 that is also being studied in essential tremor and other high frequency seizure disorders. It also has two other programs in IND-enabling studies and several preclinical programs.

Companies like this usually plow most of their resources into their lead compound while doing low-cost exploratory work in follow-on assets. These are the circumstances that biotech investors accept when putting their money behind these risky stocks.

Read full story at: http://bit.ly/22KuXLA [email protected]

In a lawsuit that Gilead Sciences Inc. filed after receiving a request from Merck & Co. Inc. for royalties from Gilead’s blockbuster hepatitis C drug Sovaldi (sofosbuvir), Merck may now be entitled to billions of dollars in royalties and damages after a jury validated the company’s patents on March 22.

Gilead sued to invalidate two Merck patents in August 2013 within weeks of Merck’s demand for a 10% royalty on sales from Sovaldi or any combination therapies containing sofosbuvir, because Gilead viewed Merck’s “prohibitive demand” as a threat, according to the company’s lawsuit. Merck filed a counterclaim that said Gilead is infringing its patents. The jury, having issued its decision upholding Merck’s patents, must now determine how much money Gilead owes Merck and co-inventor Ionis Pharmaceuticals Inc. (formerly Isis Pharmaceuticals), which as is entitled to 20%; the deliberations could add a few more days to the federal district court proceedings.

“Although we are disappointed by the jury’s verdict today, there are a number of remaining issues to be decided by the jury and the judge. Therefore, it is premature to comment any further,” Gilead said in a statement.

In its lawsuit, which was filed in the US District Court, Northern District of California, Gilead accused Merck of amending its patent applications to more broadly cover compounds for treating the hepatitis C virus (HCV) in a way that would present problems for Pharmasset Inc. – the original developer of Sovaldi, which Gilead purchased in 2011 – and other HCV drug developers.

Now that a jury has decided in Merck’s favor, the big pharma said in a statement that “the jury’s verdict accurately reflects the evidence in this case.”

Carlsbad, California-based Ionis partnered with Merck in 1998 to discover and develop modified nucleosides to treat HCV, so the jury decision upholding the patents “confirms the validity and value of the intellectual property covering the nucleoside analogs and methods we and Merck invented to treat HCV,” Ionis chair and CEO Stanley Crooke said in a statement from Ionis.

Merck also noted that “we have not sought to restrict access to Sovaldi or Harvoni in the United States, but instead asked for due compensation for the use of our intellectual property rights” related to the drug compound patent no. 7,105,499 and method of treatment patent no. 8,481,712.

If the jury grants damages equal to Merck’s demand for a 10% royalty, Gilead could owe the company almost $2bn based on 2015 sales of $19.1bn for Sovaldi and the follow-on

product Harvoni (sofosbuvir and ledipasvir). And that’s just the tip of the iceberg, since Merck could earn billions more from 2014 sales of the products and from Gilead’s future sales of Sovaldi, Harvoni, a two-drug combo containing Sovaldi and velpatasvir, and a forthcoming triple-therapy pill with Sovaldi as its backbone.

Gilead was expected, as soon as the jury verdict became public, to file an appeal to prevent billions of dollars from leaving its balance sheet. Leerink analyst Geoffrey Porges eventually confirmed that Gilead “strongly disagreed with the jury and intends to appeal the decision. It remains confident about its claims that the patents are overly broad, and intends to appeal via a bench trial, where a panel of judges – rather than a jury – will make the determination of the validity of the patents.”

Porges also wrote in a March 22 research note that: “Although today’s news is likely to put near-term pressure on Gilead’s stock, we anticipate that the legal-wrangling is far from over, with a resolution potentially years away – and that any final judgment [will] have a minor impact on the company.”

Gilead’s stock fell 2.9% to $91.05 per share in after-hours trading and Merck rose 2.2% to $54.18. Ionis rose 9% to $45.50 after the stock market closed.

Jefferies analyst Brian Abrahams said in a March 22 note that Gilead is likely to argue for a 1% to 3% royalty rate, but “a worst-case scenario is that Gilead pays the 10% royalty Merck requests on future US sales of Harvoni/Sovaldi until the patents [expire in] 2027, plus a $2.3bn upfront payment for past infringement.”

As for next steps in the patent brouhaha, Abrahams explained that “the jury determines a reasonable retroactive royalty rate based on comparable licenses for past infringement, and the judge will choose the ongoing royalty – which could align with the jury’s determined rate or could be inflated since a hypothetical license with now-valid patents would be more valuable going forward than in the past. She also does have discretion to adjust the jury’s rate if she decides damages are warranted.”

However, the lawsuit and counterclaims filed by Gilead and Merck in 2013 and 2014 are not the only patent disputes between the companies. Idenix Pharmaceuticals, which Merck acquired for $3.85bn in 2014, filed patent interferences in the US and several other countries – including the UK, where the court sided with Gilead in late 2014.

[email protected]

Merck Wins In Gilead Patent Case

Page 15: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

© Informa UK Ltd 2016 @scripnews scripintelligence.com April 1st 2016 15

bUsiness bUlletin

New Regeneron/ Bayer Deal Builds On Eylea’s SuccessRegeneron Pharmaceuticals Inc. and Bayer AG are building on a partnership that has borne fruit for nearly a decade with the March 24 announcement of a licensing agreement to create a successor product to Eylea (aflibercept). REGN910-3 combines Eylea, a vascular endothelial growth factor (VEGF) trap molecule, with nesvacumab, an experimental angiopoietin2 (Ang2) antibody. The combination therapy has completed Phase I testing and now a pair of Phase II trials are evaluating the co-formulated single intravitreal injection for patients with either wet age-related macular degeneration (AMD) or diabetic macular edema (DME), the companies said. The firms have been partnered on Eylea, which is approved in the same indications, but aflibercept begins facing patent expirations in 2017. The drug was first approved for wet AMD in November 2011, and added a second US indication of macular edema after central vein occlusion in 2012. The DME indication was added to the label in July 2014. The ocular VEGF market has become highly competitive, but there’s still need for improvement, which is what the combination of VEGF-trap and Ang2 antibody could provide. It will be a tough market to enter without a clear advantage. Eylea contends with Roche’s Lucentis (ranibizumab) and Avastin (bevacizumab), but last year an NIH-funded comparative study showed that Eylea outperformed Lucentis and Avastin in DME – a difference in improvement that was considered clinically meaningful. The difference was less pronounced, however, at two years. Bayer first licensed ex-US rights to aflibercept in October 2006 in a deal that was expanded in 2014 with a collaboration to combine the VEGF blocker with rinucumab, a platelet-derived growth factor receptor beta (PDGFR-B) antibody, in wet AMD. That combination therapy candidate,

called REGN2176-3, is in Phase II testing. Angiopoietins are a family of vascular growth factors discovered by Regeneron researchers. Preclinical data indicate combination therapy using angiopoietin-based therapy can promote the formation and maturation of ocular blood and lymphatic vessels. This means the REGN910-3 combination could influence the pathological development of new blood vessels as well as the permeability of blood-vessel walls in certain eye diseases.

Delayed Reaction: BioMarin Rises On Pegvaliase DataBioMarin Pharmaceutical Inc. has bounced back from a stock price slump that occurred after it reported that pegvaliase, the company’s second therapy to treat phenylketonuria (PKU), met the primary endpoint in a Phase III clinical trial, but failed to meet a key secondary endpoint.BioMarin fell 3.4% on March 21, but jumped 6.7% to close at $83.43 per share on March 22 after investors apparently spent more time reviewing data for pegvaliase, a product that the company has been preparing to commercialize since at least 2011. BioMarin plans to seek accelerated approval from the US FDA before the end of 2016 based on the initial Phase III results and full approval in the future if the company’s theory about a delayed neurocognitive response plays out in the ongoing trial. San Rafael, California-based BioMarin revealed plans to expand its capacity for commercial production of enzyme replacement therapies, including pegvaliase (formerly known as PEG-PAL), four and a half years ago, signaling its confidence in the PKU treatment when it still was in Phase II development. Earlier in 2016, the company reaffirmed its expectations for pegvaliase with a prediction that it will contribute $1bn in sales to BioMarin’s annual revenue at the product’s peak. Analysts also seem to believe that pegvaliase will be approved, but are not convinced about the enzyme replacement therapy’s blockbuster potential. Investors may share the same tempered optimism given the setbacks that BioMarin has experienced recently for another high-profile development program that was expected to add near-term revenue to the company’s balance sheet. BioMarin has fallen far from its one-year high closing stock price of $149.13 on July 20 when the company reported positive Phase II breast cancer results for its PARP inhibitor Abrazo (talazoparib; BMN 673), which the company has since sold to Medivation Inc. in a move that sent the stock down 2.7%. BioMarin shares have traded below $100 since mid-January when the FDA rejected Kyndrisa (drisapersen) for Duchenne muscular dystrophy (DMD). Ongoing upsets in the race to bring the first-ever DMD therapy to patients brought BioMarin to a low of $64.74 on Feb. 8, but the company’s stock has been in the $70 to $80-plus range since then. The share price was helped in early March by positive Phase I/II data in Batten disease for cerliponase alfa (BMN 190), which may support accelerated approval. BioMarin traded

lower on March 21 even though pegvaliase met the Phase III primary endpoint of change in levels of phenylalanine (Phe) in the blood, because the PKU treatment did not meet what was viewed as a key secondary endpoint – improvement in attention deficit hyperactivity disorder (ADHD) symptoms – and actually showed a negative effect versus placebo in some patients. The company’s share price rose again on March 22, however, after investors apparently decided to believe BioMarin’s assertion that it takes a while to see neurocognitive benefits as a result of lowered blood levels of Phe. The Phase III program for pegvaliase began with PRISM-1, an open-label study that enrolled 261 PKU patients to assess the safety and tolerability of the therapy in all participants. PRISM-2 was a randomized discontinuation trial (RDT) that enrolled 215 patients from PRISM-1 or from BioMarin’s Phase II extension study and switched a randomized group of patients from those studies from pegvaliase to placebo.

Investors Chase Modest Immuno-Oncology OfferingsThe two most recent US initial public offerings by drug developers were launched by companies in the immuno-oncology field – Hutchison China MediTech Ltd. (Chi-Med) and Corvus Pharmaceuticals Inc. – showing that investors still are intrigued by cancer immunotherapies, although not at a high IPO price. Seven drug developers have completed US IPOs so far in 2016, including four immuno-oncology firms, a gene-editing specialist, a gene therapy firm and a company developing treatments for cystic fibrosis and other diseases. Chi-Med and Corvus did not have the biggest first-time offerings of the year, but they accomplished something that at least three other biotechnology firms could not: they got through the IPO window instead of postponing or canceling their offerings. Chi-Med priced its 7.5m shares at $13.50 per American depository share (ADS) for gross proceeds of $101.25m on March 16. The company ended its first day of trading at $13.40 and its stock has seen little movement since then, closing at $13.49 on March 24. Chi-Med is developing therapies for both cancer and autoimmune diseases, but it was the second Chinese company working in immuno-oncology to go public in the US this year after BeiGene Ltd., which launched its IPO in February at $24 per share and closed at $28.03 on March 24. Burlingame, California-based Corvus, which raised $75m in Series B venture capital in October to fund development of novel checkpoint inhibitors, sold 4.7m shares at $15 each in an IPO on March 22 for $70.5m in gross proceeds and the stock closed at $14.25 on March 24. Corvus priced its offering at the bottom of a proposed $15 to $17 range, but the early-stage immuno-oncology company did better than Syndax Pharmaceuticals Inc., which priced its IPO at $12 per share – below the proposed $14 to $16 range. Syndax has just one cancer drug candidate, entinostat, which targets myeloid-derived suppressor cells and regulatory T-cells. The stock closed at $12.62 on March 24.

Business Bulletin

pogonici/shutterstock.com

Page 16: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

16 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

heAdline neWs

Evotec Spin-Off Eyes Early Clinical POC With Immune Tolerance PlatformEvotec AG of Germany has spun out a drug discovery company called Topas Therapeutics GmbH. It is being launched with a €14m series A financing round led by VC firm Epidarex Capital, of which Eli Lilly is an investor. The round also included EMBL Ventures, Gimv and Evotec.

Topas has been built around technology licensed from the University Medical Center Hamburg-Eppendorf where it was invented by Dr Johannes Herkel and colleagues.

Topas’ platform is based on nanoparticles which selectively target liver sinusoidal endothelial cells (LSECs) and deliver peptides to these cells. LSECs can induce tolerance against blood borne antigens by generating peptide-specific regulatory T cells; this natural pathway is utilized by the Topas technology and can be applied to treat autoimmune diseases, allergies and drug induced immune reactions where an antigen and its respective antigenic peptides are known.

Preclinical development for a product to treat multiple sclerosis is underway and Phase I studies are expected to start in 2017.

Karl Nägler, a partner at Gimv which put €4m into Topas’ series A, told Scrip that there are many reasons that the new company is an exciting prospect. The delivery platform looks promising, “and once it has been validated in one disease, we just need to change the peptide and we can target a completely different disorder.” In addition, though the company and the platform is relatively new, the lead program “is going to look like a proper drug very soon.”

The series A funds will take the company through to “immunological proof-of-concept in man,” said Nägler. “If we design our trial smartly, chose the right indication, we can show proof-of-concept early on.”

Nägler noted that Topas’ competitors in the immune tolerance field which are already in the clinic with their lead programs were able to sign early deals for their technologies.

[email protected]

Two years, $18m and a big pharma buyout for up to $600m? That’s a great return for investors in Padlock Therapeutics Inc., a biotech firm that raised a single venture capital round in late 2014 to develop novel treatments for autoimmune diseases before Bristol-Myers Squibb Co. agreed to buy the company.

Cambridge, Massachusetts-based Padlock is focused on the development of drugs that inhibit protein-arginine deiminase (PAD) enzymes, which turn healthy proteins into neoantigens known as citrullinated protein antigens, triggering an unnecessary immune system attack. PAD enzyme inhibition could be an effective way to treat autoimmune diseases, such as rheumatoid arthritis (RA), before severe disease progression. Bristol-Myers executive vice president and chief scientific officer Francis Cuss said in a statement that Padlock’s approach could “transform the lives of patients.”

Padlock CEO Michael Gilman told Scrip that the company was not necessarily looking to be acquired, “but the name of the game in this business is optionality – keeping as many options open as possible.”

The company was talking to investors about a series B round and speaking with potential partners about all kinds of transactions when a Bristol-Myers acquisition became a possibility.

“This turned out to be the best deal,” Gilman said. “For me, the long game is making sure the programs find the right home. BMS has had a long and strong presence in immunology and I think they will do a great job with it.”

The Padlock assets will be added to an early-stage immunoscience pipeline at Bristol-Myers that includes “several novel compounds that offer first-in-class and a best-in-disease opportunities targeting long-term remission,” according to the big pharma. BMS said that it is seeking “entirely new mechanisms” for RA and other autoimmune disorders that have significant unmet medical needs.

Bristol-Myers will pay Padlock shareholders up to $225m in upfront fees and payments tied to near-term milestones plus up to $375m for the achievement of certain development and regulatory milestones. That’s at least 12.5x return on the $18m in venture capital that Padlock has spent to date and up to a 33.3x return if all of the deal’s milestones are achieved.

Gilman has been passionate about the potential for PAD enzyme inhibition since the company’s founding in 2014 based on the work of Padlock’s scientific founders Paul

Thompson of the University of Massachusetts Medical School along with Kerri Mowen and Todd Huffman of The Scripps Research Institute in San Diego. Padlock kept its headquarters in Cambridge, but opened a San Diego office in January where Mowen signed on to be the company’s director of biology.

Given Padlock’s short history and its recent expansion – the company hired five of its 10 employees since the beginning of 2016 – the deal with Bristol-Myers is bittersweet in a few ways.

First, Mowen died unexpectedly in February, about a month before she and her colleagues saw their work validated by a pharma company willing to invest hundreds of millions of dollars to advance their research.

Second, Gilman noted, Padlock really was just getting started. The company advanced PAD enzyme inhibitors quickly with plans to take at least one of its therapies into the clinic in the second half of 2017. Targeted diseases besides rheumatoid arthritis include lupus and multiple sclerosis.

The portfolio includes compounds based on the work of its scientific founders, molecules from screens done with Evotec AG, monoclonal antibodies developed internally, and assets based on PAD technology acquired from GlaxoSmithKline PLC in exchange for an equity stake in the company.

“GSK were shareholders; they will get a nice cash payment,” from the Bristol-Myers deal, Gilman said. “They managed to reanimate a dormant project. For the scientists at GSK, I think they’re very happy about that.”

Even so, he noted, an acquisition always is somewhat bittersweet, especially for a company that made so much progress in such a short time after Padlock closed its series A round in December 2014.

Gilman added that the transaction with Bristol-Myers is a good outcome for Padlock’s shareholders, who include the company’s employees and its venture capital investors – Atlas Venture, Merck KGaA’s MS Ventures, Johnson & Johnson Innovation and Index Ventures.

The deal also is a notable repeat performance for Gilman, who got Stromedix up and running then sold it to Biogen for $562.5m in 2012. Both Padlock and Stromedix were backed by Atlas, which would be happy to have Gilman back as an entrepreneur-in-residence.

Looking to the future, the Padlock CEO said he may not be ready to give up on entrepreneurial biotech ventures yet.

[email protected]

Value Unlocked: BMS Buying Padlock For Up To $600m

Page 17: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

Industry leading insightavailable soon on anindustry leading platform

All the cutting edge content you’ve come to expect, but now simpler to find, easier to interact with and all on one responsive platform for faster decision making

Your online experience is about to get better, with the launch of a new Scrip platform. Find out more at: pharmaintelligence.informa.com/product/scrip/

Page 18: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

18 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

Policy & reGUlAtion brieFs

Another Bass 2nd Chance: A Pharma Kettle Of FishDrug makers already were anxious about the decisions coming out of the Patent Trial and Appeal Board (PTAB) of the US Patent & Trademark Office (US PTO) – which more often than not have resulted in patents being invalidated – and the steady stream of so-called inter partes review (IPR) petitions being filed by Kyle Bass, chief investment officer at Hayman Capital Management. Now, for the second time this month, the PTAB has reversed course on another of Bass’ patent challenges and said it would institute his IPR after declining to do so on his first petition – giving the biopharmaceutical industry another reason to fret and the hedge fund manager another boost on his personal mission to bring down what he’s called “invalid” patents that “contain no meaningful innovations.” The PTAB agreed to review four patents held by Acorda Therapeutics Inc. on its FDA-approved multiple sclerosis drug Ampyra (dalfampridine) in response to an IPR filed by Bass – something the board had earlier declined to do, citing insufficient evidence. The PTAB said it would review Biogen Inc.’s 8,399,514 B2 (‘514) patent on the 480mg dose of the company’s MS drug Tecfidera (dimethyl fumarate) – declaring it found the prior art cited and relied on in Bass’ new IPR to be “considerably more persuasive” than on his first petition, which was denied this past September. The PTAB said that after considering the arguments and the evidence presented in the IPR on the ‘514 patent, Bass had established a “prima facie case of obviousness” and had made out a case that “there is a reasonable likelihood” his challenge would prevail. The IPR reviews, created in 2011 under the American Invents Act, are trial proceedings conducted by the PTAB intended to be a faster and more affordable way for third parties to challenge patents than going through the American court system. But Bass, through his self-created Coalition for Affordable Drugs, has filed more than 30 IPRs – with more than half of them granted. The Biotechnology Innovation Organization has accused Bass of abusing the US patent system and exploiting the IPR process as part of his “cynical” short-selling strategy against biotechs – declaring that Congress never intended for the patent challenge system to be used in that manner and have called for reform. Jefferies analyst Brian Abrahams said he wasn’t surprised the

PTAB would take a different point of view on Bass’ second go-around on the Tecfidera ‘514 patent, given the more complete package he provided. The PTAB has set Nov. 30 for a hearing on Bass’ IPR. But analysts pointed out that a decision would not be expected until about five months after that, in about March or April 2017. The IPR trial will require Biogen to demonstrate no prior art and no obviousness about its patent claims, which Leerink analyst Geoffrey Porges said would be “challenging” for the company. He noted the European Patent Office (EPO) earlier this month in a verbal decision said it would revoke Biogen’s EU 2,137,537 patent in its entirety on the 480mg dose of Tecfidera. A written decision from the EPO is expected in the upcoming months, which Porges said would elucidate the reasons behind why the patent was revoked. “Although there is no direct read-through between the EPO and PTAB decisions, we think that this gives credibility” to the prior art cited by Bass in his IPR, Porges said in a March 22 research note. Jefferies Abrahams noted that if Biogen’s ‘514 patent was revoked in the US, the company would rely on its ‘999 method of use patent, which expires in 2020, although it could be eligible for an additional three years, plus maybe even six months on top of that under Hatch-Waxman Act protection. And in Europe, he said, Biogen has new molecular entity exclusivity through early 2024. Analysts also pointed out the Biogen is facing another patent challenge from Forward Pharma AS through the US PTO’s interference process.

Jim O’Neill Optimistic About AMR Review Jim O’Neill says he spends sleepless nights worrying whether his Review of Antimicrobial Resistance (AMR) will run out of steam once completed in two months’ time – but he’s encouraged by growing evidence world leaders and the pharma industry are seriously embracing the theme and will soon make lasting commitments to effectively combat antibiotic resistance. Lord Jim O’Neill - ex-chair of Goldman Sachs Asset Management and the man appointed by UK Prime Minister David Cameron to launch and chair a review into the crisis of antibiotic resistance – says the G20 and the United Nations are gradually moving to address the acute need for the dozen or so new antibiotic drugs he believes are needed globally, along with preventative action to curb AMR. O’Neill spoke to Scrip upon the publication of his seventh and penultimate report, the latest addressing the need to promote sanitation, infection prevention and control measures and related surveillance globally to reduce the spreading burden of drug resistance. The report before that called for wider use of

vaccines and alternative approaches to tackle drug-resistant infections and urged adoption of innovative funding mechanisms to achieve that. O’Neill plans to present the final report to the UK Prime Minister and the wider global community in May 2016. He says China, which is the current chair of the G20, has signalled its serious support on the issue following the discovery there late last year of bacteria that resist the most common antibiotic of last resort - colistin - a development that has prompted scientists to warn the world is on the cusp of a post-antibiotic era. “My conversations with Chinese officials indicate that they are very keen to limit the risks of AMR in China,” O’Neill said in an interview. The Chinese government has recently indicated backing to a joint commitment along with the UK government to put £50m each into a global innovation fund that the O’Neill Review proposed in a previous paper. O’Neill’s efforts are also being focused on the United Nations ahead of its assembly meeting this autumn.

The Curious Case Of WHO’s Notice To SvizeraThe World Health Organization (WHO) has retracted a notice of suspension against Svizera Labs for tuberculosis drugs made at its Indian site, amid claims by the firm that the agency had moved in haste at the time of its initial action. The WHO was reported to have suspended, on March 18, approval of TB drugs from Svizera following unreliable manufacturing standards and quality management. The WHO then suggested that independent experts retest batches of the Indian firm’s on-market drugs to determine if a recall may be necessary. However, some hours later, the notice of suspension was removed and Svizera’s top brass told Scrip that the WHO/Prequalification Team (PQT) had not been “not willing to publish a rectification”. “The same was only done after high pressure from our side on Saturday (March 19) evening,” Boudewijn Ploos van Amstel, managing director, Svizera Europe BV, told Scrip. The initial WHO “Corrigenda” did not name Svizera, though the agency subsequently clarified that the Notice of Suspension letter for Svizera Labs was published due to an “administrative error” and was therefore removed from the website. “WHO Prequalification Team apologizes for any inconvenience,” the agency noted. The WHO did not immediately respond to Scrip’s request for clarification on the issue. Some foreign media reports, though, quoted the agency as explaining that the notice was published before Svizera was given “the entirety” of the permitted time frame to respond to outstanding issues and that further action would hinge on the firm’s responses to those issues. Asked whether Svizera had addressed all the issues in the WHO’s September 2015 notice of concern (NOC), including those pertaining to data integrity, Ploos van Amstel said that these had been addressed and the firm had also explained that some “critical/major observations/ assumptions” made by auditors were not correct.

Policy & Regulation Briefs

Page 19: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

© Informa UK Ltd 2016 @scripnews scripintelligence.com April 1st 2016 19

heAdline neWs

Zydus Overhauling Vaccine Site Amid WHO NoticeZydus Cadila appears to be implementing a major corrective and preventive action (CAPA) plan at its Moraiya site pertaining to its rabies vaccine following a rather damning notice of concern against it by the World Health Organization (WHO).

The WHO action, some analysts say, is worrying following as it does a previous FDA warning letter against Zydus’ formulation facility in Moraiya and it potentially points to some systemic compliance issues at the firm.

Zydus Cadila’s CAPA plans for the rabies vaccine site, timelines for which appear to run through much of 2016, include undertaking a protocol-based evaluation for documents generated since April 2015 to evaluate if data reliability is a systemic issue, augmenting manpower in quality control/assurance and manufacturing to ensure compliance commitment and also enhancing “quality culture” with a target date of December 2016.

McKinsey & Company has been engaged to support driving a quality culture and risk management from design to delivery, details in the WHO’s notice of concern dated Jan. 29, said.

Zydus Cadila has also outlined a string of other measures to enhance reliability and accuracy of data from the site and enhancement of sterility assurance. It has also, among other actions, committed to completion of a risk assessment for the facility, product/process and environment monitoring location.

Some of the corrective actions listed as completed by the Indian firm include “counselling” employees in the vaccines department on the importance of data integrity; action against certain seemingly errant employees – a microbiologist has been removed from all quality control activities; recall of all batches of the rabies vaccines manufactured from April 2015 and a suspension of the manufacture of the product.

Pankaj Patel, chair and managing director, Zydus Cadila, had at the recent India Pharmaceutical Forum 2016, underscored how the best of equipment, processes may be of little use if the people “are not right.”

Read full story at: http://bit.ly/[email protected]

A three-judge panel from the US Court of Appeals for the Federal Circuit on March 18 said generic drug makers can be sued for patent infringement in any US jurisdiction where those firms plan to compete – upholding two separate Delaware judges’ decisions to deny motions by Mylan NV to dismiss separate lawsuits brought against it by AstraZeneca PLC and Acorda Therapeutics Inc.

Mylan is seeking to market generic versions of Acorda’s multiple sclerosis medicine Ampyra (dalfampridine) and AstraZeneca type 2 diabetes drugs Onglyza (saxagliptin) and Kombiglyze (saxagliptin and metformin) and has submitted abbreviated new drug applications (ANDAs) to the FDA – certifying under Paragraph IV filings that the patents on the brand-name firm’s products in the US regulatory agency’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book, were invalid and would not be infringed by the proposed copycats. But Acorda and its partner Alkermes PLC and AstraZeneca filed lawsuits in the US District Court for the District of Delaware claiming infringement of their respective patents.

Mylan, however, claimed the Delaware court lacked “personal” jurisdiction – either general or specific – in the cases because the company is headquartered in West Virginia, where it did most of its preparatory work on its ANDA and has it principal business there, and filed those applications in Maryland where the FDA is headquartered.

Mylan hinged its motions and appeals on the US Supreme Court’s Jan. 14, 2014 ruling in Daimler Chrysler v. Bauman, in which the high court essentially said plaintiffs must establish a connection between the company being sued and the place where the lawsuit is being filed.

But the Federal Circuit judges pointed out that in sending its notices to the innovator companies, Mylan sent one of those to AstraZeneca’s subsidiary in Delaware. Mylan also had registered to do business and appointed an agent to accept service in Delaware. And “of particular importance,” the Federal Circuit panel said, “Mylan intends to direct sales of its drugs into Delaware, among other places, once it has the requested FDA approval to market them.”

They also noted that Acorda and AstraZeneca have connections with Delaware: Acorda is incorporated in that state, while AstraZeneca’s U.S. subsidiary has its principal place of business there, and both companies have sued other generic manufacturers for infringement of the same patents in that location.

In an amicus brief, the Biotechnology Innovation Organization argued that Mylan’s theory of specific jurisdiction would slow down ANDA litigation – something the industry group said was contrary to the statutory scheme of the Hatch-Waxman Act, which “relies on early resolution of patent disputes.”

In a separate brief, the Pharmaceutical Research and Manufacturers of America (PhRMA) said a core component of the legal system the group’s members rely on to protect their intellectual property is the ability to bring patent infringement suits in a forum of their choosing before the launch of generic drugs.

“A single litigant cannot be allowed to upset a carefully crafted congressional compromise – and distort a jurisdictional doctrine in the process – based purely on its own convenience,” PhRMA charged.

In denying Mylan’s motions, the Delaware judges – Chief Judge Leonard Stark in the Acorda/Alkermes case and Judge Gregory Sleet in the AstraZeneca lawsuit – concluded that Delaware had sufficient contacts related to the subject of the cases that it could exercise specific personal jurisdiction over the generic maker.

The two judges, however, disagreed about whether Delaware could exercise general personal jurisdiction independent of suit-related contacts on the ground that Mylan consented to such jurisdiction in registering to do business – taking different views of the status of decisions by the Supreme Court.

While Judge Sleet agreed with Mylan in the AstraZeneca case there was no general jurisdiction in Delaware under the Supreme Court’s Daimler decision, he denied the generic manufacturer’s motion because personal jurisdiction existed due to the notice the company sent to the innovator’s office in that state.

Judge Stark, however, denied Mylan’s motion in the Acorda case on the basis of the general personal jurisdiction – declaring the generic company had “consented” by registering as a business there in 2010.

The Federal Circuit panel concluded Delaware has an interest in providing a forum to resolve the disputes between Mylan and the brand-name manufacturers because the cases involve the pricing and sale of products in that state and harms to firms doing business there – with some of the companies incorporated or with principal places of business in that location.

[email protected]

Federal Circuit: Generic Cos. Can Be Sued Where They Compete

Page 20: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

20 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

exPert VieW

A challenging entry to 2016, with biotech’s stock fallout, IPO struggles and the pharma industry’s instability because of increasing global pricing woes and shifting business models, has put a spotlight on the industry to be more creative. As such, the topic of how to get adventurous in deal making shaped a lively debate at the recent European Life Science CEO forum in Zurich, Switzerland.

The number of companies seeking initial public offerings, M&A activity and deals so far this year has dropped dramatically in volume, while valuations have plunged from the heights reached in 2014 and 2015. However, the general consensus at ELSCEO, an event hosted by Sachs Associates, was that money is available to life science firms but decision makers have become wary.

During a partnering panel, executives in search and evaluation roles from various pharma companies discussed the financial challenges facing industry in the future, where and why pharma is getting innovative in deal making, and the issues that can arise when trying to convince new players to take the less traveled path towards a partnership.

Early Birds Catch The Worms There is “interesting deal activity at the earlier stages of development at the moment,” according to Sarah Holland, head of Europe, external science and partnering at Sanofi. Holland said during the session on the art of creative deal structures in licensing and partnering, this could be because both smaller biotechs and academic organizations are more sophisticated now than they were a few years.

Will Watson, head of European business development at Teva Pharmaceutical Co. Ltd, agreed, adding that “biotech is now much more able to enter a risk-share structure,” because the companies have greater access to cash than they did in the past – even if 2016 has been less advantageous than the preceding couple of years.

“Everyone is savvy these days, we all have access to the internet and can see what each other is doing,” noted Stuart Kay, director transactions at GlaxoSmithKline PLC. Kay said this had enabled biotech companies to be more upfront about what they want in a relationship with pharma.

He also highlighted that big pharma has upped its interest and ability to access academia. One example is GSK’s agreement with Avalon Ventures; a venture capital firm based in the US, which Kay said gave the UK-headquartered drug major access to the West Coast university hub, where it does not have an independent presence.

In 2013 GSK and Avalon agreed to co-invest up to $495m in 10 new biotech companies, with the former putting as much as $465m into the collaboration. GSK has the option to acquire any of the start-up firms following identification of a lead drug candidate. So far the partners have launched six new companies.

Kay said GSK’s arrangement with Avalon represented a novel structure of pharma working side-by-side with a VC in order to gain access to academia.

The business development executive also mentioned the recently launched Apollo Fund, announced in January 2016, in which GSK, AstraZeneca PLC and Johnson & Johnson are investing £30m between them over six years to advance academic therapeutic research from three leading universities. The establishments, Imperial College London, University College London and the University of Cambridge, are also contributing a further £3.3m each to bring the fund’s total to £40m. How the money will be spent will be decided by the Apollo Therapeutics Investment Committee (AIC), which is comprised of representatives of the six pharma and university partners. Kay noted that when projects from the fund mature the three pharma companies will be able to compete to acquire the assets or technology platforms. “Yet, because it’s a fund, if the projects are sold to someone else, the pharma companies who have invested at the start will still benefit,” he said. “It’s a remunerative cycle and a different way of accessing innovation without tying up the IP [under one company].”

Meanwhile, chair of the discussion Chris Britten, managing director of Torreya Partners LLP, noted that industry has seen some impressive large-scale, creative business development decisions for later-stage companies too. He highlighted Baxter and Abbott Laboratories’ unexpected decisions in recent years to spinout areas of their businesses into independent, pharma-focused companies. “The fact we can still be surprised is evidence that there is still creativity in business development plans across the industry,” he said.

Splitting The DifferenceBritten also asked panelists for their opinions on splitting indications in product licenses within a partnership. He highlighted a recent deal with an unusual structure, between Boehringer Ingelheim and AbbVie Inc. for the development of immunology compounds.

The two big pharmas struck a deal in March 2016 for the development of BI 655066, an anti-IL-23 monoclonal biologic antibody in Phase III development for psoriasis. Under the agreement, the companies will also

evaluate the drug’s potential in Crohn’s disease, psoriatic arthritis and asthma. In the initial period, the companies will share the responsibility for BI 655066. However AbbVie will be solely responsible for commercialization of BI 655066, while Boehringer Ingelheim will retain an option to co-promote the compound in asthma.

Britten said this deal showed there is a tolerance for indication splits under partnerships, but GSK’s Kay disagreed. He said his company is firmly opposed to indication splits because of the disconnection these arrangements create and issues for pricing of these products.

Teva’s Watson agreed, claiming that a geographical divide for products is more favorable. “Based on past experiences I would not get involved in a deal to split a product license by indication again. Doom and gloom occurs,” he said. Watson also cited pricing issues, particularly in Europe – a region with a more fragmented pricing and reimbursement system than, for example, the US – as a big concern for deals of this nature.

Too Far Outside The BoxBritten also asked panelists for their experiences on presenting deals of a different nature to potential external partners and their own internal management teams.

Watson said the biggest challenge for him is future proofing these types of deals. He noted as an example that if a partnership includes a 10-year distribution deal, his company has to be prepared for that agreement to be tweaked under certain conditions. “In 10 years a company might have been acquired two or more times,” he said.

Holland recalled an unusual M&A deal she led that hinged on the outcome of a study in monkeys, which raised eyebrows for her company at the time. “You have to be prepared for the reaction of other people to your creativity,” she said. Holland warned though that complexity is always a concern in innovative deal structures, adding that it is always best to keep things as simple as possible.

What’s The Trick?Watson told the audience that there is nothing creative about getting a partner to sign a deal; it’s all about “mitigating new structures that work.”

Kay added “The art of creative deal making is truly understanding what you both need and exploring all options to reach that target.”

Meanwhile Holland closed on the fact her company is French, “So for us deal making is about the art of seduction.”

[email protected]

The Art Of Creative Deal Making

Page 21: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

© Informa UK Ltd 2016 @scripnews scripintelligence.com April 1st 2016 21

stocKWAtch

Like the NASDAQ Biotech Index, the stock price of BioMarin Pharmaceuticals Inc. finished the shortened trading week about where it started, although this masked a drop of about 3% for BioMarin on the day it announced the results of its PRISM-2 Phase III study of pegvaliase in patients with phenylketonuria (PKU).

BioMarin’s announcement stated in its title that pegvaliase “meets primary endpoint of blood phenylalanine reduction ( p<0.001).” However, the adjective most commentators used to describe the study results was “mixed.” This was because the key clinical cognitive secondary endpoints were not significantly different from placebo, and more than one was worse than placebo. Add to that the 39% rate of hypersensitivity adverse events with pegvaliase against placebo’s 14%, and you have the recipe not just for mixed clinical trial results, but also for pureed prospects.

High levels of the essential amino acid phenylalanine are certainly diagnostic for most PKU patients. PKU is caused by either a double mutation in the enzyme which breaks down phenylalanine to tyrosine (another essential amino acid), or a deficiency in the cofactor of the enzyme. The recovery in BioMarin’s stock price was probably a result of investors being persuaded by the company and its paid clinical advisers that phenylalanine is eventually correlated with cognitive function in PKU patients as well as being a surrogate endpoint of the disease. Whilst that is probably true, it does not explain why some of the patients worsened on pegvaliase as measured by some clinical endpoints, and it does not address the likely requirement from the FDA and payers for a demonstration of safety as well as clinical efficacy rather than a surrogate of clinical efficacy. All this controversy may still pass with the “totality of the data” – the old chestnut that no one has yet dared used to described the results from the open-label PRISM-1, PRISM-302 and placebo-controlled PRISM-2 studies, which is itself a euphemism for mixed or pureed data.

Until the FDA panel documents are published for the pegvaliase BLA, I am very comfortable having sold both our fund’s BioMarin and Incyte Inc. holdings after returning from January’s JP Morgan conference. Since that time, BioMarin’s investment proposition has worsened significantly, as exemplified by last week’s announcement of the pegvaliase clinical results. BioMarin has conducted much larger and much longer studies in PKU patients than PRISM-2. Some of these were so-called natural history studies that define the patient

population and their disease progression under the current standard of care, which in the case of PKU is a severely restricted diet. Who better to design the placebo-controlled PRISM-2 than a company that is au fait with the current natural history of PKU? Why on earth then did BioMarin’s clinical development team design, and its senior management team approve, an eight-week PRISM-2 study when even the analysts at Jefferies and Piper Jaffray noted (admittedly after the PRISM-2 event) that there was “not enough time for neurocog.”

The reason why this one mistake has damaged both the pegvaliase approval potential and BioMarin’s investment proposition is that it is not just one mistake. About a year ago BioMarin’s management and its clinical development team signed off on the $680m acquisition of Prosensa Holding NV, only to see that due diligence and investment result in a savaging by an FDA review panel over the inconsistency and contradictory nature of the company’s data, and a complete response letter requesting further clinical studies.

BioMarin’s acquisition of Prosensa for its drug Kyndrisa (drisapersen) for Duchenne muscular dystrophy (DMD) was not the only connection between it and Sarepta Therapeutics Inc., which was also recently on the receiving end of a savage FDA review for its DMD drug candidate, eteplirsen. In Sarepta’s case, the review panel had to be delayed until mid-April after Snowmageddon in late January and the review of four-year follow-up data. Last week a group of 36 DMD experts published an open letter urging

the FDA to approve eteplirsen. In their flash note the analysts from Jefferies questioned whether the new data submitted would be sufficient to support approval of eteplirsen. In reviewing the totality of the evidence against eteplirsen, the Jefferies analysts noted the FDA’s previous suggestion of a natural history study to more accurately assess the treatment effect of eteplirsen, and the agency’s critique of Sarepta’s dystrophin surrogate biomarker data due to its low and very variable levels.

The glossing over of the totality of the data against eteplirsen’s approval next month was not the most surprising aspect of the physicians’ letter. Rather, it was that there were 36 DMD specialist signatories even though Sarepta only treated 12 patients in its last open-label study, including a mere six at the proposed approved dose. Too many of them do protest, methinks.

Andy Smith

Andy Smith is chief investment officer of Mann Bioinvest. Mann Bioinvest is the investment adviser for the Magna BioPharma Income fund which has no position in the stocks mentioned, unless stated above. Dr Smith gives an investment fund manager’s view on public life science companies. He has been lead fund manager for four life science– specific funds, including International Biotechnology Trust and the AXA Framlington Biotech Fund, and was awarded the Technology Fund Manager of the year for 2007.

Natural History Confounds Surrogate Endpoints

scripintelligence.com/stockwatch

For all Stockwatch articles visit

Sophie McA

ulay/shutterstock.com

Page 22: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

22 April 1st 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016

PiPeline WAtch

Late-stage clinical developments for the week 18-24 March 2016Lead Company Partner Company Drug Indication Market Comments

REGULATORY APPROVAL

Teva Pharmaceutical Industries Ltd.

– Cinqair (reslizumab) injection

asthma US First approval for this IL-5 antagonist MAb as add-on maintenance treatment of patients with severe asthma aged 18 years and older, with an eosinophilic phenotype.

Eli Lilly & Co. – Taltz (ixekizumab) injection

psoriasis US An IL-17 Mab for moderate-to-severe plaque psoriasis in adults who are candidates for systemic therapy or phototherapy.

Elusys Therapeutics Inc.

– Anthim (obiltoxaximab) injection

anthrax US Approved under FDA’s animal rule for inhalational anthrax combined with other antibacterials, and for prophylaxis when alternative therapies are not available or are not appropriate.

Actelion Pharmaceuticals Ltd.

– Uptravi (selexipag) pulmonary arterial hypertension

Australia, New Zealand

An orally active long-acting selective prostacyclin receptor agonist.

GlaxoSmithKline PLC

Amicus Therapeutics Galafold (migalastat) Fabry’s disease France A temporary use approval (ATU) for Fabry’s disease.

Horizon Pharma PLC

– Ravicti (glycerol phenylbutyrate) oral liquid

urea cycle disorder Canada For inherited metabolic diseases linked to urea cycle enzyme deficiency.

SUPPLEMENTAL REGULATORY APPROVAL

Eli Lilly & Co. Shionogi Cymbalta (duloxetine) chronic pain Japan For chronic lower back pain.

Ono Pharmaceutical Co. Ltd.

Merck & Co. Proemend (fosaprepitant meglumine)

chemotherapy-induced nausea and vomiting (CINV)

Japan An iv infusion formulation for children aged between six months and 12 years.

REGULATORY FILING ACCEPTED

Anacor Pharmaceuticals Inc.

– crisaborole mild-to-moderate atopic dermatitis (eczema)

US FDA accepts for review the NDA for the PDE4 inhibitor, formulated as a topical 2% ointment.

Rockwell Medical Inc.

Wanbang Biopharma (Fosun Pharma)

Triferic (soluble ferric pyrophosphate)

dialysis-dependent anemia due to chronic renal failure

China Submission accepted by China FDA.

Tesaro Inc. Opko Health Varubi (rolapitant) oral chemotherapy-induced nausea and vomiting (CINV)

EU EMA validated submission for the neurokinin-1 antagonist, with the filing supported by data from four studies covering a spectrum of patients receiving emetogenic chemotherapy.

Pfizer Inc. – Xeljanz, Xeljanz XR (tofacitinib citrate) tablets

moderate-to-severe rheumatoid arthritis

EU In patients with an inadequate response or intolerance to methotrexate (MTX). The filing provides additional information to the original MAA submission.

Xbiotech Inc. – Xilonix (MABp1, CA-18C3) advanced colorectal cancer

EU Based on a recently completed Phase III study.

ORPHAN DRUG DESIGNATION

Lee’s Pharmaceutical Holdings Ltd.

– Declotana (anfibatide) thrombotic thrombocytopenic purpura

US A potential first-in-class platelet 1b receptor antagonist.

Biomarin Pharmaceutical Inc.

– BMN-270 hemophlia A EU An investigational Factor VIII gene therapy for the treatment of hemophilia A.

Atara Biotherapeutics Inc.

– EBV-CTL hematologic cancers EU Allogenic activated T-cells targeted to EBV-infected lymphoma cells in patients with EBV post-transplant lymphoproliferative disorder.

FAST-TRACK STATUS

MediciNova Inc. – ibudilast (MN-166) multiple sclerosis US A PDE-5, PDE-10 and macrophage migration inhibitory factor inhibitor that attenuates activated glial cells.

COMPLETE RESPONSE LETTER

Eagle Pharmaceuticals Inc.

– Kangio (bivalirudin), ready-to-use iv formulation

percutaneous coronary interventions for stable angina

US FDA requested further information on bivalirudin related substances in the 505(b)(2) NDA.

ROLLING NDA FILING INITIATED

Advanced Accelerator Applications SA

– Lutathera (177Lutetium-DOTATATE)

neuroendocrine tumors US The review clock will not begin until AAA informs FDA a complete NDA has been submitted.

Scrip’s weekly Pipeline Watch tabulates the most recently reported late-stage clinical trial and regulatory developments from the more than 10,000 drug candidates currently under active research worldwide.

Page 23: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal

© Informa UK Ltd 2016 @scripnews scripintelligence.com April 1st 2016 23

SUPPLEMENTAL REGULATORY FILING

Mitsubishi Tanabe – Valixa (valganciclovir) tablets

CMV disease prevention Japan In post-transplant patients; already indicated for the treatment of CMV disease in such patients.

PRIORITY REVIEW

Raptor Pharmaceutical Corp.

– Procysbi (cysteamine bitartrate)

nephropathic cystinosis Canada A 180-day priority review granted; there are around 100 patients with the condition in Canada.

REGULATORY FILING WITHDRAWAL

Eisai – E0302 (high dose mecobalamin)

amyotrophic lateral sclerosis

Japan After meeting with regulaters, the data submitted deemed not sufficient, and Eisai is reconsidering its strategy.

REGULATORY REVIEW EXTENSION

Insys Therapeutics Inc.

– Syndros (dronabinol) oral solution

CINV and HIV, AIDS related cachexia

US PDUFA data extended from April 1, 2016 to July 1, 2016

PHASE III TRIAL INITIATION

Astellas Medivation Xtandi (enzalutamide) prostate cancer – ARCHES Phase III trial will evaluate enzalutamide with androgen deprivation therapy (ADT), versus placebo with ADT, in metastatic hormone-sensitive prostate cancer.

Otonomy Inc. – OTO-104 Meniere’s disease EU The AVERTS-1 study will enrol 160 patients.

Egalet Corp. – Egalet-002 moderate to severe chronic low back pain

US An abuse-deterrence, extended-release oxycodone tablet.

PRODUCT LAUNCH

Cumberland Pharmaceuticals Inc.

– Caldolor (ibuprofen) inj post-surgical pain, fever, mild to moderate pain

US For pediatric patients aged six months and older.

Aprecia Pharmaceuticals

– Spritam (levetiracetam) tablets for an oral suspension

epilepsy US First drug in US made using 3D printing technology producing rapidly disintegrating tablets.

CSL Behring – Idelvion (Factor IX-albumin fusion protein)

hemophilia B US Long-acting fusion protein that delivers protection for up to 14 days.

Teligent Inc. – Cefotan (cefotetan) bacterial infections US First product from portfolio of discontinued drugs bought from AstraZeneca.

Source: Sagient Research's BioMedTracker

APPointMents

NantKwest, an immunotherapy company focused on the immune system, has appointed Fatih M. Uckun vice president of research and clinical development. Prior to joining NantKwest, Uckun was president of Ares Pharmaceuticals and he was also a professor in the department of pediatrics at the Keck School of Medicine of the University of Southern California and head of translational research in leukemia and lymphoma of the Children’s Center for Cancer and Blood Diseases.

Concert Pharmaceuticals Inc. has appointed Meghan FitzGerald to its board of directors and will serve as a member of its compensation committee – effective since March 22, 2016. FitzGerald is currently executive vice president of strategy and policy at Cardinal Health Inc. and prior to this she was president of Cardinal Health Specialty Solutions. Previously she was vice president of new markets international division and business development at Medco Health Solutions Inc. FitzGerald has also held various positions at Pfizer Global Pharmaceuticals.

Sunesis Pharmaceuticals Inc., a company focused on oncology therapeutics, has appointed Geoffrey Parker to its board of directors. Parker brings more than 30 years’ of finance and leadership experience to the board and most recently was executive vice president and chief

financial officer of Anacor Pharmaceuticals Inc. Parker also has experience working with life sciences companies in various capacities at Goldman Sachs, leading the firm’s West Coast healthcare investment banking practice for 12 years. Furthermore, Helen Kim has stepped down from her position as a director.

Moderna Therapeutics has appointed Saqib Islam chief business officer – effective May 9, 2016. Islam joins Moderna from Alexion Pharmaceuticals Inc., where he was executive vice president, chief strategy and portfolio officer. He also has over 20 years’ experience in international business management.

Oncothyreon Inc. has appointed Scott D. Myers president and CEO; he most recently held the same positions at Aerocrine AB (acquired by Circassia Pharmaceuticals). Myers was previously an independent director for Orexo AB. and is currently an industry advisor to EQT, a Scandinavian investment fund.

AcelRx Pharmaceuticals Inc. has appointed Howard B. Rosen CEO after he served as interim CEO for the company – effective April 1, 2016. Rosen previously held senior level general management positions and functional roles at Gilead Sciences Inc. and ALZA Corp. Most recently

he was interim CEO of Pearl Therapeutics (acquired by AstraZeneca) and has served on AcelRx’s board of directors since 2008. Rosen is also on the board for Alcobra Ltd.

Biotech company Zytoprotec has appointed Joerg Vienken and Norbert Riedel to its supervisory board. From 1996 to 2013, Vienken was vice president biosciences at Fresenius Medical Care and is a member of the scientific board of the Berlin-Brandenburg Center for regenerative therapies, the Institute of Biocybernetics and Biomedical Engineering of the Polish Academy of Sciences. For more than 10 years’ Riedel was head of research and development at Baxter and has been involved with or held positions at companies including ARIAD, Naurex (acquired by Allergan), Aptinyx, Jazz Pharmaceuticals and MediGene.

MC10, a private company focused on improving human health through digital healthcare solutions, has appointed Eric K. Brandt to its board of directors. Brandt previously served as executive vice president and chief financial officer (CFO) Broadcom Corp., from March 2007 to January 2016, but before this he was president and CEO of Avanir Pharmaceuticals. Prior to Avanir, he was executive vice president of finance and technical operations and CFO of Allergan Inc.

Page 24: GSK’s Rouan Tells Inside Scoop On Surpassing Scandal