Takeda sees lower annual profit, generics to erode cancer drug sales

Japan’s Takeda Pharmaceutical Co Ltd on Monday forecast a 17 percent drop in operating profit for the year through March 2019 as blood cancer drug Velcade looks set to face generic competition in the United States.

The loss of Velcade’s exclusivity will be partly offset by growing sales of bowel disease treatment Entyvio and heartburn and ulcer drug Takecab, but Takeda’s lower overall profitability underscores the firm’s need to bolster its drug pipeline.

“It’s always hard in a pharmaceutical company to synchronise your pipeline with your generic exposure,” Takeda Chief Executive Christophe Weber said.

While Takeda’s record-breaking $62 billion (45.6 billion pounds) deal to buy Shire is expected to buoy the Japanese firm’s pipeline in the long run, the more imminent generic threat to Velcade is expected to hit the company’s sales this year.

Generic competition for Velcade, used to treat multiple myeloma, a type of blood cancer, will likely slash the drug’s sales by half this year, the company said.

The company’s operating profit will drop to 201 billion yen ($1.84 billion), lagging an average estimate of 216 billion yen from 11 analysts polled by Thomson Reuters.

This compares to a profit of 241.8 billion yen for the year ended March 2018, up 55 percent and the highest in six years.

Entyvio sales grew 41 percent to 201.4 billion yen in the year just ended, with Takecab sales up 62 percent to 55.1 billion yen. Velcade sales fell slightly to 137.3 billion yen.

The Shire acquisition, expected to close by the end of the year, will increase Takeda’s pipeline of phase III programmes to ten from three. After the deal, the U.S. market will account for almost half of Takeda’s sales, versus a third currently.

In addition to Takeda’s core areas of gastroenterology, oncology and neuroscience, Shire will add strength in blood-derived therapies and rare diseases, which are seen as being more sheltered from U.S. price pressures.

Takeda has already been making this shift, said Takeda’s chief medical and scientific officer, Andrew Plump, with rare disease accounting for a third of its current drug pipeline.

The Japanese drugmakers’ net debt to earnings before interest, taxes, depreciation and amortisation was 1.8 times at the end of March.

That ratio could jump to more than 5 times after the Shire deal closes, according to analysts. Takeda has said it will use increased cash flow from the combined company to bring the ratio down to 2 times or less in three to five years.

Assuming the deal wins regulatory approval and the backing of shareholders, it will be the largest overseas purchase by a Japanese company and propel Takeda into the top 10 rankings of global drugmakers.

https://bit.ly/2jUrMyk

Alkahest Starts 2 Phase 2 Trials for Age-Related Macular Degeneration Med

 Alkahest, Inc. (“Alkahest”), a clinical-stage biotechnology company focused on developing innovative therapies to treat age-related diseases, today announced the initiation of two Phase 2 clinical trials of ALK4290 in patients with the wet form of age-related macular degeneration (AMD).

“The initiation of these trials represents a significant step forward in our clinical development efforts and our commitment to the development of innovative treatments for a range of age-related diseases,” said Karoly Nikolich, President and Chief Executive Officer of Alkahest. “In addition to advancing our plasma-derived products, such as lead asset GRF6019, we have also continued to progress our broader pipeline derived from our deep understanding of the plasma proteome and its role in age-related diseases. ALK4290 represents the first non-plasma-derived product in our pipeline, targeting CCL11, which is elevated in wet AMD and other age-related diseases.”

“We are excited to advance ALK4290, which has demonstrated promising preclinical activity in animal models as an oral monotherapy agent,” said Sam Jackson, Alkahest’s Chief Medical Officer. “Oral dosing is particularly advantageous from a patient convenience perspective when compared to the standard of care, which is currently administered via intravitreal injection. We look forward to continuing to work with clinical experts, patients and their families as we pursue this novel approach to the treatment of the leading cause of blindness in adults.”

The ALK4290-201 study is a single-arm open-label Phase 2 clinical trial designed to evaluate the therapeutic effects and safety of a 6-week oral treatment regimen of ALK4290 in patients with newly diagnosed wet AMD. The ALK4290-202 study is a single-arm open-label Phase 2 clinical trial designed to evaluate the therapeutic effects and safety of a similar treatment regimen in patients with refractory wet AMD. Both studies will be conducted in Hungary and Poland which will allow evaluation of treatment-naïve patients, as well as in patients who have not responded to or who are refractory to treatment with intravitreal injections of anti-vascular agents.

About ALK4290
ALK4290 is a novel orally-available small molecule which has been well-tolerated in previous clinical studies. More than 165 participants have received ALK4290 across multiple studies. Alkahest acquired ALK4290 from Boehringer-Ingelheim and has exclusive rights for development and commercialization worldwide.

https://bit.ly/2rFpnMc

Myomo Application for Medicare Codes Receives Favorable Preliminary Decision

 Myomo, Inc. (NYSE American:MYO) (“Myomo,” or the “Company”), a wearable medical robotics company, announces that the Centers for Medicare & Medicaid Services (“CMS”) has published a favorable preliminary decision regarding the Company’s application for Healthcare Common Procedure Coding System (HCPCS) “L” codes. Myomo had filed its application in December 2017 to have CMS establish two new Level II HCPCS codes to describe “microprocessor-controlled, custom fabricated upper extremity braces.”

“We are very grateful to CMS and the whole HCPCS Workgroup for their preliminary decision to assign L Codes for our MyoPro line of powered orthoses,” said Myomo Chief Medical Officer Dr. Brandon Green. “The MyoPro has already helped so many patients with neurological/neuromuscular injury and illness by supporting their weakened arms, restoring control over their range of motion, reducing their healthcare costs, and giving them back their independence. It is important for clinically qualified Medicare and Medicaid beneficiaries to have access to this technology, too.”

If the decision is made permanent, the codes will become effective on January 1, 2019. The assignment of unique L-Codes, if followed by appropriate payment terms (which are still pending), would offer greater access to the MyoPro for Medicare beneficiaries.

The CMS preliminary decision on the MyoPro orthoses can be viewed on the following website: https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/2018-06-18-HCPCS-Public-Meeting-Agenda.pdf

https://bit.ly/2IIcVFr

FDA approves additional claim for Roche cobas Zika test

 Roche (SIX: RO, ROG; OTCQX: RHHBY) announced today FDA approval of an additional claim for the cobas® Zika test for use on the cobas® 6800/8800 Systems. The newly approved claim allows for the streamlined screening of multiple individual blood or plasma donations that have been pooled together.

The new claim follows the screening recommendations made at the December 1, 2017 meeting of the Blood Products Advisory Committee (BPAC), an appointed group of key medical & scientific advisors to the FDA. In addition to supporting the most recent BPAC recommendations, the extended claims for cobas® Zika facilitate a simplified testing workflow for blood screening laboratories utilizing the cobas® 6800/8800 Systems with the cobas®Synergy software solution in the United States.

“More than 6 million blood donations from the United States and Puerto Rico have been screened with the cobas® Zika test since its initial release under the Investigational New Drug Application (IND) protocol in 2016 and subsequent commercial approval in 2017,” said Uwe Oberlaender, Head of Roche Molecular Diagnostics. “Roche is pleased to offer additional screening options that support BPAC recommendations for the US market.”

Roche deployed the cobas® Zika test in April of 2016 under the FDA’s IND Protocol to screen blood donations collected in Puerto Rico. This initial testing protocol enabled the reinstatement of the blood services in Puerto Rico after concerns over the high rates of infection locally posed a significant threat to the blood supply. The cobas® Zika test received commercial approval from the FDA in October of 2017, enabling routine use of the cobas® Zika test to support individual donor screening efforts throughout Puerto Rico the continental United States.

About the cobas Zika test
Manufactured by Roche, the cobas Zika test for use with the cobas® 6800/8800 Systems and cobas® Synergy software, is a qualitative in vitro nucleic acid screening test for the direct detection of Zika virus RNA in plasma specimens from individual human blood donors. The cobas® Zika test is the newest addition to the testing menu for the cobas® 6800/8800 Systems in the US market. These fully-automated, high-volume systems perform automated sample pooling, automated sample preparation (nucleic acid extraction and purification), followed by PCR amplification and detection. Automated data management is performed by the cobas®6800/8800 software, which assigns a test result for each test as non-reactive, reactive, or invalid. Together with the cobas® 6800/8800 Systems, the cobas® Zika test provides solutions for blood services to detect Zika virus and ensure that potentially infected blood units are not made available for transfusion.

https://bit.ly/2Ifc27G

Ziopharm Delays Phase 3 Glioblastoma Trial to Focus on Other Studies

Shares of ZIOPHARM Oncology, Inc. are still sliding after the company announced it was pausing its planned Phase III trial for its lead gene therapy product designed to treat patients with recurrent glioblastoma (rGBM) as a monotherapy and in combination with an immune checkpoint inhibitor.

On Friday Boston-based Ziopharm said before the trial can continue it must resolve previously disclosed technical requirements related to Chemistry and Manufacturing Control (CMC) in order to make the asset ready for the Phase III trial in rGBM. This is the second delay the company has initiated for this particular study. Last year the program was pushed back several months and expected to start this year. Ziopharm did not provide a timeline for the Phase III trial to begin.

The company said it intends to advance Ad-RTS-hIL-12 plus veledimex as a treatment for rGBM, but before it does so, the company said it intends to “focus its resources on studies of Controlled IL-12 in additional tumor types to demonstrate the value of this platform technology.” That was the reason cited by the company for the delay in its first quarter financial report.

During a conference call with investors and analysts David Mauney, Ziopharm’s chief business development officer and interim Chief operating officer, said the company wants to focus on expanding its IL-12 program into new tumor types and with new combinations.

“…the idea here is to make immunologically cold tumors hot by calling in the bodies T cells via the tunable control of IL-12. Once these cold tumors are flush with cancer-fighting T cells, the gates are now open to turbo-charge the effects by adding in combination therapies like checkpoint inhibitors,” Mauney said during the call, according to transcripts. “Additionally, from a business perspective, we’ve seen several recent transactions that suggest having an ability to make cold tumors hot across multiple tumor types. Even with just Phase 1 data drives tremendous value relative to pursuing just one indication. We’re now executing on a revised clinical plan for this technology, which is focused on delivering clinical data in multiple tumor types and in combination with checkpoint inhibitors as quickly and cash efficiently as possible.”

Mauney framed the decision to pause the glioblastoma trial as a business move that could potentially provide the company with a greater revenue stream. With Eli Lilly’s recent $1.6 billion acquisition of ARMO BioSciences and its cytokine programs, Ziopharm could be seeing the potential for lucrative partnerships.

“This effort greatly expands our addressable markets. It aligns us with what potential partners want to see in terms of clinical data, and have the additional benefit of tremendous cost savings in the near-term. We view this as a positive pivot point for this platform and executing on this plan will provide the information needed in the shortest time possible and for a fraction of the cost of a randomized controlled pivotal trial,” Mauney said in a statement.

While Ziopharm is indefinitely pausing the glioblastoma trial, the company said it is moving forward with its combination trial of Ad-RTS-hIL-12 and Opdivo, Bristol-Myers Squibb’s blockbuster checkpoint inhibitor. Ziopharm said it expects the first patient to be dosed in this trial in the second quarter. The company is also focused on its Sleeping Beauty program to speed up the manufacture of CAR-T cells. The company said it anticipates driving this program into the clinic in the second half of this year. The Sleeping Beauty program is designed to manufacture the CAR-T cells in two days, a move the company believes will address concerns of high cost to patients.

https://bit.ly/2rGuWtW

Behind-the-Scenes Look at Takeda Pharma’s Takeover of Shire

The ink is still drying on the contracts for Japan’s Takeda Pharmaceutical’s acquisition of Dublin-based Shire for about $62.2 billion, but company executives are sharing some of the “inside baseball” about what went on behind the scenes of the deal.

Takeda originally planned to approach Shire’s board of directors about the acquisition on April 1, but published rumors about the deal forced the company’s hand, causing them to announce on March 28. This announcement not only surprised Shire, but many at Takeda as well, which had been working on the deal under a veil of secrecy, complete with code names. Reportedly the companies were given the code names of Japanese brands of whiskey. Takeda was “Yamazaki,” Japan’s most popular single malt whiskey. Shire was “Hibiki.”

Takeda’s chief executive officer, Christophe Weber, had been performing due diligence on Shire for at least two years before the deal announcement came. At one point Takeda and Weber were more interested in Shire’s neuroscience unit and gastrointestinal products, rather than the whole company. The overall price of Shire was daunting for Weber and Takeda.

According to Dealogic, the $62.2 billion sales figure does not take into account Shire’s debt. The acquisition total is closer to $80 billion. Takeda’s market value before the acquisition was about $33 billion. Shire’s is about $50.2 billion. It was also exacerbated by shifting share prices as news of the deal broke, as Takeda investors forced stock prices downward and Shire investors forced theirs upward.

Bloomberg writes, “Then the tide turned in Takeda’s favor. Shire’s struggling stock performance after its failed sale to AbbVie Inc. and the acquisition spree that followed, culminating with the $32 billion takeover of Baxalta Inc., frustrated investors and prompted concerns about its strategy. To appease them, Shire in August announced a potential spinoff of its neuroscience unit, potentially valued at $10 billion to $15 billion.”

This gave Takeda execs the confidence to consider buying the entire company. But the leak threw a wrench in the works. Bloomberg writes, “Takeda and its external advisers, some of whom were on vacation at the time of the leak, were shaken. They hadn’t even reached out to Shire’s board yet to begin negotiations, and they called their target to formally apologize. The Japanese suitor had sought a friendly deal, with the goal of evading rival offers that could disrupt the talks.”

And shortly afterwards, Allergan was in talks with Shire, although that only lasted a few hours.

It wasn’t that easy, however. Shire rejected four offers from Takeda. They then raced to complete the deal before the May 8 deadline forced by UK merger-and-acquisition laws.

Bloomberg writes, “And although Takeda succeeded in its years-long quest, it’s left with a pile of debt and the task of combining two companies with different sizes, cultures and areas of focus in the drug industry. Integrating the Japanese drugmaker—which began by selling herbal therapies 237 years ago—with the sprawling U.S. biotechnology behemoth may prove to be more complicated than winning Shire over.”

The merged companies will trade on the Tokyo Stock Exchange as a primary listing and on the New York stock locations. In a conference call related to its first-quarter financial reporting,Weber said, “With integration you end up with a company which is really clearly in a leading position to deliver innovative treatment in the therapy area that we’ve chosen, GI, oncology, neuroscience, rare disease, plus the plasma-derived therapies which is a relatively different business with a high entry barrier, but Shire has a leading position, and there are three companies really operating in this space….We will have a footprint which would be very strong in any country of the world—so a very strong footprint.”

Takeda reported overall revenue for the quarter of 1,770.5 billion yen, a growth of 2.2 percent, with an underlying growth of 5.5 percent, which compares two periods of financial results on a common basis. Core earnings rose 40.2 percent, with earnings per share (EPS) growing 44.8 percent.

In a statement, Weber said, “We also made significant progress in R&D, with 17 New Molecular Entity clinical trial stage-ups, and 56 new collaborations to strengthen our innovation network. The strength of the underlying business means we expect to maintain revenue and earnings growth momentum in FY2018, and I am confident that through strategic focus and superior execution, Takeda will continue to deliver long-term value to patients and shareholders.”

https://bit.ly/2rH9zrv

Medigene, Bluebird Bio Expand Cancer Collaboration to $1.5B

MediGene, based in Martinsfried and Munich, Germany, and bluebird bio, headquartered in Cambridge, Massachusetts, announced they are expanding a strategic research and development collaboration inked in September 2016.

Under the terms of the original deal, Medigene was responsible for creating and delivering T cell receptors (TCR) using its TCR isolation and characterization platform. After the collaborative preclinical development, bluebird handled the clinical development and commercialization of the TCR product candidates. Bluebird also received an exclusive license for the intellectual property that came out of the TCRs.

Medigene received an upfront payment of $15 million (U.S.), as well as possible preclinical, clinical, regulatory and commercial milestone payments. Together they had the potential to reach $1 billion for the four TCR products, or about $250 million for each TCR.

Under the new expansion, they have added two additional TCR candidates under the same terms, bringing the possible deal total up to $1.5 billion, in addition to royalties on sales if anything makes it to market. Bluebird is also paying Medigene $8 million upfront and additional research-and-development funding to cover the new programs.

Analysts at Baader Helvea confirmed their “buy” recommendation for Medigene, indicating the collaboration extension validated Medigene’s tech platform.

In February, Medigene announced that its first Phase I/II clinical trial of its TCR-modified T-cell therapy MDG1011 had been approved by German regulatory authorities. Its contract manufacturer had also received the necessary manufacturing license to create the study materials. This program is independent of the bluebird bio collaboration.

MDG1011 targets the tumor antigen PRAME (PReferentially expressed Antigen in MElanoma). In the trial, it will be tested in about 92 patients with acute myeloid leukemia (AML), myelodysplastic syndrome (MDS) or multiple myeloma (MM).

“Attaining these approvals for MDG1011 is an important step towards the start of our clinical trial, and a further validation of our research and product development work,” said Kai Pinkernell, senior vice president clinical affairs and chief medical officer of Medigene, in a statement. “With our specific study design, we are able to evaluate our T-cell therapy simultaneously in various diseases and to generate data in three hematological indications in parallel.”

Under the new terms, Medigene is anticipating a milestone payment of $1 million based on the first project from the collaboration.

“We are delighted to broaden this outstanding collaboration for the joint research and discovery of TCR lead candidates designed for the treatment of multiple cancer indications,” said Dolores Schendel, Medigene’s chief executive officer and chief scientific officer, in a statement. “Medigene is contributing its unique TCR technology platform, which encompasses multiple innovative screening and assessment tools to identify and characterize specific, non-modified TCRs to selected target antigens in a highly competitive framework. The expansion of this alliance further validates the efficiency and quality of Medigene’s TCR platform technology.”

Medigene also updated their financials as a result of the deal, indicating that it “improves the Company’s cash burn guidance for 2018 and now anticipates a cash usage of EUR 16-19 million instead of EUR 21-25 million for the full year. Revenue, R&D expense and EBITDA guidance for 2018 will not change substantially as a result of this expansion of the agreement. Full financial guidance will be provided in Medigene’s six-months report 2018.”

https://bit.ly/2If1Coz