Roche steps up efficiency drive to take sting out of biosimilars

Roche (ROG.S), the world’s biggest producer of cancer drugs, is stepping up cost cuts in an efficiency drive made unavoidable by competition from cut-price copies of three mega-brands from its famed U.S. Genentech biotech stable.

Even though the Swiss company has some of the pharmaceutical industry’s most admired research and development labs, it is now battling to increase medicine sales as its biotech portfolio ages and rivalry intensifies.

Chief Executive Severin Schwan told Reuters he was confident he could fill the sales gap but expects only “moderate growth” into 2019 – helped by newer drugs such as Ocrevus for multiple sclerosis (MS) – before a “re-acceleration” around 2021-22. “If you have such a sharp portfolio shift as we have now, then of course you have to reallocate resources in a more dramatic way,” Schwan said. “That’s what we are doing.”

The company will have to run fast to stand still. Roche estimates it could have a $10 billion sales gap to fill by 2022 from rival incursions into cancer treatment, territory the Swiss drugmaker has long dominated. Roche’s three best-selling drugs – all for cancer – had combined sales of $21 billion last year, accounting for 40 percent of overall sales.

But the drugs – Rituxan, Herceptin and Avastin – now face a steep decline here due to cheap near-copies, known as biosimilars, made by rivals including Switzerland’s Novartis (NOVN.S) and South Korea’s Celltrion (068270.KS).

Adding to the pain, a key technology patent will expire next year, lopping another $600 million or so from cash flow.

In Europe, where biosimilars are already making deep inroads, Roche’s cost-cutting is more advanced, with some commercial operations being trimmed back.

Now, the United States is on the block with Roche cutting 223 positions at Genentech’s South San Francisco campus. The company is also streamlining global business units as part of a separate, wide-reaching move that could impact scores of jobs.

It is a prescription that investors are likely to appreciate. “There is room to improve efficiency in the business,” said Berenberg analyst Alistair Campbell.

BOLT-ON ACQUISITIONS

Still, Roche intends to ring-fence research and development (R&D) and is sticking by a long-standing strategy of using only small to mid-sized bolt-on acquisitions to shore up its drugs pipeline, rather than buying in a big new medicine business.

To some extent that is pragmatic. “Typically, we cannot make the economics work,” Schwan said.

The shifting sands mean Roche may look rather different when it finally emerges from the shadow of biosimilars, with non-cancer drugs playing an increasingly important role – a trend already being set by Ocrevus in MS and Hemlibra for haemophilia.

In particular, while other companies including Pfizer Inc (PFE.N) have pulled back in neuroscience, Roche hopes to restock its medicine cabinet with drugs against autism, Alzheimer’s and Huntington’s disease.

These are high-risk, high-reward diseases but Roche believes its understanding of the latest science means it could become as well known for treatments of brain and nervous system disorders as for cancer.

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“The jury is still out,” Schwan said. “There is actually now a reasonable chance that we diversify into other areas in a meaningful way.”

Meanwhile, its cancer R&D effort continues.

Schwan acknowledged Roche’s Tecentriq immunotherapy had lost ground to Merck & Co’s (MRK.N) Keytruda in first-line lung cancer treatment but he still sees important new opportunities, notably in certain hard-to-treat forms of breast cancer.

Among Roche’s biggest potentials is a bispecific antibody, a dual-action drug that brings tumor cells and immune cells closer together to fight blood cancers.

One patient who failed previous treatments, including CAR-T cell therapy in which the body’s immune cells are reprogrammed, achieved full remission for a year after getting Roche’s experimental bispecific therapy, it reported on Thursday.

“If you see such a response for very, very sick patients like that, that of course is extremely promising,” Schwan said. “That is one of our molecules we put a lot of hope into.”

https://www.reuters.com/article/us-roche-ceo-focus/roche-steps-up-efficiency-drive-to-take-sting-out-of-biosimilars-idUSKCN1LT2QF

FDA planning to require cybersecurity checks in device submissions

While the FDA has addressed threats to networked medical devices through its guidance and product evaluations, the agency should take more steps to fully integrate cybersecurity into its premarket reviews, according to an HHS report.

The HHS inspector general’s office recommended (PDF) the FDA and manufacturers use presubmission meetings to better address cybersecurity-related questions, and that the agency include cybersecurity as an element in its SMART template used in 510(k) submissions.

In addition, the office urged the agency to begin requiring cybersecurity documentation elements on its refuse-to-accept checklists. The FDA said it concurred with all three of HHS’ recommendations and has begun taking steps to implement them.

“Cybersecurity threats to networked medical devices are on the rise,” the inspector general’s office wrote. “Researchers and hackers have demonstrated that the lack of security controls in these devices makes them vulnerable to cybersecurity attacks, such as ransomware and unauthorized remote access. Such attacks can affect not only a single patient but can also impact a hospital system and disrupt the delivery of healthcare.”

Currently, the agency uses its 2014 guidance (PDF) to conduct its reviews of premarket applications and cybersecurity documentation submissions, including descriptions of a device’s cybersecurity risks, controls to mitigate those risks and lists of the threats considered by the manufacturer.

FDA reviewers take that information, as well as previously known cybersecurity threats, and apply them across their reviews of devices with similar profiles—such as threats that may affect a class of cardiac devices produced by different manufacturers, for example.

The agency often requests additional information and cybersecurity documentation from manufacturers with submissions, HHS said, following its review, and the FDA almost always clears or approves the cybersecurity aspect of networked medical devices following manufacturers’ responses.

However, the 510(k) review template currently does not prompt staff with specific questions, and it lacks a space dedicated for the results of a cybersecurity review, the report said, though the template has included a section on cybersecurity since September 2016.

For the agency’s refuse-to-accept checklist, the FDA plans to include cybersecurity requirements during its next update, after which manufacturer submissions may be turned away for lacking the necessary documentation.

https://www.fiercebiotech.com/medtech/fda-planning-to-require-cybersecurity-checks-device-submissions

Genentech: FDA OKs subcutaneous juvenile arthritis med

Genentech, a member of the Roche Group, announced today that the U.S. Food and Drug Administration has approved the subcutaneous formulation of Actemra for the treatment of active systemic juvenile idiopathic arthritis in patients two years of age and older. Actemra can be given alone or in combination with methotrexate in patients with SJIA. In 2011, FDA approved the intravenous formulation of Actemra for patients two years of age and older with active SJIA. The approval is based on data from the JIGSAW-118 study, a 52-week, open-label, multicenter, Phase 1b pharmacokinetic/pharmacodynamic bridging study designed to determine the appropriate dosing regimen of Actemra SC across a range of body weights in children with SJIA.2 The study enrolled 51 patients aged one to 17 years with SJIA and inadequate response to NSAIDs and corticosteroids who were either Actemra naive or were receiving Actemra IV with adequate disease control. Actemra SC was administered open label according to a body weight -based dosing regimen: SJIA patients weighing less than30 kg received 162 mg of Actemra every two weeks or 10 days; and SJIA patients weighing greater than or equal to30 kg received 162 mg of Actemra every week for 52 weeks. Model-computed PK and PD parameters, and safety were assessed. In general, the safety observed for Actemra SC was consistent with the known safety profile of Actemra IV, with the exception of injection site reactions. A higher frequency of Actemra SC treated patients experienced ISRs, 41% compared to patients treated with Actemra SC for other approved indications. All ISRs reported were non-serious, and none required patient withdrawal from treatment or dose interruption. The efficacy of Actemra SC in children two to 17 years of age is based on PK exposure and extrapolation of established efficacy of Actemra IV in SJIA patients and Actemra SC in patients with rheumatoid arthritis.
https://thefly.com/landingPageNews.php?id=2790181

Is Moderna prepping for biotech’s biggest-ever IPO?

Already cash-rich, Moderna Therapeutics is planning an initial public offering to extend its resources even further and push its messenger RNA-based drugs through development.

A STAT report—citing people familiar with the matter—suggests Moderna could be just weeks away from its Wall Street debut and has retained Goldman Sachs, JP Morgan and Morgan Stanley to help with the process. It adds, however, that the planning is still in the early stages and the IPO could take some time to arrange.

Moderna—one of a select group of privately held “unicorn” biotech companies with valuations above $1 billion—has been spectacularly successful in raising cash through private rounds, including a $500 million series G in February that gave it $1.4 billion in the bank and took its overall fundraising tally north of $2 billion.

That was followed a few months later by a $125 million top-up from Merck & Co. for a KRAS-targeted cancer vaccine alliance that took the Cambridge, Massachusetts-based unicorn’s valuation up to around $7.5 billion, and it is now looking for a post-IPO valuation of more than $10 billion, says STAT—which would make it the largest-ever IPO for a biotech.

With 21 mRNA candidates in development and 10 in clinical trials, Moderna will need deep pockets to advance its pipeline, which is currently led by AstraZeneca-partnered AZD8601, a VEGF-A drug which is in phase 2 for heart failure, as well as to build the manufacturing infrastructure critical to its long-term plans.

In July, the company opened a 200,000-square-foot production unit in Norwood, Massachusetts, to supply material for its clinical trials programs at an estimated cost of $110 million, with the potential to expand further once it nears the commercialization stage.

Following AZD8601 in the pipeline are phase 1 vaccines for cancer and viral infections such as chikungunya and Zika, as well as preclinical candidates for rare diseases including Fabry disease and phenylketonuria.

Last year, Moderna told FierceBiotech it had decided to switch from its venture-based R&D model, with separate business units operating as silos, to a therapeutic area model focusing on infectious diseases, immuno-oncology and rare diseases.

The move followed a series of articles in the media last year questioning its high valuation and, judging by the fundraising since then, was well received by investors.

https://www.fiercebiotech.com/biotech/moderna-prepping-for-biotech-s-biggest-ever-ipo

India bans 328 combination drugs in setback for pharma companies

The Indian government has banned 328 combination drugs in a blow to both domestic and foreign pharmaceutical firms, but the ban has been cheered by health activists worried about growing antibiotic resistance due to the misuse of medicines.

The Indian government had in 2016 banned about 350 such drugs, referred to as fixed-dose combinations (FDCs), but the industry mounted various legal challenges that prompted the Supreme Court to call for a review by an advisory board.

The health ministry on Wednesday said the board had found there was “no therapeutic justification for the ingredients contained in 328 FDCs and that these FDCs may involve risk to human beings”.

It said it was prohibiting the “manufacture for sale, sale or distribution for human use” of the 328 FDCs with immediate effect. It did not name the drugs or give any brands.

The president of the Indian Drug Manufacturers’ Association, Deepnath Roychowdhury, said the order would have an impact on a market worth an estimated 16 billion rupees ($222 million) a year for such drugs, which are produced by both small and large pharmaceutical companies.

He said the verdict would be respected.

Combination drugs are used to improve patients’ compliance, as it is easier to get patients to take one drug rather than several.

But inconsistent enforcement of drug laws in India has led to a proliferation of such medicines based on state approvals, rather than from the federal government.

Health authorities have warned that the increasing use of antibiotic combinations may be contributing to antibiotic resistance, with India of particular concern because of the large volume of combination drugs being taken.

Malini Aisola of the All India Drug Action Network welcomed the government ban, saying it was a step toward addressing a “grave situation”.

“The people of India have been made the consumers of unsafe medicines for too long,” she said.

Companies such as Indian unit of Abbott Laboratories had filed court appeals against the government’s 2016 order.

Abbott did not respond to a request for comment and it was not immediately clear how the ban would impact it.

The ministry also said 15 FDCs had been kept out of the purview of the current ban.

https://www.reuters.com/article/us-india-health-drugs/india-bans-328-combination-drugs-in-setback-for-pharma-companies-idUSKCN1LT155

EU investigating second impurity in China-made heart drug

Europe’s drugs regulator is looking into another potentially cancer-causing substance in a common blood pressure and heart drug produced in China before 2012, widening an investigation that has so far focused on batches made after 2012.

Blood pressure drug valsartan, produced by China’s Zhejiang Huahai Pharmaceutical, was this year found to contain traces of N-nitrosodimethylamine (NDMA), a probable human carcinogen, due to a production change in 2012. The findings have prompted recalls in more than 50 countries.

The European Medicines Agency (EMA) said on Thursday a similar impurity had been detected in products produced before 2012.

“In addition to NDMA, EMA is assessing the impact of a related substance, N-nitrosodiethylamine (NDEA), which has been detected in valsartan made by Zhejiang Huahai using its previous manufacturing process before changes were introduced in 2012,” it said in a statement here/news_and_events/news/2018/09/news_detail_003015.jsp&mid=WC0b01ac058004d5c1.

“Data on levels of NDEA are currently very limited, and EMA will provide further information on whether its presence impacts the risk assessment once more information becomes available.”

The watchdog also said further risk assessment had confirmed that the life-time risk of cancer from exposure to levels of NDMA detected in valsartan was considered low.

Officials at Zhejiang Huahai could not be reached for comment outside regular business hours in China.

https://www.reuters.com/article/us-pharmaceuticals-europe-china/eu-investigating-second-impurity-in-china-made-heart-drug-idUSKCN1LT2A7

Roche boss says Brexit and curbs on drug use pose threat to UK science

Uncertainty over drug regulation and a reluctance by Britain’s health service to use certain pricey modern medicines pose a threat to the country’s respected life sciences sector, the head Swiss drugmaker Roche said on Thursday.

With only six months to go until the United Kingdom is due to leave the European Union, the highly regulated pharmaceuticals industry still does not know exactly how medicines oversight will function.

Severin Schwan, chief executive of the world’s biggest maker of cancer drugs, said in an interview that Europe was already slower than the United States to approve new medicines and there are fears the UK might fall further behind, jeopardizing investment.

“The UK would get markedly less competitive and less interesting for the industry as a life science hub,” he told Reuters. “For us, this is a very relevant question and if the regulatory system should not keep up with Europe, then this would be a big issue for us.”

Roche employs 2,100 staff in Britain and has been in the country since 1908. Staff work not only in the commercial business but also in a substantial drug development operation.

“It goes without saying that we give preference in research and development activities where we bring the medicines to patients first,” Schwan said.

“Even though we very much appreciate the science and capabilities in the UK, it is not possible to disconnect that from access to innovative medicines.”

Schwan noted that the UK could, in theory, use Brexit to create an independent drugs regulator that was faster than the European Medicines Agency. However, he also said this would require large government investment in both staff and resources.

In addition to uncertainty over the licensing of medicines, Schwan is also frustrated by curbs on access to some treatments within Britain’s National Health Service.

His company is in a bitter row over the health service’s refusal to approve Ocrevus, the company’s new drug for treating a highly disabling form of multiple sclerosis.

“We now have a situation where patients in need don’t get the medicine. It’s as simple as that,” Schwan said.

In preparation for potential supply disruption in the event of Britain leaving the EU without a deal with Brussels, the government has told drugmakers to build an additional six weeks of medicine stockpiles.

Schwan said that Roche is increasing its stocks in line with peers and would be able to continue to supply patients in the event of a no-deal Brexit.

https://www.reuters.com/article/us-britain-eu-roche/roche-boss-says-brexit-and-curbs-on-drug-use-pose-threat-to-uk-science-idUSKCN1LT267