Monday, March 18, 2019
Sunday, March 17, 2019
2 Things Investors Are Missing About AbbVie
AbbVie (NYSE:ABBV) has seen better days. After a 54% gain in 2017, the big-pharma stock lost ground last year. So far in 2019, AbbVie’s share price has fallen by a double-digit percentage.
Are investors missing something about AbbVie? The company’s president, Michael Severino, thinks so. He fielded questions at the Cowen Healthcare Conference on Tuesday. At the end of the session, Severino was asked to identify one or two things that investors are missing about AbbVie. Here are the two things that he listed.
1. The overall strength of AbbVie’s business
Severino quickly pointed out that AbbVie’s business remains very strong overall. Obviously, the company faces challenges for Humira with biosimilars on the market in Europe. AbbVie provided disappointing guidance in its Q4 update primarily because of declining sales for its top-selling drug in the face of this competition.
However, Severino said that AbbVie remains confident that it won’t see direct biosimilar competition in the U.S. until 2023. The U.S. is the biggest market for Humira, so that means much of the drug’s revenue should be relatively safe. In the meantime, he thinks that investors should understand just how much growth AbbVie can deliver from its other products.
Sales continue to soar for the company’s top cancer drugs, Imbruvica and Venclexta. The latter drug has a lot of potential in additional indications, especially as a first-line treatment for chronic lymphocytic leukemia (CLL) and in treating acute myeloid leukemia (AML) and multiple myeloma.
Severino didn’t spend a lot of time talking about Orilissa. However, the drug is off to a good start with its first approved indication in managing endometriosis pain. AbbVie expects to pick up another indication for Orilissa in treating uterine fibroids. With approvals for both indications, the drug could become another blockbuster for the company.
The big story, though, is AbbVie’s new immunology drugs that could soon hit the market. Risankizumab appears likely to win Food and Drug Administration (FDA) approval in April for treating psoriasis. Upadacitinib shouldn’t be too far behind, with an anticipated approval for treating rheumatoid arthritis in the third quarter of 2019.
These two candidates are both expected to be tremendous commercial successes. Along with Imbruvica, Venclexta, and Orilissa, they’re key components of AbbVie’s goal to generate $35 billion in non-Humira sales by 2025. By comparison, AbbVie made $32.7 billion last year, with Humira accounting for more than 60% of the total.
2. The strength of AbbVie’s earlier-stage pipeline
AbbVie’s late-stage pipeline deservedly gets the most attention with the blockbuster potential for risankizumab and upadacitinib. However, Michael Severino thinks that some investors could be overlooking the strength of the company’s earlier-stage pipeline.
Severino said that there will be a lot of data released over the next 12 to 18 months from earlier programs in AbbVie’s pipeline. He especially pointed out the company’s work in immunology and oncology. AbbVie has a promising rheumatoid arthritis drug in phase 2 clinical studies with ABBV-599, which combines a BTK inhibitor with upadacitinib. Its pipeline also includes multiple oncology candidates in phase 1 studies that target solid tumors for which Severino expects significant progress.
The company also has serious development efforts underway in neuroscience. AbbVie isn’t viewed as a leader in neuroscience, although it does have one approved product in the category with Parkinson’s disease drug Duodopa. That could change in the future.
AbbVie has drugs in phase 2 testing that target treatment of Alzheimer’s disease, multiple sclerosis, and progressive supranuclear palsy (PSP). In addition, the big drugmaker is evaluating a couple of experimental drugs in early-stage testing for treating Parkinson’s disease and spinal cord injury.
Another thing you don’t want to miss
Was Michael Severino right that many investors are missing out on these two strengths for AbbVie? I think so. The stock has been hammered so much that it now trades at a dirt cheap valuation. Even with the real pipeline risk that AbbVie faces, the company’s legitimate growth prospects make the stock a bargain.
There’s also one other thing that investors shouldn’t overlook with AbbVie: Its rock-solid dividend. AbbVie’s dividend now yields nearly 5.5%. With this great dividend, the company wouldn’t have to generate very high earnings growth to deliver total returns that beat the market.
Cellectis to bring CAR-T manufacturing in-house with new plants
- Cell therapy biotech Cellectis will build an 82,000-square-foot commercial manufacturing facility in North Carolina to make its allogeneic CAR-T products, announcing last week that it had signed a lease for the site.
- Dubbed IMPACT, the planned facility in Raleigh, North Carolina, will handle both clinical and commercial production, Cellectis said.
- The drugmaker has also begun construction of a 14,000-square-foot facility in Paris, France to make the starting material supply for its UCART products. Both the Paris and North Carolina plants are intended to be Good Manufacturing Practice-compliant.
Like many biotechs before it, Cellectis has relied on contract manufacturers to produce clinical trial supply and starting materials for its flagship UCART products.
Last year, however, the company decided it would take manufacturing — a critical step in cell therapy — in house.
“Now is the right time to create our own supply competencies,” said Cellectis CEO André Choulika in a March 7 statement. “Cellectis will gain autonomy, control and expertise in manufacturing operations, allowing us to continue to build competitive advantage and remain the leader in our field.”
Cellectis’ announcement on the planned North Carolina plant comes three months after the company took on a new head of U.S. manufacturing, Bill Monteith, and tasked him with overseeing the establishment of commercial manufacturing capabilities in the U.S.
Cellectis has been a player in the CAR-T space for some time, but has moved slowly with development of its allogeneic technology.
Unlike the approved CAR-T products Yescarta (axicabtagene ciloleucel) and Kymriah (tisagenlecleucel), allogeneic CAR-Ts use donor cells rather than the patient’s own cells.
By Cellectis’ approach, donor T cells are engineered using the biotech’s TALEN gene editing technology to express a CAR capable of targeting cell-surface antigens. Allogeneic CAR-T holds the potential to side-step the time-consuming logistics required to ship patient cells to a manufacturing center and back again, earning the technology the moniker of “off-the-shelf.”
With speedier manufacturing, allogeneic cells could potentially cost less and be delivered more quickly, enabling faster treatment. Those advantages, however, come with greater immunogenic risk and, so far, the technology has proved challenging to develop.
Last April, Pfizer gave the then-newly created company Allogene Therapeutics control to development of 16 preclinical allogeneic CAR-T candidates originally licensed from Cellectis — a move some interpreted as frustration with the French biotech’s progress. Pfizer kept a 25% stake in Allogene, which is led by former leaders of CAR-T pioneer Kite Pharma.
Allogene also secured rights to an allogeneic CAR-T candidate, UCART19, which had been licensed from the French company Servier.
While Allogene and Cellectis are in the forefront of allogeneic CAR-T developments, other biotechs like Tmunity are following close behind.
Wake up call on pre-teen mobile phone use at night
This World Sleep Day (March 15), Australia is waking up to the fact that around a quarter of children aged 7-8 are using mobile phones at night (between 10pm and 6am) when they should be sleeping.
It’s a worrying statistic which highlights an increasing use of mobile phones in the bedroom and is based on a survey of 180,700 Australian students, aged 7-19, between 2013-2018.
The project, undertaken by researchers from the University of South Australia’s (UniSA) Behaviour-Brain-Body Research Centre and UniSA Online, in partnership with Resilient Youth Australia, also highlights the negative mental health impacts on pre-teen children of using mobile phones at night.
While the marriage of mobile phone technology and social mediais a well-known factor in keeping teenagers awake at night, UniSA Online’s Dr. Stephanie Centofanti says this research highlights how even younger children are negatively impacted by night-time mobile phone use.
“This is a huge data set and it provides us with a good snapshot of how Australian children are doing in terms of their wellbeing and technology use. It will enable us to identify ways to support children in this unprecedented technological age,” Dr. Centofanti says.
“Our research is based on surveys with primary and high school students in which we found that 83 per cent of those aged 17-18 had reported using phones between 10pm-6am more than once in the previous week.
“What may be considered more surprising is that 25 per cent of those aged 7-8 also reported the same use.
“Using smartphones at night is now common among children at that age and it will be a concern for parents and carers because not only does phone use impact negatively on sleep, but we are finding that it also increases angry or hurtful communication.”
One of the more obvious ways in which using a smart phone at night disrupts sleep, relates to the phone’s light which can disrupt circadian rhythms and cause havoc to the body’s biological clock.
This research highlighted other negative effects, indicating that night time phone use was associated with a fourfold increase in the odds of receiving hurtful messages and an almost threefold increase in the odds of being cyberbullied.
This can be equated to the way children use their phones at night, through the use of messaging and communicating on social media networks. But technology use isn’t all bad—the data also indicated that night time phone use facilitated friendship building.
“Technology is a part of young people’s lives and there are benefits to using these devices but we are also finding there’s a reliance on it, a physiological addiction, with anxiety felt by children when they are cut off from these devices,” Dr. Centofanti says.
“Technology use is creeping into the evening hours and this is having a big impact on the amount of sleep children are getting and the quality of sleep; children will wake up in the middle of the night, check their phone and send text messages.
“The other issue this raises is the flow over of bullying. Bullying that might have been confined to school days is now flowing over at night as children access [for example] social media accounts. Not surprisingly this can lead to difficulties falling asleep.
“The problem is that kids aren’t able to catch up on lost sleep by having a lie-in after staying up on their phones. They still need to wake up early for school, and shorter sleep times relate to poorer functioning the next day.
“Lack of sleep can lead to poorer academic outcomes and can negatively impact mood and communication skills which can be really detrimental for kids’ ability to maintain positive relationships.”
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