TransMedics Group, Inc. (NASDAQ: TMDX) today announced that it has received an FDA PMA approval for expanded clinical indications.
Monday, June 3, 2019
The top 10 pharma R&D budgets in 2018
Big Pharma companies are still, naturally, the big spenders in drug R&D, and the numbers are impressive: Last year, and for the first time, the top 15 largest companies (by sales) funneled more than $100 billion into research, and we also saw the FDA approve more drugs than ever before.
Big Pharma should get a pat on the back, right? Well, yes and no: The FDA had something of a backlog of drugs from 2017 that helped budge 2018 into more approvals, and some of the ways they classified approvals also slightly flattered the numbers (see our report below).
The tally of more than 50 new molecular entities is an impressive one, and borne from the well-funded R&D engines of life science companies; but earlier this year, a new report by the IQVIA Institute for Human Data Science showed that in fact, large pharma companies (those with more than $10 billion in yearly drug sales) have seen their R&D share drop from 31% to just 20% in the past decade.
And when it comes truly new, innovative, exciting drugs in the pipeline, the report found that the smaller biotechs are punching well above their weight.
Last year, we saw 59 new therapies get the thumbs-up under the leadership of (now ex) FDA Commissioner Scott Gottlieb, M.D. But the report points out that large pharmas were the filing companies for fewer than half of these launches. Emerging biopharma companies, on the other hand, were the originators of 38 of the 59 therapies (64%).
The report says that the “importance of large pharma in originating molecules is decreasing,” but they “remain important partners” for biotech. Still, they see the need for smaller biopharmas to team up with Big Pharma companies—and their large sales teams—decreasing.
“The dynamics of development, M&A and licensing activity seem to be shifting, and emerging companies are retaining control of their assets to a greater degree,” the report’s authors wrote.
Coupled with this is the fact that, according to the index, emerging biopharma companies (those spending less than $200 million annually on R&D and having less than $500 million in sales) account for 72% of all late-stage pipeline activity, up from 61% a decade ago.
Roche, J&J, Novartis and the like are still the unmatched big boys when it comes to R&D budgets, with Roche once again coming out on top with a staggering $11 billion in R&D spend last year (though this also includes its diagnostics business).
The names and numbers don’t change much over the years (in fact, Roche, which has been at the top for a few years now, is down nearly half a billion in terms of R&D spend since 2016), but there is one big exception: Sanofi, which has penned several biotech deals and M&As, is up more than $1 billion in two years, from $5.45 billion in 2016 to $6.6 billion in 2018, as it attempts to get back into oncology, which it seemed to be walking away from.
Merck also deserves a shoutout: While its R&D budget was down from last year (when it spent $10.33 billion), its $9.75 billion spend has put it third, ahead of Novartis, in terms of overall spend, jumping from $7.19 billion, when it was the fifth highest Big Pharma R&D spender, in 2016. This coincides with now more than 1,000 trials for its cancer drug star Keytruda.
With more approvals and big topline numbers in R&D, it’s easy to think the big boys are doing all the heavy lifting, but as the IQVIA report found, don’t forget the smaller teams with supertight budgets that continue to outpace their Big Pharma rivals. — Ben Adams
Top 10 R&D budgets:
1.Roche
2.J&J
3.Merck
4.Novartis
5.Pfizer
6.Sanofi
7.Bristol-Myers Squibb
8.AstraZeneca
9.Eli Lilly
10.GlaxoSmithKline
Scripps study claims rebate system does inflate drug prices
The pharma industry has been claiming for years that the rebate system is a key factor in driving price increases in the US. Now, a study by Scripps Research provides evidence to support that view.
The non-profit scientific institute analysed tens of millions of insurance claims for the top 49 pharmaceutical brands in the US and found “continual, marked, annual increases” that drive up prices by a median of 76% between January 2012 and December 2017.
The study – published in JAMA Network Open – found that 78% of 36 drugs available over the entire study period saw an increase in insurer and out-of-pocket costs of more than 50%, while 44% more than doubled in price.
The main reason? The researchers from the Scripps Research Translational Institute – led by cardiologist and digital medicine authority Eric Topol – say it is in no small part the “current rebate system, which incentivises high list prices for drugs and relies heavily on privately-negotiated rebates to pharmacies.”
The current system is “byzantine and secretive”, they note, and prevents consumers from making informed decisions about purchasing medications.
In January, President Trump proposed a rule that would end the rebate system, a move which was lauded by CEOs from Novartis and Eli Lilly as well as other executives, who claim that pharmacy benefit managers (PBMs) and other “middlemen” in the US supply chain are pocketing discounts instead of passing them on to patients.
It’s not black and white, however. While some drug companies have defended price increases by reasoning that rebates have increased at a similar rate, the researchers found that is not the case. In fact, both increases in list prices and a greater reliance on rebates are making drugs more expensive overall, they suggest.
Scripps is also concerned about the close coordination of price increases among products that can be prescribed interchangeably, citing insulins and TNF inhibitors like AbbVie’s Humira (adalimumab) and Amgen’s Enbrel (etanercept), regardless of competition in the marketplace.
These were “highly synchronised in relative cost changes while demonstrating some of the largest cost increases in the industry over the past six years,” it says. The price of Humira, for instance, rose from $1,940 in January 2012, to $4,338 by December 2017.
Some US lawmakers have suggested that the close correlation between insulins from different manufacturers could suggest collusion, and led to demands that producers produce documentation to explain why the price of these drugs has skyrocketed in recent years.
“It’s bad enough to see the relentless increase in drug prices, but this work underscores it is occurring without transparency or accountability,” says Topol, the Institute. “It is especially concerning to see drugs in the same class having increases that appear to be coordinated.”
The Scripps team obtained the prescription data from a proprietary Blue Cross and Blue Shield data set that includes commercial insurance claims from more than 35 million Americans.
MacroGenics looks to future with breast cancer drug margetuximab
A small biotech, MacroGenics, took the market by surprise earlier this year with some surprising data from its margetuximab – essentially a tweaked version of Roche’s Herceptin (trastuzumab) where a few amino acid mutations are enough to produce a stronger cellular response to cancer.
CEO Scott Koenig has been doing the rounds at the American Society of Clinical Oncology (ASCO) conference in Chicago following release of detailed data from the SOPHIA trial of margetuximab in breast cancer patients who have previously been treated with Herceptin and other similar medicines.
In SOPHIA, the median progression-free survival (PFS) of patients treated with margetuximab and chemotherapy was 5.8 months compared to 4.9 months in patients treated with trastuzumab and chemotherapy.
The objective response rate, a secondary outcome measure in the SOPHIA study, was 22% in the margetuximab arm compared to 16% in the trastuzumab arm at data cut-off in October.
MacroGenics argues that margetuximab works by tweaking the “Fc” part of Herceptin – the tail of the ‘Y’ shaped antibody – so that it interacts more efficiently with the immune system and produces a stronger anti-cancer response.
With Roche losing sales to biosimilars as Herceptin goes off patent, the obvious question to Koenig is whether he is looking to sell up to the Swiss pharma or one of its competitors on the basis of the margetuximab data.
Not necessarily is the answer from Koenig, who pointed out that the company has eight other cancer drugs in various stages of clinical development in the pipeline and a share price that has been boosted by the data from SOPHIA.
Scott Koenig
Although he added that as a publicly listed company MacroGenics would have a “fiduciary responsibility” to consider all serious offers, Koenig said the plan is to carry on developing its pipeline as a stand-alone pharma.
As one of the company’s co-founders around two decades ago, Koenig hopes margetuximab will be the first of several MacroGenics drugs on the market.
A filing for margetuximab is due with the FDA later this year in heavily pretreated breast cancer patients with a view to further development in the earlier stages of the disease.
The hope is that the FDA will opt for a faster six-month priority review on the basis of SOPHIA, but Koenig is already looking beyond this very advanced stage breast cancer indication.
“We are looking very optimistically when the immune system is more intact that we may see greater benefits in earlier breast cancer populations. We have insights that combinations of margetuximab with other immune agents seem to have good activity.”
Another potential indication is in gastric cancer, which in a minority of cases is also driven by the HER2 mutation like breast cancer based on favourable early stage clinical trials.
According to Koenig it looks like margetuximab could work well with a PD-1 inhibitor in this indication, where the drug is in mid-stage development.
He said: “In patients with second line therapy a combination of anti PD-1 and margetuximab have seen very significant response rates and overall survival rates that are better than standard therapy.”
ASCO 2019 day 4 preview
Key highlights for Monday:
- Seattle Genetics will present details of EV-201, also known as enfortumab vedotin monotherapy in locally advanced metastatic urothelial cancer previously treated with platinum and immune checkpoint inhibitors.
- Bayer will present additional data on its larotrectinib in TRK fusion cancers, a precision medicine that works on cancers of any origin in the body that are driven by the mutation driven by tropomyosin receptor kinase (TRK).
- Another highlight is an oral presentation of the first phase 2 data from the CaboGIST study (trial 1317) from the European Organization for Research and Treatment of Cancer (EORTC), investigating the activity and safety of Ipsen/Exelixis’ cabozantinib in patients with metastatic gastrointestinal stromal tumour after failure of imatinib and sunitinib.
View the live coverage from day four at ASCO 2019 below (the live blog may take a few seconds to load) and we will also have live coverage from day five at ASCO.
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