BioWorld’s top 10 biopharma news, trends for 2013
By BioWorld Staff
In the world of biopharmaceuticals, there’s no such thing as a boring year. Yet even by those standards, 2013 may be a standout, as the sector saw explosive growth on the capital markets, witnessed burgeoning scientific advances reach maturation and encountered new regulatory challenges that will set the stage in the years to come. Trying to pick out the biggest breaking news stories and/or trends for the year proved a challenge, but BioWorld’s staff managed to whittle down the list to the top 10 we feel have had or will have the greatest impact on the industry.
1. WIDE OPEN IPO WINDOW
When the year began no one could possibly have predicted that biotech initial public offerings (IPO) would have commanded the attention that they have received from investors. In fact, we haven’t seen so many companies emerging through a wide-open IPO window for more than a decade, and we have to go all the way back to 2000 to find a better year for biotech IPOs. In total 37 companies, focused on developing human therapeutics, successfully completed their IPOs on the U.S. markets and collectively raised approximately $3 billion in the process. The total certainly swamped the 11 U.S. IPOs completed in 2012 and put an exclamation point on the favorable capital markets throughout the year, which certainly helped to ensure that the window stayed firmly open.
In addition, these newly minted public companies provided their investors with strong post-IPO performances with the share prices of the 36 IPO-companies (Omthera Pharmaceuticals Inc. also went public this year but was acquired by Astrazeneca plc) up by an average of 53 percent, and only eight companies recorded negative performances from their initial IPO price. With several companies adding their names to the IPO runway as 2013 came to a close, and a long line of companies ready to take advantage of the JOBS Act’s provisions, 2014 could shape up to be another active one for IPOs providing that the financial markets still remain accommodating.
2. CANCER IMMUNOTHERAPY NAMED SCIENCE BREAKTHROUGH OF THE YEAR
In December, cancer immunotherapy was named breakthrough of the year by Science magazine in its annual best-of issue. It’s an unusually mature technology to be named a scientific breakthrough. But the approach definitely had a banner year in 2013. Melanoma wonder drug Yervoy (ipilimumab, Bristol-Myers Squibb Co.) looks sure to be joined in good time both by drugs revving up the immune system by targeting other co-stimulation molecules. Drugs targeting PD-1 or its ligand are being developed by Bristol-Myers, Merck and Co. Inc., Amplimmune Inc. and Genentech Inc./Roche AG.
Another approach that generated enthusiasm this year was engineered T cells that hunt down cancer cells, being developed by Novartis Inc., Amplimmune Ltd. and Kite Pharma Inc.
For now, response rates remain low – the response rate of all 1,800 patients treated with Yervoy in clinical trials stands at 22 percent. But those patients who do respond have a decent shot at long-term remissions that last years or even decades. Scientists are now working on combinations that could increase the response rate, bringing that sort of long-term relief to more patients.
3. SUPREMES TOSS ISOLATED DNA PATENTS
In a decision that threatened to erode the underpinnings of numerous diagnostic and biologic patent claims, the U.S. Supreme Court ruled in June that naturally occurring, isolated DNA is not patent eligible. However, the court’s unanimous decision in The Association for Molecular Pathology v. Myriad Genetics Inc. upheld the patent eligibility of complementary DNA, which is synthetically created. In striking down Myriad’s isolated DNA claims to the BRCA1 and BRCA2 genes, which are used in diagnosing breast and ovarian cancers, the court said the Salt Lake City diagnostics company “found an important and useful gene, but groundbreaking, innovative or even brilliant discovery does not by itself satisfy the §101 inquiry” of the Patent Act that renders laws of nature, natural phenomena and abstract ideas ineligible for patent protection. The decision overturned the U.S. Court of Appeals for the Federal Circuit, which had twice determined that isolated DNA was patent eligible because it is a “non-naturally occurring composition of matter.” It also reversed 30 years of precedence at the U.S. Patent and Trademark Office, invalidating many patents already awarded to biologics and gene-based diagnostics.
In creating a new level of uncertainty around protecting gene-based discoveries, the court’s opinion could delay advances in personalized medicine that rely on those discoveries. The decision was expected to lead to more litigation and challenges to the patent system itself.
4. ICLUSIG'S 'FALL' FROM GRACE SALVAGED BY CHRISTMAS MIRACLE
Well into 2013, sales of Ariad Pharmaceuticals Inc.’s leukemia drug Iclusig (ponatinib) were on a clear upward trajectory, with analysts ascribing potential blockbuster potential to the pan-Bcr-Abl inhibitor following accelerated approval in December 2012. But troubling safety data unveiled in October brought the drug’s momentum to a skidding halt and sent shares of the Cambridge, Mass.-based firm tumbling. The outlook worsened over the following weeks, as Ariad halted its Phase III EPIC study testing Iclusig in first-line chronic myelogenous leukemia – the study that management had previously assured investors would address FDA concerns – and then, ultimately, suspended sales of Iclusig in the U.S. Ariad continued working with the FDA, but analysts were skeptical and it looked like Iclusig was down for the count.
Then in late November, the European Committee for Medicinal Products for Human Use recommended that the drug remain on the market in Europe, a move that signaled cautious optimism that the FDA might adopt a similar stance. Still, few thought the agency’s clearance would come so fast. Just a few days before Christmas, Ariad told investors on a conference call that the drug was cleared to resume commercialization, with modest changes to prescribing information. Iclusig, which boasts efficacy data far outstripping other leukemia drugs, is set to resume commercial distribution in mid-January, though it remains to be seen how the temporary safety snafu will affect prescribing trends.
5. GENOMICS COMES OF AGE AS A CLINICAL DISCIPLINE
The dizzying progress in the development of next-generation sequencing (NGS) technologies was rewarded in 2013 with the FDA’s imprimatur, in a landmark regulatory decision that could have far-reaching consequences for the diagnosis and treatment of many diseases. In November, San Diego-based Illumina Inc. became the first company to gain pre-market clearance for an NGS sequencing system – its MiSeqDx system and associated MiSeqDx Universal Kit set of reagents and primers – which will enable clinical laboratories to develop their own in-house tests to scan patients’ genomes for disease-relevant mutations. The same company has also demonstrated the capability of the system by gaining FDA clearance for its cystic fibrosis clinical sequencing assay, which can capture 139 clinically relevant disease-causing mutations simultaneously.
Marking the milestone in a commentary, published in the Nov. 19, 2013, issue of The New England Journal of Medicine, National Institutes of Health Director Francis Collins and FDA Commissioner Margaret Hamburg, noted that the U.S. Supreme Court ruling on the non-patentability of naturally occurring DNA sequences (in Association for Molecular Pathology v. Myriad Genetics Inc) created an important shift in the legal landscape and removed the concern that clinical laboratories would have to pay royalties to multiple patent holders.
The consequences of the FDA move extend far beyond mutation analysis for genetic disease, into genome-wide approaches for diagnosing and treating cancer and into optimized drug therapy based on pharmacogenomic profiling of each patient. As they stated: “The marketing authorization of a non-disease-specific platform will allow any lab to test any sequence for any purpose.”
6. GILEAD'S SOVALDI CLEARANCE RAISES HCV HOPES
In the fiercely competitive hepatitis C virus (HCV) space, where a non-interferon, all-oral regimen has been the sought-after goal for years, few were surprised when Gilead Sciences Inc. scored big with the approval of Sovaldi (sofosbuvir) in December. Foster City, Calif.-based Gilead has long been at the forefront of HCV development, and the FDA’s Antiviral Drugs Advisory Committee earlier voted 15-0 in favor of the drug’s approval. Some balked at the high-end price tag – Sovaldi by itself is $28,000 for four weeks, and mainstay therapy of 12 weeks carries a cost of $84,000 – but excitement about the compound seemed to outweigh cost concerns.
Sovaldi’s win raised hopes for a combination pill. Due from Gilead soon are results from Phase II and Phase III trials testing sofosbuvir in combination with other agents, including Phase III experiments testing the compound with Gilead’s own ledipasvir, a direct-acting macrocyclic antiviral agent and an inhibitor of NS5A serine protease, in genotype 1 patients, the most common group.
Meanwhile, Sovaldi could bring around $2.1 billion in revenues for Gilead in 2014, according to consensus estimates, and may reach $20 billion by 2017. Also aiming for a slice of the all-oral HCV pie are Enanta Pharmaceuticals Inc., of Watertown, Mass., and Chicago-based Abbvie Inc., which gained breakthrough-therapy status from the FDA for ABT-450, the direct-acting antiviral combination regimen with and without ribavirin to treat genotype 1 HCV. The Abbvie/Enanta regimen will yield more Phase III data in the first quarter of next year, with a filing likely to follow in the second quarter.
7. FIRST BIOSIMILAR MAB APPROVED IN EUROPE
Hospira Inc.’s biosimilar of Johnson & Johnson’s blockbuster Remicade (infliximab) was approved by the European Commission with a planned market rollout in 2015. The infliximab copycat, Inflectra, received a broad label including rheumatoid arthritis, ankylosing spondylitis, Crohn’s disease, ulcerative colitis, psoriatic arthritis and psoriasis, in spite of pivotal data from just a couple of indications.
Hospira tested the product in rheumatoid arthritis; it demonstrated equivalence to Remicade, with 73.4 percent of patients receiving Inflectra hitting the ACR20 endpoint vs. 69 percent in the Remicade arm. Celltrion Inc., Hospira’s Korean partner, said it tested Inflectra (marketed in South Korea as Remsima), in 874 patients with ankylosing spondylitis and rheumatoid arthritis across Phase I and Phase III trials, with results showing clinical compatibility to Remicade in terms of both safety and efficacy.
Inflectra targets tumor necrosis factor-alpha (TNF-alpha), which has been linked to a number of autoimmune diseases. Remicade, which is estimated to cost from $19,000 to $22,000 per year per patient, recorded European sales of more than $2 billion in 2012.
In the U.S. regulators are still hashing out guidelines for biosimilars, while Europe’s biosimilar pathway has become a model and testing ground for manufacturers. A dozen biosimilar products have hit the market in Europe since Novartis AG’s Sandoz unit first introduced its recombinant growth hormone omnitrope somatropin in 2006. However, Inflectra’s approval marks an important milestone, as MAbs are much larger and more complex to copy than previously approved biosimilars such as growth hormone and erythropoietin.
8. SEQUESTER CUTS BROAD SWATH
With U.S. political wrangling sinking to new lows in 2013, Congress’ inability to live up to the 10-year deficit-busting budget agreement it had reached in 2011 resulted in an across-the-board sequester in March that chopped 5 percent from the discretionary spending of all federal agencies. Although many lawmakers said user fees, such as those paid to the FDA and Patent and Trademark Office (PTO), should be exempt from the cuts, the administration determined that the fees were subject to the sequestration knife. Consequently, nearly $150 million in patent fees were diverted from the PTO, and the FDA was denied access to $85 million in user fees in fiscal 2013.
The sequester also chopped $1.55 billion from the National Institutes of Health’s (NIH) budget, resulting in about 640 fewer research projects being awarded. Basic medical research got the closest shave as it generally claims 70 percent of the agency’s budget. The cut came on top of flat-topped budgets that have cost the NIH 22 percent of its purchasing power over the past decade. Adding insult to injury, congressional bickering over the budget led to a two-week shutdown in October of much of the federal government, including many FDA and NIH programs. The shutdown may have served as a bit of a wakeup call, as the House and Senate laid aside their political differences to pass a compromise late in the year that will avert a second sequester in 2014 and paved the way for spending bills to replace the continuing resolution that is currently funding the government at sequestered fiscal 2013 levels. The compromise did nothing to free up the $85 million in FDA user fees locked away at the Treasury Department, nor did it clarify that user fees will be exempt from future sequesters.
9. DRUG SCANDALS ROCK EMERGING CHINA MARKET
Just as China sought to bolster its reputation as a partner and bona fide contender in drug development, the country was rocked by allegations of corruption. The finger-pointing began in mid-July with a bribery probe at London-based Glaxosmithkline plc (GSK) that spread like a virus through the pharma’s China organization and quickly broadened to investigations at other multinationals, among them Sanofi SA, Astrazeneca plc, Eli Lilly and Co., Baxter International Inc. and Novartis AG unit Alcon as well as Chinese biopharmas Chia Tai Tianqing Pharmaceutical Group – majority owned by Sino Biopharmaceutical Ltd. – and Gan & Lee Biotechnology Co. Ltd.
The 2013 probes were not the first – Pfizer Inc. (with subsidiary Wyeth LLC) and Biomet Inc. paid fines of $45 million and $22 million, respectively, in 2012 to resolve charges of violating the U.S. Foreign Corrupt Practices Act – but the new allegations were more damaging.
As the drama unfolded, GSK was forced to dispatch top global executives to China. Several dozen employees were detained, and vice president and operations manager, Liang Hong, admitted on national television to the use of travel agencies to fake business expenses, pay bribes and increase drug sales. In all, Chinese authorities are investigating some ¥3 billion (US$488 billion) in GSK transactions with approximately 700 travel agencies.
The probes represent an embarrassment not only for GSK and other multinationals, but also for China’s pharmaceutical industry, shining a bright light on systemic corruption stemming from a fragmented distribution system that leads to unwieldy sales forces, a corporate travel agency system rife with abuse and a meager physician compensation system that leads some doctors to supplement their income surreptitiously. In the wake of the investigations, GSK’s sales in China plunged 61 percent in the third quarter. Damage to reputations and bottom lines likely will persist in 2014, possibly with fines and jail terms, as well.
10. DATA TRANSPARENCY COMING TO EUROPE
2013 was the year when the clamor for greater transparency of clinical trial results forced the industry into a rear guard action in which it set down a series of data-sharing principles it wants to see underpinning a system of self-regulation. The move, made jointly by the European Federation of Pharmaceutical Industries and Associations, and its U.S. counterpart, the Pharmaceutical Research and Manufacturers of America, was a direct response to the European Medicines Agency’s (EMA) proposed new data transparency regime, under which clinical study reports will systematically be published when a drug is approved.
The EMA and the pharma industry found themselves on a collision course, with the regulator implacably refusing to acknowledge that any information in a clinical study report is commercially confidential once a product has marketing authorization. The EMA consulted on its proposal between June and September and was due to publish definitive rules by the end of November, paving the way for the new regime to enter into force in January 2014. But at the beginning of December the EMA blinked, saying it needed extra time and was delaying discussion of the implementation plan until its March 2014 management meeting.
Despite the postponement, clinical trials data transparency will become a reality. However, it now seems this won’t be the free-for-all the industry feared. New principles agreed by the EMA’s management board in December include: a stepwise approach to implementation and a promise to make “appropriate” redactions. Most significantly for the industry, the EMA has conceded on commercial confidentiality, saying it will “address the risk of possible unfair commercial use of data.”
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