Innovation in the reimbursement framework are enabling providers
to build new business models.
The availability of private
hedge fund and Wall Street
finance and requirement for big returns ensure the
pharmaceutical, biotechnology and medical equipment companies
search out amplifiers that promise
exponential growth in usage and market capitalization.
614 Patients with severe heart failure, including some at: University
of Pennsylvania, Mount
Langone; were randomly assigned to be treated with a MitraClip
or standard treatment. It was found, those with the
MitraClip had a sharply reduced death rate: 28 instead of 61,
drastically improved quality of life, fewer hospitalizations: 92
instead of 151.
MitraClip was used to repair the mitral valve by clipping
together the two flaps, allowing it to once again regulate blood
The doctors inserting the MitraClip through a blood vessel in
the groin, had to demonstrate their expertise in doing so.
An echocardiogram camera in the patient's esophagus is used to
monitor where the clip is going. Treatment level was
validated by independent experts
Alexion's Soliris is used to treat atypical hemolytic uremic
syndrome and paroxysmal nocturnal hemoglobinuria.
Alexion has had numerous problems under the previous management:
Required internal investigation of aggressive sales practices,
Acquistion of Synageva failed and its main drug Kanuma's value had
to be written off; so Alexion hired Ludwig Hantson (Baxalta CEO) as CEO and
Paul Clancy (Biogen
Annual profits at Alexion doubled in 2016 to $399 million.
Analysts are positive about Alexion's next drug, ALXN1210, an
analyst Geoffrey Porges said "I absolutely think they're doing
everything that investors could ask of them." However Porges
warned they could eventually be a takeover target as the industry
consolidates. "That's where the industry as a whole has to
Allergan was purchased by Actavis which took its name. Actavis
had previously acquired Forest Labs, and Watson
Pharmaceuticals. Actavis agreed a $5 billion deal with Irish
drug maker Warner Chilcot in 2013 that allowed it to domicile in
Allergan's Brent Saunders siad that the company made the move to
avoid what he described as the "double jeopardy" of having the same
issue heard in two venues. "We did this to really make sure
that we can defend these patents in only one forum."
Restasis 2nd quarter 2017 revenues were $336.4 million.
Botox was Allergan's
leading product by 2017 2nd quarter revenue.
and other areas of unmet medical need. More than 5,000 Genzyme
employees in offices around the globe serve patients in over 80
99 Another large cap name we favor is Genzyme General (GENZ). On a
relative valuation basis, this stock appears inexpensive. The
company only has a $3.5 billion market cap, which is somewhat
extraordinary when you compare it to the market caps of some of the
other companies with product sales and earnings. Genzyme’s
lead product dominates its market and has continued to demonstrate
solid growth. This product has surprised everyone in terms of the
size of the market. The product called Cerezyme for Gaucher’s
disease, a rare genetic disease, addresses a relatively small
patient population. Despite the small size of the patient
population, the product is today a $420 million product and will
probably approach $500 million by the end of this year.
The company has done an extraordinary job of expanding the market
opportunity for the drug. Genzyme has also done an excellent job of
leveraging their expertise with a robust pipeline of other products
for rare genetic diseases. The company currently has six other
products in the pipeline for rare genetic disease, two of which are
in late stages of clinical development. With solid sales and
earnings, a maturing pipeline, and a p/e at about 19x our 2000 EPS
estimate as compared to the average of 40x 2000 estimates for the
large cap biotech stocks, we view Genzyme as an inexpensive stock.
Genentech's mission is to be the leading biotechnology company,
using human genetic information to discover, develop, manufacture
and commercialize biotherapeutics that address significant unmet
medical needs. We commit ourselves to high standards of integrity in
contributing to the best interests of patients, the medical
profession, our employees and our communities, and to seeking
significant returns to our stockholders, based on the continual
pursuit of scientific and operational excellence.
Marketed products continue to drive performance. Business week
04 felt Rituxan revenues may be
impacted by new government policies. So far the case is not
proven. Avastin revenues were stronger
than Wall Street expected. By Aug 04 damaging trial feedback was
identified for Avastin. In the long term BW see potential in
Genetech submitted a sNDA to the F.D.A. for
Nutropin/Nutropin AQ for long-term treatment of idiopathic
Genentech together with collaborator Alkermes made a decision
to discontinue Nutropin Depot® (somatropin [rDNA origin]
for injectable suspension). The decision was based on the
significant resources required by both companies to continue
manufacturing and commercializing the product. There is a
limited supply of Nutropin Depot available, and we are working
with the endocrine community - physicians, patients and their
families - to ensure a smooth transition of our existing
Nutropin Depot patients to another Nutropin® (somatropin
[rDNA origin] for injection) product.
Have recently completed Stage 1 of a Phase II study of Tarceva in
glioblastoma that was conducted in collaboration with the
ABC2. While there has been single-agent activity seen with
Tarceva in the treatment of patients with glioblastoma
multiforme, we have decided not to proceed to Stage 2 based
upon a lower-than-expected objective response with
single-agent Tarceva in this setting. We remain interested
in exploring the potential use of Tarceva in the treatment
of glioblastoma, and we will pursue further studies in this
indication through an investigator-sponsored trial
2004 Our collaborator Roche
announced the initial positive results of the European
Organization for Research and Treatment of Cancer (EORTC)
20981 trial of Rituxan
in patients with relapsed indolent NHL is non-Hodgkin lymphoma, It is:
. The trial
evaluated patients treated with Rituxan and CHOP
(cyclophosphamide, doxorubicin, vincristine and prednisone) or
CHOP alone followed by Rituxan maintenance therapy for two
years and was stopped early due to efficacy when initial
results showed Rituxan to be the best therapeutic option in
both arms of the trial.
Genentech are entering new molecular entities and product line
extensions into our clinical development pipeline, including:
Modernization Act of 2003, follow-on biologics, and employee stock
Founder Herbert Boyer - was Professor of Biochemistry at University of
Cal (San Fran) who showed potential of rDNA in low cost drug
development. (UCSF settled
patent infringement & got Genentech to admit key
contributions of UCSF scientists. )
CEO & Chairman Arthur Levinson
Richard Scheller SVP of Research;
Vince Anicetti was promoted to vice president, Product Portfolio Management;
Martin Babler was promoted to vice president, Immunology Sales and Marketing;
Charlie Johnson was promoted to vice president, Clinical Bio therapeutics;
Karen McCormick was hired as vice president, Specialty therapeutic Sales and
Desmond-Hellman president of product development -> UCSF
chancellor -> Gates
Myrtle S. Potter, president for commercial operations
We should have an excellent window into the compound’s efficacy
during the next six months. Its $550 million market cap makes it
quite attractive when compared to IDEC Pharmaceuticals’ $2.1
billion, assuming it lives up to its reputation.
Aug 2004 Erbitux may benefit from Heart risks with Genentech Avastin.
cancers, which represent a far larger market than blood
cancers. Celgene sees the deal as producing huge
Jul 2015 Celgene payed $7.2 billion cash for Receptos of San
Diego. Receptos is developing ozanimod, an oral treatment for
multiple-sclerosis and ulcerative cholitis that is in clinical
trails with possible approval in 2018. It licensed patents
from the Scripps
Research institute. Oral treatment should be an
advantage against Abbvie's
Humira and J&J's Remicade that
must be injected or infused. Ozanimod has the same mechanism
of action as Novartis's
Gilyena, which has cardiac side effects, but Celgene argues Ozanimod
could be safer.
Celgene said that ozanimod could have peak annual sales of $4 - 6
billion. They view it as a complement to GED-0301 and
Revlimid is a blood cancer drug.
Celgene's Revlimid patents are being threatened by the Coalition
for Affordable drugs (Nov
2015). It asked the patent board for sanctions against
the coalition but the board ruled against Celgene.
antivenoms and cell culture reagents. It includes USA plasma
maker CSL Behring.
CSL Behring manufactures plasma derived and recombinant
loss drug Suprenza
Suprenza is patented in 2013 and extended until 2029. The
patent is for an orally disintegrating tablet with a 'specled
appearance'. The patent is being challenged by the Coalition
for Affordable drugs (Nov
Curis initially born out of the merger of three cash-starved
biotechs in 2000. Unprofitable since it started.
Has targeted the Hedgehog signalling pathway, named after the
furry-looking mutant fruit-flies in which it was first
discovered. The pathway is used for cell signalling.
They appear to act as a molecular switch, that may control tumor
growth, hair follicle activity and reduce neuron degeneration in the
brain. The F.D.A. Food and Drug Administration.
is likely to require heavy testing - especially for a quality of
life treatment like hair restoration. It's especially
troubling since it seems to turn on to work in some cell situations
and to turn off in others. Modifiers in one treatment may have
side effects in another cell type.
April 2005 Genentech licensed to start trials of a skin cancer drug
based on Hedgehog signalling agonist.
Denali is based in South San Francisco.
Denali is a biotechnology company focused on discovery and
development of therapies for neurodegenerative diseases.
CEO Ryan Watts - former head of neuroscience at Genentech.
It was founded by Marc Tessier-Lavigne, who later became president
University. Initial funding round raised exceptional
$200 million from Fidelity
Ventures, Arch Venture.
It was initially marketed by Sanofiin 2013.
But was pulled from the market in 2015 when its list price was $500
for two injectors. After the storm of bad publicity regarding
EpiPen pricing Kaleo announced Auvi-Q would be re-released in 2017 (Oct
The Auvi-Q, an epinephrine injector, competing with EpiPen, was
initially marketed by Sanofi,
who were sold the rights by Kaleo. It was
initially released in 2013 but Sanofi pulled it from the market in
2015 amid reports that it was failing to deliver the correct dose in
some cases (Aug
Kaleo, who once again owns the rights to Auvi-Q, said they were
working to make it affordable. Mylan argued in Sep 2016
that it had raised the price of EpiPen when it
found in 2013 that Auvi-Q was 10% more expensive than their
David Maris, an analyst at Wells Fargo
commented on Mylan's
pricing issue, to the NYT, "It's a real challenge to understand how
a management team sits around a board table and makes a decision to
raise the price of a lifesaving medication over and over and over,
and when the P.R. storm hits, decides to blame someone else for that
price increase." Maris warned investors in June that Mylan's
price increases on EpiPen
and other drugs could soon draw unwanted media scrutiny.
Mylan's PAC has given donations to the Clinton Foundation, and both
the Republican (72%) and Democratic parties in the 2016 election
Ocata is a pioneer in developing human embryonic stem cells.
It was initially called Advanced Cell Technology. It is based
in Marlborough Mass.
Nov 2015 CEO Paul Wooton
Nov 2015 Chief scientific officer Dr. Robert Lanza is the driving
force behind the company.
Ocata pushes the frontiers of cloning and embryonic stem cell
It tests medical treatments derived from human embryonic stem
Later it made deals with the generic manufacturers to sell
authorized copies of adderall in exchange for royalties.
But the generic manufacturers found they were being starved of
supply and so terminated the agreements with law suits and
The problem for Shire is that the proportion of the margin that is
rebated has grown. Shire recently announced it will sell off
its attention-deficit drugs to focus on developing for rare-disease
ExxonMobil announced a $600 million collaboration in 2009 to
research next-generation biofuels.
Dr. J. Craig Venter has synthesized a full bacterial genome and
deployed it successfully into a cell. However, the initial
synthesis was a near copy of an actual bacterium's DNA
sequence. Subsequently in 2016 he has developed a synthetic
Exjade is used to treat iron overload in the blood.
federal lawsuit - specialist pharmacies and Exjade
Novartis is being sued by Federal prosecutors seeking $3.3 billion
in a whistle blower law suit claiming Novartis used financial
incentives to influence specialty
pharmacists including Accredo to promote its
drugs: Exjade and ??.
Novartis encouraged the pharmacists nurses to not tell customers
about serious side-effects of Exjade.
Consequently, from that perspective, the pipeline will become more
important for Biogen in order to show what is going to be their
encore product. Near term, I think they are still on pretty solid
ground in terms of showing solid performance in both sales and
99 The company has continued to post very good growth in their
current franchises in terms of product sales that have impacted the
bottom line very positively.
The company beat earnings expectations by a comfortable margin last
quarter. We continue to expect similar performance in the upcoming
In Amgen’s case, the company has done exceptionally well in turning
around the outlook for their pipeline, where they were formerly
criticized, and for good reasons, for not producing a major product
from their pipeline for a prolonged period of time. The third
product for the company was introduced nine years after Neupogen and
represents a relatively small market to date.
The company now has four products that are in late stages of
development. One is NESP, a second-generation Epogen, which we
believe will get filed later this year (99). It is a highly visible
product with blockbuster potential. Another product is a
second-generation Neupogen, which we expect will receive increased
visibility from data presented at an upcoming medical conference. In
particular, we are expecting positive data to be presented from a
Phase II study at the annual hematology meeting called ASH.
were initially dismissive, but after more scientific data they
agreed the drug was a substantial improvement over existing
treatments for some patients.
After the F.D.A. Food and Drug Administration. approved
Blincyto Amgen priced it at $178,000 for two 28 day cycles of
treatment. Medicare will allow a "new technology add-on
payment" to hospitals for up to $27,000. Patients typically
start treatment at a hospital and then continue it at a doctor's
office with specially trained nurses where Medicare will also help
pay for the treatment.
The $178,000 price places Blincyto in the sites of President Obama,
oncologists and Congress who are concerned that these useful drugs
are unsustainably expensive.
cost is $440 billion a year. And the cost is not the big
picture. Collaboratively the burden must be
understood. There must be headroom for innovation.
Low value goods and services must be removed.
Cusp of genomic revolution moving from bench to the bed
side/clinical practice. Replace average with personal
genetic makeup and disease characteristics. But system is
not designed to do this. Incentives do not encourage
personalized medicine. Biomarker driven therapies /
diagnostics have punishing [co-]payment constraints today.
CEO Mr. Girondi. Mr. Girondi's son has beta thalassemia and so
is likely to die in his mid 20s unless a treatment is developed for
the mutation he carries.
Co-founder Norbert Wiech, a biochemist and pharmaceutical
Mr Girondi was a successful commodities trader. He discovered
his young son had beta thalassemia in 1992. During his search
for treatments he contacted Dr. Michel Sadelian, a researcher at
Sloan-Kettering, who had published a paper on his beta thalassemia
gene therapy experiments.
Due to a death during treatment at the University
of Pennsylvania with gene therapy in 1999 there was little
commercial interest in developing new gene therapy treatments.
Girondi convinced Sloan-Kettering to license its treatment to Errant
To bring in more money Errant proposed sublicensing to Sigma Tau
pharmaceuticals. Sloan-Kettering refussed and in 2010 accused
Errant of defaulting on the license agreement. Errant has
taken Sloan-Kettering to court.
Mr. Girondi argues that Bluebird is
treating less sick patients and used a harsher regimen, one he would
not want his son to undergo.
Health care providers and their advocates argue that genomic tests
are not well understood and could result in under treatment (Dec
2015). The FDA Food and Drug Administration.
does not regulate one site testing but is asking to extend its
Has a 10 year collaboration with Celgene.
This should help Juno compete with Novartis which is
developing similar CAR immuno therapies. CEO Bishop commented
"Celgene is the ideal partner for Juno to help us realize the full
potential of our science and clinical research while maintaining the
independence we, our employees, partners and investors believe is so
critical for true innovation." Juno has the option to
codevelop and help commercialize certain Celgene drug candidates
that are aimed at T-cells.
Kite licenses patented inventions and agreed to pay royalties
of 5% of sales.
Cooperative research and development agreement. Kite
provides money to the N.C.I. to support research. Kite is
paying $3million a year to Dr. Rosenberg's lab. It pays $4
million a year to the N.C.I. and $3.8 million to academic and
tests. It is based in Irvine California.
Dr. Philip Ginsburg, executive vice president and chief medical
officer argues the tests are aids to patient management.
MDxHealth with DDL Diagnostic Laboratory have launched SelectMDx (Dec
2015). The test aims to determine if a biopsy is
necessary. It measures messenger RNA levels of biomarkers
associated with an increased probability of aggressive
Clinical studies to show that Praluent and equivalent drugs: Amgen's Repatha; prevent heart attacks and
strokes may complete in 2017. Some doctors say they will limit
prescriptions until then.
Praluent is viewed as costly. The list price is $14,600 a
year. That is substantially higher than $7000 to $12000 that
health plan and Wall Street analysts were expecting. Health
plans are expected to put
in place strict measures to control which patients can use the
drug. Health plans are worried that so many patients
might use the drugs that it would cost $[tens of] billions a
Sanofi and Regeneron argue that the saving in lower treatment costs
for heart attacks and strokes.
They will also spend $1 billion on development of other drugs with
$750 million coming from Sanofi.
Scientists appear to be succeeding in the strategy producing
substantial remissions in certain patients. Competitors,
in partnership with Juno Therapeutics,
are investing heavily. Immunocore just
obtained $320 million funding.
Regeneron and Sanofi are lagging in immuno-oncology. They are
in early clinical trials of a PD-1 inhibitor. Merck (Keytruda) and Bristol-Myers
already have PD-1 inhibitors on the market. Roche and AstraZeneca are also
further along in PD-1 development. Schliefer argues that
Regeneron will catch up by developing an array of immuno-oncology
drugs that can be combined with one another to build far greater
effectiveness. Schliefer argued that they will be able to
build bispecific antibodies that bind to both immune cells and tumor
cells and can be deployed as off-the-shelf products. In
contrast other immuno-oncology strategies focus on d