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发帖数: 22 | 1 R&D restructuring–round 2013
It's standard operating procedure in Big Pharma to tell the world that the
company has a great R&D division busily innovating important new drugs and
everything looks rosy for the future. But at some point, as generics start
stripping away billions in revenue, investors start to notice when the
emperor's clothes are gone. Merck ($MRK) made its debut on that stage this
year after a series of missteps in the clinic made it abundantly clear that
the pharma giant would have to endure yet another drought year on the
research side of the business--despite spending more than $8 billion a year
on developing new products. And it responded in classic fashion, with
draconian budget cuts, disarray and a vow to open up to outside innovators
with a new round of deals.
This restructuring business began in earnest four years ago, as
GlaxoSmithKline ($GSK) swore to find a new, more productive way to develop
drugs. AstraZeneca ($AZN) followed, then repeated the process with an even
bigger worldwide switch-up in game plans after the situation became dire.
Pfizer ($PFE) cut the most. Sanofi ($SNY) promised big changes, but the
company has been seriously hampered by entrenched unions and a hostile
French government. Roche ($RHHBY) decided it had to reorganize the pRED side
of the research business with a much more targeted approach to creating new
drugs under John Reed, and there are signs of progress. Even Novartis ($NVS
) decided to change its R&D structure this year, though it seemed
authentically surprised when asked to explain it.
It takes years to turn around one of these big groups, or get an idea if
there's really a significant awakening in the offing. GSK, for example, saw
a slate of new approvals this year, but its high-risk shots on Duchenne's,
cancer vaccines and heart drugs all stumbled badly in the second half.
We also probably haven't seen the end of the big R&D restructurings. Eli
Lilly ($LLY) vowed to stay the course several years ago. It had promised 2
new drug approvals a year, beginning in 2013, which never panned out, and it
goes into 2014 facing a rising tide of criticism for one setback after the
next. If the diabetes franchise doesn't deliver some blockbusters soon, CEO
John Lechleiter will be forced to concede that all the happy talk was
nothing but an empty boast.
You already know what happens next.
For all practical purposes, the industry has at best reached the halfway
mark in an era of global restructuring. The process is fraught with danger
for legions of staffers and also bristles with some extraordinary
opportunities for the fleet of foot.
Playing it safe is dangerous to your financial health
This year, biopharma saw a string of big breakthroughs make it through to an
approval--Biogen Idec's ($BIIB) Tecfidera (I still prefer BG-12) and Gilead
's ($GILD) Sovaldi (sofosbuvir) stand out as prime examples. Both of these
drugs promise to truly change the standard of care for the diseases they
address and they illustrate case examples of the dire need for more real
innovation.
The risks involved in R&D are so extreme that there's a natural impulse--
particularly in the larger organizations--to include a few sure things in
the pipeline. As a result the industry has seen a whole new wave of me-too
drugs come along, pushing up the number of approvals as blockbusters become
harder to come by. Take the string of SGLT2 drugs being advanced in diabetes
, where regulators have been zealous about the safety of new drugs. Many of
these drugs will flounder when they confront a marketplace that is fed up
with the enormous prices being put on newly approved drugs.
In Europe, government payers have perfected a game of regulatory hardball,
demanding some big advances for patients to justify what pharma companies
are charging. And payers in the U.S. are learning how to apply tough
standards of their own. In case you missed it, the pharma benefit manager
Express Scripts ($ESRX) has put biopharma on notice that it is going to
exclude some high-priced therapies from formularies or negotiate better
terms by pitting new entries against each other.
Pfizer CEO Ian Read noted to The Wall Street Journal that the demand to
start patients on generics has blunted the sales trajectory of Xeljanz, and
that's a trend that is here to stay.
Running the gamut of payers following an approval demands that R&D
organizations do what they claim to be doing (but often aren't): really
innovate. It will also force companies to do a better job of communicating
with patients and influential groups when they roll out new drugs likely to
induce sticker shock. Gilead is a prime example of a company that has
decided to hit the bunkers when it comes to criticism of any kind--and that
is a dangerous game to play. At some point, the industry will start inviting
federal intervention on pricing in the U.S.
Before you begin to think that I believe that 2013 was just one big bummer,
though, let's turn the discussion to the best in R&D innovation.
Immunotherapies grab the R&D spotlight
Over the last few years, there's been a growing debate over high-priced
cancer drugs that often provided patients with only marginal gains in
survival rates. Checkpoint receptor immunotherapies helped change the
discussion from one revolving around minor advances to a look at what real
innovation can do for patients. And the three PD-1/PD-L1 drugs from Bristol-
Myers Squibb ($BMY), Merck and Roche have inspired a frenzy of new deal-
making and research programs as the rest of the industry starts to play
catch-up.
Anyone who's been reading FierceBiotech over the course of the year may be a
little fatigued by the attention for this new class of immunotherapies.
Cancer vaccines--while by no means neglected in the research field--proved
sadly disappointing in the first round of late-stage studies. But there's
significant early-stage evidence that taking the brakes off the immune
system and letting it mount an attack on cancer can prove very effective,
and as a result we're seeing companies mix and match cancer therapies in a
burst of excitement and fear (no one wants to be the last to this big party.)
Immunotherapies have helped drive companies to rethink the way they do drug
development. Merck mounted a 1,000-plus patient Phase I for its PD-1 therapy
--something that had been unheard of until now. Development programs are
being compressed, with researchers integrating safety and efficacy research
in ways that can shave months and years off of a schedule. Drug research is
by necessity slow, but the ponderous, elephantine steps that marked past
efforts will no longer cut it in a world in which you get to move quickly or
not at all.
Immunotherapies also helped highlight other innovative approaches to drug
development. At ASH, Penn's Carl June demonstrated that a personalized
immunotherapy, the CAR-T program for Novartis' CTL019, had demonstrated some
stellar results. In short order, Novartis had picked up the IP to that
program after June had executed a small but very successful human study, and
it is now barreling along in an effort to get it on the market ASAP.
This R&D race will be won by companies with a hunger for execution. And it
will define the winners in a game with very high stakes.
The FDA gets in the act
A year ago, the FDA began to designate the most promising new drugs in the
pipeline as "breakthroughs" warranting quick advancement. Congress came up
with the BTD program to help placate an industry that was blaming the feds
for the dreadful productivity rate we were seeing a few years ago. And while
that was always something of an excuse--the industry was always primarily
responsible for the industry's lack of productivity--it's been helpful to
see regulators at least promise to shape up and open their doors when
something with real potential comes along.
It's clear that the agency's first round of BTDs was focused on big
companies and some low-hanging fruit. New therapies for hepatitis C and
cancer really did offer new standards of care. But quite a few of these
drugs were already well on their way to an approval. Still, when FDA execs
like Richard Pazdur come along and make a very public vow to speed things
along, that's a commitment that requires some follow through.
Over the next year we'll begin to see if the agency is really keeping its
promise. Typically, though, when any government agency commits to a new
initiative like this, there's a broad institutional focus on achieving its
goals. And that's a hopeful trend for biopharma R&D.
Biotech IPOs (finally) make a comeback
After watching the IPO market in biotech reduced to a ripple in recent years
, the big wave that hit this year was amazing to watch. Biotechs standing up
to their waists in red ink managed to make the jump through the window, and
some weren't even in the clinic yet. A surge turned into a swell in the
second quarter, with plenty of new offerings being added to the stack in the
third quarter. The swell turned into a freaky frenzy, but by the end of the
year it was clear that investors were becoming a lot more discerning,
quicker to turn a cold shoulder to a high-risk company with little in its
track record that could inspire confidence.
Also, it became clear that a few biotechs were trying to ride the IPO wave
even though they had no business going public. And as a result we began to
see companies reluctantly start stepping away from the public market, a
helpful sign of sanity.
Well over $3.5 billion was raised for these newly minted public companies
this year, pumping a significant amount of new resources into an industry
that had long been hungry for more cash. It also gave a boost to venture
capital companies trying to convince their big investors that biotech was an
appealing investment offering real payoffs. Given venture capital's
continued tepid pace, the new money was a welcome sight and likely will help
spur new funds in years to come.
The biotech IPO window hasn't closed. Stock prices waned in the second half,
reducing the appetite for new IPOs. But investors' appetite isn't dead.
Look for more offerings ahead--unless a big market correction puts the big
chill on it--with fewer overnight success stories to talk about.
http://www.fiercebiotech.com/story/5-biggest-trends-biopharma-r | O*******f
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