Notable news last week included AstraZeneca and Sanofi presenting new Phase III date on their jointly-developed nirsevimab in respiratory syncytial virus (RSV). With a heavy week of first-quarter 2021 financial result reporting, attention focussed on Bristol Myers Squibb and Merck & Co, which both reported downturns in the sales of blockbuster ant-PD-1 therapies, Opdivo and Keytruda, respectively, caused by the COVID-19 pandemic, with analysts taking a closer look. Also, AstraZeneca came out with results that pleased investors, as did Vertex Pharmaceuticals.
AstraZeneca and Sanofi’s RSV jab takes a step towards market
Several big pharma names are in late-stage development with novel projects designed to prevent respiratory syncytial virus infections, and AstraZeneca and Sanofi confirmed that they are in pole position. Nirsevimab, a long-acting antibody, succeeded in the pivotal MELODY trial, putting the project on track for regulatory filings next year, commented Amy Brown writing on Evaluate Vantage.
Biopharma has struggled for years to come up with something better than Synagis, which is only available to high-risk infants, so this clinical win is notable. But developers are hoping to convince healthcare systems that RSV prevention should be made available to all infants, and winning that argument could be difficult.
This is likely to be especially true in cost-sensitive regions, and of course nirsevimab’s ultimate commercial potential will depend on AstraZeneca and Sanofi pitching the right price. It is too early to discuss those details, Tonya Villafana, head of AstraZeneca’s global infections franchise, told Evaluate Vantage, while insisting that the project will prove cost effective for many countries.
Ms Villafana rejects the suggestion that nirsevimab could end up being used mainly in regions with loose payer restrictions. “There is a lot of interest [in the project]; we have even talked to the World Health Organization, which sees the value,” she says.
Another potential challenger could come from vaccines from GlaxoSmithKline and Pfizer, both of which are in pivotal trials (Glaxo moves up a place in the RSV treatment race, November 26, 2020). Numerous failures in this space means that these projects’ success is far from guaranteed, and both companies will be facing the challenge of running pivotal programs at a time when social distancing is lowering rates of respiratory infections.
A tale of two PD-1s. or are all threatened?
Covid-19 caused sales of Merck & Co’s Keytruda and Bristol Myers Squibb’s Opdivo to slip slightly quarter on quarter, but for Bristol the year-over-year view is more concerning, according to Jacob Plieth and Edwin Elmhirst on Evaluate Vantage. This shows a 3% Opdivo decline versus Keytruda’s muscular 19% growth, and Opdivo revenue has in fact flatlined over the past 10 quarters. Nevertheless, on its quarterly call Bristol said it was “very excited” about Opdivo’s prospects, seeing limited risk of commoditisation from new anti-PD-(L)1 entrants, and saying the areas of greatest risk did not overlap with its largest markets. According to Evaluate Pharma sell-side consensus Keytruda and Opdivo will grow 11-12% a year to hit $28.7bn and $14.8bn respectively in 2026, likely driven by adjuvant/neoadjuvant. Merck’s party will not last forever either, though this company has played up new formulations, combinations and perioperative uses, and said it “didn’t see a [post-2030] cliff as the Street does”. Still, competition is a hot issue. On Tuesday Lilly was asked whether it might compete on price with Tyvyt, and said it was “looking at ways to differentiate.” And Bernstein’s Ronny Gal has written an open letter to Regeneron, urging the group to make its own laggard, Libtayo, the first discounted anti-PD-1.
AstraZeneca’Q1 trading results
As one of the world’s most discussed companies in recent months, it is no surprise that AstraZeneca has delivered a strong set of results for the first quarter this year, commented Neil Shah, director of research at Edison Group. The company delivered significant revenue growth of 15% in the quarter to $7,320 million, excluding the contribution from the COVID-19 vaccine. Product Sales grew by 15% to $7,257 million, driven primarily by the performances of new medicines across Oncology and BioPharmaceutical. This included sales of Tagrisso, its new revolutionary cancer drug.
Globally, new medicines represented 53% of total revenue (Q1 2020: 47%). Q1 2020 benefitted from a low-to-mid single-digit percentage increase in sales following short-term inventory increases in the distribution channel, an indirect effect of the COVID-19 pandemic. The company saw a significant increase in its emerging markets business with 14% growth to $2,592 million. In the USA, total revenue increased by 10% to $2,310 million and in Europe by 28% to $1,546 million.
With worldwide inoculations likely to accelerate over the next few months, signs for AstraZeneca are positive. As the impact of the pandemic begins to dissipate the company anticipates an acceleration of performance for the second half of 2021. Having delivered one of the most important vaccines in human history, it is no surprise that the company has delivered such a solid set of results. In addition, with non-COVID medication making up a significant portion of this growth, the company is well-positioned for a high-growth year as 2021 continues, Mr Shah concluded.
Meantime, Evaluate Vantages’ Amy Brown noted that AstraZeneca on Friday also confirmed a substantial delay for the US filing of its Covid-19 vaccine, saying this would be made “within weeks.” The first half of April had been the initial target. Astra’s chief executive, Pascal Soriot, denied that there were problems, saying it was simply taking time to gather the huge package, which will encompass ex-US trials and real-world data. Speaking on a media call, executives said AZD1222 (now trade-named Vaxzevria) would be travelling down an emergency use authorization route, although they will submit a full BLA if required. Given that the US has few vaccine supply problems, this longer path cannot be ruled out. This questions the logic of pursuing USA approval in the first place, but the importance of the FDA’s validation can probably not be overstated in the wake of concerns over lack of safety and controversial data disclosures.
Solid Trikafta-driven beat in CF for Vertex
Last Thursday, Vertex reported first results that demonstrated the resilience of the cystic fibrosis franchise, even in the midst of a difficult season for diversified biopharmas, noted SVB Leerink Research analyst Geoffrey Porges.
Most biopharma franchises have faced headwinds this quarter related to COVID-19, pricing, and inventory drawdowns, and Vertex is one of the few to have delivered a genuine revenue and earnings beat, as well as maintaining a positive outlook for the year. However, investors are unlikely to give the company very much credit for the result as the company and investors have shifted their focus towards the catalysts from the company’s early-stage pipeline and the potential for further business development activity.
The controversial AATD Phase I/II trial readout should be disclosed in the next few weeks, and is unlikely to be impaired by safety considerations, given the completion of dosing in the trial. However, it seems unlikely that the biomarker and efficacy results will be sufficiently definitive to declare that the product has the efficacy to drive a reversion in the share price to its previous heights. Instead, this study could invite further studies to optimize dosing and endpoints, before the program advances to a pivotal trial. Vertex’ recent increased investment in CRISPR’s CTX001 has naturally triggered increased investor and analyst interest, but the controversies about that program’s commercial value are unlikely to be resolved for a year or more (safety in more patients, durability of benefit, economic value/pricing).
Orkambi also beat expectations; the therapy is declining as patients switch to Trikafta, but the decline has been slower than analyst expectations. For the full-year 2021, Leerink lowered Orkambi (-8% versus previous estimate), Kalydeco (-2%), and Symdeko (-22%) for a total decrease of ~$217 million across those products. Leerink increased Trikafta revenue by $200 million or 4% compared to its previous estimate, leaving the 2021 revenue forecast essentially unchanged. Leerink’s total revenue forecast increased slightly by 0%-2% versus previous estimates for 2022-2025, driven by boosts to our Trikafta forecast.