This week, Phispers has news on Indian generic drug makers. First, Sun Pharma and Dr. Reddy’s Laboratories announced their reworked strategies that are driven by severe pressures in the US market. While DRL plans to double its US product portfolio, Sun is betting big on its specialty pipeline. India’s Aurobindo Pharma made news by buying Novartis’ Sandoz US generic oral solids and dermatology business for US$ 1 billion. Even as the FDA continued to approve generic drugs at a frenetic pace, beating its own previous records, several major hospitals in the US launched a not-for-profit generic drug company, named Civica Rx, to tackle chronic drug shortages and high prices. Meanwhile, former chairman of Teva got indicted in a “pump and dump” stock fraud and GSK suffered a setback as its asthma drug failed to win expanded FDA approval for COPD.
Novartis unloads troubled US generics to Aurobindo; investors in Mylan, Teva unhappy
Novartis finally got rid of some troubled US generic assets
last week when it sold 300 products and
several development projects in its Sandoz US generic oral solids and dermatology business to Indian
drug maker Aurobindo Pharma for US$ 1 billion. Aurobindo will pay US$ 900 million upfront and up
to US$ 100 million in performance payments.
The deal relieves
Novartis of a troubled franchise, while catapulting Aurobindo to the position of the second-largest
generics player by prescriptions in the US.
The acquisition
also included some generic oral solids in autoimmune, antineoplastic and
hormonal agents. The deal included three manufacturing plants and around 750
employees.
The deal with Aurobindo is part of Novartis’ effort to focus Sandoz’s US operations on higher-margin assets like biosimilars and complex generics, which would include injectables, respiratory drugs and eye therapies.
As part of the deal, Aurobindo also gets Sandoz’s dermatology development center, as well as manufacturing facilities in Wilson, North Carolina, and Hicksville and Melville, New York, which Aurobindo said are “highly complementary” to its existing production footprint.
Many drugmakers, including China’s Fosun Pharma, and several private equity buyers had
reportedly evinced interest in the franchise.
In fact, investors in two other drug companies — Mylan and Teva — weren’t so happy with the deal. The reason? The US$ 900 million upfront
payment reached by Novartis and Aurobindo was less than the 2017 annual revenue
the portfolio sold, Wells Fargo analyst David Maris said.
“Although clearly Teva and Mylan have very different businesses than the largely commodity and dermatology portfolio Sandoz is selling, we believe some investors are looking at this as a proxy for what the commodity portions of Teva’s US and Mylan’s US businesses might be worth,” said Maris.
According to
Aurobindo, the acquired portfolio brought in sales of about US$ 1.2 billion in
2017, higher than the US$ 1 billion the deal could eventually be worth if
performance-related payments are added.
Due to increased pricing pressure that has wreaked havoc across the entire US generics industry, Novartis’ US Sandoz business has been suffering. Mylan and Teva face the same US pricing pressure as Novartis.
Meanwhile, Mylan finally revealed what it had bought during the last
quarter for US$ 483 million.
The company had purchased Novartis’ Tobi Podhaler and Tobi liquid, two cystic fibrosis
products. The company expects to pay US$ 240 million of that sum this year.
Mylan also mentioned the reason behind the secrecy. “The transaction was subject to … pre-closing confidentiality restrictions,” Mylan said in a statement.
Sun Pharma and Dr. Reddy’s rework strategy to deal with US market pressures
Indian drugmakers — Sun Pharmaceutical Industries Ltd and Dr. Reddy’s Laboratories Ltd (DRL) — made headlines recently for their new strategies. And the US market is at the helm of the strategical changes being implemented at both the companies. While Dr. Reddy’s plans to double its US product
portfolio over the next five years, Sun Pharma is betting big on its
specialty pipeline in a bid to climb up the value chain, and deal with
increasing US market pressures.
India’s largest drugmaker Sun Pharma has a portfolio of about 10 specialty products, of which five are already in the market, two more are likely to be commercialized in the next few quarters; and two more await US Food and Drug Administration (FDA) approval.
According to Dilip Shanghvi, managing director of Sun Pharma, the company has been investing in building its global specialty business for the last few years so that they continue to earn reasonable returns on investments. The company plans to continue investing in global specialty business — a move that is driven by severe pressure in the US market, which in turn is forcing companies to increase their research and development spends.
Credit Suisse
expects the specialty business of Sun Pharma to break even in financial year
2021.
Similarly, DRL
plans to double its US product portfolio over the next five years. This was one
of the five core growth areas that the company highlighted in a recent meeting
with analysts and investors, Antique Stock Broking report said.
The company wants
to ensure that no commercial opportunity is wasted due to issues related to its
manufacturing plants, the report added. Quality is likely to remain center-stage
for DRL and the company is making improvements in this regard over the last two
years.
The five core growth areas for Dr Reddy’s are (i) intensifying efforts in complex generics and developing dossiers for world markets given the legacy strength in complex APIs; (ii) doubling the number of marketed molecules in the US in the coming years (iii) capitalizing on the first-mover advantage in China; (iv) breaking into the top-10 drug makers’ by sales list in India; and (v) keep enhancing the compliance processes at its plants.
The management has
indicated that the US remains the focus area and the company is likely to
launch 15 products annually with an aim to double the
marketed products to 170 in the coming years. The company will focus more on
oral solids and injectables in the US, while for China, the focus will be on
the oncology segment.
US launches Civica Rx to tackle high prices, as FDA gets
set to approve record ANDAs
Shortages
of lifesaving drugs is a key worry for several countries across the world. In
the US, drug shortages have been widespread for more than a decade.
Last
week, several major hospital groups in the US got together to launch their own generic drug company — christened Civica Rx — to tackle chronic drug shortages and high prices. The initiative was announced in January 2018. Since then, more than 120 health organizations representing about a third of America’s hospitals have contacted Civica Rx and have expressed a commitment or interest in participating with the new company.
This not-for-profit generic drug company will help patients by addressing drug
shortages and high prices of lifesaving medications. Civica Rx will be
headquartered in Utah.
Civica
Rx plans to start with 14 widely used hospital drugs that have been in short
supply for a long time. Besides creating a reliable supply for its 500
hospitals, Civica aims to reduce drug prices by about 20 percent.
On
its part, the FDA is announcing a public meeting entitled ‘Identifying the Root Causes of Drug Shortages and Finding Enduring Solutions’. The purpose of the meeting is to give stakeholders, including healthcare providers, patients, manufacturers, wholesalers, pharmacists, pharmacy benefit managers, veterinarians, public and private insurers, academic researchers, and the public, the opportunity to provide input on the underlying systemic causes of drug shortages, and make recommendations for actions to prevent or mitigate drug shortages. The public meeting will be held on November 27, 2018.
Meanwhile,
in Canada, about 1,200 drug products go into short supply every year. At any given moment,
there are at least 700 to 1,000 drug shortages.
Last
week, 25 new drugs were listed on Canada’s drug shortage website. These include treatments for migraines, Parkinson’s disease, schizophrenia, depression, hepatitis B, genital herpes, hypertension, and even generic Viagra.
Last week, Canada’s health minister signed an order permitting US supplies of another brand of epinephrine auto-injectors to be sold in Canada to help solve the EpiPen shortage.
This
is happening at a time when the FDA is on track to approve a record number of abbreviated new drug applications (ANDAs) in FY 2018.
The
FDA has approved 666 ANDAs in the fiscal year through July and has tentatively
approved another 162 ANDAs. With an average of 67 ANDA approvals and 16
tentative approvals each month this year, FDA will likely top its
record-setting FY 2017 performance.
In
FY 2017, FDA approved or tentatively approved 937 ANDAs, breaking its previous record
of 835 in 2016.
As part of FDA’s efforts to address growing prescription drug spending, Commissioner Scott Gottlieb has also made the approval of generic drugs, especially first generics and generics to drugs with little competition, a priority.
Ex-Teva chairman charged in ‘pump and dump’ stock fraud
Last week, the US
Securities and Exchange Commission (SEC) said it charged 10 individuals and
10 associated entities for manipulating the stocks of three companies. An SEC statement said these individuals and the associated entities ran “fraudulent schemes that generated over US$ 27 million from unlawful stock sales and caused significant harm to retail investors who were left holding virtually worthless stock”.
According to the SEC, between 2013 and 2018, these “prolific South Florida-based investors” manipulated the share price of stocks in three unidentified companies. The SEC named investor Barry Honig and pharmaceutical billionaire Phillip Frost among the individuals. Frost allegedly participated in two of these three schemes.
Honig allegedly helped
acquire large quantities of company stock and engaged in manipulative activity
after taking ownership interests in the companies. OPKO Health Inc was also
named among the charged entities. Frost is chairman and CEO of OPKO, a dual
listed company traded in Tel Aviv and Wall Street.
Eighty-one year
old Frost served as the chairman of the Israeli generic drug giant Teva Pharmaceuticals until 2014. OPKO has been traded on the Tel Aviv Stock Exchange since April 2013, after OPKO Health bought Israeli biomedical company, Prolor Biotech. This deal was of interest since Frost held both OPKO and Teva.
SEC investigators allege that Honig was the ringleader of the “pump and dump” scheme. In each of the three cases, the SEC says Honig orchestrated the purchase of shares at steep discounts. The participants would buy shares in coordination with each other, driving up the prices. The group would control the actions of the management without disclosing that they were in control. Then they would arrange for the publication of promotional articles to further raise the stock price.
According to the
SEC complaint, Honig and his associates then dumped their shares into the
inflated market, reaping millions of dollars at the expense of unsuspecting
investors.
“As alleged, Honig and his associates engaged in brazen market manipulation that advanced their financial interests while fleecing innocent investors and undermining the integrity of our securities markets,” Sanjay Wadhwa, Senior Associate Director in the SEC’s Division of Enforcement, said.
GSK
suffers setback as its asthma drug fails to win expanded FDA approval for COPD
British drugmaker GlaxoSmithKline faced a setback a few
days back when its bid to expand the use of its biologic Nucala in the US to
include patients with coronary pulmonary obstructive disorder (COPD) got
rejected by the FDA.
The company is
seeking approval for Nucala (mepolizumab) as an add-on treatment to inhaled
corticosteroid-based maintenance treatment for the reduction of exacerbations
in patients with COPD, guided by blood eosinophil counts.
The FDA issued a
complete response letter (CRL) to GSK that more clinical data are required to support an approval. GSK filed for the drug’s approval for COPD on the basis of two trials - Metrex and Metreo.
GSK will work
closely with the FDA to determine the appropriate next steps for the
supplementary biologics license application (sBLA), the company said in a
statement.
Nucala is a
monoclonal antibody, already approved for asthma, that works by inhibiting
interleukin-5 (IL5) to decrease the maturation and survival of eosinophils (a
type of disease-fighting white blood cells), overproduction of which can cause
inflammation in the lungs.
Soon after
receiving the CRL from the FDA for Nucala as an add-on COPD treatment, GSK
released data that showed the same medication was a superior treatment in
severe eosinophilic asthma in patients with similar blood eosinophil counts.
GSK released data
from an indirect treatment comparison between Nucala and AstraZeneca's Fasenra (benralizumab) and Teva’s Cinqair (reslizumab). It showed Nucala “significantly reduced clinically significant exacerbations and improved asthma control” compared to the other two branded products.
Meanwhile, last
week the European Commission approved Nucala for the treatment of children with
severe asthma. The marketing authorization for Nucala has been granted as an
add-on treatment for severe refractory eosinophilic asthma in pediatric
patients aged six to 17 years.
As a result of
this license extension, Nucala is now approved for use in severe refractory
eosinophilic asthma in both adult and pediatric patients in the 31 European
countries covered by the European Medicines Agency (EMA).
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