GSK chairman to step down ahead of split; Novartis’ CEO shares updates on digital healthcare

GSK chairman to step down ahead of split; Novartis’ CEO shares updates on digital healthcare

By PharmaCompass

2019-01-24Impressions: 2768

GSK chairman to step down ahead of split; Novartis’ CEO shares updates on digital healthcare

This week, Phispers brings you news from two Indian companies — Sun Pharmaceuticals and Aurobindo Pharma.

While Sun is embroiled in corporate governance issues raised in two whistleblower complaints to the market regulator, Aurobindo continued its acquisition spree by acquiring US-based rare disease and cancer specialist Spectrum Pharma.

Japanese drugmaker Takeda has begun sale of some emerging-market drugs in order to reduce the debt it is incurring due to the acquisition of Shire.

Novartis announced a collaboration with Oxford’s Big Data Institute that would use artificial intelligence and advanced analytics to understand complex diseases and improve drug development. Novartis CEO Vasant Narasimhan posted updates on digital healthcare. And GSK chairman Philip Hampton resigned post announcement of the British drug major’s plan to split into two businesses.



Novartis ties up with Oxford’s Big Data Institute; its CEO shares updates on digital healthcare

Vasant (Vas) Narasimhan, who took charge as the CEO of Novartis AG last year, has a penchant for reimagining medicine. Before being elevated to the corner office, Narasimhan was the global head of drug development and the chief medical officer at Novartis.

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One year on, as the CEO of the Swiss drugmaker, Narasimhan posted a blog on LinkedIn where he discussed digital healthcare. “This is an incredible moment in time for medicine. We’ve reached a tipping point in the convergence of biomedical and digital innovation.”

According to Narasimhan, “computing power has expanded, and data architecture and quality has reached a place where we can extract meaningful insights to impact human health.”

“Researchers and doctors have access to increasingly sophisticated forms of artificial intelligence and machine learning that have augmented their ability to decode disease. And a proliferation of mobile devices and sensors is increasing patient’s ability to gather and share information about their health,” he blogged.

However, according to him, “the adoption of technologies in the discovery and development of medicines comes with a lot of complex challenges. But that shouldn’t deter us from pursuing bold ideas.” One way to speed up the digital revolution is through stronger collaborations with emerging health tech innovators, he said.

While last year, the company had launched Novartis Biome, a digital innovation lab and a series of open innovation challenges, known as the HealthX World Series, this year the drugmaker has struck a five-year research alliance with University of Oxford’s Big Data Institute (BDI) that would use artificial intelligence and advanced analytics to understand complex diseases and improve drug development.

“The alliance will make use of anonymized data from approximately 5 million patients from the UK and international partner organizations, together with anonymized data captured from relevant Novartis clinical trials. Using the BDI’s latest statistical machine learning technology and experience in data analysis, combined with Novartis’ wealth of clinical expertise and clinical trial data, the alliance expects to predict how patients will respond to existing and new medicines,” a statement said.

A Forbes article said Narasimhan has also been drawing attention to the industry’s miserable attrition rate — of the 20 drugs that enter clinical studies, only one makes it. Worse, this rate apparently hasn’t moved in the last 15 years, while costs have continued to increase.



Takeda’s divestures to begin soon; US$ 3 billion of emerging market assets to be sold

Japanese drugmaker Takeda Pharmaceutical has begun sale of some emerging-market drugs, as the company works at reducing its debt after the US$ 62 billion takeover of Irish drug major Shire Plc. According to a report, Takeda is working with Bank of America to gauge potential buyer interest in the emerging-market assets it acquired through its 2011 purchase of Swiss rival Nycomed.

Such medicines, including over-the-counter (OTC) and prescription drugs, could fetch about US$ 3 billion for Takeda. However, deliberations are at an early stage, sources told Bloomberg. Takeda is reportedly also working with JPMorgan Chase to evaluate options for its European OTC business.

“No decisions have been made regarding specific assets for potential disposal at this stage,” a spokeswoman for Takeda said in an emailed statement.

Takeda’s takeover of Shire was completed earlier this month. The acquisition has catapulted the Japanese drugmaker into the ranks of the world’s 10 biggest drugmakers. However, the acquisition has also increased Takeda’s borrowings, prompting S&P Global Ratings and Moody’s Investors Service to downgrade its credit rating.

In an interview, Christophe Weber, CEO of Takeda, has said the company wants to move quickly on asset sales. Takeda plans to sell off its overseas businesses where the company isn’t an industry leader and doesn’t have critical mass.



J&J-AbbVie’s star product suffers setback; Lilly suspends Latruvo promotion

Several drugs suffered a setback recently. First, AbbVie and Johnson & Johnson’s blockbuster Imbruvica was expected to be approved for pancreatic cancer. The drug is already approved to treat six diseases, and Imbruvica has been ultra-successful since its market debut in 2013. However, it looks the approval for pancreatic cancer is unlikely to come.

Imbruvica combined with two chemo drugs failed to top the chemo duo alone in a Phase 3 study of previously untreated pancreatic cancer patients whose disease had metastasized. Placebo won out at staving off cancer progression and at lengthening patients’ lives, AbbVie and J&J said.

AbbVie and J&J aren’t the only drugmakers who have lost the battle for treating pancreatic cancer, one of the most aggressive and deadliest forms of the disease bearing five-year survival rates below 9 percent, and it’s primarily treated with chemo.

The second drug to face an uncertain future was a type 1 diabetes treatment — sotagliflozin — developed by Lexicon Pharmaceuticals and Sanofi.

An advisory panel to the US Food and Drug Administration (FDA) was divided over whether to recommend it for approval for type 1 diabetes or not. The panel voted 8-8 when asked to assess the once-daily oral medicine, sotagliflozin, as an add-on to insulin therapy.

Insulin has been used to treat diabetes for decades, but side effects include hypoglycemia (a condition in which blood sugar falls to dangerously low levels) and weight gain.

According to Pablo Lapuerta, chief medical officer at Lexicon, sotagliflozin, which was tested in two doses, could help manage and maintain glucose levels while reducing the risk of hypoglycemia.

The third drug to face disappointment was Eli Lilly’s Lartruvo. Lilly suspended Lartruvo promotion after Phase 3 failure. Lartruvo failed the study in advanced or metastatic soft tissue sarcoma, an indication for which it gained accelerated approval back in October 2016.

In a statement, Lilly said it is suspending promotion of Lartruvo and working with global regulators to determine the next steps for the drug.



GSK chairman Philip Hampton to step down ahead of split

Last month, British drug major, GlaxoSmithKline Plc (GSK) had announced its bold plan of splitting the company into two businesses — one for prescription drugs and vaccines, and the other for OTC products.

As GSK prepares to split its business into two, its chairman Philip Hampton (aged 65 years) has said he will step down from the role.

According to Financial Times, his decision to resign follows pressure from investors who are concerned that the company’s share price had underperformed the global pharma and biotech sector. Hampton has been the chairman of GSK since May 2015.

Last month, GSK’s CEO Emma Walmsley had announced that GSK and Pfizer would combine their consumer health businesses in a joint venture with sales of US$ 12.7 billion, in an all-equity transaction. The joint venture was to be 68 percent-owned by GSK.

“Following the announcement of our deal with Pfizer and the intended separation of the new consumer business, I believe this is the right moment to step down and allow a new Chair to oversee this process through to its conclusion over the next few years,” Hampton said in a statement.



India’s Aurobindo acquires cancer specialist Spectrum’s marketed portfolio for US

Indian drug major Aurobindo Pharma announced last week it is acquiring US-based Spectrum Pharmaceuticals in a US$ 300 million deal, including an upfront cash payment of US$ 160 million. Spectrum Pharma is a rare disease and cancer specialist. And there has been buzz around the potential sale of the company since June 2018. However, Spectrum is only selling its FDA-approved products.

The company is selling its entire portfolio of seven marketed products to Acrotech Biopharma, a wholly-owned subsidiary of Aurobindo.

About 40 percent of Spectrum’s workforce (around 90 employees) are being cast aside, with most of them slated to move to New Jersey-based Acrotech. According to Spectrum president and CEO, Joe Turgeon, the selloff is a strategic shift “to ensure laser-focus” on novel oncology drugs, and the cash is placing Spectrum “in a solid position to evaluate additional growth opportunities.”

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In a regulatory filing, Aurobindo Pharma said Acrotech will be acquiring the product portfolio on a debt-free and cash-free basis. This acquisition will help Aurobindo enter the branded oncology market in the US.

For Aurobindo, the product portfolio is expected to generate revenue of around US$ 100 million for the first 12 months after completion of the transaction.

The acquisition “creates an ideal launch pad for Acrotech, and establishes our presence in the branded market, which is in line with our strategy to grow and diversify our business in the US," Aurobindo managing director N Govindarajan said.

“The transaction is expected to close within 90 days of signing following the completion of customary as well as regulatory conditions, including FTC clearance,” he added.



Governance concerns continue to loom over Sun Pharma with second whistleblower complaint

India’s largest drugmaker Sun Pharmaceutical has been facing concerns over corporate governance since September last year, when the first whistleblower report was submitted to the market regulator Securities and Exchange Board of India (SEBI). In the sensational 150-page document, a whistleblower has alleged numerous irregularities against Sun Pharma, its main promoter Dilip Shanghvi, his brother-in-law Sudhir Valia, and Dharmesh Desai (an associate of Ketan Parekh, who was convicted of wrongdoings in the Indian stock market scam of 2001).

Earlier this month, a second whistleblower report was submitted with SEBI. According to an article published in The Economic Times (ET), a real estate firm named Suraksha Realty, owned by Valia, has raised money using Sun Pharma shares as collateral on at least three occasions in the past two years. The latest pledge has come from Shanghvi Finance, a major shareholder in Sun Pharma. Shanghvi Finance has reportedly pledged a portion of its stake in Sun Pharma to help Suraksha raise US$ 14.02 million (INR 1 billion) through commercial paper.

Sun, however, has requested the market regulator to examine the second whistleblower complaint filed against the company. “There is a great asymmetry in the information circulating between analysts, investors and media leading to intense speculation,” the company said in a letter addressed to SEBI.

In a statement, Sun has said it neither lent money to Suraksha nor provided any guarantee, even as investors and observers took to the social media to question governance at the company.

Meanwhile, in a damage control exercise, Sun has discontinued its super stockist arrangement with related party Aditya Medisales (AML) and unwound loans given to a third party (Atlas Global Trading), say news reports. Sun’s domestic formulation business is entirely routed through a promoter-owned AML, a super stockist that was declared as a related party of the company last financial year.

In 2017-18, Sun Pharma had funded Atlas towards non-fulfilment of its supply obligations till the time such obligations were fulfilled as per the agreement. Sun clarified that its loan to a third party were a part of its settlement with this company, after it failed to supply drugs because of the US regulator’s restrictions on its Halol plant. The liability stems from Dubai-based Atlas Global assuming the damages on account of Protonix (a drug used to treat stomach ulcers).

“Till concrete steps are taken by the company and the regulators officially comment on the whistleblower letter, investor concerns can linger on,” research firm Nomura said.

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