The Competitions Market Authority (CMA) has raised concerns that the proposed merger between Illumina and Pacific BioSciences will lead to a loss of innovation in the DNA sequencing market.
Illumina is one of the worlds leading companies working in genetics and they provide next generation DNA sequencing to a number of leading organizations all over the world. One such project is the 100,000 genome project, ran by Genomics England. This shows how important the work that Illumina provides is, as its DNA sequencing aides in projects that tackle to research genetic diseases producing innovative personalized solutions.
Illumina holds 80% of the global market share in DNA sequencing, with a 90% share in the UK alone. The CMA concludes that a merger between Illumina and PacBio will cause a loss of competition between the two companies, leading to a reduction in alternative DNA sequencing systems, which ultimately leads to less choice, higher prices and/or lower quality of products. Furthermore, because this market is extremely concentrated, the CMA is also worried that a deal between the two would also lead to a decrease of innovation in the market.
Further supporting the CMA’s case, is that in the investigation between the two companies, it was found that PacBio is one of Illumina’s closest competitors, with internal documents from the companies referring to each other as competitive threats.
Illumina had hoped to close the transaction in mid-2019, but the way things are progressing it seems like they have a long time to wait just yet.
Medicine shortage has increased exponentially over the past decade, the reasons for this can be accounted due to the outsourcing of production to subcontractors located in counties where the quality controls are not as strict as in Europe, resulting in more and more frequent supply disruptions.
The National Agency for Medicines and Health Products Safety (ANSM) has previously charged a hefty financial penalty of EUR 348,623 to a pharmaceutical company because it breached its obligation to supply the market in a continuous manner. The ANSM stated that the company has not planned any shortage management plans, presenting a serious and immediate risk to patients.
The ANSM hoped that this decision will underline the responsibility that pharma companies have in regard to supply distribution with response not only vital for the wholesalers.
The above events occurred in February 2019. The Health Secretary of France as of July 2019 is setting up a select committee to help her implement her plan for pharma companies. She hopes to strengthen the ANSM powers to sanction manufacturers who do not have shortage management plans. With penalties for each day of shortage reaching up to a maximum of 30% of the average daily turnover in France.
After continuous delay there finally seems to be progress for the clearance of this $4.3bn deal by the FTC. According to reports made by Reuters, the FTC has cleared the deal without any product divestment requests.
Roche has had its eyes on Spark Therapeutics and in particular its gene therapy platform since it unveiled its plan to takeover in February early this year. Roche has been reaping success with its new product Hemlibra to prevent bleeding episodes in Hemophilia A. It was approved in the US in late 2017 and has been steadily gaining in market share, with sales of $927m in the first nine months of 2019.
When the FTC started to request for further information from Roche about the deal, analysts suspected that it was because of the overlap of expertise in the Hemophilia market, with gene therapy seen as the next big thing in the market and competition authorities are concerned it would give an unfair dominance in the market.
This worried investors as it showed a greater scrutiny from the FTC that has not been seen before as the gene therapy from Spark Therapeutics is still in clinical development with no guarantee of success and it already has a clear market competitor from BioMarin’s valoctocogene roxaparvovec.
Since this second request sent in June, Roche and Spark Therapeutics have delayed their tender offers multiple times and have now set a final deadline of October 30. It has not fully received the official stamp of approval from the FTC just yet, as top officials from the agency’s Bureau of Competition will now weigh in as well as five commissioners required to vote in favor as well.
The FTC is not the only competition authority that has had doubts with the merger. The UK Competition and Markets Authority also has an open investigation into the deal as well. It has launched a merger inquiry and set the deadline for phase 1 on December 16th. However, there could be even further delays in the merger is a phase 2 investigation is opened. Roche in their Q3 results, have announced that they expect the deal to close by year end.
This scrutiny reflects a change being experienced in the M&A sector in the pharma industry as Bristol Myers Squibb and AbbVie have both been subjected to the same scrutiny from competition authorities with regards to their respective deals, with Bristol Myers Squibb subject to mandatory divestments of Celgene’s Otezla, in order for the deal to be approved.
AZ’s lung cancer drug Tagrissio has already established itself as AZ top selling medicine, in the third quarter it grew sales by over 13.6% over the previous period to $891m surpassing analysts’ predictions by 4%.
Following suit is its immunotherapy treatment Imfinizi, which joined the blockbuster club, with its sales in the first 9 months reaching $1.05bn.
Tagrisso’s US sales grew to $350m in Q3 from $300m in Q2, with over half of that growth attributed to an increase in demand. The continued success of Tagrisso is also dependent on its performance in other markets particularly China, which has been a major contributor to AZ recent success, contributing 21% to AZ top line year to date. As of September, Tagrisso has Chinese approval in new patients with EGFR-positive non-small cell lung cancer (NSCLC). EFGR mutation in NSCLC patients is extremely prevalent in China standing at around 30-40%, more than any other country in the world.
AZ had expected growth to slow down in China in the second half of the year, but its Q3 results show that the country still turned up an impressive 40% increase at constant exchange rates. This does not mean the obstacles in China have disappeared but have only been delayed. The reason why its obstacles delayed is because the national rollout of a bulk procurement programme that is meant to cut prices of some of the older medicines was slower than expected.
AZ Imfinzi and Lynparza are set to face competition from rivals Bristol Myers Squibb and GSK respectively. CEO, Soriot announced that it doesn’t want people to think AZ is planning to become an oncology specialist company, stating that AZ has a very broad base of progress across therapy areas, meaning AZ is less exposed to something wrong happening with one product or another.
This would be the first federal trial for the case in the US, despite attempts from J&J to avoid this scenario as it tried to negotiate last-minute settlements estimated to reach $50bn. This $50bn would include cash, supplies of medicines including drugs to treat opioid addiction and overdose and distribution services, (sources seem to indicate $22bn in cash and $29bn in products and distribution)
Three of America’s largest wholesalers are offering $18bn over 18 years and J&J is offering $4bn. Teva pharmaceuticals another company with lawsuits filed against it for the crisis, is in a dire situation at the moment regarding its financial health and is desperate to avoid any cash settlements instead offering drugs and distribution services.
Lawyers representing the 2,600 plaintiffs have stated that when assessing settlements is that they provide urgent needed relief in the near term and that the resources will be exclusively used towards efforts to abate the crisis.
AbbVie has been dealing with obstacle after obstacle regarding its proposed Allergan merger, as the FTC again recently requested a second request for information on the deal, highly indicating that AbbVie will have to sell of further assets to meet regulators’ approval.
Last week, Ireland's minister of Finance, Paschal Donohoe introduced new measures targeting mergers made through ‘share cancellation schemes.’ In those deals, which were not previously subject to the countries 1% stamp duty, Irish companies would dissolve existing shares and issue new stock to the acquiring firm to complete the deal. This would amount to £673m for AbbVie. If AbbVie were to walk away from the merger, they would have to pay a termination fee, valued at £1.62 billion, over double the stamp duty fee.
AbbVie and Allergan have both already taken precautionary measures to clear anti-trust hurdles, including Allergan volunteering two of its drugs that overlap with AbbVie products in the inflammatory disease and pancreatic enzyme markets.
GSK has formed a 5-year R&D cell therapy collaboration with Lyell Immunopharma to further its efforts to treat solid tumours. GSK already has a foot in the cell therapies market, through its relationship with Adaptimmune, which gave it control of a midphase autologous T cell candidate.
GSK has not been forthcoming with the financial details of the agreement, but they have expanded upon the goals of the collaboration. They hope by working with Lyell, they will develop new technologies that will improve cell therapies, notably by expanding their use beyond blood cancers.
Lyell has a low profile among rising biotech’s, but it has grown quietly into a major player. It was founded by Rick Klausner, former founder of Juno Therapeutics and GRAIL. He has surrounded himself with leaders from organizations such as Kite Pharma, Juno, the Fred Hutchinson Cancer Research Centre and the National Cancer Institute.
The team is developing technologies to address what it sees as the three main barriers to the creation of “reliable, curative adoptive cell therapies for solid tumours.” The activities of Lyell Immunopharma can be split into three separate actions. 1) Redefining starting cell therapies, 2) Modulation of T cells so they stay functional in the solid tumour micro-environment and 3) To control the specifity and safety of T cells aimed at solid tumour targets.
J&J has been ordered to pay $8bn in damages to a US man who claims that that he was not warned that taking Risperdal could lead to experiencing breast growth. A jury in Philadelphia agreed that Janssen did not suitably emphasize the risk of the use of Risperdal in male children can cause enlarged breasts (known as gynaecomastia.)
J& will appeal the case, citing that the payout is grossly disproportionate. They also stated that they were not able to show the court key pieces of evidence to the jury that would have shown how Risperdals label outlined the risks of the drug.
The man, 26yr old Nicholas Murray, started to take Risperdal in 2003 after being diagnosed with autism spectrum disorder. Risperdal is not approved for that particular use but was pre-scribed off-label , something that is not illegal in the US based on a physicians judgement. He was originally awarded $1.75m back in 2015, but that was reduced to $680,000 after an appeal last year that upheld the original verdict.
J&J has stated that the award for a single plaintiff “is a clear violation of due process and US Supreme Court precedent dictates that punitive damages awards that are double digit multiplier of the compensatory award should be set aside.”
This is not the first lawsuit J&J has been hit with recently, with a series of lawsuits filed over the last few years claiming damages which have occurred with asbestos in talc, hip replacement and vaginal mesh products and opioid drugs all appearing in the court. In August this year it was found responsible for fueling the opioid crisis in Oklahoma and charged $572m and J&J also agreed to $20m in Ohio over similar terms.
MiroBio, a new UK start-up, raised £27m in its first-round financing for its antibody therapies for autoimmune and inflammatory disorders.
The company was created to further explore the discoveries that were made at the laboratory of Simon Davis, a professor of molecular biology at Weatherall Institute of Molecular Medicine and Richard Cornall, professor of clinical medicine at Oxford University. They will use their experience of 15 yrs of study into immune-signaling mechanisms at the cell surface to provide scientific aide to MiroBio.
The company will research into the development of therapeutic antibodies that can “reapply the natural brakes” of the immune system that are faulty in auto-immune diseases. With MiroBio stating that its antibodies will target the underlying cause of diseases unlike current therapies such as TNF inhibitors.
The company’s series A financing was co-led by Oxford Sciences Innovation, Samsara Biocapital and Advent life sciences. The money will be used to accelerate its lead programmes, strengthen its proprietary platform and build its management team for the next stage of growth.
MiroBio is currently the eight company to spin out of Oxford University this year, following in the steps of others such as antibiotic specialist GyreOx and DNA assembly company Lime Biosciences.
Figures published earlier this year by the Bioindustry association show that the UK pharma industry is still healthy and receiving good amount of investment despite the uncertainty caused by Brexit.
The FDA approved J&Js PARP inhibitor niraparib, a breakthrough therapy designation (BTD) in prostate cancer, helping it to make gains on rival Lynparza.
J&Js subsidiary Janssen has exclusive rights to the inhibitor, which is currently marketed in the US by GSK under the name of Zejula with indications for the treatment of ovarian, fallopian and primary peritoneal cancer. Janssen achieved its hope to expand the inhibitors reach with this fast-tracking approval for patients with prostate cancer. To use the inhibitor patients must have received prior taxane chemotherapy and androgen receptor (AR)- targeted therapy prior to beginning niraparib treatment.
The results from the phase two GALAHAD study showed that niraparib demonstrated a 41% objective response rate in patients and a median duration response rate of 5.5 months. These results will surely help Janssen to challenge rivals AZ/Merck’s PARP inhibitor Lynparza, which has also demonstrated positive results in prostate cancer patients of the same indication. However, at the moment Lynparza is ahead of Janssen as it is currently in the third phase of its clinical trials, as well as being studied in patients with a variety of mutations in the HRRm genes for prostate cancer.
Further advantages of AZ/Merck over J&J is that Merck’s blockbuster Keytruda is currently being studied in patients with prostate cancer as well as being studied in combination with Lynparza which could give AZ/Merck a real competitive edge over J&J if positive results seen.
From a bigger picture this news presents exciting news for prostate cancer treatments, as the emergence of these PARP inhibitors signifies a potential of unlocking a whole new stream of treatment pathways for a select patient population.
FTC demands more information on AbbVie’s Allergan buy, as the US antitrust watchdog keeps intense gaze on major pharma deals
First the FTC (Federal Trade Commission) dug in deep on BMS acquisition of Celgene, then it held up and continues to hold up Roche’s acquisition of Spark Therapeutics, now it is putting another major pharma deal under intense scrutiny.
The FTC has issued another demand of information from AbbVie and Allergan on their proposed $63bn merger. This so called ‘second request’ comes after a coalition of unions and consumer groups petitioning the FTC to carefully examine the deal and to block it if necessary. This follows a similar request by the FTC to Roche about its proposed acquisition of Spark Therapeutics, triggering a series of delays and extended tender offers.
Just as the case of the Roche situation, the FTC has offered no rhyme or reason as to why it has sent out this second request. Allergan, seeming anticipating a second request, offered before the FTC had made this announcement to sell of two of its drugs, brazikumab and Zenep which overlap with AbbVie’s Skyrizi and Creon respectively.
However, the unions do not seem to have an issue with product overlap but more what they consider anti-competitive behavior by both companies. Both companies have a history of using price hikes, rebate walls and controversial IP tactics to stifle competitions. Unions worry that a merged company between the two, creating the fourth largest drug maker in the world will give them even more negotiating power against payers.
Wells Fargo analysts say that they “do not believe there is a significant risk of the deal not being finalized given the little overlap between the companies.” However, after the forced divestment in the BMS-Celgene deal and constants delays for Roche/Spark, no one is quite sure what the FTC will demand.
Sobi (a Swedish Orphan Biovitrum) is set to acquire Dova Pharmaceuticals on the conditions of a regulatory approval of its lead drug Doptelet in a new indication.
Sobi will offer a consideration of $29 per share, with an upfront consideration of $27.5 and an additional $1.50 with approval of Doptelet. This totals to a consideration of $915m.
Doptelet is a treatment for low platelet counts in patients with chronic liver disease who have to undergo a medical procedure. It has since been expanded to patients with chronic immune thrombocytopenia, who have not benefited from previous treatment. It is delivered over a five day course, that prepares patients to have a medical or dental procedure five to eight days after. This is Dova Pharmaceuticals first product to be approved by the FDA and it is the first drug to be approved by the FDA of this indication.
Dova Pharmaceuticals hope to snare Novartis’s market share with its treatment for Hepatitis C virus infection (CIT), Revolade. Dova says Doptelet has fewer liver-related side effects compared to its Novartis counterpart and if Dova receives approval for CIT, it will further spread into Revolades market.
This deal with Dova significantly enhances Sobi’s hematology franchise, as Sobi already has a market approved therapy for Haemophilia A and B. This acquisition will hopefully help Sobi to fend of competition from other market entrants from the likes of Hemibra from Roche.
Matt Hancock announced that childhood vaccinations could be made compulsory in order to fight the increase in preventable diseases like measles. This comes after news that the vaccination rates dropped for all 13 recommended childhood vaccinations in 2018/2019.And with the UK losing its measles free status earlier this year, Hancock believes this makes a compelling argument.
Cases of hospitalization for measles in England rose by two-thirds in 2018/2019 compared to the previous year, with the UK now having the second lowest MMR vaccination rates in Europe behind France.
Hancock has taken legal advice on how such a policy could be implemented and he recognizes that some children cannot be vaccinated and some parents will resist on the basis of religious convictions but he stressed that these groups make up a very small portion of the current 7-8% now who don’t get vaccinated. He has singled out social media companies for the blame, stating they were not doing enough to stamp down anti-vacc misinformation on their platforms.
The main announcement coming from the Conservative Party Conference, is the intention to spend £13bn on capital investment on hospitals over the next decade. With £2.7bn already earmarked for 6 hospitals over five years. Another 34 hospitals are in line to receive £100m in ‘seed funding’ in the coming years, with the remainder of the money being raise by the taxpayers in the future. There is also a separate £200m fund to replace and upgrade scanning equipment like MRI and CT scans.
NHS providers chief executive Chris Hopson welcomed the programme but cautioned that the NHS “has been starved off capital since 2010. There’s a £6bn maintenance back-log, £bn of it safety critical.
According to the announcement, this injection will “mobilize £400m of private investment to allow science companies to scale in the UK.” The investment will be used to help companies raise capital, run clinical trials, employ more industrial scientists and upgrade manufacturing capabilities.
Another initiative was announced to continue to fuel the post-Brexit Life Sciences industry, with the launch of a new talent scheme for UK fund managers to attract the best scientists from around the world. This scheme follows Johnson's earlier announcement in the year to develop a new fast track visa route to continue to attract the top scientists.
Steve Bates, CEO of the UK Bioindustry Association stated: “It’s great to see the Prime Minister has reaffirmed the governments commitment to the UK life science industrial strategy to grow companies to scale in the UK.” He added that this was particular good news as in the coming weeks UK based life science venture capital funds look set to lose access to European Investment Bank Money, which has been a cornerstone in providing funds to the sector.
This news comes from the annual Conservative Conference held in Manchester, where there was also announced a new health policy statement promising £13bn in capital investment to be spent on hospitals over the next decade. NHS leaders welcome the news but understandably remain cautious. With emphasis on the upcoming political uncertainty that investment should be delivered not just for short term effects but also considering long term sustainability.
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