The new rules give the federal government the power to negotiate lower prices for some of the most expensive prescription drugs produced by Pfizer, Merck and other pharma companies purchased by Medicare, the taxpayer-funded healthcare system for retirees.

The reforms, which have been bitterly opposed by the pharmaceutical industry, aim to cut exorbitant costs for Americans, who face some of the highest prices for prescription drugs in the developed world. In 2022 the country spent more than $600bn on medicines, almost half the total global outlay, according to Statista.

“While the pharmaceutical industry makes record profits, millions of Americans are forced to choose between paying for medications they need to live or paying for food, rent and other basic necessities,” said President Joe Biden, who is expected to deliver a speech at the White House on the changes later on Tuesday. “Those days are ending,” he said.

The Department of Health said negotiations would begin this year and any negotiated prices would be implemented in 2026 for the 10 drugs, which cost Medicare $50bn in the 12 months to the end of May. Seniors paid $3.4bn of their own money for these drugs in 2022, a burden that was not reimbursed by insurers, the White House said.

The initial list of 10 drugs to face price negotiations includes a diabetes pill called Jardiance sold by Boehringer Ingelheim and Eli Lilly; a medicine to prevent strokes called Eliquis made by Pfizer and BMS; and a Novartis drug to treat heart failure called Entresto.

The Biden administration applied specific criteria in selecting the products for price talks, including their cost to Medicare and the level of competition for each drug. More drugs will be added to the list for government negotiations.

Under the proposed reforms the minimum cut from a drug’s list price will be 25 per cent, although the government may be able to secure much steeper discounts for some drugs.

The Congressional Budget Office, a non-partisan government spending watchdog, has estimated the drug price negotiation element of Biden’s reform package could save Medicare more than $100bn over a decade.

The pharma industry has filed several lawsuits aimed at blocking the reforms, which are part of Biden’s Inflation Reduction Act. They have warned that the shake-up of drug pricing will cripple innovation and stymie the development of life-saving medicines.

Phrma, an industry trade body, said the reforms were the result of a “rushed process” focused on short-term political gain rather than what was best for patients.

“Many of the medicines selected for price setting already have significant rebates and discounts due to the robust private market negotiation that [already] occurs,” said Stephen J Ubl, Phrma chief executive.

But a senior White House official said the Biden administration was “not backing down” in the face of legal challenges.

“There is no reason why Americans should be forced to pay more than any developed nation for life-saving prescriptions, just to pad Big Pharma’s pockets,” the official said. “The drug companies are running to court to try to accomplish through the courts what they couldn’t get in Congress, which is block negotiation from happening.”

Manufacturers who do not comply with the negotiation process are liable to an excise tax, which starts at 65 per cent of a product’s sales in the US.

This story originally appeared on: Financial Times - Author:Jamie Smyth

The industry uses the blood in millions of tests a year to detect endotoxins, poisons inside bacteria cells that can make people ill. But pressure is mounting on pharma companies to switch to synthetic substances as populations decline for horseshoe crabs and seabirds that eat the creatures’ eggs.

The asset management division of BNP Paribas, the French banking group, has sent letters to 14 of the world’s largest pharmaceutical companies asking them to use a cloned substance called recombinant factor C (rFC) instead of blood from horseshoe crabs for tests.

“Every injectable drug, including vaccines, every device that’s implanted in the body, including pacemakers, all of them depend on endotoxin testing, all of them depend on this one animal which is declining,” said Adam Kanzer, head of Americas stewardship at BNP Paribas Asset Management, which oversees €526bn.

Horseshoe crabs, more closely related to spiders than crabs, have lived in the oceans for about 450mn years, before dinosaurs roamed the planet. But their numbers are falling because of habitat destruction and increased collection by the fishing and biomedical industries.

In 2019 one of Asia’s three species, the tri-spine horseshoe crab, was listed as endangered by the International Union for Conservation of Nature. The global environmental protection organisation lists the American horseshoe crab as “vulnerable”.

In the US, regulations allow the biomedical industry to collect a portion of a horseshoe crab’s blood and then release it alive in the area where it was collected. Almost 720,000 horseshoe crabs were harvested for blood extraction in 2021, according to US authorities, of which it is estimated that 112,104 died.

Horseshoe crabs have been a priority for environmentalists. Earthjustice, an environmental law group, named it as lobbying issue last year, according to US Senate disclosure filings. But before BNP got involved, protecting them had not been on the list of issues for environmental, social and governance (ESG) investors.

In May, the Pharmaceutical Supply Chain Initiative (PSCI), a lobby set up by large pharmaceutical companies, said its members should stop sourcing blood from the two Asian horseshoe crab species most at risk. The London-based PSCI said continuing to harvest horseshoe crabs for their blood “[may] lead to population decline”, and encouraged member companies “to explore and adopt alternatives”.

At Indianapolis-based Eli Lilly, about 80 per cent of endotoxin testing capacity has converted to rFC and regulators have approved eight products utilising these tests. The drugmakers Pfizer and Roche said they are piloting use of rFC at some of their facilities.

Jay Bolden, a biologist working at Lilly, said the company began to make the shift to rFC over concerns about possible supply chain “pinches” when US authorities designated the red knot, a seabird, as endangered in 2015. Red knots feed on horseshoe crab eggs as they migrate from Argentina to the Arctic.

“There are regulatory hurdles that make it difficult to completely change. But we are working on that,” said Bolden, who is a keen bird watcher.

One reason why synthetic tests have not been more widely adopted is a lack of standards on the use of rFC, according to Lonza, the Swiss-based biosciences company which has developed an alternative test. US Pharmacopeia (USP), a non-profit organisation that sets standards for medicines made in the US, has not published rFC standards, Lonza said.

Last year USP dismissed all members of a committee working on the rFC standards, citing an inability to work “collaboratively and productively, impeding the standards-setting process”.

USP said agreeing standards would be a “top priority” for a newly appointed committee, which includes Lilly’s Bolden as a member and is expected to announce an update as early as Tuesday.

“The pharmaceutical industry is conservative by nature . . . and it has taken industry a long time to wrap their heads around this,” Bolden said. “But it’s happened especially within the last year or two.” 

This story originally appeared on: Financial Times - Author:Jamie Smyth

Scientific breakthroughs for both diseases have caused its shares to surge 75 per cent to a record high over the past 12 months. This week it leapfrogged Johnson & Johnson and UnitedHealth to become the world’s most valuable drugmaker and healthcare company by market capitalisation.

Chief scientific and medical officer Daniel Skovronsky told the Financial Times that Lilly was planning to launch more than 20 new drugs over the next decade to sustain its growth and that it wants to become the first trillion dollar healthcare company.

As well as Alzheimer’s disease and obesity, it also wants to expand its drug pipeline in oncology and develop treatments for underserved illnesses such as chronic pain, he said.

“It is not enough just to have good drugs. Let’s have some great ones that change medical history forever,” said Skovronsky, who spearheaded Lilly’s research and development efforts to develop the obesity and Alzheimer’s drugs.

“The fact that there’s never been a trillion dollar healthcare company. That’s a little surprising. There are few things I can think of that are more important to invest in . . . I hope we can meet this goal,” he said.

Lilly notched up a big win last month when it published the results of a late-stage trial showing its Alzheimer’s treatment donanemab significantly slowed memory loss and cognitive decline. It expects to receive regulatory approval later this year and carve up a market that could be worth $14bn a year by 2030 with rivals Eisai and Biogen.

The second drug that has lit a fire under investors is diabetes and weight loss treatment Mounjaro.

US regulators approved it to treat diabetes last year. Then in April, Lilly revealed a large trial had found it also cut body weight by 16 per cent on average over 17 months. Regulators are expected to approve it as an obesity treatment in the autumn. BMO Capital Markets forecasts this market could be worth $100bn a year by the middle of the next decade.

Mounjaro is one of a new class of drugs known as GLP-1 agonists that work by lowering blood sugar levels after eating and suppressing appetite.

“Lilly has really struck oil with its obesity franchise,” said Colin Bristow, an analyst at UBS, who forecasts annual sales for Mounjaro of $35bn by 2035.

“They have found what looks to be a best-in-class asset and a best-in-class pipeline in one of the largest untapped markets in therapeutics.”

Lilly faces competition from Danish rival Novo Nordisk, maker of diabetes and weight loss drugs Ozempic and Wegovy.

But late-stage trials showed that when Mounjaro was used to treat diabetes, it caused more significant weight loss than Wegovy, although there have not been any direct comparison trials. In June, Lilly published interim trial results for a drug called retatrutide, showing it helped people lose a quarter of their body weight in 48 weeks — the highest reduction yet for an obesity drug.

Lilly’s success has been hard won. Back in July 2016 when David Ricks was named successor to then chief executive John Lechleiter it was rebuilding after a plunge in revenues caused by the expiry of patents on several top-selling drugs. A few months later, its Alzheimer’s drug Solanezumab failed a pivotal clinical trial and US regulators delayed approval of an experimental therapy for rheumatoid arthritis.

The company cut 485 jobs, mainly from its Alzheimer’s division, but did not give up on its goal of developing the first treatment for the disease. Lilly raised $1.7bn in cash by spinning off a 20 per cent stake in its animal health unit, ploughed money into R&D and focused its efforts on five therapeutic areas: diabetes and obesity, neurodegeneration, cancer, immunology and pain management.

“It was tough,” said Skovronsky, adding that some in the company had wanted to drop Lilly’s two decade-long effort to develop an Alzheimer’s drug and focus on other areas.

Lilly also faced frequent external criticism from investors and elsewhere about why it invested so much in R&D, typically about a quarter of its annual revenues, he said.

But following discussions with Ricks and the board a decision was made to continue Alzheimer’s research, building on Solanezumab.

Skovronsky said Lilly’s commitment to R&D and its focus on areas of long-term internal expertise have been critical for its success. He added that the company’s relatively remote location in Indiana means many employees stay for long periods, insulating it from certain external pressures.

“We have some advantages in terms of being able to pursue sometimes unpopular ideas for long periods of time. And I think that’s important, because science takes a while to figure out. We have watched so many competitors jump from area to area. One day they are in Alzheimer’s and then next day they are out and on to something else.”

Evan Seigerman, an analyst at BMO Capital Markets, said Ricks has followed a strategy of “underpromising and overdelivering” as chief executive and avoiding some of the pitfalls that have affected rivals.

“He was able to really focus on the long-term growth of the company. And what is remarkable to me is that [Mounjaro] and donanemab are all kind of homegrown assets. These are things they really built themselves.”

Lilly has avoided the transformational but risky megamergers that became a feature of the pharmaceutical industry over the past two decades until US regulators started intervening more recently. Instead, it has prioritised internal R&D and smaller acquisitions to add to its drug pipeline.

“Lilly hasn’t been one of those really big deal junkies,” said Les Funtleyder, a healthcare portfolio manager at E Squared Capital Management, which owns Lilly shares.

He said Lilly had benefited from its strong research culture and breakthroughs in the two biggest untapped pharmaceutical markets. In contrast, Pfizer had invested a lot in internal R&D without managing to bring many blockbuster drugs to market.

“Lilly has been a bit lucky as it turned out their diabetes drugs happen to be great for weight loss and their Alzheimer’s drug is on course to be approved despite some questions over efficacy and safety. But they clearly have an R&D engine that works, so they make their own luck,” said Funtleyder.

Despite its recent successes, Lilly faces challenges in delivering on the high expectations of investors, given its shares trade at 56 times forecast earnings in 2023. Some doctors have warned uptake of its Alzheimer’s drug could be slower than expected because of concerns about side-effects that can include swelling and bleeding of the brain.

For Mounjaro, analysts have set very high annual peak sales forecasts — ranging from $35bn from UBS to $70bn by Jefferies — before the drug has even been approved by regulators to treat obesity. Meeting these will be difficult, particularly since Lilly and Novo Nordisk are struggling with manufacturing capacity, causing shortages of Mounjaro, Ozempic and Wegovy.

There is also no guarantee that public and private insurers will fund the $1,000 a month cost of Mounjaro for all patients, due to the huge costs of treating a disease that affects about 40 per cent of Americans. Or that they will agree to maintain coverage for a patient’s entire lifetime — studies have shown that weight is usually regained after treatment is stopped.

Skovronsky said a study published this week by Novo, which showed that Wegovy cut the risk of heart attacks and strokes by 20 per cent should help persuade insurers to cover the drugs.

“Now we have the data to show . . . this is not an aesthetic problem. It’s a medical problem,” he said.

This story originally appeared on: Financial Times - Author:Jamie Smyth

The study’s preliminary results found that patients who took the Wegovy drug had a 20 per cent lower chance of suffering a cardiovascular event such as a heart attack or stroke than those who received a placebo.

Analysts said the results would pressure public health systems and private health insurers to cover a new class of weight-loss drugs called GLP-1 agonists developed by Novo and US drugmaker Lilly.

In the US, some health insurers have been reluctant to cover the drugs because of their high cost and the sheer number of people who qualify to take them, with obesity affecting about 40 per cent of the population. 

Evan Seigerman, analyst at BMO Capital Markets, said the health benefits demonstrated by Novo’s trial now made it “unethical” for payers to not provide these potentially life-saving medications to patients who needed them.

Expanding insurance coverage for Wegovy and Lilly’s diabetes drug Mounjaro, which is expected to be approved to treat weight loss in the autumn, could unlock a more than $100bn-a-year obesity market, he said.

Novo’s shares surged as much as 16 per cent after publication of the study while Lilly shares jumped 16 per cent to a record high of $527.50 in early trading. The US drugmaker was also boosted by publication of financial results, which showed sales of Mounjaro hit almost $1bn in the second quarter. Lilly raised its full-year annual sales forecast by $2.2bn to the range of $33.4bn to $33.9bn.

Over the past 12 months Lilly’s shares have increased by 75 per cent, enabling the Indianapolis-based company to surpass Johnson & Johnson as the world’s most valuable drugmaker by market capitalisation.

Novo said the Wegovy trial, which enrolled 17,604 adults aged 45 or older, had achieved its primary objective by showing a statistically significant reduction in major cardiac events for patients who received 2.4mg of the drug semaglutide, the main ingredient in Wegovy, compared with those who took the placebo.

While many clinicians and researchers had assumed that Wegovy would automatically improve the health of patients’ hearts as they lost weight, the trial’s findings will be used by Novo as it makes the case to health systems and insurers to buy the medicine.

Martin Holst Lange, executive vice-president for development at Novo, said that until now there had been no approved weight management drug that also reduced the risk of heart attack or stroke.

It was a “landmark trial” that demonstrated the drug had “the potential to change how obesity is regarded and treated”, he said. 

Novo expects to file for regulatory sign-off to expand what Wegovy is approved for use for, showing that it can reduce cardiac risks, in the US and the EU this year. The full results of the trial will be presented at a scientific conference later in 2023. 

So far, manufacturing problems have restricted supplies in the UK, but the country’s National Institute for Health and Care Excellence, or NICE, has said the drugs will be paid for by the NHS, but restricted to those with higher BMIs and only for two years.

Nevertheless, investors’ confidence in the potential for Wegovy has transformed the fortunes of Novo, making the Danish company Europe’s largest drugmaker by market capitalisation.

This story originally appeared on: Financial Times - Author:Jamie Smyth

Morgan & Morgan, a personal injury law firm, on Wednesday said it had filed a case on behalf of a 44-year-old woman from Louisiana who suffered such severe vomiting after taking the drugs Ozempic and Mounjaro that she was hospitalised and lost teeth.

The firm said it has signed up 400 clients who claim that after taking these drugs they contracted gastroparesis — a disorder that slows or stops movements of food from the stomach to the small intestine and causes nausea, vomiting and abdominal pain.

Novo’s Ozempic and Lilly’s Mounjaro are prescribed to treat diabetes. They are part of a new class of drugs called glucagon-like peptide 1 (GLP-1) agonists, which are also used to treat weight loss.

The drugs have proved hugely popular in the US, with Wall Street analysts forecasting they could generate a market worth $50bn by 2030.

Paul Pennock, a lawyer at Morgan, said the drugs had caused debilitating and disabling injuries to the firm’s clients, who had not been adequately warned by Lilly and Novo about the dangers of gastroparesis.

He said: “Many people are experiencing constant vomiting. I don’t mean once a week, I mean every day, all the time. I mean, so bad that these people are going to the emergency room for their vomiting.”

Morgan said it had signed up clients from 45 US states and expected the litigation would eventually involve thousands of cases nationwide.

Novo Nordisk told the Financial Times GLP-1 drugs had been on the market for years to treat diabetes and symptoms of delayed gastric emptying, nausea and vomiting are listed as possible side effects.

Novo said: “Patient safety is of utmost importance to Novo Nordisk. We recommend patients take these medications for their approved indications and under the supervision of a healthcare professional.”

Lilly said: “Patient safety is Lilly’s top priority, and we actively engage in monitoring and reporting safety information for all our medicines.”

Court documents show the claim was filed by Morgan on behalf of Jaclyn Bjorklund in a federal court in Louisiana.

Personal injury lawsuits are common in the US, some of which can turn into mass torts, whereby multiple plaintiffs seek compensation for harms or injuries caused by third parties. Johnson & Johnson is fighting a bruising battle over tens of thousands of claims its talcum powder caused cancer.

This story originally appeared on: Financial Times - Author:Jamie Smyth

A decade ago, the Anglo-Swedish drugmaker was cutting its investment in neuroscience. It was not the only one. GSK, Pfizer and Bristol Myers Squibb were among other big pharmaceutical companies that stopped trying to find treatments for some of humanity’s most inscrutable diseases. At the time, Alzheimer’s research was considered a costly, hopeless cause and investors preferred companies to chase larger rewards in areas such as cancer.

Peering over a conference table in Stockholm, Osswald admits neuroscience is risky for drugmakers. “It’s a difficult area. But the benefit can be so huge when you have something which is successful,” she says. 

After AstraZeneca closed its site, Osswald did not give up. Instead, she became the leader of a start-up of just 20 people devoted to tackling Alzheimer’s, called BioArctic, and brought in others from AstraZeneca. Their aim was to create a drug that would become the first to significantly slow the progression of the disease.

On that front, they have made progress. This week, the Food and Drug Administration, the US regulator, will decide whether to fully approve BioArctic’s first commercially available drug candidate, lecanemab, created with the Japanese drugmaker Eisai and US biotech Biogen.

The FDA already granted emergency approval in January, based on data that showed lecanemab slowed the rate of cognitive decline in early-stage Alzheimer’s patients by 27 per cent, a moderate but statistically significant result. Full approval should vastly increase the number of patients able to access the drug in the months ahead; it is the first time people with Alzheimer’s will be able to take something to slow the progression of their disease.

“It is really a big step forward,” says Osswald, explaining that before this, drugs could only alleviate some symptoms, not tackle the causes of the condition. 

Not everyone agrees. Some researchers and clinicians are concerned that the reduction in the rate of cognitive decline seen during the late-stage drug trial is not “clinically meaningful” because many patients would not feel much of an impact.

They worry that the benefits do not outweigh the risks: the trial showed the drug can cause swelling and bleeding in the brain. Patients will have to be carefully monitored when they first take the drug, which is administered intravenously. Since the trial of 1,795 ended, at least three Alzheimer’s patients have died from brain bleeds after taking lecanemab, including two people who were also taking blood-thinning medicines. Eisai said the drug could not be directly linked to the deaths. 

About 55mn people worldwide have dementia, of which up to 70 per cent suffer from Alzheimer’s — a disease that erases memories and the ability to communicate and live independently. In the UK, the Alzheimer’s Association estimates it already costs the government £25bn a year. The disease is distressing for patients and their families, and expensive for overstretched health systems in countries with ageing populations.

Osswald weighs her words carefully, wary of overpromising to desperate patients. “It’s not a cure. But it hopefully can help them to get a longer time when they are fairly healthy,” she says.

Lecanemab is not the only new Alzheimer’s drug with potential. BioArctic’s results last autumn were rapidly followed by those from another promising trial for a drug, donanemab, from Eli Lilly.

If they are both approved, the drugs may eventually save on healthcare costs by keeping people healthier for longer. But they will create huge upfront bills. Lecanemab will have an official US price of $26,500 a year, though insurers will negotiate rebates that make it cheaper. Medicare, the US government-backed insurance for seniors, has pledged to pay for it if approved. In Europe, the regulator is expected to make a decision in the first quarter of next year.

Lecanemab has given hope to large pharmaceutical companies, such as Bristol Myers Squibb and GSK, which are piling back into neuroscience, partnering with start-ups, or looking to see if they can revive failed drug candidates.

There are now more clinical trials for Alzheimer’s drugs than ever before, with drugmakers increasing the number they sponsor by almost 8 per cent in the past year, according to research from the University of Nevada. AstraZeneca says it still has a small neuroscience group with a number of products in trials, including one for Alzheimer’s in an early study.

After a transformation in oncology treatments over the past decade — mortality rates are falling across many types of cancer — scientists are speculating that Alzheimer’s could also be tackled with medicines targeted to sub groups of patients. 

While it is far from a perfect drug, lecanemab is the culmination of decades of research and many failed candidates — a prolonged and frustrating process of trial and error that is beginning to bear fruit. John Hardy, a professor of neurology at University College London, says academics and companies finally understand what a potential drug has to do to tackle the disease. “We’re not operating in the dark anymore,” he says.

The ‘Arctic mutation’

BioArctic’s co-founder, a doctor-turned-scientist called Lars Lannfelt, travelled to the end of the earth to find the clue that led to his drug breakthrough.

In the 1990s Lannfelt made a name for himself in dementia research when he discovered in Alzheimer’s patients a mutation in the gene that produces a protein called amyloid beta. A build-up of amyloid in the form of sticky plaques in the brain is generally considered to be the cause of Alzheimer’s. (Not all researchers agree with the “amyloid hypothesis”. Numerous therapies aimed at reducing plaques in patients’ brains have failed in trials, sowing doubts and entrenching division.)

Lannfelt made his discovery — christened “the Swedish mutation” — after long and slippery drives to faraway communities in his Volvo, which, he laments, lacked power steering.

In his search for a drug to treat the disease, he went even further, flying to Umeå in Northern Sweden and driving a rental car to a remote community of people who, due to their own genetic mutation, were suffering disproportionately from Alzheimer’s. They experienced “exaggerated forms of the disease” — developing symptoms at a younger age than average and experience a faster decline. It was therefore easier to witness what was happening in the brain using blood tests and scans.

“My idea was, if we don’t understand the mutation cases, we will never understand the more common forms. You start off with what is simple,” Lannfelt says. 

Lannfelt discovered that patients in the Arctic community had the symptoms of Alzheimer’s but they didn’t have the sticky plaques in their brains. Rather, they had a build-up of amyloid beta in a soluble form called protofibrils. Lannfelt came to believe that it was the protofibrils that initially cause the disease. Unlike the plaques, soluble protofibrils can move around the brain, gumming up neurons and eventually causing the cells to die.

Protofibrils, he thought, would also be a safer target for a drug. Amyloid beta exists in many forms in the body. Protofibrils are only in the brain. Drugs designed to target amyloid beta generally could therefore latch on in unintended places, causing severe side effects.

In 2003, Lannfelt and his BioArctic colleagues first approached Eisai, a much bigger company with experience in clinical trials with Alzheimer’s patients. Unlike many pharmaceutical companies at the time, Eisai was similarly determined to find a drug for the disease. Haruo Naito, chief executive, was leading the company’s discovery lab when Eisai developed its first therapy for symptoms of Alzheimer’s, and he stayed in contact with patients and their families. Alexander Scott, executive vice-president of integrity, says Naito understood the “tremendous unmet need” for patients. 

In 2007, the Japanese drugmaker took the license for lecanemab and in 2014 Eisai signed up Biogen to jointly develop and commercialise the drug. 

Lannfelt, now 74, has been studying Alzheimer’s since 1992. He was convinced BioArctic’s new approach would work, yet it worked better than he expected. In the study, the patients taking the drug declined 27 per cent more slowly than those who received a placebo, as measured on a cognitive and functional scale. Study participants, considered early-stage, had probably had the amyloid building up in their brains for 20 to 25 years. But scans showed a significant removal in just 18 months.

“I was surprised the effect was so strong,” Lannfelt says.

Investors were also surprised. BioArctic’s stock shot up more than 240 per cent on the day the initial results were published. When approved, analysts at Swedish bank Carnegie forecast sales will peak at $13bn in 2035, giving BioArctic a $1.1bn royalty that year. In total, it stands to receive billions, much of which it plans to invest in the hunt for more effective drugs.

This is a marked difference from the last Alzheimer’s drug heralded as a breakthrough. Medicare refused to pay for Biogen and Eisai’s aduhelm, after a controversial US accelerated approval in 2021. Aduhelm did not work as well, and scientists debated the validity of its trials, after one failed. It was initially priced far higher, at $56,000 a year, though it was later cut to $26,500.

Now there are two drugs with more solid prospects. An exception to Big Pharma’s initial exodus from neuroscience was Indianapolis-based Eli Lilly, which persisted despite having other Alzheimer’s drugs fail. Ron DeMattos, senior vice-president and chief scientific officer of neurobiologics at Lilly, says the decision to pursue an amyloid-reducing drug was a “leap of faith”. 

Unlike BioArctic, Lilly targeted the solid form of amyloid beta, the plaques. Its molecule proved successful: donanemab slowed the progression of the disease by 35 per cent in 1,182 patients — a narrower group than in the lecanemab trials. The trial also showed side effects of brain swelling and bleeding. But its full trial results have not yet been published.

“I believe the field can now move past all this back and forth, amyloid hypothesis, or not amyloid hypothesis,” DeMattos says. “The real question is how do we drive further benefit for patients? How do we continue on this line of success to improve those margins that make patients better over time.”

Hardy, the neurology professor at UCL, says the real problem with the previous drugs targeting beta amyloid was that they didn’t remove enough of it. “To me, the two [new] drugs look pretty similar, they both remove amyloid, and they both have similar clinical effects,” he says. 

But at the same institution, Rob Howard, a professor of old age psychiatry, disagrees. He accepts amyloid beta is connected with Alzheimer’s, but doubts if it drives its progression. He believes there was poor correlation between how much amyloid was cleared and how much clinical benefit there was in patients in the lecanemab trial.

A new golden era?

Since the successful trial results of lecanemab and donanemab, there has been a real uptick in interest from Big Pharma looking to acquire neuroscience biotechs, says Philip Scheltens, who leads the €260mn LSP Dementia Fund. “We are now in an interesting position because Big Pharma suddenly gains interest again, but doesn’t have a pipeline,” he says. 

Dementia is still far less understood than cancer, despite having a similar number of patients, partly because it receives less funding, Scheltens says. Some 4.8mn papers about cancer have been published on the online database PubMed, compared to 264,000 on dementia. 

Aware that global Big Pharma is now paying attention to the tiny company in Stockholm, Osswald is tight-lipped about what else BioArctic is working on for Alzheimer’s. But the company is inspired by a transformation in oncology. Anders Martin-Löf, chief financial officer, says oncology was the “big thing” of the past 10 years, with more targeted drugs, often combined for better impact. 

“We’re at the starting point now in neuro. And I think we’re looking for a golden era that is about to start,” he says. 

Even if amyloid build-up is the first sign of Alzheimer’s, there are other targets to tackle, like the tangles of proteins called tau that accumulate in patients’ brains. Eisai is already testing lecanemab combined with a drug to target tau.

As tests become more accurate and we understand more about what is happening inside individuals, drugs may become targeted to specific groups, like in cancer where many tumours are sequenced to discover which mutations are driving them, and then specific drugs are prescribed. Some believe Alzheimer’s may not even end up being a single disease. 

BioArctic is also looking at ways to target beta amyloid more effectively. Its moonshot project is a “brain transporter” designed to get more drug into the brain. At the moment, only about 1 per cent of a drug can cross the strict blood-brain barrier, so patients must receive large doses and risk side effects. By hijacking the system that delivers iron into the brain, it hopes that it can access the 600km of blood vessels inside the organ.

Zoe Karamanoli, an analyst at RBC Capital Markets, who covers BioArctic, says brain transporter has “huge potential” — but is still really risky at this stage. She says BioArctic’s cash windfall from the lecanemab royalties will help the company — but it is not enough to guarantee a second success. “Definitely having something that has worked and is approved in such a difficult field helps them. But don’t get carried away and assume everything will work,” she warns. 

Lecanemab is already in phase 3 trials for a population with less amyloid in their brains and who do not yet have symptoms.

Other companies are also looking to go earlier. Last week AC Immune received an FDA breakthrough designation — a fast track through the regulatory process — for an “Alzheimer’s vaccine”, which it hopes will stimulate the immune system to tackle the build-up of proteins itself. 

In a fortunate coincidence, in 2020 Swedish scientists created a blood test that can detect the early stages of build-ups in the brain, before anyone would seek treatment. The test can detect the disease five to 10 years before patients show a clear impairment. 

Some experts believe the current drugs have too serious side effects to treat asymptomatic people, though others hope that with less amyloid stuck to blood vessels, there could be fewer side effects. 

Eisai’s Scott, whose own parents died from Alzheimer’s, compared taking drugs to prevent the disease to the “pretty radical procedures” that some are prepared to undertake to reduce the risk of cancer. “People will get double mastectomies, if they have a family history, as Angelina Jolie showed us,” he says. 

If lecanemab is used preventively, BioArctic could make billions more. Osswald has ambitions to grow BioArctic into a standalone pharma company, which conducts large trials and sells its own drugs globally.

But she does not want it to be the next AstraZeneca which, she found, could get bogged down in bureaucracy. BioArctic has just 85 staff in an office and labs spread over a couple of floors in Stockholm.

Nor is she wary of competition as other Big Pharma companies rejoin the race for better treatments for Alzheimer’s. “We’re not afraid of competition. I think that is helpful for patients,” she says. “The market is enormous.”

Graphic illustration by Ian Bott and Bob Haslett

This story originally appeared on: Financial Times - Author:Jamie Smyth

But five years on she is more hopeful following their participation in the trial of an experimental gene therapy, which has reversed some of the debilitating effects of the muscle-wasting disease Duchenne muscular dystrophy.

SRP-9001 works by inserting a miniaturised gene inside muscle cells, which carry instructions for them to begin making a smaller version of protein called micro-dystrophin. Sarepta and some scientific experts say the protein improves muscle and organ function in patients, which can improve their quality of life and lifespan.

“I think there is a lot of evidence that it helps to slow down progression of the disease and probably extending by a couple of years the ability of these kids to walk and to function independently,” said Jeffrey Chamberlain, a neurologist at the University of Washington.

He said even if there did not appear to be an obvious clinical benefit in the short-term there is evidence the therapy slows loss of muscle mass. It therefore could improve quality of life over the longer term.

“This is the best drug in the clinic. It’s not perfect but it is better than any of the alternatives,” said Chamberlain, who helped design some of the tools used by Sarepta to develop its gene therapy.

But there is limited scientific data showing the therapy’s clinical benefit with just the first phase of a randomised trial over 48 weeks completed by Sarepta. This showed a statistically significant benefit in functional motor abilities for 4- to 5-year-old participants, but not for 6- to 7-year-olds.

Sarepta said the older children who were given the gene therapy were at later stages of Duchenne than the younger ones, causing a discrepancy.

“It was just a strange failure of randomisation,” said Doug Ingram, Sarepta chief executive, who insists that results from a trial due later this year will demonstrate the therapy’s efficacy.

“We can’t wait to get the therapy [out] there. We will lose an entire generation of kids while we are waiting.”

Most drugs must succeed in at least one phase 3 placebo-controlled trial showing clinical benefit to patients to win approval from the FDA, a process that takes several years. But under the accelerated approval pathway pursued by Sarepta it must meet a “surrogate endpoint” — a biological effect that is likely to predict a clinical benefit. In this case, SRP-9001 must only show it increases levels of micro-dystrophin.

The FDA said it wants to expand its use of the accelerated approval pathway for gene therapies to ensure potentially life-saving treatments get to patients. According to the health news site Stat, the director of the FDA’s Center for Biologics Evaluation and Research intervened twice to keep Sarepta’s application for fast-track approval alive despite concerns of agency reviewers.

The FDA said it could not comment on pending applications.

But some experts warn that approving Sarepta’s gene therapy would be premature because it has still not been proved that higher levels of micro-dystrophin will provide a clinical benefit to patients. Approving the therapy could also be counter-productive for some patients, they say, as it could exclude them from taking rival gene therapy products targeting Duchenne in development that may prove more efficacious.

Pfizer is undertaking a late-stage trial of an alternative gene therapy to treat Duchenne’s.

Reshma Ramachandran, assistant professor of medicine at Yale University, said this type of gene therapy could only be administered once in a lifetime due to the potentially harmful side effects caused by reintroducing the viral vector carrying the gene into the body. This could prompt an attack by the body’s immune system, she added.

“We could be shutting the door to other potentially more promising treatments in the pipeline by awarding accelerated approval. It could be more difficult to enrol people in clinical trials for other similar therapies,” she said.

But for most parents, including Contreras, who has moved her entire family to the US from Chile to access Sarepta’s trial, withholding access to a gene therapy to other sufferers of Duchenne’s is inconceivable.

“This approval is not only important for the kids who haven’t got the therapy yet but also for the field to move forward,” Contreras said. “There are studies ongoing to figure out how to manage the antibody response to give a second dose. If this [therapy] gets approved then so do these studies.”

This story originally appeared on: Financial Times - Author:Jamie Smyth

The company said a decision by Centers for Medicare and Medicaid Services to restrict financial support for Leqembi to Alzheimer’s patients whose doctors participate in a health agency database could have “unintended consequences”.

Rival drugmaker Eli Lilly, which is developing a similar Alzheimer’s drug, has also criticised CMS for linking reimbursement to a registry.

Wall Street analysts have said the registry requirement could delay uptake of Leqembi in the short term, as it would require physicians to sign up for a “CMS-facilitated portal”, but that it was not a big challenge over the longer term.

“We see the ongoing registry requirement (coupled with previously anticipated infrastructure build/prescriber education) as likely slowing initial uptake for the category. Our longer-term expectations for the market remain unchanged,” said JPMorgan, which forecasts the new class of anti-amyloid drugs could generate $25bn in peak sales.

CMS said in a statement it is committed to helping people obtain timely access to innovative treatments that meaningfully improve care and outcomes for Alzheimer’s disease.

This story originally appeared on: Financial Times - Author:Jamie Smyth

The surge in M&A, compared to just $35.6bn in deals in the same period of 2022 and $49.1bn the year before, according to Stifel, an investment bank, is being fuelled by large cash reserves amassed by Big Pharma during the coronavirus pandemic and investor concerns about future growth prospects.

Pfizer, Merck and Sanofi have led the M&A revival this year by announcing multibillion-dollar acquisitions, even as dealmaking across other market sectors has fallen sharply due to rising interest rates and tighter bank lending.

“It’s a big turnround and completely bucking the overall trend in the M&A market,” said Tim Opler, managing director at Stifel’s global healthcare group. “If we maintain the pace of the first five months and a week we would be on track to have a $215bn year.” In 2022 the total value of biopharma deals was $127bn while in 2021 it was $149bn.

But at Bio International Convention, one of North America’s largest biotech conferences, last week in Boston, company executives, bankers and sector analysts were not celebrating the return of dealmaking. Rather, they were fretting about the rising threat that US antitrust regulators have begun a crackdown on consolidation in the sector.

The next test for antitrust authorities involves Pfizer’s takeover of oncology-focused Seagen. The FTC must decide within days whether to extend the initial 30-day time period for a review of the deal, which is central to Pfizer’s efforts to return to growth after a sharp fall in Covid revenues this year.

“We could see a potential challenge to Pfizer/Seagen as this would represent an even larger transaction,” said Evan Seigerman, analyst at BMO Capital Markets, in a note published after the FTC sued Amgen.

But for the moment Pfizer and Seagen are confident their deal will not draw fire from the FTC, arguing there is no product overlap and that it would benefit competition and innovation.

“It's not even unlikely, its like zero [chance]. It is not going to happen,” said Epstein, noting that the break-up fee Pfizer would pay Seagen in that event is almost $2.3bn.

This story originally appeared on: Financial Times - Author:Jamie Smyth

The US drugmaker said on Tuesday the reforms contained in the Inflation Reduction Act, a key part of President Joe Biden’s agenda to reduce the cost of prescription medicines, violated the first and fifth amendments to the US constitution.

This story originally appeared on: Financial Times - Author:Jamie Smyth

There are 14 oncology medicines listed “in shortage” by US regulators, including the generic chemotherapy drugs cisplatin and carboplatin, which are first-line treatments for many common types of cancer.

Drug shortages are not new. But experts warn a growing reliance on offshore manufacturing, increasing demand, market consolidation and pricing pressure has made the US particularly vulnerable to them.

This story originally appeared on: Financial Times - Author:Jamie Smyth

According to an internal company document seen by the Financial Times, 408 patients were incorrectly told they had a signal in their blood suggesting they could have cancer.

Grail, which is due to make a presentation on Galleri this weekend at the biggest cancer conference in the US, said more than half of individuals who received the letters had not yet had their blood drawn for the Galleri test.

“No patient health information has been disclosed or breached due to this issue, and no patient harm or adverse events have been reported,” the company said.

In February, US life assurer John Hancock announced it would expand access to Grail’s “first-of-a-kind” test, saying preventive care and early detection was critical to its commitment to help customers live “longer, healthier, better lives”. It collaborated with Munich Re on the pilot announced in September.

A spokesperson for John Hancock said its partnership with Grail had not changed. Munich Re declined to comment.

PWNHealth, which is a subsidiary of Everlywell, a digital health company, is an independent telemedicine vendor which reviews Galleri test requests, prescribes the test and delivers results to patients.

This story originally appeared on: Financial Times - Author:Jamie Smyth

“I’ve been shot before and beaten but this really makes me cry,” said Gilberto. The 44-year-old homeless drug user trembles as he points to deep wounds on his legs that are trademark signs of injecting the powerful sedative also known as “tranq”.

This story originally appeared on: Financial Times - Author:Jamie Smyth

William Pao, Pfizer’s chief development officer, said M&A is an important part of the funding ecosystem that supports the development of innovative therapies by scientists.

This story originally appeared on: Financial Times - Author:Jamie Smyth

The real estate broker from Flagstaff, Arizona, spent $950 last year on an experimental blood test called Galleri which detected gallbladder cancer at an early stage. Following scans to verify the diagnosis, Caro had surgery to remove a tumour and underwent chemotherapy. She is now in recovery.

Grail published the results of a study of almost 6,700 participants aged 50 years or over in September last year. Of 92 participants flagged with a potential cancer signal, about 35 participants were diagnosed with cancer. All but 10 of these diagnoses were for cancers that did not have routine cancer screening programmes in place. Fifty-seven were false positives, almost a third of which prompted an invasive procedure to rule out a cancer diagnosis.

Promising results from early MCED test trials led to a rush of start-ups and investment. In 2020, Illumina bought Grail back for $8bn, citing its ability to “help transform cancer care”. The transaction attracted the attention of European and US antitrust authorities, which said the tests had the potential to “revolutionise” the fight against cancer. Last year the EU ordered Illumina to unwind the transaction, arguing it would dent competition in the MCED market since Illumina would have an incentive to cut off Grail’s rivals from using its sequencing technology.

Grail will soon face competition in the US from Datar Cancer Genetics, which inked a $250mn deal last year with US-based diagnostic laboratory company Artemis DNA to fund the rollout of its own MCED test called TruCheck in the US and Vietnam.

Other competitors such as Exact Sciences, based in Wisconsin, and San Francisco’s Frenome, a start-up backed by Roche, are racing to launch their own tests.

“When interest rates were low and cash was easier to come by there was huge excitement about the potential for these tests and companies were able to raise billions of dollars of investment,” says Vijay Kumar, an analyst at Evercore ISI, an investment bank.

But their success rests on getting regulatory approval. In the US, because Galleri has not yet won approval from the FDA, it is not covered by US government health insurance schemes. “This [approval] remains an open question that will depend on the results in ongoing trials,” Kumar adds.

Illumina and Grail increased their US lobbying spending fivefold to $14.6mn in 2021 and 2022 when compared to the previous two years. Illumina also expanded lobbying in Europe and the UK, where it hired former prime minister David Cameron as an adviser in 2019 shortly before winning a gene sequencing contract with a company owned by the Department of Health and Social Care. (Illumina says it no longer employs Cameron as a paid adviser.) In November 2020, the NHS struck its deal with Grail to pilot Galleri — a collaboration that is key to winning regulatory approval. Interim results are expected next year.

An uncertain diagnosis

The full-throttle corporate race to persuade governments to integrate MCED tests in national screening programmes is raising concerns among some cancer specialists.

Research shows there are drawbacks to screening for certain types of cancer, particularly for those where there is limited evidence that early detection and treatment saves lives. Tests can sometimes produce a cancer signal, even when the body is cancer-free. Such false-positive results can lead to more tests or treatment, which can carry potential risks and cause needless anxiety.

Screening can fail to detect cancers, which provides a false sense of security and may cause some patients to neglect symptoms. About 20-30 per cent of women with breast cancer have tumours that are missed by mammogram screening, according to research.

As an oncologist, I love the concept. Cancer is a pandemic and we need a safe way to screen younger patients

Screening can also pick up slow-growing tumours that don’t cause symptoms during a person’s lifespan, a process known as over-diagnosis. “Over-diagnosed patients . . . can’t be helped because there’s nothing to fix, but they can be hurt in the process,” said H Gilbert Welch, a cancer epidemiologist at Brigham and Women’s Hospital in Boston, Massachusetts.

In 2012, the US Preventive Services Task Force recommended against screening all men for prostate cancer using a prostate-specific antigen blood test, concluding the benefits did not outweigh the risks. The advice reflected concerns about side effects linked to follow-up testing via unnecessary biopsies and treatment, which include erectile dysfunction and incontinence.

Welch says the new generation of MCEDs are a remarkable technology. But it is a mistake to rush their rollout without the necessary long-term studies that prove they save lives. “My guess is this is a quagmire that costs a lot of money to governments and individuals. If you test all Americans aged 50 and above it costs $100bn a year,” he says.

“Such a policy would lead people to go through a lot more testing. It will make some people poor and make others excessively worried and I don’t think it’s really going to change mortality much, if at all,” he adds.

Some doctors already prescribing the Galleri tests to patients say they have reservations. Dr Vershalee Shukla, who runs a cancer screening programme in Scottsdale, Arizona, for firefighters — a high-risk group due to their regular exposure to environmental toxins — says the Galleri test missed the cancer in almost 50 individuals out of roughly 3,000 tests she conducted over two years. The test accurately detected three cancers and produced two false positives, she adds.

Firefighters in the nearby city of Mesa are offered additional screening options under a publicly funded programme, including a full-body MRI scan. One of the patients, Drew Mogalian, says that after getting a clear result from Galleri he only went for a follow-up MRI scan after a discussion with his wife about the death of a colleague from cancer.

“The full-body MRI came back and showed a brain tumour,” he says.

Mogalian had a biopsy in September which confirmed the diagnosis. He has recently completed a course of chemotherapy and is awaiting further results.

Dr Shukla says her experience testing the firefighters provoked mixed emotions. “As an oncologist, I love the concept. Cancer is a pandemic and we need a safe way to screen younger patients and blood tests are very safe. There is no radiation and it’s minimally invasive,” she says. “But it missed almost 50 cancers. This provides a false sense of security to patients, who may not want to do additional screening that could pick up their cancers.”

She says it is “upsetting” that Grail is still promoting its test to firefighters even when she presented the company with her evidence. Additional testing is needed in younger, high-risk populations if the test is going to be marketed to them, she adds.

Grail says that all cancer screening tests have both false positives and false negatives, many of which are at a higher rate than Galleri. One in eight mammograms produces a false negative result while the rate of colonoscopies can be between 7 per cent and 25 per cent, according to Grail. Screening tests run on small populations will see different results based on age and risk, says the company’s chief medical officer, Jeffrey Venstrom. “At the national level, our cancer signal detection rates are consistent with our clinical studies and epidemiological modelling,” he says, adding that Galleri is finding asymptomatic, potentially deadly cancers that would otherwise have gone undetected.

Ofman, Grail’s president, says that with the NHS trial the company is undertaking the largest randomised control trial ever for a MCED test. The trial would “once again validate the performance” of Galleri and measure how it can reduce the number of cancers detected in their late stages, he says, adding that he feels a sense of “urgency” and “responsibility” to get tests out to as many patients as possible, as quickly as possible.

But the NHS trial will not measure whether Galleri reduces mortality rates when used as a screening test — that would take a decade to produce definitive results.

Pharoah of non-profit Cedars-Sinai says the trial is “seriously flawed” because the first and foremost thing you should measure is whether a test that would be applied to a screening programme reduces mortality. “Just because you reduce late-stage disease does not mean you will reduce mortality from cancer or other causes,” he says.

Susan Bewley, a consultant obstetrician and emeritus professor of obstetric and women’s health at King’s College London, says the problem with MCED screening is that the more of this you do on healthy people the more errors you get.

“This sort of screening test could bankrupt the NHS, prioritise people who are well over those who are sick, and make people ill. This is ethically dubious,” says Bewley. “Before these tests are rolled out we need to follow hundreds of thousands of people over many years to determine if the treatments actually stop them from dying.”

Bewley is concerned that the way the NHS trial is structured means that Grail is likely to claim success even though many of the people with early-stage cancer may never have become ill.

“Screening is like a modern form of bloodletting with leeches: if you died it’s because we didn’t leech you early enough and if you didn’t die then the leeches saved you,” she says.

Graphic illustration by Ian Bott

This story originally appeared on: Financial Times - Author:Jamie Smyth

Leonard Schleifer said he supported the US Federal Trade Commission’s decision to tackle a “new area” after the agency made its first attempt to block a pharma deal in over a decade by filing a novel lawsuit against the Amgen transaction.

This story originally appeared on: Financial Times - Author:Jamie Smyth

John Jacobs told the Financial Times there was no guarantee governments would deliver on all their existing commitments with the company, which include $2.1bn in advanced purchase agreements signed with the US biotech group stretching into 2025.

This story originally appeared on: Financial Times - Author:Jamie Smyth

But after enrolling in a trial of an experimental therapy developed by Eli Lilly, the 65-year-old former teacher says her memory has improved and she is able to do things she previously found difficult.

This story originally appeared on: Financial Times - Author:Jamie Smyth

The carved-out company sold $3.7bn of stock at a price of $22 per share — slightly above the middle of its price range, according to a person familiar with the details. The stock will begin trading on the New York Stock Exchange on Thursday.

Kenvue is unusual among IPO candidates in that it is profitable, backed by a large parent group, and plans to pay a $1.5bn annual dividend. As such, most bankers do not expect it to trigger an immediate surge in further listings, but the deal is nonetheless being closely watched across Wall Street as a test of investor confidence.

“It’s pretty idiosyncratic, but . . . I think it’s a good sign,” said a senior executive at a bank that did not work on the deal.

Goldman Sachs, JPMorgan Chase and Bank of America were lead underwriters on the listing.

This story originally appeared on: Financial Times - Author:Jamie Smyth

For patients in a late-stage trial, the drug called donanemab slowed progression of the disease by 35 per cent compared with those who took the placebo during an 18-month treatment period. The decline in patients’ ability to perform daily tasks was 40 per cent lower for those on the drug.

This story originally appeared on: Financial Times - Author:Jamie Smyth