Author: Jaimy Lee

BIIB – Biogen, under pressure, tells investors it ‘stands by' the FDA review process for its Alzheimer's drug

Biogen executives sought to assure investors that the science behind its newly approved Alzheimer’s disease drug is firm despite ongoing questions about whether the drug works, how it was approved, and what it costs. 

“I want to be clear that Biogen stands behind the integrity of the review process,” Biogen CEO Michael Vounatsos said Thursday, according to a FactSet transcript of the company’s second-quarter earnings call.

Shares of Biogen Inc.
BIIB,
+1.30%

gained 1.3% in trading on Thursday. Earlier in the day, the company disclosed that Aduhelm has generated $2 million in revenue since the June 7 approval. 

Biogen executives said Aduhelm’s launch has been slower than expected, and much of the earnings call featured company executives emphasizing the therapy’s clinical benefits, explaining the lengths the company went to ensuring the scientific integrity of the clinical trials, and promoting its focus on giving patients with Alzheimer’s a new treatment option. 

Aduhelm is the first new Alzheimer’s disease treatment in two decades.

“Biogen is struggling with negative commentary, acknowledging launch is slower than expected,” Bernstein’s Ronny Gal told investors on Thursday. “They spent a good amount of the call arguing against misinformation [and] negative media comments.”

The story behind Aduhelm is complicated. Biogen in 2019 scrapped development of the drug, saying the therapy didn’t work, before telling investors later that year that it planned to resurrect the drug.

More recently, members of the influential FDA advisory committee who had recommended against approving Aduhelm quit in response to the approval. Biogen itself requested a narrower label for the drug (which was granted by the FDA earlier this month). The acting FDA commissioner requested a federal investigation into her own agency’s handling of the approval. And several hospital systems including the Cleveland Clinic in Ohio and Mount Sinai Health System in New York have said they will not offer the drug to their patients. 

“A better understanding of the facts is good for everyone involved to assure confidence in both the therapy and the process by which it was approved,” Dr. Alfred Sandrock, Biogen’s chief medical officer, said during the call. “We will cooperate fully with the review even as we prioritize the issues that affect patients.”

That means the company is moving forward with its commercial plans for Aduhelm. This includes working on reimbursement, designing the FDA-required confirmatory trial and a real-world observational study, and setting up care sites that can administer the drug. (Aduhelm is an infusion therapy that also requires brain magnetic resonance imaging scans in patients before being administered.)

Aduhelm is currently being reviewed by regulators in 10 countries, Biogen said. 

Biogen’s stock is up 31.9% for the year. Its shares hit a six-year high the day that Aduhelm was approved. The S&P 500
SPX,
+0.21%

has gained 15.1% so far in 2021.

JNJ – J&J to stop selling opioids for 10 years and will pay $5 billion as part of settlement

Shares of Johnson & Johnson
JNJ,
+0.61%

were up 0.3% in trading on Wednesday after a dozen or so state attorneys general announced an opioid settlement that requires J&J to pay $5 billion over nine years, including $3.7 billion in payments over the first three years. The company is also required to stop selling opioids for 10 years, and it cannot fund or provide grants to organizations that promote opioids or lobby on opioids during that time period. The agreement resolves around 4,000 opioid-related lawsuits in both federal and state courts. As part of the deal, which has been in the works for several years, AmerisourceBergen Corp.
ABC,
+0.84%
,
Cardinal Health Inc.
CAH,
+1.02%
,
and McKesson Corp.
MCK,
+1.39%

will pay $21 billion. J&J’s stock is up 7.4% so far this year, while the broader S&P 500
SPX,
+0.77%

has gained 15.2%.

PFE – Israel said the delta variant is making Pfizer's COVID-19 shot less effective. Medical experts say it's too soon to worry

Israel this week said the delta variant is blunting the effectiveness of BioNTech
BNTX,
+0.79%

and Pfizer’s
PFE,
-0.29%

COVID-19 shot, but how well a vaccine works is going to fluctuate in the real world and a single data point may not tell the whole story. 

The Middle Eastern country began vaccinating its population earlier than the rest of the world and primarily used the Pfizer shot as part of a deal signed in January with the drug maker to gather and share real-world evidence from the vaccine rollout. 

Israel’s health ministry on Monday tweeted that the Pfizer vaccine is now considered 64% effective at preventing symptomatic and asymptomatic disease and 93% effective at preventing hospitalization and death, citing the spread of the transmissible delta variant there. (It later shared some additional data.)

The immediate response to Israel’s tweet was worry. The delta variant is rapidly becoming the most dominant form of the virus, including in the U.S., where it now makes up 51% of new cases.

But medical experts caution against taking too seriously a stand-alone data point, especially one that has not been independently verified by scientists, even if it signals a much lower rate of protection than the 95% efficacy that came out of Pfizer’s vaccine trials back in 2020. 

“The Israel data is still yet to be investigated,” said Dr. Kawsar Talaat, an associate professor at the Johns Hopkins Bloomberg School of Public Health. “I didn’t see any data. But what they did say, which is incredibly reassuring, is that it was still [93]% effective against severe disease and hospitalizations.”

“Remember, observational vaccine study data are not randomized trial data,” Natalie Dean, an assistant professor of biostatistics at Emory University’s Rollins School of Public Health, tweeted July 6. “Allow for additional fudge factors.”

Vaccine effectiveness may be a moving target

A vaccine’s effectiveness rate is always going to be somewhat lower than the efficacy rate. (Medical researchers use the term “efficacy” to describe data that comes out of tightly controlled clinical trials and “effectiveness” once a vaccine or medicine is being used in the real world.) 

One reason is that people who participate in vaccine studies tend to be healthier than the general public, according to Talaat, citing the lack of people with cancer or who have undergone transplants in the clinical trials.

The studies were also conducted at a time when we were all doing more to avoid the virus, by wearing masks, avoiding large gatherings, and staying home. The delta variant had yet to be detected in India.

But as we move back into the world, there are more chances to come into contact with people who are infected. And that’s going to increase the risk, however rare, of contracting the virus, even if it turns out to be a mild or asymptomatic breakthrough infection in someone who is vaccinated. 

“We know that masking works. We know that social distancing works,” Talaat said. “But is that really the way we want to live our lives? Or do we want to go back to a more normal life where we can mingle, and we can see our friends, and we can send our kids to school safely. And, again, the way to do that is to get vaccinated.”

And as mass vaccination campaigns have rolled out and real-world data rolls in, we’ve seen new — and slightly different — effective rates for the vaccines. 

Public Health England said in March that Pfizer’s vaccine has an efficacy rate of 85% to 90% in adults 70 years old and older in the U.K. Pfizer said April 1 that its shot had efficacy of 91.3%, based on six months of follow-up data among the Phase 3 clinical trial participants. Canada said in May that Pfizer and Moderna’s
MRNA,
+4.83%

mRNA vaccines have a 91% effectiveness rate among people in Ontario.

The Israeli data also raises an important question that may be too early to ask: Does the declining effectiveness rate have to do with waning protection among the vaccinated given how early Israelis began receiving their shots? 

“I don’t think we should undervalue the Israel data, but I think it has to be studied more carefully,” said Robert Hecht, a professor of clinical epidemiology at the Yale School of Public Health. “Unfortunately, here in the U.S., we’re not able to study this as well as the British or the Israelis because their health system and their lab system enables them to look at a pretty representative sample of these breakthrough infections and find out whether the person was already vaccinated or not.”

The delta variant is a concern, but there’s no need for ‘panic mode’

The delta variant’s rapid takeover is worrisome, though it is still unknown at this time whether COVID-19 infections that occur as a result of this variant lead to more severe disease, which can cause hospitalization or death down the line. 

“The world is understandably worried about the delta virus variant,” Dr. Anthony Fauci, chief medical adviser to President Joe Biden, told reporters on Thursday. “The vaccines indeed are effective against it.”

This form of the virus is more infectious and is responsible for spikes in states like Arkansas, which this week had its highest one-day increase in COVID-19 cases since mid-February, and Louisiana. Both states have vaccination rates below 35%. 

About 47% of Americans have been fully vaccinated, though vaccination is less likely in the Midwest and Southern states, according to the Centers for Disease Control and Prevention.

“We still need to convince people that COVID vaccines really work and make a huge difference,” Hecht said. “This is the overwhelming happy story about what’s happened. We can fret and we should fret about the variants and about delta. But we need to step back and look at how far we’ve come.”

The public health view is that mitigation measures like wearing a mask or social distancing help protect us, but the vaccines, in particular the mRNA shots, are considered the best tool at our disposal.  

“Don’t lose sleep and don’t go into panic mode and started hyperventilating about delta or any other future strain,” Hecht added, “but don’t become complacent.”

LLY – Lilly's COVID-19 antibody drugs are a top seller this quarter, but investors aren't that excited

Eli Lilly’s COVID-19 monoclonal antibody treatments brought in $810.1 million in global sales in the first three months of the year, but investors remain largely lukewarm about therapies that they expect to have a short lifespan.

Lilly’s
LLY,
-2.40%

stock was down 2.0% in trading on Tuesday after the drug maker announced first-quarter earnings for 2021.

The immediate upside is that Lilly’s COVID-19 antibody therapies are already one of the company’s top-selling drugs, coming in only second to diabetes drug Trulicity, which generated $1.45 billion in sales in the first quarter of 2021. Yet sales of the antibodies missed consensus by $73 million and overall revenue fell short, as well, according Mizuho Securities analyst Vamil Divan.

Read: Vaccines are here. That’s no reason to call off the hunt for effective COVID-19 treatments.

Lilly’s COVID-19 antibody treatment bamlanivimab had initially received emergency-use authorization in November. The Food and Drug Administration then authorized a combination of bamlanivimab and another monoclonal antibody, etesevimab, in February; however, as new variants in the U.S. began to circulate that lessened the effectiveness of bamlanivimab, federal regulators pulled back on distribution in hard-hit states before pulling the EUA for the standalone therapy altogether in mid-April.

This coupled with increased vaccination rates, lower-than-expected utilization of the antibodies, and a restructuring of the contract Lilly inked with the U.S. government for its antibody treatment (as a result of the revoked balmlanivimab EUA) set the stage for a wobblier financial performance.

“We assumed lower sales of COVID-19 antibodies would impact the quarter and guidance,” Divan wrote in an investor note. “But the extent of the [overall] miss, especially for important products such as Taltz and Verzenio, is surprising to us.”

It would seem that brand-new drugs on track for blockbuster status in the first half of the year would be a reason for investors to cheer. But much of Lilly’s quarterly disclosure focused on separating the financial performance of its COVID-19 antibody drugs from the company’s core revenue base, which includes Trulicity and breast-cancer drug Verzenio, and seeking to reassure investors about the strength of those products.

“We realize for those keeping score on sell-side model accuracy [there is] perhaps some disappointment,” Lilly CEO David Ricks said Tuesday, according to a FactSet transcript of the earnings call. “Nonetheless, underneath all that is a strong and growing core business for Lilly and a significant number of positive, even compelling, pipeline readouts in the quarter to support long-term growth across all of our core therapy areas.”

This is likely going to be an ongoing issue for drug makers that have participated in the pharmaceutical arms race during the COVID-19 pandemic.

Developing therapies or vaccines that will keep people healthy and economies thrumming is a good — and even temporarily lucrative — thing, but spending millions of dollars to develop and manufacture a product that may no longer be necessary in a few years is much less appetizing to longtime pharmaceutical investors.

Lilly said its COVID-19 antibody therapies contributed to lower gross margins, noting that there were additional charges based on excess supply of bamlanivimab after utilization slowed and the EUA was revoked.

In addition, the company’s research and development costs jumped 21% year-over-year, driven “primarily” by $220 million in spending on the antibody treatments and on Olumiant, an rheumatoid arthritis drug it markets with Incyte Corp.
INCY,
-1.00%

that is being tested as a treatment for severely ill COVID-19 patients. 

See also: Eli Lilly asks FDA to revoke EUA for COVID antibody treatment alone to speed transition to combination therapy

Further, Lilly’s updated financial guidance for the year is expected to be impacted by lower demand for the antibodies and higher R&D costs.

Lilly CFO Anat Ashkenazi told investors that the company had narrowed the revenue range for these therapies to $1.0 billion to $1.5 billion in 2021, from previous expectations of $1.0 billion to $2.0 billion.

“Based on the rollout of the vaccine across major markets, current antibody utilization rates, existing U.S. government bamlanivimab supply and the transition to only supply bamlanivimab and etesevimab administered together in the U.S., we believe this updated range contemplates a variety of potential scenarios,” he said.

Lilly’s stock has gained 8.1% so far this year, while the broader S&P 500
SPX,
-0.04%

is up 11.5%.

EBS – Emergent says experimental COVID-19 treatment failed in Phase 3 trial

Emergent BioSolutions Inc.
EBS,
-13.40%

said Friday that its experimental COVID-19 treatment did not demonstrate a clinical benefit in a late-stage clinical trial. The study was testing Emergent’s immunoglobulin candidate with the standard of care, which uses Gilead Sciences Inc.’s
GILD,
+2.80%

Veklury, in hospitalized patients with COVID-19 symptoms. “Emergent will continue to explore COVID-HIG as a treatment in ongoing clinical trials,” Dr. Laura Saward, the head of the company’s therapeutics business unit, said in a news release. The trial had received funding from the federal government. Emergent was in the news this week after Johnson & Johnson
JNJ,
-0.92%

confirmed that some of its COVID-19 vaccines manufactured at an Emergent plant did not meet “quality standards.” Emergent is the U.S. manufacturing partner to J&J for its coronavirus vaccines. Shares of Emergent have gained 71.0% over the past year, while S&P 500
SPX,
+1.18%

is up 53.7%.