AZ News from the Street 2017

GSK slashing R&D projects, while keeping spending flat. Probably spending on more on ever greening instead of on real R&D. Narrowly focusing now in Inflammation and Infectious therapy areas with some oncology in the mix. Former AZ Exec joins GSK to help in the dismantling of the GSK R&D operation.

GlaxoSmithKline's new boss streamlines R&D, axes slew of drugs
Reuters
July 26, 2017

* Focus on respiratory and HIV; 30 programmes being stopped


By Ben Hirschler

LONDON, July 26 (Reuters) - GlaxoSmithKline's new chief executive announced plans on Wednesday to narrow the focus of the group's drug research by ditching more than 30 drug projects to improve returns in its core pharmaceuticals business.

Walmsley, who took over in April, said GSK would in future allocate 80 percent of its R&D budget to respiratory and HIV/infectious diseases, along with two other potential areas of oncology and immuno-inflammation.

Thirteen clinical and around 20 pre-clinical programmes will be stopped, partnered or divested, and the group is considering options for its rare diseases unit after a strategic review.

It also plans to stop selling the struggling diabetes drug Tanzeum and end a collaboration with Johnson & Johnson over experimental rheumatoid arthritis drug sirukumab, as well as divesting around 130 old drugs with limited sales.

GSK has lagged behind rivals recently in producing multibillion-dollar blockbusters and has suffered a number of high-profile failures, undermining faith in its R&D skills.

"We've been too broadly spread," Walmsley told reporters, adding that the overhaul would not result in a lower R&D budget because GSK had been investing too little in individual experimental drugs in the past.

Indeed, spending could rise as Walmsley and her team go shopping for promising early-stage experimental drugs to bolster the pipeline in GSK's priority areas.

The announcement came as Britain's biggest drugmaker reported a 12 percent rise in adjusted earnings per share in sterling terms to 27.2 pence on sales up 12 percent at 7.32 billion pounds ($9.53 billion).

Analysts, on average, had forecast EPS of 26.2 pence and sales of 7.26 billion pounds, according to Thomson Reuters data.

The group reiterated its outlook for 2020, first given in 2015, forecasting sales growth of low-to-mid single digits and adjusted earnings of mid-to-high single digits on a constant currency basis.

For 2017, it now sees EPS growth of 3-5 percent, against 5-7 percent predicted previously, following investment in a "priority review voucher" to accelerate U.S. approval of a new HIV medicine.

Shares in the group fell 1.3 percent by 1400 GMT, with some investors disappointed that Walmsley had not taken the opportunity to increase long-term financial targets.

Given that she announced an extended cost-cutting programme to deliver an additional 1 billion pounds of annual cost savings by 2020, UBS analyst Michael Leuchten said the cautious approach "suggests tougher underlying trends".


Walmsley, who previously headed GSK's consumer health unit after 17 years working for L'Oreal, is known for her focus on benchmarking business performance and had been expected to revamp pharma R&D.

She had previously said she was considering the divestment of older antibiotics and planning to sell two UK nutritional brands.

Overhauling GSK's R&D machine is her biggest task, however, and she wants scientific and commercial teams to work closely together to pick winners.

The changes will take time to deliver results but Walmsley does have a window as GSK is not expecting its next wave of new drugs until after 2020. It also has no further major patent expiries until 2026.

To some extent GSK is following in the footsteps of its smaller British rival AstraZeneca, which has divested a large number of non-core drug projects recently. Significantly, former AstraZeneca executive Luke Miels, who joins in September, will be a key lieutenant for Walmsley during the shake-up.

GSK benefited once again in the quarter from a weak pound, after last year's Brexit vote, as well as strong demand for HIV medicines and the failure, so far, of generic firms to win U.S. approval for copies of its inhaled lung drug Advair.

But HIV competition is set to increase next year and U.S. generics to Advair, which has generated more than $1 billion in annual sales for GSK since 2001, are likely by mid-2018.

The company extended a commitment to pay its current 80 pence per share annual dividend through 2018.

 

Share price down 15% on Mystic results
https://www.theguardian.com/business/2017/jul/27/astrazeneca-shares-mystic-lung-cancer-drug-trial

 

Somebody knew something about that oncology trial failure ahead of time!

AstraZeneca's Lung Cancer Treatment Fails Trial; Q2 Earnings Top Estimates
Lisa Botter
Jul 27, 2017 2:43 AM EDT

AstraZeneca plc (AZN) said a key lung cancer treatment failed a crucial clinical trial after the group reported better-than-expected second quarter earnings despite continued pressure in the U.S. from loss of exclusivity of key products.

The pharmaceutical company reported second quarter earnings per share of $0.87 beating a FactSet consensus of $0.80. Revenue for the three months ending in June came in at $5.05 billion against estimates of $5.04 billion, down 10% against the same quarter last year. Meanwhile product sales were down 10% year-on-year coming in at $4.94 billion in the quarter beating analysts' estimates of $4.87 billion.

"Our performance in the first half was in line with expectations as we experience the loss of exclusivity of Crestor and Seroquel XR in the US," CEO Pascal Soriot said in a statement. "I'm excited about our pipeline-driven transformation as we continue to deliver for shareholders on our strategy to return to sustainable long-term growth. In a pivotal year for AstraZeneca, we remain focused on realising the potential of our pipeline, growing our new launch medicines and bringing our strong science to patients."

In a separate release the company reported that the initial trials for its much anticipated lung cancer therapy did not meet expectations.

AstraZeneca was hoping to prove that its combination of two immunotherapy drugs, durvalumab and tremelimumab, can help previously untreated patients with advanced lung cancer. The company Thursday said that the combination "did not meet a primary endpoint of progression-free survival compared to chemotherapy."

 

Takeover talk is back now that the Mystic trial has failed:

AstraZeneca Takeover Chatter Bubbles Up Again After Massive Drug Trial Disappointment
Jonathan Braude
Jul 27, 2017 10:12 AM EDT

AstraZeneca for sale?

AstraZeneca plc (AZN) could once again be vulnerable to takeover speculation, after disappointing trial results for a pipeline lung cancer drug that was a key component of the company's successful defense against Pfizer Inc's (PFE) hostile £69.4 billion ($91.2 billion) bid of 2014.

The result of the Mystic trial, released a full 11 minutes after a set of better-than-expected second quarter earnings from the U.K.'s second-largest pharma group, and five minutes after the separate announcement of a multi-billion dollar strategic alliance with Merck & Co. Inc. (MRK) , did little to soothe investors already troubled by rumors that chief executive Pascal Soriot is preparing to step down.

By late morning trading in London, Thursday, July 27, AstraZeneca was changing hands at 4,292.5 pence, down 16.05% on Wednesday's close. AstraZeneca's U.S.-listed shares were down 16% to $28.61 apiece on Thursday morning.

The bombshell news was that in the much-hyped Mystic trial, AstraZeneca's stage-IV lung cancer drug Imfinzi failed to meet its hoped for target for progression free survival compared with standard chemotherapy, either in combination with tremelimumab or on its own.

 

Merck is still paying AZ 8.5 billion for Oncology collaboration. Merck actually knows how to run a clinical trial, so maybe that one will be positive:



Merck profit beats as Keytruda sales soar, expenses drop
Reuters
July 28, 2017

Merck & Co Inc's <MRK.N> quarterly profit blew past analysts' estimates on Friday as demand surged for its key immuno-oncology drug, Keytruda, and the company reined in expenses.

The company's shares were up 1.3 percent at $64.50 in premarket trading.

Sales of Keytruda, which works by taking the brakes off the immune system, nearly tripled to $881 million in the second quarter, handily beating consensus estimates of $777 million, according to Barclays.

First approved in 2014 to treat melanoma, Keytruda has since won approvals to treat lung as well as head and neck cancer and is being tested against other cancers.

The drugmaker's position as the market leader in previously untreated lung cancer was bolstered on Thursday after AstraZeneca Plc <AZN.L> said its combination of two injectable immunotherapies failed to help patients as hoped in a closely watched advanced lung cancer trial.

Merck said on Friday it does not yet know the magnitude of the impact of a hacking in June and was restoring its manufacturing operations.

The drugmaker narrowed and raised its full-year revenue forecast to a range of $39.4 billion to $40.4 billion, reflecting the company's efforts to restore operations.

Merck also reduced its full-year profit forecast to between $1.60 per share and $1.72 per share due to the inclusion of licensing expenses related to its deal with AstraZeneca.

The company on Thursday agreed to pay AstraZeneca up to $8.5 billion under an oncology collaboration agreement to study cancer drug combinations using the British drugmaker's ovarian cancer drug, Lynparza.

Merck maintained its full-year adjusted profit forecast.

Net income attributable to Merck rose to $1.95 billion, or 71 cents per share, in the second quarter, from $1.21 billion, or 43 cents per share, a year earlier.

Research and development expenses fell about 19 percent to $1.75 billion.

Excluding items, Merck earned $1.01 per share, above analysts' average estimate of 87 cents, according to Thomson Reuters I/B/E/S.

Sales inched up about 1 percent to $9.93 billion, largely due to loss of market exclusivity for several products and lower sales of its diabetes drugs.

Analysts on average had expected $9.75 billion.

 

Financing may become more challenging in the future:

Moody's changes outlook on AstraZenaca's A3 rating to negative; affirms ratings

Global Credit Research - 28 Jul 2017

London, 28 July 2017 -- Moody's Investors Service has today changed to negative from stable the outlook on the A3/(P)A3 long-term ratings of British pharmaceutical company AstraZeneca Plc (AstraZeneca) and A3 long term rating of its guaranteed subsidiary. At the same time, Moody's has affirmed all the ratings on the company.



"The change in outlook follows AstraZeneca's recent announcement that its lung cancer treatment, Imfinzi in combination with tremelimumab, had failed to achieve the success the company had anticipated in clinical trials," says Knut Slatten, a Vice President -- Senior Analyst at Moody's.



A full list of affirmed ratings can be found at the end of this press release.



RATINGS RATIONALE



Today's change in outlook to negative reflects the increased execution risk present in AstraZeneca's pipeline and Moody's concern that strengthening of credit metrics, which are currently weak for the rating, will take longer to materialize following the negative results on the important Imfinzi study, in which the drug in combination with tremelimumab failed to meet the primary 'endpoint' of progression free survival -- the time after treatment during which the disease does not get worse.



Whilst Moody's notes that clinical studies are continuing in order to assess the drug's overall survival benefit -- with results expected in the first half of 2018 -- the rating agency considers the risk has substantially increased of not obtaining approval in the key indication of first-line lung cancer.



The quality of AstraZeneca's pipeline remains strong and Moody's notes the company also presented favourable phase III studies on Tagrisso, an alternative lung cancer treatment. In addition, in May the company also presented positive progression free survival data for Imfinzi in third line metastatic lung cancer.



AstraZeneca will over the next 12-18 months present a number of data readouts -- and see regulatory decisions -- which will determine the amplitude of the company's return to earnings growth. The negative results related to Imfinzi in combination with tremelimumab do, however, lower Moody's expectations as regards to the earnings recovery over the next 2-3 years.



With a leverage -- defined as Moody's-adjusted debt/ EBITDA -- of 4.5x for the 12 months to March, AstraZeneca's credit metrics were already weakly positioned in the rating category prior to yesterday's announcement. While the company continues to free up cash through divestments and out licensing deals, Moody's believes AstraZeneca's free cash flow (after dividends) will remain negative at least until 2018 especially as the company has not made any adjustment to its financial policies to create more cushion.



-- AFFIRMATION OF A3-RATING



AstraZeneca's A3 rating continues to reflect (1) a strong and diversified product portfolio in prescription drugs; (2) good geographic spread; (3) a solid liquidity profile and; (4) one of the most solid pipelines in the industry, which, however, exhibits a degree of execution risk.



These positive rating drivers are tempered by (1) a still high exposure to patent expiries, which will diminish towards the end of 2017 as the impact from Crestor generics recedes; (2) a business profile that is less balanced than that of other players in the industry and which exhibits a degree of product concentration; and (3) credit metrics, which are overall weak for the rating category, but which are expected to improve as the company again returns to growth in 2018.



LIQUIDITY



AstraZeneca's liquidity profile is good. As at 30 June 2017, the company had cash balances of $5.2 billion and short term investments of $1.0bn. Further liquidity cushion is provided by access to $3.0 billion of undrawn long-term committed bank facilities, exceeding the group's $2.9 billion of short-term debt. In June, AstraZeneca pre-financed $1.75bn of the $2.9bn short term debt with a $2.0bn bond issue.



WHAT COULD CHANGE THE RATING UP/DOWN



Upward pressure on the ratings is not expected in the short term. The outlook could be stabilized should AstraZeneca execute well on its late-stage pipeline allowing for the company to demonstrate strong earnings growth so that Moody's-adjusted CFO/debt shows a clear trajectory towards 25% (assuming a Moody's-adjusted cash/debt ratio of around 20%). Longer term, positive rating pressure would arise if Moody's-adjusted CFO/debt were to increase to around 40% (on the basis of a Moody's-adjusted cash/debt ratio comfortably above 20%).



Negative rating pressure could develop should AstraZeneca see further setbacks on key drugs in the pipeline. More quantitatively, negative rating pressure could arise if Moody's-adjusted CFO/debt remains sustainably below 25% (assuming a Moody's-adjusted cash/debt ratio of around 20%). Negative rating pressure could also develop should free cash flow continue to be negative and/or if AstraZeneca embarks upon larger acquisitions.



LIST OF AFFIRMED RATINGS



Issuer: AstraZeneca PLC



Affirmations:



....Senior Unsecured Regular Bond/Debenture, Affirmed A3



....Senior Unsecured MTN Program, Affirmed (P)A3



....Senior Unsec. Shelf, Affirmed (P)A3



....Commercial Paper, Affirmed P-2



Outlook Actions:



....Outlook, Changed To Negative From Stable



Issuer: Zeneca Wilmington Inc.



....BACKED Senior Unsecured Regular Bond/Debenture, Affirmed A3



Outlook Actions:



....Outlook, Changed To Negative From Stable

 

MedImmune replaces several people who left recently:

AstraZeneca fights back in cancer with new hires, fast drug status

Reuters
July 31, 2017
(Updates with MedImmune appointments)

LONDON, July 31 (Reuters) - AstraZeneca hired two senior scientists to bolster its cancer drug work on Monday, signalling confidence in its oncology portfolio despite last week's big setback in a lung cancer clinical trial.

The company said Jean-Charles Soria, previously a professor at South-Paris University, had joined the MedImmune biotech unit as head of oncology innovative medicines, while Geoffrey Kim would lead work on late-stage immunotherapy drug combinations.

Kim was most recently at the U.S. Food and Drug Administration (FDA), where he worked on the evaluation and regulation of medicines for a variety of cancers.

"Our ability to attract these recognised experts in the fast-developing field of immuno-oncology speaks to our exciting pipeline of innovative cancer treatments," said MedImmune head Bahija Jallal.

AstraZeneca also announced its immunotherapy drug Imfinzi had been granted "breakthrough" designation by U.S. regulators for treating non-metastatic lung cancer following the success of the so-called Pacific trial.

The FDA decision paves the way for a speedy regulatory review and confirms the drug's potential in earlier stage disease, despite its initial failure in the key Mystic trial, which targeted the bigger advanced cancer market. (Reporting by Ben Hirschler; editing by David Clarke)

 

Takeover rumors again, but the stock price certainly does not reflect that now:

AstraZeneca a tricky takeover target after big cancer drug blow
Reuters
August 1, 2017


* Lung cancer flop ramps up growth challenge for drugmaker

* AstraZeneca still has novel medicines to attract predators

* But obvious acquirers wary of big deals, political fallout

By Ben Hirschler and Pamela Barbaglia

LONDON, Aug 1 (Reuters) - Hurdles ranging from existing commercial tie-ups to politics make drugmaker AstraZeneca a problematic takeover target in the wake of last week's big lung cancer setback that hammered the stock and rekindled takeover talk.

Industry executives and bankers say Pfizer, which failed to buy it for $118 billion in 2014, is unlikely to return, while European rivals Novartis, Sanofi and GlaxoSmithKline are wary of large deals.

Overall, the drugs industry is in "wait and see mode", according to one banking source, who sees no mega-mergers until there is clarity on tax reform in the United States, where a suggested corporate tax holiday could unleash another round of M&A.

AstraZeneca still boasts a pipeline of new drugs that could lure predators - even after the failure of its immunotherapy treatment to curb lung cancer as hoped in the closely watched Mystic trial.

Two other new cancer medicines, Tagrisso and Lynparza, are doing well, while its troubled immunotherapy drug Imfinzi should still be a significant seller for non-metastatic lung cancer, despite the big hit to the firm's chances in advanced disease.

Such prospects are tarnished, however, by the downward spiral of older drugs like cholesterol fighter Crestor and the road to growth will be "longer and slower" as a result of Mystic, according S&P Global, which downgraded its debt rating for AstraZeneca on Friday.

Spinning off the group's old medicines might be one way to make AstraZeneca more attractive, some bankers suggest, but that is unlikely to happen any time soon.

Another complication for any acquirer wanting to access the full potential of AstraZeneca's new drugs is last week's tie-up with Merck & Co for Lynparza, which transfers half the drug's value to the U.S. firm.

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POLITICAL SCIENCE

Politics, meanwhile, adds a further twist.

British officials have rallied behind science-based industries, after Pfizer's 2014 bid ran into opposition from many lawmakers. Indeed, Prime Minister Theresa May called out AstraZeneca and the need to "defend a sector that is as important as pharmaceuticals is to Britain" in a 2016 speech.

In practice, of course, promises on jobs and investment might limit such concerns, as happened when chip designer ARM was bought last year by Japan's SoftBank.

But it all makes AstraZeneca a tricky target for the likes of Novartis and Sanofi, which could use AstraZeneca's newer drugs to boost their pipelines in oncology, currently the hottest area of drug research.

At the same time, healthcare bankers believe these European manufacturers will not want to make a move while U.S. giant Pfizer - a serial acquirer - is still eyeing its next big deal.

"Pfizer has taken a break on M&A for now and no-one expects them to make another move for AstraZeneca. But M&A is like a game of chess and nobody will go after AstraZeneca until Pfizer picks its next target," said one banker.

Pfizer's loss of appetite for AstraZeneca can be explained by the U.S. government's move to block the kind of tax-saving deal it planned for AstraZeneca in 2014, as well as its decision to address cancer immunotherapy through a separate deal with Germany's Merck KGaA.

British rival GSK is one company that could generate big synergies by buying AstraZeneca, but new CEO Emma Walmsley is focused on streamlining her firm's drug pipeline, a process that is expected to involve only small bolt-on deals.

AstraZeneca CEO Pascal Soriot, who last week insisted he was not a quitter after talk he might leave to join Teva Pharmaceutical Industries, says takeovers are a fact of life but is sanguine about the chances of a fresh bid.

"Any company that has a very good pipeline, like we do, is of course attractive. But if Mystic was positive, I'm sure you'd be asking me the same question."

 

Label expansion:

AstraZeneca, plc AZN and partner Merck &amp; Co., Inc. MRK announced that the FDA has approved a new tablet formulation for ovarian cancer drug, Lynparza while also broadening its U.S. label." AstraZeneca, plc AZN and partner Merck & Co., Inc. MRK announced that the FDA has approved a new tablet formulation for ovarian cancer drug, Lynparza while also broadening its U.S. label.

AstraZeneca’s shares are up 11.5% so far this year, comparing unfavorably with an increase of 13.7% for the industry.

The FDA has approved expansion of Lynparza’s (tablets) label to include maintenance treatment of patients suffering from platinum-sensitive recurrent ovarian cancer regardless of BRCA-mutation status.

Meanwhile, the FDA also approved a new tablet formulation (2 tablets twice daily) of the PARP inhibitor as opposed to capsules (8 capsules twice daily), which should improve patient convenience.

Lynparza’s accelerated approval for BRCA-mutated ovarian cancer beyond the third-line setting was also converted to a regular approval. We remind investors that Lynparza was first approved by the FDA on an accelerated approval basis in Dec 2014, as a capsule formulation.

The label expansion strengthens Lynparza’s position in the PARP inhibitor market where competition has become fierce with Clovis Oncology, Inc.’s CLVS Rubraca, launched in Dec 2016, and Tesaro, Inc.’s TSRO Zejula (niraparib), available from Apr 2017. Shares of both these small biotechs were down on Thursday following the news.

Lynparza is also being evaluated in different studies for a range of tumor types including breast, prostate and pancreatic cancers as well as earlier-line settings for ovarian cancer.

AstraZeneca announced an oncology collaboration with Merck last month to commercialize and develop Lynparza, both as monotherapy and in combination studies for multiple cancer types. The companies will share development and marketing costs equally and also the profits from Lynparza.

 

https://www.google.com/amp/www.telegraph.co.uk/business/2017/08/24/astrazeneca-drug-reduces-risk-repeat-heart-attack-almost-third/amp/
AstraZeneca drug reduces risk of repeat heart attack by almost a third

 

Wow, where are all the comments on this little tid-bit of news? I realize good news is no news here, but this is just funny.

 

Another label extension in US, This time for Faslodex:

AstraZeneca, plc AZN announced that Faslodex has received FDA approval for a label extension in the first-line monotherapy setting for the treatment of advanced breast cancer." AstraZeneca, plc AZN announced that Faslodex has received FDA approval for a label extension in the first-line monotherapy setting for the treatment of advanced breast cancer.

Faslodex has been approved as a monotherapy treatment for previously untreated post-menopausal women with hormone-receptor positive (HR+), human epidermal growth factor receptor 2 negative (HER2-) advanced breast cancer.

So far this year, AstraZeneca’s shares have moved up 7%, comparing unfavorably to a 10.8% increase for the industry.

Coming back to the latest news, the FDA approval was based on data from the phase III FALCON study. The FALCON study evaluated the anti-tumor effects and tolerability profile of Faslodex (500 mg) plus placebo in comparison to anastrozole (1 mg) plus placebo.

Data from the study showed that treatment with Faslodex led to 20% reduction in disease progression or death versus anastrozole, the current standard of care treatment.

We note that Faslodex is currently approved in the United States for the treatment of postmenopausal women with estrogen-receptor (ER)-positive locally-advanced or metastatic breast cancer whose cancer has progressed following anti-estrogen therapy. The drug is also approved in the United States in combination with Pfizer Inc.’s PFE Ibrance (palbociclib), for the treatment of HR+, human epidermal growth factor receptor 2 negative (HER2-) advanced or metastatic breast cancer in women whose cancer has progressed after endocrine therapy.

We remind investors that Faslodex was approved in the same first-line indication in the EU in July and in Japan in June.

The latest approval in the first-line setting is expected to improve the sales of the drug.

In the first half of 2017, Faslodex generated sales of $462 million, up 15% year over year.

 

Diabetes news:

Novo Nordisk A/S’ NVO shares gained 1.1% on Friday after it announced that the FDA has approved the label expansion of Victoza. The drug is now approved as a treatment to reduce the risk of major adverse cardiovascular (CV) events including heart attack, stroke and CV death, in adults with type II diabetes and established CV disease." Novo Nordisk A/S’ NVO shares gained 1.1% on Friday after it announced that the FDA has approved the label expansion of Victoza. The drug is now approved as a treatment to reduce the risk of major adverse cardiovascular (CV) events including heart attack, stroke and CV death, in adults with type II diabetes and established CV disease.

Victoza is a once-daily human glucagon-like peptide-1 (GLP-1) analogue approved for the treatment of type II diabetes in adults. The drug is one of the main revenue contributors for the company with sales of $1.85 billion in the first half of 2017.

Novo Nordisk’s shares have outperformed the industry year to date. The stock rallied 28.7% compared with the industry’s gain of 10.9%, over the same time frame.
We note that the FDA’s approval was based on data from the pivotal LEADER study on CV outcomes, which evaluated the drug in more than 9,300 people with type II diabetes at high risk of major CV events. The study evaluated the drug in combination with standard-of-care over a period of up to five years. The data from the study demonstrated that Victoza significantly reduced the risk of CV death. The drug lowered the risk of non-fatal heart attack or non-fatal stroke by 13% compared to placebo and showed an absolute risk reduction of 1.9%.

Per one study, CV disease is a leading cause for death in diabetic patients. With the addition of new indication to its label, Victoza is expected to bring in more revenues as it can now be prescribed for diabetes medication that also reduces the patient's CV risk.

However, last year the FDA approved Eli Lilly and Company’s LLY label expansion for the diabetes drug, Jardiance, to include CV risk reduction data. The drug with the updated label has already been launched in January 2017, which increases competition for Victoza.

Moreover, other companies like Merck & Co., Inc. MRK and AstraZeneca plc AZN are also developing their drug for the same indication. Notably, Merck was denied approval by the FDA in April 2017 to include CV outcomes data from the TECOS study on the labels of Januvia. Also, AstraZeneca’s Bydureon failed to reduce CV risk in a phase IIIb/IV CV outcomes study, EXSCEL.

 

Possible asthma drug hit for AZ?

New AstraZeneca, Amgen drug looks strong rival in severe asthma

Reuters
September 7, 2017

* Tezepelumab cuts exacerbations 61-71 pct in mid-stage test

* "Broadest and most promising biologic", says asthma expert

* Phase III tests later this year or early next (Adds analyst reaction and share price)

By Ben Hirschler

LONDON, Sept 7 (Reuters) - A new kind of injectable biotech treatment for severe asthma from AstraZeneca and Amgen promises to help a much broader range of patients than existing medicines like GlaxoSmithKline’s Nucala.

Findings from a mid-stage clinical trial involving 584 patients showed on Wednesday the experimental drug tezepelumab reduced the annual rate of serious asthma attacks, known as exacerbations, by between 61 and 71 percent, depending on dose.

The results could put the first-in-class injection in a strong position in a competitive market as it heads into final-stage Phase III tests later this year or early next.

"Tezepelumab appears to be the broadest and most promising biologic for the treatment of persistent uncontrolled asthma to date," Elisabeth Bel of Amsterdam's Academic Medical Center wrote in an editorial in the New England Journal of Medicine.

Still, she cautioned researchers needed to confirm its safety profile in larger trials, since there was a potential risk its impact on the immune system might lead to infections.

Shares in AstraZeneca rose 1 percent on Thursday following the news, with Barclays analysts citing it as an example of the strength of the drugs pipeline beyond cancer, which will be in focus at a medical meeting in Madrid this weekend.

Injections for severe asthma have opened up a multibillion-dollar market as competing drugmakers have raced to develop antibody-based medicines for the 15 percent or more of patients who do poorly even on the latest inhalers.

Despite treatment advances in recent decades, their asthma is still not well controlled by standard therapy, which consists of inhaled steroids and drugs to open the airways.

Nucala and Teva's Cinqair are two recently approved new injectable drugs and AstraZeneca's benralizumab is likely to join them soon, since it is awaiting approval in the fourth quarter of this year.

Sanofi's Dupixent, already approved for severe eczema, is a bit further behind but is widely seen as a strong contender.

However, all these new medicines only appear to help people with certain types of severe asthma, by targeting specific inflammatory chemicals made in the body that drive asthma, making them suitable for subgroups of patients.

Tezepelumab is different because it acts further upstream in the inflammatory cascade responsible for asthma by blocking the action of a cell-signalling protein called thymic stromal lymphopoietin (TSLP).

That means it can help a wider range of patients and could be a "game-changer", according Tom Keith-Roach, head of AstraZeneca's respiratory, inflammation and autoimmune business.

Biotech drugs for severe asthma are already worth $2 billion in annual sales and Keith-Roach believes there is significant scope for growth since currently only about 10 percent of patients who might benefit are getting them.

Tezepelumab, like Dupixent, is also being developed for eczema.

The results of the Phase IIb asthma study, which were published online by the New England Journal of Medicine, will also be presented at the European Respiratory Society annual meeting in Milan next week.

 

Some oncology news, the drug works earlier in the disease, but not later after progression apparently:

AstraZeneca rebuilds cancer drug hopes with new lung data
Reuters
September 11, 2017

* Boost for drugmaker's prospects after Mystic trial setback

* Imfinzi improves progression-free survival by 11.2 months

By Ben Hirschler

MADRID, Sept 9 (Reuters) - Two AstraZeneca drugs tackling lung cancer in different ways delivered impressive clinical results on Saturday, helping the British group offset July's big clinical trial setback in the disease.

Particularly notable was the success of the infused immunotherapy medicine Imfinzi in helping non-small cell lung cancer patients with inoperable mid-stage disease that has not spread widely around the body.

Chief Executive Pascal Soriot said it gave AstraZeneca a chance to intervene earlier in lung cancer, distinguishing it from rivals that have made more progress in tackling advanced or metastatic disease.

Results from a large clinical trial showed patients survived on average 16.8 months without their disease worsening when given Imfinzi, against just 5.6 months for those on placebo.

Solange Peters of the Centre Hospitalier Universitaire Vaudois in Lausanne, who was not involved in the study known as Pacific, told Reuters the advantage of more than 11 months provided by Imfinzi was "absolutely amazing".

It is the first medicine to show superior progression-free survival in such patients. These individuals typically receive a combination of chemotherapy and radiotherapy, but only around 15 percent of them are still alive after five years.

Significantly, while there were more reports of toxicity in patients taking Imfinzi, the level of severe problems was similar in both groups.

"What we hear from the experts is that they think this is practice-changing," Soriot told reporters.

AstraZeneca had already said Pacific and another study called Flaura met their pre-defined goals, but the exact scale of the benefits was only disclosed at the European Society for Medical Oncology (ESMO) congress in Madrid.

The results were also published online in the New England Journal of Medicine.

Analysts believe using Imfinzi in so-called stage III lung cancer opens up an annual sales opportunity worth around $2 billion. Importantly, AstraZeneca has a lead of two to three years over rivals in this particular area.

HIGHER SALES FORECASTS

Soriot said analyst forecasts were now likely to rise - and the initial stock market reaction was positive, with AstraZeneca shares gaining 2 percent in extended trading after the results were unveiled late on Friday U.S. time.

The stage III market is smaller than for advanced lung cancer, where a combination of Imfinzi and tremelimumab failed to work as hoped in the Mystic trial. That setback wiped $14 billion off AstraZeneca's shares in July.

Early success in Mystic would have given AstraZeneca the chance to establish the first immunotherapy combination in advanced lung cancer, ahead of rivals Bristol-Myers Squibb , Roche and Merck.

But Soriot says early-stage disease - where a cure is potentially possible - is now a big opportunity for AstraZeneca, which is also testing Imfinzi earlier than stage III.

"The early lung cancer population will grow with more cancer screening," he said.

The Flaura trial, meanwhile, demonstrated the ability of AstraZeneca’s new pill Tagrisso to hold lung cancer at bay in patients with a certain genetic mutation that is particularly common in Asia.

The study showed Tagrisso, which AstraZeneca has predicted will become a $4 billion-a-year seller, was significantly better than older medicines that act in a similar way.

Patients on Tagrisso went 18.9 months on average before their disease worsened, against 10.2 months for those given either Roche's Tarceva or AstraZeneca's Iressa.

ESMO spokesman Enriqueta Felip of Spain's Vall d’Hebron Institute of Oncology said Tagrisso's edge over older medicines and its good tolerability meant it should be considered a new first-line treatment option.

AstraZeneca is in discussions with global health authorities about seeking marketing approval to extend the use of Imfinzi and Tagrisso, based on the Pacific and Flaura data. (Reporting by Ben Hirschler; Editing by Mark Potter and Dale Hudson)

 

Heart med trial promising:

Sept 14 (Reuters) - Biotech unicorn Modern Therapeutics said on Thursday its heart drug, developed along with British drugmaker AstraZeneca, met the main goal in an early-stage trial.

The company, which develops drugs based on molecule known as messenger RNA, said AstraZeneca has submitted a clinical trial application in Europe for a mid-stage study of the drug, mRNA AZD-8601, in patients undergoing coronary artery bypass grafting (CABG) surgery.

Messenger RNA (mRNA) carries the recipe for making proteins inside the body. Using it as a medicine could offer a new way to tackle many hard-to-treat diseases, from cancer to infections to heart and kidney disorders.

AstraZeneca first invested $240 million in 2013 to access Moderna's know-how in manipulating RNA, or ribonucleic acid, which helps create proteins inside cells - another example of CEO Pascal Soriot placing a bet on new science.

In 2016, AstraZeneca invested another $140 million in Moderna, which already has a cash pile of around $1 billion.

 

dapa in type 1 too?

FRANKFURT, Sept 14 (Reuters) - AstraZeneca's Farxiga was shown to help type-1 diabetics when added to standard insulin therapy, possibly opening up a additional market opportunity for the type-2 diabetes drug, the British drugmaker said in a statement on Thursday.

Adding Farxiga, also known as dapagliflozin, helped reduce excess glucose levels in the blood, led to some weight loss and allowed patients to lower their insulin dose, when compared to a control group that received insulin only, the group said, citing interim results from a late-stage trial.

Type 1, which accounts for 5-10 percent of all diabetes cases, is typically diagnosed during childhood while type 2 is linked to factors such as obesity and high blood pressure later in life.

The results were gathered a little less than half a year into the study but AstraZeneca will await figures for a full year before deciding on a request for approval to widen the use to type 1 diabetes.

Farxiga, which analysts expect to generate close to $2 billion in annual revenues in 5-6 years' time, belongs to a relatively new class of type 2 diabetes drugs called SGLT-2 inhibitors, which help remove excess blood sugar through urine.

Others in the class include Eli Lilly and Boehringer Ingelheim's Jardiance and Johnson & Johnson's Invokana.

 

Ia AZ a takeover target again?

AstraZeneca Stock Upgraded: What You Need to Know
Bernstein sees opportunity in a buyout target.

Rich Smith
Sep 22, 2017 at 1:08PM

Shares of U.K. drugmaker AstraZeneca are in a rut. In contrast to much larger big pharma peers like Pfizer and Merck, both of whose shares have been gaining, AstraZeneca stock is down more than 4% over the past year.

This means that, in a market that has risen nearly 15% over the same period, AstraZeneca stock was lagging the market by a good 20 percentage points as recently as early this morning. But then, a miracle happened -- investment banker Bernstein laid out a case for buying AstraZeneca stock, and the shares shot up 3% in response. According to the banker, AstraZeneca at $32 and change is priced to outperform the market, and shares are actually worth closer to $39.

But is Bernstein right to recommend AstraZeneca? Is the stock's newfound price strength warranted? Here are three things you need to know.


1. What Bernstein said
StreetInsider.com (requires subscription) laid out Bernstein's argument for AstraZeneca stock in a note this morning. As the site reports, Bernstein sees the bull case on this stock ranging from good to...even better. Although the company has suffered one high-profile drug setback (Mystic), Bernstein believes AstraZeneca still has a good base of business in its existing product lines. With drugs covering the treatment of cancer, cardiovascular, and respiratory problems, AstraZeneca should be able to keep growing "even [if] no new pipeline drugs [were developed from now] to 2025."

What's more, Bernstein says AstraZeneca boasts "one of the fullest phase 3 pipelines" in the pharmaceutical industry today, a fact which the analyst believes will make AstraZeneca "a take-out candidate."

2. Where have we heard this before?
As a matter of fact, AstraZeneca was a "take-out candidate" as recently as 2014, when Pfizer tried to buy it. This historical fact tends to support Bernstein's view that one of the larger pharmaceutical giants could make a follow-on attempt to buy this somewhat smaller giant. AstraZeneca, at $81 billion, is less than half the size of Merck (at $178 billion) or Pfizer (at $213 billion), for example.

And yet, Bernstein notes with interest, AstraZeneca at 22 times earnings sells for a significantly cheaper multiple to earnings than its peers do. There's "little premium" built into AstraZeneca's "current share price" to account for the potential of a buyout.

Why might that be?


3. Trouble in paradise
Seeing AstraZeneca stock valued at barely 22 times earnings, while shares of Pfizer go for more than 26 times earnings and Merck costs more than 35 times earnings suggests there's something more to this story than Wall Street simply failing to anticipate that a large company might buy a smaller one. After all, at $87 billion in market capitalization, Eli Lilly is a morsel nearly as easy to digest as AstraZeneca. But Lilly stock sells for nearly 36 times earnings -- a significant premium incorporating the potential that someone might try to buy it.

All of which gets an investor to wondering: What's wrong with AstraZeneca? What might it be that's keeping the stock's valuation depressed? In fact, I think I see several things wrong with AstraZeneca, which undermine Bernstein's argument that the stock is underpriced.

Let's start with the debt. With $6.2 billion in cash on its balance sheet, but debt of $19.7 billion, AstraZeneca bears a net debt load of $13.5 billion, making the stock about 17% more expensive than its market cap alone makes it appear. That's about twice the debt load that Eli Lilly carries (and on a smaller market cap). While not excessive, this added debt in and of itself might make AstraZeneca a less attractive "take-out candidate" than Lilly.

A second reason is the debt loads that would-be acquirers themselves are carrying. At $29.5 billion, Pfizer's debt is the heaviest of the companies mentioned so far. Merck's a bit less debt-laden at $13 billion -- but even so, the more debt a would-be acquirer is carrying, the lesser the likelihood it will be able to swing a buyout of somebody else (like AstraZeneca).

Speaking of debt, cash -- the thing that companies generate to pay down debt, or to avoid getting into debt in the first place -- is a bit of a sore point at AstraZeneca. Although AstraZeneca reported earnings of $3.9 billion over the past year under generally accepted accounting principles (GAAP), data from S&P Global Market Intelligence confirm the company's true free cash flow was just $1.7 billion -- a mere $0.44 in cash earnings per dollar of reported profits. Contrast that with Lilly's financials, which show Lilly generating $4.6 billion in free cash flow over the past year, versus net income of only $2.4 billion -- $1.89 in free cash flow for every $1 of reported profit.

The upshot for investors
Bernstein thinks AstraZeneca stock is a good target for a buyout by a larger pharmaceutical player -- and maybe it's right. With a steady business and a strong pipeline of new drugs in the works, AstraZeneca might well be something a larger big pharma company might want to buy -- but in spite of the stock's valuation, not because of it.

At just 22 times earnings, AstraZeneca stock looks cheaper than the competition, but between the company's significant debt load and its weak free cash flow, I fear those looks could be deceiving.

 

Respiratory news:

AstraZeneca plc AZN announced top-line data from a late stage study, which showed that its Bevespi Aerosphere led to a statistically significant improvement in lung function in patients with moderate to very severe chronic obstructive pulmonary disease (COPD)." AstraZeneca plc AZN announced top-line data from a late stage study, which showed that its Bevespi Aerosphere led to a statistically significant improvement in lung function in patients with moderate to very severe chronic obstructive pulmonary disease (COPD).

The phase III PINNACLE 4 study included more than 1700 patients across Asia, Europe and the United States. The study evaluated Bevespi Aerosphere administered twice daily via pMDI compared to its monotherapy components and placebo. The improvement in lung function was measured by trough forced expiratory volume in one second (FEV1).

AstraZeneca expects to file regulatory application in China and Japan supported by this latest data from the PINNACLE 4 study as well as past PINNACLE studies.

Bevespi Aerosphere is a fixed dose combination of glycopyrrolate -a long-acting muscarinic antagonist (LAMA) and formoterol fumarate- long-acting beta2-adrenergic agonist in a pressurized metered dose inhaler (pMDI), which is approved for the long-term maintenance treatment of airflow obstruction in COPD.

Bevespi was launched in the United States in January this year. The inhaler recorded sales of $4 million in the first half of 2017. Bevespi is under review in the EU with a launch expected next year.

Several LABA/LAMA combination treatments have been approved by the FDA in the past few years including GlaxoSmithKline’s GSK Anoro Ellipta and Sunovion Pharmaceuticals/Novartis’ NVS Utibron Neohaler.

Importantly, the respiratory therapeutic area saw the FDA approval of the first triple combination therapyfor COPD this month. Glaxo and partner Innoviva, Inc.’s INVA once-daily single inhaler triple therapy, Trelegy Ellipta received FDA approval this month for the treatment of appropriate patients with COPD

A combination of an inhaled corticosteroid (“ICS”), a LAMA and a LABA, Trelegy Ellipta will provide patients with a convenient dosing option.

Respiratory is one of AstraZeneca’s main therapy areas with asthma and COPD treatments like Symbicort, Pulmicort Daliresp, Duaklir and others. The respiratory medicines, accounting for 23% of AstraZeneca’s total product revenue, generated sales of $2.28 billion in the first half of 2017, down 4% at constant exchange rates.

AstraZeneca also boasts a strong respiratory pipeline expecting to launch four new respiratory medicines between 2017 and 2020.

Promising late-stage/under review pipeline candidates include benralizumab (severe asthma and COPD), tralokinumab (severe asthma) and PT010 (COPD).

 

AstraZeneca (AZN) and Tesaro (TSRO) stocks were in a slump Tuesday, a day after an institute doubted the cost-effectiveness of their drugs, known as PARP inhibitors, in ovarian cancer.

But RBC analyst Kennen MacKay called the negative report from the Institute for Clinical and Economic Review "myopic" and argued that its conclusions wouldn't have a significant impact on market uptake or reimbursement for the drugs.

"We see (Monday's) pullback in PARP inhibitor stocks following ICER's pharmaco-economic report on the PARP class as largely unjustified," he wrote in a note to clients. Clovis Oncology (CLVS) closed down 2.5% and Tesaro lost 1.8% on the report.

By the closing bell on the stock market today, though, Clovis advanced 2.9% to finish at 82.67 while AstraZeneca was nearly flat at 34.26 and Tesaro fell 1.9% to 124.40. Broadly, the No. 2-ranked biotech sector lost a fraction.

MacKay views PARP inhibitors are "transformative" in the ovarian cancer market. But ICER's report suggested the trio of drugs would need to be significant discounted, 50%-78%, to align with their potential benefit for patients.

The sole exception to ICER's finding was Lynparza used to treat patients with a mutated gene who've already responded to chemotherapy. In that setting, Lynparza fell in line with ICER's acceptable cost-effectiveness threshold.

Zejula costs $9,833 a month for a 200-milligram dose, but the label recommends the starting dose at 300 milligrams. At that dose, Zejula would cost $14,749.50 each month, or $176,994 for a year. ICER lists the wholesale acquisition prices of Lynparza and Rubraca at $13,679 and $13,940 per month, or a respective $164,148 and $167,280 per year.

Payers will likely support the class of PARP inhibitors, MacKay argued. He noted that before their entry to the market, ovarian cancer therapy centered on chemotherapy which diminished in efficiency upon re-treatment, caused multiple side effects and proved inconvenient.

"We see the PARP inhibitor class as a novel breakthrough in the treatment of ovarian cancer, and anticipate U.S. payers will continue to provide reimbursement," he said.

This could become more complicated as Lynparza, Rubraca and Zejula gain similar approvals to treat specific populations of ovarian cancer patients, but as it stands payers don't prefer one agent to the detriment of another, MacKay said.

ICER argued trial data haven't yet shown PARP inhibitors to have a benefit on overall survival, and some studies haven't compared them to alternative therapies. MacKay called this "myopic," noting PARP inhibitors have shown a benefit on progression-free survival.

"Given the robust nature of the Phase 3 progression-free data sets from all three PARP inhibitors as second maintenance treatments in ovarian cancer, we expect overall survival to read out in a similarly beneficial manner," he said.