2019 J.P. Morgan Healthcare Conference: Biogen, GSK, Eli Lilly, and Amgen Unveil Strategic Priorities and Pipeline Highlights

Once-in-a-lifetime encounter. In January 2019, the J.P. Morgan Healthcare Conference was held as scheduled in San Francisco. At this event, dubbed the “Super Bowl of biomedicine,” massive biopharmaceutical technology deals are often struck amidst clinking glasses and a series of handshakes and conversations.

On the second day of the conference, leading pharmaceutical companies including Biogen, GSK, Eli Lilly, and Amgen shared their latest developments in 2019. Below is a summary of the key highlights curated by VCBeat (WeChat ID: vcbeat):

Biogen has made numerous attempts in gene therapy but has yet to achieve any concrete results. Notably, the company’s gene therapy for spinal muscular atrophy (SMA) has been delayed in entering clinical trials, while its competitor Novartis AG’s SMA gene therapy, AVXS-101, has been awaiting FDA approval.

In April last year, Novartis acquired the biotechnology company AveXis for $8.7 billion, thereby gaining access to its gene therapy business. When the deal was announced, some investors in Biogen strongly hoped that the transaction between the two companies would fail, as AVXS-101 posed a threat to Biogen’s antisense oligonucleotide (ASO) drug, Spinraza.

At the JPM conference, Biogen did not disclose any updates on its gene therapy programs, stating only that it would continue its dialogue with the FDA regarding its investigational new drugs.

In an interview, Alfred Sandrock, Chief Medical Officer of Biogen, emphasized that the company is committed to advancing gene therapy but may seek partners for joint development in this field.

Sandrock stated that collaboration is at the core of Biogen’s R&D engine. “Over the past two years, we have executed 10 collaborative deals, doubling our clinical therapeutic pipeline.”

GlaxoSmithKline (GSK) is making significant investments in oncology, including the $5.1 billion acquisition of Tesaro, a biopharmaceutical company focused on oncology, announced last December. The company also unveiled a development strategy at the J.P. Morgan Healthcare Conference to pursue high-value opportunities. GSK is focusing on two late-stage cancer therapies in highly competitive areas of drug development: Zejula, a PARP inhibitor owned by Tesaro, and an anti-BCMA (B-cell maturation antigen) antibody-drug conjugate developed in collaboration with GSK ’916.

Axel Hoos, Head of Oncology at GSK, outlined in an interview the reasons he believes GSK’s BCMA product will hold a competitive advantage in the treatment of multiple myeloma.

BCMA-targeted therapies were a hot topic at last year’s American Society of Hematology (ASH) Annual Meeting. In addition to GSK, drugs in this field include bb2121, a chimeric antigen receptor T-cell (CAR-T) therapy jointly developed by Celgene and Bluebird Bio, as well as multiple bispecific antibodies currently under development.

GSK has been actively accelerating the clinical development of its product, keeping pace with Celgene/Bluebird’s plan to submit bb2121 in 2019. GSK expects that in the second half of 2019, it will be well-positioned to file for approval in third-line or later settings for multiple myeloma. According to Hoos, based on the results of the DREAMM-1 trial, the company aims to launch the product by mid-2020.

GSK CEO Emma Walmsley also highlighted the BCMA development program as an example of how the company is conducting multiple clinical trials simultaneously across different patient populations. Meanwhile, the company is advancing pilot studies that combine its approach with the standard of care for both second-line and first-line multiple myeloma.

GSK has also expressed high expectations for its PARP inhibitor, Zejula, which faces intense competition from Lynparza, the leading PARP inhibitor jointly developed by AstraZeneca and Merck & Co.

But GSK believes that after the preliminary results of its Phase III study are announced later this year, the company may gain an advantage in the first-line treatment of ovarian cancer.

This study is recruiting participants, while Lynparza was approved last December for first-line maintenance therapy in patients with BRCA (breast cancer susceptibility gene) mutations.

On January 8, Nick Leschly, CEO of Bluebird Bio, proposed at a JPMorgan conference presentation that the company would introduce an innovative value-based installment pricing model for its lentiglobin gene therapy, hinting that the price would be below $2.1 million.

The therapy is under review by the European Union for transfusion-dependent beta-thalassemia and is expected to receive U.S. approval in 2020.

According to the detailed plan announced by Leschly at the conference, patients can pay for the treatment over five years. The first 20% is paid upfront, and the remainder will be paid in annual installments.

At the JPM Conference, Leschly explained that the total value of the therapy is approximately $4 million, taking into account patients’ quality of life, life extension, cost offsets (which vary between the United States and Europe), and societal value. However, Bluebird Bio’s pricing strategy is based on its so-called “intrinsic value,” which includes quality of life and life expectancy gains, with the remainder of the treatment cost being returned to the healthcare system. Nevertheless, Leschly emphasized that value and price are not the same thing, and the price has not yet been determined.

The company aims to maintain transparency in pricing and strives to make treatment accessible to as many patients as possible. To achieve this goal, Bluebird Bio will not set high prices for its therapies, and any price increases will not exceed the Consumer Price Index.

At the JPM conference on January 8, Eli Lilly CEO David Ricks and CFO Joshua Smiley repeatedly emphasized that, despite the company’s $8 billion acquisition of Loxo Oncology announced just the day before, Eli Lilly still has sufficient financial capacity to pursue additional transactions this year.

“Our capabilities are unconstrained.” Eli Lilly CEO David Ricks stated during a fireside chat at the JPMorgan Healthcare Conference, noting that the company boasts strong cash flow generation, very low debt levels, and high credit ratings. The company believes it has substantial capacity to pursue additional collaborations or mergers and acquisitions.

At the conference, media outlets asked Ricks whether large-scale transactions like Bristol-Myers Squibb’s $74 billion acquisition of Celgene, announced just days before the conference, would pique Eli Lilly’s interest. Ricks did not provide a direct answer but denied the notion that such a deal would create value.

Eli Lilly’s Chief Financial Officer, Joshua Smiley, stated, “We will win through innovation, not through cost synergies or economies of scale.” He noted that, to negotiate more effectively with payers, “you cannot simply merge your way out.” The consolidation among U.S. commercial health insurers and pharmacy benefit managers has shifted bargaining power in reimbursement negotiations toward the payers.

However, Smiley added that as a massive wave of innovation sweeps through the biopharmaceutical industry, small companies must consider their path to commercialization and whether they can face the challenges alone. Furthermore, recent declines in valuations among drug developers have made some acquisition targets more attractive.

It is worth noting that even as the company faces pricing headwinds, Eli Lilly remains committed to reinvesting in its R&D pipeline and external innovations. Ricks pointed out that various pricing pressures will lead to a decline in net prices per unit within the commercial portfolio.

However, the company has added 10 new drugs over the past five years, and revenue from these products is bridging the gap. Ricks stated that Eli Lilly’s revenue is projected to grow by 4%–5% in 2019.

At the JPMorgan Healthcare Conference, Amgen CEO Robert Bradway stated that the company is prepared to engage in various transactions in 2019.

In the subsequent Q&A session, the CEO reiterated that Amgen would look beyond its extensive internal genomics data-driven R&D organization to seek new assets. The proportion of Amgen’s drug candidates that have undergone human genetic validation and are currently in translational development has risen to three-quarters, up from 15%. Furthermore, improved R&D efficiency has shortened the company’s drug development process by up to three years.

At a media Q&A session, Meline pointed out that Amgen ended the third quarter with $30 billion in performance. He stated, “This provides the company with strong capacity for business investment, including acquisitions, which are our top priority. Fifty percent of our product sales come from past acquisitions, so we will continue to expand our portfolio.”

Whether through internal discovery and development projects or by leveraging external opportunities, the company faces pressure to introduce more products via R&D and commercial markets. This is because some of its best-selling products, including Neulasta, a treatment for neutropenia, are facing competition.

In its main report at the JPM conference, Bradway noted that despite facing competition from similar biologics, Neulasta OnPro—the in vivo injectable drug/device version of the biologic—still holds a 60% market share. However, how long this proportion can be maintained remains to be seen.

Last November, biosimilar company Coherus BioSciences pledged to launch its biosimilar Udenyca in January and bring it to market at a price 33% lower than that of the reference product. The company has now launched the biologic Udenyca in the United States.

Biohaven, a biopharmaceutical company, is preparing to engage in fierce competition with Allergan, a formidable rival in the migraine treatment sector. Upon completion of Phase III data collection for its Zydis orally disintegrating tablet formulation, developed in collaboration with Catalent, Biohaven will launch rimegepant, an oral calcitonin gene-related peptide (CGRP) inhibitor.

Biohaven plans to submit applications to the FDA for both the conventional tablet and Zydis formulations of rimegepant in the first half of 2019, just months after its competitor Allergan submitted an application for ubrogepant, an oral CGRP inhibitor. Allergan CEO Brent Saunders stated in his January 7 presentation at the J.P. Morgan Healthcare Conference that the company would seek approval for ubrogepant “immediately.”

At the JPM conference, Biohaven CEO Vlad Coric described the Phase III results of Zydus’s rimegepant formulation as “stunning” and “better than expected,” with the company noting that separation between placebo and the rapidly dissolving drug began 15 minutes after administration and durability lasted up to 48 hours.

Coric pointed out that ubrogepant does not act as rapidly, with a duration of efficacy of only 24 hours. He attributed this to the fact that ubrogepant has a half-life of 4 hours, whereas rimegepant has a half-life of 8 to 12 hours.

Biohaven intends to seek FDA approval for both the Zydis and rimegepant formulations simultaneously, but the company anticipates that its fast-acting version will achieve stronger sales. Coric noted the many advantages of the Zydis formulation; for instance, given that 85% of migraine patients are women, the fact that rimegepant remains in the bloodstream for only one to two days—unlike biologics, which persist in the body for weeks or months—makes it more appealing to younger patients who are trying to conceive.

The company also has an early-stage development version of an intranasal CGRP inhibitor, BHV-3500, which can produce therapeutic effects within 5 minutes.

At the JPM Q&A session on January 8, Roche’s Chief Financial Officer Alan Hippe stated that the company is eager to implement value-based pricing, but faces challenges in execution, particularly in the United States.

Implementers pointed out that value-based pricing has many prerequisites, such as databases, and is not easy to implement.

“On U.S. pricing, I don’t really see a revolution in the short term. I expect an evolution, but that will take quite some time,” said Hippe.

Following the conference, Roche elaborated on its value-based collaboration agreements, heralding a drug pricing system grounded in diverse indications, treatment regimens, and outcomes, as it strives to become part of the solution.

The company noted that in the United States, Roche is currently piloting several value-based collaboration agreements with individual payers and has submitted recommendations to the federal government on this matter. A spokesperson stated that Roche has already engaged in collaborations with multiple countries in Europe.