It's going to be an action-packed second half for a handful of big pharmaceutical companies, and perhaps the most interesting six-month stretch in Novartis' (NYSE:NVS) history. Recently launched therapies from the Swiss pharma giant and Pfizer (NYSE:PFE) will be closely watched for different reasons.
AbbVie (NYSE:ABBV) and Novartis are expecting important decisions from the Food and Drug Administration (FDA), and clinical trial readouts from Bristol-Myers Squibb (NYSE:BMY) and Merck (NYSE:MRK) could help their cancer immunotherapy stars shine even brighter. Even GlaxoSmithKline (NYSE:GSK) has a couple of late-stage trials that could deliver big wins for the company and its shareholders.
Big oncology readouts ahead
Bristol-Myers Squibb will get its last chance to treat newly diagnosed non-small-cell lung cancer (NSCLC) patients with its immunotherapy combination of Opdivo and Yervoy. Last year the company tried to send an application to the FDA based on interim results from the CheckMate-227 study that showed patients with high tumor mutational burden, a measurement that Bristol concocted, responded well to Opdivo plus Yervoy.
The FDA wasn't interested in an application based on an endpoint that wasn't a specific goal at the study's outset, especially when the data wasn't particularly compelling. Meanwhile, oncologists are getting used to using standard chemotherapy plus Merck's Keytruda to treat first-line NSCLC thanks to outcome data that shows it reduced patients' risk of death by half compared to standard care.
Merck probably has the first-line NSCLC indication sewn up with Keytruda, but it's still battling it out with Tecentriq plus chemotherapy from Roche (OTC:RHHBY) for two more important first-line indications: newly diagnosed small-cell lung cancer and triple-negative breast cancer. These are both difficult to treat, and patients need a new option. Before the end of 2019, we should see data from studies with Keytruda and chemotherapy for both indications.
GlaxoSmithKline is trying to put itself on the oncology map again with a chimeric antigen receptor-modified T-cell (CAR-T) therapy that trains patients' own immune cells to find and destroy cancer cells with BCMA on their surface. Glaxo's therapy is one of several BCMA directed treatments in late-stage development right now, so stellar results are a must.
Other readouts on the way
Before the end of the year, we'll also get a chance to see if Glaxo's new HIV treatment, Dovato, has what it takes to beat the new market leader from Gilead Sciences (NASDAQ:GILD), called Biktarvy. Dovato earned approval in April, and so far it isn't exactly flying off the shelves.
In the third quarter, GlaxoSmithKline will present 96-week data from the pivotal studies that supported Dovato's approval. If its safety profile doesn't hold up against Biktarvy, Dovato is going to be awfully hard to market.
First-quarter sales of Novartis' heart failure drug, Entresto, jumped 85% over the previous-year period to an annualized $1.4 billion, thanks to evidence that giving patients the drug in the hospital significantly reduces rehospitalization risk. It could get another boost this year if the Paragon study shows it significantly reduces the risk of cardiac events for less severe cases than Entresto is used to treat at the moment.
Annual sales of AbbVie's flagship rheumatoid arthritis treatment, Humira, peaked in 2018 just shy of $20 billion. Investors want to see the company's next-generation rheumatoid arthritis treatment, upadacitinib, earn approval with as few restrictions as possible, and avoid repeating the catastrophe Eli Lilly (NYSE:LLY) walked into with a drug of the same class, Olumiant. Because of a possible elevated risk of dangerous blood clots noted during clinical trials supporting Olumiant's application, the FDA only approved a dosage considered too low to be effective.
Age-related macular degeneration (AMD) is expected to affect 1.5 million Americans in 2020, making it the leading cause of vision loss among older adults. Global sales of Regeneron's (NASDAQ:REGN) AMD drug, Eylea, reached an annualized $7 billion during the first three months of 2019, which might be a high-water mark. Novartis is barreling toward this lucrative space with a candidate called brolucizumab.
Novartis used a priority review voucher to secure a shortened review of brolucizumab's application. Depending on the FDA's decision, Novartis could field its Eylea competitor before the end of the year.
There's no room for error with brolucizumab, because the clock is ticking. Low-priced biosimilar versions of Regeneron's Eylea should appear in the EU in 2025.
New drug launches
More often than not, drugs touted as future blockbusters fail to achieve the expectations placed on them. Two ongoing commercial launches that investors want to keep an eye on in the second half come from Pfizer and, you guessed it, Novartis.
Pfizer's long-awaited oral transthyretin (TTR) stabilizer, Vyndamax, earned approval to treat patients with heart problems caused by TTR that keeps breaking up into amyloid fragments. Vyndamax doesn't appear as effective as Onpattro, an infusion from Alnylam (NASDAQ:ALNY), at knocking down TTR, but it's a lot more convenient. If Pfizer can leapfrog Alnylam in the TTR space, it could make raising money to develop RNA drugs like Alnylam's a lot more difficult.
Another RNA drug facing an existential crisis is Biogen's (NASDAQ:BIIB) Spinraza, a blockbuster treatment for a severe muscle-wasting disease called spinal muscular atrophy (SMA). Biogen's lead growth driver could be in trouble because a drug-pricing think tank has deemed Spinraza about four times more expensive than a recently approved gene therapy from Novartis, called Zolgensma.
Novartis wants to sell Zolgensma's with $2.1 million list price evenly over a five-year period, which is around the same as overall expenses for Spinraza maintenance treatment over the same amount of time. While a one-time gene therapy seems like a much-better deal than several injections of Spinraza each year for life, insurers are leery about Zolgensma's $2.1 million price tag because it puts them in an awkward position.
Novartis' plan is popular among health plan sponsors, which ultimately pay for these drugs. Unfortunately, it's much less popular among America's unique collection of middlemen that earn a living in the spaces between drugmakers and plan sponsors, neither of which are getting their way lately. The White House recently walked away from a plan to reduce the influence of intermediaries in the prescription drug supply chain.
If a giant like Novartis can't successfully commercialize Zolgensma, its peers will pour a lot less money into gene therapy development regardless of how these treatments benefit the patients who need them. All of these events are important, but if you only have time to watch one in order to see where the biopharmaceutical industry is heading, make it Zolgensma's commercial launch.