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The Pulse of the Pharmaceutical Industry
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|PRODUCT||2013 SALES||2012 SALES|
All sales are in millions of dollars.
In millions of dollars, except EPS
Leaders at AstraZeneca are pleased by the company’s progress in 2013 and in the first half of 2014. Others have taken note of that progress, and in 2014, the company spent the first half of the year fending off would-be acquirer Pfizer Inc. (see profile on page 58).
It’s been more than a year since AstraZeneca executives set out their strategy to return the company to growth and ensure that the company is a great place to work. “A year on, we’ve built momentum behind our strategic priorities, in particular our objective of achieving scientific leadership, and started to deliver on some of the targets we have set ourselves,” says CEO Pascal Soriot.
AstraZeneca’s main goal in 2013 was accelerating and replenishing its portfolio in the company’s three core therapy areas – Cardiovascular and Metabolic disease; Oncology; and Respiratory, Inflammation and Autoimmunity – supplemented by an opportunity-driven approach to the Infection, Neuroscience and Gastrointestinal area. The company works across biologics, small molecules, immunotherapies, and protein engineering.
Financially, the company took a hit in 2013, with revenue affected by the loss of exclusivity for key brands, but Soriot says, “The progress being made provides us with the confidence that our 2017 revenues will be broadly in line with what we achieved in 2013.”
According to executives, the company’s financial performance in 2013 was defined by the significant revenue decline associated with the loss of exclusivity for several products. Seroquel IR alone declined by more than $900 million in constant currency terms, and regional losses of exclusivity for brands – including Atacand and Crestor – combined for a further negative impact of more than $1 billion. The changing product mix also affected the gross margin percentage.
Because of the competition from generics, revenue was down 8 percent from 2012, to $25.71 billion, or down 6 percent at constant exchange rates. Revenue fell by 9 percent in the United States, 9 percent in Europe, and 10 percent in Established Rest-of-World (ROW). Revenue rose by 8 percent in Emerging Markets, including growth of 19 percent in China.
In the first half of 2014, worldwide revenue grew incrementally to $12.87 billion, 2 percent more than in the first half of 2013, or 3 percent at constant exchange rates.
Gross profit in 2013 was $20.45 billion, 9.4 percent less than in 2012, or 7 percent less at constant exchange rates. During the first half of 2014, gross profit was $10.11 billion, 1 percent more than in the same period during 2013.
Executives say 2013 was a year of investment in business development. The acquisitions AstraZeneca has made have been in the company’s three core areas, with the intention of strengthening the pipeline or helping the company gain access to cutting-edge science. The company’s 7 percent increase in core SG&A costs at constant exchange rates reflects AstraZeneca’s focus on investing in its growth platforms, executives say. The excise fee imposed by the enactment of U.S. healthcare reform measures accounted for 2.7 percent of core SG&A costs.
In 2013, AstraZeneca generated an incremental $1.2 billion of revenue at constant exchange rates for its key growth platforms: Brilinta, the diabetes franchise, respiratory, Emerging Markets, and Japan. This figure was more than offset by the impact of patent expirations that reduced revenue by $2.2 billion at constant exchange rates.
Core R&D expenditures for 2013 grew 1 percent, to $4.3 billion. Executives say the company was able to contain R&D costs despite increased business development activities in 2013 due to strong cost control and flexibility in the reallocation of resources. Actual reported R&D in 2013 was $4.82 billion, 8 percent less than in 2012.
In the first half of 2014, AstraZeneca reported total R&D expenditures of $2.53 billion and core research and development expenditures of $2.31 billion, 15 percent more than core R&D expenditures in the first six months of 2013.
Reported operating profit for 2013 was down 51 percent at constant exchange rates, or down 54 percent as reported, to $3.71 billion, driven by impairment charges including $1.76 billion for Bydureon. Executives say core operating profit was down 22 percent at constant exchange rates to $8.39 billion, or 25 percent as reported. This is greater than the decline in revenue primarily due to the higher expenditures associated with the company’s key growth platforms and strengthened pipeline.
During the first two quarters of 2014, operating profit was reported at $1.95 billion, 25 percent less than in first-half 2013, Core operating profit was reported at $2.03 billion, 1 percent less than in same period during 2013.
Basic earnings per share in 2013 were reported at $2.04, compared with $4.95 in 2012. In the first half of 2014, basic earnings per share were reported at 63 cents, with core earnings per share reported at $1.30, 8 percent more than in first-half 2013.
Total restructuring costs associated with the global program to reshape the cost base of the business were $1.42 billion in 2013. The fourth phase of restructuring is focused on the restructuring of R&D, into strategic research and development centers in the United States, the United Kingdom, and Sweden to improve pipeline productivity. The program has been expanded to include additional activities such as a transformation of the IT organization, the exit of R&D activities in Bangalore, India, and the exit from branded generics in certain emerging markets to further reduce costs and increase flexibility. Total restructuring costs charged since the start of the restructuring program in 2007 amount to $7.85 billion.
AstraZenenca experienced decreases in sales of most of its products in 2013, with loss of exclusivity for key brands reducing sales by $2.2 billion in 2013. Over the coming years, this trend will continue as medicines such as Crestor, Nexium, and Seroquel XR continue to lose exclusivity in markets such as the United States and Europe.
Crestor remains AstraZeneca’s top-selling product. In 2013, sales of Crestor declined 13.8 percent to $5.62 billion due to loss of exclusivity in a number of markets. In first-half 2014, Crestor sales were $2.78 billion, about the same as in first-half 2013.
The company’s second-best selling product in 2013 was the acid reflux drug Nexium. Sales were $3.87 billion, 1.8 percent less than in 2012. Though loss of exclusivity eroded sales in certain markets, in Japan – the company’s second largest market – growth was helped by the performance of Nexium.
In the first half of 2014, Nexium sales were $1.9 billion, about 1 percent less than the same period one year earlier. In the United States, Nexium sales in the second quarter of 2014 were $455 million, down 18 percent compared with second-quarter 2013. Total prescription volume declined by 13 percent and realized net price also reduced slightly. U.S. Nexium sales in the first half of 2014 were down 13 percent to $939 million, but sales in other markets in the second quarter were up 14 percent to $516 million. Japan and China contributed much of the growth, with sales up 47 percent and 31 percent respectively. Nexium sales in other markets were up 14 percent in the first half of 2014 to $962 million.
Symbicort was AstraZeneca’s third top-selling drug in 2013. Sales grew 9 percent to $3.48 billion. Symbicort drove growth with a strong performance in the United States, Japan, and emerging markets. In first-half 2014, sales of Symbicort were $1.86 billion, 11 percent more than in the same period of 2013. Symbicort sales in the United States were $377 million in the second quarter of 2014, a 30 percent increase over the prior year’s second quarter. U.S. Symbicort sales in January-June 2014 were up 25 percent to $721 million. Price was broadly flat for both the second quarter and half year. Symbicort sales in other markets in the second quarter were $551 million, down 3 percent versus 2Q 2013. Sales in Europe were down 7 percent due to competitive and pricing pressure in the market. Sales in Established ROW were up 2 percent as strong underlying volume growth was offset by destocking in Japan. Sales in Emerging Markets were up 11 percent with China revenue more than doubling. Symbicort sales in ROW in the first half were up 4 percent to $1.14 billion.
Seroquel XR was AstraZeneca’s fourth top-selling product in 2013. The drug generated $1.34 billion, 11.4 percent less than in 2012. In first-half 2014, sales were $596 million, 9.8 percent less than in the same period for 2013. Sales of Seroquel XR in the United States were $181 million in the second quarter of 2014, down 2 percent. U.S. sales for the first half of 2014 were down 2 percent to $347 million. Sales of Seroquel XR in the rest of the world were down 22 percent to $123 million in the second quarter, as a result of generic competition (including some “at risk” launches) in Europe. Sales in Established ROW were down 48 percent, as a result of generic competition in Canada. Sales in Emerging Markets were up 9 percent.
The fifth best-selling product for the company in 2013 was the respiratory syncytial virus drug Synagis, which recorded sales of $1.06 billion, 2.1 percent more than in 2012. Sales in the first half of 2014 were $375 million, 9.6 percent less than in the same period of 2013. In the United States, sales of Synagis during second-quarter 2014 were $3 million. The second quarter is out of season for the United States. Outside the United States, sales in the second quarter of 2014 were $44 million, up 246 percent, which reflects the quarterly phasing of revenues related to shipments to AbbVie, AstraZeneca’s international distributor.
The American Academy of Pediatrics Committee on Infectious Diseases updated its guidelines for administration of Synagis to premature infants in the United States in July 2014. These recommendations will result in fewer doses of antibody, especially for infants born at 32 weeks, 0 days, to 34 weeks, 6 days of gestation. AstraZeneca executives say these further restrictions will put downward pressure on volume.
The prostate cancer drug Zoladex was AstraZeneca’s sixth top-selling product in 2013, with sales of $996 million, 8.9 percent less than in 2012. Sales in the first half of 2014 were $457 million, 9.1 percent less than in first-half 2013. Zoladex sales were $236 million in April-June 2014. Sales in Europe were down 15 percent and down 13 percent in Japan.
Pulmicort was the company’s seventh top-selling product of 2013. The respiratory drug garnered sales of $867 million, about the same as in 2012. In first-half 2014, sales were $472 million, 5.8 percent more than in the first half of 2013. Although U.S. sales of Pulmicort were down 12 percent to $104 million in the first half of 2014, Pulmicort sales in the rest of the world were up 13 percent to $368 million, with China comprising about half.
The blood pressure medicine Toprol-XL/Seloken was AstraZeneca’s eight best-selling drug in 2013, recording sales of $750 million, 18.3 percent less than in 2012. In the first half of 2014. Toprol-XL/Seloken sales were $386 million, 5.2 percent less than in the same period during 2013. U.S. sales of Toprol-XL, which includes sales of the authorized generic, were down 6 percent in the second quarter to $29 million, largely the result of market share loss following additional generic entrants. Outside the United States, where the drug is known as Seloken, sales in these other markets were up 13 percent to $164 million.
Sales of the breast cancer drug Faslodex were $681 million in 2013, making the product the company’s ninth best seller and growing 4 percent from 2012. First-half 2014 sales of Faslodex were $351 million, 6.4 percent more than in the first half of 2013.
The patents for Faslodex are being challenged in the United States and in Europe. In April 2014, Sandoz Inc. sent notice that it had submitted an abbreviated new drug application, claiming that the patents listed in the FDA Orange Book were invalid and unenforceable and will not be infringed by Sandoz’s product. In Europe, during 2008, the Opposition Division of the European Patent Office (EPO) maintained a formulation patent, EP 1250138, following an opposition against the grant of this patent by Gedeon Richter Plc., which appealed this decision. The Board of Appeal of the EPO called the parties to oral proceedings in March 2014 and decided to remit the case back to the Opposition Division for further consideration.
The lung cancer drug Iressa also experienced growth in 2013, making it the company’s 10th best-selling drug. Sales grew 6 percent from 2012 to $647 million. In the first half of 2014, sales were $316 million, 2.7 percent less than in the same period for 2013. Iressa sales in the second quarter were down 5 percent to $147 million, as a decline in Japan more than offset growth in China.
AstraZeneca’s 11th best selling drug in 2013 was the cardiac drug Atacand. Sales declined 39.4 percent from 2012 to $611 million. In the first half of 2014, Atacand sales were $261 million, 21.9 percent less than in the first half of 2013. U.S. sales of Atacand were down 63 percent in the second quarter of 2014 to $9 million. Generic competition for the diuretic combination product followed the loss of exclusivity in December 2012. Atacand second-quarter sales in other markets were down 8 percent to $130 million, reflecting loss of exclusivity in many markets.
Although sales have been greatly eroded by generic competition and over-the-counter availability, the proton-pump inhibitor Prilosec/Losec was AstraZeneca’s 12th top-selling product in 2013. Sales were $486 million in 2013, 31.5 percent less than in 2012. In first-half 2014, sales were $215 million, 11 percent less than in the same period in 2013.
Executives say the company’s five growth platforms delivered an incremental $1.2 billion of revenue in 2013. “While our focus on these platforms is beginning to bear fruit, we have more work to do if they are to deliver to their full potential,” Soriot says.
Executives say the oral antiplatelet drug Brilinta/Brilique is a key product for AstraZeneca and it continues to grow globally. In 2013, sales of the drug were $283 million, compared with $89 million in 2012. First-half 2014 sales were $216 million, 86.2 percent more than in first-half 2013. Sales of Brilinta/Brilique were $117 million in the second quarter of 2014. Almost half of the sales were in Europe, where second-quarter sales increased by 42 percent compared with the second quarter of 2013. Strong performance in Canada, Australia, and emerging markets also contributed to brand revenue growth. U.S. Brilinta sales in April-June 2014 were $35 million.
The company’s long-term commitment to diabetes was reinforced with the acquisition of Bristol-Myers Squibb’s 50 percent interest in the joint diabetes business (see profile on page 32). The acquisition, which was completed in February 2014, included the rights for the development, manufacture, and commercialization of the business’ global diabetes assets.
The acquisition provides AstraZeneca with 100 percent ownership of the intellectual property and global rights for the development, manufacture and commercialization of the diabetes business, which includes Onglyza (saxagliptin), Kombiglyze XR (saxagliptin and metformin HCl extended release), Komboglyze (saxagliptin and metformin HCl), Farxiga, Byetta (exenatide), Bydureon (exenatide extended release for injectable suspension), Myalept (metreleptin), and Symlin (pramlintide acetate).
As a result of sales below expectations, AstraZeneca incurred an impairment charge for Bydureon, acquired as part of Bristol-Myers Squibb’s acquisition of Amylin. Bydureon is the long-acting form of Byetta, which was also acquired from Bristol-Myers Squibb. “Nevertheless, we continue to have confidence in the commercial future of the product,” Soriot says.
Overall, diabetes sales grew globally last year and the company is stepping up investment and improving execution of plans to take full advantage of the portfolio. In 2013, Bydureon sales were $151 million compared with $37 million in 2012. Byetta sales were $206 million, compared with $74 million in 2012.
Sales of Bydureon and Byetta in the United States were $148 million and $52 million in the rest of the world in the second quarter of 2014. Bydureon’s share of total prescriptions in the United States was 19.9 percent in June 2014, up 0.3 percentage points since March 2014. Half-year revenue reached $358 million, up 130 percent. Byetta sales were $166 million in first-half 2014, compared with $74 million in first-half 2013. Bydureon sales were $192 million in the first half of this year, compared with $59 million in the same period last year.
In July 2014, the Committee for Medicinal Products for Human Use adopted a positive opinion in the European Union for the Bydureon Pen (exenatide extended-release for injectable suspension).TheBydureon Pen is a pre-filled, single-use pen injector, eliminating the need for patients to transfer their medication between a vial and syringe during the self-injection process. The Bydureon Pen contains the same formulation and dose as the original Bydureon single-dose tray, providing the same continuous release of exenatide. The Bydureon Pen is the next step in the device development plan, further establishing value as the ideal first injectable choice for physicians and patients.
The sJNDA submission for the Bydureon Pen for the treatment of type 2 diabetes was filed in Japan in April 2014. The U.S. dual chamber pen launch is on track for the second half of 2014.
Like many other of the top pharmaceutical companies, AstraZeneca is concentrating on growth in emerging markets. Executives say the company met its target of high single-digit growth, at common exchange rates, in these markets, at 8 percent. In China, revenue grew 19 percent over 2013.
In the first half of 2014, emerging markets growth continued, with revenue of $2.88 billion, 6 percent more than in the first half of 2013. Revenue in China was $1.11 billion, 24 percent more than in the same period last year.
First-half sales in the United States amounted to $4.95 billion, 5 percent more than in first-half 2013. In Europe, sales were $3.28 billion, 2 percent more than in first-half 2013.
However, first-half sales in Japan, Canada, and other established rest-of-world markets slipped in the first half of 2014, declining 12 percent to $1.76 billion.
Executives believe that for full-year 2014, revenue is expected to be in line with last year at common exchange rates, an increase on the previous guidance of low-to-mid single-digit percentage decline. Core earnings per share are expected to decrease in low double digits at common exchange rates, an update on previous guidance of a percentage decrease in the teens.
Defining the first half of 2014 for AstraZeneca was an unsolicited bid from Pfizer to buy the company (see profile on page 58).
Pfizer launched its play for AstraZeneca in November 2013 with an offer of $100 billion. The logic for acquiring AstraZeneca was understandable: the deal would boost Pfizer’s presence in emerging markets, in primary care areas – particularly respiratory and diabetes – and in oncology. The news of the bid emerged in April, but according to AstraZeneca executives, the initial contact from Pfizer CEO Ian Read was made Nov. 25, 2013. AstraZeneca did meet with Pfizer in January, where Pfizer made a preliminary and conditional proposal. The offer comprised £13.98 in cash (30 percent) and 1.758 Pfizer shares (70 percent) per AstraZeneca share, representing a value of £46.61 per AstraZeneca share, based on the closing price of Pfizer shares of $30.52 on Jan. 3, 2014. The proposal also involved a new U.S. listed and headquartered holding company.
AstraZeneca’s board concluded that the proposal very significantly undervalued the company and its prospects. The board had concerns about the proposed transaction structure, which contained a large proportion of the consideration in Pfizer shares. The board also raised certain concerns regarding the execution risks associated with the proposed inversion structure, as Pfizer would redomicile to the United Kingdom for tax purposes. As a result, AstraZeneca wrote to Pfizer on Jan. 12 rejecting the proposal and did not engage further with Pfizer. AstraZeneca was subsequently notified by Pfizer on Jan. 15 that it was no longer actively considering making an offer for AstraZeneca.
However, Pfizer made a concerted effort in April to interest AstraZeneca in a merger. Read contacted Leif Johansson, the chairman of AstraZeneca, for the first time since January. AstraZeneca states that Read did not make a specific proposal regarding an offer to acquire the company, but nevertheless Pfizer requested that both companies issue a joint statement, before the markets opened on April 28, announcing that they had entered into discussions regarding a combination. AstraZeneca’s board considered this request and concluded that, absent a specific and attractive proposal, it was not appropriate to engage in discussions with Pfizer.
Pfizer made its second offer on May 2, which AstraZeneca again rejected. The company made another offer less than two weeks later. The reception was once again chilly. The company issued a statement: “The board of AstraZeneca believes Pfizer is making an opportunistic attempt to acquire a transformed AstraZeneca, without reflecting the value of its exciting pipeline. This value should accrue fully to AstraZeneca shareholders. The board reiterates its confidence in AstraZeneca’s ability to deliver on its prospects as an independent, science led business.”
Pfizer announced a final bid for the company on May 19, raising its offer to £69.3 billion ($116.6 billion), or £55 a share.
Again, AstraZeneca management rejected the offer.
“Pfizer’s approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimization,” Johansson says. “From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case. The board is firm in its conviction as to the appropriate terms to recommend to shareholders.
“AstraZeneca has created a culture of innovation, with science at the heart of its operations, which will continue to create significant value for patients, shareholders and all stakeholders of AstraZeneca.”
According to Johansson, the proposal was rejected because rejected it is inadequate and would present significant risks for shareholders, while also having serious consequences for the company, employees, and the life-sciences sector in the United Kingdom, Sweden, and the United States.
Even though the board rejected the proposal, there are AstraZeneca investors still hoping for a merger. Stock prices for AstraZeneca surged during late August after the mandatory cooling-off period. Under U.K. regulations, would-be acquirers can make a one-time offer three months after the last bid was rejected.
However, the three-month period ended without any one-time offer from Pfizer or any indication that AstraZeneca had approached the other company. The companies would be able to fully re-engage in talks in three more months, after the six-month cooling-off period has fully elapsed.
One of the main reasons AstraZeneca executives believed that Pfizer’s offer seriously undervalued the company was because of its pipeline. “I’m really pleased by the progress made during 2013,” Soriot says. By the end of the year, the company had 99 projects in its pipeline, of which 85 were in the clinical phase of development and 14 were approved, launched or filed. That total included 11 new molecular entities, in Phase III of development or under regulatory review, almost double the number the company had at the end of 2012. Four new molecular entities that progressed to Phase III were olaparib, selumetinib, and moxetumomabpasudotox for cancer, and benralizumab for severe asthma. Two new molecular entities came from transactions in 2013. PT003, for the treatment of COPD, came to the company from the acquisition of Pearl Therapeutics and Epanova, for dyslipidemia, came from the acquisition of Omthera.
Regulatory filings were submitted during 2013 for naloxegol, for opioid-induced constipation, in the European Union and the United States, and olaparib in the European Union. The diabetes drug Farxiga was approved for marketing in the United States in January 2014, having been approved in the European Union in 2012 under the name Forxiga. In the second quarter of 2014, executives reported that Farxiga is the most successful U.S. launch in the oral non-insulin diabetic drugs market since Januvia, with a 40 percent new-to-brand prescription share among SGLT-2s.
Xigduo, also for diabetes, was approved in the European Union in January 2014.
The company discontinued 15 projects during 2013. This included fostamatinib as the performance of clinical trials resulted in AstraZeneca not proceeding with regulatory filings.
In the second quarter of 2014, AstraZeneca had 14 projects in Phase III, up from eight one year earlier. Strong data was presented at the American Thoracic Society meeting for respiratory biologics assets; at the ASCO meeting in June for the immuno-oncology portfolio, AZD9291, olaparib, and cediranib; and at the American Diabetes Association for the saxagliptin and dapagliflozin combination.
AstraZeneca’s pipeline in the second quarter of this year included 114 projects, of which 100 were in the clinical phase of development. During the second quarter, across the portfolio, 19 projects successfully progressed to their next phase. This included nine new molecular entity progressions and 10 new molecules entering first human testing. Four projects have been withdrawn.
The late-stage pipeline continues to progress rapidly and as of the second quarter of 2014, there were 14 new molecular entity projects in late-stage development, either in Phase III or under regulatory review. In the quarter, MEDI4736 for nonsmall lung cancer, tremelimumab for mesothelioma, and roxadustat for chronic kidney disease and end-stage renal disease entered Phase III/pivotal development. Olaparib as an adjuvant for BRCAm breast cancer and benralizumab for COPD initiated further line-extension Phase III studies.
In June, the FDA Oncologic Drugs Advisory Committee voted 11-to-2 that current evidence from clinical studies does not support an accelerated approval for use of olaparib as a maintenance treatment for women with platinum-sensitive relapsed ovarian cancer who have the germline BRCA (gBRCA) mutation, and who are in complete or partial response to platinum-based chemotherapy.
AstraZeneca filed the U.S. regulatory submission for olaparib in February 2014. The FDA granted priority review status for the NDA in April and set a Prescription Drug User Fee Act (PDUFA) action date of Oct. 3. Subsequent to the panel’s review, the FDA extended the PDUFA Priority Review action date for olaparib. A major amendment to olaparib’s new drug application was submitted in July by AstraZeneca. The FDA has assigned a new PDUFA action date of Jan. 3, 2015, to allow the agency time for a full review of the submission.
The second planned Phase III study for olaparib in BRCAm breast cancer, OlympiA, will evaluate olaparib for a maximum of 12 months versus placebo as an adjuvant treatment in BRCAm high-risk HER2 negative primary breast cancer. The primary endpoint of the study is invasive disease-free survival. AstraZeneca anticipates the first regulatory filing in breast cancer in the United States and the European Union in 2016.
In May, AstraZeneca announced that FDA approved Epanova (omega-3-carboxylic acids) as an adjunct to diet to reduce triglyceride levels in adults with severe hypertriglyceridemia. Epanova is the first FDA-approved prescription omega-3 in free fatty acid form. The dosage is 2g (two capsules) or 4g (four capsules), making it the first prescription omega-3 to have a dosing option as few as two capsules once a day, with or without food.
In addition, AstraZeneca has made investment decisions to further expand the late-stage pipeline. The company previously announced its intention to start Phase III for PD-L1 in combination with tremelimumab for nonsmall cell lung cancer and Forxiga for type 1 diabetes. The company has also made further Phase III investment decisions for MEDI4736 for head and neck cancer, AZD9291 for first-line line EGFR M+ non-small cell lung cancer, and olaparib for pancreatic cancer.
In the immuno-oncology area, there was the first patient randomization in the Phase III PACIFIC study, investigating the efficacy of MEDI4736 as a sequential therapy following chemoradiation in patients with locally advanced, unresectable NSCLC.
At the ASCO meeting, AstraZeneca announced the Phase III investment decision made to investigate the combination of PD-L1 and tremelimumab in third-line NSCLC patients would start in 2014. Subsequently, the company made the decision to initiate a pivotal program for PD-L1 monotherapy as well as the combination with tremelimumab in head and neck cancer in 2014. The ongoing randomized study with tremelimumab in unresectable pleural or peritoneal mesothelioma has been expanded for registrational intent.
Additional Phase I combination studies for MEDI4736 have been initiated, including combinations with Iressa and MEDI0680 (anti-PD-1 mAb). Other combination trials, including two Phase I studies in combination with AZD9291, are planned.
In the respiratory area, AstraZeneca advanced the asthma drug tralokinumab to Phase III clinical trials in August. The company will evaluate the safety and effectiveness of tralokinumab in reducing the rate of asthma exacerbations (AER) in adults and adolescents with severe, inadequately controlled asthma despite receiving inhaled corticosteroids plus long-acting beta-2 agonist. The program will also assess the effect of tralokinumab on lung function, patient-reported asthma symptoms and quality of life, as well as investigate whether potential clinical biomarkers could identify patients who are more likely to respond to tralokinumab.
Tralokinumab is an investigational human monoclonal antibody that potently and selectively neutralizes interleukin-13 (IL-13). IL-13 is a key cytokine that is believed to contribute to the onset of severe and frequent asthma attacks, impaired lung function and other debilitating asthma symptoms by driving inflammation, airway hyper-responsiveness and excessive mucus production. The drug was developed by MedImmune, AstraZeneca’s global biologics research and development arm.
Executives say collaborations and acquisitions have further strengthened the progress being made in the company’s pipeline, including AlphaCore in cardiovascular and metabolic disease as well as Amplimmune and Spirogen in oncology. The acquisition of Amplimmune and Spirogen were completed in October 2013.
The company has continued to focus on targeted acquisitions to strengthen its portfolio. In July 2014, AstraZeneca announced that it has entered into an agreement to transfer to the company the rights to Almirall’s respiratory franchise for an initial consideration of $875 million on completion, and up to $1.22 billion in development, launch, and sales-related milestones. AstraZeneca has also agreed to make various sales-related payments.
When the transaction is completed, AstraZeneca will own the rights for the development, manufacture, and commercialization of Almirall’s existing proprietary respiratory business – including rights to revenue from Almirall’s existing partnerships – as well as its pipeline of investigational novel therapies. The franchise includes Eklir a (aclidinium); LAS40464, the combination of aclidinium with formoterol that has been filed for registration in the EU and is being developed in the United States; LAS100977 (abediterol), a once-daily long-acting beta2-agonist (LABA) in Phase II; an M3 antagonist beta2-agonist (MABA) platform in pre-clinical development; and multiple pre-clinical programs.
Under the agreement, AlmirallSofotec, an Almirall subsidiary focused on the development of innovative proprietary devices, will also transfer to AstraZeneca.
According to AstraZeneca executives, the deal not only strengthens the company’s respiratory portfolio, but has a compelling financial structure and impact. The contingent deal structure takes the risk out of the business combination and enhances returns; adds revenue immediately; and though it will be core-earnings neutral in 2015, the deal will be accretive from 2016 onward and accelerates and strengthens the company’s return to growth plans and long-term revenue targets.
AstraZeneca signed an agreement in July to evaluate two drugs with Kyowa Hakko Kirin’s anti-CCR4 antibody, mogamulizumab. The Phase I/II two-armed oncology study will evaluate the efficacy and safety of two separate combinations of three investigational compounds in multiple solid tumors. The first arm of the study will evaluate MEDI4736 in combination with mogamulizumab. The second arm will evaluate AstraZeneca’s anti-CTLA-4 antibody tremelimumab in combination with mogamulizumab.
In June, AstraZeneca announced a global licence agreement with Synairgen Plc for SNG001, a novel, inhaled interferon beta (IFN-beta) in clinical development for treating respiratory tract viral infections in patients with severe asthma. SNG001 supports the immune system by correcting a deficiency that makes patients vulnerable to respiratory tract viral infections. In early 2015, AstraZeneca will begin a Phase IIa study in patients with severe asthma, building on available clinical data from an initial Phase lla trial in a broad asthma population. SNG001 also provides the opportunity to expand the clinical program in other pulmonary diseases including COPD.
AstraZeneca announced in May that its subsidiary MedImmune entered into a clinical study collaboration with Incyte Corp. The Phase I/II oncology study will evaluate the efficacy and safety of MedImmune’s investigational anti-PD-L1 immune checkpoint inhibitor, MEDI4736, in combination with Incyte’s oral indoleamine dioxygenase-1 (IDO1) inhibitor, INCB24360.
MedImmune and Incyte will collaborate on a non-exclusive basis on the study, to evaluate the combination in multiple solid tumors including metastatic melanoma, NSCLC, squamous cell carcinoma of the head and neck, and pancreatic cancer. The Phase I part of the trial is expected to establish a recommended dose regimen of both MEDI4736 and INCB24360, and the Phase II part of the study will assess the safety and efficacy of the combination.
MedImmune entered into another clinical trial collaboration in July, this time with Advaxis Inc., a biotechnology company developing cancer immunotherapies. This Phase I/II immunotherapy study will evaluate the efficacy and safety of MEDI4736 in combination with Advaxis’ lead cancer immunotherapy vaccine, ADXS-HPV, as a treatment for patients with advanced, recurrent or refractory human papillomavirus (HPV)-associated cervical cancer and HPV-associated head and neck cancer. Under the terms of the agreement, MedImmune and Advaxis will evaluate the combination as a treatment for HPV-associated cervical cancer and squamous cell carcinoma of the head and neck.
AstraZeneca has engaged in non-drug R&D collaborations as well. In July, AstraZeneca announced two collaborations to develop innovative blood-based companion diagnostic tests to support the company’s portfolio of lung cancer medicines.
The collaboration with Qiagen is focused on the development of a circulating tumour DNA (ctDNA) test to identify NSCLC patients who are suitable for treatment with Iressa. The two companies are seeking approval from the European Medicines Agency for the ctDNA test, as a companion diagnostic for Iressa. AstraZeneca is also working with Roche to develop a ctDNA test to support the global development program for AZD9291, the company’s investigational NSCLC medicine. These simple blood tests would be less invasive and less costly methods of patient profiling. Biopsy is currently the main method of assessing a patient’s tumor mutation status.
In August, AstraZeneca signed an agreement with the gene sequencing tools company Illumina Inc. to develop its next-generation platform for companion diagnostic tests applicable across AstraZeneca’s oncology portfolio. In the first instance, AstraZeneca intends to apply Illumina’s cutting-edge technology to a novel companion diagnostic test in pivotal studies for one of its investigational oncology compounds. This is expected to be one of the first next-generation gene sequencing-based companion diagnostic tests for a novel drug in the world, and its application could speed the clinical trial process.
Illumina’s technology allows rapid sequencing of multiple genes in a much faster and cheaper way than traditional DNA sequencing methods. Under the collaboration, it will be used to screen a panel of several gene sequences, scanning for all possible genetic variants – known and unknown – rather than specified mutations from a single tumor sample.
The comprehensive information obtained from sequencing full genes will be used to predict which patients will respond to certain treatments, and will go through appropriate regulation. Doctors are increasingly using companion diagnostic tests as an essential part of personalized healthcare to help them understand the causes of disease at a molecular level.
“This partnership has the potential to deliver an unprecedented amount of clinical information from a single test,” says Ruth March, VP, Personalized Healthcare & Biomarkers at AstraZeneca. “Illumina’s technology will inform doctors about the molecular make-up of their patients’ tumors, enabling them to match medicines to the drivers of disease. Our aim is for doctors to be able to use these tests to prescribe the right medicines for the right patients – bringing benefits to healthcare professionals, payers and patients alike.”
Executives say the collaboration is aligned with AstraZeneca’s strategic ambition to transform patients’ lives through personalized healthcare, ensuring that innovative treatments are matched to those patients who will benefit most.
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