Oncology is the largest therapeutic sector in the global pharmaceutical industry, accounting for nearly $105 billion in global sales. So what have been the key market moves in this sector thus far in 2016? DCAT Value Chain Insights examines key developments. .
From Pfizer’s $14-billion pending acquisition of Medivation to biosimilar progression of one of Roche’s top-selling anticancer drugs, Herceptin, to new indications approved for Merck & Co.’s and Bristol-Myers Squibb’s leading immuno-oncology drugs, the oncology drug market continues to drive deal-making and new product strategy. So what should be on your radar?
Inside the global oncology market
The current and future global market for oncology drugs is strong. Growth in global spending on oncology therapeutics and supportive care drugs increased 11.5% on a constant-dollar basis in 2015 to reach $107 billion, according to a recent study by the IMS Institute for Healthcare Informatics. Collectively, there are more than 500 companies pursuing oncology drug development on a global basis with nearly 600 new molecules in late-stage clinical development. IMS projects that annual global growth in the oncology drug market is expected to between 7.5% and 10.5% through 2020, when the market is expected to reach $150 billion. The top 10 oncology companies, measured by their current sales of existing cancer drugs, collectively have 130 molecules in their late-stage pipeline, representing from 20% to 60% of total research activity.
Oncology research and development activity remains concentrated on targeted therapies, which make up approximately 87% of the late-phase oncology pipeline, according to the IMS study. Targeted therapies include small-molecule protein kinase inhibitors, biologic monoclonal antibodies, and a range of new mechanism that can identify or block the cell processes that cause cancer cells to multiply, according to the IMS report. The late-phase oncology pipeline includes 270 biologic therapies, including 16 gene therapies, 86 new monoclonal antibodies and 15 biosimilars of existing monoclonal antibodies. The late phase pipeline also includes 74 potential vaccines for various tumor types. Immunotherapies are a fast-growing area and are projected to make up a larger portion of the pipeline in 2020, according to the IMS report.
On a current market basis, targeted therapies accounted for $27.8 billion in 2015 with a compound annual growth rate (CAGR) of 18% between 2011 and 2015, according to the IMS study. Hormonal therapies accounted for $3.4 billion with a CAGR between 2011 and 2015 of 6%. Cytotoxics accounted for $6.1 billion and declined by an average of 3% over the past five years. Within these market segments, oral therapies are becoming more common and make up a larger portion of market share than five years ago, according to the IMS study. In 2015, the market for oral targeted therapies was $10.8 billion, accounting for about 39% of the overall market for targeted therapies. Growth in oral targeted therapies was 28% between 2011 and 2015, outpacing overall growth in this segment, which was 18%. Oral formulations accounted for about 65% of the hormonal therapy market in 2015 with CAGR of 6% for oral formulations, which was on par with overall segment growth. Hormonal therapies historically are more focused more on oral formulations, such as in the area of breast cancer treatments. Oral formulations accounted for a lesser share of the market for cytotoxics, accounting for only $1.1 billion in spending or about 18% of the cytotoxic drug market.
Overall, 511 companies have late-phase active oncology pipelines, according to the IMS study, with 53 companies in the pre-registration/registration phase, 195 companies with Phase III candidates, and 379 companies with Phase II drug candidates. One-third of the companies with late-phase oncology pipelines have more than one-late phase cancer drug in development. Overall, 34 companies have five or more molecules in late-stage development, and three quarters of the companies with a late-stage drug candidate today have no presence currently in the global oncology market. Among the large pharmaceutical companies, 19 of the top 20 companies have an active late-phase oncology pipeline (defined as molecules that have reached at least Phase II development), according to IMS. The 130 cancer therapies being developed by the 10 largest oncology companies represent between 19% and 59% of their respective late-phase pipelines. Other large companies are developing an average of six cancer medicines and 55% to 92% of their late-phase therapies target other diseases.
Key activity thus far in 2016
So given the market potential in the global oncology market, what have been the key developments thus far in 2016? Below is a summary of key deal-making and product developments.
Pfizer’s $14-billion proposed acquisition of Medivation. Pfizer become the eventual winner among several suitors, including Sanofi, in a bid to acquire the biopharmaceutical company, Medivation, a pharmaceutical company based in San Francisco, California that is developing and commercializing small molecules for oncology, with an approximately $14 billion acquisition proposal. Both companies’ board of directors unanimously approved the merger, which was announced in August 2016, and Pfizer expects to complete the acquisition in the third or fourth quarter of 2016.
In acquiring Medivation, Pfizer won out over efforts by Sanofi, which was also interested in acquiring the company. Sanofi first made a bid to acquire Medivation in late April 2016 and again in early May 2016, with an initial offer of $9.3 billion, which was rejected by Medivation. Sanofi then took the strategy of seeking to replace the Medivation board in a hostile takeover bid but later increased its offer for Medivation to approximately $10 billion in July 2016 and was advised by Medivation it would be one of the companies considered in an acquisition bid.
The key gain for Pfizer is Medivation’s prostate cancer drug, Xtandi (enzalutamide), an androgen receptor inhibitor that blocks multiple steps in the androgen receptor signaling pathway within the tumor cell. Xtandi generated approximately $2.2 billion in worldwide net sales over the past four quarters as recorded by Astellas Pharma Inc., with whom Medivation entered an agreement in 2009 to develop Xtandi globally and commercialize jointly in the US. The drug was approved by the US Food and Drug Administration (FDA) in 2012. Medivation and Astellas are continuing a development program for Xtandi, including two Phase III studies in non-metastatic prostate cancer and another Phase III study in hormone-sensitive prostate cancer. It is also being further developed in Phase II studies for the potential treatment of advanced breast cancer and hepatocellular carcinoma.
In addition, Medivation has a late-stage oncology pipeline, which includes two development-stage oncology assets, talazoparib and pidilizumab. Talazoparib, currently in a Phase III study for the treatment of BRCA-mutated breast cancer, has the potential to be a highly potent PARP inhibitor and could be efficacious across several additional tumors. Pidilizumab is an immuno-oncology asset being developed for diffuse large B-cell lymphoma and other hematologic malignancies and has the potential to be combined with immuno-oncology therapies in Pfizer’s portfolio.
The proposed acquisition of Medivation adds to Pfizer’s pipeline and commercial portfolio in oncology. The key product in Pfizer’s commercial oncology portfolio is Ibrance (palbociclib), a drug to treat HR+/HER2- metastatic breast cancer. Pfizer projects that Ibrance and Xtandi will be two of the top 10 oncology products by 2021, according to an investor presentation by Pfizer in outlining the Medivation acquisition. Ibrance posted 2015 sales of $723 million and is the key product in Pfizer’s oncology portfolio. Analysts project potential blockbuster status for Ibrance. A recent Thomson Reuters analysis projects sales of $4.6 billion for Ibrance by 2019. Ibrance is a small-molecule oral inhibitor of CDKs 4 and 6, which are key regulators of the cell cycle that trigger cellular progression. It was first approved by the FDA in February 2015, and it was a major revenue driver in 2015 for Pfizer in its global oncology portfolio.
The battle in immuno-oncology. Immuno-oncology is one of the new areas for cancer treatment, and Merck & Co. and Bristol-Myers Squibb (BMS) continue to battle in this sector, respectively with Merck & Co.’s Keytruda (pembrolizumab) and BMS’ Opdivo (nivolumab), PD-1/PD-LI immune checkpoint inhibitors and key commercial entries that are projected by some analysts for blockbuster status. Keytruda had 2015 sales of $566 million. In 2015, Opdivo had global sales of $942 million, and a recent Thomson Reuters analysis projects that 2019 sales will reach nearly $8.9 billion.
Both companies are continuing their strategy to gain new indications for these cancer drugs. Earlier this year, Merck & Co. received FDA approval for a new indication for Keytruda for treating recurrent or metastatic head and neck squamous cell carcinoma with disease progression on or after platinum-containing chemotherapy. Keytruda was previously approved for treating unresectable or metastatic melanoma and for patients with metastatic non-small cell lung cancer (NSCLC) whose tumors express PD-L1 as determined by an FDA-approved test with disease progression on or after platinum-containing chemotherapy. Also, earlier this year, Merck received approval from the European Commission for a new indication for Keytrudua to treat locally advanced or metastatic NSCLC in patients whose tumors express PD-L1 and who have received at least one prior chemotherapy regimen.
BMS had a setback in advancing Opdivo for treating a specific form of NSCLC. Earlier this year, the company reported that Opdivo did not meet its primary endpoint in a clinical trial investigating the use of the drug as a monotherapy in patients with previously untreated advanced NSCLC whose tumors expressed PD-L1 at ≥ 5%. The company will complete an evaluation of the trial’s data and work with investigators on the future presentation of the results.
Opdivo is indicated for the treatment of patients with NSCLC with progression on or after platinum-based chemotherapy. In the US, Opdivo is approved as a single agent for treating BRAF V600 wild-type unresectable or metastatic melanoma and as a single agent for treating BRAF V600 mutation-positive unresectable or metastatic melanoma. It is also approved in combination with BMS’ Yervoy (ipilimumab) for treating unresectable or metastatic melanoma and for treating advanced renal cell carcinoma that has received prior anti-angiogenic therapy. It is also approved for treating patients with classical Hodgkin lymphoma that has relapsed or progressed after autologous hematopoietic stem cell transplantation and post-transplantation brentuximab vedotin.
In other developments, Opdivio received breakthrough therapy status from the FDA for treating advanced bladder cancer earlier this year. Opdivo is also under review by US and European regulatory authorities for treating previously treated recurrent or metastatic squamous cell carcinoma of the head and neck.
Both Merck & Co. and BMS continue to partner to evaluate their immuno-oncology drugs in combination with other anti-cancer agents. Some clinical collaborations this year for Opdivo include agreements with AbbVie to evaluate AbbVie's Rova-T (rovalpituzumab tesirine), an investigational antibody drug conjugate (ADC), in combination with Opdivo and Opdivo + Yervoy, a combination regimen, for relapsed extensive-stage small-cell lung cancer. AbbVie acquired Rova-T through its acquisition of Stemcentrx, a South San Francisco-based biopharmaceutical company, earlier this year in a deal valued up to $5.8 billion. BMS also partnered with Janssen, part of Johnson & Johnson, to evaluate Opdivo with Janssen’s live attenuated double–deleted Listerial monocytogenes cancer immunotherapy for treating NSCLC.
Roche joined the commercial race in the immuno-oncology market in May 2016 following the granting of accelerated approval by the FDA for Tecentriq (atezolizumab) for treating bladder cancer. The FDA’s Accelerated Approval Program allows conditional approval of a medicine that fills an unmet medical need for a serious condition based on early evidence suggesting clinical benefit. Tecentriq is designed to directly bind to PD-L1 expressed on tumor cells and tumor-infiltrating immune cells, blocking its interactions with both PD-1 and B7.1 receptors. By inhibiting PD-L1, atezolizumab may enable the activation of T cells.
Moves by Novartis, Lilly, BI, Celgene, AbbVie, Roche, Takeda, Sanofi, Merck & Co., and Baxalta. Earlier this year, Novartis received breakthrough therapy designation from the FDA for ribociclib, in combination with letrozole, for treating hormone-receptor-positive, human epidermal growth factor receptor-2-negative advanced or metastatic breast cancer. Ribociclib is a selective cyclin-dependent kinase (CDK4/6) inhibitor. Ribociclib represents a class of drugs that help slow the progression of cancer by inhibiting CDK4/6 proteins. These proteins, when over-activated in a cell, can enable cancer cells to grow and divide too quickly. The drug has been studied in non-clinical models and is currently being evaluated in combination with additional endocrine agents as part a clinical trial program.
In July 2016, Eli Lilly and Company and Boehringer Ingelheim (BI) formed a clinical-trial collaboration for a Phase Ib study on a combination breast cancer drug. The drug is a combination of Lilly’s abemaciclib, an inhibitor of cyclin-dependent kinase (CDK)-4 and CDK-6, and BI’s compound, designated as BI 836845, an insulin-like growth factor (IGF)-1/IGF-2 ligand-neutralizing antibody. The drug is being developed to treat patients diagnosed with hormone-receptor-positive, human-epidermal-receptor-2 (HER2)-metastic breast cancer. In 2015, the FDA granted abemaciclib breakthrough therapy designation
In July 2016, Jounce Therapeutics, a Cambridge, Massachusetts-based immuno-oncology company, formed a global strategic collaboration with Celgene worth up to $2.6 billion for developing and commercializing immuno-oncology treatments. Under the collaboration, Jounce receives an upfront payment of $225 million, a $36-million equity investment by Celgene, and up to an additional $2.3 billion in future milestone payments. The collaboration includes options on Jounce’s lead product candidate, JTX-2011, a monoclonal antibody that binds to and activates the T-cell inducible costimulator, which is a protein on the surface of certain T cells that is believed to stimulate an immune response against cancer. JTX-2011 is being developed to treat solid tumors as a single agent and in combination with other therapies. It is expected to enter clinical studies in the second half of 2016.
In April 2016, AbbVie and argenx, a clinical-stage biopharmaceutical company developing treatments for cancer and severe autoimmune diseases based in Breda, the Netherlands, formed a collaboration to develop and commercialize ARGX-115. argenx' preclinical-stage human antibody program targeting the immuno-oncology target GARP, a protein believed to contribute to immuno-suppressive effects of T-cells, in a deal valued up to $685 million.
Also in 2016, the FDA approved AbbVie’s and Roche’s Venclexta (venetoclax) for the treatment of patients with chronic lymphocytic leukemia (CLL) who have a chromosomal abnormality called 17p deletion and who have been treated with at least one prior therapy. Venclexta is the first FDA-approved treatment that targets the B-cell lymphoma 2 (BCL-2) protein, which supports cancer cell growth and is overexpressed in many patients with CLL. Venclexta is indicated for daily use after detection of 17p deletion is confirmed through the use of the FDA-approved companion diagnostic Vysis CLL FISH probe kit. Venclexta is manufactured by AbbVie and marketed by AbbVie and Roche’s Genentech with the drug jointly commercialized by AbbVie and Genentech in the US and commercialized by AbbVie outside of the US. The Vysis CLL FISH probe kit is manufactured by Abbott Molecular.
Mersana Therapeutics, a biopharmaceutical company focused on developing oncology treatments, and Takeda Pharmaceutical Company Limited formed a new strategic partnership granting Takeda rights to Mersana’s lead product candidate, XMT-1522, outside the United States and Canada in a deal valued up to $830 million. The deal also expands an existing collaboration between the companies to provide Takeda with additional access to Mersana’s Fleximer ADC platform and grants Mersana an option at the end of Phase I to co-develop and co-commercialize one of these programs in the US. In addition, the companies will co-develop new payloads for use with ADCs. XMT-1522 is an investigational, Fleximer-based ADC therapy that targets HER2-expressing tumors, including breast, gastric, and non-small cell lung cancers.
In other deals, Merck & Co. acquired IOmet, a privately held UK-based drug discovery company based in Edinburgh, Scotland, which is focused on the development of cancer treatments, with a particular emphasis on the fields of cancer immunotherapy and cancer metabolism.
Also, earlier this year, Sanofi and Innate Pharma, a Marseille, France-based biopharmaceutical company, formed a research collaboration and licensing agreement to apply Innate Pharma's new proprietary technology to the development of bispecific antibody formats engaging natural killer (NK) cells to kill tumor cells. Sanofi and Innate Pharma will work together on the generation and evaluation of up to two bispecific NK cell engagers, using technology from Innate Pharma and Sanofi's proprietary bispecific antibody format as well as tumor targets. Under the license agreement, Sanofi is responsible for the development, manufacturing, and commercialization of products resulting from the research collaboration. Innate Pharma will be eligible to up to EUR 400 million ($450 million) in development and commercial milestone payments as well as royalties on net sales.
Baxalta the biopharmaceutical company spun off from Baxter in 2015, and Symphogen, a Copenhagen, Denmark-based biopharmaceutical company developing recombinant antibodies and antibody mixtures, formed a broad strategic immuno-oncology collaboration earlier this year worth up to $1.6 billion. Under the agreement, Baxalta and Symphogen will advance therapeutics against six checkpoint targets, with the first program to enter clinical studies in 2017. Symphogen receives an upfront payment of $175 million from Baxalta in exchange for the exclusive option rights for six checkpoint therapies. Symphogen will be responsible for performing R&D through Phase I clinical trials at its own expense. The agreement holds a total potential value up to $1.6 billion in option fees and milestones over the long-term, in addition to royalties on worldwide sales.
Biosimilar progression and small-molecule generic competition. Competition in the oncology market is also heating up with the potential entry of several biosimilar entries and a generic entry for a leading small-molecule oncology drug. In August 2016, the European Medicines Agency (EMA) accepted a marketing authorization application filed by Mylan for a proposed biosimilar referencing Roche’s Herceptin (trastuzumab), for certain HER2-positive breast and gastric cancers. Herceptin, one of Roche’s top-selling oncology drugs, had 2015 global sales of CHF 6.5 billion ($6.6 billion).
Mylan and Biocon, a Bangalore, India-based biotechnology company, co-developed this proposed biosimilar. Trastuzumab is one of six biologic products co-developed by Mylan and Biocon for the global marketplace. Mylan has exclusive commercialization rights to trastuzumab in the US, Canada, Japan, Australia, New Zealand, the European Union, and European Free Trade Association countries. Biocon has co-exclusive commercialization rights with Mylan for the product in the rest of the world.
The trastuzumab biosimilar is the second biosimilar submission developed by the partnership between Mylan and Biocon that has been accepted for review in Europe. In July 2016, Mylan's filing for a proposed biosimilar of pegfilgrastim was accepted for review by the EMA. Pegfilgrastim is the active ingredient in Amgen's Neulasta. Neulasta is one of Amgen's top-selling drugs with 2015 revenues of $4.7 billion. Pegfilgrastim is prescribed for cancer patients to help them with some of the side-effects of their treatment. It reduces the duration of neutropenia (low levels of neutrophils, a type of white blood cell that fights infections) and the incidence of febrile neutropenia (neutropenia with fever) that are a result of their chemotherapy treatment.
Oncology is also a target of Sandoz, a division of Novartis, in its biosimilar strategy. Sandoz plans to launch five biosimilars of major oncology and immunology biologics across key geographies by 2020 and invest $1 billion as part of a 2010-2020 investment scheme in biomanufacturing facilities in Schaftenau and Kundl, Austria. The five launches will be enabled by a regulatory submissions strategy of 11 filings over a three-year period (2015-2017). The oncology portfolio includes two marketed products (filgrastim and epoetin-alfa) and a biosimilar candidate of pegfilgrastim, which is under regulatory review in the US and the European Union.
Earlier this year, Teva Pharmaceutical Industries launched the generic equivalent to Novartis’ Gleevec (imatinib mesylate) tablets, 100 mg and 400 mg, in the US for multiple indications, including certain forms of leukemia. Gleevec, marketed as Glivec in Europe, had 2015 global sales of nearly $4.7 billion. The drug had annual sales of approximately $2.42 billion in the US, according to IMS data as of May 2016 and as reported by Teva.
Niche anticancer products. Several companies advanced niche therapies for cancer. Earlier this year, Merck & Co. formed a strategic collaboration and license agreement with Moderna Therapeutics, a clinical-stage biopharmaceutical company, to develop and commercialize messenger RNA (mRNA)-based personalized cancer vaccines. The collaboration will combine Merck’s position in immuno-oncology with Moderna’s mRNA vaccine technology and GMP manufacturing capabilities to advance individually tailored cancer vaccines across a spectrum of cancers. Under the agreement, Merck makes an upfront cash payment to Moderna of $200 million, which Moderna will use to lead all research and development efforts through proof of concept. The development program will entail multiple studies in several types of cancer and include the evaluation of mRNA-based personalized cancer vaccines in combination with Merck’s Keytruda. Moderna will also use the upfront payment to fund a portion of the build-out of a GMP manufacturing facility in suburban Boston for the purpose of personalized cancer vaccine manufacturing.
Earlier this year, Kite Pharma, a clinical-stage biopharmaceutical company focused on developing engineered autologous T-cell therapy products for the treatment of cancer, opened a new 43,500-square-foot, commercial manufacturing facility in El Segundo, California. The facility is designed to produce chimeric antigen receptor (CAR) and T-cell receptor (TCR) product candidates for clinical trials, as well as for the potential launch and commercialization of Kite's lead CAR T-cell product candidate, KTE-C19, which is in clinical study for the treatment of chemorefractory diffuse large B-cell lymphoma and other B-cell malignancies. Kite anticipates commercial launch of KTE-C19 in 2017.