Business and Financial News, In Brief

Amgen hits a snag after a long bull run; an NEJM letter provokes a response from Biogen Idec; AstraZeneca is troubled generics; Europe freezes, and so does a manufacturing facility.

Amgen’s Momentum Slowing?

Amgen Inc. has enjoyed strong market momentum in 2013, with shares up 30% since Dec. 31. But despite beating bottom-line estimates, thanks to one-time events including a tax savings, drug sales were soft across the board during the first quarter, potentially ending a period of unbridled optimism around the company.

Nearly every key product missed sales estimates: Prolia/Xgeva (denosumab), Neupogen (filgrastim) and Neulasta (pegfilgrastim), Enbrel (etanercept), and Aranesp (darbepoetin alfa), among others, came in below expectations, although the last slightly outperformed ex-U.S. sales estimates. Still, as company executives reported in an April 23 conference call, overall sales were still up 5% worldwide.

Analyst Erica Chase of Barclays wrote in a same-day research note that pipeline catalysts are “limited” in 2013, placing greater focus on performance of key products. Amgen expects to unveil long-awaited data concerning its Phase III melanoma vaccine T-VEC (talimogene laherparepvec) at the ASCO conference in Chicago beginning May 31, and is beginning a pivotal study of its biosimilar Herceptin (trastuzumab) in the second quarter.

Other analysts noted that Amgen’s first quarter is typically soft, with a rebound in the second. The company left its revenue guidance unchanged, but said it expects earnings per share to be “above the midpoint” for the year.

Biogen Idec CEO Deflects Concerns About Fumarate Drugs

After the New England Journal of Medicine published letters April 25 describing two incidences of the brain infection progressive multifocal leukoencephalopathy in patients treated with the psoriasis drug Fumaderm (fumaric acid esters), Biogen Inc. CEO George Scangos deflected concerns that those cases could affect the launch of newly approved Tecfidera (dimethyl fumarate), a drug in the same class.

During the company’s April 25 earnings call, Scangos stressed that the incidences of PML were well-known to FDA regulators who approved Tecfidera for multiple sclerosis. The cases occurred in two European patients given Biogen’s Fumaderm – one for psoriasis, and one as part of a compounded product for progressive hemiparesis. Biogen defended itself in a letter to the Journal, noting especially that Tecfidera, also known as BG-12, has never produced a similar infection.

“Frankly, it’s hard for me to understand why these old reports were deemed worthy of publication at all,” Scangos said during the call. “These are old news, right?” He acknowledged that a total of four incidences have occurred in patients on fumarate drugs over 19 years, a rate he called “extraordinarily low.”

AstraZeneca First-Quarter Sales Hit Hard By Generics

AstraZeneca PLC‘s first-quarter sales fell a bigger-than-expected 13% to $6.4 billion and earnings per share dropped 25% to $1.41, reflecting the continuing impact of generic competition to antipsychotic Seroquel IR (quetiapine fumarate) and to a lesser extent cholesterol fighter Crestor (rosuvastatin calcium) in Canada and Australia – and underscoring the task Britain’s second biggest drug maker faces to turn itself around.

The pure pharma group reminded investors of its deep-seated troubles when it reported first quarter sales on April 25 that missed analysts’ estimates as some of its best-selling medicines faced generic competition and its new heart drug Brilinta (ticagrelor) – for which AstraZeneca has high hopes – continued to give a lackluster performance.

Apart from the quarterly financial results, there were no other material updates, pipeline or otherwise, from the U.K. group, which on March 21 gave an in-depth Investors Day briefing in New York (Also see "AstraZeneca Seeking Patient Investors: Pipeline Holds Promise, But Long-Term" - Pink Sheet, 1 Apr, 2013.).

Guidance was reiterated, with AstraZeneca expecting a mid-to-high single digit percentage decline in revenues in 2013, and “core” earnings per share falling significantly more, due to higher operating costs.

AstraZeneca Subpoenaed By U.S. Attorney’s Office About Macclesfield Facility

AstraZeneca has also been subpoenaed by the U.S. Attorney's Office in Boston related to manufacturing standards at the British drug maker’s Macclesfield facility in the north of England.

Britain's second-biggest drug maker said the approach was made on March 28 and the company was coordinating its response and intended to cooperate with the inquiry. The officials are asking for documents and records related to manufacturing, quality or good manufacturing practices.

Chief Financial Officer Simon Lowth declined to go into further detail about the case during a conference call with reporters following AstraZeneca’s first quarter results on April 25. “That’s all we can say. It's a very early approach," he said without elaborating.

AstraZeneca currently has around 2,500 employees at its Macclesfield site, with one-third working in the manufacturing, packing and distribution of medicines. It is the company’s second-largest manufacturing site and acts as its European center for packing.

UCB Weathers Difficulties

Belgium's mid-sized pharma company UCB Pharma SA said the weather was partly to blame for its slow start to 2013, with revenues declining by 9% to €799 million ($1.04 billion) in the first quarter, compared with the same quarter last year. The continuing cold weather in the Northern Hemisphere has delayed the start of the allergy season and affected sales of its allergy franchise, UCB said April 25. The company sells the antihistamines Zyrtec (cetirizine) and Xyzal (levocetirizine) in a number of markets.

Another factor in the slow start to 2013 was the 23% decline in sales of its top-selling product, the anti-epileptic, Keppra (levetiracetam), to €171 million, because of increasing generic competition. Sales were down 17% in the U.S., and generic erosion accelerated in Europe, where sales declined by 37%. However, Keppra sales showed double-digit growth in other regions, the company added.

UCB's three recently launched products, the Crohn's and rheumatoid arthritis therapy, Cimzia (certolizumab pegol), the anti-epileptic Vimpat (lacosamide) and the Parkinson's therapy Neupro (rotigotine patch), all registered strong growth, with their combined sales reaching €247 million, up 23%, in the quarter. In the U.S., Cimzia sales grew by 13% and Vimpat sales by 17%. At the end of 2012, Cimzia was approved for marketing in Japan, and UCB filed two new indications for the product in the EU and U.S., for the treatment of active psoriatic arthritis and treatment of active axial spondyloarthritis.

Ipsen’s Agents of Growth

Supplies of Ipsen's short stature therapy Increlex (mecasermin) will be interrupted this year because of manufacturing issues at Lonza Group Ltd.’s site in Hopkinton, Mass., Ipsen reported April 25. Lonza is working closely with FDA to resolve the matter, but supplies of Increlex are unlikely to restart this year, the French company added.

Sales of Somatuline (lanreotide) for acromegaly and Smecta (diosmectite) for intestinal disorders drove Ipsen's business in the first quarter, with group sales climbing by 4.7% to reach €306 million ($398.73 million). Somatuline sales totaled €61.5 million and Smecta sales were €29.7 million. During the first quarter, Ipsen and its partner Inspiration Biopharmaceuticals completed the sale of their recombinant porcine Factor VII product, OBI-1, to Baxter International Inc., and their recombinant Factor IX, IB1001, to Cangene Corp. (Also see "Ipsen To Take Hit As Biotech Partner Inspiration Declares Bankruptcy" - Pink Sheet, 31 Oct, 2012.).

Boehringer on Biosimilars

German drug manufacturer Boehringer Ingelheim GMBH is investing heavily in biosimilars, Chairman Andreas Barner said during the company’s annual meeting April 24. “We want to develop our own products,” he said, pointing out how high the barriers to entry have turned out to be in the biosimilar market. “Once it gets demanding, it gets interesting for us.” The family-owned company said the COPD medicine Spiriva (tiotropium) remains its best-selling drug with sales of €3.56 billion in 2012 ($4.63 billion). Sales of the oral anticoagulant surpassed €1 billion for the first time. Sales of Pradaxa (dabigatran) were €1.1 billion.