Earnings Briefs: Actavis, Celgene, InterMune, Lilly, Forest

Companies are reporting out their half-year earnings and giving investors updates on the progress of their pipelines, as well as ongoing launch plans. Actavis and Warner Chilcott are in line as their merger approaches; Lilly’s Lechleiter gives an update on BD plans; AbbVie talks about its HCV combo; and Shire recommits to ADHD promotion.

Actavis Strong Prior To Acquisition Close

Half-year and quarterly numbers for both Allergan PLC and Warner Chilcott PLC, which reported the same day, mostly were in line with analysts’ expectations. The former’s pending $8.5 billion deal to buy the latter is slated to close in October, pending FTC approval. Aside from the closing, key near-term catalysts for Actavis include launches of generic Pulmicort (budesonide inhalation suspension) in the U.S. and generic Exalgo (hydromorphone HCI), a painkiller made by Mallinckrodt PLC, in the fourth quarter. The launch of budesonide, AstraZeneca PLC’s respiratory drug, has been delayed from its original date scheduled in April, pending an appeals court decision expected on Aug. 12 (Also see "Actavis’ Pulmicort Respules Generics Race Out The Door Before “Short Injunction”" - Pink Sheet, 8 Apr, 2013.). Although the delay gives potential competitors who were not ready in April time to jump in, “We still feel good about the market. It is enormous,” said President, Actavis Pharma, Sigurdur Olafsson.

Actavis is now the largest generics company in the U.S. by sales, beating Teva Pharmaceutical Industries Ltd. by about $30 million in the first quarter of 2013, according to IMS Health Inc., CEO Paul Bisaro told analysts on a half-year earnings call on July 25. That’s a notable shift, given that Teva has relished its number-one position in generics for years (Teva reports quarter results on Aug. 1). The sales strength demonstrates that Actavis’ pending Warner Chilcott deal was not devised out of weakness in its generics business, he said in response to an analyst’s question (Also see "Tax Benefits, Branded Portfolio, Synergies Drive Actavis’ Acquisition of Warner Chilcott" - Pink Sheet, 27 May, 2013.). Despite efforts to diversify, generics currently account for more than 80% of Actavis sales.

Forest Gains Further Formulary Access For Tudorza

Forest Laboratories Inc.’s long-acting muscarinic antagonist Tudorza (aclidinium) finally is gaining some traction now that the company has obtained greater unrestricted formulary access. “On July 1, formulary coverage for Tudorza took a giant leap forward, which we expect to be a positive sales driver,” said Forest Chief Commercial Officer Elaine Hochberg on the company’s July 23 earnings call. Sales of the severe chronic obstructive pulmonary disease drug totaled $15.9 million in the quarter, up from $10.8 million in the quarter ended March 31.

Even though prescriptions were up 23% from the prior quarter, limited coverage for Part D patients has kept sales of the respiratory drug down. Tudorza is now on formulary at ESI – the nation’s largest pharmacy benefit manager, Humana Inc., Caremark Rx Inc., Cigna Corp. and WellCare Management Group Inc. – one of the largest regional plans. The company is still seeking further formulary access from Caremark Commercial. In total, including both Part D and commercial, 75% of patients now have unrestricted access to Tudorza (Also see "COPD Market Snapshot: New Products, Limited Differentiation" - Pink Sheet, 6 May, 2013.).

Lechleiter Looking For Small Acquisitions

Just a few weeks after returning to work following surgery to repair a heart defect, Eli Lilly & Co. CEO John Lechleiter made comments about the Indiana-based pharma company’s strategy for business development. “We continue to be vigilant, obviously, and on the lookout for technology that we think could supplement or augment what we currently have coming out of our own pipeline. I think our greatest challenge the next few years is to make sure that despite the headwinds we face in patent expirations we’re able to adequately fund the completion of these Phase III trials and make sure we have good launches with what we hope will be a number of products as we come to the end of this patent-expiration period,” he said.

He also noted that the company is “still not interested in large-scale M&A” and that he would like to see the company make a license deal or small acquisition “that could give us access to sales revenue in our Biomedicines business between now and say 2017.” Lilly has been adding aggressively to its animal health business, Elanco, over the last few years in hopes of expanding the $2 billion business to $4 billion.

Lechleiter went in for surgery on May 13 to correct a dilated aorta discovered during an unrelated test. He said during Lilly’s second quarter earnings call that his recovery had gone well.

Celgene Preps To Launch Apremilast

Celgene Corp.’s second quarter was marked by strong performance across products. The firm raised its full-year 2013 guidance to $6.2 billion, reflecting product growth of 15%, up from the 11% forecast at May’s R&D day. The quarter was carried by the consensus-beating performance of Pomalyst (pomalidomide), its first full quarter since launch, in heavily pre-treated multiple myeloma; and by Abraxane (albumin-bound paclitaxel for injectable suspension) in metastatic breast cancer and its new indication of NSCLC. Celgene is preparing for Abraxane’s global launch in combination with gemcitabine against pancreatic cancer; the PDUFA date is Sept. 21, with a potential end-of-year approval in Europe.

The firm also is preparing to file Apremilast in several inflammatory conditions over the next two years, with U.S. approvals in psoriatic arthritis coming in the second half and in psoriasis in the first half 2014; European decisions on both indications will come in the first half of 2015.

InterMune Updates On Esbriet

InterMune Inc. expects to have confirmatory Phase III data results from the ASCEND trial studying Esbriet (pirfenidone) for the treatment of idiopathic pulmonary fibrosis in the second quarter 2014, management said during a July 24 sales and earnings call. As long as the data are positive, the company would resubmit an NDA for Esbriet as soon as possible, CEO Daniel Welch said. Esbriet was approved in Europe and is rolling out there now, but received a “complete response” letter from FDA in May 2010, with the agency requesting additional information (Also see "Despite Positive Advisory Committee Vote, InterMune Gets Complete Response For Pirfenidone" - Pink Sheet, 4 May, 2010.). Sales of Esbriet in Europe were $14.4 million in the second quarter, compared with $5.5 million in the second quarter 2012. The company reported a net loss for the second quarter of $62.9 million compared to a loss of $9.3 million a year ago.

Recordati Buys Majority Share In Opalia

The mid-sized European pharmaceutical company Recordati Industria Chimica & Farmaceutica SPA is to acquire Tunisia’s third-largest local pharma firm, Opalia Pharma SA, in a move that continues the Italian company’s push into emerging markets, particularly in the Middle East and Africa. Recordati expects to pay around TND 80 million ($49 million) for a 90% stake in Opalia, it announced July 24. The company previously bought two Turkish concerns, Dr F Frick Ilac in July 2011 and Yeni Ilac in December 2008, to extend its emerging-markets business (Also see "What Pricing Pressure? Recordati Continues Push Into Turkey With Latest Acquisition" - Scrip, 13 Jul, 2011.).

Opalia is ranked eighth in terms of sales in the Tunisian pharmaceutical market, with 2013 sales expected to be around TND 40 million, and has its own cGMP manufacturing facility for liquids and semi-solids. The profitability of its business is similar to that of Recordati’s, noted the Italian company’s Chief Financial Officer Fritz Squindo during its first-half earnings call July 25.

Opalia has a broad spread of products, sales are growing at a double-digit percentage rate and a restructuring of its business is not required, Squindo added. The company will give Recordati a direct presence in North Africa, and a platform to extend into countries in Central Africa and the Gulf states. The acquisition will close in the coming months after Tunisian authority approval [See Deal].

Shire Ramps Up ADHD Promotion

Specialty pharma Shire PLC has a plan in place to increase the sales of its latest attention deficit hyperactivity disorder (ADHD) drug Vyvanse (lisdexamfetamine). “We are progressing with plans to reinvigorate growth in our ADHD sales in the U.S.,” said newly appointed CEO Flemming Ornskov on the company’s second quarter earnings call on July 25. “As you may know, we had a change in strategy last year with some of our field force focused away from key prescribers. We quickly realized that was not an optimal allocation of resources, and we have rapidly changed our sales strategy back to calling on physicians.”

By September, the company will have 50 more sales reps calling on doctors, bringing the total neuroscience field force to 450 reps, who are facing increased incentives. Shire also is increasing its focus on the pediatric market – in time for the back-to-school season, which could help the company capture 30% of this patient population.

“We have invested in direct-to-consumer and physician-directed advertising,” said Ornskov. “We know from experience this market responds well to promotional spend, and we are determined to capture greater share to this market and the prescriptions in this market. We are confident that this will fuel growth of the overall market as well as our brand’s market share.”

AbbVie On Track With Gilead In All-Oral HCV Race

AbbVie Inc. is aiming to bring its all-oral hepatitis C combination treatment to market at about the same time as competitor Gilead Sciences Inc. On its second quarter earnings call, AbbVie said it expects to file a regulatory submission for its HCV combo during the second quarter of 2014 with a launch slated for early 2015.

The triple direct-acting antiviral combination of the protease inhibitor ABT-450 boosted with ritonavir, NS5A inhibitor ABT-267 and non-nucleoside polymerase inhibitor ABT-333 received breakthrough designation from FDA in May. It’s in six Phase III trials, which are expected to begin reading out later this year.

Gilead’s all-oral combo of nucleoside sofosbuvir and NS5A inhibitor ledipasvir also received breakthrough designation and is slated for a regulatory filing in the second quarter of 2014. Its HCV single-agent sofosbuvir has an Oct. 25 Antiviral Drugs Advisory Committee meeting and a Dec. 8 PDUFA date (Also see "Gilead Maintaining Lead Position In Hepatitis C, While Idenix Is Starting Over" - Pink Sheet, 11 Feb, 2013.).

Alexion Increases Penetration In PNH Market

Ultra-rare disease pharma Alexion Pharmaceuticals Inc. saw a 35% increase in Soliris (eculizumab) sales during the second quarter to $370.1 million as it continues to grow its paroxysmal nocturnal hemoglobinuria (PNH) business and the number of atypical hemolytic uremic syndrome (aHUS) patients (Also see "Alexion’s Bell Notes The Changing Role Of Innovation In Regulatory Decisions" - Pink Sheet, 13 Jun, 2013.).

Alexion was able to increase its presence in Turkey, Brazil and Russia, adding newly identified PNH patients to Soliris treatment. “We also now expect to add patients in Korea in the second half of 2013 as the next major country in our global PNH roll-out,” said Alexion Chief Commercial Officer David Hallal. “In addition, we see a significant opportunity to serve patients with PNH in multiple countries in Latin America, with the potential for growth in Argentina and Colombia later in 2013 and continuing further in 2014.”

The company received FDA “breakthrough therapy” designation for asfotase alfa, an enzyme replacement therapy in development to treat an inherited and life-threatening metabolic disease, in May (Also see "Alexion Ultra-Rare Disease Candidate Makes “Breakthrough” List" - Pink Sheet, 31 May, 2013.). “Importantly, the designation will provide us with enhanced interactions with the FDA which will help us to strengthen our filing and regulatory strategies for this larger than anticipated patient population now defined by age of onset,” said Alexion CEO Leonard Bell during its second quarter conference call with analysts on July 25.