Regeneron Confident In Relationship With Sanofi After Viehbacher’s Departure

Biotech and French partner remain on track to file PCSK9 inhibitor alirocumab this quarter in U.S. and EU; meanwhile, Eylea continues strong sales growth – but launch in second indication, diabetic macular edema, is slow.

With much of its pipeline potential tied to a longstanding partnership with Sanofi, Regeneron Pharmaceuticals Inc. tried to reassure investors during its third quarter earnings call Nov. 4 that things are progressing smoothly with the LDL cholesterol-lowering candidate alirocumab and other drug candidates subject to the collaboration.

Regeneron CEO Leonard Schleifer said the recent sacking of Sanofi CEO Chris Viehbacher will not affect the two companies’ plans or ability to work together.

“We had a close and productive working relationship with [Viehbacher] for many years, and we wish him well in his future endeavors,” Schleifer said. “But our relationship with Sanofi began before Chris’ tenure and extends deeply through both companies’ research, development and commercial organizations. We expect the relationship to continue without interruption and unabated as we advance our joint pipeline, including three Phase III antibodies, through clinical trials and into commercialization.”

Schleifer added that he talked with Sanofi’s Chairman and acting CEO Serge Weinberg on Oct. 29, the day Viehbacher was dismissed, to re-affirm to companies’ joint commitment to alirocumab, to be marketed as Praluent, and other partnered assets, including new Phase I candidate REGN2222, an monoclonal antibody candidate for respiratory syncytial virus (Also see "Sanofi Says Au Revoir To Viehbacher, But Is It Committing A Faux Pas?" - Pink Sheet, 3 Nov, 2014.).

The French pharma and the Tarrytown, N.Y., biotech have been partnered around Regeneron’s VelocImmune antibody technology platform since 2007 [See Deal] (Also see "Sanofi Strengthens Monoclonal Antibody Access With $560 Million Regeneron Deal" - Pink Sheet, 29 Nov, 2007.).

Other assets under the collaboration include sarilumab, in Phase III in rheumatoid arthritis, and dupilumab, in Phase III in atopic dermatitis and chronic sinusitis with nasal polyps. Sarilumab, an interleukin-6 receptor blocker, should be ready for regulatory filing by late 2015, Schleifer said. Dupilumab, which blocks IL-4 and IL-13, also is in Phase IIb in asthma.

Amgen Patent Challenge Rebuffed

Much of the intrigue around Regeneron, however, pertains to alirocumab, an anti-PCSK9 antibody that is vying with Amgen Inc.’s evolocumab to be the first candidate in that class approved for hypercholesterolemia (Also see "For Regeneron, Near-Term PCSK9 Filing, Eylea Growth Point To Rapidly Improving Prospects" - Pink Sheet, 5 Aug, 2014.).

While a BLA for the Amgen drug was filed in the third quarter, Regeneron and Sanofi believe they made up that ground by purchasing a priority review voucher from BioMarin Pharmaceutical Inc. in July.

Regeneron and Sanofi are counting on a marketing edge because of promising data being generated in the ongoing 18,000-patient ODYSSEY LONG TERM trial, which is showing that alirocumab is the first PCSK9 inhibitor to demonstrate a reduction in the rate of major cardiovascular events (Also see "Sanofi/Regeneron’s Alirocumab Cuts CV Events And Cholesterol" - Pink Sheet, 1 Sep, 2014.).

After presenting data from this study at the European Society of Cardiology conference in September, Regeneron is planning to unveil new data from five additional studies of alirocumab at the American Heart Association’s annual meeting Nov. 15-19 in Chicago, Chief Scientific Officer George Yancopoulos said during the call.

Regeneron and Sanofi also face a patent challenge by Amgen, which is claiming that alirocumab violates three of its patents. Amgen filed a complaint Oct. 17 seeking an injunction for infringement of its patent and damages. The partners have until Nov. 18 to respond to the complaint.

Schleifer indicated Regeneron’s approach to this matter during the Q&A portion of the investor call. “We’re not going to comment much, but we are going to focus on the facts and the law,” he responded to a question on the Amgen motion. “We’ve got a lot of experience in this patent arena. As you remember, we had a patent fight with Genentech Inc. relating to our Eylea. So, this is something I think that you’ll just have to watch it unfold. … What we can say [is] we don’t believe that we infringe any valid claims asserted in the patents.”

Eylea’s DME Claim Must Create Physician ‘Urgency’

Meanwhile, Regeneron’s blockbuster ophthalmology drug Eylea (aflibercept) posted strong sales growth during the third quarter, both domestically and in Europe, although ramp up of a second indication in diabetic macular edema has been slow-going. Eylea brought in $722 million worldwide on the quarter, up 48% year-over-year. This included a 23% increase in U.S. sales to 445 million, the company announced, while EU sales by partner Bayer AG more than doubled to $277 million. Regeneron earned $85 million in profit-sharing on those EU sales during the quarter, Chief Financial Officer Robert Landry said.

DME represents roughly as large a commercial opportunity as Eylea’s initial indication of wet age-related macular degeneration, Senior VP-Commercial Robert Terifay said during the investor call, with a U.S. patient base of about 600,000 people. However, only 40% of those patients are treated with anti-vascular endothelial growth factor therapy, with laser surgery offered as a therapeutic alternative. Lesser clinician urgency to treat DME compared to wet AMD is among the reasons the DME indication is taking off slowly, Terifay added.

“In wet AMD, physicians are concerned if patients have ongoing retinal edema, with fear of hemorrhage leading to sudden vision loss,” he explained. “Therefore, they look for alternative treatment options that might dry the retina. At the time of the Eylea launch in wet AMD, there was a large patient population with a history of inadequate response to both ranibizumab and bevacizumab whose physicians were waiting to switch them to Eylea.”

“In DME, physicians believe that the waxing and waning edema is not as dangerous to long-term maintenance of vision as in wet AMD,” the exec continued. “Thus, there’s less urgency to initiate treatment of naïve patients or switch patients who have suboptimal responses to their current therapies.”

DME Launch Faces Reimbursement Challenge Too

Terifay also outlined the difference in payer dynamics between the wet AMD and DME patient populations. In wet AMD, the vast majority of patients are over age 65 and covered by traditional Medicare. By contrast, only about 30% of DME patients are covered by traditional Medicare.

“Commercial payers are slower to provide drug coverage,” Terifay added. “Even when coverage is granted, notification to physicians and the loading of reimbursement information to payer portals doesn’t occur in a predictable manner. Retinal physicians, who must absorb the cost of anti-VEGF agents if they don’t get reimbursed, often want evidence for each payer that the drug is covered, and that each payer has paid a claim, before they will prescribe the drug. For these reasons, while usage of Eylea in DME continues to grow, we expect the uptake of Eylea in DME to be slower than what we saw in wet AMD.”

Regeneron is making steady week-by-week progress, however, in building the Eylea business in DME, he said. All Medicare jurisdictions have coverage and evidence of paid claims for Eylea in DME, Terifay noted, while more than 95% of commercial lives have confirmed coverage for Eylea for that indication.

The company adjusted its full-year 2014 sales guidance for the drug downward slightly, to range between $1.7 billion and $1.74 billion. Previously, the upper range of its Eylea sales guidance had been $1.8 billion.

Wall Street expressed confidence that this reduction is only a slight bump in the road and that the longer-term picture for Eylea is very bright. In a same-day note, Deutsche Bank analyst Robyn Karnauskas said she agreed with the company’s assertion that DME will be as big a market opportunity for Eylea, just slower to grow.