Fourth Quarter Earnings Calls, In Brief

Vertex/FDA in discussions on “breakthrough therapies”; Ipsen earnings hurting in EU; Pfizer discusses biosimilars; Krka likes emerging markets; Novo sees GLP-1 market competition stiffening

Vertex, FDA Discussing “Breakthrough Therapy” Designation

During Vertex Pharmaceuticals Inc.’s 2012 earnings call, management said that Kalydeco (ivacaftor), indicated to treat a small subset of CF patients harboring the G551D mutation, brought in $171.6 million in net sales in 2012, including $58.5 million during the fourth quarter, a 19% increase over the previous quarter. Vertex projects net sales in 2013 of between $280 million and $320 million for Kalydeco, with growth driven by EU sales, where pricing and launch are expected near-term in the U.K., Ireland, Germany and France. Together, these markets account for 80% of the G551D population in Europe. The combination of Kalydeco and experimental VX-809, to be tested in CF patients homozygous for the F508del mutation, may provide a therapy for roughly half of the worldwide CF population, the company says.

As Vertex plans to move the combination into pivotal Phase III studies in cystic fibrosis, the specialty pharma hopes a recent “breakthrough therapy” designation by FDA could mean an accelerated regulatory process (Also see "FDA’s First Breakthrough Designations Continue Vertex Kalydeco’s Regulatory Successes" - Pink Sheet, 7 Jan, 2013.). CFO Peter Mueller noted that both Kalydeco, approved in 2012, and the two-drug CF combo received the breakthrough designation. “We are committed to working with regulators to explore novel and potentially more rapid development strategies for both the Kalydeco label expansion and VX-809 plus ivacaftor combination regimens,” he said.

Ipsen Hurt In EU; Turns To Other Markets

France's mid-sized pharmaceutical company Ipsen found the going tough in Europe for its primary care products, particularly in its home market, but its focus on its specialty products and international markets started to pay off during 2012. Total group sales increased by 5% in local currencies to €1.2 billion ($1.6 billion), with specialty care products growing by 13.6% and primary care sales declining by 12%.

In France, sales declined by 16%, impacted by price reductions on Nisis/Nisisco (valsartan with and without hydrochlorothiazide) in November 2011; the delisting from reimbursement of Tanakan (Ginkgo biloba extract) in March 2012; and increased generic penetration following a change to reimbursement rules which meant patients had to pay upfront for several of its branded products, and were later reimbursed. North American sales rose by 11% to €73 million, driven by the supply of Dysport (abobotulinumtoxinA) to Medicis Pharmaceutical Corp. for aesthetic use, the use of Dysport in cervical dystonia patients, and Somatuline (lanreotide) use in acromegaly. North American sales represented 6% of group sales. Ipsen, which will report income Feb. 27, is currently involved in divesting two investigational hemophilia products developed in collaboration with the troubled U.S. biotech, Inspiration Biopharmaceuticals Inc. (Also see "Deals of the Week: Allergan/MAP, Actavis/Uteron, Baxter/Ipsen, and More" - Pink Sheet, 28 Jan, 2013.).

Pfizer Talks Biosimilars

The big pharma’s biosimilar pipeline is “starting to move very nicely,” Worldwide R&D President Mikael Dolsten said during Pfizer Inc.’s year-end sales and earnings call Jan. 29. A Phase II trial studying a biosimilar version of trastuzumab (Roche’s breast cancer drug Herceptin) recently completed and yielded positive data, he said. The company is exploring plans to move into Phase III later this year. Another Phase II study evaluating a biosimilar version of Roche’s lymphoma and rheumatoid arthritis drug Rituxan (rituximab) is expected to report out later this year. The company has five biosimilars in development, though CEO Ian Read said two are in active development and the other three are “further back.”

Krka Turns To Emerging Markets

The largest market for the Slovenia-based branded generics company, [KrKa DD], during 2012 was Russia, where its sales increased by 25% to €244 million ($331 million), showing it's not only Big Pharma companies that are targeting emerging markets for growth. Krka's net profit is expected to be approximately €155 million in 2012.

Krka is investing heavily in new manufacturing facilities, including a €135 million solid-dose facility in Russia, which should be completed in 2013 and be able to produce nearly two billion tablets and capsules annually. A new €200 million oral solid-dose plant, a €45 million laboratory facility, and an €85 million API facility also are being constructed in Slovenia. Krka, which is listed on the Ljubljana (Slovenia) and Warsaw stock exchanges, is one of the few remaining independent generics companies in Europe, following an acquisition spree by larger companies over the past several years (Also see "North American Buyers Turn to European Branded Generics For Growth" - Pink Sheet, 6 Jun, 2011.). The latest M&A move saw Actavis Group acquired by the U.S. generics company Watson for €4.25 billion (Also see "Watson Begins Anew As Actavis, Focuses On Organic Growth" - Pink Sheet, 25 Jan, 2013.).

Novo’s Victoza Dominates GLP-1 Market, But For How Long?

The sales growth of Novo Nordisk's flagship product, the glucagon-like peptide-1 (GLP-1) agonist, Victoza (liraglutide), is likely to be slightly lower in 2013 as competitive pressures intensify, said president and CEO Lars Sorensen during the company's annual financial results call Jan. 31. Victoza currently accounts for 62% of the GLP-1 market in the U.S. by value, and 68% of the global GLP-1 market, up from 58% in 2011.

Victoza sales grew by 50% to reach DKK 9.5 billion ($1.7 billion) during 2012, but this growth will come under increasing pressure from competing GLP-1 agonists expected to be launched by other companies over the coming months, such as Lyxumia (lixisenatide) from Sanofi /Zealand Pharma AS, and albiglutide from GlaxoSmithKline PLC (Also see "GSK Highlights Easy Pen Delivery Of Albiglutide As FDA Begins Review" - Pink Sheet, 14 Jan, 2013.). Also, Amylin Pharmaceuticals Inc.’s marketed GLP-1 agonists, Bydureon (extended-release exenatide) and Byetta (exenatide) are expected to be revitalized following the acquisition of the company jointly by AstraZeneca PLC and Bristol-Myers Squibb Co. last year (Also see "$7 Billion Amylin Buyout Boosts BMS, AZ Diabetes Partnership" - Pink Sheet, 30 Jun, 2012.).