Second Opinion: Mid-year Portfolio and Pipeline Outlook

Welcome back to Second Opinion, where we’re putting on our robe and looking into our crystal ball. Well not really, but there is a lot that can be seen about what has yet to come to pass by looking back at what has.

This month our team has sifted through both past and forward-looking reports of leading portfolio products as well as notable pipeline medicines to consider what we can look back at and what we should be looking forward to.

What therapies will be drivers of new approaches to healthcare in the next 5 years? What capabilities will need investment to meet these needs? These are big questions, and we’re starting by asking a simple question: What’s next?

As always, if you have any thoughts or contributions to this ongoing discussion, keep the conversation going on LinkedIn or by reaching out to us directly. 

PINCH TO ZOOM OUT 

So often at Second Opinion we focus on pharma from a brand-level strategic perspective. The tech to be investing in, the capabilities to be developing. Sometimes, however, we need to pull our heads up and look across the market landscape to see what’s coming next.

What therapy areas will be the biggest this year, and what patient or healthcare trends can we expect to be ripe for innovation as a result? This month we’re looking at insights from the EvaluatePharma 2023 Vantage Report – what’s going up, what’s going down, and how the biggest companies are adapting to change and making moves in the industry.

💉 MAbs in, jabs out: Keytruda to overtake Comirnaty as 2023’s top-selling drug

The pandemic saw the boom of the COVID vaccine, with Comirnaty (Pfizer/BioNtech) being the top-performing product in 2022 with sales of nearly $41bn, overtaking monoclonal antibody Humira’s (Abbvie) top spot from 2021. However, as countries have built up a healthy product inventory and are reaching high population immunity rates, analysts suggest that 2023 will be the year of plummeting sales for COVID vaccines and antiviral treatments – termed the ‘COVID cliff.’

In turn, the MAb is set to dominate once again. Cancer treatment Keytruda (Merck & Co.) has been one of the best-selling drugs worldwide. Having already accumulated sales of $5.8bn in Q1’23 and a growth of 20% compared to last year, the top product for Merck is projected to become the highest-selling drug in 2023. Termed ‘the gift that keeps giving,’ the drug has won approval after approval over the years for different types of cancers, including some that are difficult to treat – it has had over 40 indications across over 20 different tumour types. Having launched in 2016, Keytruda is a sleeper hit compared to a blockbuster, showing that slow and steady consistent progress in all areas can indeed win the race.

📱 No-zempic: What happens when a drug becomes a viral sensation?

For Novo Nordisk’s Ozempic and Wegovy, this means global shortages and health scares. The two products are the same drug in different strengths with different indications (Ozempic for diabetes management, Wegovy for obesity). The dramatic weight loss results from both were seen in many celebrities and influencers, among them Elon Musk. Because of this, Ozempic went viral in late 2022. The rapid spread of information across social media fuelled a frenzy and led to global shortages. As Ozempic is not indicated for weight loss, this has put type 2 diabetes patients at risk.

Eli Lilly’s Mounjaro is another one to watch. The diabetes drug had an incredibly strong launch, with high effectiveness in clinical trials. Forecasted for $2bn new sales in 2023, the product has reached more than $500m revenue in Q1’23. This has been, in part, due to the shortages of its competitors from Novo.

The use of Ozempic is now so widespread that on TikTok, #Ozempic has 1.5bn views – even Jimmy Kimmel joked about it at the Oscars. With no end in sight, it has become a new norm. It is undeniable that the market for weight loss is vast. However, companies and healthcare professionals must make sure to prioritise access for diabetes patients over off-label use.

📊 IPOs and M&As: Demerge to refocus, acquire to strengthen portfolio

With the IPO market slowly returning to favourable conditions, a notable one this year has been Kenvue. The J&J consumer health spinoff is valued at roughly $50bn and has raised $3.8bn so far. The company is known for BandAid plasters and Listerine mouthwash, and J&J will continue to hold the majority of shares, largely controlling the direction of the company. This move refocuses J&J’s business objectives on its pharmaceutical and med device arms. This follows a trend of large, diversified pharma companies streamlining their various subsidiaries by demerging or ‘spinning off’ certain arms (see GSK-Haleon and Merck-Organon).

In parallel, there have been movements in the M&A side of things. The status of Horizon Therapeutics’ $28bn acquisition by Amgen is in contention. The deal has been recently blocked by the US Federal Trade Commission (FTC), who filed a lawsuit to prevent Amgen from entrenching “monopoly drugs.” These are Tepezza for thyroid eye disease and Krystexxa for chronic gout, which have no competition in the market and have been central to the deal valuation. This move sends a clear message to pharma companies looking to consolidate their market power – the FTC will not hesitate to challenge moves that enable companies to exorbitantly hike prices.

Another deal to watch is Pfizer’s acquisition of Seagen for $43bn, the latter of which specialises in cancer care. Reasons for the acquisition include Seagen’s antibody-drug conjugate technology, as well as the looming COVID cliff Pfizer is facing with Comirnaty. 

PIPELINE REPORT: THE MEDICINES THAT WERE PROMISED

In the realm of pharmaceuticals, R&D holds immense potential for shaping the future of healthcare. Significant breakthroughs that have the potential to revolutionise patient treatment begin life in R&D. By exploring the top 10 most-valued projects from 2022 (see table 1), we can understand which of these projects came to fruition, which have faltered in their predicted trajectory, and why.

Table 1. Top 10 most valuable R&D projects (ranked by net present value, Aug 22) 

Source: Evaluate World Preview 2022

• Neurology: Alzheimer’s projects feature twice on the list. While Gantenerumab (Roche/MorphoSys) gave disappointing trial results late last year, Donanemab (Lilly) has fared better, with an expected approval this year. If successful, it could be the least controversial approval in Alzheimer’s treatment in the last few years. Biogen’s Aducanumab was approved in the US for Alzheimer’s in June 2021 despite lack of clear clinical trial effectiveness, leading to the resignation of three FDA advisers. The shadow this cast remained during Eisai’s Lecanemab approval in 2022, with mixed opinions on its efficacy and side effects. On the other hand, antipsychotic KarTX is close to approval stage for Karuna/ZaiLab. The drug selectively activates muscarinic acetylcholine receptors in the brain, moving away from the mechanisms of current antipsychotics (which work by inhibiting the dopamine system). This has potential to pave the way for a new class of antipsychotics.

• Oncology: So far, Tiragolumab (Genentech) remains in clinical trial, Adagrasib (Mirati/Zai Lab) has been granted FDA accelerated approval, and Epcoritamab (AbbVie/Genmab) has been approved as Epkinly in May 2023. Epcoritamab is a bispecific antibody, which remains a novel yet effective approach in cancer treatment.

• Ophthalmology: Intravitreal Pegcetacoplan (Apellis) addresses Geographic Atrophy (GA), a leading cause of blindness, by inhibiting a molecule of the complement immune system. With positive results in 2022, it is no surprise that the drug became FDA-approved in Feb 2023 as it is now the first and only approved treatment for GA. Apellis itself continues to lead the charge in therapies that target the complement system.

• Gene Therapy: SRP-9001 (Sarepta/Roche) is an investigational gene therapy designed to address the root cause of muscular dystrophy by delivering a gene that helps to preserve muscle. This represents a ground-breaking approach to an incurable condition, which currently only has symptomatic treatments. Sarepta is in discussions with the FDA for regulatory reviews and potential accelerated approval – study results are expected Q4’23.

• Infectious Diseases: mRNA-1647 is being developed as a vaccine for cytomegalovirus, as Moderna continues their push in the mRNA technology space. Normally a common infection that goes unnoticed or has mild symptoms, CMV can cause birth defects if a woman becomes infected while pregnant.

• Cardiovascular Care: Aficamten (Cytokinetics) addresses hypertrophic cardiomyopathy, a condition affecting the heart's ability to pump blood effectively. Phase II results have been positive, and its safety and efficacy are currently being examined in phase III trials.

R&D in pharma brings about innovation and progress. Many new therapies, some the only treatment possible for that disease, are brought about by the cutting-edge advancements and breakthrough technologies that are tirelessly trialled. For many of the projects on the list, meeting the phase III clinical trial endpoint remains pivotal for its approval and launch (as it should).

In the world of finance, one might say that money talks, but in the world of pharma, efficacy and safety are the ones that can and need to speak louder. 

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