NICE Snubs Novo With Draft Lira Guidance

You'd think that even nice would have welcomed with open arms a new, effective treatment option for the UK's nearly 3 million diabetic patients--particularly one that not only lowers blood sugar, but also causes weight loss.

Nah. NICE is playing hardball (again). Its draft recommendation for Novo Nordisk's GLP-1 analog liraglutide (Victoza), although not nearly so damning as last week's preliminary guidance around Sprycel and Tasigna, suggests that the drug be used only in limited circumstances by the National Health Service. 'Limited' means a) as part of triple therapy regimens only (that is, for patients already on metformin and a sulfonylurea, or metformin and a thiazolidinedione, where the above combos aren't quite doing the trick), b) among patients with a body mass index equal to or higher than 35kg/m2 (that's high) and c) only at the lower, 1.2mg daily dose.

Ok, so patients that aren't quite so obese as 35kg/m2 could also qualify for the drug, "if it is considered that the drug's use could help to achieve levels of weight loss that could be beneficial in treating other conditions caused by being obese", the nice press release concedes.

But a quick read of the full appraisal consultation document reveals that even among those tightly-defined patient groups, drug treatment should only be maintained if the individual loses at least 3% of body weight after six months (that's not far off the threshold for an actual weight-loss drug) and sees a reduction in blood sugar levels of at least 1 percentage point.

It seems, at first glance, to be a case of "damned if you do, damned if you don't" for Novo. After all, weight loss is supposed to be a nice side-effect of the diabetes drug--one that could lead to lower incidence of co-morbitidies--yet it's apparently being used to limit its reimbursement.

Although NICE concedes that liraglutide "may have some advantages over insulin...in particular its effect on weight," it appears to rule out the higher dose point blank, and is asking for further analyses on the cost-effectiveness of liraglutide on patients with a lower BMI, which it says were not presented.

nice was also unsatisfied with the extent of the data comparing liraglutide in triple therapy with other combinations of oral drugs, including for instance DPP-4 inhibitors, and felt that the LEAD-1 trial comparing liraglutide to rosiglitazone used an insufficiently high dose of the glitazone.

It's impossible to cover all the various permutations and combinations in diabetes therapy, however--and Novo did submit data from six trials in over 4000 patients. All except one of the trials showed that the drug reduced HbA1c levels significantly better than comparators, which included rosiglitazone (Avandia), sitagliptin (Januvia, the DPP-4 inhibitor), insulin glargine (Lantus), placebo, and Lilly/Amylin's exenatide (Byetta, the only other GLP-1 out there). The exception: the LEAD-2 trial, comparing liraglutide with glimepiride (Amaryl), which showed up liraglutide's weight advantage although no significant difference in blood sugar lowering.

Perhaps nice's conclusion isn't such a surprise, though, considering the fate of Byetta in the UK (which you can read about in nice's Type 2 diabetes guideline document). In brief, Byetta's "not recommended for routine use in Type II diabetes", with the same six-month benefit hurdles as described above, deemed as "expensive" and "not cost-effective for an unselected population as compared to commencing human insulin therapy."

As such, Novo's VP Europe, Viggo Birch, admitted that "given what they [NICE] have done for exenatide, this is what you'd expect in the first round." Still, "I'm not happy with it," he continued. "We have a much better product [than exenatide] and much better data." Novo's looking for reimbursement as second-line therapy, "at least for important patient subgroups," and a relaxation of the BMI-based restriction, since this, Birch claims, "isn't fair; it was plucked out of the sky."

There's a crack in the door, though. NICE will hold another meeting on March 18, allowing Novo and others time to comment and submit further data supporting wider use of the drug. And in its full diabetes document, nice does acknowledge, with regard to Byetta, some uncertainty as to whether GLP-1s would be deemed cost-effective if the [health economic] model "fully reflected the negative quality of life issues of insulin, including fear of hypoglycaemia, and the costs of support and patient education for modern intensity of insulin dose titration" and added that the "more obese require much higher insulin doses, such that insulin costs alone can easily exceed those of exenatide."

Still, reading between the lines, we suspect this preliminary appraisal for Victoza is a call not just for more analysis, but also for a cost-sharing scheme of some description to help smooth the drug's passage past the cost-effectiveness watchdog.

That's not likely, according to Birch. "It [a cost-share scheme] is not really on the radar for this product right now." Perhaps with reason: after all, Victoza's hardly the most expensive drug to cross nice's desk--the low dose costs GBP 954 per year, compared to tens of thousands of pounds for some cancer treatments.

But given the growing prevalence of diabetes, "nice is probably wary of giving free rein to something that [may become] so huge" comments one analyst.

The question is whether its hard-ball stance on Victoza ideally balances the concern over escalating drug costs, with that of the escalating costs of the disease itself (plus consequences), estimated to eat up about 10% of the health care budget.

image by flikrer Roland used under a creative commons license

Deals of the Week: Holiday Shopping

Having trouble this holiday season deciding what to get for the Big Biotech CEO in Your Life Who Has Everything? Join the bidding for Facet Biotech! The reserve may be quite high--higher than $17.50 per share, anyway--and it's not technically an auction (because Facet isn't necessarily going to sell, which would be sure to garner it some negative feedback on eBay). But is money really a problem when it comes to that special someone?

And don't worry about losing any of Facet's drug candidates if you're the winning bidder. "The Pink Sheet" DAILY noted this morning that while Facet's top compounds are tied up in partnerships, including Biogen Idec's co-ownership of its most advanced drug, daclizumab for rheumatoid arthritis, none of the agreements will be affected by a change-of-control.

"In each of our three collaborations, the non-acquired entity would not have a right to terminate the collaboration," Facet CEO Faheem Hasnain told "The Pink Sheet" DAILY. "In fact, the acquiring entity would step right into Facet's shoes."

Whatever you do, though, just don't materially undervalue those shoes while overstating their liabilities. That approach has gotten Biogen Idec nowhere. Respect the shoes!

Meanwhile the rest of you biopharma dealmakers have had a busy week (makin' AND breakin' deals), so we oughta get to it. The following companies won't be trawling the malls on Christmas Eve, they're ...



GSK/Intercell: Not even Santa Claus himself could earn this much for delivery. This morning Austrian vaccines company Intercell said it licensed to GSK its patch vaccine delivery technology in a deal worth €33.6 million ($49.4 million) in up front cash. GSK also agreed to purchase up to €84 million worth of Intercell shares in a "staggered shareholding purchase option" that could reach a 5% holding in the biotech (€28 million u/f for 0.9mm shares at an 18% premium, other investments milestone-based). The development and commercialization deal will include Intercell's Phase III travelers' diarrhea vaccine, a Phase II pandemic flu vaccine, and future patch vaccines. Intercell will be eligible for a slew of milestone payments and profit sharing on the projects already in development, as well as milestones and royalties for future products that include its patch technology. GSK is now Intercell's second strategic investor--Novartis owns about 16% of the company through a 2006 deal for a Japanese encephalitis vaccine and a monster 2007 deal for the biotech's vaccines for bacterial infections. Intercell has a variety of other partners, including Merck, Sanofi-Pasteur, and Kyowa Hakko Kirin. For more on Intercell and the market for adult vaccines, check out this recent IN VIVO feature.--CM

Novo Nordisk/ZymoGenetics: This is Novo/Zymo IL-21, the Sequel. In a second deal around the IL-21 cytokine, these two companies' long, entwined history continued this week when Novo Nordisk licensed from ZymoGenetics a preclinical anti-IL21 antibody for auto-immune and inflammatory diseases. The terms look good for Zymo: $24 million up-front, reflecting the value of IP around the target that was included in the deal. As Novo EVP and CSO Mads Krogsgaard Thomsen told "The Pink Sheet" DAILY: "we're buying all IP surrounding [the blocking of] IL-21 as a concept, and its utility in different disease areas." That move should provide the Danish firm with "a good degree of exclusivity on this target," he says. "We now have global patent rights to block cytokine IL-21; no one else can do that." (Competitors could block the IL-21 receptor, however, just not the molecule itself.) ZymoGenetics is eligible to receive $157.5 million in potential milestones, up to and including the antibody's regulatory approval in major global markets, and royalties on net sales. ZymoGenetics may opt to co-promote the biologic in the U.S., for a $10 million fee and a 15% contribution to Phase III trial costs. In this scenario, US royalty payments would increase from single to double digits. Novo is familiar with ZymoGenetics efforts in the IL-21 space; until last year when it retrenched into diabetes and opted out of the alliance, it was the biotech's partner on its recombinant IL-21 cancer project. Novo is confident that blocking the cytokine has broad applicability in immune disorders. Hence why it's snapping up that IL-21 IP. --CM/Melanie Senior

Celgene/Gloucester Pharmaceuticals: In a move that adds to its hematological cancer franchise, Celgene purchased privately held Gloucester Pharmaceuticals and its recently approved Istodax (romedepsin) for $340 million in upfront payments, plus potential milestones that could total another $300 million. The deal secures a nice exit for Gloucester’s five venture capital investors – Novo A/S, Apple Tree Partners, ProQuest Investments, Prospect Venture Partners and Rho Ventures – who backed the biotech with a $29 million Series D round in August. Over Gloucester’s six years of operations, the investors kicked in a total of roughly $100 million. Celgene predicts the Gloucester purchase will be accretive to earnings by 2011, in part because it would not need to add to its marketing and sales infrastructure since it already sells hematological cancer drugs Revlimid, Thalomid and Vidaza.--Joseph Haas

BMS/Tranzyme: In its first alliance with a Big Pharma company, Tranzyme Pharma will receive $10 million upfront plus two years of research funding from Bristol-Myers Squibb in a collaboration to discover potential new macrocyclic compounds, which have potential in a wide range of therapeutic areas, including oncology and metabolic disease. Announced Dec. 7, the deal is not Bristol’s first foray into the macrocyclic space – in April, it paid $5 million upfront plus $7.5 million in research and development funding to Ensemble Discovery to develop macrocyclic compounds called Ensemblins against eight undisclosed targets. It’s likely Bristol is trying to get ahead of the curve on what Tranzyme calls an underdiscovered area – no other Big Pharma companies are doing deals in the space and Tranzyme has thus far not partnered any of its clinical or preclinical assets. The new deal centers on Tranzyme’s MATCH (Macrocyclic Template Chemistry) drug-discovery platform. The biotech will perform early lead discovery against a range of undisclosed targets specified by Bristol, which will then be responsible for lead-optimization, preclinical and clinical development, and commercialization. Tranzyme will receive two years of research funding ranging between $3 million and $6 million and could earn regulatory milestones up to $80 million for each target program, as well as sales milestones and royalties.--JH

Mylan/Pfizer: Details are scant on the authorized generic agreement around the Wyeth antidepressant Effexor XR. But Mylan said early this week it had reached an agreement with Pfizer to sell the long-acting capsule formulation as early as June 1, 2011. Doses equivalent to Mylan's planned generic venlafaxine capsules racked up $2.9 billion in sales in the year to September 30, the company said in its release. Legislation that would curtail or even ban brand/generic settlements is winding its way through Congress these days (it may even catch a ride on the behemoth of health care reform) and we know where the FTC stands on these deals.--CM


Lilly/Isis: Lilly and Isis called it quits this week on their 5-year collaboration on LY2275796, a second-gen antisense compound targeting eukaryotic initiation factor-4E that recently completed Phase I trials in oncology. Isis is paying an undisclosed amount to take back the product, arguing that ‘5796 got lost in the shuffle after the big drugmaker’s 2008 ImClone acquisition. Is this spin control or honest truth? Data related to ‘5796 are sparse, with Isis failing to provide an update at its recent R&D day, leading Joseph Schwartz, an analyst at Leerink, to write in an investor note: “it’s logical to conclude that lack of anticancer activity and/or toxicity may be the reason why LLY [Lilly] is not pursuing it.” As Isis CEO Stanley Crooke points out in “The Pink Sheet” DAILY, Lilly has right of first negotiation to opt back in to the molecule’s development when—or if—it enters Phase III studies. (The two companies are also still partners on a Phase II antisense prostate cancer drug.) So, maybe for Lilly this is about curbing risk: with critical drugs coming off patent near-term (including Zyprexa and Cymbalta), Lilly needs late-stage assets to bolster its flagging pipeline, not early stage, highly risky products that are going to be a drain on resources. Better to let Isis carry the risk—and cost—but keep a just-in-case door open. The central question for many investors becomes will another partner, Genzyme, reach the same conclusion? Recall Genzyme and Isis announced a lucrative tie-up in January ‘08 on the CV medicine mipomersen, with Isis garnering $175 million in upfront cash and another $150 million in equity. Six months later, the two revised the deal terms, with Isis having to pony up more development money after data from a competing trial highlighted the regulatory risks associated with cardiovascular studies. Mipomersen is much further along than the Lilly cancer drug, and recently scored good data at the American Heart Association meeting, giving partner Genzyme some positive news to tout after a string of manufacturing and regulatory gaffes. But the Phase III medicine has also been the subject of questions, especially related to adverse liver side-effects and high clinical trial drop-out rate.--Ellen Foster Licking

GSK/Cytokinetics: Cytokinetics continues to phase out its oncology R&D and on Thursday announced it had scrapped a third and final cancer program with GSK (GSK decided not to opt into two others late last year). GSK will complete an ongoing Phase I trial of the compound, GSK-923295, in advanced, refractory solid-tumor patients. Then rights will revert to Cytokinetics, which says it is de-emphasizing its oncology work in favor of its core muscle-related R&D (which includes the Amgen-partnered cardiac contractility program discussed here). The three GSK-partnered programs were the company's entire clinical oncology portfolio.--CM

Genentech A Wholly Owned Member of the Roche Group/Seattle Genetics: As the Roche Pipeline Purge rolls on, the latest casualty is SeaGen. Genentech paid $60 million up-front for access to SGN-40 (dacetuzumab) in 2007 and at least $8 million more in milestones since then. But this morning the companies said that Roche was giving back rights to the anti-CD40 antibody in development for non-Hodgkin's lymphoma and multiple myeloma. The end of the SeaGen alliance follows Roche's decision this past week to drop partnerships with Actelion and GenMab. But you can't just blame Roche's re-org. Earlier this year a trial of SGN-40 in diffuse large B-cell lymphoma was halted when an interim analysis suggested the trial would not reach its goals. In any case, hold onto your hats, Genentech partners! --CM

Whoops! Did We--and Novo--Speak Too Soon?

Did we—and Novo—speak too soon yesterday about Victoza’s chances at the FDA advisory committee next month? We reported Novo’s confidence that its GLP-1 analog liraglutide won’t be required to comply fully with the new FDA diabetes guidance issued last December.

Today, however, Takeda tells us that FDA has said its new diabetes treatment, alogliptin, will indeed be subject to the December guidance, even though it, like Victoza, was submitted earlier. It appears that Takeda will require more data, and, according to JP Morgan analysts, “this provides absolute clarity that FDA will now apply its new guidelines to all new diabetes drug applications.” Oh dear. Misplaced confidence? (Certainly Novo’s investors think so: shares were off about 3% today.)

But Novo’s position hasn’t changed. “Today is no different than yesterday,” Novo’s CMO Mads Krogsgaard Thomsen told The In Vivo Blog this afternoon. Liraglutide’s clinical trial program is more than double the size of alogliptin’s. And they’re completely different drugs: alogliptin is a DPP-IV inhibitor, a class that isn’t shown to improve blood pressure or reduce weight, as Novo claims is the case with Victoza. It’s conceivable, therefore, that FDA might hold DPP-IV inhibitors up to the new guidance—but not GLP-1 analogs, at least, not quite so strictly.

Thomsen also re-iterates that the company has done its MACE analyses (of CV events) with good results—indeed, the JP Morgan analysts appear to interpret this as Victoza actually meeting the new guidance requirements, despite the statistical powering issues (we couldn’t check as they don’t talk to journalists.)

Victoza’s other potential advantage: it’s clearly differentiated from the only other drug in its class, Lilly/Amylin's Byetta, on both efficacy and conveniece. Takeda can’t say the same.

Good for Novo. Why not hold a brave face? If one thing’s clear, though, it’s that victory next month is not a foregone conclusion. But even if Victoza does stumble—and, as one of you kindly pointed out yesterday, pancreatitis is another possible hurdle, given Byetta’s story so far, although Novo doesn’t think it will be more than a labelling issue—Novo might not mind that much (not that it would ever say so.) As mentioned, any delay would likely stall Byetta LAR, too. Which leaves Novo playing in the field where it’s strongest: insulin.

image from flikr user Mel B. used under a creative commons license

Novo Confident of Victoza Victory at FDA in May

The odds might appear to be stacked against it, but Novo Nordisk sounds remarkably confident that GLP-1 analog liraglutide (Victoza) will get approval from FDA by the end of May.

OK, so it needs to be confident: even if it is approved as expected, the once-daily drug, already about four years behind schedule, will have barely a year to make its mark before Lilly/Amylin’s once-weekly version of the incumbent GLP-1 analog Byetta hits the market in 2010.

But Novo’s up against a very diabetes-resistant FDA, with strong memories of the Avandia fallout, that has recently changed its guidelines in this disease area to require more safety data among patients at high risk of cardiovascular disease. And this, as Novo’s CMO Mads Krogsgaard Thomsen acknowledges, is “just the reverse of how we’ve recruited patients into diabetes trials in the past,” including into the liraglutide Phase III trials.

Traditionally, companies have sought to prove their drug’s safety and efficacy in relatively clean patient populations first. Given the cv signal picked up from Avandia well after that drug was approved, it’s clear why the agency has taken a more severe stand.

Among the 6000 or so patients in the liraglutide Phase III trials, very few suffered cv-related events. That’s good for those 6000, but it’s less good as far as providing sufficient statistical power to convince an edgy FDA to wave the drug through. Worse still, since Victoza’s early April advisory committee meeting is widely expected to provide the test case for the new guidance, FDA will be keen to set examples, not make exceptions.

Still, Novo’s got its defense all lined up--and its fingers crossed. For one thing, argues Thomsen, the guidance relates only to drugs that were not submitted by the time it was published, late last year. (Novo submitted liraglutide in May 2008.) There's some controversy over this, but the guidance, as Thomsen underlines, specifically appears to refer to studies in the planning stage and studies completed before submission of the NDA/BLA. (See pages 3 & 4.)

Plus, he adds, "we did not a receive any letter from FDA to say we would have to adhere to the guidelines with liraglutide, as we did for our [Phase II, not-yet-filed] once-weekly GLP-1 analog NN9535." His second point: when looking at risk factors like body weight, systolic blood pressure or biomarkers of cv events, “our data shows nothing concerning at all,” Thomsen told The IN VIVO Blog.

Sure, but FDA could always retort with: “Nor did Avandia’s. That’s the point of our guidance.” At this stage, Novo is hoping that its willingness to do a post-approval study looking specifically at cv outcomes will be enough to win the agency’s favor. “Even though the event numbers are small, we’ve done the [cv event] analyses that the agency asked for--the same ones it will now require going forward--and this convinces us at least why there’s a good case for not requiring a pre-approval study.” He goes on to say that liraglutide may even provide cv benefits.

Favorable trends aren’t enough, though. But whatever hoops Novo has to jump through, its competitors, BMS/AZ and Takeda, both with DPP-IV inhibitors currently under review and, more pertinently, Lilly/Amylin with Byetta LAR, will have to do the same. And whether Novo has to do its CV outcomes trial before or after approval, at least that data will help it make its case in the next—likely even tougher—regulatory challenge it faces with liraglutide: getting it approved for obesity.

image from flickr user samthsham used under a creative commons license.

R&D: Worth It Only When You Don’t Pay for It

The late Michael Sorrel, one of biotech’s most perspicacious analysts, had a few basic rules for investing, one of which was the call option. Did the biotech have not merely a lead program, which could anchor the company’s valuation, but something else the stock buyer could get for free.

Same holds true with pharma. Analysts are now so skeptical of early-stage Big Pharma R&D that they want it for free. Or at least that’s the implication of some intriguing calculations from Craig Maxwell, European equity research analyst at JP Morgan.

Maxwell summed the estimated value of the six major European pharmas based solely on their current products plus their Phase III pipelines – the “embedded value” -- and then compared it to their current share prices (see chart). The closer these values came to the share value, the less the market—theorizes Maxwell—is valuing research. And that means the less the investor is paying for R&D.

Conversely, the bigger the gap between product value and share value, the greater the value the market is putting on research. No free R&D option—and a poor deal for investors.

Best value on the European market: Novo Nordisk (products equal 104% of share price). Worst deal: GSK (products equal just 74%).

Now, you can disagree with Maxwell’s estimates of product value. Maybe he’s discounting the value of GSK’s products and inflating Novo’s. But the fact that he won’t pay for R&D—that he wants it for free, and apparently can get it—seems about as damning an indictment of the value of R&D as we’ve heard in a long time.

A Boon for Byetta?

As doctors, patients and regulators rush to make sense of the recent NEJM study showing an increased risk of heart attack among patients taking GSK's Avandia, it looks like good news for Lilly's Byetta.

The GLP-1 analog--or 'smart drug', as Lilly execs like to call it, since it stimulates insulin secretion in a glucose-dependent way, reducing the risk of hypoglycemia--has already done pretty well since its launch in June 2005. It suffered a brief blip in sales when Merck's DPP-IV inhibitor Januvia arrived (since Januvia, although less effective, comes in pill form and Byetta is a twice-daily injection) but has since recovered. Sales will be about $700 million this year.

And things can only get better. "Both Januvia and Byetta will benefit from Avandia's problems, and as physicians see that Januvia isn't that great, they'll move to Byetta," David Kliff, publisher of Diabetic Investor, told the IN VIVO Blog.

Januvia seems safe--so far--but doesn't actually work that well, as we explained in a previous issue of IN VIVO. Byetta, on the other hand, not only is extremely effective at controlling blood sugar (it prevents sugar lows plus, because of its effect on glucagon, sugar highs) but also helps diabetic patients lose weight.

And that, frankly, is just perfect, since many diabetics are overweight, and since insulins tend to exacerbate that problem. So rather than being stuck on insulin, getting fatter and with poorly controlled blood sugar levels (only about a third of insulin users actually control their blood sugar effectively), patients "start a cycle of success," enthuses Lilly's global brand development leader for Byetta, David Vondle. "They have more energy, start feeling better, so they take a walk, and that helps with weight loss...and they're just more optimistic," he says.

Lilly's GLP-1 team probably feels pretty happy, too (unlike their cousins in the insulin department, who blew it). Not only has first-to-market Byetta brought a huge improvement to patients' lives, but there's an even bigger paradigm-shift on the way: a once weekly Byetta. "Every doctor is salivating for Byetta LAR," says Kliff.

They'll have to salivate until 2010, but it may be worth the wait: patients will be able to take just one weekly injection, rather than twice daily. That's 13 fewer injections per week.

That's a selling point if ever there was one. And, as with Avandia, where there's a winner, there's a loser. In the GLP-1 space, it might just be Novo Nordisk's human GLP-1 analog, liraglutide. It's due out a year or so before Byetta LAR, but Novo's not always the timeliest, and liraglutide is a once-daily. Read more in the next issue of IN VIVO.