pfizer’s fda-approved adalimumab faces four-year wait · 2019-11-27 · with abrilada and...

FOR THE LATEST INSIGHT ON GENERICS AND BIOSIMILARS VISIT: GENERICS.PHARMAINTELLIGENCE.INFORMA.COM

STRATEGY

Hikma Searches For Strategic ‘Fourth Leg’, p.20

STRATEGY

Amneal Starts Seeking International Partners, p. 6

INTERVIEW

Anti-Infectives Are Strategic For Sandoz, p.14

Issue 423 • 29 November 2019

Pfizer’s FDA-Approved Adalimumab Faces Four-Year WaitDAVID WALLACE [email protected]

A nnouncing the US Food and Drug Administration’s approval for Pfizer’s Abrilada (adalimum-

ab-afzb) biosimilar, the acting director of the Office of Therapeutic Biologics and Biosimilars within the agency’s Center for Drug Evaluation and Research, Sarah Yim, celebrated the agency’s 25th biosimilar approval and noted that Abrilada was “one of nine new biosimilar products the FDA has taken action on in 2019.”

However, Yim neglected to mention that the intellectual property landscape around AbbVie’s Humira reference brand – and the various litigation settlement deals ultimately struck by the originator with prospective biosimilar challengers – mean that Pfizer’s adalimumab biosim-

ilar is not due to enter the US market for another four years.

Under a settlement agreement with AbbVie, Pfizer’s version of adalimumab may enter the US market from 20 No-vember 2023, putting it months behind several launch dates negotiated by its peers, many of which have also seen biosimilar adalimumab approvals years ahead of launch.

Settlements agreed by AbbVie offer biosimilar entry dates of:

• 31 January 2023 for Amgen with Am-jevita (adalimumab-atto), approved in September 2016;

• 30 June 2023 for Samsung Bioepis with Hadlima (adalimumab-bwwd), approved in July 2019;

• 1 July 2023 for Boehringer Ingelheim with Cyltezo (adalimumab-adbm), approved in August 2017;

• 31 July 2023 for Mylan;• 30 September 2023 for both Sandoz

with its Hyrimoz (adalimumab-adaz), approved in October 2018, and Fre-senius Kabi;

• 20 November 2023 for both Pfizer with Abrilada and Momenta; and

• 15 December 2023 for Coherus BioSciences.

While Pfizer’s US entry date is the same as was negotiated by Momenta, the latter firm announced earlier this year that it had shelved plans for bio-similar adalimumab development after failing to find a commercial partner in such a competitive field.

The deal with Boehringer was the latest to be agreed by AbbVie, with the origina-tor noting that it represented “an impor-tant settlement as it resolves all Humira-related patent litigation in the US.”

“Pfizer is working to make Abrilada available to US patients as soon as fea-sible based on the terms of our agree-ment with AbbVie,” Pfizer commented. “Our current plans are to launch in 2023. We will provide further updates as the date approaches.”

Insisting that the FDA had taken “another step to further foster biolog-ics competition” with the approval of Abrilada, Yim said she was “pleased to see this progress and am confident that the market for these therapies will continue to grow.”

To date, she noted, 74 programs for 38 different reference products had been enrolled in the FDA’s Biosimilar Product Development Program, thus “laying the foundation for ongoing competition in the marketplace.”

CONTINUED ON PAGE 4

2 | Generics Bulletin | 29 November 2019 © Informa UK Ltd 2019

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IN THIS ISSUE

“This week brings a wealth of strategy

updates from among the generics, biosimilars and value

added medicines industry’s biggest

players”

This week brings a wealth of strategy updates from among the generics, biosimilars and value added medicines indus-try’s biggest players.

We examine Amneal’s plans to bounce back from adversity after Chirag and Chintu Patel resumed control of the company as co-CEOs (p.6). Meanwhile, we give you the latest update on Teva as it begins to roll out its rituximab biosimilar in the US (p.9), as well as making a U-turn on its previous decision to discontinue supplies of vincristine (p.22).

We also have an interview with Sandoz CEO Richard Saynor on the importance of anti-infectives to the Novartis unit’s strategy (p.14), and we look at Hikma’s potential merger and acquisition opportunities as it seeks to build up a ‘fourth leg’ of its business (p.20).

At the same time, we also bring you the latest updates on bio-similars, including a US approval for Pfizer’s Abrilada adali-mumab biosimilar – albeit with a lengthy wait until it hits the market (see front cover) – as well as an FDA filing made by Samsung Bioepis for its SB8 bevacizumab candidate (p.18).

mailto:[email protected]

mailto:[email protected]

genericsbulletin.pharmaintelligence.informa.com 29 November 2019 | Generics Bulletin | 3

inside:

@genericbulletin

/company/genericsbulletin

COVER /Pfizer’s FDA-Approved Adalimumab Faces Four-Year Wait

4 European Industry Sets Out Value Added Medicines Priorities

6 Amneal Starts Seeking International Partners

9 Teva On Track To Hit Targets With Truxima

11 Accord Strikes Thiotepa Deal With Adienne

13 Dutch Decision Invalidates Truvada SPC

13 FDA Holds Zydus Cadila Responsible For ‘Repeat Violations’

14 Anti-Infectives Are Strategic For Sandoz

16 Bids Rumored For Stake In Wockhardt

17 Teva Beats Janssen On Canadian Bortezomib Compensation

18 FDA Reviews Samsung Bioepis’ Bevacizumab

19 Future Of Bankrupt Orchid In Doubt

20 Hikma Searches For Strategic ‘Fourth Leg’

22 Teva To Return With Vincristine In US

FDA’s Stein Sees Differences On Biosimilar ReviewUS FDA’s Office of New Drugs director Peter Stein explained that different review divisions take different approaches in their regulation of biosimilars, but feels their frameworks will become more unified as they gain experience in reviewing biosimilar programs.

https://bit.ly/2Dlj9X6

Monroe Site ‘Critical’ For Glenmark In USGlenmark expects its first US manufacturing site to go commercial next year, accelerating growth in that market, while it sets right certain compliance blips back home. The Indian firm is also on course to divest certain non-core assets but notes that bringing in a minority partner for its API unit is not a priority.

https://bit.ly/2OIYfqw

US Approvals Off To A Slow StartUS FDA reports another low tally of full approvals in October, but stakeholders are not worried given the agency’s history of record-breaking totals year over year.

https://bit.ly/2QY9uy5

Zydus Ready For Moraiya Reinspection In JuneZydus says its Moraiya plant should be ready for re-inspection at the end of June 2020, following a recent FDA warning letter.

https://bit.ly/37NCRsS

Industry Not Sold On FDA Emerging Technology ProgramFDA’s calls for more generic industry participation in its Emerging Technology Program fell on deaf ears at a recent meeting, with several complaining about the costs and value of investing in new manufacturing technologies.

https://bit.ly/34mddJz

exclusive online content

11 22 13

scripintelligence.com


REGULATION / VALUE ADDED MEDICINES

“We are also continuing the agency’s work under the Biosimilars Action Plan to improve the efficiency of the biosimilar and interchangeable product develop-ment and approval process,” Yim out-lined, pointing to the agency’s efforts to “develop and implement new biosimilar-specific review templates and progress towards the development and validation of pharmacodynamic biomarkers tailored to biosimilar development.”

“As outlined in this plan, we’re con-tinuing to provide scientific and regula-tory clarity for the biosimilar development community, and at the same time, we are undertaking communication and out-reach efforts for educating patients, clini-cians and payors about biosimilars’ safety and effectiveness,” she said.

“The promise of biosimilar and inter-changeable biological products in provid-ing increased access to important thera-pies is great,” Yim concluded, “and the FDA will continue to do all that we can to facili-tate competition in this area.”

Published online 18 November 2019

“The promise of

biosimilar and

interchangeable

biological products in

providing increased

access to important

therapies is great

and the FDA will

continue to do all that

we can to facilitate

competition in this

area.” – Sarah Yim

CONTINUED FROM PAGE 1 European Industry Sets Out Value Added Medicines PrioritiesDAVID WALLACE [email protected]

N ew incentives, guide-lines and regulatory frameworks are needed

in Europe to fully realize the potential of value added medi-cines – medicines that innovate around known molecules in-cluding through repurposing, reformulation and new technol-ogies or combinations – accord-ing to local off-patent industry Medicines for Europe.

Setting out the proposals at its third value added medicines conference held in late November in Brussels, Belgium, the European off-patent indus-try body said that “key next steps” for the sector included:

Addressing delegates to the conference, Medicines for Europe’s value added medi-cines sector chair Arun Narayan said it was key to find a consensus on “evidence and outcomes that demonstrate the benefits of value added medicines and that are most relevant to patients, to healthcare professionals and healthcare systems,” to help “en-sure the integration of value added medicines in tomorrow’s healthcare systems.”

Pointing to changing demographics, Narayan said “the number of people over 80 will dou-ble by 2050, rising from 4.7% to 11.3% across 27 EU member states. Governments will be more challenged to deliver high-quality care due to rising demand and the physical and mental challenges associated with ageing – and value added medicines provide one solution.”

Referring to Belgian moves in mid-2018 to set out a reimbursement pathway for value added medicines, Narayan observed that “within 18 months of the introduction of pricing and reimbursement legislation in Belgium that supports value added medicines, more Belgian patients are benefiting from safer and more convenient value added medicines.”

“We urge EU governments to adopt the Belgian approach,” he said, “and seize the benefits of continuous improvements to transform health care.”

STOLLER HIGHLIGHTS ‘DIGITAL HEALTH REVOLUTION’Narayan also pointed to the recent creation of a German pathway to recognize digital health-care in the form of apps eligible for reimbursement, and urged other European member states to join Germany in creating an environment to support digital value added medicines.

Meanwhile, Medicines for Europe’s president, Christoph Stoller, insisted that “patients must sit at the heart of the digital health revolution.”

“There are clear and significant benefits to be gained,” Stoller maintained, urging in-dustry to “make the most of the digital health revolution so that patients can be the ultimate beneficiaries from such continuous innovation.”

“Our ambition as value added medicines manufacturers is to contribute to a healthier society bringing tailored solutions to patients, healthcare professionals and healthcare systems,” Stoller declared. “Today’s conference is a crucial milestone in creating the right environment for value added medicines in Europe.”

Further details from the conference – including panels on optimizing the European regulatory environment for value added medicines, improving patient access, and the future digital outlook – as well as an in-depth interview with Arun Narayan will follow next week in Generics Bulletin.


Photo courtesy of Medicines for Europe


BIOSIMILARS

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STRATEGY

Amneal Starts Seeking International PartnersAIDAN FRY [email protected]

M aking better commercial use of its US marketed portfolio and pipeline by licensing assets

to international partners forms part of a major turnaround plan for Amneal Phar-maceuticals unveiled by co-CEOs Chirag and Chintu Patel three months after they resumed control following the departure in early August of former CEO Rob Stew-art and executive chairman Paul Bisaro.

Other elements of the plan laid out by the Patel brothers, who founded Amneal in 2002 and grew it into a leading gener-ics player before the firm’s merger with Impax last year, include: shifting devel-opment efforts towards more complex products; winning new business for its US base portfolio; and improving facility uti-lization and supply-chain management.

Explaining how Amneal intended to play outside of the US, Chirag said “certain of our assets are highly valuable in other markets”, with Eastern Europe and China in particular looking “very attractive.” Thus, he said, the company would seek strate-gic partnerships with “top-five players” in these regions to maximize the returns on its portfolio and pipeline investments.

LEVERAGE FDA-APPROVED ASSETS“We are not planning to go and buy a company,” he clarified. Rather, he said, Amneal’s international strategy would be based around leveraging through al-liances the value of both key assets that had been approved by the US Food and Drug Administration for production in the group’s FDA-approved facilities in the US, Ireland or India.

While Amneal in 2014 started expanding globally by opening an international head-quarters in Zug, Switzerland, and making a string of bolt-on acquisitions such as Creo Pharma in the UK and Pharmagenus in Spain, it soon reversed that strategy by in 2017 divesting its CoPharma and Pharma-genus operations as well as selling its Aus-tralian business to Arrow Pharma.

And last year, under the previous man-agement team, Amneal further sharp-ened its focus on the US by divesting Creo Pharma to Zentiva at the end of March for

$32m in cash. A $3m deal to sell its Am-neal Deutschland unit in Germany to Aus-tria’s Ever Pharma followed in May. Both transactions include license and supply agreements for certain products.

In the US, Chirag said Amneal was in-creasingly exploring opportunities in un-

tapped distribution channels such as gov-ernment contracts and unit-dose supplies.

EXPLORING SMALL-SCALE US TRANSACTIONS

Beyond the international partnerships and expanded trade channels, he said Amneal was actively evaluating small-scale transactions in the US, particularly around hybrid 505(b)(2) opportunities and sterile-drug manufacturing that “of-fer compelling returns on our investment.”

“The actions we are taking to strength-en our business,” he remarked, “will lay the foundation for accelerating and eval-uating inorganic growth in both generics and specialty, including potentially trans-formational M&A.”

Detailing how Amneal was transform-ing its product pipeline, Chintu Patel said “as the generics market has become more competitive, we have refocused our research and development efforts away

from commodity products and more to-wards complex products: first-to-market opportunities, sterile injectables, biosimi-lars, ophthalmic, inhalation and 505(b)(2) specialty products, which Amneal is uniquely positioned to deliver.”

While just over half of Amneal’s 95-strong submitted abbreviated new drug application pipeline in the US is for solid oral-dosage forms such as tablets and capsules, three-quarters of its 80-proj-ect pre-filing development pipeline is for more complex delivery forms such as in-jectables, ophthalmics, topicals, oral liq-uids and inhalation products.

“Over the last 30 days, we have added 15 products to our development portfo-lio, and by the end of 2019, we expect to have filed 15 to 17 ANDAs with the FDA,” Chintu told investors. “And next year, we expect to file 25 to 30 products,” he said, adding that several drugs within the firm’s pipeline could qualify for six-month com-petitive generic therapy (GCT) exclusivity.

LINING UP FIRST US INHALATION FILING

Pointing to the wide range of dosage forms that were already pending final FDA approval, he revealed that “we anticipate filing our first inhalation product in the coming months.”

“Through a combination of base business wins and new product launches, we antici-pate double-digit volume growth in 2020 for transdermal, oral liquids and sterile prod-ucts, which will also drive improvement in our margins,” he said. “We expect this focus to become even more evident over the next 18-to-24 months as we work to launch ap-proximately 15 complex products.”

The gap between approval and launch had already been brought down, he high-lighted, noting 10 successful launches since the Patel brothers resumed control in early August, including of aminocaproic acid oral solution as well as injectable forms of ful-vestrant and including paliperidone.

To support its increasing push into sterile products, Amneal recently de-cided to expand capacity next year at its injectables site in Ahmedabad, India, by

“The actions we are taking to strengthen

our business will lay the foundation

for accelerating and evaluating inorganic

growth in both generics and specialty,

including potentially transformational M&A”

– Chirag Patel


STRATEGY

adding a new ophthalmic and vial line.Shortly before they departed, the pre-

vious management team of Stewart and Bisaro had unveiled an efficiency drive that envisaged cutting 550 employees largely by closing a manufacturing plant in Hauppauge, New York and a packag-ing center in East Hannover, New Jersey. Investors reacted by slashing the firm’s share price, and Stewart and Bisaro were gone less than a month later.

The Patels believe that a more funda-mental overhaul of Amneal’s entire sup-ply-chain network is needed.

THOROUGH ANALYSIS OF BUSINESS ALMOST COMPLETED

“Since 5 August,” Chirag told investors, “we have done a top-to-bottom analy-sis of our business and our operations; we have visited our plants and talked to employees at all levels; we have met with customers and commercial partners to find ways to work more closely together. While conversations are continuing, the majority of our review is complete.”

“To drive higher revenue and profitabil-ity,” he explained, “our initiatives include: maximizing the value of our base business portfolio of more than 225 marketed prod-ucts, which adds incremental business; improving our gross margin by increasing plant utilization; streamlining our inven-tory and supply-chain management; im-proving our gross-to-net sales conversion; and rightsizing our operating expenses.”

Addressing how Amneal would seek to halt the decline in, and revitalize, its base business, Chirag said the firm had identi-fied around a quarter of its currently mar-keted portfolio of 225 products in which it could win new business and add volume. “We have already won new awards for 20 base-business products that will be incre-mental in 2020. In addition, we have more than 30-year product opportunities in the works, demonstrating in a short time how we can maximize our existing asset base to support incremental volume and growth,” he revealed.

MARGIN DECLINE UNACCEPTABLE BUT FIXABLE

Turning to the group’s weakening gross margin, Chirag acknowledged that the Generics division’s adjusted gross margin had declined over the past 18 months

from around 50% to about 30%. “There is no question that the industry has changed – there is more competition and more concentration in buying-group power today,” he recognized. “However, this level of compression is simply unac-ceptable and unsustainable. More impor-tantly, we believe it is fixable.”

Outlining how Amneal would improve its Generics gross margin, Chirag stressed the importance of winning more base business to better utilize its manufactur-ing infrastructure while adding in high-value launches.

“We are working to streamline our in-

ventory and supply-chain management,” he continued. “We are strengthening our forecasting; improving coordina-tion across finance, operations, supply chain, R&D and with our customers; and leveraging our scalability and network of reliable suppliers.” These changes, he be-lieved, would reduce inventory-obsoles-cence charges and back orders.

CENTRALIZED DATABASE FOR SUPPLY-CHAIN MANAGEMENT

“We are developing a centralized intelli-gence database,” he outlined, “focused on providing easy access to mission-critical

Amneal Shifts Pipeline Towards Complex DosageFormsWhile just over half of Amneal's 95-strong submitted abbreviated new drug application pipeline in theUS is for solid oral-dosage forms such as tablets and capsules, three-quarters of its 80-project pre-ling development pipeline is for more complex delivery forms such as injectables, ophthalmics,topicals, oral liquids and inhalation products.

Pending ANDAs

IR Tablet/Capsule/Soft-Gel 41%

Injectable 17%

MR/ER Tablet 13%

Oral Liquid 12%

Topical 7%

Ophthalmic 5%

Transdermal 3%

Tran

smuc

osal

2%

Development Pipeline

Injectable 26%


Ophthalmic 13%

Oral Liquid 11%

MR/ER Tablet 10%

Topical 10%

Inhalation 8%

Nasal Spray 3%

Tran

sder

mal

3%

Otic 1%

Breakdown by delivery format of Amneal's led and pre-ling US pipelines (Source - Amneal)

Amneal Shifts Pipeline Towards Complex Dosage FormsWhile just over half of Amneal’s 95-strong submitted abbreviated new drug application pipeline in the US is for solid oral-dosage forms such as tablets and capsules, three-quarters of its 80-project pre-filing development pipeline is for more complex delivery forms such as injectables, ophthalmics, topicals, oral liquids and inhalation products.

Pending ANDAs


Amneal Shifts Pipeline Towards Complex DosageFormsWhile just over half of Amneal's 95-strong submitted abbreviated new drug application pipeline in theUS is for solid oral-dosage forms such as tablets and capsules, three-quarters of its 80-project pre-ling development pipeline is for more complex delivery forms such as injectables, ophthalmics,topicals, oral liquids and inhalation products.

Pending ANDAs


Injectable 17%

MR/ER Tablet 13%

Oral Liquid 12%

Topical 7%

Ophthalmic 5%

Transdermal 3%

Tran

smuc

osal

2%


Injectable 26%


Ophthalmic 13%

Oral Liquid 11%

MR/ER Tablet 10%

Topical 10%

Inhalation 8%

Nasal Spray 3%

Tran

sder

mal

3%

Otic 1%

Breakdown by delivery format of Amneal's led and pre-ling US pipelines (Source - Amneal)Breakdown by delivery format of Amneal’s filed and pre-filing US pipelines (Source - Amneal)

Nasal Spray 1%



STRATEGY

product data, which will increase our sup-ply-chain efficiency.” This move, which was well underway, would cut cost of goods meaningfully in areas such as failure-to-supply penalties, he insisted. Amneal is also bringing products currently made by contract manufacturers in-house to its Hayward, California plant.

Through these initiatives, he predicted that Amneal would be able to lift the Ge-nerics division’s gross margin to “at least 40%”. However, he admitted that return-ing to Amneal’s historic gross margin level of 45% to 55% was unrealistic.

Chief financial officer Todd Branning was blunt in his assessment: “We face a challenging generics marketplace, and we have compounded those challenges with internal inefficiencies that have continued to hamper our results.”

Around two-thirds of the margin com-pression had come from price erosion, largely in the Generics business, he ex-plained. The other third or so was more due to internal factors such as manufac-turing inefficiencies, failure-to-supply penalties and inventory obsolescence. Launching new generics to replace more commoditized products would help pric-ing dynamics, he added.

GROUP TURNOVER DECLINED BY 21%In the third quarter of this year, Amneal re-ported group gross margin tumbled by 27.6 percentage points to 14.4%, while its adjust-ed margin was 15 points lower at 40% on group turnover that slid by 21% to $378m.

Both the gross margin and turnover declines were largely attributable to the firm’s Generics division, which saw more than a 30-point drop in reported gross margin to 8.3% – and a 20-point fall from 50% to 30% in adjusted gross margin – on sales that declined by $100m, or by just over a quarter, to $291.0m.

Several factors contributed to the 25.6% Generics sales slide, including: vol-ume and price erosion of $132m; a $17m hit from reclassifying oxymorphone as a Specialty product “due to its status as a single source generic product”; and $12m of lost revenues from divesting the international operations in the UK and Germany. Offsetting these negative is-sues that were compounded by supply constraints on epinephrine auto-injec-tors was a $39.8m boost from introduc-

ing levothyroxine sodium under a licens-ing deal with Jerome Stevens.

“Favorable volume growth increased revenue in levothyroxine, abiraterone ace-tate, chlorpromazine hydrochloride, guan-facine and hydroxyprogesterone caproate injection, which was partially offset by price and volume declines in revenue from Yuvafem (estradiol), diclofenac sodium gel and aspirin/dipyridamole extended-release capsules,” Amneal commented.

The Generics gross margin was depleted by a $49.1m charge to cost of goods, “pri-marily related to impairment and inventory obsolescence charges.” Including in-process research and development impairment charges of $23.4m primarily related to four marketed and four pipeline Impax prod-ucts, restructuring and associated charges running to $14.7m, and legal charges of $14.75m related to a Wellbutrin XL (bupro-pion) settlement deal with Teva, the Ge-nerics division posted an operating loss of $80.4m versus a $92.2m prior-year profit.

Amneal’s group operating loss was $112.3m versus a $74.6m prior-year profit. The loss of exclusivity last year for the an-thelmintic brand Albenza (albendazole) hit the Specialty segment that has just licensed US rights to Kashiv BioSciences’ K127 pyridostigmine orphan-drug candi-date as a treatment for myasthenia gravis.

“While we are disappointed with our third-quarter results we continue to be optimistic about Amneal and view 2019 as a transition year,” commented Chirag and Chintu Patel.

IDENTIFIED CAUSES OF UNDERPERFORMANCE

“Since re-joining as co-CEOs in early Au-gust, we have substantially completed

a comprehensive review of the business and believe we have identified the root causes of Amneal’s recent underperfor-mance. This review has reinforced our be-lief that Amneal is a fundamentally strong company with a diverse generics portfolio across multiple dosage forms, a growing and increasingly complex pipeline, and a specialty franchise with significant op-portunities. We have already implemented initiatives to accelerate the reinvigoration of our company and are confident we will return to growth in 2020 and beyond.”

Challenged by Piper Jaffray analyst Da-vid Ansellem that they were “articulating the kind of vision that many other generic companies aspire to” in targeting complex dosage forms and non-retail trade chan-nels, Chirag recalled that Amneal had been a relatively late entrant into US ge-nerics in 2007, but had rapidly outpaced market growth. “We are used to operating in a competitive field,” he pointed out.

Listing how Amneal could differenti-ate itself from its peers, Chirag said: “We have a very large portfolio, our focus is in the US market, we are the largest US-domiciled company with various dosage forms, a great quality track record, and a great customer supply track record. Our relationships are superb.”

He pointed to the firm’s pipeline of complex products in areas such as inject-ables and ophthalmics, including three biosimilars through partnerships with Kashiv BioSciences and mAbxience. “We may look for a deal in biosimilars – the other complex products are covered,” he commented in relation to potential inorganic growth initiatives. On biosimi-lars, he said “our strategy is to be third or fourth or fifth as we are setting up our commercial and regulatory expertise.”

Amneal would, he added, continue to aim to invest almost 10% of its turnover in researching and developing not only complex dosage forms and biosimilars, but also solid oral dose drugs. “We be-lieve in retail generics as well as institu-tional and specialty,” he clarified.


ANALYZE

Further information related to this story is available here: https://bit.ly/37AnvYF

“We face a challenging generics marketplace,

and we have compounded those

challenges with internal inefficiencies”

– Todd Branning


STRATEGY

Teva On Track To Hit Targets With TruximaDAVID WALLACE [email protected]

T eva has insisted that it will hit the high end of its sales targets for 2019 and is also on track to meet

its restructuring goals, as it anticipates a boost from being the first company to enter the US market with a biosimilar ver-sion of rituximab.

However, in what Teva president and CEO Kåre Schultz continues to refer to as a “trough year” for the Israeli company, third-quarter group sales were down by 6% to $4.26bn as a hit of a fifth to North American sales of Copaxone (glatiramer acetate) due to generic competition com-bined with Teva’s declining generics sales in both Europe and North America to pull down the firm’s total, despite moderate contributions from newer brands such as Ajovy (fremanezumab-vfrm).

Nevertheless, Teva said it expected to achieve full-year sales of $17.2bn-$17.4bn, the high end of its previous estimate of $17.0bn-$17.4bn. Meanwhile, operating income was slated to hit $4.0bn-$4.2bn, again the high end of its previous guid-ance of $3.8bn-$4.2bn.

Schultz also referred to the restructur-ing plan that he has overseen since tak-ing control of Teva in late 2017, insisting that the firm was “perfectly on track” to achieve its two-year restructuring target of a $3bn spend base reduction, having already reached a figure of $2.9bn.

“We’ve seen the number of full-time equivalents go down by more than 11,500,” Schultz added, having said in 2017 that the firm would reduce its work-force by at least 14,000.

“We also are in the continued process of restructuring our manufacturing net-work,” Schultz said. “Right now, we have [since 2017] closed down or sold 11 sites. And we have five more sites where we

have announced that they are in the process of being closed or divested by the end of 2019. So we are ap-proaching just above 60 manufacturing sites.”

NORTH AMERICAN SALES AIDED BY LAUNCHES

North American sales dropped by almost a tenth to $2.051bn, due mainly to the hit on Copaxone sales. Generics from both Sandoz and Mylan have gradually erod-ed Copaxone’s US market share, but the reference brand continues to lead, with Teva claiming a 63.0% share of the US glatiramer acetate 40mg/ml market as of September 2019, down slightly from a 64.3% share in June this year.

However, Sandoz recently slashed the prices of its version by 70%, and the latest data points to Teva having lost around two-thirds of its US Copaxone sales over the past three years or so. Over the same period, total US prescriptions for the Co-paxone brand have roughly halved.

Schultz said this hit on Copaxone had been partly offset by generics launch-es. “We’ve seen a very high number of launches this year,” he outlined. “I think year to date in the US alone, we have had about 40 launches. So we see a very healthy business, basically driven by the fact that we had more generic projects in the pipeline than anyone else.”

Observing that this pipeline “naturally leads to a high level of launch activity, both in the US and in Europe and in the inter-national markets,” Schultz said he was “very satisfied with that stabilization. And it goes hand in hand with an overall stabilization of the pricing environment, both in North America and in Europe on generics.”

In Europe, Copaxone sales that fell by 14% in the third quarter – and a tenth in local-cur-rency terms – combined with generics sales that were 1% lower as reported to drag the region’s total down by 4% to $1.163bn.

TRUXIMA LAUNCH PROMISES TO BOLSTER SALES

Teva expects future sales to be lifted by its recent launch of Truxima (rituximab-abbs) in the US. The biosimilar – market-ing rights to which were gained through Teva’s partnership with Celltrion – was in-troduced in mid-November at a 10% dis-count to the wholesale acquisition cost of the Rituxan original.

“We firmly believe that in order to be successful with a biosimilar in the US marketplace, you need to have the com-mercial footprint and commercial insight in order to penetrate the market,” Schultz commented. “In this case, we believe that due to our long experience in the oncol-ogy space in the US with several products in the marketplace and longstanding re-lationships with all the different parts of the commercial value chain, that we have a very good chance of doing so.”

Looking further ahead, he suggested that “in the future, we will be able to do the same with many different biosimi-lars.” Teva had “an appetite for bringing specific biosimilars to the marketplace,” Schultz said, but pointed out that “it’s a unique situation product by product.” The Herzuma (trastuzumab-pkrb) biosimilar that also falls under the Teva-Celltrion collaboration is lined up to be launched by Teva late in the first quarter of 2020.

Brendan O’Grady, Teva’s vice-pres-ident and commercial head of North America, noted that there had been “a

Teva said it expected to achieve full-year sales of $17.2bn-$17.4bn, the high end of its previous estimate of $17.0bn-$17.4bn.



STRATEGY

lot of interest in the biosimilar launch of Rituxan” and acknowledged that “of course, Pfizer will follow on after us. So there would be two in the market here in the not too distant future.”

“I think it still remains to be determined how pricing shakes out and what the up-take is on share,” O’Grady commented. “But we’re fairly optimistic that we have the right mix to take advantage of it. If you think about who Teva is as an orga-nization, we have an oncology business that we’re very familiar with. And we have a product in that portfolio, Granix (tbo-filgrastim), that very much acts like a biosimilar. And then we have, of course, the generics business. And biosimilars are somewhere between a brand and a ge-neric. So we think we have the right com-mercial structure and the right strategy to fully take advantage of this marketplace, maybe uniquely better than most.”

Asked about whether Teva would be seeking to convert existing rituximab pa-tients to Truxima or pursue new patients, O’Grady said that “As far as Truxima goes, I would expect that you won’t see many con-versions of patients currently on therapy.”

“Whether it’s Truxima or whether it is any biosimilar in an oncology setting, it’s probably going to be mostly driven by new patient starts,” he suggested.

OPIOIDS SETTLEMENT, PRICE- FIXING AND A NEW CFO

During the first nine months of 2019, Teva recorded an adjustment for legal settlements of $1.171bn “mainly related” to the opioids settlement agreement in principle reached earlier this year.

However, it remains unclear whether Teva will be able to finalize the agree-ment it has proposed, as negotiations with state attorneys could last years. “This will only work if everybody comes to-gether; I very much hope that everybody will come together,” Schultz commented.

Meanwhile, questioned over Teva’s in-volvement in ongoing price-fixing litiga-tion in the US, Schultz said that the firm remained “in ongoing dialog with the De-partment of Justice.” Teva had “shared more than 1 million documents with them,” Schul-tz said, adding that “we have not found any evidence that we were in any way part of any structured collusion or price fixing.”

“The hard facts are against the accu-

sations,” Schultz maintained.At the same time as announcing its

third-quarter results, Teva bid farewell to the company’s chief financial officer, Mi-chael McClellan, who has stepped down from the role “for personal reasons.”

Schultz announced that McClellan’s successor, Eli Kalif, would begin in the role on 27 December, with Schultz himself acting as interim CFO until that date. Ka-lif, who joins Teva from global operations, components and services business Flex, had “a strong background in finance and manufacturing as well as other relevant elements for us,” Schultz highlighted.

Kalif is not the only key appointment

made by Teva in recent months, after the firm named Eric Drapé to become its exec-utive vice-president for global operations.

With Schultz pointing to improvements in operating margin and related efficien-cies as a “key topic” for Teva, he said that the firm planned to reveal further details in this area when it announces full-year results in February 2020.


BUSINESS SEGMENTSALES

($ MILLIONS) CHANGE (%)PROPORTION OF TOTAL

(%)

Generics 914 -1 21

Copaxone 271 -41 6

Bendeka/Treanda 124 -23 3

ProAir 71 -34 2

Qvar 60 +68 1

Ajovy 25 - 1

Austedo 105 +71 2

Anda Distribution 351 +5 8

Other 131 -28 3

North America 2,051 -9 48

Generics 836 -1 20

Copaxone 106 -14 2

Respiratory 87 -7 2

Other 134 -10 3

Europe 1,163 -4 27

Generics 474 -5 11

Copaxone 20 +39 -

Distribution 176 +18 4

Other 66 +3 2

International 736 +1 17

Other 314 -4 7

Teva 4,264 -6 100

Teva Sees Stabilization Despite Sales Slide

Teva’s group sales dropped by 6% in the third quarter of 2019 on declines in North America and Europe

(Source - Teva)

ANALYZE

Further information related to this story is available here: https://bit.ly/2OjPST6


VALUE ADDED MEDICINES

Accord Strikes Thiotepa Deal With AdienneAIDAN FRY [email protected]

A ccord Healthcare has entered into an exclusive licens-ing and distribution agreement to commercialize Adi-enne Pharma & Biotech’s Tepadina (thiotepa) 15mg and

100mg lyophilized powder for injections.Intas’ European operation will begin selling Tepadina across

select markets in Europe, such as Italy, Spain, UK, Ireland, Ben-elux and Portugal. “Additional markets will be included in 2020, with the aim of Accord becoming the sole distributor across all European markets by early 2021,” the partners stated.

Adienne will continue to be the marketing authorization hold-er for the oncology vials in the territories and will be responsi-ble for manufacturing and supplying the freeze-dried product, which is indicated in the conditioning regimens before autolo-gous and allogeneic hematopoietic stem cell transplantation to treat hematological diseases and solid tumors both in adult and pediatric population. It has been granted orphan-drug designa-tions by both the European Medicines Agency and the US Food and Drug Administration.

ORPHAN DESIGNATION GRANTED IN EUROPENoting that thiotepa had been used to prepare patients for transplantation of blood-making cells in the European Union since the late 1980s, the EMA said Adienne had presented pub-lished literature that included 109 studies involving around 6,000 adults and 900 children with blood diseases or solid tu-mors. Having given an orphan designation in January 2007, the European Commission issued a pan-European centralized au-thorization for Tepadina in March 2010.

“With this new partnership,” the firms commented, “Accord se-

cures exclusive rights to market, commercialize and sell Adienne’s novel chemotherapy brand Tepadina which will be supported by an expert sales force, and a seasoned marketing team that has successfully launched multiple oncology products in Europe.”

Accord has also gained commercial rights in Europe and India to new delivery presentations of thiotepa and other oncology and cytotoxic drugs that the Switzerland-based rare and severe disease specialist is developing “to improve and enhance the healthcare professional and patient experience.”

“We are committed to bringing complex, added value prod-ucts to improve the lives of cancer patients,” commented James Burt, Accord’s executive vice-president for Europe, the Middle East and North Africa. “This agreement builds on our oncology platform adding to our extensive oncology experience in Eu-rope, where we supply more than 35 oncology products across the region. We are excited to take over the commercialization of this product, which will provide tangible advantages to patients and healthcare providers, and we look forward to a mutually beneficial and successful collaboration with Adienne.”

Adienne’s founder, owner and president, Antonio Francesco Di Naro, remarked: “We are very pleased to have established this collaboration with Accord, whose established track record of successful marketing of complex oncology and specialty prod-ucts gives us confidence that they are the best partner for our Tepadina product. Accord has a remarkable commercial team and infrastructure in place, and we are highly confident in their ability to successfully leverage that platform with us.”


“This agreement builds on our

oncology platform adding to our

extensive oncology experience in

Europe, where we supply more

than 35 oncology products across

the region” - James Burt

Visit https://pharmaintelligence.informa.com/generics-bulletin

Unrivalled coverage, news and analysis of the global generics, biosimilars and value-added medicines industries


BIOSIMILARS


Do you havemoney to burn?Your old NDAs and ANDAs are VALUABLE ASSETS and withdrawing them from theOrange Bookis like BURNING MONEY.

Don’t make the same mistake other owners have already made!For more information: [email protected]

No matter the condition of your A/NDA, it should never be withdrawn

from the Orange Book.We will make you a cash offer, regardless

of the condition or age of your file.

Remember: Once approval of your A/NDA is withdrawn,

there is no way to bring it back!


INTELLECTUAL PROPERTY

Do you havemoney to burn?Your old NDAs and ANDAs are VALUABLE ASSETS and withdrawing them from theOrange Bookis like BURNING MONEY.

Don’t make the same mistake other owners have already made!For more information: [email protected]

No matter the condition of your A/NDA, it should never be withdrawn

from the Orange Book.We will make you a cash offer, regardless

of the condition or age of your file.

Remember: Once approval of your A/NDA is withdrawn,

there is no way to bring it back!

Dutch Decision Invalidates Truvada SPCAIDAN FRY [email protected]

T he Netherlands’ patent office was correct to deny a supplementary protection certificate for Gilead Sci-

ences’ Truvada (tenofovir/emtricitabine) combination antiretroviral, a district court in The Hague has decided.

Gilead had applied for a Dutch SPC, ref-erencing the local part of European patent EP0,915,894 entitled ‘Nucleotide Analogs’. Claim 25 of the ‘894 patent specifically identifies tenofovir disoproxil, while claim 27 covers previously disclosed com-pounds such as tenofovir “together with a pharmaceutically acceptable carrier and optionally other therapeutic ingredients.”

The Dutch patent office rejected Gil-ead’s SPC application on the grounds that it did not comply with Article 3(a) of the SPC Regulation 469/2009EC, which requires that a product being protected by a basic patent in force. Claim 27’s ref-erence to “other therapeutic ingredients” did not sufficiently identify emtricitabine for the combination to satisfy the stric-tures of Article 3(a), it maintained.

In reaching this conclusion, the patent office referenced Court of Justice for the European Union jurisprudence from the

landmark Medeva, Queensland and Lilly decisions on the SPC Regulation.

HAGUE COURT REFERENCED CJEU DECISION

On appeal, the Hague district court high-lighted the CJEU’s own C-121/17 ruling on Truvada from late July last year. That deci-sion stated that active ingredients of a com-bination drug must each be “specifically identifiable” in light of all information dis-closed in a basic patent for the combination to be able to benefit from SPC protection.

Given that emtricitabine was not in any way identified or mentioned in the ‘894 patent, nor did the patent point a skilled reader to a specific class of active ingredi-ents to combine with tenofovir, the CJEU’s requirement for each component of a combination to be “specifically identifi-able” was not met, the court confirmed.

Gilead argued before the district court that a skilled person would have read claim 27’s reference to “other therapeutic ingredi-ents” as pointing to nucleotide reverse tran-scriptase inhibitors such as emtricitabine, as this class of antiretrovirals represented a “gold standard” of treatment.

But the court said this did not overcome the requirement for the basic patent to specifically disclose emtricitabine. In any case, the court noted, the therapeutic ef-ficacy of emtricitabine for treating HIV in-fections in humans was not yet known at the priority date of the ‘894 patent.

DUTCH DECISION FOLLOWS IRISH INVALIDITY CASE

The Hague court is the latest European body to invalidate an SPC for Truvada. For example, Ireland’s High Court recently ac-cepted arguments put forward by Mylan and Teva as to why the local SPC based on the ‘894 patent was invalid in light of Article 3(a). The SPC had been due to ex-pire on 20 February 2020.

An equivalent SPC had already been invalidated in the UK last year following the CJEU’s ruling that had been triggered by a referral from the UK courts.

In the first nine months of this year, Gilead’s Truvada sales in Europe tumbled by almost two-thirds to $88m as generic competitors entered several markets.


MANUFACTURING

FDA Holds Zydus Cadila Responsible For ‘Repeat Violations’AKRITI SETH [email protected]

The US Food and Drug Administration has released details of the warning letter sent to Zydus Cadila Health-

care following an inspection at its Indian drug manufacturing facility in Moraiya, Ahmedabad, from 22 April to 3 May 2019.

Zydus Cadila maintained that “this warning letter does not affect the exist-ing business of the company in the US and the existing product supplies from the Moraiya facility will continue.”

However, the FDA has warned Zydus Cadila that “until it corrects all violations

completely and FDA confirms its compli-ance with current good manufacturing practice, it may withhold approval of any new drug applications or supplements listing the firm as a drug manufacturer.”

Failure to correct these violations may also result in the FDA refusing admission of articles manufactured at the compa-ny’s Moraiya facility into the US.

Calling the company’s previous response “insufficient,” the FDA stated that, “in previ-ous warning letters the FDA cited similar cGMP violations.” Zydus Cadila had pro-

posed specific remediation for these viola-tions in its response. But “repeated failures demonstrate that executive management oversight and control over the manufacture of drugs is inadequate,” the agency said.

CEASES PRODUCTION OF INJECTABLES FOR THE US

Zydus Cadila told the agency that it had ceased production of injectable drug products for the US market at the Mo-



MANUFACTURING / INTERVIEW

raiya plant, and in its response to the FDA included its action plan for transferring any of the injectable drug products to other facilities.

The company was however, informed by the FDA that “full remediation of the re-lated cGMP violations cited will be neces-sary if it decide to resume the manufactur-ing of injectable drug products” for the US.

Zydus Cadila recently told Generics Bul-letin sister publication, Pink Sheet, that it was shifting production of sterile inject-able drugs for the US market from Mo-raiya to its “state of the art” Liva Pharma-ceuticals facility near Vadodara, India, and Alidac Pharmaceuticals plant located at SEZ, Ahmedabad, India.

CROSS-CONTAMINATION CITED BY FDA

In its warning letter, the FDA held that be-cause the company’s methods, facilities, or controls for manufacturing, process-ing, packing, or holding do not conform to cGMP, its drug products are adulterated.

During the inspection, the FDA investi-gators found that “significant equipment flaws and cleaning deficiencies resulted in cross-contamination between the firm’s drug products” and said that “the firm failed to clean, maintain, sanitize or steril-ize equipment and utensils at appropriate intervals to prevent malfunctions.”

The FDA stated that Zydus had “failed to thoroughly investigate any unex-plained discrepancy or failure of a batch or any of its components to meet any of its specifications, whether or not the batch has already been distributed.”

In the response that FDA received from the firm, the agency said there was “a lack of assessment of the adequacy of the [un-disclosed drug’s] calibration standards.”

Zydus Cadila also failed to follow ap-propriate written procedures that are designed to prevent microbiological con-tamination of drug products purporting to be sterile, and that include validation of all aseptic and sterilization processes.

“Your firm failed to establish an ad-equate system for monitoring environ-mental conditions in aseptic processing areas,” said the FDA report. The company’s environmental and personnel monitoring program was also labelled “deficient.”


Anti-Infectives Are Strategic For SandozAIDAN FRY [email protected]

S andoz sees supplying antibiotics, particularly finished-dose prod-ucts, as a core part of its business

and strategic ambition, according to Richard Saynor, who took charge as CEO of Novartis’ generics and biosimilars divi-sion in August this year.

“Anti-Infectives is a core part of our busi-ness,” Saynor told Generics Bulletin during an exclusive interview. “It is still sustainable, it’s still growing and it’s still an attractive business segment to be in,” he asserted.

Sandoz describes its Anti-Infectives & API Business Unit as “a fully-integrated provider of affordable, high-quality pharmaceutical intermediates, active pharmaceutical ingre-dients and finished dosage forms.” Manu-facturing operations are focused around the global finished-dose center of excel-lence in Kundl, Austria, which forms part of a global network providing raw materials and finished doses both for marketing un-der the Sandoz label and for supply to third-party customers on a ‘one-stop-shop’ basis.

LEADING WESTERN BETALACTAMS PRODUCER

“The mainstays of our product portfolio are the classical fermentation-derived antibiotics, namely penicillins, cephalo-sporins and macrolides,” Sandoz explains. “Today, we are the largest fully-integrat-ed producer of betalactam antibiotics in the western world.”

In the first nine months of this year, to-tal Anti-Infectives sales that slipped by 1% on a constant-currency basis, and by 5% as reported, to $970m comprised Sandoz label sales that fell by 3% as reported to $587m as third-party turnover that were 6% lower at $383m.

However, in the third quarter of 2019, to-tal Anti-Infectives sales stabilized, with third-party sales rising by 2% as reported, and by 5% in constant-currency terms, to $124m as the overall business overcame temporary supply issues and tough pricing in the US to restore the unit to a “global growth trend.”

Pointing out that Sandoz sits in a very select group of antibiotic manufacturers

in Europe – and is market leader globally in generic antibiotics, according to IQVIA data – he highlighted the importance of a reliable, high-quality supply. “We are incredibly proud of what our teams in Kundl, at Lek in Slovenia and at our other sites have done,” he stated.

Describing the Anti-Infectives fran-chise as “a significant component of our business,” Saynor – who re-joined San-doz in mid-July after nine years leading GlaxoSmithKline’s established medicines and classic brands portfolio – pointed out that he was no stranger to the anti-infectives sector. “I have spent most of my working life supplying and manufactur-ing antibiotics,” he recalled.

Saynor said amoxicillin, including in combination with clavulanic acid – the active ingredients in GSK’s mature Amoxil and Augmentin brands – remained impor-tant treatments for bacterial infections, not just in Europe, “but equally in an emerg-ing markets context.” “They are still grow-

Richard Saynor

“I have spent most

of my working

life supplying and

manufacturing

antibiotics”

– Richard Saynor


INTERVIEW

ing strongly; there is a significant patient need,” he observed. “In emerging markets, it is a very dynamic part of our business.”

COMMITMENT TO TACKLING RESISTANCE

Given the strong demand for generic an-tibiotics, Saynor recognized that “clearly there’s a balance to how you supply and manage them within the whole antimi-crobial resistance framework.”

“The AMR position is about how we sup-ply and manufacture products in a clean and green way, and that then we ultimate-ly market them and position them with prescribers in the right way,” he outlined.

In a LinkedIn post ahead of the World Health Organization’s Antibiotic Aware-ness Week, Saynor noted that the WHO had identified antimicrobial resistance as “one of the major global healthcare threats of our time.” Antibiotics formed the “cornerstone of modern medicine” in treating and pre-venting infections, including around sur-gery and chemotherapy, he stressed.

“Without harmonized global action to combat AMR, we risk entering a ‘post-an-tibiotic era’ in which common infections once again kill and other routine treat-ments become too dangerous to perform,” Saynor cautioned. “As the CEO of the lead-ing global supplier of generic antibiotics, I feel a clear commitment to be part of that global effort. That’s why, a year ago, we published our AMR Statement of Intent.”

“I believe part of that role is to help frame the public debate. Unfortunately, there seems to be a growing perception that, while all four pillars of the global anti-AMR strategy – research & science, appropriate use, access and environment – are equally important, the need to promote R&D for novel antibiotics is somehow ‘first among equals.’ It’s a perception worth challeng-ing,” he argued.

CANNOT JUST FOCUS ON NOVEL ANTIBIOTICS

What was needed, he maintained, was a balance. “Paradoxically, focusing too ex-clusively on the research & science part could prove to be the quickest way of lim-iting its ultimate potential,” he warned.

Recognizing the need for new medicines, Saynor suggested antibacterial therapy was changing quickly, with novel treatments likely to be reserved for those who needed

them most. This, he insisted, meant that “new therapies will only have the chance to be truly effective if we do everything in our power to safeguard and maximize the effi-cacy of the medicines we have today.”

“We need to learn to work with what we have – and that also means recognizing the role played by growing pricing pressure in

increasing shortages of essential generic medicines, which in turn promote the spread of resistance,” he continued. “If we fail to fix today’s issues today, future ‘push and pull’ initiatives for new medicines may arrive too late to be much use.”


Anti-Infectives Are A Core Business For Sandoz

Own-label and third-party sales of Anti-Infectives accounted for around 13% of Sandoz’ total turnover in the third quarter and first nine months of 2019

Breakdown by business franchise of Sandoz’ turnover that fell by 2% as reported in the first nine months of 2019 to $7.248bn but rose by 3% in the third quarter to $2.484bn (Source - Novartis)

Anti-Infectives Are A Core Business For SandozOwn-label and third-party sales of Anti-Infectives accounted for around 13% of Sandoz' total turnoverin the third quarter and rst nine months of 2019

Nine Months 2019

$5096m, -4%

$1182m, +13%

$587m, -5%

$383m, -6%

Download data

Retail Generics Biopharmaceuticals Sandoz Label Anti-Infectives

Third-Party Anti-Infectives

Third Quarter 2019

S1734m, -1%

$430m, +23%

$197m, -2%

$124m, +2%

Download data



Breakdown by business franchise of Sandoz' turnover that fell by 2% as reported in the rst nine months of 2019 to $7.248bnbut rose by 3% in the third quarter to $2.484bn (Source - Novartis)

NINE MONTHS 2019

Anti-Infectives Are A Core Business For SandozOwn-label and third-party sales of Anti-Infectives accounted for around 13% of Sandoz' total turnoverin the third quarter and rst nine months of 2019

Nine Months 2019

$5096m, -4%

$1182m, +13%

$587m, -5%

$383m, -6%

Download data



Third Quarter 2019

S1734m, -1%

$430m, +23%

$197m, -2%

$124m, +2%

Download data



Breakdown by business franchise of Sandoz' turnover that fell by 2% as reported in the rst nine months of 2019 to $7.248bnbut rose by 3% in the third quarter to $2.484bn (Source - Novartis)

THIRD QUARTER 2019



STRATEGY

Bids Rumored For Stake In WockhardtPENELOPE MACRAE

T he race to acquire a chunk of debt-laden Wockhardt’s domestic for-mulations business is heating up

and offers are expected in the final week of November, according to an Indian media report which pushed up shares of the company that makes generic and bio-pharmaceutical formulations, active pharmaceutical ingredients and vaccines.

In the latest development in the loss-making firm’s quest to sell a chunk of itself to reduce its hefty debt, financial portal Moneycontrol quoted an unnamed source as saying “due diligence is being carried out by the suitors and the submis-sion of bids is expected in the final week of November.” Wockhardt’s shares leapt 13% on the back of the 18 November re-port, but pared its gains by nearly 3% the following day.

Company secretary Narendra Singh said in a stock exchange statement that “at this point of time, no event has occurred that requires disclosure.” But he added that Wockhardt was continuing “exploring various options for sustainable growth.” Wockhardt would make an announce-ment should the need arise, Singh said.

Fellow Indian generics firms Cipla and Dr Reddy’s, along with private-equity fund Carlyle and Hong Kong-based in-vestment fund PAG, “are among the suit-ors in the race for these select business portfolios,” Moneycontrol quoted a sec-ond source as saying. None of the com-panies commented.

The report came after Wockhardt re-ported second-quarter losses that wid-ened sharply and a top credit-rating agency downgraded the firm, piling further pressure on the company to sort out its finances.

EXPECTS INR24BN-INR27BN VALUATION FOR SEGMENTS UP FOR SALE

Wockhardt is expecting a valuation of be-tween INR24bn-INR27bn ($334m-$376m) for the segments up for sale, according to the second source, as the company seeks to dig itself out of a debt burden that stood at INR33.67bn on 31 March. The firm has tried various routes to raise funds

and “this is a fresh construct involving the sale of a controlling stake and has at-tracted considerable interest,” the second source was quoted as saying.

The firm has a portfolio with presences in cardiology, dermatology, diabetes, re-spiratory, ophthalmology and other areas. Moneycontrol said it could not “indepen-dently verify” which of the segments were earmarked for sale. Wockhardt, which has 6,700 employees and operations in the US, UK, Ireland and France along with marketing presences in Russia, Brazil and other nations, holds a 1.1% share of India’s fragmented drug market. The company is 74.07%-owned by pharmaceutical tycoon Habil Khorakiwala and his family.

WOCKHARDT STRUGGLING ON MANY FRONTS

Wockhardt has been going through hard times. Back in 2009, the firm defaulted on $110m in overseas bonds and had to re-negotiate payment on INR13bn in loans after spending $453m on foreign acquisi-tions and suffering foreign exchange and derivatives losses during the 2008 global financial crisis.

The firm recovered thanks to a bruising debt restructure and asset sales. But the reprieve lasted only a short while before Wockhardt faced a fresh crunch with US Food and Drug Administration regula-tory action that hit new generic launches in the critical US market. Seven of Wock-hardt’s facilities were under regulatory restrictions by the FDA at the end of June 2019. Among these, two flagship formu-lation facilities have been under import alerts since 2013. Mumbai-based Wock-hardt has said “remedial” costs “continue to impact profitability.”

Back in July, a leading Indian financial daily, The Economic Times, named private-equity players Apax Partners, Blackstone, Carlyle and KKR as being in talks with Wockhardt to buy a “substantial” stake in its domestic formulations business. At that time, thr newspaper said the buyout com-panies were each seeking at least a 51% stake in the unit, but that the firm wanted to sell only a 40% minority stake.

The company on 7 November re-ported a consolidated second-quarter net loss that trebled to INR942m from the prior-year period on revenues that slid by 29% to INR8.02bn with declines across all global operations. Wockhardt blamed a nearly 50% drop in Indian rev-enue, which accounts for 28% of global sales, to INR2.27bn on lower turnover in “quality generics” and in some thera-peutic areas. Wockhardt added that US sales, which account for a fifth of overall revenues, fell to INR1.45bn from INR1.86bn “mainly on account of pric-ing pressures.”

RATINGS CUT REFLECT ‘SIGNIFICANTLY ELEVATED REFINANCING RISKS’: IND-RA

Pressure is now mounting for Wockhardt to reduce its debt overhang. India Ratings & Research, or Ind-Ra, has downgraded Wockhardt’s long-term issuer rating to a speculative ‘IND BB+’ from an investment grade ‘IND BBB-’. The agency said the long-term issuer outlook was negative, reflect-ing “significantly elevated refinancing risks for Wockhardt in the 2019-20 fiscal second half due to weak liquidity for ser-vicing its upcoming debt maturities.”

“In the absence of a meaningful recov-ery in operating performance, the com-pany has witnessed continuous deple-tion in cash balances for servicing debt,” said Ind-Ra. In fiscal year 2019, Wock-hardt’s promoters injected INR2.5bn in the form of redeemable preference shares to refinance preference debt.

On a positive note, Wockhardt is de-veloping a new class of patented break-through anti-infectives for tackling multi-drug anti-microbial resistance and has received qualified infectious disease product approval for five unique drugs from the FDA. Of these, three are in the advanced stages of global clinical tri-als and two molecules have completed Phase III studies and been filed for review with Indian regulatory authorities. The company expects to commercialize these products from fiscal 2021, Ind-Ra said.



INTELLECTUAL PROPERTY

Teva Beats Janssen On Canadian Bortezomib CompensationAIDAN FRY [email protected]

T eva Canada is entitled to dam-ages for delays in bringing its ge-neric of Janssen’s Velcade (bort-

ezomib) to the market caused by patent litigation, Canada’s Federal Court of Ap-peal has confirmed.

Janssen has appealed against a Fed-eral Court finding from July 2018 that Teva was eligible for compensation for losses suffered during the time that its was kept off the Canadian market for the oncology drug due to a patent-infringement case brought by Janssen. The Federal Court ruled that two of the originator’s patents – Canadian patents 2,203,936 and 2,455,146 – were invalid due to obviousness.

On appeal, Janssen and co-appellant Millennium Pharmaceuticals attacked the Federal Court’s obviousness deci-sion from July 2018 as having failed to follow Supreme Court jurisprudence laid down in a dispute between Apotex and Sanofi over clopidogrel.

In reaching its obviousness decision, the Federal Court had considered wheth-er it was inventive to have selected each of the individual characteristic compo-nents of bortezomib in combination. It concluded that there were “a finite num-

ber of possible practical combinations to try, and any of them would have been expected to offer some potency.” It would not have been inventive to conduct the routine testing required.

Writing for the panel of three Court of Appeal judges, Justice David Stratas said: “A fair reading of the Federal Court’s rea-sons from beginning to end, in light of the record before it, shows that it proper-ly applied the legal test for obviousness.” Thus, the lower court had not made “an error in legal principle.”

Specifically, he rejected the origina-tors’ argument that the Federal Court had incorrectly employed hindsight in analyzing the component parts of bort-

ezomib. “The Federal Court,” he stated, “had ample evidence upon which to find, without employing hindsight, that the selection of components of bortezo-mib lack inventive ingenuity.”

NO CHERRY-PICKING OF PRIOR ARTNor had the Federal Court ‘cherry-picked’ only the prior art that supported an ob-viousness finding. “Preferring one line of evidence over another is the exclusive prerogative of the first-instance court,” Stratas pointed out.

Highlighting the difficulty in demon-strating that a court had made a “pal-pable and overriding error,” Stratas said the appellants had not met this required standard. “They have picked at the leaves and branches, but the tree remains standing,” he remarked.

Observing that appellants often tried to highlight alleged defects “by parsing individual paragraphs of the Federal Court’s reasons closely,” he said appel-late courts did not automatically con-strue gaps and imprecise wording tak-en in isolation as misunderstandings of legal principles nor as a faulty applica-tion of the law to the facts. Rather, an appellate court must look at a lower court’s decision as a whole in the wider context, bearing in mind that the lower court had reviewed and considered all the evidence.

Teva is one of several companies that hold authorizations to market generic bortezomib 3.5mg vials in Canada, with Apotex, Dr Reddy’s and Pharmascience also holding approvals.


“A fair reading of the Federal Court’s reasons from beginning to end, in light of the record before it, shows that it properly applied the legal test for obviousness” - Justice David Stratas

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BIOSIMILARS

FDA Reviews Samsung Bioepis’ BevacizumabDAVID WALLACE [email protected]

S amsung Bioepis, the joint venture between Samsung BioLogics and Biogen, has announced that its

filing for a US biosimilar rival to Genen-tech’s Avastin (bevacizumab) has been accepted for review by the US Food and Drug Administration.

The biologics license application had been submitted by Samsung Bioepis in September this year.

If Samsung Bioepis ultimately re-ceives approval from the US agency, its SB8 bevacizumab biosimilar will be commercialized in the US by Merck, Sharp & Dohme.

In the US, Samsung Bioepis already mar-kets its SB2 or Renflexis (infliximab-abda) biosimilar and holds US Food and Drug Administration approvals for its SB3 On-truzant (trastuzumab-dttb), SB4 Eticovo (etanercept-ykro) and SB5 Hadlima (adali-mumab-bwwd) biosimilars.

Merck, Sharp & Dohme is also due to

market Hadlima in the US, with Samsung Bioepis having secured an entry date of 30 June 2023 via a settlement with AbbVie.

TWO APPROVED BEVACIZUMAB BIOSIMILARS

The FDA has already approved two bio-similar versions of Avastin in the US.

Amgen Mvasi (bevacizumab-awwb) was approved in September 2017 and was the first oncology biosimilar to be approved by the FDA. Amgen launched ‘at risk’ in July this year. The firm recently reported that the biosimilar had made a “solid start” since being introduced.

Meanwhile, Pfizer – which received FDA approval for its Zirabev (bevacizum-ab-bvzr) version in June this year – has cleared the way to launch on 31 Decem-ber this year following a patent-litigation settlement with Roche. The firm plans to follow this up by launching its Ruxience (rituximab-pvvr) biosimilar to Roche’s

Rituxan in January 2020, followed on 15 February next year by rolling out its Traz-imera (trastuzumab-qyyp) treatment for various cancers.

Samsung Bioepis CEO Christopher Hansung Ko recently told Generics Bulle-tin that biosimilars firms “need to exercise a certain level of patience and caution when it comes to talking about the future of the US biosimilar market.”

Recalling that biosimilars had been made available in Europe almost a de-cade before the US, Ko said there had been “extremely high expectations for biosimilars to immediately impact the US market, and such expectations may have been excessive.” He suggested that “it may be unfair to compare a rapidly maturing European biosimilar market with a US market that has just started to explore the potential of biosimilars.”



DEALS

Future Of Bankrupt Orchid In DoubtPENELOPE MACRAE

T he future of India’s bankrupt Or-chid Pharma has been thrown up in the air once again. An appellate

body has rejected Dhanuka Laboratories’ offer to acquire Orchid and put the debt-laden company back on the road to re-covery. It is the second time a rescue bid for Orchid has collapsed and the news has sent the firm’s share price tumbling.

In late June, The National Company Law Tribunal approved an insolvency recovery plan submitted by privately-held Dhanu-ka to acquire Orchid, which is headquar-tered in the southern city of Chennai. The tribunal rejected rival offers from Accord Life Spec and Covalent Laboratories.

But now, the appeal body of the tribu-nal has rejected the approval of Orchid’s takeover by Dhanuka, based on the out-skirts of New Delhi. The Dhanuka bid had been approved by two-thirds of a com-mittee of Orchid’s creditors led by the State Bank of India.

The National Company Law Tribunal Ap-pellate Tribunal was acting on an appeal by Accord Life Spec, part of the Accord Group. Accord had argued in its appeal that the so-called bankruptcy “resolution value” pro-posed by Dhanuka was INR5.7bn ($79.3m) – less than half of Orchid’s INR13.1bn “liq-uidation value”. It further submitted that a working capital infusion of INR400m by Dhanuka could not be included as part of the “resolution value.”

The appeals tribunal noted that the an-chor principle of India’s Insolvency and Bankruptcy Code is that a creditor cannot be paid less than the liquidation value of a company. As the goal of India’s bankrupt-cy resolution process is maximizing the as-sets of the company in trouble, it was clear Dhanuka’s rescue plan for Orchid fell short of the bankruptcy code’s valuation provi-sions, the tribunal said.

Now, “the matter stands remitted to the Adjudicating Authority for a decision in accordance with law,” the appellate tribu-nal said. No timing has been announced for the Adjudicating Authority’s decision.

This was the second attempt to bring in an investor to save Orchid, which owes over INR32bn to banks and has been

lurching from one debt crisis to another for more than a decade.

Dhanuka Labs is a manufacturer and exporter of oral antibiotic cephalosporin active pharmaceutical ingredients, an area in which Orchid has also been strong.

NO OTHER RECOVERY PLAN MORE VIABLE THAN DHANUKA’S

India’s Corporate Insolvency Resolution Process known as CIRP has a person called the ‘resolution professional’, who acts to settle bankruptcy cases like Orchid. The resolution professional had argued be-fore the lower tribunal that Dhanuka had shown its expertise in Orchid’s area of busi-ness while the other bidders did not pos-sess similar qualifications. The resolution professional also had asserted there was no other recovery plan for Orchid more feasible and viable than Dhanuka’s offer.

Orchid is among dozens of corporate defaulters on a central bank list that have been referred to the law tribunal for swift resolution of their problems. The central bank and the government have been push-ing lenders to resolve bad loans on their balance sheets that are slowing corporate lending growth and undermining efforts to revive India’s sputtering economy.

Dhanuka’s offer had meant a far bigger haircut for lenders than under an earlier of-fer of INR14.9bn last year. That was annulled when the buyer, US-based Imgen Capital Group, failed to put a INR10bn deposit into Orchid creditors’ escrow account.

The creditors’ committee has taken steps to ensure that Orchid, which has

1,400 employees, keeps operating while the company’s future is settled. In an en-couraging development, Orchid report-ed its first-quarter net loss narrowed to INR134.4m from a net loss of INR923.7m during the prior-year period on total income that grew to INR1.67bn from INR1.57bn. The firm has not reported second-quarter results.

Orchid was set up in 1992 as an exporter after the government began liberalizing the country’s previously closed economy. Orchid’s debt woes began mounting in the last decade and it agreed in 2009 to sell its high-margin generic injectable for-mulations business to US-based injectable drugs major Hospira for $400m after its debts more than doubled to INR29.85bn in just four years. Orchid’s debts climbed as it moved swiftly up the value chain from bulk cephalosprins to packing the drug in injection vials. After it sold its US injection plant, which was clocking $90m revenues, one financial commentator remarked the company “had sold its future.”

Orchid’s share price collapsed from INR373.5 in 2006 to a low of INR3 in March. But as talk of Orchid’s revival gathered steam, the share price started crawling higher. In expectation that Dhanuka’s re-covery plan for Orchid would succeed, the share price hit a 52-week high of INR8.6. But after the appellate tribunal’s ruling, the shares slid. Orchid’s shares closed down 4.89% at INR5.25 on 18 November, marking the second straight trading day of losses.




STRATEGY

Hikma Searches For Strategic ‘Fourth Leg’AIDAN FRY [email protected]

H ikma Pharmaceuticals is consid-ering merger and acquisition opportunities in specialty and

biologic injectables as it seeks to secure long-term growth, CEO Siggi Olafsson told delegates to the Jefferies Healthcare Conference 2019 in London, UK.

“We need a fourth leg to the stool,” he stated. “I have three legs now, with our US non-injectable Generics, generic In-jectables and Middle East and North Af-rica Branded products segments, and I am comfortable with the growth of the busi-ness in the short to medium term. But I feel we need a fourth leg for the long-term growth of the business, because at some point in time the Injectables pipeline will not be there if we are not in biologics.”

Discussing what could deliver this fourth strategic leg, Olafsson suggested “it could be biologics, it could be spe-cialty injectables.” The company’s posi-tion as the third-largest volume supplier of generic injectables in the US put it in “a special place” from which to expand into new areas, he argued.

US GENERIC INJECTABLES DEAL PRESENTS CHALLENGES

“The challenge with doing a transac-tion in generic injectables is the size of our portfolio of having 110 products on the US market. When the Federal Trade Commission starts its exercise of com-paring molecule-by-molecule, I’m afraid we would have significant negative syn-ergies in any transaction,” he explained, adding that he would not rule out a ge-neric injectables deal that made sense.

Highlighting Hikma’s “beautiful bal-ance sheet” with a net debt to earn-ings before interest, tax, depreciation and amortization leverage ratio below one-times and operating cash flow in excess of $400m per year, Olafsson said the group had options on doing a deal. But given the current levels of organic

growth across the three business seg-ments, “I don’t need to do a transaction to hide anything in the underlying busi-ness, because it is doing fine.”

Questioned on what sort of opportu-nities Hikma would consider for allocat-ing its capital, Olafsson said the needs of each of Hikma’s three current business segments – US non-injectable Generics, generic Injectables and MENA Branded products – differed significantly.

In terms of US Generics, I don’t want to do a transformational deal. I am not looking to double the size of our US Ge-nerics business,” he stated, adding that investors might not appreciate increas-ing the group’s exposure to the current volatility of the US retail generics market. “I know multiples in the US are extremely low at the moment, but I only want to do add-on deals.”

INSYS SPRAYS DEAL EXAMPLE OF BOLT-ON TARGET

As an example of such bolt-on deals, he cited the group’s recent purchase of global rights to epinephrine and nalox-one nasal spray candidates from Insys, along with single-dose manufacturing lines. “We are looking for technologies and products, more than doing a trans-formational synergy move,” he explained.

In Hikma’s MENA Branded products segment – which is starting to roll out biosimilar rituximab through a partner-ship with Celltrion – Olafsson outlined that the plan was to add more products into the group’s existing markets, rather than expand its geographic footprint. “The return on capital and synergies I get by building bigger in the markets I am in today is significantly better than to put a step down into Japan or South-East Asia,” he explained.

“We have so many opportunities in the markets where we are today, to do more in the US and MENA,” he main-

tained. “And in Europe, our Injectables business is currently only at $100m, be-cause it has been limited by our manu-facturing capacity.”

CAPACITY ALLOWS FOR EUROPEAN INJECTABLES PUSH

Noting the prevalence of tender pro-curement in Europe, Olafsson noted that the continent offered the weakest profit margins of the group’s three Injectables regions, “so I have to prioritize Europe last in terms of the growth of the busi-ness.” With increased sterile manufactur-ing capacity and capabilities coming on board, not least a new high-containment plant in Portugal, opportunities to ex-pand the firm’s Injectables portfolio and footprint in Europe were opening up, he commented. “We have the cost structure to be able to do that,” he insisted.

“I don’t expect a transformational transaction,” Olafsson summarized. “It is more to build up the fourth leg of the stool, which probably will be more in the injectables space.”


“The return on capital and synergies I get by building bigger in the markets I am in today is significantly better

than to put a step down into Japan or

South-East Asia” – Siggi Olafsson

LET’S GET SOCIAL @genericbulletin


BIOSIMILARS

Future Of Bankrupt Orchid In DoubtPENELOPE MACRAE

T he future of India’s bankrupt Or-chid Pharma has been thrown up in the air once again. An appellate

body has rejected Dhanuka Laboratories’ offer to acquire Orchid and put the debt-laden company back on the road to re-covery. It is the second time a rescue bid for Orchid has collapsed and the news has sent the firm’s share price tumbling.

In late June, The National Company Law Tribunal approved an insolvency recovery plan submitted by privately-held Dhanu-ka to acquire Orchid, which is headquar-tered in the southern city of Chennai. The tribunal rejected rival offers from Accord Life Spec and Covalent Laboratories.

But now, the appeal body of the tribu-nal has rejected the approval of Orchid’s takeover by Dhanuka, based on the out-skirts of New Delhi. The Dhanuka bid had been approved by two-thirds of a com-mittee of Orchid’s creditors led by the State Bank of India.

The National Company Law Tribunal Ap-pellate Tribunal was acting on an appeal by Accord Life Spec, part of the Accord Group. Accord had argued in its appeal that the so-called bankruptcy “resolution value” pro-posed by Dhanuka was INR5.7bn ($79.3m) – less than half of Orchid’s INR13.1bn “liq-uidation value”. It further submitted that a working capital infusion of INR400m by Dhanuka could not be included as part of the “resolution value.”

The appeals tribunal noted that the an-chor principle of India’s Insolvency and Bankruptcy Code is that a creditor cannot be paid less than the liquidation value of a company. As the goal of India’s bankrupt-cy resolution process is maximizing the as-sets of the company in trouble, it was clear Dhanuka’s rescue plan for Orchid fell short of the bankruptcy code’s valuation provi-sions, the tribunal said.

Now, “the matter stands remitted to the Adjudicating Authority for a decision in accordance with law,” the appellate tribu-nal said. No timing has been announced for the Adjudicating Authority’s decision.

This was the second attempt to bring in an investor to save Orchid, which owes over INR32bn to banks and has been

lurching from one debt crisis to another for more than a decade.

Dhanuka Labs is a manufacturer and exporter of oral antibiotic cephalosporin active pharmaceutical ingredients, an area in which Orchid has also been strong.

NO OTHER RECOVERY PLAN MORE VIABLE THAN DHANUKA’S

India’s Corporate Insolvency Resolution Process known as CIRP has a person called the ‘resolution professional’, who acts to settle bankruptcy cases like Orchid. The resolution professional had argued be-fore the lower tribunal that Dhanuka had shown its expertise in Orchid’s area of busi-ness while the other bidders did not pos-sess similar qualifications. The resolution professional also had asserted there was no other recovery plan for Orchid more feasible and viable than Dhanuka’s offer.

Orchid is among dozens of corporate defaulters on a central bank list that have been referred to the law tribunal for swift resolution of their problems. The central bank and the government have been push-ing lenders to resolve bad loans on their balance sheets that are slowing corporate lending growth and undermining efforts to revive India’s sputtering economy.

Dhanuka’s offer had meant a far bigger haircut for lenders than under an earlier of-fer of INR14.9bn last year. That was annulled when the buyer, US-based Imgen Capital Group, failed to put a INR10bn deposit into Orchid creditors’ escrow account.

The creditors’ committee has taken steps to ensure that Orchid, which has 1,400 employees, keeps operating while the company’s future is settled. In an en-couraging development, Orchid report-ed its first-quarter net loss narrowed to INR134.4m from a net loss of INR923.7m during the prior-year period on total income that grew to INR1.67bn from INR1.57bn. The firm has not reported second-quarter results.

Orchid was set up in 1992 as an exporter after the government began liberalizing the country’s previously closed economy. Orchid’s debt woes began mounting in the last decade and it agreed in 2009 to

sell its high-margin generic injectable for-mulations business to US-based injectable drugs major Hospira for $400m after its debts more than doubled to INR29.85bn in just four years. Orchid’s debts climbed as it moved swiftly up the value chain from bulk cephalosprins to packing the drug in injection vials. After it sold its US injection plant, which was clocking $90m revenues, one financial commentator remarked the company “had sold its future.”

Orchid’s share price collapsed from INR373.5 in 2006 to a low of INR3 in March. But as talk of Orchid’s revival gathered steam, the share price started crawling higher. In expectation that Dhanuka’s re-covery plan for Orchid would succeed, the share price hit a 52-week high of INR8.6. But after the appellate tribunal’s ruling, the shares slid. Orchid’s shares closed down 4.89% at INR5.25 on 18 November, marking the second straight trading day of losses.


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STRATEGY

Teva To Return With Vincristine In USAIDAN FRY [email protected]

T eva has rescinded its decision to discontinue US supplies of the vincristine chemotherapy agent

due to current market shortages. The Israeli group had previously de-

fended itself against media and public criticism, including articles in publications such as New York Times and Forbes that highlighted increasing supply shortages of the injectable drug, which is widely used in US hospitals to treat pediatric can-cers such as leukemias and lymphomas.

“Because vincristine is such a lifesaving medicine – and there is no reliable single supply anticipated in the near term – we have decided to re-introduce the product and plan to manufacture it in our plant in the US, which provides the fastest route to market,” Teva stated. “Product will be available to patients in the US as early in 2020 as possible.”

Teva and Pfizer’s Hospira currently hold the only approved abbreviated new drug applications for vincristine sulfate 1mg/ml pre-filled syringes. The Israeli firm discon-tinued its Vincasar PFS branded generic in early July this year, while Eli Lilly’s Oncovin original is also no longer on the US market.

PFIZER IS CURRENTLY THE SOLE SUPPLIER

An update to the drug shortages list of the American Society of Health-System Pharmacists dated 4 November states that: “Pfizer has vincristine on shortage

due to manufacturing delays and in-creased demand. They are the sole sup-plier of vincristine sulfate injection.”

Pfizer, the ASHP says, has “limited sup-ply” available of vincristine 1mg/ml in 1ml and 2ml vials. In a letter posted on the website of the US Food and Drug Administration that is dated 18 Octo-ber, Pfizer’s portfolio director for oncol-ogy and alternate site, Chris Hernandez, promised further shipments of the firm’s vincristine 1ml and 2ml Onco-Tain glass flip-top vials in late October.

“Based on current forecasts, we believe our next deliveries will meet current pa-tient needs throughout the rest of the year,” Hernandez stated. “We expect to fully recover on this product by January 2020.”

In a revised statement released through its US website, Teva insisted that it “takes very seriously the importance of vincristine.” “We also understand the pas-sion and pain that parents and patients may feel,” the company stated.

TEVA HELD ONLY A 3% MARKET SHARE“When Teva removed vincristine from the market earlier this year, there was no indi-cation at all of a possible shortage,” the firm asserted. “In fact, the company was only supplying 3% of the market and, without any information to the contrary, antici-pated that the volume could quickly and easily be absorbed by the brand manufac-turer, which was supplying the other 97%.”

In its previous statement on the che-motherapy drug, the Israeli group had said: “Based on this lack of demand for the Teva product at the time, and to en-able us to re-adjust our limited resources to make other life-saving products need-ed in the market, Teva decided to discon-tinue vincristine and alerted the FDA of its decision in March 2019.”

“With the data that was available,” the company commented last month, “there was no indication of a possibility of a shortage if the company left the market, and availability of Teva product has not contributed to the shortage that is being experienced today.” Nevertheless, it com-mitted to examining “any and all options” to address the shortage situation.

“We do not take the discontinuance of any product lightly,” Teva stressed in its updated statement, “and we always evaluate the need for our product as thor-oughly as possible before deciding to dis-continue it; though we are generally not privy to the supply challenges that other manufacturers may be experiencing.”

Reacting to the initial Teva discon-tinuation decision via social media last month, Martin Van Trieste – president and CEO of non-profit hospital drugs buying consortium Civica Rx – had sug-gested a novel solution. “Teva – donate your ANDA to Civica and we will make the product!” he proposed.

Updating the pediatric oncology com-munity on the current vincristine short-ages, the chair of the US Children’s Oncol-ogy Group, Peter Adamson, recognized the complex issues that were contribut-ing to US shortages, including “aging manufacturing facilities overseas and a consolidation of suppliers.”

PRICING IS KEY FACTOR IN SUPPLY SHORTAGES

He cited 2003 Medicare payments reforms that had capped the amount charged for intravenous drugs prescribed by physi-cians at 6% over the average sales price that was calculated on a six-monthly basis from data supplied by manufacturers.

“In 2019,” Adamson observed, “the ASP

“Product will be available to

patients in the US as early in 2020

as possible” - Teva


STRATEGY

for a vial of vincristine was about $5; thus, the economics of supplying drugs like vincristine are challenging.”

By contrast, he said Europe spends significantly more on generics, but less on new drugs. “The bottom line,” he sug-gested, “is that long-term solutions to this problem involve US Medicare regu-lations, economic and other policies.” Among potential advocacy arguments to be put forward by the medical commu-nity, he proposed a national stockpile of key paediatric cancer treatments as well as “US government purchasing contracts that provide a guaranteed buyer and may help stabilize a fragile market.”

An FDA report published last month on the root causes of, and potential solutions to, drug shortages notes that an analysis of 163 drugs that went into shortage be-tween 2013 and 2017 showed that 103, or 63%, were sterile injectables, while a slightly higher proportion – 109 or 67% – had a generic version on the market. “About half of the 163 drugs studied that went into shortage between 2013 and 2017 were both generics and sterile in-

jectables,” the FDA points out in its report.“In the year prior to going into short-

age,” the agency observes, “the median price per unit was $8.73 for all the short-age drugs: $11.05 for injectables; and $2.27 for orally administered drugs.”

The report identifies three root causes for drug shortages:

• Lack of incentives for manufacturers

to produce less profitable drugs;• The market does not recognize and

reward manufacturers for “mature quality systems” that focus on con-tinuous improvement and early de-tection of supply chain issues; and

• Logistical and regulatory challenges make it difficult for the market to re-cover from a disruption.

It also recommends several solutions to address drug shortages. These solu-tions include:

• Creating a shared understanding of the impact of drug shortages on pa-tients and the contracting practices that may contribute to shortages;

• Developing a rating system to incen-tivize drug manufacturers to invest in quality management maturity for their facilities; and

• Promoting sustainable private sec-tor, such as with payers, purchasers, and group purchasing organizations, to make sure there is a reliable sup-ply of medically important drugs.


“Teva – donate your

ANDA to Civica and we

will make the product!”

- Martin Van Trieste

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