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Pharma Stock Roundup: Mylan EpiPen Pricing in Focus, FDA Nod For Novartis Biosimilar
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It was a rough week for drug stocks with focus once again shifting to the pricing policies of pharma and biotech companies. Mylan’s pricing policy for EpiPen raised a storm with lawmakers questioning the company’s pricing actions. Meanwhile, companies like Novartis (NVS - Free Report) and Roche (RHHBY - Free Report) came out with positive regulatory/pipeline updates.
Recap of the Week’s Most Important Stories
EpiPen Pricing Weighs on Mylan: Mylan was in focus the whole of last week thanks to the EpiPen pricing controversy. According to lawmakers, as of May 2016, Mylan hiked the price of its life-saving combination product by more than 480% in the U.S. – from $103.50 for a set of two in 2009 to $608.61. Although Mylan took steps to lower the impact of this issue by increasing the maximum value of its savings cards to $300 (from $100), expanding eligibility of its patient assistance program and announcing the upcoming launch of a generic EpiPen at a 50%+ discount to the branded product (Read more: Mylan Promises $300 Generic EpiPen), lawmakers continue to question the company’s pricing policy. With Democratic presidential candidate Hillary Clinton tweeting that “EpiPens can be the difference between life and death. There's no justification for these price hike”, the drug pricing issue will remain in focus (Read more: Did Hillary Clinton's Tweet Cause the Sell-Off in Mylan Stock?).
Novartis Scores Another Win in Biosimilar Segment: Novartis scored another big win in the biosimilars area with the company gaining FDA approval for its biosimilar version of Amgen’s blockbuster drug, Enbrel. Erelzi, Sandoz’s (Novartis’ generic arm) biosimilar version of Enbrel, has been approved for the treatment of multiple inflammatory diseases. However, Amgen is not giving up without a fight. The company has already filed a patent infringement lawsuit against Sandoz to keep away cheaper versions of Enbrel from the market (Read more: Novartis Gets FDA Nod for Biosimilar Version of Enbrel). We note that Sandoz was the first to gain approval for a biosimilar in the U.S. – the company gained approval for Zarxio, a biosimilar version of Amgen’s Neupogen (filgrastim) last year.
Setback for Teva Copaxone 40 mg: After receiving unfavorable rulings from the Patent Trial and Appeal Board (PTAB) last week for a couple of patents covering multiple sclerosis treatment, Copaxone 40 mg (Read more: Mylan Obtains Favorable USPTO Ruling for Copaxone), Teva (TEVA - Free Report) got another unfavorable ruling this week. The U.S. Patent and Trademark Office (PTO) has ruled in Mylan’s favor in its inter partes review (IPR) proceeding. Teva is already facing generic competition for its older formulation of Copaxone (Copaxone 20 mg). The company, which had worked on converting patients to the new formulation to lower the impact of the entry of the generic version of Copaxone 20 mg, is likely to leave no stone unturned to delay the entry of generic versions of the new formulation. Copaxone is the lead product in Teva’s branded franchise and brought in sales of more than $2 billion in the first half of 2016.
Roche’s Tecentriq Impresses in Lung Cancer Study: Roche’s cancer immunotherapy Tecentriq hit the primary endpoints in a late-stage study – the treatment helped people with a specific type of lung cancer live significantly longer compared to chemotherapy. A significant improvement in overall survival was observed regardless of PD-L1 status (Read more: Roche Immuno-oncology Drug Tecentriq Positive in Phase III).
Roche is currently looking to expand Tecentriq’s label into the treatment of people with locally advanced or metastatic non-small cell lung cancer (NSCLC) whose disease expresses PD-L1, as determined by an FDA-approved test, and who have progressed on or after platinum-containing chemotherapy -- a response from the FDA is expected by Oct 19, 2016.
Mylan Progresses with Herceptin Biosimilar in the EU: Mylan and partner Biocon are making progress with the regulatory process for their biosimilar version of Roche’s cancer drug, Herceptin (trastuzumab). The companies said that the European Medicines Agency (EMA) has accepted their regulatory application for review. The companies believe theirs is the first regulatory application for a Herceptin biosimilar to be accepted for review by the EMA. Herceptin, used for the treatment of certain HER2-positive breast and gastric cancers, is one of Roche’s top-selling pharma products with 2015 global sales crossing CHF 6.5 billion including sales of more than CHF 2 billion in the EU. With governments across the EU working on lowering healthcare costs, biosimilars represent major commercial potential.
The NYSE ARCA Pharmaceutical Index was down 0.7% over the last five trading days. With questions being raised about the repeated and significant price increases for EpiPen, focus is back on drug pricing issues in the healthcare sector. Most of the major pharma stocks recorded a decline last week with Bristol-Myers (BMY - Free Report) losing 3.4% while Merck (MRK - Free Report) was up 0.9%. Over the last six months, Bristol-Myers declined 11.6% while Merck was up 21.6%.
What's Next in the Pharma World?
While Mylan will continue to remain in the news as investors, lawmakers and media remain focused on drug pricing, watch out for an update on Teva’s generics business following the close of the Actavis generics deal.
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Pharma Stock Roundup: Mylan EpiPen Pricing in Focus, FDA Nod For Novartis Biosimilar
It was a rough week for drug stocks with focus once again shifting to the pricing policies of pharma and biotech companies. Mylan’s pricing policy for EpiPen raised a storm with lawmakers questioning the company’s pricing actions. Meanwhile, companies like Novartis (NVS - Free Report) and Roche (RHHBY - Free Report) came out with positive regulatory/pipeline updates.
Recap of the Week’s Most Important Stories
EpiPen Pricing Weighs on Mylan: Mylan was in focus the whole of last week thanks to the EpiPen pricing controversy. According to lawmakers, as of May 2016, Mylan hiked the price of its life-saving combination product by more than 480% in the U.S. – from $103.50 for a set of two in 2009 to $608.61. Although Mylan took steps to lower the impact of this issue by increasing the maximum value of its savings cards to $300 (from $100), expanding eligibility of its patient assistance program and announcing the upcoming launch of a generic EpiPen at a 50%+ discount to the branded product (Read more: Mylan Promises $300 Generic EpiPen), lawmakers continue to question the company’s pricing policy. With Democratic presidential candidate Hillary Clinton tweeting that “EpiPens can be the difference between life and death. There's no justification for these price hike”, the drug pricing issue will remain in focus (Read more: Did Hillary Clinton's Tweet Cause the Sell-Off in Mylan Stock?).
Novartis Scores Another Win in Biosimilar Segment: Novartis scored another big win in the biosimilars area with the company gaining FDA approval for its biosimilar version of Amgen’s blockbuster drug, Enbrel. Erelzi, Sandoz’s (Novartis’ generic arm) biosimilar version of Enbrel, has been approved for the treatment of multiple inflammatory diseases. However, Amgen is not giving up without a fight. The company has already filed a patent infringement lawsuit against Sandoz to keep away cheaper versions of Enbrel from the market (Read more: Novartis Gets FDA Nod for Biosimilar Version of Enbrel). We note that Sandoz was the first to gain approval for a biosimilar in the U.S. – the company gained approval for Zarxio, a biosimilar version of Amgen’s Neupogen (filgrastim) last year.
Setback for Teva Copaxone 40 mg: After receiving unfavorable rulings from the Patent Trial and Appeal Board (PTAB) last week for a couple of patents covering multiple sclerosis treatment, Copaxone 40 mg (Read more: Mylan Obtains Favorable USPTO Ruling for Copaxone), Teva (TEVA - Free Report) got another unfavorable ruling this week. The U.S. Patent and Trademark Office (PTO) has ruled in Mylan’s favor in its inter partes review (IPR) proceeding. Teva is already facing generic competition for its older formulation of Copaxone (Copaxone 20 mg). The company, which had worked on converting patients to the new formulation to lower the impact of the entry of the generic version of Copaxone 20 mg, is likely to leave no stone unturned to delay the entry of generic versions of the new formulation. Copaxone is the lead product in Teva’s branded franchise and brought in sales of more than $2 billion in the first half of 2016.
Roche’s Tecentriq Impresses in Lung Cancer Study: Roche’s cancer immunotherapy Tecentriq hit the primary endpoints in a late-stage study – the treatment helped people with a specific type of lung cancer live significantly longer compared to chemotherapy. A significant improvement in overall survival was observed regardless of PD-L1 status (Read more: Roche Immuno-oncology Drug Tecentriq Positive in Phase III).
Roche is currently looking to expand Tecentriq’s label into the treatment of people with locally advanced or metastatic non-small cell lung cancer (NSCLC) whose disease expresses PD-L1, as determined by an FDA-approved test, and who have progressed on or after platinum-containing chemotherapy -- a response from the FDA is expected by Oct 19, 2016.
Mylan Progresses with Herceptin Biosimilar in the EU: Mylan and partner Biocon are making progress with the regulatory process for their biosimilar version of Roche’s cancer drug, Herceptin (trastuzumab). The companies said that the European Medicines Agency (EMA) has accepted their regulatory application for review. The companies believe theirs is the first regulatory application for a Herceptin biosimilar to be accepted for review by the EMA. Herceptin, used for the treatment of certain HER2-positive breast and gastric cancers, is one of Roche’s top-selling pharma products with 2015 global sales crossing CHF 6.5 billion including sales of more than CHF 2 billion in the EU. With governments across the EU working on lowering healthcare costs, biosimilars represent major commercial potential.
Performance
LARGE CAP PHARMA Industry Price Index
LARGE CAP PHARMA Industry Price Index
The NYSE ARCA Pharmaceutical Index was down 0.7% over the last five trading days. With questions being raised about the repeated and significant price increases for EpiPen, focus is back on drug pricing issues in the healthcare sector. Most of the major pharma stocks recorded a decline last week with Bristol-Myers (BMY - Free Report) losing 3.4% while Merck (MRK - Free Report) was up 0.9%. Over the last six months, Bristol-Myers declined 11.6% while Merck was up 21.6%.
What's Next in the Pharma World?
While Mylan will continue to remain in the news as investors, lawmakers and media remain focused on drug pricing, watch out for an update on Teva’s generics business following the close of the Actavis generics deal.
Confidential: Zacks' Best Investment Ideas
Would you like to see a hand-picked "all-star" selection of investment ideas from the man who heads up Zacks' trading and investing services? Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand. Click for his selected trades right now >>