It was a very good year for the Bay Area’s Gilead Sciences (NASDAQ: GILD), which saw its new hepatitis C treatments— sofosbuvir (Sovaldi) and Harvoni (a combination of sofosbuvir and ledipasvir)—make big inroads and help cure patients, even as the price tag of the drugs raised ire.
Hackles were up not just among longtime industry watchdogs like U.S. Congressman Henry Waxman, but also among people whose daily business is drug pricing such as Express Scripts CMO Steve Miller, whose organization is a powerful price-negotiating and order-processing “middle man” between insurance companies and drug companies.
While Gilead CEO John Martin was gathering big thumbs-ups from a Dartmouth College business school professor and from the Harvard Business Review toward the end of the year, a dark cloud was growing on Foster City, CA-based Gilead’s horizon. You might consider Miller’s Forbes.com essay, linked above, to be an ominous rumble. Then came approval of rival hepatitis C treatment Viekira Pak, a combination regimen from AbbVie (NYSE: ABBV).
Upon approval Friday, AbbVie said it would price the medicine at a nearly identical price to Sovaldi.
Yesterday, heavy rain began to fall on Gilead’s parade. AbbVie announced a deal with Express Scripts (NYSE: ESRX) to sell Viekira Pak for a significant discount (they didn’t say how significant)—and to make it exclusive. In other words, Express Scripts will now only allow AbbVie’s hep C drugs in its formulary and for the 25 million patients it serves. Adam Feuerstein of The Street said it was a big shift in the biopharma landscape:
“After today, investors are no longer going to ask biotech executives, ‘What will you charge for your new drug?’ Instead, the new question becomes: ‘What will Express Scripts—or any other pharmacy benefit manager—allow you to charge for your new drug?'”
Gilead shares closed Monday at $92.90, down 14 percent. The biotech stock indices of the Nasdaq (NASDAQ: NBI) and the New York Stock Exchange (NYSE: BTK) were down 2.4 percent and 1.1 percent, respectively.
That said, both indices are still above where they sat before two of the biggest biotech IPOS of the year— Bellicum Pharmaceuticals and Juno Therapeutics (see below)—lifted a lot of other boats on Thursday and Friday. They’re also up about 36 and 50 percent respectively for the entire year, as of this writing.
With the holidays upon us, we might not know the full effect of the AbbVie-Express Scripts deal ( or if you’re feeling Ludlumesque, The Viekira Pact) until markets return full throttle the first week of January. At least we’ll have an extended edition of the West Coast biotech roundup, our final of the year, to tide us over. Happy holidays, everyone.
—Juno Therapeutics of Seattle (NASDAQ: JUNO) nabbed on Dec. 18 the biggest biotech IPO of the year, raising $265 million to fund its long slate of cancer immunotherapy clinical trials. Juno shares opened at $24 apiece, which gave the company a $2 billion market cap, and continued to rise, closing Monday at $39.90.
—The Alzheimer’s field took another hit when Swiss giant Roche said Dec. 19 it would halt a Phase 3 trial of gantenerumab, which it was testing in “prodromal” patients—those who hadn’t begun to show symptoms, but who screened positive for biomarkers, or telltale signs, of early disease. (Roche’s research and early development work in Alzheimer’s is based at its South San Francisco, CA-based Genentech division.) It was the first major test of the theory that treating Alzheimer’s will require intervention in the accumulation of a misfolded protein called beta-amyloid, well before patients show symptoms.
—Shares of San Diego-based Auspex Pharmaceuticals (NASDAQ: ASPX) said Dec. 16 that its lead drug candidate for treating involuntary movements associated with Huntington’s disease met the primary goal in a late-stage trial. Shares nearly doubled the next day and since then have been trading at or above $50.
—On the other hand, Sophiris Bio (NASDAQ: SPHS) shares plunged more than 80 percent after the San Diego and Vancouver, BC-based company said Dec. 15 interim results from a late-stage trial of its drug for treating an enlarged prostate failed to show effectiveness.