Thursday, September 21, 2017

The Readout by Damian Garde & Meghana Keshavan

Welcome to The Readout, where we keep you on top of the latest in biotech. For more in-depth coverage of biopharma, subscribe to STAT Plus. On Twitter: @damiangarde@megkesh, and @statnews.

Your turn, Axovant


(Jennifer Keefe/STAT)

Alnylam Pharmaceuticals did exactly what it needed to do, hitting each of its key goals and earning itself a bullseye on our biotech scorecard. The company’s rare disease treatment met high expectations, paving the path for a new type of drug and putting a smile on at least one face.

The success also added so many billions to Alnylam's value that some investors (while delighted) were left a bit stunned. Adam Feuerstein digs into the reasons for that run up.

And if you're wondering why you should care about that blank box by Zogenix's name (or what, exactly, Zogenix is), Adam has you covered there, too.

Spare a thought for the millionaire pharma CEO

Dr. Milton Packer once met with a pharma CEO, using his time to argue that the company would make more money in the long term if it priced its soon-to-launch drug below market expectations. To Packer’s surprise, the CEO agreed, but then mournfully confessed that he had no choice but to charge an exorbitant amount because “a 20-something analyst in London” expected him to.

“The CEO was a prisoner of the financial markets,” Packer wrote in MedPage Today, “and there was nothing I could do to free him.”

So, OK, there’s no obvious reason to doubt that this story is true. And there’s no way to prove that it’s not but a single example of an industrywide epidemic, in which our noble, egalitarian CEOs watch helplessly as their well-meaning arms are twisted beyond recognition by the amoral analysts whose pupils have long since been replaced by dollar signs.

But, like, come on. 

Every pharma CEO is compensated, in part, according to the return they provide to shareholders. That means they’re incentivized to increase the stock price. One way to do that is by raising revenue. Which is to say that if Packer’s pal really thought charging less for the drug would make his company more money, he could just say that in an earnings forecast, and then the stock price would go up, and everyone would be happy.

What does 'cost-effective' mean, exactly?

In general, we think of a new drug as being good for society if its overall cost is cheaper than the alternative, whether that be hospitalization, surgery, or just some other drug.

But what if the alternative was overpriced in the first place? And what if that alternative was only deemed "cost-effective" because it supplanted something similarly gouging? Is biotech just a Ponzi scheme of incremental advances judged against their too-expansive forebears?

That's the question a trio of academics takes on in the Journal of the American Medical Association, using Novartis's CAR-T therapy (and its $475,000 price tag) as a starting point.

A "comparison to high-cost alternatives can be misleading," they write, adding that "this is the same mechanism that allows a BMW to look like a bargain when the only other car on the lot is a Ferrari."

Good news and bad news in Alzheimer's R&D

There are 87 drugs in development for Alzheimer's, according to a new report from PhRMA. That number is 13 percent higher than it was last year. But the rate of failure remains daunting, and, accordingly, the number of phase 3 therapies dropped year over year.

Meanwhile, the disease gets all the more prevalent. It affects about 5.5 million Americans today, and that figure is expected to roughly triple by 2050.

What are scientists and drug companies working on? Here's a look at what's in the pipeline. Curious about how experts view the evolving field? Check out the transcript of our recent chat with Dr. Reisa Sperling of Brigham and Women’s Hospital.

More reads

  • Pfizer accuses J&J of illegally stifling insurance coverage for its biosimilar. (STAT Plus)
  • After settling with the SEC, biotech VC Steven Burrill now faces up to 30 years for fraud, tax evasion charges. (Endpoints)
  • J. Craig Venter's Synthetic Genomics hit with gender discrimination suit. (San Diego Tribune)
  • CRISPR used to peer into human embryos' first days. (Nature)

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Thanks for reading! Until tomorrow,

Damian & Meghana

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