Year in pharma

Trump's tweets, therapeutic T cells, and a turning point for gene therapy were just a few topics that made headlines in 2017

December 4, 2017 | Volume 95 Issue 48

For drugmakers, the year opened with uncertainty about an unconventional new Administration in Washington. The industry braced itself for public scrutiny, and it came swiftly in the form of President Donald J. Trump’s barbed remarks in press conferences and on Twitter about the high price of drugs and how he will rein them in.

So far, those promises have been empty, but the focus on the high cost of health care isn’t going away. Every few months of 2017 brought a new face of drug industry greed. Under new leadership, the U.S. Food & Drug Administration began to make it harder for bad actors to keep prices on old drugs high.

Despite the pressure on cost, the industry had many moments to shine in 2017. The first genetically engineered T-cell therapies were approved, and a gene therapy is on the cusp of reaching people with a rare form of blindness.

Moreover, the year brought yet another new crop of well-funded companies working on the edges of technology—next-generation cellular therapies, the gene-editing technology CRISPR, and other tools in search of the next wave of therapeutic advances.

Pharma navigates a new Administration

Empty threats and promises from Trump left drugmakers grappling with uncertainty

By Lisa M. Jarvis

Credit: Ron Sachs/SIPA/Newscom

Trump had a friendly meeting with pharmaceutical executives at the start of the year but has been adversarial on social media.

It was a sound bite that reverberated through the drug industry. On Jan. 11, in his first news conference as president-elect, Donald J. Trump castigated pharmaceutical companies as “getting away with murder.” In the next breath, he vowed to shake up how the government paid for drugs.

Those 29 seconds of commentary sent the biotech stock index down 3%. It would become just one of many off-the-cuff remarks directed at the pharmaceutical industry in Trump’s first year in office.

The price negotiation threat has so far turned out to lack teeth. But the general uncertainty around key issues in the Trump agenda—the fate of health care reform, corporate tax reform, even the ability to bring talented foreign scientists to the U.S.—has left companies and investors on edge.

For investors, the uncertainty wrought by Trump poses a challenge. “In a world where an Administration is more unpredictable, that’s a net negative for many of us,” says Bruce Booth, a partner at life sciences-focused Atlas Venture. “We prefer clear policy agenda items, clear choices, and therefore things we can evaluate in our scenario planning for the next three to five years. We would all benefit from an Administration who is more consistent, more predictable, more measured in the way that it approaches these subjects.”

The failed attempt to push health care reform through Congress ate up much of the agenda for the new Administration, leaving little progress on the one issue that drug industry watchers agree would markedly affect pharma companies in 2018: tax reform.

The high corporate tax rate in the U.S. has caused many companies to park substantial cash overseas—$150 billion, Ernst & Young estimates. Until a 2016 Treasury Department rule made it more difficult, the high taxes even prompted some companies to acquire overseas firms in order to shift their headquarters to countries with more favorable tax codes.

Trump has proposed a law that would encourage companies to repatriate, or bring back, that overseas money, a possibility that many in the industry say could spur big pharma firms to do more deals. Merger and acquisition activity was modest in 2017.

“If we allow for repatriation at a lower rate of 10 to 15%, some good things could come out of it because a lot of money is sitting outside the U.S.,” says Ambar Boodhoo, Americas transactions services life sciences leader at Ernst & Young. “I’m hoping they don’t take the cash and just start buying back shares and paying dividends.”

CAR-T cancer immunotherapy took off

Two personalized immune-cell therapies came to the market, and more are likely on the way

By Ryan Cross

Credit: Novartis

An IV bag of Kymriah, the one-time, $475,000 CAR-T immunotherapy treatment from Novartis, contains a patient’s genetically engineered T cells.

In a sweeping success for cancer immunotherapy this year, the U.S. Food & Drug Administration approved the first two treatments that use a patient’s own genetically engineered cells to combat specific kinds of blood cancer.

Both new drugs are CAR T-cell immunotherapies, created by injecting an individual’s T cells with DNA that encodes a chimeric antigen receptor (CAR). The CAR proteins jut from the immune cells’ surfaces and direct them to seek and destroy tumor cells.

Some 83% of people treated with the first approved CAR-T drug, Kymriah from Novartis, achieved complete remission—no cancer detected—within three months. More than 50% of people treated with the second drug, Kite Pharma’s Yescarta, are in complete remission.

“The excitement is justified; it is a validation of the field,” says David Epstein, former CEO of Novartis Pharmaceuticals.

Despite the excitement, many challenges remain for CAR-T therapies. To start, both treatments were approved for a small subset of cancers.

Kymriah treats people up to 25 years old who have acute lymphoblastic leukemia of B-cell origin who are resistant to treatment or have relapsed twice, limiting potential patients to a few hundred per year. Yescarta treats large B-cell lymphoma in adults after two other treatments have failed. It could help an estimated 7,500 people per year.

“The number one challenge for CAR-T is to get it to work more broadly,” says Brad Loncar, a biotech investor specializing in immunotherapy. If CAR-T therapy ends up being useful for only a few kinds of cancer, “it will be a huge failure,” although Loncar thinks this scenario is unlikely.

One company to watch is Bluebird Bio, which recently announced promising Phase I clinical trial data using a different kind of CAR-T therapy to treat multiple myeloma. But even if CAR-T works for other blood cancers, applying the technique to the majority of solid tumors will be difficult.

Loncar says the CAR-T company “the market is most excited about” is Juno Therapeutics, which has more than 10 clinical programs for blood and solid tumors. Juno’s most advanced program fell behind after five patients died from CAR-T-induced brain swelling.

Toxicity is a lingering issue for other CAR-T therapies too. Kymriah and Yescarta both come with warnings for cytokine release syndrome, a severe, body-wide immune reaction after injection of the drug. “It’s not an exaggeration to say that it almost kills you before it helps you,” Loncar says.

The personalized nature of CAR-T makes manufacturing another complication. Some companies, including Cellectis, are designing “off-the-shelf” CAR-T cell therapies made ahead of time with other people’s cells.

Pricing, however, is perhaps the issue that’s most captured the public’s attention. The drug industry has signaled that CAR-T will be a big business. Less than two months before Yescarta’s approval, Gilead Sciences acquired Kite Pharma for $11.9 billion.

Kymriah’s one-time cost of $475,000 and Yescarta’s price tag of $373,000 caused sticker shock and spurred broader questions about the affordability of CAR-T and gene-therapy treatments. Novartis said people won’t pay for Kymriah if they don’t respond to treatment within a month.

“CAR-T is not expensive because of greed,” Loncar says. It is expensive because of the logistics, limited patient population, and its novelty, he adds. “CAR-T is state of the art, and this is just the beginning.”