Written by: Amy Whiting and Alasdair Milton
Analysis of: GSK starts Relovair phase-III asthma programme 

SUMMARY
Relovair is expected to launch in the U.S. and European markets for both asthma and COPD in 2013. Although the drug will face competition from both branded (Novartis’ indacaterol / mometasone) and ‘branded generic’ (Novartis AG / Vectura’s VR315) drugs, we believe that Relovair will eventually supplant Advair as the market leader in the LABA/ICS space – most notably because of GSK’s marketing strength in this arena.

ANALYSIS
GlaxoSmithKline Plc is developing its follow-on to Advair (salmeterol / fluticasone propionate) – a once daily fixed-dose combination of the inhaled corticosteroid (ICS) fluticasone furoate (685698 – currently marketed under the brand name Veramyst as an intranasal treatment for allergic rhinitis), and the long-acting beta2-agonist (LABA) vilanterol trifenatate (642444). The drug, which emerged from GSK’s strategic alliance with Theravance, entered pivotal Phase III COPD and asthma trials in October 2009 and March 2010, respectively.

 

However, in February 2010, the FDA announced new safety controls aimed at limiting use of all LABA-containing drugs in asthma. The FDA will also require manufacturers of LABA / ICS combination products to conduct post-market studies to identify the safety risks associated with these drugs. As such, Theravance recently noted that Relovair may face a longer and more costly clinical development program in the United States should the FDA require more rigorous safety studies for emerging LABA / ICS combination products.

 

Given GSK’s commercial success with Advair, we expect the company to embark on an aggressive switching campaign to the once-daily follow-on product. However, uptake is likely to tempered somewhat by the expected 2013 launch of Novartis’ once-daily LABA / ICS combination, indacaterol / mometasone.

 

Written by: Kiran Meekings
Analysis of: Syngene in pact with Endo Pharma to develop anti-cancer novel molecules

SUMMARY
This deal is in-line with Endo’s recent moves to diversify its pipeline ahead of near-term patent expiries. Diversification into the high-growth biological oncology sector could be a shrewd move and, if the alliance bears fruit, could help Endo’s long-term growth prospects.  However, we do not expect this deal to contribute to ethical drug sales within the next 7 years and note that by the time these candidates reach maturity, the oncology biologics space will be highly competitive.

ANALYSIS
Endo Pharmaceuticals is an established pharmaceutical company with a presence in the pain products market. The largest near-term risk to the company’s earnings comes from generic competition within the next three years for Lidoderm and Opana ER.  Management has therefore increased its efforts in recent years to diversify its therapeutic coverage beyond pain treatments and has become increasingly aggressive in broadening its portfolio and pipeline prospects through licensing deals. The company’s largest single transaction was the 2009 purchase of Indevus Pharmaceuticals, which added exposure to the urology, endocrinology, and oncology segments, as well as pipeline projects in the anti-viral and urology areas.

 

Within the oncology franchise, the acquisition added Vantas and Valstar to the company’s marketed portfolio for the treatment of advanced prostate cancer and bladder cancer respectively. Although these products mark a start of a foray into the oncology arena, both have limited growth prospects.  Endo is therefore keen to build a robust oncology pipeline.  The alliance with Sygene is the latest move to achieve this aim.  Syngene International, a subsidiary of the Indian biotechnology company Biocon, is a custom research company, which specializes in early-stage drug discovery for a range of global clients.  Under the terms of the recent initiative, Endo will retain all rights to the novel biologics developed whilst Syngene will receive milestone payments and research fees.

 

Decision Resources is expecting global growth in the oncology market (2008-2015 CAGR of 3.8%) to far exceed growth across the global pharmaceutical market (2008-2015 CAGR of 2.3%).  In addition, growth of branded biological cancer products is expected to be more than double that of small molecules.  However, this arena is a focus of R&D for most of the major pharmaceutical players.  Unless Endo is planning on focusing on small niche indications, by the time of fruition the candidates stemming from this alliance will have to prove their superiority in a much more competitive landscape.
 

Written by: Silvia Eash
Analysis of: WHO Suspends Sanofi Vaccine

SUMMARY
In March 2010, the WHO suspended the distribution of sanofi-aventis' Shan5 vaccine based on quality issues.   As a result, short-term gains are expected for Novartis/Crucell's equivalent pentavalent vaccine, Quinvaxem, but limits on local manufacturing capacity will ultimately cap the benefit.  Instead the overall effect is expected to be minor as the shortfall will be addressed with similar paediatric combination vaccines from GSK as well as sanofi/Shantha’s other WHO-pre-qualified vaccines.
 
ANALYSIS

SHAN5 (DPT-HebB-Hib) is a pentavalent paediatric combination vaccine that includes Diphtheria, Pertussis, Tetanus, Haemophilus influenza B, and Hepatitis B. The vaccine is developed and manufactured by Shantha Bioethics in Hyderabad, India. Sanofi-aventis acquired an 80% stake in Shantha in August 2009, and the company positions Shantha, with its range of affordable paediatric vaccines and established relationships with a number of supranational organizations for vaccine supply to Asia-Pacific, Africa and Latin America, as one of its main drivers of growth for its vaccine portfolio in the emerging markets.

 

SHAN5 is pre-qualified by the WHO for supplying to U.N. agencies around the world.  In September 2009 the U.N. agency awarded Shantha a $340-million contract to supply SHAN5 for the period 2010-2012. The contract covers supply of SHAN5 to countries in Africa, Asia, and Latin America. However, in March 2010 the WHO suspended SHAN5 because of complaints that white sediment was found in some of the vials. No safety concerns have been associated with the vaccine but in the countries where the vaccine is available, immunisation with SHAN5 has been suspended pending the findings from an ongoing quality investigation.

 

Despite the suspension of SHAN5, the WHO has advised that immunisation should continue using pentavalent vaccines from different manufacturers or using different vaccines that also offer protection against DTP.   This will provide benefit only to a small subset of the global vaccine companies, as the likes of Merck and Pfizer have a limited presence in the paediatric vaccine market in the regions covered by SHAN5. The companies that are likely to benefit the most are Novartis / Crucell who produce an equivalent paediatric combination vaccine, Quinvaxem, which offers coverage against the same five childhood disease as SHAN5.  Quinvaxem is also a WHO pre-qualified vaccine and is sold to developing countries through supranational organizations for large vaccination programs. In August 2009 Crucell was awarded a new $300-million contract by a large supranational organization to supply Quinvaxem during the 2010-2012 period.

 

While the suspension SHAN5 is expected to be temporary, a prolonged absence from the market would clearly leave a void in the paediatric combination vaccine market in developing countries. However, given its own contractual obligations it is unlikely that Novartis/Crucell will be able to take on additional sizeable orders at this time. Instead we expect that if SHAN5 is suspended following the quality investigation, the gap will be filled with other similar, but not identical, paediatric combination vaccines including Shantha’s other WHO-pre-qualified vaccines that offer similar coverage such as SHANTETRA (DTP-HepB), SHANVC-B (rHepB), and SHANTT (tetanus toxoid), meaning the overall impact on sanofi-aventis will likely be minimal.