Pharma Outlook 2019: Drug Pricing Dialogue Continues

- December 24th, 2018

During this challenging time in healthcare news, our pharma outlook aims to help investors steer through the industry.

Drug pricing, merger and acquisition (M&A) activity and clinical trial news were major pharma trends in 2018, and as 2019 approaches investors are wondering about the pharma outlook.

As we head into the new year, the Investing News Network (INN) is looking at what’s in store for the pharma industry moving forward with insight from industry experts.

During this challenging time in healthcare news, our pharma outlook aims to help investors steer through the industry. We cover drug pricing, clinical trial news and drug approvals, which may be a few of the big topics that the market will deal with in 2019.

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Pharma outlook 2019: Drug pricing talk continues

Throughout 2018, drug pricing was brought into question by many big figures, including US President Donald Trump and the US Food and Drug Administration (FDA). Though questions have subsided, David Nierengarten, managing director at Wedbush Pac Grow Healthcare, told INN they’re likely to return.

Nierengarten said drug pricing inquiries will come back when the Democrats resume the US House of Representatives, but when going up against the US Senate, “nothing major will be done there.”

“If [a pricing scheme] did come through, it would wipe out a lot of valuation,” he said. Aside from a possible “wild card” on a new drug pricing scheme with US Congress, there likely won’t be any huge changes, he added.

The FDA has also been commenting on adding competition to lower drug prices. Nierengarten said this is why drug companies have been increasing prices, with some going up by 9 percent every nine months. More drugs on the market — generics or not — have put the lid on many price increases. “That’s a good thing for the consumer, but a bad thing for the top-line revenues for the pharma companies,” he said.

William Looney, executive editor for In Vivo at Informa Pharma Intelligence, told INN that a value-based payment mechanism could serve as an alternative to the traditional fee-for-service model. This could “garner additional support from payers, providers and regulators in the US and Europe,” he said.

That would put pressure on pharma companies to adapt their business models to generate evidence through non-traditional means, such as clinical trials. By switching to the use of real-world data, patient-reported outcomes and observational studies, companies would need to make costly investments in data aggregation, analysis and stakeholder outreach, Looney said.

We found the top performing pharma stocks to watch this year

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Bonnie Bain, global head and executive vice president of healthcare operations and strategy at GlobalData (LSE:DATA), and Kelly Lambrinos, senior editorial analyst at GlobalData, agreed with these sentiments. They said, “unexpected changes in policies and political uncertainties remain a great risk for the pharma sector.”

Patents could be another focus of bringing down drug prices. Kelsey Oliver, senior industrial analyst at IBISWorld, said many blockbuster drugs are set to expire in 2019, including Novartis’ (NYSE:NVS,SWX:NOVN) GILENYA, Allergan Pharmaceuticals’ (NYSE:AGN) Restasis and Takeda Pharmaceuticals’ (TSE:4502) Uloric.

Oliver said companies will likely shift focus to rare diseases, or oncology drug indications that benefit from orphan drug status and have longer patent protections. The designation prevents the FDA from approving any other application for the same drug for the same indication within seven years.

Pharma outlook 2019: Trial news

GlobalData’s Bain and Lambrinos mentioned many companies that are expecting trial news in 2019.

Arcus Biosciences (NYSE:RCUS) is planning to report proof-of-concept data in the first half of 2019 for its A2a receptor targeting therapy, AB928, in five tumor types. GlobalData said experts have said there are unanswered questions for the drug’s mechanism and the future of its oncology trials.

Aptinyx (NASDAQ:APTX) also has a catalyst coming up in the first half of the year. This will be for proof-of-concept data for the company’s lead compound, NYX-2925, for diabetic peripheral neuropathy and fibromyalgia.

Meanwhile, FibroGen’s (NASDAQ:FGEN) pooled major adverse cardiovascular event analysis is expected between March and April of next year.

For its part, Intercept Pharmaceuticals (NASDAQ:ICPT) will be releasing interim results from its Phase 3 REGENERATE trial for obeticholic acid in non-alcoholic steatohepatitis in the first half of 2019.

We found the top performing pharma stocks to watch this year

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ImmunoGen (NASDAQ:IMGN) will also disclose the final results from its Phase 3 trial of IMGN853 in the first half of 2019. This is anticipated to trigger a major share price movement, GlobalData said.

With a focus on breast cancer, MacroGenics (NASDAQ:MGNX) will release top-line data from its Phase 3 SOPHIA trial of an anti-HER2 candidate, margetuximab, which is expected in Q1 2019.

Additionally, Karyopharm Therapeutics’ (NASDAQ:KPTI) Phase 3 BOSTON trial for multiple myeloma for KPT-330 will be released in Q4 2019.

Pharma outlook 2019: Drug approvals

The outcomes of FDA drug approvals can’t be predicted, but companies are assigned a prescription drug user fee amendment (PDUFA) date by the FDA. This is the deadline by which the agency will review new drugs, usually within 10 months. On priority review, the drug application is addressed within six months.

Drug approvals generally always have an implication for a company’s share price — either positive or negative — meaning these are important milestones for investors to watch.

In 2019, Acorda Therapeutics (NASDAQ:ACOR) has a PDUFA date of January 5 for its drug INBRIJA (CVT-301). The drug could serve as a new Parkinson’s disease treatment for OFF periods, which about 40 percent of Parkinson’s patients have.

Lexicon Pharmaceuticals (NASDAQ:LXRX) and Sanofi (NYSE:SNY) have a PDUFA date of March 22 for their drug Zynquista. If approved, the drug could be the first oral anti-diabetic drug for patients with Type 1 diabetes, used in combination with insulin.

After a resubmission for its biologics license application, the FDA gave ADMA Biologics (NASDAQ:ADMA) a PDUFA date in early April for its drug RI-002. This unique drug candidate is a human plasma-derived drug for primary immune deficiency disease and the prevention of certain infectious diseases.

We found the top performing pharma stocks to watch this year

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In Canada, Canntab Therapeutics (CSE:PILL) is expecting Health Canada approval for its oral-dose cannabisdelivery solution. This and other milestones will allow the company to begin generating product sales in 2019, Canntab CFO Richard Goldstein told INN.

Oliver added that investors should follow the FDA’s Center for Drug Evaluation and Research, which lists novel drug approvals annually. Checking out 2018’s approvals could provide a window into the next few years, she said.

Pharma outlook 2019: Investor takeaway

Oliver said Novartis, AbbVie (NYSE:ABBV), Amgen (NASDAQ:AMGN) and AstraZeneca (NYSE:AZN) are a few of the top performers in the pharma sphere that are expected to continue with strong pipelines.

Looney added a few more companies to this list, including Merck (NYSE:MRK), Gilead Sciences (NASDAQ:GILD) and Bristol-Myers Squibb (NYSE:BMY). These companies are expected to expand their cell- and gene-based immuno-oncology franchise into additional therapeutic indications.

As 2019 begins, investors interested in the pharma space will have plenty to look forward to, and are encouraged to keep tabs on the main players in the space.

Don’t forget to follow @INN_LifeScience for real-time updates!

Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Canntab Therapeutics is a client of the Investing News Network. This article is not paid-for content.

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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