• SERVICES
  • INDUSTRIES
  • PERSPECTIVES
  • ABOUT

    • Who We Are

      We support businesses in their strategic decisions on growth and optimization

      Who We Are

    • Connect With Us

      let’s connect to discuss how we could support your intelligence needs

      Contact

    • Work With EOS

      We are researchers – curious, knowledge-hungry, and eager to solve problems

      Work With Us
  • Search
  • ENGAGE

PHARMACEUTICALS

Home PHARMACEUTICALS

Pet and Animal Health M&A What’s the Scoop on the Industry's Latest Shake-ups by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

Pet and Animal Health M&A: What’s the Scoop on the Industry’s Latest Shake-ups?

The pet and animal health market has seen a recent surge in M&A, signaling shifting dynamics within the industry. While rising pet ownership and increasing pet care awareness are creating positive momentum for the sector, broader trends are pushing major players to venture into the industry.

Many European players are focusing on cross-border acquisitions

M&A activity is particularly robust in Western markets

A significant number of mergers and acquisitions observed recently in the industry indicate a desire for major players to consolidate their positions and expand geographically in a bid to build their global presence and diversify revenue sources. Many companies pursuing geographic diversification are targeting Western markets with well-established pet care, mainly due to high disposable incomes, advanced veterinary services, and a cultural tendency to indulge pets.

An example of such a move is the 2023 acquisition of UK-based Kin Vet Community by Perwyn Capital, a European private equity (PE) investor, to gain entry into the UK veterinary services market. This acquisition aims to capitalize on the UK veterinary services market’s significant growth, which has risen from US$6.4 billion in 2021 to almost US$8 billion in 2023.

The UK-based veterinary sales and service provider, Animalcare Group acquired Australia-based Randlab in 2024 to strengthen its presence in the equine veterinary market. With this acquisition, Animalcare Group will be able to bolster its existing product portfolio and expand from the UK and Europe into Australia and New Zealand.

Similarly, Sweden-based investment company EQT Partners acquired VetPartners, a veterinary care network spread in Australia and New Zealand, in 2023. This move will not only help EQT enter the Australian and New Zealand veterinary markets but also help gain a strategic position in the veterinary industry with a network of 267 clinics and hospitals.

Experts believe that all these recent acquisitions indicate a desire of players to solidify their industry presence and widen their customer base, especially in the lucrative Western markets.

Central Europe is also experiencing a notable uptick

While M&A activity is the strongest in Western markets, some companies are also looking to Central Europe to search for their acquisition targets. An example is the 2024 acquisition of Bratislava-based VetCare Group by AniCura, a Swedish veterinary care provider owned by US-based Mars. This acquisition will add ten clinics to AniCura’s portfolio, three in the Czech Republic and seven in Slovakia. This strategic move also marks AniCura’s entry into the Czech and Slovak markets, significantly expanding its footprint in Central and Eastern Europe and complementing AniCura’s existing presence in Poland.

The developing markets are also grabbing players’ attention

A few players are also showing interest in developing markets such as Asia and Africa, where pet ownership is increasing, but veterinary and pet healthcare infrastructure remains underdeveloped.

Strategic acquisitions are increasing in Africa

Africa is a particularly lucrative investment zone with a favorable market situation for able players interested in investing in the continent’s animal health sector. This is due to barriers in local drug manufacturing, lack of local vets in private practice, and shortage of veterinary drugs.

A recent example of such an investment is Dutch-based animal nutrition company Nutreco’s 2024 acquisition of AECI Animal Health in South Africa. With this acquisition, Nutreco intends to utilize AECI’s expertise in animal nutrition to bolster its operations in South Africa. This move is also expected to allow Nutreco to tap into AECI’s distribution network and manufacturing facility in Burgersdorp, expanding its footprint in Africa’s crucial markets.

Similarly, in 2022, Ireland-based Bimeda acquired Afrivet, an animal health product distributor based in South Africa. This acquisition facilitated Bimeda’s entry into the African animal health products industry.

Foreign players are targeting the growing Asia-Pacific market

The Asia-Pacific (APAC) animal health market is also seeing similar interest from many competitive players. The pet care market in Asia, though still developing in several areas, is experiencing rapid growth. Countries such as China, India, and Japan are seeing a rise in pet ownership and heightened awareness regarding pet health. This makes it a great place for players looking to concentrate on various growth strategies, including collaborations, partnerships, agreements, and M&A, to strengthen their market presence.

An example of a recent strategic acquisition in the Asian market was France-based animal health company Virbac’s purchase of Japanese ORIX Corporation’s animal health subsidiary, Sasaeah, in 2024. The acquisition will help position Virbac as a leader in Japan’s farm animal vaccine market, particularly in the cattle sector. Sasaeah already has a strong presence in Japan and develops a wide range of veterinary products for both farm and companion animals. With this acquisition, Virbac will also gain Sasaeah’s local manufacturing facilities in Japan and Vietnam and its R&D capabilities. It will also strengthen Virbac’s status as a major player in the Japanese animal health market and offer opportunities for further expansion throughout Asia.

Virbac also acquired in 2023 a majority stake in Globion, a poultry vaccines company located in India, as part of its strategy to enter the avian vaccines market in the region and expand its geographic reach.

Similarly, in 2022, Germany-based Symrise AG, the parent company of Diana Pet Foods, which provides palatants for the pet food industry, acquired Wing Pet Food, a leader in pet food palatability in China. This acquisition gave Symrise access to the APAC markets.

Though the acquisition efforts are much lower in the developing markets, with favorable conditions such as increasing pet ownership and rising demands for efficient veterinary care, interested players can expect an overall improvement in market conditions and attractiveness in the future.

Major players are vying for smaller companies in a bid to grow product portfolios

Beyond increasing the geographical reach, the M&A activities aimed at expanding and strengthening companies’ product portfolios are also a significant trend observed in the animal health industry. Many big players are eyeing smaller firms to build comprehensive portfolios that can compete more effectively against other industry giants.

An example is the 2024 acquisition of Boston-based Invetx, which specializes in protein-based animal therapeutics and monoclonal antibody (mAb) development, by UK-based Dechra Pharmaceuticals. This acquisition enhanced Dechra’s specialty therapeutics portfolio for pets and provided access to the growing mAbs market. It will also introduce new technological capabilities, strengthen Dechra’s pipeline, and create significant future growth opportunities for the company.

Similarly, in 2024, the NJ-based Merck Animal Health acquired Indiana-based Elanco Animal Health’s aqua business to enhance Merck’s position in the aquaculture sector. This includes medicines, vaccines, supplements, and nutritional products for aquatic species, as well as two manufacturing facilities located in Vietnam and Canada and a research center in Chile. With this acquisition, Merck aims to strengthen its extensive portfolio, including warm and cold water products, vaccines, anti-parasitic treatments, and nutritional supplements.

Many other acquisitions materialized in 2024 in a similar vein. This includes Animalcare Group’s acquisition of Randlab to enter the equine care market and Australia and New Zealand’s animal health market. Also, South Korea-based Easy Bio acquired US-based Devenish Nutrition to bolster its feed additive and premix operations in North America.

Players are focusing on consolidation to bolster their veterinary service offering

The veterinary services segment is also seeing robust consolidation. Several corporate buyers acquired independent clinics and businesses to strengthen their market position and access the robust customer base of the target companies. Significant consolidation has been visible in the USA and globally for the past three decades.

A recent example is Norway-based veterinary dental care provider EMPET acquiring Smadyrklinikken, a Norway-based provider of veterinary services, including surgery and emergency care, in 2023. EMPET also acquired a Norway-based horse treatment clinic, Hesteklinikken Bergen, in 2024, further expanding its veterinary treatment scope.

Similarly, in 2024, Miami-based at-home veterinary care provider The Vets merged with Boston-based BetterVet, a mobile veterinary service provider, to combine the strengths of both companies and enhance their pet healthcare services across the USA.

Another acquisition along the same line in 2024 was that by Pavo, part of the Netherlands-based ForFarmers‘ global equine organization, which acquired Thunderbrook Equestrian, operating primarily in the UK and Ireland. Thunderbrook offers a diverse range of products, including conventional and organic horse feed, supplements, and herbs, supported by a strong distribution network and online presence. Experts expect this acquisition to enhance Pavo’s distribution capabilities.

Private equity firms are also targeting pet health firms

It is not only businesses within the veterinary or pet sector that are acquiring clinics and animal health businesses, but also companies from other industries and PE firms.

One example is the 2024 acquisition of Ireland-based veterinary products manufacturer Chanelle Pharma by Exponent Private Equity, a UK-based PE firm. Chanelle specializes in R&D and has a prominent position in the market as a producer of generic pharmaceuticals for both human and veterinary use. This acquisition offers Exponent many opportunities for investments in product development and R&D.

Similarly, UK-based PE firm Apax Partners, in 2023, acquired stakes in US-based pet care software service provider Petvisor to focus on accelerating innovation and to position itself as a market leader in the pet software segment.

This trend will continue since the pet care market is expanding remarkably. According to Fortune Business Insights, an India-based market research firm, the global pet care market valued at US$246.7 billion in 2023 is expected to reach US$427.8 billion by 2032. Experts anticipate that this significant growth fueled by the increasing trend of pet ownership will prompt more PE firms to invest in the pet care market.

Pharmaceutical and vaccine segment is seeing acquisitions with rising pet diseases

The growing demand for specialized pet treatments is driving M&A in the pharmaceutical and vaccine segments of the pet health industry. The rising cases of pet and livestock infections and increasing zoonotic diseases are creating a strong demand for improved treatments, conveniently available medicines, and vaccines. This has prompted many players to divert their attention toward acquiring companies in the veterinary pharma segment to gain market access.

An example is the 2024 acquisition of Iowa-based animal pharmaceuticals and vaccines manufacturer Diamond Animal Health by Minnesota-based animal compounding pharmacy, Veterinary Pharmaceutical Solutions. Experts see this acquisition as the first step in VPS’s plans to grow its capabilities, market presence, product offerings, and research capabilities.

Another example is the 2023 acquisition of PetMedix, a UK-based firm developing species-specific therapeutic antibodies for pets, by US-based Zoetis, a global animal health firm. With this acquisition, Zoetis has gained access to PetMedix’s portfolio of antibody drug candidates targeting unmet clinical needs in dogs and cats with chronic and terminal diseases, including oncology and inflammatory diseases.

Similarly, the US-based Better Choice Company‘s acquisition of Canada-based Aimia Pet Healthco in 2024. This move will allow Better Choice to lead internal clinical trials focused on addressing the increased demands for treating obesity-related issues in cats and dogs.

In 2023, Zoetis acquired Germany-based veterinary care company Adivo, which focuses on creating animal therapeutic antibodies. This acquisition will allow Zoetis to leverage Adivo’s existing libraries of species-specific antibodies, facilitating the creation of a diverse array of new veterinary products.

The vaccine market in emerging economies such as Asia-Pacific is also seeing some scattered M&A activity. Virbac’s 2023 acquisition of a majority stake in India-based poultry vaccines company Globion to venture into the growing avian vaccines market can be seen as an instance of this budding trend.

Preventive care and wellness players are becoming attractive targets

A 2023 survey published by the American Veterinary Medical Association indicated that 76% of pet owners consider their pet’s safety and health a top priority. This disposition has also started influencing how pet owners choose food for companion animals, prompting them to opt for organic and healthy treats. All these have made diagnostics, preventive care, and sustainable health a hot topic among interested players, leading to some major acquisitions.

Wellness and preventive care players are attractive acquisition targets

Many acquisitions in the animal health industry are also focused on wellness and preventive care businesses. The factors driving this trend are the rising awareness among pet owners about the advantages of preventive healthcare, early disease detection, and overall wellness of the pets in the long term.

An example is the 2024 acquisition of US-based treat and pet care company Riley’s Organics by Skane-based Swedencare‘s subsidiary business, Pet MD Brands, marking its entry into the organic dog treat market in the U.S. The acquisition will give Pet MD access to Riley’s premium organic dog treats and nutritional supplements targeting coat and skin health, liver support, ear care, etc.

Similarly, Antelope, a US-based company that offers premium pet care products and services, has acquired My Perfect Pet, a US-based brand known for its ‘gently cooked’ dog and cat food. With this acquisition, Antelope can strengthen its portfolio with My Perfect Pet’s nutritionally balanced pet food without preservatives.

Veterinary diagnostics surge as acquisitions drive segment growth

The veterinary diagnostics sector has also seen some recent acquisitions. Mars, currently a leading name in the pet health segment, acquired Cerba HealthCare’s stake in the French veterinary diagnostics firms Cerba Vet and Antagene. Mars made a similar decision in 2023 when it acquired US-based Heska, a veterinary diagnostic and specialized solutions provider. All these acquisitions can help Mars position itself as a major competitor in the pet diagnostics sector.

Similarly, in 2024, US-based Ollie, a subscription service for fresh dog food, acquired Dig Labs, a diagnostic company that delivers real-time health screenings for pets, including stool analysis and weight management. This acquisition also aims at helping pet owners monitor their pet’s food intake and get personalized food intake recommendations to prevent health issues.

We expect the veterinary diagnostics segment to grow significantly, and M&A activity will continue accelerating in the coming years.

EOS Perspective

The flurry of M&A activity in the animal health sector highlights the industry’s significant potential. Along with the existing trends, experts believe there are many more segments interested and able players looking to consolidate their position in the industry can focus on.

Online and mobile pet care is a promising area for businesses considering investment or acquisition within the pet health sector. Companies that can effectively navigate this space will likely capitalize on the increasing demand for online services, likely through acquiring businesses with an established customer base to strengthen their portfolio. It will also help firms enhance their competitive edge through a digital-first approach. The 2024 acquisition of The PharmPet Co by Pharmacy2U, both UK-based firms, can be seen as one of the early steps in this direction. This merger will allow Pharmacy2U to offer pet medicines online to customers.

A nascent trend that could offer opportunities in the future is pet owners’ increasing interest in their pets’ gut and microbiome health. Experts believe this inclination of pet owners will increase in the coming years, creating a massive market for pet foods and supplements, especially those containing probiotics and gut-supporting formulas. This will make profitable businesses in the pet supplement segment a lucrative option for able and interested players to focus on.

Read our related Perspective:
 Poop to Pills: Is FMT the Future of Veterinary Medicine?

Sustainable and eco-friendly products are another segment with growing attractiveness thanks to the ever-increasing environmental awareness. As in many other markets, pet owners will seek products that consider environmental impact. With consumers aligning their choices with eco-friendly solutions, we can expect major brands to merge or acquire companies making eco-friendly pet products. The 2024 merger of Chr. Hansen and Novozymes, both Denmark-based firms, to create Novonesis is an example. With this merger, the new company aims to develop microbial solutions and enzymes while focusing on minimizing chemical use and advancing climate-neutral practices.

New Directions in Alzheimer’s Diagnostics Will Blood Tests Replace CSF and PET by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

New Directions in Alzheimer’s Diagnostics: Will Blood Tests Replace CSF and PET?

702views

Around three-fourths of dementia cases continue to remain undiagnosed even though the incidence of Alzheimer’s disease (AD) is rapidly growing across the globe. AD affects about 60-80% of dementia patients worldwide. Early diagnosis of AD is critical in forging beneficial medical care strategies and enhancing patient outcomes. Current AD diagnostic tests, such as cerebrospinal fluid (CSF) and PET scans, are either invasive or associated with side effects and are generally expensive. This calls for developing less invasive, safer, faster, and more accurate AD diagnostics, such as blood tests.

Blood-based tests promise accurate and non-invasive AD diagnosis

Researchers are developing less invasive and less costly blood tests that are likely to be more accurate than contemporary tests. There are currently two types of AD diagnostics blood-based tests: the phosphorylated tau217 (ptau217) test and the amyloid beta (Aβ) 42/40 plasma ratio test.

The ptau217 biomarker has the potential to differentiate AD from other neurodegenerative diseases, as ptau217 levels can be high in AD patients before the onset of clinical symptoms. Studies have proved that ptau217 tests can detect AD early on and monitor disease progression.

The Aβ 42/40 plasma ratio tests detect amyloid beta protein plaques in the brain that cause cognitive impairment. Due to the lack of a certified reference standard for measuring plasma Aβ42 and Aβ40’s absolute values, ptau217 may be better than an amyloid beta ratio test. However, both tests are accurate enough to diagnose AD.

Notably, ptau217 blood tests are believed to give up to 95% accurate results when coupled with CSF tests as against 90% accuracy of CSF when used as a standalone method. At the same time, amyloid beta (Aβ) 42/40 ratio tests are known to give around 80% accuracy in detecting amyloid positivity.

Many laboratories and diagnostic companies have designed or are designing ptau217 assays. C2N Diagnostics, Quanterix, Quest Diagnostics, and Laboratory Corporation of America (LabCorp) offer ptau217 laboratory-developed tests (LDTs).

Low cost of blood-based AD tests can also be a growth-driving factor

A major push towards blood-based AD diagnostics comes from the tests’ lower cost in comparison to PET and CSF. The cost of blood tests typically ranges from US$200 to US$1,500, depending on the test provider.

The cost of PET ranges from US$1,200 to US$18,000, while the average price of CSF tests is around US$4,000 (in both cases, the actual cost depends on the type of facility, location, and the extent of insurance coverage).

As of 2023, Medicare and Medicaid covered PET scans for AD in the USA outside clinical trials. Therefore, AD patients need to pay around 20% of the PET cost, which translates to US$240-US$3,600, even after insurance coverage.

Considering the high share of dementia and AD cases remaining undiagnosed, there is a chance that the lower cost of blood-based tests can help contribute to higher accessibility to testing and ultimately improve the early detection rate.

Large AD diagnostic players partner with smaller ones to develop new tests

In an attempt to develop ptau217 assays, major diagnostics companies tend to recognize the development progress made by smaller players. ALZpath, a novel AD diagnostic solutions provider, is the pioneer of the ptau217 antibody, which helps in the early detection of the disease. Large players such as Roche and Beckman Coulter are enticed by the synergistic opportunities ALZpath offers.

In June 2024, Roche partnered with ALZpath, an early-stage biopharmaceutical company specializing in AD diagnostics, to launch the plasma ptau217 In-Vitro Diagnostic (IVD) test. As per the partnership, Roche will use ALZpath’s ptau217 antibody to design and commercialize an IVD test to detect AD with the help of Roche’s Elecsys platform.

In July 2024, Beckman Coulter also partnered with ALZpath to utilize ALZpath’s proprietary ptau217 antibody to detect AD on Beckman Coulter’s DxI 9000 Immunoassay Analyzer.

AD diagnostics firms receive funding from various sources, including drugmakers

Constantiam Biosciences, a bioinformatic analysis firm, received a US$485,000 Phase 1 SBIR grant (Small Business Innovation Research) from the National Institute on Aging to develop a tool for deciphering risk variants pertaining to AD and related dementias (AD/ADRD) in September 2024.

Biogen and Eli Lilly invested in the Diagnostics Accelerator, a funding initiative started in 2018, at the Alzheimer’s Drug Discovery Foundation (ADDF) in 2020. The Diagnostics Accelerator has invested over US$60 million across 58 projects, most of which are blood tests. In its Q4 2023 earnings call, Biogen emphasized its support for developing tau biomarker diagnostics and pathways. Its partner, Eisai, has invested around US$15 million in C2N Diagnostics and collaborated with IVD companies such as Sysmex, among others. In September 2024, ADDF invested US$7 million in C2N Diagnostics to further develop blood-based AD detection tests.

Other investors have also identified the opportunities AD diagnostic offers. A 2024 market research report by Market Research Future estimated that the AD diagnostic industry would nearly double, from US$4.5 billion in 2023 to US$8.8 billion in 2032.

FDA stands as an accelerating force for blood-based tests via breakthrough device designation

For a while now, the FDA has been granting breakthrough device designation (BDD) to devices that could address life-threatening diseases with unmet medical needs. BDD facilitates the expedited development, review, and assessment of medical devices, ensuring quicker access for patients and medical professionals. It would not be too ambitious to conclude that strong positive evidence from several uses and studies of ptau217 tests is likely to compel the FDA to approve them for use in the near future. The first sign of this is that the FDA is granting BDD status to multiple ptau217 blood tests.

In March 2024, the FDA granted BDD to Simoa ptau217 by Quanterix. This blood test can detect AD in patients with cognitive ailments even before signs and symptoms start to appear.

In April 2024, the FDA gave BDD to Roche’s Elecsys ptau217 plasma biomarker test to augment early diagnosis of AD. Roche partnered with Eli Lilly to develop this blood test that will widen and accelerate AD patients’ access to diagnosis and suitable medical attention and care.

In early 2019, the FDA gave BDD to C2N Diagnostics’ blood test to detect AD. The BDD status of AD blood tests will likely accelerate the development, review, and assessment processes of these tests, improving patient outcomes.

Some FDA-approved AD drugs have used blood tests in clinical trials. Eli Lilly’s Kisunla and Esai/Biogen’s Leqembi have successfully utilized C₂N Diagnostics’ Precivity-ptau217 blood biomarker in their clinical trials. The FDA approved both drugs to manage AD. This improves the chances of this blood test getting approved by the FDA.

Lumipulse G β-Amyloid 1-42 Plasma Ratio test by Fujirebio Diagnostics received BDD from the FDA in 2019. The company submitted an FDA filing for the Lumipulse G ptau217/β-Amyloid 1-42 Plasma Ratio IVD test in September 2024. If approved, this test will become the first commercially available blood-based IVD test in the USA to detect AD.

EOS Perspective

There has been considerable progress in developing blood-based assays for AD diagnosis by pharma and diagnostics companies. However, a good portion of the liability for their products not reaching market readiness faster lies (and will probably remain to lie) on the approving authorities that are unable to accelerate the administrative steps.

Some blood tests, such as PrecivityAD, are approved for safe use in the EU but are still not in the USA. While such approval is typically a time-consuming process and requires a thorough investigation, the blood tests will enter the market at a larger scale across several geographies only if the authorities fast-track their approvals. This is particularly applicable to blood tests previously successfully used in clinical trials for approved AD drugs and for tests that have already attained BDD status from the FDA.

As an example, PrecivityAD by C2N Diagnostics received BDD status in 2019 from the FDA. However, the FDA has still not approved the blood test for safe use in the USA. This is still despite the fact that PrecivityAD and other C2N Diagnostics’ assays have been utilized in over 150 AD and other research studies across the USA and abroad. FDA’s time-consuming and lengthy review procedures and bureaucratic reasons are some of the factors responsible for the delay in approval. In addition to this, C2N Diagnostics needs to submit some more evidential data pertaining to the accuracy of PrecivityAD, which is likely to take time to produce.

These procedural and administrative impediments, along with the time taken by the device makers to present the data to the FDA, will likely continue to put a brake on the blood-based tests becoming available to patients in the near future.

The situation will remain so, given the FDA’s recent decision to regulate new LDTs involving diagnostic tests that use body fluids such as blood, saliva, CSF, or tissue on similar lines as medical devices (meaning LDTs must comply with the same standards as medical devices). As per this regulation, LDTs need to prove the accuracy of their tests. This decision will have both winners and losers in the AD stakeholder ecosystem.

Researchers and physicians are looking at this regulation with a positive stride as this step will reduce the number of tests with unconfirmed accuracy from the market in the USA. This is undoubtedly a positive change for patients’ safety, reducing the number of misdiagnoses and accelerating correct diagnoses.

On the other hand, smaller start-ups and diagnostic companies are not likely to benefit from this decision as it will restrict the development of new innovative tests vis-à-vis large diagnostic companies. Overall, the decision will likely decelerate the approval of blood-based AD tests or at least will require much more paperwork and proof of accuracy from the device makers. This decision will take effect in multiple phases over four years, starting from July 2024.

On the research and development side of the Alzheimer’s disease diagnostics space, a certain level of symbiosis between drug producers and diagnostic solution providers will continue to impact the market positively. Drugmakers are partnering with or investing in diagnostic companies to leverage the latter’s innovative blood-based biomarkers (BBBM) technologies in the clinical trials of their own drug candidates. This trend is likely to continue.

Not only drugmakers but also more prominent healthcare diagnostics companies, such as Roche and Beckman Coulter, are partnering with early-stage biopharmaceutical companies, such as ALZpath, to develop and commercialize AD ptau217 tests. Collaborations such as these are a testimony to the fact that it is mutually beneficial for AD industry stakeholders to work in tandem to advance AD diagnostics research, a significant growth-driving factor for the market.

Phase 3 Drug Candidates - A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

Phase 3 Drug Candidates – A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape?

Many biopharmaceutical companies, such as AriBio, Annovis Bio, Athira Pharma, Cassava Sciences, and Alzheon, specializing in treating neurodegenerative diseases, are developing drugs for Alzheimer’s disease (AD) that are currently in phase 3 of clinical trials. If approved, these drugs can ameliorate the AD treatment approaches to a considerable extent. A major prerequisite to this is for concerned authorities to take concrete steps to fast-track clinical trials and increase AD research investment.

With only a 1% success rate of clinical trials in drug development until 2019, the AD treatment gap is alarming. A 99% failure rate means there is a very limited influx of new, more effective, and more advanced AD drugs into the market, and the gap between available treatment options and the rising number of AD cases is increasing.

The disease burden of Alzheimer’s will rise from US$1.3 trillion in 2020 to US$2.8 trillion by 2030 globally. With the rise in the aging population across the globe, the estimated number of AD patients will increase from 55 million in 2020 to 78 million in 2030.

However, recent drug approvals, such as Elli Lilly’s Kisunla (Donanemab) in July 2024 and Biogen/Eisai’s Leqembi (Lecanemab) in January 2023, bring a ray of hope for a new approach to AD treatment.

Initial hopes for new drugs can be premature

New drugs do enter the market from time to time. However, their impact on AD treatment in the long term is not always significant. An example of this is Biogen’s Aduhelm. Based on its ability to reduce amyloid protein in the brain, the FDA approved Aduhelm (Aducanumab) in 2021 in an accelerated approval route for AD treatment.

However, in 2024, Biogen discontinued the drug in the alleged desire to reprioritize its resources in AD treatment. Experts cite weak clinical evidence for efficacy, serious side effect risks, a high price point, and poor sales among the many reasons for Aduhelm’s withdrawal from the market.

AD drug candidates succumb to clinical failures

Eisai and Biogen have been working together since 2014 to develop and commercialize AD drugs. However, they have faced clinical drug failures, similarly to many other pharmaceutical companies during that time. For instance, they had to terminate Elenbecestat, one of their AD drugs, in phase 2 clinical trial in 2019 following an unfavorable risk-benefit ratio finding by the Data Safety Monitoring Board (DSMB).

Eisai launched its first AD drug, Aricept, an acetylcholinesterase inhibitor, in the USA in 1997 in collaboration with Pfizer. The annual peak sales of Aricept were US$2.74 billion before its patent expiry in 2010. However, Pfizer exited neuroscience drug research and development in 2018 after the failure of its AD drug candidates, such as Dimebon and Bapineuzumab.

Clinical challenges in Alzheimer’s research and reallocation of resources were among the other reasons for Pfizer’s exit from neuroscience R&D and drug development. Nevertheless, Pfizer did not desert the neuroscience space completely, rather forged a spin-off company called Cerevel Therapeutics in partnership with Bain Capital.

Phase 3 Drug Candidates - A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence

Phase 3 Drug Candidates – A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence

Recent drug launches focus on amyloid beta targeting mechanism

In January 2023, the FDA approved Leqembi (Lecanemab), a drug by Biogen and Eisai, for AD treatment. It is a monoclonal antibody that clears away the amyloid beta plaques known to cause cognitive impairment in AD patients. With MHRA’s (Medicines and Healthcare Products Regulatory Agency) approval of Leqembi, Great Britain becomes the first European country to authorize the drug for the treatment of early-stage AD as of August 2024.

In July 2024, the FDA approved Kisunla (Donanemab) by Eli Lilly to treat early-stage AD. The drug’s mechanism of action is the same principle as that of Leqembi, an amyloid beta protein plaque targeting mechanism. Kisunla becomes the third anti-amyloid drug approved for AD treatment, following Aduhelm (now discontinued) and Leqembi. Both Kisunla and Leqembi drugs carry the risks of the formation of temporary lumps in the brain that can be fatal. Therefore, physicians advise regular brain MRIs to alleviate this risk. Neurologists and researchers are in disagreement over whether the benefits offered by these drugs are clinically meaningful.

Researchers are still studying the side effects of these two drugs. Prescribing them requires confirmation of the presence of amyloid protein in the brain. Therefore, PET scans and CSF tests are required before such a prescription.

The FDA has approved both drugs in the USA for intravenous infusions (IV) in the early stages of AD. Kisunla is administered every four weeks instead of every two for Leqembi. Therefore, Kisunla offers greater convenience compared to Leqembi.

Experts from Bloomberg Intelligence suggest that Eli Lilly will likely surpass Biogen and Eisai’s reign at the top of the AD drug market by capturing around 50% of the US$13 billion market globally by 2030. This is partly because of Kisunla’s convenient dosing and the fact that AD patients can stop taking the drug after the amyloid levels touch the clearance threshold.

Newer therapeutic approach-based drugs are in phase 3 clinical trials

Apart from the amyloid beta therapeutic approach, AD researchers are exploring the role of other mechanisms in AD treatment, such as anti-tau antibodies, neurotransmitter receptors, and synaptic plasticity or neuroprotection. Drugs based on these mechanisms are currently in phase 3 of clinical trials.

The Washington University School of Medicine’s DIAN-TU (Dominantly Inherited Alzheimer Network Trials Unit) trial is testing Lecanemab plus Eisai’s investigational anti-tau antibody E2814 in patients with early-onset AD caused by a genetic mutation. E2814 prevents the spreading of tau seeds in the brains of AD patients. This drug is in phase 3 clinical trial. The clinical study commenced in June 2024 and will complete by November 2029.

ACP-204 by Acadia Pharmaceuticals is also in phase 3 clinical trial for AD. The agent acts as an inverse agonist at the 5-HT2A serotonin receptor. FDA has approved Acadia’s previous 5-HT2A inverse agonist, Nuplazid, for Parkinson’s disease psychosis. ACP-204 will be the first drug for AD treatment in Acadia’s product portfolio if approved.

Another drug in phase 3 trial is AriBio’s AR1001, a phosphodiesterase-5 (PDE5) inhibitor. Apart from AR1001, two more AD drugs are in AriBio’s pipeline, AR1002 and AR1003 that are currently under the investigational new drug-enabling stage of clinical trials.

For better patient outcomes, researchers are attempting to develop AD drugs with non-invasive modes of administration that are likely to be less expensive and equally effective compared to AD drugs administered intravenously.

The safety and effectiveness of oral therapy candidate Buntanetap, developed by Annovis Bio, are comparable in people with early onset AD regardless of whether they do or do not carry a genetic risk factor APOE4. That is according to new data from a phase 2/3 clinical trial that tested three doses of Buntanetap against a placebo in more than 300 patients with the neurodegenerative disease. Buntanetap modulates protein production to reduce clumping. The competitive advantage of Annovis Bio over its peers is the fact that Buntanetap targets multiple proteins in the brain, such as amyloid beta, tau, alpha-synuclein, and TDP43, making it more effective than AD drugs that target a single protein.

Apart from Buntanetap, Annovis Bio has another oral drug to treat advanced AD and dementia in its pipeline, ANVS301, which is in phase 1 of clinical trial. In July 2024, Annovis Bio received FDA approval to transition to a new solid form of Buntanetap in future clinical trials allowing the company to refine its drug formulation, potentially improving its efficacy and safety profiles.

Another promising AD drug candidate, Fosgonimeton by Athira Pharma, is a small-molecule positive modulator of the hepatocyte growth factor (HGF) system, previously showing neuroprotective, neurotrophic, and anti-inflammatory effects in preclinical models of dementia. This drug is in phase 3 clinical trial. Athira Pharma ended 2023 with a strong balance sheet, signaling its better financial position to augment its ongoing pipeline development.

Eli Lilly’s new drug Remternetug works as pyroglutamyl (3)-amyloid beta-protein (3-42) inhibitors, positioning it as a promising AD drug. Remternetug will join Eli Lilly’s portfolio as a second AD drug if approved.

Simufilam by Cassava Sciences is a proprietary, small-molecule oral drug that restores the normal shape and function of altered filamin A (FLNA), a scaffolding protein, in the brain. It is now in phase 3 clinical study to test this new and promising scientific approach to treating and diagnosing AD. The mechanism of action of this drug involves stabilizing a critical protein in the brain instead of removing it. This novel approach distinguishes Cassava Sciences’ drug from other treatments that predominantly focus on amyloid-beta or tau proteins. In May 2024, Cassava Sciences raised US$125 million by selling its stock to shareholders. The funds will be utilized for the continued development of Simufilam.

Valiltramiprosate by Alzheon is potentially the first oral disease-modifying treatment for AD. Valiltramiprosate is well differentiated from plaque-clearing antibodies in development for AD due to its novel mechanism of action, oral mode of administration, and potential efficacy in a genetically targeted population. In October 2017, Valiltramiprosate/ALZ-801 received FDA Fast Track designation for AD investigation. Due to Alzheon’s significant progress in AD drug development, the company has attracted a lot of investors since 2022. Alzheon received US$100 million in June 2024 in Series E venture capital funding which will be utilized to further develop and commercialize Valiltramiprosate. This is in addition to US$50 million received in series D round of funding in 2022.

Big names dominate the competition, with clinical trials in progress by smaller biopharma players

On the competitive landscape front, the AD drug market is highly competitive, with many pharmaceutical companies financing R&D to engineer new drugs that could potentially delay the progression of AD and/or restore neuronal health. The global AD therapeutics market size was US$4.8 billion in 2023 and will surpass US$7.5 billion by 2031, as per Towards Healthcare, a healthcare consulting firm.

A couple of large players still dominate the global AD therapeutics market. Interestingly, they are not the only ones active in the AD treatment development, as several smaller biopharmaceutical companies that specialize in neurodegenerative disease treatment are working on AD drugs (many currently in phase 3 of clinical trials).

High R&D costs are a considerable factor in slowing the progress down

Between 1995 and 2021, the cumulative private spend (total R&D expenditure by pharmaceutical companies, does not include federal funding) on clinical stage R&D for AD was US$42.5 billion, with the largest share of 57% (US$24.1 billion) incurred during phase 3. During the same period, the FDA approved 878 drugs across all therapeutic areas; only six of these drugs were for AD treatment (four cholinesterase inhibitors [ChEIs], memantine, and aducanumab). These statistics speak volumes of the complex, expensive, time-consuming, and predominantly unsuccessful nature of AD clinical trials. This ultimately leads to exorbitant prices of AD drugs.

A range of factors drive the R&D costs and, in turn, the price of AD drugs. A significant component here is patient screening, which contributes to 50-70% of the cost. Patient recruitment and retention are also challenging, given the considerable length of such trials.

Moreover, patient recruitment challenges stunt the progress of AD clinical trials. The recruitment rate for AD clinical trials is as low as one patient per site per month. In terms of eligibility, 99% of AD patients who are eligible for participation in a clinical trial never consider taking part. This further increases the time taken to conduct AD clinical trials.

EOS Perspective

After decades of failure in clinical trials, two anti-amyloid AD drugs, Kisunla and Leqembi, are available in the market, forming a duopoly in the USA. There are several promising drugs in phase 3 clinical trials with a new mechanism of action apart from amyloid beta protein inhibitors. However, the disease management landscape is prone to unforeseen changes, such as the withdrawal of drugs owing to safety, efficacy, and pricing issues.

The AD treatment landscape faces challenges such as drug inefficacy, complex pathophysiology of AD, expensive and time-consuming clinical trials, delays in diagnosis by physicians, behavioral changes and deteriorating mental health of AD patients, and severe side effects of medications. These challenges will continue to impede the development of new disease management approaches.

An issue that is very likely to continue to challenge progress in developing better treatment options for AD is the severe lack of funding. Dementia research is extremely underfunded compared to HIV/AIDS, cancer, and COVID-19 in the USA. Irrespective of the fact that the deaths attributed to AD are on par with cancer, the difference between the annual US federal government funding for AD vis-à-vis cancer is strikingly huge.

AD drug development is a tough market to operate in. The ongoing issue with AD research funding persists, and there do not seem to be changes in federal funding soon. On top of that, the slow progress in successful R&D and many failed clinical research trials will likely make private-sector investors hesitate or withdraw.

In addition to this, AD drug manufacturers will also continue to face the challenge of low to modest drug sales due to poor adoption rates stemming from issues like restricted coverage.

As of June 2023, Medicare was covering AD drugs that slow down the progress of the disease provided a physician agrees to the collection of real-world evidence of these AD drugs, as per the Centers for Medicare & Medicaid Services (CMS). However, there is a significant underlying problem with drugs for AD treatment. When the drug finally enters the market, patients cannot afford the treatment, and the coverage is restricted and sometimes withdrawn. There is no foreseeable change to this impasse, and hence, the AD treatment development is likely to be slow.

If reimbursement of AD drugs is removed, patients are likely to stop administering AD drugs altogether and adopt alternative healthcare resources such as antidepressants, as found in a 2021 study by researchers from Paris-Saclay University and Memory Center of Sainte Périne Hospital in France.

The reluctance of payers to cover the treatment cost for AD is influenced by several factors beyond just the high cost of the drug. Factors include cost-effectiveness of treatments, uncertain long-term safety and efficacy benefits of treatments, clinical guidelines and recommendations, availability of alternative treatments including generics (from drug makers such as Cadila, Cipla, Dr. Reddy’s, among others), and regulatory and reimbursement policies.

The future of AD treatment approaches will continue to remain bleak, and patients will be left with only a few available drug options unless the right authorities set out a plan for fast-track clinical trial processes, increase AD research investment, and support broader insurance coverage.

Pharma Companies Navigate Their Way through Ac-225 amidst Supply Constraints by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

Pharma Companies Navigate Their Way through Ac-225 amidst Supply Constraints

652views

Pharma companies have been increasingly investing in developing targeted alpha therapies for cancer treatment, using alpha-emitting isotopes such as Ac-225. However, the current supply for Ac-225 is limited, and thus, companies are working towards securing their supply chain. The recent investment by Eli Lilly in isotope manufacturer Ionetix brings to light the increasing interest of large pharmaceutical companies in Ac-225 and its uninterrupted supply for their pipelines. Similar to Eli Lilly, several other companies have strategically invested in or partnered with manufacturers to ensure a guaranteed supply.

Ac-225 is pegged as a promising isotope for next-generation cancer treatment

Among the recent advances in cancer therapies, only a few have shown as much promise as targeted alpha therapies have. Targeted alpha therapies (TAT) involve using alpha-emitting isotopes to selectively target and destroy cancerous tissue without causing significant damage to surrounding healthy tissue. This is facilitated by the short range of alpha radiation in human tissue (less than 0.1 mm), which corresponds to less than 10 cell diameters. Moreover, they are characterized by high energy levels (5-9 MeV), which results in the selective destruction of malignant cells.

Several alpha-emitting isotopes are currently being explored for TAT, the most common among them being Ac-225, At-211, Pb-212, and Bi-213. Of these, Ac-225 (actinium-225) is considered the most potent medical-grade radioisotope as it has a high decay energy of 5.9 MeV and a half-life of 10 days. It is the isotope of choice in several clinical trials, with about 15 Ac-225-based ongoing clinical trials currently in the USA. However, despite having substantial potential for developing next-generation treatments in the cancer space, their adoption has been slow, given the short supply of the isotope.

Ac-225 is not naturally available and is derived from Th-229 (thorium-229), a byproduct of uranium-233 (U-233), which is a leftover from the production of atomic weapons in the 1950s and 1960s. The initial batch of Ac-225 has been supplied by the US Department of Energy (DOE). However, the supply cannot keep up with the growing demand for trials.

Isotope producers invest to accelerate Ac-225 supply in the future

Currently, there are two commercialized routes to produce Ac-225. As mentioned above, the first and traditional route involves separating Ac-225 from Th-229, derived from the US government’s legacy reserves of U-233. The US government holds about 453kg of U-233, of which only about 256kg is of high quality and will produce about 24g of medical-grade thorium.

The government had previously started a program that extracted a small amount (150mCi) of Th-229, which produced about 1.2 Ci of Ac-225 per annum, enough to treat 1,200 patients. However, in 2019, the US DOE entered into a public-private partnership with Terra Power and Isotek to downblend its stock of U-233 to extract Th-229, which can further be used to develop Ac-225. In 2021, TerraPower entered into an agreement with Cardinal Health, a US-based commercial alpha contract manufacturing organization (CMO), to develop and produce Ac-225 for drug development commercial sales. This will likely significantly improve the supply of Ac-225 in the long run.

The other route to produce Ac-225 is through cyclotron production, which involves irradiating a Ra-226 (Radium-226) target with a proton and knocking off two neutrons. Several isotope manufacturers are adopting this technology and are working on increasing their manufacturing capacity.

Niowave, a US-based supplier of medical and industrial radioisotopes, uses a closed-loop cycle to produce high-purity Ac-225 and other alpha emitters from Ra-226 using a superconducting electron linear accelerator. Similarly, Ionetix, a leading cyclotron technology innovator and isotope manufacturer, uses the same technology to produce Ac-225 and managed to produce its first batch of Ac-225 in June 2024. The company commissioned its first cyclotron at its current facility in 2023, while it aims to install and commission a second cyclotron there in early 2025. By 2025, it is expected that the company will be able to produce about 1Ci per week. The company also aims to establish another site in the USA for Ac-225 production in 2026.

While isotope manufacturers are strategically working to enhance the production of Ac-225 in the long run, the current supply, which is required to fuel the ongoing clinical trials using Ac-225, is quite limited. In 2024, the worldwide supply of Ac-225 is estimated to be about 2Ci per annum, which is merely enough to treat 2,000 patients.

Pharma companies invest in securing their Ac-225 supply chain

Given its currently limited availability and immense potential, leading pharmaceutical players are adopting various strategies to secure their Ac-225 supply to support their targeted alpha therapies drug pipelines. Several leading players, such as Fusion Pharmaceuticals, Telix Pharmaceuticals, and Bayer, are actively working on partnering with companies producing Ac-225 to overcome supply-related challenges for their trials. Recently, a leading pharmaceutical company, Eli Lilly, also joined the bandwagon and secured its supply of the actinium isotope.

Fusion, which has three Ac-225-based drugs currently under trial, was one of the first movers in this regard and has inked several partner agreements to ensure a smooth supply.

In December 2020, Fusion entered into a partnership with TRIUMF, Canada’s national particle accelerator center. In this partnership, Fusion would provide the latter with up to US$18.5 million (CA$25 million) to upgrade its production facilities and scale up production of Ac-225. In return, Fusion would receive preferred access and pricing to the resulting isotope.

In June 2022, Fusion collaborated with Niowave, a US radioisotope manufacturer. Under the agreement, Fusion would invest up to US$5 million in Niowave to further develop their technology to increase their production capacity of Ac-225. In return, Fusion will be guaranteed access to a pre-determined percentage of Niowave’s capacity of the resulting Ac-225, as well as preferred access to any excess stock produced.

In November 2023, Fusion entered into an agreement with BWXT Medical, a US-based supplier of nuclear components and a subsidiary of BWX Technologies. Under the agreement, the latter agreed to provide Fusion with a preferential supply of Ra-225 (parent isotope of Ac-225) and access to high-specific activity generator technology. This would enable Fusion to produce Ac-225 at its own manufacturing facility for use in clinical trials. In addition, BMXT Medical provides Fusion with predetermined amounts of its actinium supply needs under a preferred partner agreement.

Another leading radiopharmaceutical player, Telix Pharmaceuticals, entered into an agreement with Cardinal Health in May 2024 to supply Ac-225 globally.

Similarly, in February 2024, Bayer signed an agreement with PanTera (a Belgian radioisotope production JV created by Ion Beam Applications and SCK CEN) to secure large-scale production of Ac-225. PanTera uses both the Ra-226 and Th-229 production mechanisms to produce Ac-225. It is collaborating with TerraPower to supply Th-229.

Eli Lilly, the largest pharmaceutical company globally, has also recently invested in a nuclear isotope manufacturing company, Ionetix, in August 2024. Eli Lilly has made a US$10 million convertible loan investment in the company to secure its supply of Ac-225. Moreover, PointBiopharma, which was acquired by Eli Lilly in 2023, also had a previous US$10 million investment in Ionetix, resulting in Eli Lilly holding a total of US$20 million debt facility with Ionetix. The pharma giant has the option to convert this debt into equity when Ionetix’s valuation exceeds US$300 million.

These investments by Eli Lilly and Fusion Pharmaceuticals are rare cases where major pharmaceutical companies are investing up the supply chain to secure actinium availability for their cutting-edge drug pipelines.

EOS Perspective

While targeted alpha therapies are emerging as high-potential next-generation cancer drugs, they are plagued by supply constraints of alpha-emitting isotopes, especially Ac-225. Thus, companies seeing great promise in these therapies must work towards securing their supply of these isotopes to ensure the smooth running of their clinical trials.

In the past, large pharmaceutical companies such as BMS have had to halt enrolment in their clinical trials due to the non-availability of Ac-225. Such interruptions not only delay the entire clinical trial but also have significant cost implications and could jeopardize its overall success.

Considering these limitations, it is imperative that pharmaceutical companies with ongoing or planned Ac-225-based trials invest in ensuring a guaranteed supply of the isotope for the entirety of their trial and future production of the drug once approved. While several companies are merely entering into supply agreements with isotope manufacturers, others are taking it one step ahead and investing in their upstream suppliers. Moreover, some companies, such as Fusion and now BMS, are advancing towards building on-site production of Ac-225.

That being said, establishing a secure supply chain of Ac-225 comes with its own set of costs and risks. Most pharmaceutical companies are undertaking significant investments (ranging between US$5-25 million) to guarantee their supply of Ac-225.

However, as a cancer therapy, TAT is in the nascent stages of development, and most trials utilizing Ac-225 are still in either phase 1 or phase 1/2, far from FDA approval. Moreover, the only Ac-225-based trial in phase 3 is being conducted by BMS for neuroendocrine cancer and is currently halted due to supply issues. Given the nascency and early stages of development of this treatment, it is too soon to predict if these heavy investments into Ac-225 would result in the development of FDA-approved drugs and bring sufficient returns. This risk can have particularly dire consequences for small players.

Thus, while companies looking to develop targeted alpha therapies using Ac-225 must work to secure their supply, their level of investment must remain in sober relation to their size, pipeline, and financial position.

IRA Are Patients Winning at the Cost of the US Pharma Sectoral Growth by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

IRA: Are Patients Winning at the Cost of the US Pharma Sectoral Growth?

The market reaction to the US Inflation Reduction Act of 2022 is mostly mixed. It is expected to change the pharma industry dynamics in terms of the competitive positioning and product pricing of those companies projected to be negatively impacted by the IRA. The answer to whether the IRA will be able to curb rising healthcare costs in the USA lies in the legislation’s on-the-ground application.

IRA to decrease prescription drug prices via a four-pronged strategy

Prices of prescription drugs in the USA are 2.78 times higher than in 33 other countries analyzed in a 2024 report published by RAND, a public policy think tank.

In pursuit of reducing healthcare costs in the USA, the Biden government passed the Inflation Reduction Act (IRA) in August 2022. One of the major goals of the act includes the reduction of prices of prescription drugs.

This is expected to be achieved through a four-pronged strategy, the mainstay of which involves the US federal government negotiating the prices of some high-priced prescription drugs covered under Medicare.

The second prong includes pharmaceutical firms paying a rebate to Medicare if they raise the price of prescription medicines covered under Medicare by a rate that is higher than the inflation rate.

The monthly cost of insulin for Medicare patients is capped at US$35, as the third prong.

The fourth prong aims to reduce prescription drug prices by capping the out-of-pocket costs of Medicare Part D patients at US$4,000 in 2024 and US$2,000 in 2025.

IRA Are Patients Winning at the Cost of the US Pharma Sectoral Growth by EOS Intelligence

IRA Are Patients Winning at the Cost of the US Pharma Sectoral Growth by EOS Intelligence

Pharma companies to suffer more due to IRA compared to projected government savings

Under the IRA, large pharmaceutical companies, defined as those with over US$1 billion in net profits, are required to pay a minimum of 15% annual taxes, a financial burden on these companies. Analysts predict that the annual revenue from corporate taxes could be to the tune of US$222 billion. Furthermore, the IRA is expected to save over US$287 billion for ten years from the roll-out, as per the estimates of the Congressional Budget Office (CBO).

Apart from the increased financial burden on some companies, experts foresee potential adverse impact on several pharmaceutical companies based in the USA to a considerable extent.

The pharma companies witnessing the least to no impact are the ones with their primary operations based outside the USA, biologics or large molecule drug producers, and the ones that do not receive government funding for R&D. This is because of the differing timelines under IRA for negotiating the prices of biologics and small molecules. Biologics’ timeline is 11 years after FDA approval, while small molecule drugs are eligible after 7 years. Therefore, Medicare negotiations will begin four years earlier for a small molecule drug that has received approval at the same time as a large molecule biologic drug.

Apart from these adverse effects, such as differential treatment of small molecule drugs compared to biologics under Medicare price negotiation timelines, there are some other negative impacts on the overall US pharma industry, such as diminishing competition among generic drug producers, decreased discovery of new treatments, and new uses of existing drugs.

IRA to affect the revenues of top pharma companies surely but variably

There are differing viewpoints regarding the impact of IRA on pharmaceutical companies’ revenue. One group of experts suggests that Medicare prescription drug negotiations under the IRA will depend on the expiration of the drug’s patent. Other experts expressed their opinion that irrespective of when a drug loses exclusivity, a significant threat to drug revenues comes from the competition entering the market and not from lower negotiated drug prices.

The first group of experts states that lower negotiated prices in 2026 are expected to have a lower impact on medicines projected to witness revenue loss owing to patent expiry around the same time. One such example of a drug losing its exclusivity in the USA in 2025 is Stelara by Janssen Biotech approved for treating psoriasis.

In contrast, pharma companies producing medicines that are expected to witness competition from their generic counterparts after 2026 are projected to lose revenue owing to lower negotiated prices even before the drugs lose exclusivity. However, some companies’ revenue will be affected more than others.

Medicare price negotiations to hit revenues of some drugmakers drastically

The pharma industry’s revenue is expected to decrease by 2% due to the new measures brought about by the IRA, as per a 2022 report by Morningstar, a US financial services firm. Among the companies that will be highly affected are Novo Nordisk, Gilead, Bristol Myers Squibb, AbbVie, and AstraZeneca. In contrast, others, such as Pfizer, Merck, Roche, and Novartis, will not be as much impacted by Medicare price negotiations.

Some 15% of global branded drug sales come from Medicare in the USA, as per Morningstar estimates. Therefore, the impact of the IRA on pharmaceutical companies depends on their reliance on Medicare sales, price adjustments, high-cost specialized drugs, and extended patent protection.

Medicare prescription drug negotiations are projected to impact pharma companies the most among all IRA measures, although this impact might not be uniform across the players. On the other hand, Medicare negotiations are projected to save the government approximately US$100 billion through 2031. The pharma companies facing the highest revenue losses include Novo Nordisk, Gilead, and AstraZeneca.

When the Medicare price negotiation measures start to roll out in 2026, two drugs of Novo Nordisk, namely, Ozempic and Rybelsus, that are approved to treat type 2 diabetes, are expected to witness an 8% decline in their projected revenue through 2031, as per Morningstar. Gilead’s Biktarvy, which treats HIV-1 infections, is expected to be subject to price negotiation in 2027 and thereby face a projected revenue loss of 7% through 2031. On similar lines, Calquence (to treat mantle cell lymphoma) and Tagrisso (to treat non-small cell lung cancer) drugs of AstraZeneca are expected to lose 6% revenues through 2031 owing to Medicare price negotiations.

In contrast, considering the existing portfolios, Pfizer, Merck, Bristol Myers, and BioMarin are expected to witness no revenue loss due to Medicare negotiations.

Medicare inflation caps to impact major pharma companies negatively

Another important IRA measure is Medicare inflation caps. This measure involves drug producers paying penalties for increasing drug prices beyond the inflation rate. It is expected to result in US$62 billion in government savings through 2031.

Around March 2023, the US federal government, along with the Centers for Medicare & Medicaid Services (CMS), released a list of 27 drugs whose prices were increased by their manufacturers at a higher rate than the inflation rate. This list included AbbVie’s Humira (to treat Crohn’s Disease) and Astellas Pharma’s and Seagen’s Padcev (to treat urothelial cancer). Gilead Sciences, Johnson & Johnson, and Pfizer are among other impacted companies by Medicare inflation caps. Pfizer had the most drugs on the list, with a total of five.

Bristol Myers Squibb is one of the pharma companies that is expected to be highly impacted by Medicare inflation caps. The company’s drugs, such as Eliquis (to treat or prevent blood clots), Opdivo (to treat melanoma), Orencia (to treat rheumatoid arthritis), and Yervoy (to treat various cancer types) are among the medicines that are expected to face revenue loss owing to inflation caps. Other drugs on the list include Novo Nordisk’s drugs such as Novolog and Levemir (both for type 1 diabetes) and Victoza (for type 2 diabetes), Johnson & Johnson’s drugs such as Imbruvica (to treat certain cancers) and Xarelto (to treat or prevent blood clots), along with Novartis’s Sandostatin (for severe diarrhea and flushing related to metastatic carcinoid tumors).

In contrast, Merck is not expected to face any revenue loss due to inflation caps, while GSK, Regeneron, Roche, and Sanofi are projected to witness minimal revenue loss as these companies have not raised the prices of their drugs beyond the inflation rate.

IRA to potentially reduce competition from generics

According to the IRA, following the price negotiations of some of the branded drugs, manufacturers of the generic versions of such drugs will have less scope to charge a reduced price for those drugs. This would disincentivize the generic drug producers to manufacture generic versions of the already low-priced branded drugs.

EOS Perspective

The IRA represents a substantial change in the US legislation that strives to make healthcare more affordable to Americans through increased access to more reasonably priced prescription medicines.

However, IRA can be expected to affect small-molecule drugmakers more negatively than biologics. Moreover, some pharmaceutical companies are projected to feel the pinch more than others in terms of revenue losses.

Companies such as Merck, Bristol Myers Squibb, and the pharmaceutical association PhRMA have filed lawsuits against some provisions of the IRA, stating that they are unconstitutional. Bristol Myers Squibb and J&J are planning to appeal after the US court dismissed the IRA lawsuits. These pharmaceutical companies are trying to find ways to circumvent the negative impact of the legislation.

IRA is also expected to negatively impact R&D and medical innovation. This is evident from the fact that biopharma companies have reduced their R&D efforts in the neuroscience space, especially since a lot of development work in this space involves small-molecule drugs. Moreover, as IRA exempts only one orphan drug from price negotiation, investments in R&D for orphan drugs are likely to get deprioritized. Many pharmaceutical companies are reconsidering their R&D planning and investment strategies to counter the effect of IRA.

IRA is clearly not a win-win strategy for all stakeholders. Pharmaceutical companies are mostly at the losing end, while patients could be winners. Considering all the positives and negatives of IRA, only time will tell the actual impact of the legislation on the overall pharmaceutical industry.

Denmark – A Trailblazer in Digital Health Innovation by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

Denmark – A Trailblazer in Digital Health Innovation

1.5kviews

The COVID-19 pandemic has spurred the need to embrace new digital tools and technologies within the healthcare sector. There has been a significant increase in the use of technology to provide care, resulting in improved health outcomes. In Europe, Denmark has made significant progress and is at the forefront of the digital health transformation with a 99% digitalization rate. Over the last few years, Denmark has strived to digitalize further its healthcare infrastructure, testing and leveraging technologies such as AI and robotics to implement them at full scale across the country. In this transformation, the Danish digital health system can be a source of valuable lessons, uncovering various opportunities it presents for health tech companies.

Demark’s digital health: Harnessing power from a robust public infrastructure

Denmark’s healthcare system is among the most expensive worldwide, with 10% of GDP allotted for healthcare expenditures and 90% publicly funded through taxes. The health infrastructure is highly digitalized, with almost 99% of healthcare communication done electronically.

The national e-health portal, Sundhed.dk, launched in 2003, plays a key role in Denmark’s digitalization, offering a comprehensive platform catering to both healthcare professionals and citizens alike. Sundhed.dk provides safe and secure access to an individual’s personal health records (from hospitals), medication information, vaccinations, laboratory results, appointments, and referrals. The portal is user-friendly and is regarded as one of the superior models for public healthcare information exchange worldwide.

Over the last 20 years, the Danish government has supported and invested in various digital health initiatives, rolled out several IT services, and strengthened its digital healthcare infrastructure. In 2007, the country introduced E-record, through which individuals can access their medical information from EHR systems using the Sundhed.dk portal. The government also launched Shared Medication Record, which has records of patients’ prescriptions, details of the doctor who prescribed the medicines, and information pertaining to where the medications were picked from. During the COVID-19 pandemic, the “My Doctor” app was introduced to facilitate video consultations between GPs and patients. These digital initiatives contribute to improved care coordination and increase the patient’s trust in the system.

Denmark – A Trailblazer in Digital Health Innovation by EOS Intelligence

Denmark – A Trailblazer in Digital Health Innovation by EOS Intelligence

Unraveling the blueprint: Denmark’s digital health success story

Well-formulated digital health strategies address the needs of patients and healthcare workers

Many countries develop digital health strategies, which are frequently focused solely on technical aspects, steering away from addressing the actual needs of patients and healthcare professionals. Moreover, these policies often function as plain vision documents with no clear description of action plans or the roles and responsibilities of various stakeholders.

In contrast, Denmark’s digital health strategy is well-formulated and primarily focused on addressing the needs of patients and healthcare workers. It provides a clear vision of how digital technology can help meet their needs. In addition, the strategies highlight the importance of cross-sectoral collaboration, detailing focus areas and specific initiatives that must be jointly executed. For instance, it clearly mentions how the health and education sectors should work together to promote digital health literacy.

Denmark’s well-crafted digital health policies are a cornerstone of its successful digital health transformation. Since 1999, the country has been updating these strategies every four years, ensuring ongoing review and modernization of its digital health infrastructure.

Governance models aid in the speedy integration and implementation of digital healthcare tools

Denmark follows a regional governance model instead of the top-down approach, controlled by the state (national) government. The states and municipalities are responsible for developing and implementing their own health IT solutions in alignment with the national strategy.

Further, the government has established several steering groups to aid in implementing and disseminating digital health initiatives for rapid digital uptake. For instance, Connected Digital Health in Denmark, a cross-governmental organization, manages, coordinates, and ensures the implementation of various action plans mentioned in the national digital health strategies.

In addition, the government also regularly engages in public-private partnerships to boost its digital capabilities. The country’s strong governance is considered one of the critical success factors for the digital health transition.

Common IT standards help in effective healthcare data exchange

Many countries have deployed digital health technologies; however, integration remains sparse, resulting in a fragmented digital landscape. Integrating patient information siloed across multiple healthcare segments is crucial for establishing a high-quality digital health infrastructure. The adoption of common IT standards helps facilitate this data exchange and integration.

Denmark has been using these standards since 1990 for electronic health data communication as well as improving workflows between public hospitals, general practitioners, private healthcare entities, specialists, laboratories, and home care services. The early development of these standards significantly increased electronic communication within the healthcare sector, contributing to the high level of digitalization of the Danish healthcare sector.

Strict testing protocols ensure digital health tools are user-friendly

The user-friendliness of digital technologies is considered one of the major factors for early e-health adoption. Denmark undertakes several initiatives to ensure that digital health tools and technologies are user-friendly and easy to use. For instance, the country collects feedback from healthcare stakeholders about their experience with various digital health solutions, checks if they are user-friendly, and uses the input received to develop new solutions.

The country has also implemented strict testing protocols for telehealth solutions by evaluating their performance on mobile devices and testing the products with a range of end users, including the elderly and people with disabilities.

Government’s focus on educating and training healthcare stakeholders helps them to use digital tools effectively

Denmark educates and trains healthcare workers to use digital tools appropriately. According to a 2020 Deloitte report, nearly 76.8 % of Danish clinicians mentioned that they are well-trained and supported in using digital health tools and solutions.

Local governments and hospitals in Denmark collaborate with tech professionals to provide support, education, and training on using digital solutions such as EMRs, telemedicine platforms, and shared IT standards for healthcare data exchange. Digital health literacy of front-line healthcare workers is one of the core objectives of the country’s digital health strategy.

Unlocking opportunities: Denmark’s digital health sector for health tech companies

According to Statistics Denmark, the percentage of the Danish population aged 75 or above is expected to double from 7.8% in 2017 to 14.4% in 2047. In addition, the country faces a severe labor shortage, with projections suggesting that by 2035, Denmark might have a shortage of 14,500 healthcare workers. These factors are expected to put increased pressure on the Danish healthcare system.

In order to tackle these challenges, Denmark’s government continues to invest in advanced innovative technologies and digitalization strategies. In 2018, the country launched a digital health strategy titled “A Coherent and Trustworthy Health Network for All: 2018-2024”, aiming to modernize the healthcare infrastructure further. Under this initiative, the country aims to expand telemedicine solutions, increase virtual care visits, and automate the administrative and clinical workflows within the Danish healthcare system. This initiative is creating opportunities for startups and companies offering health tech solutions in the areas of telemedicine, video consultations, remote patient monitoring, hospital automation, and diagnostics.

Danish government seeks to expand telemedicine solutions for various segments of the patient population

Denmark has been using telemedicine services since 2012, beginning with home monitoring solutions for Chronic Obstructive Pulmonary Disease (COPD) patients. The country seeks to further expand the rollout of telemedicine solutions for patients with COPD, chronic diseases, heart failure, comorbid conditions, and pregnant women facing complications. In December 2023, the government of Denmark invested about US$72 million to expand telemedicine solutions for these patients, offer digital rehabilitation courses, and increase the number of virtual consultations through GPs.

Various governmental organizations in Denmark have been looking to partner with companies providing innovative remote monitoring and virtual care solutions to facilitate home treatment.

For instance, in 2021, in collaboration with the local government, Trifork, a Denmark-based digital health company, developed a telemedicine solution called Telma for severe COPD patients. The solution provides COPD patients with medication, measuring tools, and devices to track pulse and oxygen levels at home. The Telma app transmits this data in real time and facilitates communication between healthcare professionals and patients through video consultations, thus lessening the need for frequent hospital visits.

Similarly, in 2022, two Denmark-based health tech companies, Copenhagen Center for Health Technology (CACHET) and Cortrium, forged a research collaboration to develop a novel technology to monitor a patient’s heart rhythm remotely. This allows heart failure patients to receive prompt medical care without visiting a hospital.

The Danish government is also looking to provide telerehabilitation services amidst the rising mental health issues across the country. In 2021, the government established the Centre for Digital Psychiatry to develop, test, and implement several nationwide digital services. In March 2023, the Center initiated a research project with Monsenso, a Danish mobile health company, to provide personalized digital treatment for patients with depression.

A rise in telemedicine programs catering to various segments of the patient population is expected in the forthcoming years. This surge in demand fuels the growth of companies offering telehealth solutions nationwide.

AI presents several opportunities for innovation and collaboration within the healthcare segment

Denmark actively seeks to integrate AI into its healthcare system, especially in diagnostics, presenting numerous opportunities for AI-based health companies to thrive. The country has established research and innovation centers across the country focusing on AI for uses such as identifying at-risk stroke patients, helping radiologists interpret scans, and assisting in other diagnostics.

In 2021, Denmark established the Radiology AI Test Center (RAIT) to accelerate the development and implementation of medical AI applications in the country. Through RAIT, private companies can test and validate their AI-based technologies in Denmark. For example, in 2021, through the RAIT program, several Danish hospitals in Copenhagen partnered with US-based imaging AI startup Enlitic to evaluate an AI-based algorithm to read chest X-rays. Similarly, in 2023, RAIT partnered with Cerebriu, a Denmark-based health tech company, to use AI to improve MRI imaging of the brain.

Investments in advanced digital technologies modernize healthcare infrastructure

As Denmark endeavors to digitalize its hospitals, ample opportunities arise for companies specializing in robotics and mobile health to improve hospital and clinical workflows, among other areas.

Some steps have been taken to digitalize hospitals. For instance, the Centre for Clinical Robotics (CCR), a research and innovation center for healthcare robotic technology in Denmark, aims to leverage robotic technology for various hospital processes, such as food service, cleaning, medication dispensing, clinical sample collection, etc.

Another interesting instance is the pilot project between Systematic, a Denmark-based software company, and physicians at the Aalborg University Hospital. Systematic has developed a communication platform called Columna Flow Clinical Tasking, which facilitates direct communication among the physicians at the Aalborg Hospital. The solution offers a real-time overview of the patients, including their medical conditions and the workload of hospital clinicians on duty. This empowers physicians to prioritize patients and efficiently allocate tasks during peak hospital hours.

EOS Perspective

The Danish health system is poised for an even more profound digital transformation in the coming years, aiming to improve patient accessibility and convenience. Denmark’s healthcare market is already highly digitalized, which provides a robust foundation for further digital transformation and innovation.

Home care and telemedicine, health data interoperability, AI-based diagnosis, healthcare automation, personalized medicine, and preventative health are likely the key focus areas for the next phase of digital health transformation.

Further, the country is looking to elevate patient care through its super hospital program, which involves consolidating smaller hospitals into larger, higher-capacity units. The aim is to provide superior medical care at lower costs. Technology will play a key role in improving healthcare delivery and patient outcomes in these hospitals, with applications across logistics, clinical decision support tools, diagnostic tools management, and patient engagement, among other areas.

These initiatives can be expected to make the Danish health system even more robust. The system is expected to move from a doctor-centric to a patient-centric care model, where patients would be actively involved in taking care of their own health. The country’s meticulously crafted digital health strategies, well-established digital infrastructure, and technology-proficient population lay a solid foundation to usher in the next wave of innovation.

As Denmark persists in its commitment to build a healthcare system fit for the future, there are abundant opportunities for health tech companies to thrive and drive innovation within the Danish healthcare industry.

An Era of Innovation Novel Drugs Redefining Multiple Sclerosis Treatment Paradigm by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

An Era of Innovation: Novel Drugs Redefining Multiple Sclerosis Treatment Paradigm

344views

Since the approval of the first drug, interferon beta 1b (IFNβ-1b), in 1993, the treatment landscape of multiple sclerosis (MS) has significantly changed. Currently, there exist more than 20 disease-modifying therapies (DMTs) to treat MS, encompassing orals, injectables, and infusions. These drugs, however, can cause adverse side effects such as toxicity, pregnancy-related complications, and gastrointestinal symptoms, among others. Moreover, about 5-10% of the patient population still develops disability. Despite the wide range of therapeutic options available, patients experience relapses and worsening disease symptoms, which significantly reduce their quality of life.

The ongoing challenges have driven pharmaceutical companies to develop and launch drugs that offer greater efficacy and safety, enhancing patients’ health outcomes in the longer term. In particular, significant efforts are geared towards treating the progressive forms of MS, such as Primary Progressive MS (PPMS) and Secondary Progressive MS (SPMS), for which therapies are currently limited.

Several emerging therapies are in various stages of development, targeting distinct mechanisms of the underlying disease etiology. Among all the emerging therapeutic approaches, Bruton Tyrosine Kinase Inhibitors (BTKIs) emerge as the most promising, currently in later stages of clinical trials, poised for approval. The potential advantage of BTKI agents is that they can treat both relapsing and progressive forms of MS.

Remyelination is another equally promising therapeutic approach, as it has the potential to promote myelination, restore axonal and neuronal health, and prevent disability; however, extensive clinical trials are essential to develop these drugs and fully integrate them into clinical practice.

On the other hand, monoclonal antibodies (mAbs) are becoming the most common therapeutic option due to their higher selectivity for B-cells (a type of immune cell), a fact that plays a crucial role in MS disease pathogenesis. The higher selectivity of mAbs allows to efficiently target these cells and reduce inflammation.

An Era of Innovation Novel Drugs Redefining Multiple Sclerosis Treatment Paradigm by EOS Intelligence

An Era of Innovation Novel Drugs Redefining Multiple Sclerosis Treatment Paradigm by EOS Intelligence

Pharma companies place high hopes on BTKI

Following the success of B-cell depleting therapies in treating MS, there has been a notable surge in interest in utilizing a novel class of medications called BTKI. BTK is an enzyme crucial for the functioning of B-lymphocytes, which elucidates the autoimmune response in MS patients. Unlike B-cell depleting therapies, which directly reduce the number of B-cells, BTKIs alter B-cell function, preventing relapse or slowing disease progression in MS patients.

These BTKIs can be taken orally, offering a convenient and easy way of administration. Another potential advantage is that BTKIs can cross the complex blood-brain barrier, which other MS drugs fail to do. Due to this potent efficacy, researchers believe that BTK inhibition can even act as a cure for MS.

Over the past few years, top pharma companies such as Roche, Sanofi, InnoCare, and Novartis have betted big on BTKI to treat MS patients. There are currently four BTKI agents that are being investigated for MS treatment – Sanofi’s Tolebrutinib, Roche’s Fenebrutinib, Novartis’ Remibrutinib, and InnoCare’s Orelabrutinib. Among these, Sanofi is ahead in the race, looking to submit its BTKI drug Tolebrutinib to treat Relapsing-Remitting Multiple Sclerosis (RRMS) for FDA approval in 2024. The company is also currently evaluating Tolebrutinib in a phase 3 trial for treating PPMS, which is expected to be completed in August 2024. If successful, Sanofi would become the first pharmaceutical company to offer BTKIs for both RRMS and PPMS. At present, Roche’s Ocrevus (Ocrelizumab) is the only DMT approved for treating PPMS. Sanofi’s approval of BTKIs would set the stage for direct competition between Roche and Sanofi in the treatment of PPMS. However, Roche’s Ocrevus patent expires in 2029, hence the company remains focused on its BTKI drug Fenebrutinib.

Similar to Sanofi, Roche is testing Fenebrutinib for treating both RRMS and PPMS patients. Roche is slated to complete its phase 3 studies investigating the drug to treat RRMS in November 2025 and PPMS in December 2026.

Novartis and InnoCare are slightly trailing in the competition. Novartis is currently evaluating its BTKI drug, Remibrutinib, in phase 3 clinical trials to treat people with RRMS, expected to be completed in 2029. On the other hand, InnoCare is currently evaluating Orelabrutinib in phase 2 trials for RRMS treatment. Both Remibrutinib and Orelabrutinib cannot be used to treat PPMS, which is a major limitation.

The development of BTKI fosters hope for the next era of MS treatment, as the therapy treats both relapsing and progressive MS. However, the safety and efficacy of each drug still needs to be understood.

Results from BTKI clinical trials indicate that these drugs differ in the strength of BTKI inhibition, BTK enzyme binding mechanism, and central nervous system (CNS) penetration. For instance, Sanofi’s Tolebrutinib showed greater CNS penetrance than the other BTKI agents, making the drug a potential candidate for treating PPMS. On the other hand, Roche’s Fenebrutinib is the only reversible BTK inhibitor that does not cause drug resistance, thus offering a better and safer treatment compared to the rest of the BTKI agents.

It is too early to predict the timeline and extent to which these drugs will be incorporated into the MS treatment paradigm. Until then, pharmaceutical companies in this space will persist in vying to accelerate the launch of their therapies in the fiercely competitive MS market.

Therapies targeting remyelination nearing clinical trials

In MS, myelin, a fatty tissue that surrounds the nerve cells, gets damaged, impairing the nerve’s ability to send electrical signals. At present, no therapies can promote myelin repair in MS patients. The current treatments focus primarily on reducing immune system activity and stopping immune cells from entering the CNS to reduce relapse rates and improve symptoms. The emergence of remyelination therapies holds extensive promise by protecting and restoring neuronal function, and preventing clinical disability in MS patients.

Remyelination works by either removing myelin debris or by creating a type of cells called oligodendrocytes to repair and replace the damaged myelin sheaths.

Over the last few years, pharmaceutical companies have shown heightened interest in evaluating and developing drugs that could promote remyelination. Some of these drugs are in later stages of development, nearing clinical trials.

For instance, in March 2024, Convelo Therapeutics, a US-based biotechnology company, announced that its two oral therapies showed promising evidence in myelin repair in animal models. Similarly, in the same month, the FDA granted a breakthrough device designation to a neurostimulator, for treating RRMS. The device is developed by SetPoint Medical, a US-based healthcare company, to slow myelin damage in RRMS patients. Both these companies have been working to begin clinical trials soon to test their remyelinating agents.

Numerous other companies across the world are also conducting extensive research on remyelination therapies for MS. Additionally, studies are underway to explore the potential of existing drugs, such as Metformin, Ibudilast, and Clemastine, among others, in promoting myelin repair. Encouraging results from preclinical trials and ongoing research studies foster growing optimism that this approach will become viable in treating MS patients in the future.

However, work on remyelination to treat MS patients has just begun, and there is still a long way to go. Defining the optimal clinical criteria for evaluating myelin repair appears largely undefined. There is also an urgent need to develop tools to measure the remyelination achieved and assess the drug’s effectiveness. That said, recent discoveries shedding light on remyelination processes and the functions of oligodendrocyte cells inspire hope that these issues will be effectively addressed in the coming years. Companies are also developing advanced imaging techniques to quantify myelination.

Overall, remyelination emerges as the sole therapy focused on repairing the neuro damage and improving the neurodegenerative conditions in MS patients, which is not currently fulfilled by existing treatments. This underscores remyelination as an inevitable treatment approach for both RRMS and PPMS.

Monoclonal antibodies continually transforming the MS treatment landscape

In recent years, mAbs have emerged as the indispensable treatment option for managing the relapsing forms of MS. These therapeutic agents offer high efficacy in managing symptoms while providing additional advantages such as ease of dosing and lower side effects compared to traditional therapies.

Given the promising potential of this therapeutic approach, pharma companies strive to introduce novel mAbs targeting different cells, molecular pathways, or molecules. Interestingly, new mAbs are also being developed to help repair the damage or disability that has already occurred. Thus, mAbs aim not only to alleviate symptoms but also repair the damage caused by MS, potentially reversing disability – a critical unmet need in the MS treatment landscape.

Among all the mAbs approved, antibodies that target the CD20 molecule (a protein found on the surface of B-cells) have gained significant interest lately. In recent years, the FDA has approved various therapies targeting anti-CD20 molecule. Currently, anti-CD20 mAbs such as Ocrelizumab, Natalizumab, Ofatumumab, Ublituximab, and Rituximab are used for the treatment of MS. Ocrelizumab, developed by Roche, stands out as the only mAb approved for treating both RRMS and PPMS. Ublituximab, developed by TG Therapeutics, is the latest addition to this group, approved by the FDA in 2022.

The mAb market is highly competitive. Hence, companies have been increasingly seeking to differentiate their products based on parameters such as efficacy, safety, and dosing convenience to capture larger market shares. For instance, Novartis considers the ease of administration to be the primary differentiating factor to help drive its mAb sales. The company launched Ofatumumab in 2020, the only mAb that can be administered via injection for treating RRMS. Similarly, Roche is developing Ocrevus subcutaneous injection version similar to the IV infusion. Phase 3 trials are currently underway to evaluate the drug to treat both RRMS and PPMS.

Companies have also been looking to differentiate their drugs in terms of safety. The common side effect of MS therapies is lymphopenia, i.e., lymphocyte depletion, which can pose risks, such as increased vulnerability to infections. To address this, Sanofi is developing a CD40-based mAb named Frexalimab to treat RRMS and SPMS. CD40L is a protein that activates the innate and adaptive immune systems in humans. Sanofi’s phase 2 trials investigating Frexalimab rapidly reduced the disease activity up to 89% without depleting the lymphocytes, thus offering a safer treatment option. Sanofi already has a strong MS pipeline with its BTK drug, Tolebrutinib, to be approved in 2024. Frexalimab, once approved, is expected to further boost the company’s market share.

While mAbs are promising, factors such as high prices hinder their market penetration. Consequently, companies have been looking to develop biosimilar compounds for mAbs, aiming to lower drug prices while simultaneously maintaining and expanding their market share. For instance, in August 2023, the FDA approved Tyruko, a monoclonal antibody that is a biosimilar version of Biogen’s Natalizumab, for treating RRMS. Overall, an increased interest in R&D, coupled with the number of clinical trials underway indicate that mAbs will remain a favored approach in MS treatment for the foreseeable future.

EOS Perspective

The MS treatment market is expected to witness significant growth, reaching a value of US$39 billion by 2032. The increasing prevalence of MS and the demand for highly effective therapies are driving pharma companies to investigate and develop novel drugs. Extensive R&D efforts and the high unmet needs for treating PPMS and SPMS are the other key factors fueling market growth. In addition, governments worldwide are actively supporting drug research with substantial funding.

To gain higher market shares in the competitive MS market, pharma companies are fiercely focusing on innovation and differentiation. They are conducting extensive clinical trials to demonstrate their drugs’ efficacy and superiority. Additionally, these companies are striving to innovate in other aspects, such as drug safety, tolerability, ease of dosing, and convenient routes of administration.

The primary challenge slowing market growth is the high cost of drugs. MS drugs are very expensive, with prices consistently rising each year. According to a 2019 survey published by the National Multiple Sclerosis Society, 40% of respondents terminated their treatment due to the high costs of DMTs. Hence, companies must navigate reimbursement processes and negotiate drug prices with payers to ensure broad patient access and increased market penetration.

Other challenges inhibiting the market growth include patent expiration and the complex nature of MS. Patent expiration allows low-priced generics to enter the market, negatively impacting drug sales. Additionally, the disease’s high heterogeneity limits companies’ ability to develop therapies for the long term.

However, despite these challenges, the MS treatment market looks promising and is continually evolving. In recent years, the treatment landscape has shifted towards introducing highly efficient and safer therapies earlier in the disease course to prevent complications in the longer term. Consequently, companies demonstrating higher drug efficacy are expected to gain a significant foothold in the market. In addition, substantial opportunities exist for companies that address neuroprotection, as the majority of the existing treatments primarily target the inflammatory part of the disease.

Anti-Obesity Drugs – Pharma Companies Race to Grab a Bite of the Pie by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

Anti-Obesity Drugs – Pharma Companies Race to Grab a Bite of the Pie

773views

For many years, bariatric surgery has been the go-to option for people struggling with obesity and obesity-induced conditions. However, for the last couple of years, another easier option has become available in the form of GLP-1-based weight loss drugs. This class of medicine mimics a hormone that helps reduce food intake and control appetite. These drugs have revolutionized the weight loss market, which was previously dominated by gimmicky and fad-based OTC solutions. Due to GLP-1’s proven effectiveness, there is soaring demand for these drugs, outstripping its current supply capacity. While only two players operate in this market, several leading drugmakers have been racing to develop their own version of the drug. Moreover, with additional proven merits of the drug beyond just weight loss, it has become more appealing for pharma players to invest in.

GLP-1 anti-obesity drugs make big waves in the pharmaceutical sector

Over the past few years, anti-obesity drugs have received immense attention from healthcare professionals, pharmaceutical companies, and the general public. A new class of medication that stands out is glucagon-like peptide-1 (GLP-1) agonists, traditionally used for treating Type 2 diabetes. But along with managing diabetes, these drugs also suppress appetite and lower calorie intake by mimicking the GLP-1 hormone (a gastrointestinal hormone), which causes the patient to feel fuller longer and thereby prevents overconsumption. Regular intake of such drugs is deemed to result in a weight loss of about 15-25% of body weight in obese people.

GLP-1 agonists received FDA approval as anti-obesity drugs in 2021. Given their promising results, the demand for these drugs has increased immensely. However, despite the patient’s high out-of-pocket price of US$1,000 plus, there are severe shortages in the market.

Anti-Obesity Drugs – Pharma Companies Race to Grab a Bite of the Pie by EOS Intelligence

Anti-Obesity Drugs – Pharma Companies Race to Grab a Bite of the Pie by EOS Intelligence

Only two players operate in this highly-coveted market

The GLP-1-based medication is now marketed in two categories – one for managing diabetes and blood sugar levels and the other as a weight loss drug. The GLP-1-based weight loss drug market is highly consolidated, as only two players operate in this space. These are Denmark-based Novo Nordisk and US-based Eli Lilly.

Novo Nordisk, the market leader, received FDA approval for its weight loss injectable, Wegovy, in June 2021. This drug uses the same active ingredient as Novo Nordisk’s diabetes drugs, Ozempic and Rybelsus (oral); however, it has a different dosage and can also be used for weight loss in patients who do not have diabetes. That being said, Ozempic has also been used off-label for weight loss.

On the other hand, Eli Lilly’s injectable drug for weight loss, Zepbound, received FDA approval in November 2023. Eli Lilly’s glucose-dependent insulinotropic polypeptide – GIP/GLP-1 injectable drug for diabetes, Mounjaro, has the same composition and dosage as Zepbound and is often prescribed off-label for weight loss as well.

While Novo Nordisk’s drugs, which use semaglutide as an active ingredient, result in weight loss of about 13 to 22 lbs, the drugs by Eli Lilly have tirzepatide as an active ingredient. They are stated to result in a weight loss ranging between 15 and 28 lbs.

From a price-point perspective, Wegovy has an out-of-pocket cost of US$1,349 per month, compared to Zepbound, which has an out-of-pocket cost of US$1,060 per month. Thus, while Novo Nordisk’s Wegovy has the first-mover advantage, Eli Lilly’s Zepbound is considered more effective and better priced.

Currently, both weight loss drugs by Novo Nordisk and Eli Lilly come in the form of injectables. However, both companies are developing oral versions of the drug as they are easier to administer and more convenient to prescribe. They may also help ease supply constraints currently impacting the injectables. In June 2023, Novo Nordisk conducted Phase 3 trials for its once-daily oral Wegovy drug, according to which the drug helped obese adults lose about 15% of their body weight. Similarly, in June 2023, Eli Lilly conducted Phase 2 trials for its oral GLP-1 receptor for weight loss. The drug helped obese adults lose up to 14.7% of their body weight. Both companies are optimistic about the outcomes of their trials; however, the expected launch timelines for these drugs have yet to be determined.

Leading drugmakers race to compete in the growing anti-obesity drug market

Currently, Novo Nordisk and Eli Lilly are the only two players operating in this market. However, several other leading pharmaceutical players have joined the race and are working towards developing their own version of the drug, either through in-house R&D or through strategic acquisitions.

Moreover, they are targeting their research towards developing and marketing a new generation of GLP-1-based medications that are administered orally, are longer lasting, and have additional health benefits and limited side effects.

In February 2024, US-based biopharmaceutical company Amgen successfully completed a Phase 1 clinical trial for its GLP-1 agonist drug, MariTide. As per the trials, the drug produced a 14.5% weight loss in patients administered the highest dose. Moreover, the company claims that the trial indicates that patients may need to take less frequent doses of MariTide (compared with current competition), and the weight loss achieved stays significantly longer. The company has begun its Phase 2 trial, with results expected by late 2024.

In December 2023, Swiss-pharmaceutical giant Roche acquired US-based Carmot for US$3.1 billion (US$2.7 billion upfront cash and US$400 million on certain milestones). This acquisition has helped put Roche on the map for obesity drug development. Carmot has two GLP-1 agonist molecules for weight loss, which are currently being tested in the mid to advanced stages of clinical trials. The first drug, CT-388, is a once-weekly injectable and has completed Phase 1 clinical trial, while the other drug, CT-996, is an oral drug currently undergoing Phase 1 trials.

In November 2023, UK drugmaker AstraZeneca entered into an agreement with Shanghai-based Eccogene, wherein the former licensed an oral once-daily GLP-1 receptor agonist called ECC5004 for the treatment of obesity, Type 2 diabetes, and other cardiometabolic conditions. For this, AstraZeneca agreed to pay Eccogene an upfront fee of US$185 million for the drug and a further payment of US$1.83 billion in future clinical, regulatory, and commercial milestones and tiered royalties. The drug is currently in Phase 1 development, and the company hopes to enter Phase 2 of clinical studies by the end of 2024. In the past, AstraZeneca stopped the development of two GLP-1 agonist drugs that were being developed in-house. The development of an injectable called Cotadutide was halted in April 2023, and an oral drug called AZD0186 was halted in June 2023 after their respective Phase 2b and Phase 1 clinical trials did not yield the desired results.

Pfizer, one of the most active companies in this regard, has faced multiple failures in their endeavor to develop a competitive obesity drug. In 2020, it started a clinical trial for its GLP-1 agonist weight loss drug, Lotiglipron. However, in June 2023, the company stopped developing the drug after its Phase 1 and Phase 2 drug interaction studies indicated a rise in liver enzymes in patients who took the drug once a day. In 2021, the company simultaneously began working on another GLP-1 receptor agonist, Danuglipron, which was to be taken twice daily. While the Phase 2a trial for the drug in June 2023 showed promise, the company halted the development of the drug post its Phase 2b trial in December 2023. The drug was scrapped as, despite significant weight loss, the trial patients experienced high rates of common gastrointestinal and mechanism-based adverse side effects. The company is now conducting a pharmacokinetic study with a once-daily version of the Danuglipron drug that will provide guidance on future development plans.

Pfizer’s failure with these two drugs demonstrates the struggle the leading pharma companies face to develop a safe, effective, and tolerable GLP-1 agonist for weight loss.

GLP-1 agonist drugs have benefits beyond diabetes and weight loss

Despite multiple setbacks, leading pharma companies are investing heavily in this space, as they understand the potential of these drugs. While currently, GLP-1 agonists are poised as diabetes and weight loss drugs, they have far more benefits. Data from ongoing clinical trials and independent studies suggest that GLP-1 agonists also help improve cardiovascular health and kidney function and help treat addiction and dementia.

In March 2024, Novo Nordisk’s Wegovy received FDA approval for reducing the risk of serious cardiovascular complications in adults with obesity and heart disease. This is based on the results shared from the company’s three-phase trial SELECT, which indicated that Wegovy reduced patients’ risk of major cardiovascular problems by about 20% during the five-year trial period.

Similarly, in 2019, the company started another clinical trial, FLOW, to determine the impact of GLP-1 agonists on kidney function. As per the interim results in October 2023, the trial displayed that Ozempic (Wegovy’s diabetes counterpart) reduced the risk of kidney disease progression and kidney and cardiovascular death in diabetes patients by 24%. Given its success, the company has halted the trial at the interim stage.

An initial study conducted on animals in March 2023 reportedly showed positive results for curbing addictive tendencies, such as drinking and smoking, with Ozempic. Currently, two trials are being undertaken to validate the use of GLP-1 agonists in humans to manage drug and alcohol addiction. Given the testimonies from current users of the drug, it is indicative that the drug has been helping users curb their addictions.

In addition to this, several researchers are also suggesting that GLP-1 could be used in the treatment of dementia and other cognitive disorders. This is based on the claim that GLP-1 agonists reduce the build-up of two proteins, amyloid, and tau, in the brain. These two proteins are known to be responsible for Alzheimer’s disease, which is the most common form of dementia. In February 2022, a new trial at the University of Oxford was initiated to test people with high levels of amyloid and tau and at risk of developing dementia to determine if the use of GLP-1 agonists would result in a reduction in tau accumulation and brain inflammation. The interim results from the study have not yet been disclosed.

High prices and limited coverage pose as speedbumps for obesity drug adoption

While these obesity drugs have exploded in popularity in recent times and are only expected to grow further as their case use increases, they do have certain shortcomings and challenges that are important to address.

These drugs are known to cause several side effects, such as nausea, diarrhea, vomiting, constipation, and ulcers. They can also lead to severe complications, such as pancreatitis, in some extreme cases. While most of the common side effects of the drugs are manageable and justifiable given the risk-benefit ratio, one of the key issues with the drugs is that they need to be taken in perpetuity to keep the weight off. In other words, once a patient stops taking the drugs, the weight comes back. Given that these drugs are priced at more than US$1,000 per month at the moment, taking them constantly becomes a considerable challenge for patients.

Moreover, considered as ‘vanity-use’, these drugs are currently not covered by most medical insurance policies, and thus, patients have to pay for them out-of-pocket. While several employers in the USA are considering including these drugs in their health plans, they are still debating their merit. Employers acknowledge the benefits of these drugs as they help employees who battle with obesity improve their health and, in turn, improve overall performance and employee satisfaction. However, high costs and long-term use act as definite barriers, which make both employers and insurers reluctant to cover these drugs.

Insurers are slowly warming up to the inclusion of GLP-1 drugs in their plans

In March 2024, leading insurance company Cigna stated that it would expand insurance coverage to include weight loss drugs but would limit how much health plans and employers spend on the drug each year. As per Cigna’s benefits management unit, Evernorth Health Services, spending increases for these weight loss and diabetes drugs would be limited to a maximum of 15% annually. The plan offers a financial guarantee and enables employers and health plans to have greater predictability and control over their GLP-1 spending by offering clients (employers) a guarantee that the cost of weight loss and diabetes drugs would not increase by more than 15% annually.

As a part of the effort to limit how much employers spend on GLP-1-based drugs annually, Evernorth has entered into an agreement with Novo Nordisk and Eli Lilly. However, the details of the agreement have not been disclosed.

While this is a good start, the drug would need better coverage by many other insurance players to reach a wider audience.

EOS Perspective

Given that about 12% of the global population and more than 40% of the American population grapple with obesity (as per WHO and 2022 statistics by the National Institute of Diabetes and Digestive and Kidney Diseases, USA, respectively), weight loss drug manufacturers Novo Nordisk and Eli Lilly are sitting on pharma goldmines. The weight loss drugs market, expected to reach US$100 billion by 2030, is poised as one of the most promising sectors for the pharma sector. Thus, it is no surprise that several leading players are investing heavily to join Novo Nordisk and Eli Lilly at the top, either through in-house R&D or through acquisitions.

However, developing these drugs proves to be challenging for drugmakers, as evidenced by the failures of several companies in creating their own versions. We can expect the sector to consolidate further as larger pharma companies look to acquire niche players with their trials being in advanced stages.

Moreover, in a bid to find their footing in this promising sector, pharma players are trying to develop advanced versions of the drug that have benefits beyond just weight loss and offer long-term benefits. This is also because, at the moment, these drugs are not approved by most insurance companies, which makes them extremely expensive for the wider population to afford. This, in turn, is withholding these drugs from becoming mainstream and is thereby preventing them from tapping into their true growth potential. That being said, Wegovy’s recent FDA approval for reducing cardiac complications in people with obesity and heart disease will likely tip the insurers’ coverage scales. Insurance companies are likely to cover the drug in the near future.

Since no other drug in the market offers proven cardiac benefits along with weight loss (including Eli Lilly’s), it is safe to say that Novo Nordisk is way ahead in the race and will dominate the market for the foreseeable future. Thus, to be able to compete in the market, it is not enough for drugmakers to develop obesity drugs offering just weight benefits. They would need to develop drugs that offer higher efficiency or additional therapeutic benefits along with weight loss and price them competitively.

Top