Following up on previous post, this is the part 2 of biotech/pharma outlook.
In this post, I would like to discuss key developments in some major therapeutic areas of interest that will have repercussion not only during 2H23, but beyond.
Regeneron’s High Dose Eylea Gets CRL and That Will Have a Lasting Impact for REGN, Roche, and wet AMD / DR market
Regeneron is a highly respective biotech company (probably up there with Vertex) that generally never messes up in this risky business of drug development. Its core product is Eylea – eye injection for treatment of wet AMD and diabetic retinopathy (DR). Eylea is currently (at least as of 1Q23) the market leading product in anti-VEGF therapy market – however, it has one major issue, which is that there is high risk that a biosimilar Eylea enters the market in 2H24.
As a smart biotech, Regeneron has been preparing for this LOE for a long time and its plan was to launch High Dose Eylea (HD Eylea) – which is the next-gen product that extends dosing interval – thereby delivering additional benefits to patients/physicians and saving our healthcare system money. Regeneron told investors that Eylea patients will quickly switch to HD Eylea before biosimilar Eylea products come into competition – thereby locking in these patients. Investors also trusted them.
However, big surprise came – FDA gave REGN a CRL – the fill finish was the problem. REGN outsourced the fill-finish to Catalent – a contract manufacturer who has been messing up for their customers, most recent victim being Novo Nordisk.
This will likely lead to a delay of upto 6 months – essentially this cost 50% of time HD Eylea had before biosimilar Eylea would enter the market. you won’t be able to switch patients as easily when there is a biosimilar product.
One lucky winner from this unfortunate event is Roche – Roche commercialized Lucentis, but was forced to take a backseat as Eylea took over the market. However, Roche is now launching Vabysmo – which is the next-generation product that also has extended dosing interval, like HD Eylea. Currently Vabysmo had ~9 month lead ahead of HD Eylea, but they just got another ~ 6months. I expect Roche to really push their effort to maximize patients on Vabysmo before HD Eylea gets to the market and this has an impact WELL BEYOND 2024.
This is a CHRONIC THERAPY – once a patient is already stable on a therapy and is responding well (most patients do on Vabymo as it is a highly efficacious therapy), they do not switch for YEARS. Also, these are extended duration therapies – therefore, switching will be even more difficult. Therefore, HD Eylea delay will have impact not only on 2023 estimates, but peak sales too because peak market share is now impaired vs. before.
Roche has been disappointing investors since gantenerumab failure and stock has not been acting well – they finally have a positive news for them and this should help their financial profile going forward.
I think bulls want to believe that the Catelent fill-finish issue would be resolved quickly. However, job postings from the troubled Catalent smells more of a desperation vs. stabilization. Massive hiring in the QC department, including relatively senior roles- including Senior Director of microbiology and sterility assurance and Vice President of quality control.
Catalent is trying to fill 15 roles – just in quality and regulatory department, and some jobs were posted after Regeneron received CRL – which tells me they are scrambling to solve the problem.
*not investment advice
