Over the Pill
Welcome to “Over the Pill”, the Berenberg podcast where Kerry Holford & Luisa Hector lift the curtain on the messy reality of analysing pharma share prices. With over 30 years of friendship, Kerry & Luisa invite listeners into their regular debates on pharma strategy, drug pipeline prospects and commercial power.
Over the Pill
Episode 8
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Luisa records from the road this week as she visits AstraZeneca and Sanofi “up north”. Kerry highlights key takes from her meetings with GSK at the recent Berenberg UK conference. The duo also discuss the longevity of Sanofi’s Dupixent, expectations ahead of Lilly’s orforglipron launch and the Medicare obesity BALANCE pilot programme.
Hi, I'm Carrie Holford.
SPEAKER_00And I'm Louisa Hector.
SPEAKER_01Welcome to Over the Pill, a weekly podcast on the latest hot topics in Farmer Investor. So Louisa, you are speaking to us remotely, out and about.
SPEAKER_00Yes, we thought we'd give this a go, right? So I am in Cambridge in the UK, and I am visiting AstraZeneca and Sanafi. It's lovely out here. I know you live up north, so you're used to this word. It's it's really beautiful.
SPEAKER_01So what have you learned uh in the last week? Your Sanafi Annual Checkup, I think, was published recently.
SPEAKER_00Yes, so I'm still trying to catch up with you. The Sanafi Annual Checkup, um, lots of neat shots as usual on the kind of standard themes, rebates, etc. Uh, I would say that what's standing out, and it's also something to think about as we head into the Q1 results, um, Dupixant. Um, so there's still kind of question mark on the duration of the life cycle of Dupixant, and then the follow-ons, which were kind of beefed up a little bit at the full year on the Regeneron and the Sanafi side. But the things I spotted that were new, very much a statement in the in the annual report of Sanafi that IRA for Dupixant, that price negotiation effect is not expected until 2031 at the earliest. Now, March 31 is the year of the US composition of matter patent, but they've always talked about patents beyond that. Um, and we now see a later date on those additional patents. They talk about April 2045 for the US. And that is a little bit of an extension. Previously, they talked about 2044. And at Q1, we will get the update or a bit more colour around the additional plans with regeneron. So we know there is a longer dosing interval of dupixant coming. So dupixant at the moment, every two-week injection. And also they they're kind of compelled to collaborate on any IL4 alpha antibodies. IL-13, they I think they can both do separately, but IL4 alpha, there is a long-acting antibody, and that will, I think that still needs to move into the clinic. So these are the topics I expect will come up at Q1. Certainly in the first half, is what they've promised. Um we also spotted, because we get the information on remuneration um in the Sanafiana report, but the annual bonus, the pipeline metric was below target. I think this is just intriguing because you know, we know that's the big issue for the company. Uh, now this was obviously the annual bonus of Paul Hudson, and we'll see, you know, how that fares under Belen going forwards. So that's me on Sanafi. You were at the Grove last week, and you met with GSK.
SPEAKER_01I did. So, yeah, the Grove being the Berenburg annual UK focused conference. Um, we had GSK Investor Relations there. Um, and I guess that the two key areas that sort of stood out to me really centered on the message that they wanted to get across with regard to the new CEO, Luke Miles, and the fact that he is quite super product focused, which means he's going to look to maximize opportunities from both an internal investment perspective and a business development perspective to build that pipeline, which is, you know, clearly what investors want to see. But I think the key takes from that perspective is that essentially RD investment is going to increase. So interesting here with sort of parallels to Sanafi. It is not new that they've talked about increasing RD spend. They've said that they intend to grow that ahead of sales over the next three years. That was something that was reiterated, the growth. But also with regard to business development, the target price range that they'd previously talked about was one to two billion sterling. Now the message is we're going up. We're looking at opportunities in the two to four billion sterling range. And I would say so far, so good in terms of the targets that those BD deals that have been announced. I'm thinking of RAPT, more recently 35 Pharma. These all make a lot of sense and fit nicely into the strategy. Um but I think we'll be hearing more from GSK management over the coming 12 months with regard to Luke's vision and what may or may not change going forward. So that was all pretty solid but interesting, and the focus there on RD for GSK.
SPEAKER_00That's great on the business development side. And I know that we've had maybe a little bit of a surge in questions from investors on HIV, the Viv prospects. I mean, we don't have time to go into it now, but I need to pick your brains because you are HIV on the team. And I need to get ready because Merck will have its Latravere, Lenkapavir, combo trials reading out this quarter, I think, or this you know, very soon. And that's a weekly pill. So we need to have that on our horizon and also think about all the longer acting plans from GSK and Gilead, right?
SPEAKER_01Yeah, exactly. And GSK is committed to giving the investors an update more broadly on HIV with an event in June. But we did have some data at Croy back last month. Um that leads us to conclude the likely six-month injectable route for GSK is probably the combination of the new integraze inhibitor, the Shionogi, and the capsid inhibitor. But they haven't finalised that comment yet with the market, but that would be my expectation. I think we'll hear more about that in June.
SPEAKER_00Okay, good. Another battle of the pills we need to think about. So I also need to check with you. You had your Lily pre-Q bundle, so we can't get we can't get this to slip anything of note.
SPEAKER_01No, uh exactly. The Battle of the Pills here is is about to get started. So, yeah, from that discussion with Lily back end of last week, um, two areas I would highlight. Not surprisingly, the most talked about element on that call was was Orphagleprom, the oral GRP1. So companies confirming they're on track to get the FTA approval mid-April and launch in the US by the end of Q2. They were asked about pricing. They confirmed that their entry-level price would be the same as Novo's Wagovy Pill. So that's the $149 per month. Um previously they talked about going up to $399 based on the dose increase. Um the dose selection, but they they talked about that as being potential to go up to $399, noting that Novo price range is from $149 to $2.99. So my sense is they may not push the envelope too far on the price of the highest dose of all for Glepron. They were generally very um, you know, upbeat, but I would say the tone changed slightly. So they are keen to highlight that Novo has a first mover advantage. The launch has been very rapid, and they conclude therefore it may take time to change that given the momentum that Novo has. So interestingly, they're just being a little bit more cautious, I think, into expectations for the second half of the year, which for some on our side of the fence remain pretty high in terms of first year um sales expectations. So that was awful. The second point for me was the takeaways on Medicare and the obesity coverage. So confirming the bridge program on track to start July 1st, and the main CMMI balance program will start January 1st next year. We've got a bit more detail on the latter published by CMS earlier this month. So the bits that we discussed on the call and I would highlight, be aware that Balance has a minimum 80% opt-in requirement. So the pilot program will not launch unless plans covering at least 80% of Part D beneficiaries apply to participate. And the deadline for that application is the 30th of April. So Lillian noted therefore that you know a lot of education of payers, physicians, patients is ultimately going to be required, but particularly ahead of that deadline in order to secure sufficient opt-ins. That was not something that I was aware of ahead of time. Um, and we also have more detail now on which patients will qualify. So interesting, the requirements to get access to the drugs through Medicare is going to be more stringent than the drug labels. So anyone with a BMI of 35 plus will be um eligible. A BMI of 30 plus, you also have to have heart failure, uncontrolled hypertension, or mash. And if you have a BMI of 27 plus, then you will need to have evidence of pre-diabetes or have had a previous cardiac event, MI or stroke. So a little bit more stringent than the labels. So that would be my key takes um on the lily front.
SPEAKER_00So we should know by the 30th of April whether this 80% opt-in. Will they tell us? I guess after the 30th of April, you can ask whether that opt-in has happened yet.
SPEAKER_01Exactly. Yeah.
SPEAKER_00So I had one more thing to flag to you. Alzheimer's, just for us to be aware. I was listening to Biogen, and they will be reading out soon the Celia trial. It's phase two, phase two B kind of trial. It's with that anti-Tau. And I think this is just going to be interesting for the whole landscape within Alzheimer's. It should hopefully give some colour on whether towers cause or correlate basically within disease progression and Alzheimer's. So we need to keep an eye out on that one. We don't cover it, but um it's going to be, you know, have ramifications for others. Um, so that was quite exciting as well. I think that's it. Should we talk about next week or the week ahead this week even?
SPEAKER_01Yes, this week. Well, reasonably quiet. We're we're obviously preparing for Q1, so some more um calls ahead of the results into the end of next month. Um marketing and some holidays.
SPEAKER_00Yeah, you're going skiing.
SPEAKER_01Indeed. Hoping for no more injuries.
SPEAKER_00Oh yeah, keep keep a grip on those limbs. And I get to go to Barbados just for a few days for the school cricket tour. But I'm looking forward to that. Um, good. Now, I don't know what you're doing, but I'm going to go and have lunch with Thomas Lawson at Sanafee. I'm looking forward to that. Uh, you can go back to the desk. Um, and as ever, we would love to hear your feedback and requests. So do email us at luisa.hecta or carrie.