A Peek at Europe's Pharma Pipeline

(page 2 of 2)

From Standard & Poor's Equity Research

This drug works differently than existing RA therapies, is supported by solid clinical data, and solidifies Roche's entry into the inflammatory and autoimmune diseases field. It has potential to be a blockbuster, but Landsbanki/Kepler, the investment bank, points out that its initial utility may be limited due to safety concerns; moreover, it will be entering a crowded market where it will have dosing disadvantages due to its intravenous formulation.

Also, Roche could initiate U.S. commercialization of its renal anemia therapy Mircera. This protein therapy received FDA approval in November, 2007, but its U.S. launch is delayed pending resolution of patent litigation with Amgen (AMGN; 3 STARS). Mircera went on the EU market in late 2007.

Sanofi, which has the greatest near-term exposure to generics among major EU pharmaceutical companies, doesn't expect to commercialize any major new products in 2008. It is still recovering from U.S. regulators' rejection of Zimulti/Acomplia. It continues to study Zimulti for non-obesity indications, notably diabetes (U.S. filing anticipated 2009 or later) and views the drug as an important contributor to future sales. Standard & Poor's believes Sanofi's R&D pipeline could transform into marketable products beginning in 2010 and onward. These would include some products, which the company expects to submit for approval this year, such as aflibercept, a VEGF-Trap drug initially indicated for ovarian cancer, S-1 (advanced gastric cancer), AVE5026 (a successor to anti-coagulant Lovenox), and antidepressant saredutant.

Novartis' 2009 Could Be a Winner

Novartis' regulatory track record is excellent, and second only to GSK in the percentage of its new product filings that were approved from 1998 to 2007. Recently launched Tekturna (hypertension), Xolair (asthma), Exforge (hypertension), Sebivo (hepatitis B), and Tasigna (cancer) could contribute a combined $2.1 billion to sales by 2009, according to ABN AMRO, enabling sales growth to reach 10% that year. Expect a considerable slowdown in new product activity in 2008, however, with the only important launch being Galvus, in Europe. Initially, Galvus may not contribute much to sales, however, because it faces stiff competition. The following year looks better for the company, which could launch three new products (for cancer, depression, and chronic obstructive pulmonary disease—COPD). Of these, QVA149 for COPD could be important if clinical trial data hold up since COPD has few treatment options; the others are likely to be small.

One of the most promising products in late-stage development at an EU pharma appears to be Bayer's (BAYRY; 4 STARS) anti-coagulant Xarelto. Bayer is a diversified health-care and chemicals conglomerate, but it has increased its reliance on pharmaceuticals. A successful new drug would certainly help to validate its strategy. Phase III study data released in late 2007 showed Xarelto to be more effective than the standard antithrombosis medication, Sanofi's Lovenox, at preventing venous clots from forming in patients following orthopedic surgery. Bayer has filed a regulatory application for this indication in the EU and anticipates a possible launch in 2009; a separate submission is planned in 2008 for the U.S., where Johnson & Johnson (JNJ; 4 STARS) has marketing rights. Standard & Poor's Equity Research anticipates first-year post-launch sales could total $120 million. A much bigger opportunity lies in the use of Xarelto as a medication in the acute-care setting (atrial fibrillation, deep vein thrombosis), but approval for this indication isn't likely to come before 2011.

AstraZeneca, on the other hand, is likely to struggle as up to three of its most important drugs face patent challenges in the U.S. in 2008—Nexium (gastrointestinal), Pulmicort (asthma), and, less likely, Seroquel (antidepressant). Serious R&D setbacks have depleted its near-term pipeline. Nevertheless, it has 10 products in Phase III (including several line extensions). In 2008, the company expects to submit documents for U.S. approval of motavizumab (Numax), an anti-infective, which it obtained when it bought MedImmune in June, 2007. In addition, it may file for approval of saxagliptin (diabetes) in the U.S.; EU filings for both drugs are slated for 2009.

Diller is a reporter for Standard & Poor's Global Editorial Operations .