Every Little Helps: Shire Product Advances Fortify Takeda's Bid
Executive Summary
A positive opinion in the EU for Shire's Takhzyro and a favorable US advisory committee vote for prucalopride are incremental positives for Takeda's planned acquisition, on which shareholders are likely to vote in the coming weeks.
Regulatory progress for two late-stage Shire drugs may not on its own convince doubting Takeda Pharmaceutical Co. Ltd. shareholders of the merits of the deal, but the positive news will be welcomed by the Japanese company's management as it prepares for shareholder votes.
A European positive opinion for Takhzyro (lanadelumab) that will help Shire PLC expand its empire in rare condition hereditary angioedema (HAE) comes just one day after a US FDA Advisory Committee unanimously endorsed the company's prucalopride to treat chronic idiopathic constipation (CIC). The two drugs stand to win approval in their respective territories by the end of 2018.
The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP), whose advice is usually followed by a European Commission approval decision within 67 days, has issued a positive opinion recommending approval for Takhzyro to prevent recurrent attacks of HAE in patients aged 12 and over. The recommendation bringing European approval within sight follows US FDA approval of the monoclonal antibody in August. (Also see "With Takhzyro Approval, Shire Could Reclaim HAE Prophylaxis Market From CSL Behring" - Scrip, 24 Aug, 2018.) The drug had enjoyed accelerated assessment in Europe because the CHMP considered it to be of major interest for public health.
Prucalopride, branded as Motegrity in the US, was approved as Resolor in the EU in 2009. It is not a major product for Shire. The application's user fee date is Dec. 21, 2018. (Also see "Shire’s Motegrity: US FDA Panel Nod On CV Safety Comes With Concern About Neuropsych Events" - Pink Sheet, 18 Oct, 2018.)
Takhzyro: A Blockbuster In The Wings
Takhzyro's likely approval in Europe will help Shire reinforce its position in the HAE market there. The US approval in August gave it the tool it needed to start to re-establish its position after losing ground to CSL Behring following the July 2017 approval of the latter's Haegarda, a more conveniently dosed subcutaneous version of its C1 esterase inhibitor, which has long been marketed in intravenous form in both the US and Europe under the brand name Berinert. Haegarda has been approved in several European countries and awaiting approval in others, but it hasn't been launched there yet.
While Takhzyro may cannibalize some of Shire's own portfolio of HAE products, it is expected to result in net growth for the franchise overall, with analysts predicting the product will rapidly achieve blockbuster status and potentially reach new patients in the prophylactic HAE space. With once-monthly or twice-monthly dosing, Takhzyro will enable Shire to leapfrog back over CSL Behring in the convenience stakes, since Haegarda needs to be injected twice a week (and in higher volume).
A monoclonal antibody, Takhzyro targets the enzyme kallikrein, which is chronically uncontrolled in HAE patients. Shire already markets a product that inhibits kallikrein – Kalbitor (ecallantide) – but the product had sales of just $67m in 2017 and has not been approved in the EU.
Shire's top-selling HAE drug had been Cinryze, an intravenous C1 esterase inhibitor for use as prophylaxis, but in the first half of 2018 sales of the product fell to $283m from $402m in the first half of 2017, while CSL Behring in August 2018 said Haegarda had taken around 50% of the US HAE prevention market since its launch .
To treat acute attacks, Shire sells Firazyr (icatibant), a bradykinin B2 receptor inhibitor: sales grew to $417m in the first half, from $266m in the first half of 2017.
The US accounts for the bulk of sales of both products, with first-half 2018 ex-US sales of Cinryze totaling just $24m ($21m in H1 2017) and of Firazyr totaling $51m ($36m in H1 2017).
An Extra $1bn In HAE By 2023
Deutsche Bank forecast in an Oct. 12 note that Takhzyro sales would reach $73m in 2018, ramping up to $304m in 2019 and reaching blockbuster status in 2021 with $1.1bn. It expects Cinryze to dip from $699m in 2017 to $540m in 2018, before recovering some ground but ultimately declining to $433m in 2021. Firazyr is also expected to decline. However, by 2023, Deutsche Bank expects Shire's HAE portfolio to book $2.4bn in sales in 2023, compared with $1.4bn in 2017.
Even more bullishly, BTIG analysts peg Takhzyro revenues at $70m in 2018 rising to $450m in 2019 and $1.1bn in 2020. In an Aug. 23 note they said it "could be a game-changing treatment for hereditary angioedema" and that "the number of patients receiving prophylaxis treatment could double within the next three years with the launch of lanadelumab."
Also in an Aug. 23 note, Jefferies analysts pointed out that around 45% of HAE sufferers in the US and EU are undiagnosed, and highlighted previous Shire comments on the room for "significant market expansion via treating milder forms of the disease given the strong safety profile and significantly improved convenience of Takhzyro."
Takeda Deal
With the US market representing by far the larger opportunity, today's positive opinion for Takhzyro is a minor boon, but every little helps as Takeda nears the moment of truth for its merger plan.
The Japanese big pharma is likely to receive antitrust regulatory approval for the acquisition of Shire in both the EU and Japan in November 2018, clearing the way for extraordinary general meetings of the companies' shareholders to vote on the deal, which Takeda hopes to complete in the first half of 2019. Chinese and US regulators have already given the green light.
Some Takeda family shareholders have expressed disapproval of the deal, but Takeda management has minimized the risk. According to an Oct. 15 note, Credit Suisse analysts' view "is that the vocal family holders who continue to oppose the deal hold only a very small stake, and are not influential.
[Editor's note: this article was corrected on Oct. 24, 2018 to note that Haegarda has been approved in some but not all European territories, although not launched. Scrip had incorrectly reported that it had not yet been filed in Europe.]