Shaw Leaves Lilly To Helm Gilead’s Kite
Executive Summary
After heading up Lilly Bio-Medicines for two-and-a-half years, Shaw will take over Gilead’s gene therapy subsidiary. At Lilly, she oversaw the approvals of Olumiant and Emgality and helped grow Taltz.
Investors were caught by surprise on 11 July as Eli Lilly & Co. revealed that the president of its Bio-Medicines unit, Christi Shaw, is leaving at the end of August, with Patrick Jonsson, currently president and general manager of Lilly Japan, selected to succeed her. Shaw’s move wasn’t a mystery for long.
After the markets closed on 11 July, Gilead Sciences Inc. announced that Shaw would be coming in as CEO of its Kite Pharma Inc. oncology/gene therapy business. Gilead bought out the biotech for nearly $11.9bn in 2017, and one of CEO Daniel O’Day’s first moves was to announce that Kite would become a separate business unit with its own chief executive. (Also see "Gilead To Let Kite Fly Free; O’Day Says It Will Become Separate Business Unit" - Scrip, 2 May, 2019.)
At Lilly, Shaw had been in charge of a unit that oversaw commercialization of both large and small molecule therapeutics outside the diabetes and cancer spaces. (Also see "Lilly Management Reorg Brings In Shaw To Oversee Bio-Medicines" - Scrip, 5 Jan, 2017.) In announcing her departure, Lilly credited Shaw with the launches of Olumiant (baracitinib) for rheumatoid arthritis and Emgality (galcanezumab) for migraine prevention.
Lilly began her career at the Indianapolis pharma, working in a series of commercial roles from 1989 to 2002 before moving on to various positions at Johnson & Johnson and Ethicon Inc. But in 2010 she moved to Novartis AG – where as president of the Swiss pharma’s US business, she launched the anti-IL-17 medicine Cosentyx (secukinumab), which quickly tallied blockbuster revenues.
Shaw left Novartis in 2016 to care for her older sister, who had multiple myeloma. On arriving at Lilly, she told Scrip she hadn’t expected to return to big pharma but was drawn by an opportunity to be in charge of profit and loss for both the clinical development and commercial operations in her division. (Also see "A Q&A With Lilly Biomedicines President Christi Shaw " - Scrip, 25 May, 2018.)
Cancer care and advocating for cancer patients have become a focus of her public speaking engagements, so it's not a big surprise to make the leap to leading a cancer portfolio.
At the time Shaw moved to Lilly, there were striking similarities between the Lilly’s and Novartis’ portfolios, including in psoriasis with Taltz, the CGRP antagonist Emgality, which competes with Novartis/Amgen Inc.’s Aimovig (erenumab) in migraine, and the JAK1/2 inhibitor Olumiant, which is in the same class as Novartis’ Jakafi (ruxolitinib), although the products have different indications. Whereas Olumiant is cleared to treat moderate to severe RA in patients who did not benefit from anti-TNF therapy, Jakafi is approved to treat myelofibrosis, polycythemia vera and graft-versus-host disease and is in mid-stage development for several cancer indications.
Shaw leaves behind a pipeline at Lilly that includes eight new molecular entities in Phase II development or later, plus a pair of line extensions each for Olumiant and the IL-17 antagonist Taltz (ixekizumab), currently approved to treat psoriasis and psoriatic arthritis (see chart). Lilly Bio-Medicines also lists eight NMEs in Phase I outside of cancer and diabetes on its website – seven for immunological indications and one for pain.
One of her immediate challenges was to get Taltz more competitive in the IL-17 space – the biologic posted first quarter sales of $252.5m, a blockbuster run rate and 72% growth compared to first quarter 2018. (Also see "Lilly Says Volume Growth Strategy, Launches Working Despite Price Pressures" - Scrip, 30 Apr, 2019.) For full-year 2018, Taltz posted sales of $937m, up 68% from 2017, but those numbers still paled in comparison to Cosentyx, which brought in $2.837bn in 2018 with 37% growth.
At the end of 2018, Lilly held a 2019 forecast event at which it pointed to the importance of 10 new launches in the previous five years to drive growth, including Taltz, Olumiant and Emgality. (Also see "Lilly's New Year Resolution: Make New Launches Into Blockbusters " - Scrip, 20 Dec, 2018.) It also made note of lasmiditan, a 5-HT1F receptor agonist for acute migraine, now under review at the US Food and Drug Administration as a potential growth product. These newer products are expected to account for about 45% of Lilly’s pharmaceutical revenues in 2019.
Line extensions for Taltz in both radiographic axial spondyloarthritis and non- radiographic axial spondyloarthritis offer growth prospects as well. The biologic is under FDA review for the first indication, while Lilly reported in April that product met all primary and secondary endpoints in a Phase III study for the second indication. (Also see "Taltz Results In Spondyloarthritis Add To Lilly Franchise Hopes" - Scrip, 23 Apr, 2019.) There are an estimated 5m cases of the two indications combined in the US, Japan and the five largest EU markets, according to Datamonitor Healthcare.
Less rosy, however, are the future prospects for tanezumab, a nerve growth factor inhibitor partnered with Pfizer Inc., after it showed potential for negative joint health outcomes in an osteoarthritis study. (Also see "Lilly/Pfizer’s Tanezumab Safety Takes A Hit With Latest Phase III Results" - Scrip, 19 Apr, 2019.) While the antibody hit two of three efficacy endpoints at 16 weeks in the study, an 80-week safety assessment showed indications of disease worsening compared to control. The two companies currently are assessing their options for taking the drug forward.
The commercial future of Lilly Bio-Medicine’s pipeline will be Jonsson’s responsibility now. Jonsson joined Lilly in 1990 and has overseen the pharma’s business in Sweden, Scandinavia and Italy before becoming president and general manager of Lilly Japan in 2014.
Lilly finished the trading day down 4% to $109.79 on the news. The transition is likely to be a major focus when the firm reports quarterly earnings on 30 July.
As for Shaw’s tenure at Kite, still-new Gilead CEO O’Day has said that making Kite a separate entity is all about focus and that the new CEO will have “full accountability for all aspects of gene therapy.”
Kite’s Yescarta (axicabtagene ciloleucel) obtained FDA approval for third-line relapsed or refractory large B-cell lymphoma in October 2017, shortly after the sale to Gilead. Yescarta posted sales of $96m during the first quarter, up 19% sequentially and 140% year-over-year, but analysts generally have called the buildup of Gilead’s gene therapy business slow.
Gilead lists three Kite clinical candidates in its pipeline, as well as several line extensions for Yescarta. The CAR-T drug is in Phase III for second-line DLBCL, Phase II for non-Hodgkin lymphoma and DLBCL patients who are PD-L1-positive and Phase I for DLBCL patients positive for 4-1BB. Kite’s next CAR-T, KTE-X19, is in Phase II for both adult and pediatric acute lymphoblastic leukemia and for mantle cell lymphoma and in Phase I for chronic lymphocytic leukemia.
It has additional novel T-cell therapies in Phase I in solid tumors, the autologous genetically modified MAGE-A3/A6 T-cell receptor (TCR) transduced autologous T-cell product KITE-718 and another TCR, KITE-439.