Beyond The Pandemic, An Interview With Astellas’ Percival Barretto-Ko
Executive Summary
Astellas Pharma US accounts for roughly one-third of the parent company’s annual revenues with a growing focus on immuno-oncology. The unit’s president discusses lessons from the pandemic, racial disparities in health care and business development.
Astellas Pharma, Inc., the multinational biopharma headquartered in Tokyo with multibillion-dollar operations in the US, was impacted by the same forces that buffeted many in the industry in 2020, including the global COVID-19 pandemic. The global health crisis delayed and, in some cases, halted ongoing projects at Astellas but it also offered new business opportunities and revealed novel ways to work and collaborate.
Astellas Pharma US Inc. President Percival Barretto-Ko oversees the company’s US operations from its base in Northbrook, IL. The pharma recorded global revenues of about $12bn in 2019, of which about $4.4bn was generated in the US, Barretto-Ko told Scrip. Created by the merger of Yamanouchi Pharmaceutical and Fujisawa Pharmaceutical Co. Ltd. in April 2005, Astellas’ therapeutic areas include cardiology, hematology, immunology, infectious diseases, oncology and urology, with a strong emphasis on immuno-oncology.
In August, the company reported an 8% decline in core revenues in the fiscal first quarter (ended 30 June) despite 17% sales growth for its top-selling product – the prostate cancer therapy Xtandi (enzalutamide). (Also see "Virus-Hit Astellas Cuts Forecast" - Scrip, 5 Aug, 2020.) Due partly to the pandemic, Astellas reduced its revenue guidance for 2021 to 3% below what it brought in during the year ended 31 March 2020.
In a wide-ranging discussion, Barretto-Ko talked about what Astellas learned from the pandemic, the firm’s strategy and goals in immuno-oncology and its role in addressing racial disparities in health care.
Scrip: How has Astellas been impacted by the novel coronavirus pandemic and what has it learned from it?
Barretto-Ko: We’re still in the middle of it at the moment, but at the onset of the pandemic, it challenged us in different ways. First, we needed to make sure that we focused on the patients and ensure product supply, product continuity so that we can protect the well-being of patients.
Our second priority was making sure that we paused all of our clinical trials as well as many of our peers did across the industry. We were one of the first to do that and with our workforce we were one of the first to pull our field from the marketplace – to protect them, but also to protect health care providers and patients alike.
From the get-go, we had to act quickly, with agility, and really focus on what was important for us.
In the thick of the pandemic, there was business impact. Frankly, in terms of some of our therapeutic areas we’re very much focused on – oncology, prostate cancer and hematology, and now with the launch of Padcev (enfortumab vedotin) – [Astellas Pharma US] did not see a significant impact in sales. We expect to grow year-on-year almost double digits, if not 11%-12%, from last year. This is a trend that we’ve seen, at least for Astellas US, in the last four years, double-digit growth every year.
We did see an impact as expected on elective procedures. For example, in cardiology, we have a leading imaging agent called Lexiscan (regadenoson injection) and it did suffer, particularly in April and May, and then started to recover as some semblance of normalcy came back in the summer months. Long story short, there was an impact to the business but certainly not as significant as we initially thought.
The third impact of the pandemic was how to maintain and nurture the culture. This was a priority personally for me as we had to work virtually and make sure that we continued to protect our employees, but at the same time, make sure that we continued to have a robust culture.
Scrip: It looks like 2020 was still a busy year for Astellas in business development, with the acquisition of iota Biosciences in October and Nanna Therapeutics Ltd. in April, and collaborations announced during the year with KaliVir Immunotherapeutics, LLC, University of Pittsburgh, Insilico Medicine, Cytokinetics, Inc., CytomX Therapeutics, Inc. and Adaptimmune Therapeutics plc. (Also see "Astellas Pays $300m+ For iota In ‘Pharma-Plus’ Push" - Scrip, 15 Oct, 2020.) (Also see "Adaptimmune And Astellas Team Up For Off-The-Shelf T-Cell Therapies " - Scrip, 14 Jan, 2020.) What are Astellas’ business development priorities looking ahead to 2021?
Barretto-Ko: 2020 was a very exciting and productive year for us in terms of acquiring external innovation while complementing the innovation happening in our internal drug discovery unit. The philosophy we have for business development is really focused on science first, and this is really our innovation-based philosophy as well.
We’re driven by our focus areas, which were determined about three years ago in our last corporate strategic plan that really drills down on specific modalities, basic science and indications that we feel can generate molecules that can be applied to different indications. The focus areas range from mitochondrial pathways to immuno-oncology to ophthalmology. In terms of cell therapy, they run the gamut. (Also see "Nanna Acquisition Gives Astellas Mitochondrial Expertise" - Scrip, 20 Apr, 2020.)
As we were looking at business development opportunities, it was very important for us to go back to the science, find truly innovative, first-in-class or best-in-class treatments – that’s always been our philosophy since we were founded in 2005 – and then take it from there and find the value in all of the innovations we seek.
Scrip: How often does Astellas set a new strategic plan? Are these plans for five years, 10 years, open-ended?
Barretto-Ko: It’s a three-year plan and actually we’re in the middle of refreshing our corporate strategic plan that will be announced publicly next year. When I look at the last three years, it’s been very productive for us as we continue to follow through on the original CSP that we had in 2016/2017.
Scrip: There’s some overlap in three of Astellas’ therapeutic focus areas of oncology, hematology and immunology. What is the company’s strategy and/or goals in immuno-oncology?
Barretto-Ko: Just yesterday I was pondering this. It’s been about 10 years since we really established our oncology franchise in Astellas. Firstly, with the acquisition of OSI Pharmaceuticals and then the partnership originally with Medivation, Inc., now Pfizer Inc., which brought us Xtandi. (Also see "Astellas to bring OSI fully into the fold by mid-2011" - Scrip, 4 Nov, 2010.) (Also see "Astellas furthers oncology ambitions with $765 million Medivation deal" - Scrip, 28 Oct, 2009.) A decade later, to see we’re touted as one of the companies with the strongest oncology pipelines, we’re proud of the track record so far.
Specifically on immuno-oncology, we’ve been very much engaged in this field over the last two to three years. Our goal is building an IO powerhouse that hopefully will drive first-in-class, transformative treatments for patients moving forward. The strategy is to identify, develop and potentially deliver treatments through targeting multiple steps of the cancer immunity cycle simultaneously.
As you know, IO mostly has been focused on hematology, but we’ve also focused a lot on solid tumors lately. We’ve been progressing development, for example, of bispecific immune cell-engager pipeline candidates engaging solid tumors, particularly through our partnerships with CytomX and Xencor, Inc. (Also see "CytomX’s Probody T-Cell Platform Produces Astellas Pact" - Scrip, 25 Mar, 2020.) (Also see "Deal Watch: Editas, BlueRock Ink Cross-Licensing Technology Collaboration" - Scrip, 3 Apr, 2019.)
Another partnership that we have with Tottori University in Japan is developing immuno-stimulating, gene-loading oncolytic viruses with a goal of anti-tumor immunity in advanced solid tumors that are not responding to currently available immunotherapies.
This is our philosophy, because as much as immuno-oncology therapies have been phenomenally successful over the last five years in particular, there’s still a lot of unmet needs and a lot of patients who do not respond to currently available immunotherapies, so we’ve focused on that.
Finally, we’ve recently established a new cancer cell therapy center of excellence with Xyphos Biosciences, Inc. in South San Francisco and this will lead our cancer cell therapy and tumor microenvironment research. (Also see "Astellas Strengthens Next-Gen I-O Hand With $665m Xyphos Buy" - Scrip, 26 Dec, 2019.) When you look at the pipeline, we have Universal Cells Inc. in Seattle, we have our regenerative medicine research platform in Boston and then we have the cell therapy center of excellence in San Francisco. And Iota as well in Berkeley. We’re trying to build an arsenal of research facilities throughout the US across multiple focus areas and across different modalities as well.
Scrip: Roughly what percentage of your annual sales now comes from oncology?
Barretto-Ko: When I look at the US, we’ve been growing double digits year-on-year. Right now, it’s a nicely balanced portfolio, so we have approximately half to 55% of our US sales in oncology, and the other half in a category we call medical specialty. This runs the gamut from cardiology to urology to immunology. Just a decade ago, we were very heavy on immunology with Prograf (tacrolimus), and now when you look at the portfolio, it’s quite nicely balanced across different therapeutic areas. Even in oncology, while we’re very strong in prostate cancer, we’re starting to build strength in other tumor types as well.
We’ve had a very busy two-to-three years, with several launches and more to come. For example, Xtandi currently is the standard of care for advanced prostate cancer. We continue to look into new indications for Xtandi. You’ll see more in the next 12-18 months. Secondly, we have an asset called enfortumab vedotin (Padcev) for the treatment of all patients with locally advanced or metastatic urothelial cancer who have not previously received PD-1 or PD-L1 or platinum-based chemotherapy. This is something we’re very excited about – it’s a partnership with Seattle Genetics [now Seagen Inc. ], that was launched last year and has been doing phenomenally well and been very encouraging for us. (Also see "Astellas, Seattle Genetics Break Ground With US ADC Approval" - Scrip, 19 Dec, 2019.)
On the hematology front, we have Xospata (gilteritinib) for the treatment of acute myeloid leukemia with FLT3 mutation. It launched two-to-three years ago in the US and now is being launched globally, in Japan, Europe and some international markets. We’re continuing to build our focus, not just on prostate cancer where we started and also with OSI with whom we worked in lung cancer as well with Tarceva (erlotinib), but now branching into other solid tumors and other blood cancers as well.
Scrip: How do you expect pricing and competitive pressure to impact Xtandi in the US?
Barretto-Ko: For us, one of the things that is always top of mind is how do we make sure that the right patients get the right treatments and how do we continue to keep our treatments affordable. This will continue to be a focus for us.
In working with the administration and working with payers, one thing I’ve been very vocal and passionate about is the need to look into benefit redesign for Medicare Part D. While Part D has been phenomenally successful over the past 10 years, the new therapies that have been introduced by the pharma industry have taken leaps and bounds. I’ve advocated very strongly that Part D in itself should also evolve [in terms of] the structure of rebates and more transparency of how those rebates flow or don’t flow down to the patients in terms of their savings. I think there’s a lot of things that collectively we can do as an industry with other partners to continue to make treatments affordable.
Scrip: Tell us about your interest and involvement in addressing heath care racial disparities and access to therapies for at-risk communities.
Barretto-Ko: One thing that I think 2020 and COVID-19 has highlighted for us is systemic health disparities in society and the need to make sure that those communities that truly need our support receive therapies and diagnosis that they might not have access to. I’m very proud of the work that we’re doing right now at Astellas to highlight this issue, but also to look at inequalities and work with PhRMA, which recently issued a set of commitments, particularly on clinical trial diversity. It’s important that if we truly call ourselves a patient-centric industry, that we’re serving all patients and not just some.
[Editor’s note: Barretto-Ko is a board member of Pharmaceutical Manufacturers and Researchers of America.]
Scrip: Do you think that the biopharma industry should be directly involved in assuring equal access to COVID-19 therapies and vaccines?
Barretto-Ko: In terms of access, we need to make sure that there is equitable access. I think the industry does have a role to play along with the government, along with state governments, to make sure that we have a really logical, step-by-step way of rolling it out. That is true not just for COVID, but more broadly; ensuring education, awareness and that there is a single set of facts as well. We need to make sure that patients understand what the benefits of treatment are, but also what to expect as they go through the process, because the worst thing is if they also have false expectations of what they’re getting into.
(Editor's note: This article has been revised to correct the spelling of Percival Barretto-Ko's last name.)