JPM need-to-know, Part 1: Merck's cancer aims, Gilead's new CEO; Pfizer's cliff-free future

Pharma came storming out of the gate at this year's J.P. Morgan Healthcare Conference in a Monday full of deal talk, CEO ambitions and analyst assessments and prognostications.

Merck chief Ken Frazier predicted that Keytruda will just keep on growing, for instance, while Novartis CEO Vas Narasimhan argued that the company's cell and gene therapy work now will pay off big-time in the long run, even if the numbers don't look so great right now. J&J's CFO defended against talc allegations in a bombshell Reuters article. Regeneron touted better-than-expected Eylea growth and blasted doubts about its late-to-market checkpoint inhibitor Libtayo. And much more.

In fact, even before presentations kicked off bright and early with Bristol-Myers Squibb and Celgene's joint fireside chat—focusing, naturally, on last week's $74 billion megamerger—Eli Lilly had announced its own cancer-related buyout. And Narasimhan seemed quite eager to outline his own strategy; so eager, in fact, that he started his morning presentation 10 minutes early.

We'll be chronicling the events with continuously updated daily roundups, from news stories to executive remarks to excerpts from our own sideline interviews. Scroll down for your Monday need-to-know—including late-night updates—and click through for more on the news of the day. And for all our FiercePharma coverage over the course of the conference, keep tabs on this page, and look here for FierceBiotech's own news.

Merck & Co. has plenty of room to grow with Keytruda, and to see it, investors need only look at its opportunities outside the U.S. The recent European approval of the company’s Keytruda-chemo combo in previously untreated lung cancer alone tripled the addressable patient population the New Jersey drugmaker had in the EU, CEO Ken Frazier said during a Monday afternoon fireside chat. The company is also “just getting started” with melanoma in China, and it recently had a number of studies added to its label in Japan, too. But while investors tend to focus on Keytruda, Merck has more going on in oncology—think Lenvima and Lynparza—and beyond, too, Frazier and R&D chief Roger Perlmutter stressed. “We’ve never had a more exciting vaccine portfolio at Merck than we have right now, and I can speak across 25 years of experience,” Perlmutter noted. Story

How has Sanofi made sense of its Dengvaxia experiences? Look no further than the old adage: Learn from your mistakes. For one, the company was “overly optimistic” with its early sales forecasts for the shot, vaccine head David Loew told FiercePharma. And its "flipping the model" strategy, touted early on as a key part of the launch strategy, hamstrung the rollout even more. Article

Novartis may have been hamstrung by CAR-T manufacturing problems, but the company still figures it can build a cell and gene therapy platform strong enough to deliver success not only with Kymriah but a full "game board" of treatments for many more diseases, CEO Vas Narasimhan said Monday. The company is partnering up to boost Kymriah supplies and has inked gene therapy deals while working on "innovative" deals with payers to cover treatments that can potentially cure diseases, but at record-breaking price tags. Article

Pfizer CEO Albert Bourla, in his first JPM presentation as chief, had two key words for his audience: patent and cliff. But in this case, Bourla's not talking about danger but talking up a cliff-free future that follows after Lyrica tumbles off patent in June. Meanwhile, Pfizer has a strong balance sheet and could pull off big deals, Bourla said, but instead, the company is focused on R&D and upcoming launches. 

Teva’s leaders have dropped bad news at J.P. Morgan in the past, but not this year. “The take-home is that everything’s on plan … now you know what’s coming,” CEO Kåre Schultz said to open his presentation. The company is “very much on track” to hit the $3 billion in cost savings it promised, and it’s whittled its debt down to $27.6 billion from $35 billion over the last nine months. But what about Teva’s ability to keep revenue flowing in? Schultz acknowledged that the company has faced a fair amount of skepticism, but “I think we’ve proven that we can do that,” he said, pointing to new migraine drug Ajovy—which is capturing 30% of new-to-brand prescriptions—and CNS drug Austedo, which still has plenty of room to grow. On the flip side, Teva has also stemmed the decline of some key moneymakers, including Copaxone, which is hanging on to 70% share despite generic competition. Teva’s own copycat unit is also out of the “death spiral of price declines,” Schultz said, though investors should make no mistake about what that means. “That does not mean that we get back to where we were,” before pricing pressure ravaged the generics industry, he noted. “It just means that this constant reduction of the marketplace has stopped, and that’s of course very important for us.” Story

Vertex chief Jeff Leiden gave a history lesson Monday afternoon, sketching the company’s cystic fibrosis progress since he arrived as CEO seven years ago. But he wasn’t just bragging about the franchise’s 600% growth since 2011 or its almost $3 billion in projected 2018 sales. He was using that journey to show how Vertex’s work in other diseases could follow the same steps: chasing targets “that we know are causing the diseases,” he said, and using lab tests and clinical biomarkers to assess whether candidates are working, for two. Witness its small molecule program for alpha-1 antitrypsin deficiency: The disease “looks like, sounds like and acts like CF” in drug development terms, Leiden said. It’s a protein-misfolding disease, like CF, and in this case more than 90% of severe patients carry a single point mutation. Vertex has a biomarker that reliably shows response, Leiden said. Its first small molecule went into the clinic in December with more to follow. Meanwhile, with label expansions and new approvals on the way in CF, Vertex has a clear path to grow that franchise into the “mid-2020s,” he added. One key push in 2019? Getting reimbursement for Orkambi and its brand-new Symdeco in countries outside the U.S., a task it’s found difficult in England.

Gilead Sciences has its next CEO sewn up in Roche's Daniel O'Day, and he was the company's pick for his scientific prowess and experience in large international companies, interim CEO Gregg Alton said during the company's fireside chat. Plus, O'Day will also fit right in with Gilead's culture when he takes the reins in March, Alton said, and will be a “stable force” for the company. Meanwhile, Gilead has big plans for 2019 after a “tough year” in 2018, executives told the audience—namely, a new surge of growth propelled by HIV rollout Biktarvy, which new commercial head Laura Hamill called the “most successful” launch in the history of the disease. The company also expects more predictability in hepatitis C, where competition has bashed Gilead’s fortunes, and to build on its investments in cell therapy, where they argued Gilead is an industry leader. The company acquired CAR-T drug Yescarta in its 2017 buyout of Kite Pharma, but so far the drug's sales haven't lived up to expectations.

Regeneron dropped 2018 growth numbers for Eylea on Monday morning, and they show that the drug—which investors have worried is slowing down—checked in with sales of $4.07 billion, a leap of 10% over 2017 numbers. And there’s more expansion coming in the drug’s wet age-related macular degeneration and diabetic macular edema indications, CEO Len Schleifer said in his JPM presentation, pointing out that “demographics are in our favor" as the population ages and diabetes becomes more prevalent. Meanwhile, dermatitis and asthma drug Dupixent’s launch “is still in accelerating mode,” he noted. And as for Libtayo, a latecomer entry to the PD-1/PD-L1 class? “Many of you were skeptical,” Schleifer told the audience, but the therapy is “the engine that could.” And Regeneron’s executives see big things ahead for the cancer fighter. “We believe we can maximize the skin cancer opportunity while also rapidly becoming a player in lung cancer,” Chief Scientific Officer George Yancopoulos, M.D., Ph.D., said.

When it comes to Johnson & Johnson's belief that its baby powder—which has been accused of causing cancer in legal battles playing out across the country—is safe, “the conviction could not be stronger,” CFO Joe Wolk said during a Monday afternoon fireside chat. “If you look at the science, if you look at the facts, this product is safe,” he said, noting that “our company’s position is based on tens of thousands of men and women that have been in clinical trials.” That doesn’t match a Dec. 14 Reuters article, which said the pharma giant knew for decades that its baby powder contained the carcinogen asbestos. But “we’re going to continue to defend what we know to be a safe product,” Wolk said, adding that “we wish the Dec. 14 article did not come out.”

Allergan investors have been fretting over the threat of forthcoming competition to Botox, the company's biggest seller by far. But CEO Brent Saunders insists they have nothing to worry about. “There is no greater proxy” for how competition in the U.S. medical aesthetics marketplace could play out than the rest of the world, where “the competition is intense” compared with anything currently in the U.S. or on the way. “Allergan continues to lead the world despite that competition,” he told investors, adding, “we know how to compete, and we know how to win.” He also once again reiterated that “there is no better business in the biopharmaceutical industry than medical aesthetics,” calling it a “fast-growing global market supported by very strong global dynamics.”

Bristol-Myers Squibb and Celgene sent 2019's first big shockwave throughout pharma with last week's $74 billion megamerger announcement. And they immediately touched off questions about the deal: Analysts called it too expensive, not to mention risky on the patent side and pipeline, too. But even as market watchers continued to offer up their reservations on Monday, executives took to the stage in a fireside chat to fire back with their own detailed case for the deal. Story

Eli Lilly confirmed that big-ticket M&A is back in fashion in the industry—and that cancer's the theme for 2019. Lilly said it will acquire targeted cancer drug maker Loxo Oncology for $8 billion in a deal that brings along TRK inhibitor Vitrakvi, the first drug approved to target tumors with a genetic abnormality rather a particular location in the body. The $235-per-share price rests in large part on the pipeline drug LOXO-292, however, and analysts fear competition to that drug makes that bid a bit too rich. Story

Biogen CEO Michel Vounatsos told an audience his company took “reasonable” price hikes this year, including increases in line with the consumer price index growth for drugs where Biogen has stopped development. According to a note last week from Evercore ISI analyst Umer Raffat, the company hiked prices on Plegridy by 2%, Tysabri by 3.5% and Tecfidera by 6%. At the conference, Vounatsos said Biogen’s spinal muscular atrophy drug Spinraza generated $1.6 billion in sales in the last 12 months, and that the company has secured reimbursement deals for the drug in 30 countries. Even with the Spinraza launch success, the helmsman said he welcomes new competition in SMA, including gene therapy, as competition benefits patients. 

The way Bausch Health CEO Joseph Papa sees it, when a sales rep goes into an office and a doctor asks “What’s new?,” the company’s now got a good answer. The reason? Bausch's recent GI acquisitions. Last year, for example, Bausch scored an approval for colonoscopy prep product Plenvu after acquiring rights from Norgine. “We become more important to the gastroenterologists and physicians that prescribe Xifaxan,” the leading moneymaker for Bausch’s Salix GI unit, Papa said. And the company—previously known as Valeant—wants to do more of that in the future. It’ll be looking for “those products that we can bolt on that just naturally fit with the rest of our pipeline and get real leverage between our portfolios,” he said.

Endo's another company that’s happy to see generics pricing stabilize. Tumult in the sector hit the company hard over the last few years, and in response, Endo took impairment charges of more than $5 billion in 2017 and slashed its employee ranks from more than 6,000 to less than 3,000. Now, though, “we’re seeing stability in the generic environment,” CEO Paul Campanelli said, pointing to “little movement within the consortiums,” that represents “a good thing in particular” for Endo subsidiary Par. Meanwhile, the company is spending the meeting seeking out international marketing partners for collagenase clostridium histolyticum, or CCH, an in-development therapy for cellulite.

Merck KGaA executives said Bavencio, the PD-1 drug it shares with Pfizer, is one half of a dynamic duo that'll push the company into a growth phase this year, despite a couple of recent trial failures the partners were hoping to use to expand its reach. The other half: its multiple sclerosis drug Mavenclad, which finally won EMA approval in 2017. The company plans “stringent management” of R&D and other expenses this year, and confirmed it expects earnings growth in 2019.