While the COVID-19 pandemic still drove a lot of the conversation around the pharmaceutical industry over the past year, much of it was focused on the development of vaccines and their rollout starting in late 2020, as well as treatments for the virus. But other innovative agents also came to market in 2021, continuing the industry’s trend of producing pioneering products. AIS Health, a division of MMIT, spoke to industry experts about the impact of COVID-19 on the industry and other 2021 pharma trends.
Looking back over 2021, what were some of the most notable developments within the pharmaceutical industry, and why?
Jeff Ford, principal, biopharma segment leader at Deloitte Consulting LLP: I would be remiss not to mention the COVID-19 vaccines and therapeutics that have come to market in record time. In 2021, we saw the expansion of the use of the mRNA [i.e., messenger RNA] vaccines for children 5 years old and older. Oral antiviral treatments are also on the horizon and could be approved before the year is out. This changes the calculus of the pandemic by creating more tools in our toolkit to prevent and treat the COVID-19 disease. The scientific advances around COVID-19 vaccines and therapeutics were made possible by public-private collaboration, cross-company collaboration, new clinical trial paradigms including the rapid analysis of real-world data and regulatory flexibility.
Ash Shehata, national sector leader for healthcare and life sciences at KPMG U.S.: In the transaction space, there were an increased number of separations driven by the need to offset the balance sheet as life sciences organizations look to refill their pipeline and launch new drugs. As digital transformation continues to reshape the industry, distributors are expanding partnerships with nontraditional health care players such as in the example of McKesson and Walgreens. Further, we are seeing increased innovation in the area of Alzheimer’s disease through precision and digital medicine in neuroscience.
Could you comment on the COVID-19 pandemic and its impact over the past year and how that compared with 2020?
Shehata: Vaccines by Pfizer, Moderna and Johnson & Johnson were brought to market in the last year in breakneck speed and initially leveraged through Emergency Use Authorization (EUA) and then FDA approval. This rapidly decreased the number of hospitalizations and infection rates and created a high degree of confidence in combating the COVID-19 virus overall. This was short-lived given [that] the Delta variant hit in short order, but the vaccines have proved overall effective against that variant and others, and the pharma companies have now brought boosters to market to help the more vulnerable and broader populations against further transmission of the virus.
What kind of an impact has COVID had on the pharma industry?
Ford: The pandemic accelerated many of the trends that were already present in the industry (e.g., shift from volume to value, reduction in direct access to customers such as health systems and HCPs [i.e., health care professionals], increasing patient empowerment, etc.). As a result, the pharma industry as a whole was not well-equipped going into the pandemic to effectively communicate with external stakeholders including regulators, payers, HCPs and health systems. We found that companies that have quickly scaled up investments in digital capabilities across the enterprise have been better positioned to respond to the pandemic.
In fact, our research on the returns on pharmaceutical innovation showed that cohort companies were able to respond to clinical trial disruptions, in part because of the ability to pivot to digital and remote collection of data from patients. Additionally, a dramatically shifted sales environment, altered launch dynamics and the scramble to implement new digital strategies drove changes in commercial functions.
We surveyed 150 biopharma executives about their adoption and investments in digital technologies earlier this spring and found that the momentum of digital innovation is likely to continue post pandemic; 82% of respondents agree digitalization of operations will continue even after the pandemic ends. In fact, digital innovation is now a burning strategic priority; 77% of respondents say their organization views digital innovation as a competitive differentiator.
Shehata: It’s been an opportunity for these organizations to elevate their R&D functions and speed-to-market capabilities. On the flip side, it has exposed the over-indexing of manufacturing off-shore and the supply chain risk and disruption associated with that. Further, from a labor shortage perspective, the health care and life sciences industry has been disproportionately impacted given the number of workers required to be on the front lines and the need to adequately compensate clinicians.
Could you comment on the impact of COVID vaccines, not just on the coronavirus but also on the perception/reputation of the pharma industry?
Ford: In January 2021, Deloitte’s US and UK Centers for Health Solutions conducted consumer research about trust in biopharma in four countries — the United States, United Kingdom, India and South Africa. Notably, 26% in the United States, 45% in the United Kingdom, 26% in South Africa and 70% in India reported that their feelings toward biopharma had improved as a result of the industry’s efforts towards developing a COVID-19 vaccine. In focus groups, consumers expressed appreciation of pharma companies’ efforts to collaborate among themselves and with government agencies to speed up the process of bringing the vaccines to market.
Shehata: The impact of the COVID vaccines quickly decreased the number of hospitalizations and infection rates and created a higher degree of confidence nationally and in many developed nations. As we’ve continued navigating through the pandemic, we appreciate operating in a global and interconnected world and that the distribution of vaccines to developing nations needs to occur in order for the virus to diminish mutation and decrease the number of new variants. The perception of the pharma industry has fared positively through this pandemic.
Todd Wills, managing director at CAS Custom Services, a division of the American Chemical Society: Building on mRNA techniques used in the COVID-19 vaccine, researchers have already identified a promising Malaria vaccine candidate. I expect we’re going to see many more such promising vaccine candidates and therapeutics for other diseases enabled by mRNA in the next three to five years.
The urgent search for COVID-19 vaccines and therapies also catalyzed an unprecedented level of collaboration among industry, academia and government organizations. For example, the sharing of data provided the research community with better and faster access to existing and emerging insights to accelerate their research efforts. It is yet to be seen if this level of collaboration is sustainable in the commercial sector, but with the enabling technologies now available and the clear benefits demonstrated in light of COVID-19, the case for greater cooperation is stronger than ever. It has initiated more active conversations about how to further enable, incent and facilitate collaboration among various pharmaceutical stakeholders and where competition and collaboration each fit in to optimize the process.
What were the most notable and/or innovative FDA approvals, and why?
Dea Belazi, Pharm.D., M.P.H., president and CEO of AscellaHealth: The FDA has approved 45 new therapies to date in 2021 and 53 new medications in 2020. While each approval is significant and provides a new treatment option for patients, a few of the most notable FDA approvals in 2021 include Aduhelm, CAR T therapies (i.e., Breyanzi and Abecma), interchangeable biosimilars (i.e., Semglee and Cyltezo), Lumakras and Amondys 45.
In June, the FDA approved Biogen [and Eisai’s] controversial Alzheimer’s disease (AD) therapy, Aduhelm (aducanumab). Aduhelm, a monoclonal antibody, is administered once monthly via IV infusion and is the first new drug approved for AD in over 17 years. It was approved under the accelerated approval pathway and was controversial for several reasons. First, the efficacy is based upon reduction in amyloid beta plaques in the brain, but there is no direct correlation with AD progression and amyloid beta plaques. Secondly, the FDA seemed to disregard the recommendation of its own advisory panel not to approve the drug based on limited clinical evidence for efficacy. The FDA modified the original label that allowed for use in the broad AD population to state that aducanumab should be initiated only in patients with mild cognitive impairment or mild dementia stage of the disease, which corresponds to the population treated during clinical trials. Finally, Biogen set the price at $56,000 per year, again creating controversy considering the available scientific evidence on safety and efficacy. As a result, there has been minimal uptake by many payers and providers.
The FDA allotted Biogen a window of nine years to conduct a follow-up trial to determine whether the drug benefits patients’ daily lives. However, safety is already a real concern. The manufacturer recently announced they were investigating the potential death of a patient who was hospitalized and diagnosed with swelling in the brain before dying.
Despite the controversy, Aduhelm’s approval provides some initial hope for millions of AD patients and their caregivers. It has also set an initial standard for the data needed for an AD drug to receive FDA approval. The FDA specifically noted its decision was based on the drug’s ability to reduce amyloid beta aggregates, which is likely to predict a clinical benefit. As a result, other treatment options for AD from Lilly and other manufacturers could be available as early as 2022.
CAR T-cell therapy represents an innovative approach to cancer treatment. The one-time treatments work by reprogramming the patient’s T-cells, which are part of the immune system, to fight cancer. The process is initiated with collecting a sample of a patient’s T-cells from the blood, then modifying them to produce special structures called chimeric antigen receptors (CARs) on their surface. When these CAR T-cells are reinfused into the patient, the new receptors enable them to latch onto a specific antigen on the patient’s tumor cells and kill them. CAR T-cell therapy has become a key treatment of several types of leukemia and multiple myeloma in patients who have not responded to multiple previous treatments. In addition, CAR T-cells are promising candidates to expand into other diseases, such as hard-to treat solid tumors.
Two CAR T therapies, Breyanzi and Abecma, were approved in 2021. Breyanzi (lisocabtagene maraleucel) [from Juno Therapeutics, Inc., a Bristol Myers Squibb company] is approved to treat adult patients with certain types of large B-cell lymphoma (LBCL) who have not responded to, or who have relapsed after, at least two other types of systemic treatment. In clinical trials, Breyanzi treatment significantly improved event-free survival compared to standard therapy and was also better at achieving complete responses and extended progression-free survival.
Abecma (idecabtagene vicleucel) [from Bristol Myers Squibb and bluebird bio] is FDA approved to treat adult patients with multiple myeloma who have not responded to, or whose disease has returned after, at least four prior lines of therapy. Abecma is the first cell-based gene therapy approved by the FDA for the treatment of multiple myeloma. In the trial that supported Abecma’s approval, almost three-fourths of patients had some response to treatment while a third of all patients went into remission after treatment. Large cohorts of patients who would have been considered terminal without additional treatment options now have durable and meaningful remissions and good quality of life due to these new treatment options.
Lumakras (sotorasib), developed by Amgen, is the first Kirsten rat sarcoma viral oncogene homolog (KRAS) inhibitor to be approved by the FDA. It is a once-daily oral medicine used in adult patients with KRAS G12C-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC). In tumors with the KRAS mutation, the protein remains active, and cells are continuously forced to grow. Lumakras targets the mutated KRAS protein and inactivates it to prevent tumor cell growth. In clinical trials, the drug demonstrated high efficacy and considerable increase in overall survival and progression-free survival rates of NSCLC patients. Lumakras is now the first therapy to effectively treat a tumor target that was once thought of as untreatable.
Lumakras is already experiencing high adoption rates because of its specific mechanism of action and the unavailability of other KRAS targeting drugs in the market. Another KRAS inhibitor [Mirati Therapeutics, Inc.’s adagrasib] received breakthrough therapy designation from the FDA in July and could enter the market by next year. In addition to NSCLC, both Lumakras and the investigational drug are also being evaluated in other cancers, including colorectal cancer, pancreatic cancer and other solid tumors with the KRAS G12C mutations. The approval of Lumakras represents a major advancement in the field of cancer treatment.
In July, the FDA approved [Viatris Inc.’s] Semglee as the first interchangeable biosimilar insulin product in the United States. This approval is different from all prior biosimilars approved in the United States. The interchangeable designation means that Semglee is the first biosimilar that can be substituted at the pharmacy, depending on state laws, for its reference product, [Sanofi’s] Lantus (insulin glargine), without needing prescriber approval. This is similar to how generic drugs can be substituted for brand name medications today. However, under the current process for other noninterchangeable biosimilars, a prescriber must be contacted to change from the reference product to a biosimilar. Semglee (insulin glargine-yfgn) is indicated to control high blood sugar in adults with Type 2 diabetes and adults and pediatric patients with Type 1 diabetes.
In October, the FDA approved the supplemental Biologics License Application (sBLA) for [Boehringer Ingelheim Pharmaceuticals, Inc.’s] Cyltezo (adalimumab-adbm) as the first interchangeable biosimilar with [AbbVie Inc.’s] Humira (adalimumab). The FDA originally approved Cyltezo in 2017 for the treatment of multiple chronic inflammatory diseases, and this latest approval designates it as interchangeable across all these indications. Adalimumab-adbm is the second interchangeable biosimilar to be approved by the FDA and the first interchangeable monoclonal antibody. Unfortunately, because of a settlement agreement with AbbVie, the launch of Cyltezo will not occur until July 1, 2023, delaying this cost savings opportunity.…Biosimilars and interchangeable biosimilar products like Semglee and Cyltezo are the next generation of generics. They will provide patients with additional safe, high-quality treatment options that should provide cost saving opportunities for both payers and patients. In addition, they usher in competition and have the potential to be a significant driver in reducing prescription drug spending.
The FDA has indicated that biosimilars marketed in the United States typically launch with initial list prices 15% to 35% lower than comparative list prices of the reference product. According to Biosimilars Forum, increased provider and patient education, better patient access and increased biosimilar utilization could reduce drug costs by $100 billion in the next five years. While that may seem like a lofty reduction in prescription drug cost, current government support and approval of the first interchangeable biosimilars does signify a first step in a brighter biosimilar market that can drive cost saving opportunities for patients and payers.
In February, the FDA granted accelerated approval to Sarepta Therapeutics for Amondys 45 (casimersen) injection for the treatment of Duchenne muscular dystrophy in patients who have a confirmed mutation of the DMD gene that is amenable to exon 45 skipping. Exons are pieces of DNA that provide information for making proteins in a person’s genome. Amondys 45 is an antisense oligonucleotide that works by driving a cell’s protein-making machinery to skip over mismatched exons, allowing those that again fit together to attach. This enables the production of a shorter but functional version of dystrophin, a protein found in muscle fiber that helps keep the muscles intact.
Amondys 45 is the first FDA-approved targeted treatment for patients with exon 45 skipping and provides a chance of positive outcomes to patients who have no other targeted therapy options. Results from clinical trials indicate that patients who received Amondys 45 showed a significantly greater increase in dystrophin protein levels from baseline. The FDA has concluded that an increase in dystrophin production is reasonably likely to predict clinical benefit, including improved motor function in patients with DMD. Because a definite clinical benefit has not been established, the indication states that continued approval may be contingent upon verification of a clinical benefit in confirmatory trials.
Shehata: The industry realized that an arsenal of solutions was required to combat this pandemic and the introduction of antivirals, injectables and pills, in addition to the vaccines, was imperative.
Mesfin Tegenu, CEO and chairman of RxParadigm: Some notable FDA approvals this year are Cyltezo (adalimumab-adbm) and Semglee (insulin glargine-yfgn), which are the two interchangeable biosimilar versions of Humira and Lantus, respectively.
Other notable FDA approvals that shed light in a subset patient population include [ViiV Healthcare’s] Cabenuva, the first and only complete long-acting regimen for HIV-treatment; [Boehringer Ingelheim’s] Pradaxa, the first oral anticoagulant for a pediatric population; and Aduhelm, the first targeted therapy for Alzheimer’s disease.
Wills: There is innovation happening on many fronts in drug discovery right now. Small molecules have continued to be an important drug modality in 2021, as they once again represented over 60% of the new therapeutic drugs approved so far this year (not including diagnostic imaging agents). At CAS, we have been tracking the structural novelty of new small-molecule drugs over the last few years as one measure of innovation. Most of this year’s approved small-molecule drugs included at least one structurally novel new molecular entity (NME), meaning its shape was not used in any previous FDA-approved drug. Some of the most novel shapes belong to drugs such as [G1 Therapeutics, Inc.’s] Cosela (trilaciclib) and [Scynexis, Inc.’s] Brexafemme (ibrexafungerp).
Tremendous innovation is also happening in the biologics space. 2021 represented the third consecutive year that two or more antibody-drug conjugates (ADCs) were approved by the FDA. Of the two ADCs approved so far this year (as of 11/30), [ADC Therapeutics SA’s] Zynlonta (loncastuximab tesirine-lpyl) is particularly interesting since its disease-receptor antibody and its small molecule warhead had not been used in previously FDA-approved ADCs.
Cancer treatment continues to be one of the most active areas of drug development and innovation. Of the 16 structurally novel drugs approved so far in 2021 (as of 11/30), a majority were cancer drugs. Those drugs resulted from discovery work credited to 17 different organizations, showing the diversity of contributors to this critical area.
Advances in precision therapies also continue to facilitate new drug development approaches, allowing diseases like lung cancer, for example, to be divided into biomarker-defined populations appropriate for targeted therapies. We saw a significant uptick in targeted oncology drug approvals in 2021 including the following structurally novel small molecule drugs:
- Lumakras (sotorasib) — the first targeted treatment for patients with KRAS G12C-mutated locally advanced or metastatic NSCLC. For many years, KRAS was considered an “undruggable” target. Sotorasib was discovered by Amgen and Carmot Therapeutics.
- Scemblix (asciminib) — the first FDA-approved chronic myeloid leukemia (CML) treatment that binds to the ABL myristoyl pocket. This unique mechanism of action could potentially overcome resistance to treatment. Asciminib was discovered by Novartis.
- Tepmetko (tepotinib) — the first FDA-approved oral MET inhibitor for the treatment of advanced NSCLC harboring MET gene alterations. Tepotinib was discovered by Merck KGaA.
Could you comment on merger and acquisition (M&A) activity within the pharma industry that occurred in 2021?
Ford: Most of the M&A activity we saw this year was primarily in therapeutic areas such as rare diseases and oncology. We didn’t see many blockbuster deals, which likely sets up 2022 for another record-breaking year. A combination of high equity valuations and uncertainty around legislative policy resulted in a reduced number of deals with that capital sitting on the sidelines. In addition, many of our large life sciences clients are focusing on their scientific core and putting less emphasis on diversification, which is further contributing to the lack of larger M&A deals. But many analysts believe that there is likely over $1.5 trillion available for M&A deals in the biopharma space alone, which we expect will start being deployed in 2022. Catalysts include failed or negative results in drug trials, the need to replenish pipelines and downstream effects from mega-mergers and divestitures from prior years.
2021 saw a flurry of spin-offs and carve-outs, which will likely continue in 2022 and may trigger even more novel and innovative partnerships and acquisitions. Many private-equity firms are also sitting on a lot of cash and could be looking to make deals. 2021 will likely go down as one of the biggest years ever for digital health-tech investments and revenue growth. Investors pumped nearly $15 billion dollars into 372 digital health care deals during the first half of 2021. That tops investments for all of 2020. A decade ago, digital health investments were a fraction of what they are now (fewer than 100 deals and just $1.1 billion in investments).
Shehata: There were an increased number of separations driven by the need to offset the balance sheet as life sciences organizations look to refill the pipeline and launch new drugs.
Is there anything I’ve neglected to ask about that you’d like to add?
Ford: After two years of COVID-19, quarantines and remote work, many people are reevaluating their professional lives. This trend has led to a battle for talent unlike anything we have ever seen. As the sector continues its transformation, it is also facing unprecedented challenges in attracting, motivating and retaining the best and the brightest employees.
Shehata: In terms of the life sciences sector, the medical device and diagnostics subsector was negatively impacted given that many of those surgeries are elective and were therefore deferred. Second, the supply chain disruption will continue for the foreseeable future given the costs associated with filling, dispensing and distributing drugs.
Contact Belazi via Caroline Chambers at firstname.lastname@example.org, Ford through Julie Landmesser at email@example.com, Shehata through Matt Weiss at firstname.lastname@example.org, Tegenu at email@example.com and Wills via Tina Tomeo at CTomeo@cas.org.