Jefferies on Pharma London Conference Highlights: Mylan, Biocon, Moderna, Suboxone, Alembic Pharma and more - all you need to know in brief

Alembic's JV Rhizen licensed Umbralisib to TG Therapeutics which has filed/ plans to file the product for various hematological malignancies including Chronic Lymphocytic Leukemia. The CEO of TG Therapeutics laid out post-approval launch plans. Jefferies believes that the price erosion would impact Mylan and Biocon's ability to grow revenues from this product in the US.

Moderna CEO highlighted next steps to the launch of its Covid vaccine:

TG Therapeutics laid out post-approval launch plans which indicate that Umbralisib's combo U2 is on track for an early 2021 filing. A new competitor to Suboxone film, Brixadi is set to gain US approval in Dec-2020. Amgen is at 34% share in Trastuzumab market, may face price pressure due to increasing competition

TG Therapeutics heading for Umbralisib combo filing in CLL, Positive for Alembic:

Alembic's JV Rhizen licensed Umbralisib to TG Therapeutics which has filed/ plans to file the product for various hematological malignancies including Chronic Lymphocytic Leukemia. The CEO of TG Therapeutics laid out post-approval launch plans. In CLL, the company plans to go for patients who are not eligible or have failed existing standard of care treatments, even if the company gets a broad label from the US FDA. As next steps, the company is looking for accelerated approval for the U2 combo, which includes Umbralisib, in Follicular lymphoma and Marginal zone lymphoma. Jefferies believes Umbralisib is a promising candidate and will be a meaningful contributor to Alembic in terms of royalty and milestone. The commercial arrangement between Rhizen and TG Therapeutics is not disclosed.

Brixadi approval expected on 1-Dec, competitor to Suboxone film in Opioid use disorder:

Camurus has launched Buvidal in EU/Aus and has seen marked uptake in the markets of Sweden, Finland and Australia. Management stated that it has been able to switch patients from Suboxone film in markets where Suboxone film was available. Brixadi has shown clinical superiority against Sublingual Buprenorphine/ Nalaoxone. The product can be stored at room temperature.
Amgen's biosimilar sales trending at USD 2 bn a year, 35% of it from Trastuzumab:

Amgen's three Biosimilars include MVASI (Bevacizumab), KANJINTI (Trastuzumab) and AMGEVITA (Adalimumab). Management ascribed part of commercial success to the fact that Amgen uses the same salesforce / commercial team to sell its Biosimilars as its innovative products. Specifically, KANJINTI has a 34% share of the Trastuzumab market in the US, vs 8% for Mylan/Biocon. Due to the launch of 4 additional biosimilars in the US in Trastuzumab, Amgen has guided price erosion going forward. Jefferies believes that the price erosion would impact Mylan / Biocon's ability to grow revenues from this product in the US.

Moderna CEO Comments on next steps for the vaccine:

Few more cases remain for final analysis; this should be out in days, not weeks. Out of 95 cases adjudicated till Sunday, there were 11 severe cases, all 11 on placebo. Moderna needs 151 cases for final analysis. With the final analysis, Moderna will file EUA in the US and bring other regulators including UK and EU up to speed. In the US, FDA will go through an adcom before granting EUA. Moderna is adding manufacturing lines to ramp up capacity and plans to produce 500 mn-1 bn doses a year, with raw material availability being the swing factor. Moderna has been talking to governments around the world since May. US/ Japan/ Switzerland/ UK/Canada/ Israel have tied up some quantities already. EU negotiations are ongoing for 80 mn doses.

Company Valuation/Risks:

Alembic Pharmaceuticals:

Jefferies value Alembic Pharma at 17.9x FY22E EPS to arrive at a Target Price of Rs 855. They rate the company UNDERPERFORM.

Key Risks:

1) Continued shortage of Sartan products
2) Better than expected number of product launches in US
3) Faster USFDA approval of new facilities

Biocon:

Jefferies value Biocon at 31x FY22E EPS to arrive at a Target Price of Rs 410. They rate the company HOLD.

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Key Risks:

1) Non interchangeable status for Glargine
2) Lower revenue from Glargine