Astra’s Soriot Pumped Up the Noise on Cancer Medicine Pipeline

Apr 28, 2014 7:00 pm ET

April 29 (Bloomberg) -- When Pascal Soriot took the helm at AstraZeneca Plc in 2012, he inherited a company with a looming patent cliff and an ailing pipeline after a string of drug development setbacks.

Now, 18 months later, Pfizer Inc. is seeking to shell out almost $100 billion, in part for that pipeline.

While Soriot, 54, hasn’t made any major acquisitions in his short tenure, he’s revived drugs previously cast aside and highlighted others that investors weren’t valuing, helping to establish AstraZeneca as a company that’s pushing the envelope on a variety of promising therapies. AstraZeneca now has 11 experimental treatments in late-stage trials, with as many as 19 others expected to enter final-phase testing by the end of next year, the London-based company said in January.

That pipeline, which could get a boost from results to be reported at the American Society of Clinical Oncology meeting in May, was cited by Pfizer Chief Executive Officer Ian Read as key to his company’s $98.7 billion takeover bid.

Soriot raised “the noise level, the visibility of what’s there, as opposed to really driving drastic changes,” Michael Leuchten, an analyst at Barclays Plc in London, said in a telephone interview.

Most of the late-stage assets were in-house before Soriot arrived, according to Leuchten, including drugs from AstraZeneca’s $15.2 billion acquisition of MedImmune Inc. in 2007. While then-CEO David Brennan was criticized for overpaying for MedImmune, Soriot has given new credibility to the products gained through that acquisition, Leuchten said.

‘Longer-Term Play’

“We knew it was going to be a longer-term play,” Brennan said of the MedImmune deal in a telephone interview. “It was an expensive deal to do and it wasn’t something that was going to fix the patent expirations in the pipeline. It was really a more fundamental shift in our research.”

Brennan, 60, stepped down in 2012 after a six-year tenure in which repeated drug development failures left investors skeptical of the company’s earnings prospects.

Previously, Soriot served as the head of Roche Holding AG’s biotechnology unit, known for its discovery and development of medicines to treat cancer. Soriot’s focus on cancer and biotech since he came to AstraZeneca has helped restore investor confidence, said Odile Rundquist, a Helvea SA analyst based in Geneva.

‘Changed’ Company

Soriot “decided to go for collaboration and in-licensing deals” when he arrived, rather than seek out a megamerger, Rundquist said in an interview. “And that has totally changed the future of the company.”

Astra’s shares have climbed 52 percent, including reinvested dividends, since Soriot took the helm on Oct. 1, 2012, compared with a 34 percent advance for the Bloomberg Europe Pharmaceutical Index in the same period.

Among the experimental treatments Pfizer cited as reasons for its interest are targeted medicines for lung and breast cancer, and a clutch of drugs called immunomodulators designed to marshal the immune system against tumors.

Perhaps the most telling decision by Soriot came immediately after he joined AstraZeneca, when he revived an ovarian cancer drug the company had previously sent to the trash heap as too unpromising to pursue.

Now that gamble may pay off. The drug called olaparib, shown to work best in patients with a certain genetic mutation, is set to be the subject of a priority review in the U.S. in June. A positive result could push the drug into the marketplace relatively soon afterward.

Facing Challenges

Soriot is a native of France and a veterinarian by training. He took the helm at AstraZeneca, the U.K.’s second- largest pharmaceutical company, at a time when it was grappling with a string of research setbacks and patent losses on medicines that accounted for 40 percent of 2011 peak revenue. There seemed little reason to support a drug whose promise seemed limited, working well in only some patients.

As a result, Soriot’s decision to revive olaparib was a surprise within the industry. The company had taken a $285 million charge in 2011 related to ending the development of the drug, which was not a rousing success in early trials.

“There was definitely biological activity with olaparib, it was just a question of can you find the right patients for it,” Brennan said. “Some of that gets advanced when you begin to find diagnostics and other ways to try and identify patients who might be more susceptible to the drug.”

Different Approach

While the company previously saw the drug’s limited patient base as a reason to halt further development, Soriot had a different approach.

With his experience at Roche’s Genentech unit, known for its discovery and development of medicines to treat cancer, Soriot was well aware of the biotechnology industry’s push to targeted drugs seeking to improve the efficiency of cancer treatments by focusing on genetic mutations, such as the ones seen in women who did well in the olaparib trial.

About 15 percent of ovarian cancer is linked to the BRCA mutation. Researchers went back to the original mid-stage study of 265 patients and blood and tissue to see if the tumors carried the BRCA gene.

Soon after Soriot took over, the company announced it was reversing the charge and would once again study olaparib in relation to the BRCA mutation.

Risk Reduced

The finding: in women with the mutation, olaparib reduced the risk the cancer would worsen by 82 percent. The disease progressed after a median of almost a year in women getting the drug, compared with four months for those given a placebo comparison.

“One of Pascal’s first decisions was to put olaparib back in development,” Mene Pangalos, AstraZeneca’s head of Innovative Medicines, said in an interview. “He brought it back from the ashes.”

The U.S. Food and Drug Administration has already granted olaparib orphan drug status for ovarian cancer and will hold an advisory panel hearing on the company’s application on June 25. Still, there’s no guarantee it will make it to the market. The company has two pivotal trials under way in women with ovarian cancer, three trials in breast cancer and others in gastric and non-small cell lung cancer. Much will depend on the results.

If olaparib is approved, Soriot will have potentially opened a doorway to a family of new medicines for ovarian cancer that’s been largely de-emphasized by other big drugmakers. It will also give weight to his plan to stick with research and development rather than dabble in acquisitions and, possibly, help redefine the evidence needed to get U.S. clearance for cancer medicines.

Innovative Treatment

Olaparib’s success would put AstraZeneca at the front edge of an innovative treatment approach that involves a protein called PARP, normally tasked with fixing broken or damaged DNA in the body. The problem is that it also works to revive malignant cells damaged for other reasons, including chemotherapy, radiation and genetic mutations.

There are few effective drugs for ovarian tumors that develop in almost 22,000 Americans each year, killing about 14,000 women, according to the American Cancer Society. For women who relapse, there is no cure.

In 2009, the promise of the approach was so strong that half-a-dozen drugmakers were vying to be the first to develop a PARP inhibitor. Paris-based Sanofi paid $500 million for BiPar Sciences Inc. to join the drive. Within seven months, though, the bubble burst when Sanofi’s drug failed to help women with an aggressive form of breast cancer.

Pfizer, Merck

Soon after, Pfizer and Merck & Co., which had both touted the potential for their products, ended up turning them over to smaller drugmakers. Pfizer licensed its drug, now known as rucaparib, to Clovis Oncology Inc., where it’s being developed for relapsed ovarian cancer, pancreatic cancer and tumors with DNA repair deficiencies. Merck licensed niraparib to Tesaro Inc., which is developing the therapy for use against ovarian, breast and other cancers.

Regulators often require clear evidence that cancer drugs prolong life before they are released onto the market. By giving AstraZeneca’s olaparib priority review, the FDA may have signaled its willingness to clear the drug for use in a way that allows the company to study its ability to prolong life even as it moves into regular use.

The company is using a tablet formulation of the drug in the final stage of olaparib’s development, rather than capsules used in the initial trials.

Positive results in patients with the BRCA mutation, the finding of a dose and schedule for the tablet and the consistent effects seen in early studies rejuvenated olaparib’s development, said Jane Robertson, global clinical director for the drug at AstraZeneca.

“The benefit seems to be concentrated on folks with a BRCA mutation,” said Jennifer Litton, an oncologist at M.D. Anderson Cancer Center in Houston, who wasn’t involved in the trial. “Now we need to figure out how to get Parp inhibitors to work in folks who don’t have a BRCA mutation.”

--With assistance from Allison Connolly in London and Albertina Torsoli in Geneva.