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Hot Topics In This Week's Issue … April 21, 2014

OBAMA SAYS 8 MILLION HAVE SIGNED UP FOR HEALTH INSURANCE -- President Barack Obama said Thursday that eight million people had picked health-insurance plans through the Affordable Care Act, a number that significantly outstripped initial projections and emboldened him to step up criticism of Republicans seeking to repeal the law. The president, in a surprise Thursday afternoon appearance in the White House briefing room, employed noticeably more aggressive rhetoric in defending his signature legislative achievement, language that should help bolster Democratic candidates who have been on the defensive. The eight million sign-ups go beyond earlier projections by the Congressional Budget Office that six or seven million people would enroll through the exchanges in 2014. Mr. Obama pointed to the number to declare the law a success and that Republicans should stop trying to overturn it. “The point is, the repeal debate is and should be over,” the president said. “The Affordable Care Act is working and I know the American people don’t want us spending the next two and a half years refighting the settled political battles of the last five years.” Some 35% of those who signed up through the federal health-insurance exchange were in the coveted under-35 demographic, Mr. Obama said. The participation of younger, relatively healthy people is needed to balance out the cost of medical claims from older and sicker ones.

          The announcement contained few other new details about enrollment. Republicans quickly pointed to missing information--such as the number of people who had actually gained coverage after being uninsured, as opposed to those replacing an existing policy--to suggest the figures could be overblown as a measure of success. Democrats up for re-election in the fall have been bracing for a renewed debate around the law as the Senate prepares to hold confirmation hearings for a successor to Health and Human Services Secretary Kathleen Sebelius, whose resignation was announced the prior week. Rep. Carol Shea-Porter (D-NH), who has come under strong criticism from Republicans for supporting the law and is in a tough race for re-election, called the development great news. She has made her frustrations with the law known to the Obama administration, but said Thursday she has also heard from constituents in both parties who have been helped by the law. “The Affordable Care Act still has challenges, but today’s news is clearly a giant step forward,” she said.

JOHNSON & JOHNSON PROFIT JUMPS AS PRESCRIPTION SALES SURGE -- Johnson & Johnson (New Brunswick NJ), the world’s biggest maker of healthcare products, beat expectations and raised its 2014 forecast by focusing on new drugs and reducing its reliance on medical devices. The drug division overtook medical devices as the company’s biggest unit after its sales surged 11% to $7.5 billion. The growth, the fastest among the top 10 pharmaceutical companies worldwide, obscured a drop in demand for consumer goods and sales that were essentially unchanged in devices and surgical products after the harsh winter dampened elective medical procedures. While quarterly sales increased for medicines such as Stelara for psoriasis and Zytiga for prostate cancer, the performance of the hepatitis C drug Olysio was responsible for most of the $1 billion bump in the 2014 revenue forecast, CFO Dominic Caruso said. “There is no question they have had a string of pretty great wins in pharma that has taken four or five years to build,” said Matt Miksic, an analyst at Piper Jaffray in New York. “Pharma is the standout and it’s probably going to remain the story for at least another 18 to 24 months.” The company raised its 2014 forecast to $5.80 to $5.90 a share from $5.75 to $5.85 a share, excluding one-time items. Annual revenue is expected to be $74.5 billion to $75.3 billion.

          As the first major healthcare company to report earnings, J&J set the stage for its competitors. Net income rose 34% to $4.7 billion, or $1.64 a share, from $3.5 billion, or $1.22, a year earlier, the company said in a statement. Earnings excluding one-time items of $1.54 a share outpaced analysts’ estimates of $1.48. First-quarter revenue increased to $18.1 billion from $17.5 billion a year earlier, driven by Stelara, Zytiga, Invega Sustenna for schizophrenia, Prezista for HIV and Xarelto to prevent blood clots. The company also posted increases for specialty surgery, cardiovascular and vision care. Olysio, approved in November, received a boost when guidelines from medical societies that deal with hepatitis C infections in January recommended using J&J’s drug with Gilead Sciences Inc.’s (Foster City CA) Sovaldi for patients who can’t tolerate interferon, formerly a standard component in cocktails to treat the disease. That has become the standard of care, Caruso said. “Olysio surprised by reporting sales of $354 million, primarily sold in combination with Gilead’s Sovaldi,” said Derrick Sung, a Sanford C. Bernstein analyst. J&J closed the week at $98.96, the highest share price in more than 34 years, according to data compiled by Bloomberg. The shares have gained 21% in the past 12 months.

TRACKING WASHINGTON -- Departing Health and Human Services Secretary Kathleen Sebelius, who took scornful criticism over the botched rollout of President Barack Obama’s signature healthcare law, is considering a run for the U.S. Senate in Kansas, The New York Times reported. Sebelius, a former Kansas governor, is weighing overtures from Democrats who want her to run for the Senate seat occupied by Republican Pat Roberts, the newspaper said, quoting unidentified Democrats. It quoted one person said to have spoken directly with Sebelius as saying that she was thinking about the idea, but it was too soon to say how serious she was about it. Sebelius, who announced her resignation two weeks ago, is staying on the job until her successor, White House budget director Sylvia Mathews Burwell, is confirmed by the Senate. A representative of HHS declined to comment on The Times story. A run for the Senate would be a bold move in a solidly Republican state after Sebelius oversaw the introduction last October of the policy known as Obamacare, becoming a lightning rod for critics of the health reform law. In an interview with The New York Times, Sebelius said she wished she could take “all the animosity” toward Obamacare with her when she departs.

          The Food and Drug Administration has failed to track the effectiveness of generics that make up 80% of medicines sold in the U.S., according to doctors and researchers who told Congress last week that new efforts by the FDA still aren’t strong enough. Generic heart drugs made by some India-based companies don’t work as they should, said Preston Mason, a researcher at Brigham & Women’s Hospital in Boston who has studied the effectiveness of copies of Pfizer Inc.’s (New York) Lipitor made both in the U.S. and abroad. That may be because some companies are cutting corners to save money, he said. “This is the Wild West, the whole generics business,” Mason said during the session, which included about 50 congressional staff and representatives from the White House, the State Department and the FDA. Mason’s research included 36 different copies of the Lipitor cholesterol pill collected from 15 countries, he said. Generic versions from U.S.-based companies Mylan Inc. (Canonsburg PA) and Actavis Plc (Dublin IRL) weren’t contaminated, the study found. Two weeks ago the FDA said it was reviewing the results. Many of the drugs Mason studied “at best didn’t work, and at worst may have had adverse affects on the body,” he said at last week’s briefing. The meeting was organized at the request of the speakers to educate lawmakers in hopes of moving toward formal congressional hearings on the topic.

FDA/EMA ROUNDUP -- The U.S. Food and Drug Administration said it approved Bristol-Myers Squibb Co.’s (New York) drug to treat rare and potentially fatal disorders involving loss of body fat. The condition, known as generalized lipodystrophy, involves fat buildup in the blood and organs such as liver and muscle and can lead to diabetes, pancreatitis and fatty liver disease. The FDA said it required seven post-marketing studies on the drug, Myalept.

          Elsewhere, GlaxoSmithKline Plc’s (London) diabetes treatment albiglutide was approved for use by the FDA, after a series of drug-development setbacks for the company. Albiglutide was approved for use in Europe in March under the brand name Eperzan. It belongs to a class of drugs called GLP-1 receptor agonists, which work by stimulating the body’s natural production of insulin and help regulate blood-sugar levels. Glaxo expects the drug to be launched in the U.S. under the brand name Tanzeum in the third quarter of this year. Despite approval, Glaxo’s drug is likely to face stiff competition from rivals that work in a similar way. The leading drug prescribed for this type of treatment is Victoza from Novo Nordisk A/S (Bagsvaerd DNK), which must be injected every day. Albiglutide could prove to be more convenient for diabetics because it is a once-weekly injection. Another once-weekly injection, called Bydureon from AstraZeneca Plc (London), is already available.

          The FDA has again approved a Merck & Co. (Whitehouse Station NJ) tablet for gradually reducing seasonal allergies, this time for ragweed pollen. Ragwitek tablets dissolve quickly under the tongue. Patients are to take one daily, from three months before ragweed season begins until it ends, for a few years. The FDA approved it for patients aged 18 through 65. Merck’s tablet for spring grass allergies, Grastek, was approved earlier in the week for patients aged 5 to 65. Both offer an alternative to medicines that just temporarily relieve symptoms or years of uncomfortable allergy shots. The shots and tablets work by gradually tamping down immune response to allergy-triggering substances and reducing sneezing, runny noses and itchy, watery eyes.

          And the European Medicines Agency (EMA) said it has concluded an inquiry into lax drug-safety reporting at Roche Holding AG (Basel CHE) and sent its report to the European Commission for the next steps. The European Commission will decide whether the matter should be pursued and financial penalties should be imposed. The process could potentially lead to hefty fines for the Swiss drugmaker for breaching EU rules but the agency gave no further details on its conclusions because the procedure is considered confidential. The EMA previously said in November it had not uncovered any new safety issues connected with Roche’s drugs as a result of the shortcomings in reporting adverse events. EMA launched its probe into Roche in 2012 after a routine inspection found the firm had failed to properly assess tens of thousands of cases of possible adverse drug reactions, involving 19 drugs, several of which were for cancer. Drugmakers are required to evaluate problems reported by doctors and patients after taking their drugs and then pass on any serious cases to regulators.

MEDICAL STOCK SPOTLIGHT -- Akebia Therapeutics Inc. (Nasdaq) led advancing issues, soaring $9.23, or 55% over the week, to $26.09. The big upward move came after the company announced it has completed enrollment in its ongoing 200-patient Phase 2b study of AKB-6548 for the treatment of anemia associated with chronic kidney disease in patients who are not dependent on dialysis. Stock in the Cincinnati, OH-based company soared, thanks to some highly optimistic analysts’ reports that were released early in the week. Tops among those was Morgan Stanley, which is predicting that Akebia’s stock price will leap to $90 within a year. Morgan Stanley analyst David Friedman said in his report that annual revenue for Akebia’s first drug could top $2 billion. He expects the drug to hit the market by 2018. Morgan Stanley was among the lead underwriters when Akebia completed its initial public offering on March 20.

          Elsewhere, Repligen Corp. (Nasdaq) leaped $2.19, or 16%, to $15.84 after replacing Hi-Tech Pharmacal Co. Inc. in the S&P SmallCap 600. In addition, Jefferies Group started coverage on shares of Repligen. The firm issued a “Buy” rating and a $17.00 price target on the stock. Waltham, MA-based Repligen develops therapeutics for the treatment of diseases of the central nervous system. The company owns intellectual property on monoclonal antibody and antibody fusion products. For the latest quarter, analysts’ consensus average estimate is for revenues of $15.30 million.

          And Horizon Pharma Inc. (Nasdaq) jumped 11% to $13.37 after announcing that it has received notice of the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, in connection with its proposed acquisition of Vidara Therapeutics International Ltd. Horizon Pharma, a maker of treatments for arthritis, pain and inflammatory diseases, agreed last month to purchase Ireland’s Vidara for about $660 million. The combined company, to be renamed Horizon Pharma Plc, will be based in Ireland to provide a “tax-efficient corporate structure,” Deerfield, IL-based Horizon said. Vidara, a closely held company based in Dublin, markets Actimmune, a treatment for chronic granulomatous disease, a genetic disorder which affects the immune system, and severe osteopetrosis, a bone disease. Horizon Pharma’s yearly stock performance is 481%.

          But Transition Therapeutics Inc. (Nasdaq) plummeted $2.40, or 30%, to $5.59 despite reporting that there are no undisclosed material changes or corporate developments involving the company to account for its recent downdraft. The Toronto, Ontario-based company did recover nearly 12% Thursday. That reverses the trend of the company since April 9, as the stock is now down over 31% since then. Transition Therapeutics is a biopharmaceutical company focused on developing novel therapeutics in order to address global medical needs in large disease indications, including Alzheimer’s disease and diabetes.

IPO SECTOR -- The initial public offering for Vital Therapies Inc. (San Diego CA) opened at $12.25 after pricing 4.5 million shares of common stock at a price to the public of $12.00 per share, below the expected $13-$15 range. Shares, which trade on the Nasdaq under the symbol “VTL,” closed the week unchanged at $12.00. BofA Merrill Lynch and Credit Suisse Securities (USA) LLC are acting as joint book-running managers for the offering. Vital Therapies is a biotherapeutic company developing a cell-based therapy targeting the treatment of acute liver failure. The company’s lead product-candidate, ELAD, is an extracorporeal bio-artificial liver currently in Phase 3 clinical trials.

Previous Week's Issue … April 14, 2014

OBAMA ANNOUNCES SEBELIUS RESIGNATION, SUCCESSOR -- The departure of Kathleen Sebelius from President Barack Obama’s cabinet removes a focal point for criticism over Obamacare’s troubled rollout, right at a moment when the White House can blunt attacks with enrollment numbers that exceeded targets. Senate confirmation hearings on the president’s choice to succeed Sebelius as Health and Human Services secretary, budget director Sylvia Mathews Burwell, will give Republicans days of media exposure for their criticism of Obamacare. But those hearings will now be held months ahead of midterm congressional elections, helping diminish the impact on voters. Sebelius’s departure also addresses demands from some Democrats for a change at the department to demonstrate that Obama recognizes the difficulties, political and practical, caused by the flawed startup of the healthcare law. Sebelius “has become a lightning rod,” Chris Lehane, a communications adviser in the Clinton administration, said. Now “it’s not as easy to use her as a foil in the fall because she’s hit her mark and she won’t be there.” The Obama administration set the stage for the exit hours before news of it leaked out. Sebelius, 65, delivered to a Senate committee the word that enrollment in Obamacare’s health plans had reached 7.5 million, exceeding a first-year projection of 7 million made by the Congressional Budget Office.

          Obama alluded to both early stumbles with the federal insurance exchange and the enrollment total in a White House ceremony Friday morning announcing Sebelius’s resignation and his pick to replace her. “Yes, we lost the first quarter of open enrollment period with the problems with healthcare.gov,” Obama said. “But under Kathleen’s leadership her team at HHS turned the corner, got it fixed, got the job done, and the final score speaks for itself.” Obama said Sebelius let him know last month of her desire to leave once the enrollment was done. The choice of Burwell, 48, currently director of the Office of Management and Budget, permits an expedited confirmation process. She was approved by the Senate just one year ago, by a 96-0 vote. “It will help the confirmation process that Sylvia just recently went through it,” said Jim Manley, a former top aide to Senate Majority Leader Harry Reid, a Nevada Democrat. “I still expect it to be nothing short of brutal.”

SMALL GROUP OF DOCTORS ACCOUNT FOR HUGE PORTION OF MEDICARE COSTS -- A tiny fraction of the 880,000 doctors and other healthcare providers who take Medicare accounted for nearly a quarter of the roughly $77 billion paid out to them under the federal program, receiving millions of dollars each in some cases in a single year, according to the most detailed data ever released in Medicare’s nearly 50-year history. In 2012, 100 doctors received a total of $610 million, ranging from a Florida ophthalmologist who was paid $21 million by Medicare to dozens of doctors, eye and cancer specialists chief among them, who received more than $4 million each that year. While more money by far is spent for routine office visits than any other single expenditure, one of the most heavily reimbursed procedures--costing a total of $1 billion for 143,000 patients--is for a single treatment for an eye disorder common in the elderly. The Medicare data--all for 2012 and the subject of an intense legal battle--provides an unprecedented look at the practice of medicine across the country, shedding fresh light on the treatment decisions physicians and other practitioners make every day. It will also provide consumers with an ability to compare doctors and treatments in a way they have never had until now.

          Fraud investigators, health insurance plans, researchers and others will spend weeks poring over the information about how many tests were ordered and procedures performed for every provider who received Medicare payments under Part B, which excludes payments to hospitals and other institutions. The Centers for Medicare and Medicaid Services made the data publicly available last Wednesday. While total Medicare spending--including hospitals, doctors and drugs--is approaching $600 billion a year, payments to individual doctors have long been shrouded in secrecy. For decades, the American Medical Association (Chicago), the powerful doctors’ group, and others have blocked the release of the information, citing privacy concerns and the potential for misuse of the information. But a federal judge ruled last year that the information could be made public.

TRACKING WASHINGTON -- The release last week of Medicare payment data is getting mixed reviews from doctors. Many say they favor sharing information but worry that the data presented by Medicare omits important details and may mislead the public and paint an unfairly negative picture of individual doctors. Dr. Gary Heit, a recently retired neurosurgeon in Redwood City, CA, said he thought some of the details revealed could be useful to patients who want to make sure that the physicians they choose are experienced--say in carotid-artery surgery, where more operations performed correlate with better patient outcomes. “Being able to track the number of procedures is incredibly valuable,” Dr. Heit said. “I think the ability to see the number of cases a physician does is really important.” However, the data only include treatments given to certain Medicare patients. Many other doctors worried that the data released was incomplete and often misleading. In some cases, enormous payments that seem to be going to one doctor are actually distributed to multiple others. But the data tables do not reveal that the money was shared.

          The highest-paid 2% of doctors received almost one-fourth of Medicare payments. For instance, Dr. Jean M. Malouin, a family medicine physician at the University of Michigan Health Systems, shows up as one of the top Medicare billers in the country, collecting payments of $7.58 million in 2012 for more than 207,000 patients. But Dr. Malouin directs a Medicare project that involves 1,600 primary care physicians, who each receive a small payment each month. Those payments are funneled through Dr. Malouin. The doctor’s situation is described in a website that the hospital set up last week to help explain the data to the public. Dr. David L. Longworth, chairman of the medicine institute at the Cleveland Clinic, said the data could also be misconstrued because it does not explain that some doctors treat unusually ill patients who need a great deal of complex, time-consuming care, for example those with heart failure or advanced cancers. People who focus only on the payments may assume that doctors who receive more money are doing something wrong, he said.

FDA/EMA ROUNDUP -- Zogenix Inc. (San Diego CA) won approval to sell the first painkiller made of pure hydrocodone as U.S. regulators recommended restrictions on popular combination treatments with the drug. The Food and Drug Administration cleared the company’s Zohydro for the management of pain severe enough to require continuous, long-term treatment, the agency said in a statement. Zohydro is intended as an alternative to drugs including Vicodin that mix hydrocodone with less-potent medicines such as aceteminophen. Zogenix is counting on the painkiller to boost its $44 million in 2012 revenue from sales of a migraine treatment Sumavel.

          Elsewhere, a federal task force recommended that some pregnant women take low-dose aspirin daily to avoid getting preeclampsia, a condition that can lead to preterm birth and other complications. Aspirin in general isn’t recommended during pregnancy because it can contribute to maternal and fetal bleeding. However, low-dose aspirin is sometimes prescribed for pregnant women with certain health conditions. The recommendation by the U.S. Preventive Services Task Force comes after the nation’s biggest obstetrics association issued similar advice last fall. The task force said that women who have had preeclampsia during previous pregnancies should take a pill of 81 milligrams--often called “baby aspirin”--each day after the 12th week of pregnancy. The recommendation applies to pregnant women whose doctors consider them at high risk for the condition, as long as they haven’t had previous bad medical experiences with aspirin. The task force’s advice is a draft recommendation and the panel is seeking comments from the public before making it final.

          Testosterone medicines are being reviewed by the European Union’s drug regulator after studies suggested the products may pose risks to the heart. The European Medicines Agency will study the products’ benefits and risks to issue an opinion whether their marketing authorizations should be maintained, changed, suspended or withdrawn across the 28-nation bloc. The drugs are mainly used by men who don’t produce enough of the sex hormone, the agency said. One study suggested that using testosterone increases the risk of a heart attack in men older than 65, as well as in younger men with heart disease, the agency said. Other trials have raised similar concerns, the EMA said. In January, the U.S. Food and Drug Administration said it was looking over data on testosterone drugs because of potential harm to the heart.

          And the FDA approved an easy-to-use device made by Kaleo Inc. (Richmond VA) that automatically injects the right dose of an overdose antidote named naloxone before an ambulance arrives. Doctors could prescribe it for family members or caregivers to keep on hand, in a pocket or a medicine cabinet. Opioids include legal prescription painkillers, such as OxyContin and Vicodin, as well as illegal street drugs like heroin. Called Evzio, the device contains naloxone, a long-used antidote for overdoses that is usually administered by syringe in ambulances or emergency rooms. But with the rise in drug overdose deaths, there has been a growing push to equip more people with the protection. The FDA said Evzio’s design makes it easy for anyone to administer.

MEDICAL STOCK SPOTLIGHT -- Celladon Corp. (Nasdaq) led advancing issues, surging $2.40, or 24% on the week, to $12.38. The U.S. Food and Drug Administration granted “breakthrough” therapy designation for Celladon’s lead product candidate, Mydicar, for reducing hospitalizations for heart failure in NYHA class III or IV chronic heart failure patients who are NAb negative. The company is developing Mydicar as a new first-in-class therapy for patients with chronic heart failure due to systolic dysfunction. The drug uses genetic enzyme replacement therapy to correct the deficiency in the enzyme SERCA2a, which is an enzyme that becomes deficient in heart failure patients and results in inadequate pumping of the heart. Celladon president and CEO Krisztina Zsebo said the San Diego-based company is looking forward to working with the senior staff at the FDA to determine the most expeditious path to bring Mydicar to patients with advanced heart failure.

          Elsewhere, Agios Pharmaceuticals Inc. (Nasdaq), a clinical-stage biopharmaceutical company developing cancer therapies, vaulted $7.84, or 22%, to $43.32 after the Cambridge, MA-based company released initial data on its phase 1 study of AG-221, an oral inhibitor of IDH2 mutations, in patients with hematological malignancies (blood cancers). According to its press release, Agios’s preliminary data for AG-221 demonstrated that the drug was well-tolerated and safe. More importantly, though not the initial goal of its phase 1 study, AG-221 demonstrated promising clinical activity, including complete clinical remissions, even at the lowest-tested dose. Overall, six of seven evaluable patients had an objective response, with three complete responses and two complete remissions with incomplete platelet recovery, and one patient with a partial response.

          And Health Insurance Innovations Inc. (Nasdaq) jumped $1.71, or 18%, to $11.26. The uptick came after the web-based health insurance company posted record quarterly sales results during the first quarter. The Tampa, FL-based company received 57,644 submitted applications during the quarter, a 107% jump from first quarter 2013. The numbers have been helped due to the Affordable Care Act mandate. “Our sequential growth of 56% in first-quarter over fourth-quarter 2013 confirms that consumer demand for these more agile health plans continues in this post-Obamacare market,” said CEO Mike Kosloske. TheStreet Ratings team rates the company a “Hold” with a ratings score of C-.

          But Regado Biosciences Inc. (Nasdaq) plummeted $3.70, or 39%, to $5.85 after the biopharmaceutical company priced an offering of its common stock. The Basking Ridge, NJ-based company priced 10 million shares at $6 a share. The offering should close on or about April 16 and includes a 30-day option for underwriters to purchase an additional 1.5 million shares, Regado said. Regado expects gross proceeds of $60 million, which it plans to use to fund further clinical development of its REG1 anti-coagulant.

IPO SECTOR -- Shares of Adamas Pharmaceuticals Inc. (Emeryville CA) wavered Thursday after the drug developer’s initial public offering raised $48 million. The offering of 3 million shares priced at $16 each, the low end of an expected range of $16 to $18. Shares closed the week down $3.00, or 19%, at $13.00. Credit Suisse and Piper Jaffray are acting as joint book-running managers for the offering. Adamas is developing drugs that treat central nervous system disorders such as Parkinson’s and Alzheimer’s disease. It worked with Forest Laboratories Inc. on Namenda XR, an extended-release version of a Forest drug that treats Alzheimer’s. The two companies are also studying a pill that combines Namenda XR with donepezil, the active ingredient in Pfizer Inc.’s drug Aricept. Forest filed for approval of that pill in March. Adamas is also studying a drug that could treat irritability and aggression caused by traumatic brain injury as well as movement disorders caused by levodopa, a drug that is used to treat Parkinson’s disease. Shares of the company are trading under the symbol “ADMS” on the Nasdaq Global Market.

April 7, 2014 ...

MORE THAN SEVEN MILLION SIGN UP FOR HEALTH COVERAGE, OBAMA SAYS -- More than 1 million people waited until the last five days to sign up for 2014 health coverage under Obamacare, and early indications are that many were young minorities, insurance analysts and enrollment groups said last week. That may be good news for health insurers who have been concerned that the customers enrolling in health plans through the new insurance exchanges are sicker and older than the average American. About 7.1 million people signed up for private plans under the Patient Protection and Affordable Care Act by the close of the first enrollment period on March 31, President Barack Obama announced. The figure, a symbolic triumph for the president, met a year-old projection by the Congressional Budget Office that was thought out of reach after the exchanges were plagued by computer malfunctions last October. “The enrollment surge is the best news possible for insurance companies,” the Kaiser Family Foundation, a Menlo Park, CA-based nonprofit that tracks health programs, said. Six million people had signed up by March 27. Enrollment events across the country were swarmed by late applicants the previous weekend, and the federal website, healthcare.gov, saw almost 8 million visits from March 29 to March 31. While computer errors prevented many people from signing up on the deadline day, anyone who tried can complete the process this month, federal officials have said.

          More than 5.4 million adults may have gained health insurance since the start of enrollment in Obamacare plans through early March, according to a survey released last week by the Robert Wood Johnson Foundation (Princeton NJ). That would bring the percentage of uninsured Americans to 15.2% from 17.9% in September, the nonprofit group said. The survey of 7,500 adults younger than age 65 doesn’t include the late surge of people who selected plans close to the March 31 deadline, the group said. It may be weeks before specific details are known about the impact of the Affordable Care Act or about the people who have signed up for coverage. The Department of Health and Human Services is expected to release a report later this month on enrollment through the end of March; previous reports have broken down enrollment by age and gender. They are silent on how many of the enrollees were previously uninsured, and how many have paid their first premium to health insurers, the final step required to finish signing up.

J&J ACCEPTS $4-BILLION OFFER FROM CARLYLE FOR ORTHO UNIT -- Johnson & Johnson (New Brunswick NJ) has accepted an offer of about $4 billion from the private equity firm The Carlyle Group LP (Washington DC) to buy its Ortho-Clinical Diagnostics business. J&J said last week that the deal for the blood-testing unit should close by mid-year. The healthcare giant had said in January that Carlyle had offered $4.15 billion for the business, and that it would talk to works councils and trade unions representing its employees before making a decision. The Ortho-Clinical business serves hospitals, testing laboratories and blood banks. It supplies equipment and chemicals to screen donated blood for HIV, hepatitis C and other serious diseases. It also makes technology for advanced testing of blood to diagnose health conditions and to monitor medication effects. Ortho Clinical Diagnostics is based in Raritan, NJ, and employs more than 4,500 employees. It runs factories in Rochester, NY; Pompano Beach, FL.; and Pencoed, Wales.

          J&J CEO Alex Gorsky had said last year the company was looking at strategic options for Ortho-Clinical Diagnostics, which doesn’t meet the company’s long-held strategy of focusing on businesses that rank first or second in their markets. Shares of J&J closed the week up 98 cents, or 1%, at $98.42. They have climbed more than 7% so far this year.

TRACKING WASHINGTON -- The Supreme Court last week agreed to hear an appeal from Teva Pharmaceutical Industries Ltd (Petach Tikva ISR), a decision that could conceivably delay generic competition to Teva’s big-selling multiple sclerosis drug Copaxone. An appeals court last July had invalidated a patent that would have protected Copaxone until September 2015. Without that protection, the drug could face competition from lower-priced copies as early as late May. While Teva, an Israeli company, is the world’s largest manufacturer of generic drugs, the branded product Copaxone accounts for about 20% of its revenue and around half of its profit. Sales of Copaxone reached $4.3 billion last year, of which $3.2 billion came from the United States. But health insurers are eagerly anticipating the introduction of a generic. There are none available right now as treatments for multiple sclerosis. And the prices of Copaxone and some of its competitors have roughly quadrupled over the last decade.

          So far, the Food and Drug Administration has not approved any generic versions of Copaxone, which is known as glatiramer acetate. But two teams of companies have expressed confidence that their versions could be approved by June. One team is Momenta Pharmaceuticals Inc. (Cambridge MA) and Sandoz, the generic division of Novartis AG (Basel CHE). The other is Mylan Inc. (Canonsburg PA) paired with Natco Pharma Ltd., an Indian drug company based in Hyderabad. The question now is whether the companies, in light of the Supreme Court decision, will start to market their generics this year, assuming they obtain FDA approval. David Maris, an analyst who follows Teva for BMO Capital Markets, said the Supreme Court’s decision to hear the case was “great news for Teva, as we believe it will bolster investor confidence that a generic will not be on the market in May 2014.” He said in a note that the generic companies “may not be willing to risk a launch.”

FDA/EMA ROUNDUP -- The Food and Drug Administration on Thursday approved an easy-to-use device made by Kaleo Inc. (Richmond VA) that automatically injects the right dose of an overdose antidote named naloxone before an ambulance arrives. Doctors could prescribe it for family members or caregivers to keep on hand, in a pocket or a medicine cabinet. Opioids include legal prescription painkillers, such as OxyContin and Vicodin, as well as illegal street drugs like heroin. Called Evzio, the device contains naloxone, a long-used antidote for overdoses that is usually administered by syringe in ambulances or emergency rooms. But with the rise in drug overdose deaths, there has been a growing push to equip more people with the protection. The FDA said Evzio’s design makes it easy for anyone to administer.

          Elsewhere, shares of Intuitive Surgical Inc. (Sunnyvale CA) climbed last week after the company said the FDA approved a new version of its da Vinci robotic surgical system. Intuitive Surgical said the agency cleared a new version called da Vinci Xi. It said the features of the new system include longer instrument shafts that provide greater reach; smaller, thinner surgical arms with a new joint design that improves their range of motion; and a new overhead instrument arm design that is intended to give surgeons anatomical access from almost any position. The da Vinci system uses robotic arms, cameras and a remote-control console to help doctors perform surgery with tiny incisions. It is used in minimally-invasive gynecological procedures, heart surgeries, prostatectomies, thoracic surgeries, urology procedures and other operations. Shares of Intuitive closed the week up $70.53, or 16%, at $505.52.

          The FDA said it has approved the first tablet in the U.S. for gradually reducing hay fever symptoms, an alternative to months of weekly doctor visits for uncomfortable allergy-desensitizing shots. Oralair was approved for patients ages 10 through 65. It’s made by France’s Stallergenes SA (Antony), a leader in immunotherapy medicines that dissolve under the tongue. Oralair tablets are to be taken daily starting four months before grass pollen season to reduce allergic reactions to the five most common U.S. grass types: Kentucky bluegrass, orchard, perennial rye, sweet vernal and Timothy. It contains freeze-dried extracts from pollens of those grasses. About 60 million Americans have hay fever, but fewer than 3 million are treated with allergy shots.

          And MannKind Corp.’s (Valencia CA) inhaled diabetes treatment won the backing of a panel of FDA advisers, boosting the company’s long-running effort to get its first product on the market. Advisers voted 13 to 1 and 14 to 0 that the drug, Afrezza, should be approved for Type 1 and Type 2 diabetes, respectively. The FDA doesn’t have to follow the panel’s recommendation. FDA staff raised concerns in a report March 28 that the drug may affect lung function and about missing data from a study on Type 1 diabetes patients. MannKind has spent more than seven years trying to gain approval. The FDA rejected the drug twice, most recently in 2011, after the company decided to switch inhalers during the review process.

MEDICAL STOCK SPOTLIGHT -- IsoRay Inc. (NYSE) led advancing issues, rocketing 31% over the week to $3.03, continuing to rally on high-volume after unveiling it plans to host a booth at the Annual Meeting of the American Brachytherapy Society (ABS). The annual ABS meeting took place in San Diego. The company presented five papers during the convention and believes that all studies will show exceptional results realized in all areas of the body where Cesium-131, or the physics associated with Cesium-131, was used. IsoRay produces a brachytherapy seed which is used to treat prostate and other cancers. The Richland, WA-based company’s seed delivers more than 90% of its total radiation dose in less the 33 days, reducing the incidence of common brachytherapy side effects.

          Elsewhere, genetic testing firm Myriad Genetics Inc. (Nasdaq) surged $8.12, or 25%, to $40.99 after it received a welcome boost from the Center for Medicare & Medicaid Services. Back in late December, the CMS had announced that it would cut reimbursement rates heavily for Myriad’s gene diagnostics tests for breast cancer. That took down the stock then, but Myriad bounced back last week after the CMS’s final price cuts ended up much less than originally expected. It’s a big win for Salt Lake City UT-based Myriad with concerns over competition circulating about this stock, although Myriad’s 61% year-to-date rise does invite caution according to some analysts.

          And TetraLogic Pharmaceuticals Corp. (Nasdaq) jumped 11% to $6.84 after announcing that data published in the April issue of Molecular Cancer Therapeutics further advances the preclinical characterization of its lead SMAC-Mimetic birinapant, which is currently being tested in Phase 1 and Phase 2 clinical trials for hematological malignancies and solid tumors. The publication will appear in the April edition of Molecular Cancer Therapeutics. The electronic version of the publication is available online at http://mct.aacrjournals.org/content/early/2014/03/24/1535-7163.MCT-13-0798.abstract. Malvern, PA-based Tetralogic discovers and develops small molecule peptide-mimetic drugs for the treatment of cancers.

          But Halozyme Therapeutics Inc. (Nasdaq) plunged $3.68, or 30%, to $8.43 after announcing that as a result of a recommendation received last week from an independent Data Monitoring Committee (DMC), it is temporarily halting patient enrollment and dosing of PEGPH20 in an ongoing Phase 2 trial evaluating PEGPH20 in patients with pancreatic cancer. The DMC is assessing clinical data that indicate a possible difference in the thromboembolic event rate between the group of patients treated with PEGPH20, nab-paclitaxel and gemcitabine versus the group of patients treated with nab-paclitaxel and gemcitabine without PEGPH20. San Diego-based Halozyme is a biopharmaceutical company developing products for the diabetes, cancer, dermatology and drug-delivery markets. The company’s platform technology is based on recombinant human hyaluronidase plus additional enzymes.

IPO SECTOR -- The initial public offering for Corium International Inc. (Menlo Park CA) opened for trading last week at $8.26 after pricing 6.5 million shares of common stock at a price to the public of $8.00 per share, below the expected $10-$12 range. The IPO raised $52 million. The offering size was boosted from 5.5 million shares. Shares closed the week up 1% at $8.10. Jefferies LLC and Leerink Partners LLC are acting as joint book-running managers for the offering. Together with its partners, Corium says it has successfully developed six marketed products in the prescription drug and consumer markets, and it is the sole commercial supplier of each of those products for its marketing partners. These marketed products are Clonidine Transdermal Delivery System, or TDS, Fentanyl TDS and four Crest Advanced Seal Whitestrips products.

March 31, 2014 ...

OBAMACARE'S 6 MILLION TARGET REACHED AS EXCHANGE VISITS SURGE -- Back on track after a stumbling start, President Barack Obama’s healthcare overhaul reached a milestone last Thursday, with more than 6 million Americans signed up for coverage through new insurance markets. The announcement--four days before open enrollment season ends today--fulfills a revised goal set by the Congressional Budget Office and embraced by the White House. Like much else about Obama’s healthcare law, it comes with a caveat: The administration has yet to announce how many consumers actually closed the deal by paying their first month’s premium. Some independent estimates are that as many as 10% to 20% have not paid, which would bring the total enrollment to between 5 million and 6 million people. The White House said the president made the announcement during an international conference call with enrollment counselors and volunteers, while traveling in Italy. Administration officials, focused on signing up even more people over the weekend, played down the occasion. Others said it was unmistakably a promising sign. “I think the program is finally starting to hit its stride in terms of reaching the enrollment goals the administration set,” said John Rother, CEO of the National Coalition on Health Care (Washington DC), a nonpartisan coalition of businesses, healthcare industry groups and consumer organizations.

          Today is the deadline to enroll in the new insurance exchanges, but potentially millions of people will still be able to take advantage of extensions announced last week. Some people will get more time to finish enrolling in Obamacare insurance plans under new rules that include anyone who begins signing up before midnight or was previously kept from enrolling by website flaws. Americans who aren’t insured by midnight are supposed to pay a penalty of as much as 1% of their income, according to the law. The extension, announced last week, opens up the chance to produce many more last-minute enrollees. The U.S. website, healthcare.gov, drew 1.1 million visitors on March 24, the second-most in a single day. Consumers who begin applying by 11:59 p.m. today will be able to complete their enrollment later in plans to take effect May 1. Additionally, those who attest online they had trouble signing up before the deadline can begin the enrollment process after today, said Julie Bataille, a spokeswoman for the Centers for Medicare and Medicaid Services.

BAXTER SPLITTING INTO TWO SEPARATE BUSINESSES -- Baxter International Inc. (Deerfield IL), the maker of hemophilia treatments, will split into two companies, one focused on developing biotechnology and pharmaceutical medicines and one that sells medical products. The deal, to be completed by the middle of next year, follows a two-year trend in the industry in which Abbott Laboratories Inc. (Abbott Park IL), Pfizer Inc. (New York) and Bristol-Myers Squibb Co. (New York) have all sold, spun off or split apart businesses. Baxter’s drug unit last year had $6 billion in revenue, while the medical-products division had more than $9 billion, according to a statement. “It’s a very good move,” said Joanne Wuensch, a New York-based analyst at BMO Capital Markets. “They’ll be able to focus on businesses they do best, and unleash opportunities for franchises which could have been hidden inside a larger organization.” Baxter was trading “at a steep discount” because of concern over competition in the hemophilia market, she said. The transaction may produce a market potential of $50 billion in 2017 for the medical-products division, and $65 billion for the biopharmaceuticals division, according to company data. The split will “enhance prospects for growth in both mature and emerging markets,” Baxter CEO Robert Parkinson, Jr. said.

          Parkinson will remain CEO and chairman at the medical products company, which retains the Baxter International name, according to the statement. Ludwig Hantson will be CEO of the pharmaceutical company, which will be named at a later junction, Baxter said. The new biotechnology-pharmaceutical company will focus on hemophilia and new therapies for treating bleeding disorders, Hantson said. It will be “driving scientific innovation and leveraging expertise into new therapeutic areas through acquisitions and collaborations,” he said. The two new divisions will attract new investors depending on their appetite for risk, according to Erik Gordon, a professor at the Ross School of Business at the University of Michigan. “Baxter had two businesses with very different risk profiles,” Gordon said. “The bioscience division is going to invest a lot of money in next-generation treatment, which is risky business. Then you have another business where you’re selling bags of IV solution, which has nice, steady growth but is not too risky.” Baxter closed the week up $5.14, or 8%, at $72.85.

TRACKING WASHINGTON -- Six senators, five Democratic and one independent, on Thursday rolled out a series of policy proposals they said were intended to fix and improve President Obama’s signature healthcare law. Three of the Democrats--Senators Mark Begich of Alaska, Mary L. Landrieu of Louisiana and Mark Warner of Virginia--are up for re-election in 2014. Their unveiling of the policy prescriptions comes as vulnerable Democratic candidates in both the House and Senate are under increasing pressure to distance themselves from the Affordable Care Act. The other Democratic senators, Heidi Heitkamp of North Dakota and Joe Manchin III of West Virginia, as well as Senator Angus King, independent of Maine, rounded out the group of centrists who laid out their plans in an op-ed article in Politico Magazine Thursday. The move reflects part of a broader strategy by Democrats, who are grappling with the awkward reality of how to escape the embrace of the healthcare law--which passed with no Republican votes and has become a political liability--while not going as far as their Republican counterparts who are trying to repeal it. The Democratic plan heading into the midterm elections, which has already begun to play out on the airwaves, calls on vulnerable Democrats to talk candidly about the healthcare law’s problems, while offering their own solutions.

          In other news, the U.S. Federal Trade Commission is seeking a settlement of $1 billion or more from pharmaceutical companies it has sued for delaying the sale of cheaper medicines after patents on brand-name drugs may have expired, an FTC official told a legal conference on Friday. The antitrust agency alleges that the way drugmakers settle patent-related lawsuits hurts consumers by making drugs more expensive. In the settlements, makers of brand-name drugs pay millions of dollars to generics companies while they delay putting their products on the U.S. market. Last June, the U.S. Supreme Court ruled that the FTC may challenge the deals in federal courts. A panel moderator at the American Bar Association’s spring antitrust meeting asked Deborah Feinstein, the director of the FTC’s Bureau of Competition, what developments to expect in the coming year. “My hope is that we get a billion-dollar settlement in one of the patent-settlement, pay-for-delay cases,” Feinstein responded, giving no indication that any settlement was imminent. The FTC’s long-running lawsuits are not close to going to trial. “In all truth, that is one of the biggest priorities we have,” she said. “The consumer harm there is extremely significant, and so we have a tremendous amount of resources there and hope to come out with a victory one way or another in those cases.”

FDA/EMA ROUNDUP -- William Demant Holding A/S (Smorum DNK) has received approval for its first hearing aid reducing tinnitus from the U.S. Food and Drug Administration, according to Reuters. The new hearing aid is especially targeted at the U.S. Veterans Administration (VA), a government-led program for U.S. military veterans, which currently makes up about 20% of all hearing aid units dispensed in the U.S. “There is a demand for it in the U.S. market, especially within the Veterans Administration,” a William Demant spokeswoman said. In 2011, 840,865 members of the VA had tinnitus according to Handelbanken.

          Elsewhere, Biogen Idec Inc. (Weston MA), a biotechnology company that specializes in multiple sclerosis treatments, won FDA approval for a long-lasting hemophilia B drug that may reduce the need for infusions. The medicine called Alprolix was cleared to treat the blood disorder, the FDA said. The medicine replaces the factor IX protein that helps blood clot. Biogen and Sweden’s Orphan Biovitrum AB are partners on the development of Alprolix. Current treatments can require several infusions a week, Tony Kingsley, executive vice president of Biogen’s global commercial operations, said. Alprolix may be infused once a week or less frequently depending on the patient, he said.

          A panel of FDA advisers has narrowly backed an experimental blood test that uses patients’ DNA to help screen for colon cancer. The FDA’s genetic experts voted 5-4, with one abstention, that the benefits of Epigenomics AG’s (Berlin) test outweigh the risks. The vote amounts to a recommendation for approval of the company’s Epi proColon kit. The FDA is not required to follow the panel’s recommendation. Doctors have long used stool tests to look for hidden blood that can be an early warning of cancer. Epigenomics’ test is part of a new wave of diagnostics that detect genetic markers associated with cancerous tumors. FDA scientists said in their review earlier last week that Epi proColon did not meet all of its accuracy goals in testing against older, stool-based technology.

          Separately, another colon cancer screening method that analyzes DNA from stool samples won the unanimous backing of an FDA advisory panel on Thursday, paving the way for potential regulatory approval of the non-invasive test. A panel of outside experts advising the FDA voted 10-0 to recommend approval of the Cologuard screening test made by Exact Sciences Corp. (Madison WI). The company said a large clinical trial found that its test detected 92.3% of colorectal cancers in average-risk patients based on a combination of DNA and hemoglobin markers. If Cologuard is approved by the FDA, patients who have a positive cancer finding with the test, which identifies abnormal cells shed in the stool, would then undergo a colonoscopy.

MEDICAL STOCK SPOTLIGHT -- Keryx Biopharmaceuticals Inc. (Nasdaq) led a small group of advancing issues, rising $1.77, or 12% over the week, to $16.61. The spike followed news that the “doc fix” bill moving through Congress includes language for Medicare to delay moving oral-only end-stage renal disease (ESRD) drugs into the ESRD bundle until 2024. A note sent by Guggenheim Partners to clients included the revelation that the “doc fix” would delay the inclusion of ESRD drugs that don’t have an IV alternative. This 8-year delay comes after a previous 2-year delay bumping the date to 2016 and should be a boon to those companies producing medications falling into the oral-only ESRD category. New York-based Keryx’s lead product candidate recently completed Phase 3 testing for hyperphosphatemia in ESRD patients.

          Elsewhere, Staar Surgical Co. (Nasdaq) gained $1.76, or 11%, to $18.37 after an FDA panel voted to recommend approval for the company’s novel Visian Toric implantable collamer lens for treatment of myopic astigmatism in adults aged 21-45. If the FDA follows its panel’s recommendation and grants marketing approval for Visian Toric, Monrovia, CA-based Staar Surgical will hold the only lens approved in the U.S. for placement in the posterior chamber (ciliary sulcus) of the phakic eye for myopia and astigmatism.

          But Exelixis Inc. (Nasdaq) plunged $2.91, or 46%, to $3.38--the most in almost 2 1/2 years--after the biotechnology company said trials of its prostate cancer drug wouldn’t end early. Analysts anticipated the study might be stopped in advance based on the beneficial effects of the drug, cabozantinib. “We’ve been really clear with investors that we hope to have positive results from the study, whether they come at the interim or final analysis,” said CEO Michael Morrissey. South San Francisco-based Exelixis gained approval in November 2012 from the U.S. Food and Drug Administration for cabozantinib as a treatment for thyroid cancer patients. “We see this as a disappointing outcome given that many other high-profile prostate cancer Phase 3 trials have been stopped early,” said Cory Kasimov, a New York-based analyst for JPMorgan Chase & Co.

          And the biotech sector index fell 7% for the week. With just one trading day left in March, the index was down about 13% for the month at Friday’s close. Taking it on the chin was Relypsa Inc. (Nasdaq), down 25% over the week to $30.01. Also hit were Endocyte Inc. (Nasdaq), off 22% at $21.96 and Sangamo Biosciences Inc. (Nasdaq), down 22% at $16.74. “The decline in biotech is part of the reallocation of capital as we near the end of the quarter. It seems like they are a bit out of favor right now, along with momentum stocks,” said J.J. Kinahan, chief strategist at TD Ameritrade in Chicago.

IPO SECTOR -- Included among recent SEC filings for initial public offerings, Ariosa Diagnostics Inc. (San Jose CA) registered up to $69 million worth of common stock. The company plans to list on the Nasdaq Global Market under the symbol “AROS.” The offering is being made via J.P. Morgan and Citigroup. The developer of molecular diagnostics and prenatal tests posted $53 million in sales for the fiscal year ended Dec. 31, 2013, Nasdaq.com reported. The nearly 4-year-old company develops Harmony--a prenatal genetic test that assesses the risk for chromosome conditions such as Down syndrome. The test also has an option for an analysis of fetal sex and sex chromosome conditions. Ariosa describes itself as a global commercial-stage molecular diagnostics company focused on improving overall patient care by developing and delivering innovative, affordable and widely-accessible genetic testing.

March 24, 2014 ...

HEALTHCARE SIGNUPS HIT 5 MILLION MARK -- More than 5 million people have enrolled in private health insurance under the law known as Obamacare since open enrollment began on October 1, the Obama administration said last week. With the March 31 enrollment deadline only a week away, a top administration official reported a big upswing in public interest in subsidized health insurance and said traffic on the federal website HealthCare.gov reached 1 million visitors over the previous weekend. “The last several days have been the busiest since December,” Marilyn Tavenner, administrator of the U.S. Centers for Medicare and Medicaid Services, said in a government blog posting that announced the new total. The 5 million enrollee total marked an increase of at least 800,000 people since March 1, indicating that total enrollment could approach the 6 million figure estimated by the nonpartisan Congressional Budget Office if enrollment surges in the final weeks as administration officials have predicted. The CBO initially forecast 7 million enrollees in private health coverage, but scaled back its estimate after technical problems with the rollout that continue to afflict Obamacare insurance marketplaces operated by several states.

          Last Monday’s release did not say how many new enrollees were adults aged 18 to 34, a younger demographic whose participation is seen as essential for the success of President Barack Obama’s signature domestic policy achievement. Before the rollout, administration officials said their goal was for 38% of the new online private insurance marketplaces to consist of younger consumers, who compensate for older, sicker enrollees because they tend to be healthy and cheaper to ensure. But the data so far shows young adults accounting for only one-quarter of enrollees. Another important section consists of people signing up for insurance for the first time, a group that also tends to be healthy. The administration says it has no data for that group, but the consulting firm McKinsey & Co. (New York) in a report this month put the number at around 27% of the total enrollees. Too few healthy beneficiaries could cause healthcare costs to rise as insurers grapple with higher insurance risks posed by policyholders who are sick or older. “Five million is only a good number if it’s mostly people who didn’t have insurance before,” said Joe Antos of the conservative American Enterprise Institute (Washington DC).

STUDY QUESTIONS EFECTS OF DIETARY FATS ON HEART DISEASE -- A long-held tenet of healthy nutrition is that saturated fat, the type found in meat, butter and cheese, causes heart disease. But a large and exhaustive new analysis by a team of international scientists found no evidence that eating saturated fat increased heart attacks and other cardiac events. The new findings are part of a growing body of research that has challenged the accepted wisdom that saturated fat is inherently bad for one’s health and will continue the debate about what foods are best to eat. For decades, health officials have urged the public to avoid saturated fat as much as possible, saying it should be replaced with the unsaturated fats in foods like nuts, fish, seeds and vegetable oils. But the new research, published last week in the journal Annals of Internal Medicine, did not find that people who ate higher levels of saturated fat had more heart disease than those who ate less. Nor did it find less disease in those eating higher amounts of unsaturated fat, including monounsaturated fat like olive oil or polyunsaturated fat like corn oil. “My take on this would be that it’s not saturated fat that we should worry about” in our diets, said Dr. Rajiv Chowdhury, the lead author of the new study and a cardiovascular epidemiologist in the department of public health and primary care at Cambridge University.

          But Dr. Frank Hu, a professor of nutrition and epidemiology at the Harvard School of Public Health, said the findings should not be taken as “a green light” to eat more steak, butter and other foods rich in saturated fat. He said that looking at individual fats and other nutrient groups in isolation could be misleading, because when people cut down on fats they tend to eat more bread, cold cereal and other refined carbohydrates that can also be bad for cardiovascular health. The single macronutrient approach is outdated,” said Dr. Hu, who was not involved in the study. “I think future dietary guidelines will put more and more emphasis on real food rather than giving an absolute upper limit or cutoff point for certain macronutrients.” He said people should try to eat foods that are typical of the Mediterranean diet, like nuts, fish, avocado, high-fiber grains and olive oil. A large clinical trial last year, which was not included in the current analysis, found that a Mediterranean diet with more nuts and extra virgin olive oil reduced heart attacks and strokes when compared with a lower fat diet with more starches.

TRACKING WASHINGTON -- The White House said it would shift its strategy for winning Senate confirmation of its choice for the next U.S. surgeon general after President Barack Obama’s fellow Democrats helped sink another of his nominees this month. White House spokesman Jay Carney told reporters the administration expects Vivek Hallegere Murthy, the head of a doctors group, to eventually be confirmed by the U.S. Senate and is not reconsidering withdrawing Murthy’s nomination for the top health post. Earlier this month, seven Democrats broke ranks and joined Republicans to block the nomination of lawyer Debo Adegbile to head the Justice Department’s civil rights division. The administration’s defeat came eight months before congressional elections and as some of Obama’s Democrats in Congress did not want to be seen as soft on crime by supporting Adegbile amid objections from police groups. Obama nominated Murthy in November to serve as the nation’s top public health advocate. Murthy’s appointment passed a key Senate panel with bipartisan support. But the full Senate must still vote to back him. “After the confirmation vote of Debo Adegbile, we are recalibrating the strategy around Dr. Murthy’s floor vote, Carney said.

          In other news, Gilead Sciences Inc. (Foster City CA) was asked last week by Congressional Democrats to explain how the company set its $84,000 price for hepatitis C treatment Sovaldi. CEO John Martin also was asked to explain what is being done to make sure the medicine gets into the hands of low-income patients, especially in government-run health programs, according to the letter from the representatives. “Our concern is that a treatment will not cure patients if they cannot afford it,” wrote Democratic representatives Henry Waxman of California, Frank Pallone Jr., of New Jersey, and Diana DeGette, of Colorado. In the letter they asked Gilead to brief Congress by April 3. Gilead’s drug was approved last year as a breakthrough treatment for viral liver infection. The medicine offers higher cure rates and fewer side effects than older treatments, and its high cost has attracted scrutiny and resistance from insurers and public health advocates.

FDA/EMA ROUNDUP -- Celgene Corp. (Summit NJ), the maker of the cancer drug Revlimid, won U.S. approval of a pill to treat psoriatic arthritis that may challenge injections that are among the best-selling drugs on the market. The medicine, called Otezla, was cleared to treat arthritis associated with the skin condition psoriasis, the Food and Drug Administration said, giving the company its first victory in its effort to sell the drug for a handful of other inflammatory diseases. The painful joint condition occurs in about 30% of the 125 million people worldwide who have psoriasis, according to Celgene. The drug, also known as apremilast, is an oral medication while commonly used treatments are given by injection, including AbbVie Inc.’s Humira and Enbrel, from Amgen Inc. and Pfizer Inc. Humira generated $10.7 billion in 2013 while Amgen and Pfizer reported $8.32 billion in Enbrel sales. Otezla may produce $1.1 billion in sales by 2017, according to analysts’ estimates compiled by Bloomberg.

          Elsewhere, the FDA approved a drug, Impavido, to treat the tropical disease leishmaniasis, which is caused by a parasite transmitted to humans through fly bites. The drug, also known as miltefosine, is already approved for sale in Europe, the Indian subcontinent and Central and South America. Leishmaniasis occurs primarily in people who live in the tropics and subtropics. Most U.S. patients acquire the disease while traveling overseas. Impavido, made by Canada’s Paladin Labs Inc. (Montreal), is an oral medicine approved to treat the three main types of leishmaniasis: visceral, which affects internal organs; cutaneous, which affects the skin; and mucosal, which affects the nose and throat. This is the first drug approved by the FDA to treat cutaneous or mucosal leishmaniasis.

          Staar Surgical Co. (Monrovia CA) said an independent advisory panel to the FDA recommended marketing approval for its implantable lens, bringing it closer to a long-awaited U.S. launch and sending the company’s shares up 8% over the week to $16.61. The lens--Visian Toric implantable lens--can correct both nearsightedness and blurry vision associated with astigmatism. Analysts at Canaccord Genuity said they expect regulatory approval for the lens in the second half of 2014, adding that “the positive FDA panel is the first of several important milestones on the horizon for Staar.” Staar Surgical sought U.S. marketing approval for the lens in April 2006 but had to wait as the agency raised concerns about the integrity of the submitted data. The agency later placed on hold the company’s application for a two-year period starting 2007. The regulator removed the hold in 2009 but added questions related to the patient data.

          And Biogen Idec Inc. (Weston MA) said the FDA extended the review process for the company’s multiple sclerosis drug by three months to evaluate the application. Biogen, which was expecting to launch the drug, Plegridy, by mid-2014, said the FDA did not ask for additional studies. Plegridy, is an injectable drug designed to reduce the dosing schedule of standard interferon drugs such as Biogen’s own Avonex, which are typically dosed at least once a week. Interferon is hard to tolerate as it leads to flu-like symptoms, prompting patients to delay or discontinue treatment. Analysts say the market for such interferon-based treatments will shrink over the next decade as newer generation products enter the fray.

MEDICAL STOCK SPOTLIGHT -- IsoRay Inc. (Nasdaq) led advancing issues, more than doubling over the week to $2.42 on news of a breakthrough in tumor treatment. The patient--a 12 year old boy in North Carolina--had been diagnosed with a recurrent metastatic Wilms tumor in his left chest. In a press release from Richland, WA-based IsoRay, Dr. Anthony Crimaldi, the doctor who treated him, said: “I worked closely with IsoRay to design a custom mesh containing Cesium-131 sources and we were able to place the mesh at the time of surgery so as not to expose critical organs to high doses of radiation (lung, spinal cord, and aorta). Post-treatment dose calculations were performed confirming the delivery of dose to the resection bed and sparing of the critical structures. The patient recovered normally and has been discharged home.”

          Elsewhere, Endocyte Inc. (Nasdaq), a biotechnology company with no marketed products, doubled to $28.15 after its experimental medicine slowed the progression of lung cancer in a study. The drug, vintafolide, also won the backing of a European Union panel to treat ovarian cancer along with an imaging agent that will help the therapy target the patients who will respond best, the West Lafayette, IN-based company said. The trial results in non-small cell lung cancer are key because that study involves a larger patient population, Adnan Butt, an analyst at RBC Capital Markets in San Francisco, said. The mid-stage study showed vintafolide combined with chemotherapy reduced the risk of patients’ lung cancer worsening or of death by 25% compared with chemotherapy alone.

          And Pernix Therapeutics Holdings Inc. (Nasdaq) surged $2.44, or 70%, to $5.93 after reporting fourth-quarter EPS of ($0.15), $0.05 worse than analysts’ estimates of ($0.10). Net sales increased by 31% to $23.9 million, versus the consensus estimate of $23.82 million. The Houston, TX-based company markets a portfolio of branded products, including: Cedax, an antibiotic for middle ear infections, and a number of treatments for cough and cold conditions including Zutripro, Rezira and Vituz. The company also markets Silenor, a non-narcotic product for the treatment of insomnia and Khedezla for major depressive disorder.

          But Agenus Inc. (Nasdaq) tumbled 16% to $3.64 after announcing that GlaxoSmithKline’s experimental product didn’t work in a lung cancer study, the second time the medicine failed an advanced test against cancer. The therapy known as MAGE-A3 didn’t help patients with non-small cell lung cancer live longer without the disease recurring. Glaxo plans to continue to study the treatment in a smaller group of patients who may respond better to the drug based on their genetic makeup. The treatment, which contains Lexington, MA-based Agenus’s Stimulon adjuvant, is an immunotherapy designed to stimulate the immune system to recognize and attack cancer cells.

IPO SECTOR -- Included among recent SEC filings for initial public offerings, Signal Genetics LLC (New York) registered up to 2.27 million shares of its common stock at a price to the public between $10-$12 per share. The company plans to list on the Nasdaq Market under the symbol “SGNL.” The offering is being made via Aegis Capital Corp. Signal Genetics is an emerging commercial stage, molecular diagnostic company focused on providing innovative diagnostic services that help physicians make better-informed decisions concerning the care of their patients suffering from cancer. The company’s mission is to develop, validate and deliver innovative diagnostic services that enable better patient-care decisions. The company says it was founded in January 2010 and became the exclusive licensee in its field to the research on multiple myeloma performed at the University of Arkansas for Medical Sciences, in April 2010.

March 17, 2014 ...

MORE AMERICANS BUY INSURANCE UNDER HEALTHCARE LAW -- President Barack Obama, aiming to assuage concerns about the viability of his signature healthcare law, said on Friday enough people have enrolled to make its insurance marketplaces stable. “Well, at this point, enough people are signing up that the Affordable Care Act is going to work,” Obama said in an interview with the medical website WebMD. “The insurance companies will continue to offer these plans.” The Obama administration is mounting an enrollment drive aimed at adults aged 18 to 34, whose participation in the marketplaces is vital to the success of the Patient Protection and Affordable Care Act. In his latest bid to persuade people to enroll before a March 31 deadline for 2014 coverage, Obama found himself on the defensive, noting for example that some enrollees might have to change doctors. “For the average person, many folks who don’t have health insurance initially, they’re going to have to make some choices. And they might end up having to switch doctors, in part because they’re saving money,” said Obama. That was a change from his assurance to Americans in 2009, when he was trying to get the law passed, that “if you like the doctor you have, you can keep your doctor.”

          The WebMD interview was part of Obama’s recent push to reach people beyond traditional media. Last Tuesday he made a direct appeal to the youthful audience of comedy website Funny or Die by appearing on its talk show parody, hosted by comedian Zach Galifianakis. The Obama administration is targeting younger Americans because they are cheaper to insure and can compensate for older policy holders who have been able to obtain affordable insurance due to the law, known as Obamacare. “The number of people who have signed up is already large enough that I’m confident the program will be stable,” Obama said. His administration said last Tuesday that 4.2 million people have signed up for private health insurance under the law and that total enrollment could surpass a forecast of 6 million by the end of March.

RIKEN APOLOGIZES FOR ERRORS IN TWO STEM-CELL STUDIES -- A prestigious Japanese research institute mired in controversy over two high-profile papers on stem cells apologized Friday, saying the work contained “serious errors.” Ryoji Noyori, a Nobel laureate and president of the government-funded Riken Center for Developmental Biology, appeared at the beginning of a packed, four-hour-long news conference in Tokyo and said the institute was examining whether to retract the papers, which had appeared to offer a revolutionary new approach to creating stem cells. Dr. Noyori repeatedly referred to Haruko Obokata, the 30-year-old lead author of the papers, as “immature” and “sloppy.” He said an investigation was continuing into the most serious allegations--in particular, the question of why three images in the papers were nearly identical to three images included in Dr. Obokata’s 2011 doctoral dissertation at Japan’s Waseda University. The stem-cell papers were published in late January in the journal Nature, which has said it is investigating the irregularities. The controversy has highlighted the race for improved methods of creating stem cells, long seen as a potential source of cures for heart disease, diabetes and other ailments. It has also pointed to apparent lax controls at one of Japan’s top scientific institutions.

          Dr. Obokata, who has avoided public comment since the allegations emerged, offered a defense on some points in an email to The Wall Street Journal. She said she was “very hurt” by the media hoopla surrounding the research and responded to suspicions of plagiarism in her dissertation. Portions of the dissertation posted online were almost identical to text posted on a U.S. National Institutes of Health website. “The doctoral dissertation that is currently making the rounds in the media is not the version that has passed (the university’s) screening but a rough draft,” Dr. Obokata wrote in the email. She said that version didn’t contain citations or corrections. A total of 14 Japanese and American researchers were involved in writing the two Nature papers. Riken said that as a general rule, a retraction couldn’t be made unless all the authors agreed. Charles Vacanti, another co-author and a tissue engineer at Harvard Medical School and Brigham and Women’s Hospital in Boston, has defended the paper, saying the questions raised didn’t affect the findings of the study.

TRACKING WASHINGTON -- There will be no delay in the penalty most Americans face under President Barack Obama’s healthcare reform law if they fail to obtain health coverage this year, U.S. Health and Human Services Secretary Kathleen Sebelius said last week. Sebelius also said there would be no postponement of this month’s deadline for enrolling in coverage through new private health insurance marketplaces or the Medicaid program for the poor. “No, sir,” was Sebelius’ categorical answer when asked about both prospects by Representative Kevin Brady of Texas at a hearing of the House of Representatives Ways and Means Committee. Sebelius rebuffed Republican claims that the Patient Protection and Affordable Care Act’s implementation was failing to attract enough enrollees. In response to Representative James Renacci, an Ohio Republican, Sebelius said the sign-up effort would be a success despite the botched October rollout that led the nonpartisan Congressional Budget Office to pare back its enrollment forecast from 7 million to 6 million people. ** Separately, insurers offering family policies to a person with an opposite-sex spouse must also sell to someone whose spouse is of the same sex, regardless of whether the marriage is recognized by their state government, the Department of Health and Human Services said Friday.

          In other news, the Obama administration said it would scrap much of a proposed plan to limit the types of antidepressants and other drugs that seniors can get through Medicare after a backlash from lawmakers and the health industry. In January, the Centers for Medicare and Medicaid Services proposed broad changes to the Medicare Part D prescription-drug program that covers medicines for about 39 million beneficiaries. Among the most contentious proposals was one to end the practice of covering essentially any type of antidepressant, antipsychotic or immunosuppressant prescription drug for consumers in the program. Medicare had said the plan was meant to save taxpayers money and simplify the program for seniors. In a letter sent to congressional lawmakers last week, Marilyn Tavenner, the Medicare agency administrator, said the drug-coverage provision and some other proposed changes to pharmacy networks and drug plans would be shelved for now. Ms. Tavenner said the agency would “engage in further stakeholder input before advancing some or all of the changes in future years.”

FDA/EMA ROUNDUP -- The Food and Drug Administration said it approved a nerve-stimulating headband as the first medical device to prevent migraine headaches. Agency officials said the device provides a new option for patients who cannot tolerate migraine medications. The Cefaly device is a battery-powered plastic band worn across the forehead. Using an adhesive electrode, the band emits a low electrical current to stimulate nerves associated with migraine pain. Users may feel a tingling sensation on the skin where the electrode is applied. The device is designed to be used no more than 20 minutes a day by patients 18 years and older. A 67-person study reviewed by the FDA showed patients using the device experienced fewer migraines per month than patients using a placebo device. The Cefaly headband did not completely eliminate migraine headaches or reduce the intensity of migraines that occurred. Cefaly is manufactured by STX-Med of Liege, Belgium.

          Elsewhere, the Pap test, a ritual for women that has been the mainstay of cervical cancer prevention for 60 years, may be about to play a less crucial role. A federal advisory committee recommended unanimously that a DNA test developed by Roche Holding AG (Basel CHE) be approved for use as a primary screening tool. “Has our Pap, as we know it, outlived its time?” Dr. Dorothy Rosenthal, a professor at Johns Hopkins University, testified to the committee, which advises the Food and Drug Administration. She said deaths from cervical cancer in the United States had stopped declining and that there would be “a tremendous gain” by moving to the new test. The Roche test detects the DNA of human papillomavirus, or HPV, which causes almost all cases of cervical cancer. Pap testing involves examining a cervical sample under the microscope looking for abnormalities. Until now HPV testing has been used mainly as a follow-up test when the Pap results were ambiguous, or used jointly with Pap testing. Last week’s 13-to-0 vote would allow Roche’s test to be used alone as the initial test for women 25 and older.

          The FDA has banned imports from a plant operated by Mumbai-based Sun Pharmaceutical Industries Ltd. amid widening scrutiny of Indian drugmakers that feed the $93 billion U.S. generics market. A Sun Pharma facility in Gujarat state was put on the FDA’s “red list” meaning products can be detained without physical examination, according to a posting on the FDA website. The curbs are another blow to India’s generics industry, which sells drugs and ingredients worldwide. In January, the FDA placed a ban on products from a plant run by Sun Pharma rival Ranbaxy Laboratories Ltd. (Gurgaon). “The FDA is definitely becoming more stringent--it will streamline this system,” said Surya Patra, an analyst at Phillip Securities Ltd. in Mumbai. “This plant is an old plant, and I don’t think that it is a technically very important plant for Sun.”

          And debate over a powerful new painkiller ratcheted up Thursday as the head of the Food and Drug Administration defended the drug’s approval and a West Virginia Senator responded with a bill to force it off the market. FDA Commissioner Dr. Margaret Hamburg told Senate lawmakers that the recently-launched Zohydro fills an “important and unique niche” for treating chronic pain. Her agency has been under fire for clearing the drug since December, amid concerns from lawmakers, addiction specialists and others that the drug will exacerbate the national epidemic of prescription drug abuse. Zohydro is the first single-ingredient hydrocodone drug ever cleared for U.S. patients. Each extended-release pill contains up to five times more of the narcotic than previously available combination pills, such as Vicodin. Pharmacies began dispensing the drug last week. Hours after Hamburg’s appearance on Capitol Hill, Senator Joe Manchin (D-WV) introduced a bill that would force the FDA to withdraw the drug and prohibit the approval of any similar medications that don’t have tamper-resistant design features.

MEDICAL STOCK SPOTLIGHT -- Castlight Health Inc. (NYSE) led advancing issues, more than doubling over the week after its debut on the New York Stock Exchange. The online healthcare software company raised $177.6 million in an initial public offering priced at $16 per share. Shares closed the week up 248% at $39.64. The San Francisco-based company sells cloud-based software to large companies that provide it to their workers. Castlight allows the workers to search and compare doctors, hospitals and procedures based on cost and the quality of care. Castlight sold 11.1 million share of its Class B common stock in the IPO. The $16 per share price was above its previously announced range of $13 to $15 per share. The stock is trading under the ticker symbol “CSLT.”

          Elsewhere, Oxigene Inc. (Nasdaq) soared 90% to $3.99 after the biopharmaceutical company reported positive Phase 2 clinical trial results for an ovarian cancer treatment. The company has a pipeline with various treatments under clinical studies that each aim to combine a compound known as zybrestat with other therapies to potentially treat ovarian and certain thyroid cancers. The South San Francisco-based company said its study of cancer treatment Avastin with the combination of zybrestat met its primary endpoint of a “statistically significant increase in progression-free survival” when compared with the use of Avastin alone. The patients will continue to be followed for overall survival.

          And La Jolla Pharmaceutical Co. (Nasdaq) rocketed 50% to $14.67 after saying its lead experimental drug to treat chronic kidney disease met the main goal of improving kidney function in a mid-stage study. The San Diego, CA-based company said the trial tested two doses of the drug, codenamed GCS-100, and the lower dose showed an increase in the rate of blood filtering through the kidneys, compared with a placebo. La Jolla said the lower dose also reduced the levels galectin-3, a protein associated with tissue scarring. The higher dose did not show a statistically significant increase in the rate of blood filtering or reduction of the levels of protein, compared with a placebo.

          But Geron Corp. (Nasdaq), a biotechnology company with no marketed products, plunged 60% to $1.83--the most ever--after U.S. regulators halted development of its only experimental drug, imetelstat for blood disorders, because of the possibility of liver damage. It was the biggest decline since the company first sold shares to the public in 1996. Prior to last week, the shares of the Menlo Park, CA-based company had tripled in the last 12 months. The U.S. Food and Drug Administration told Geron to place a clinical hold on its mid-stage trials of imetelstat because of low-grade liver function test abnormalities. The regulator cited the potential risk of chronic liver injury following long-term exposure to the drug, Geron said in a statement.

IPO SECTOR -- Last week’s initial public offering for Achaogen Inc. (S. San Francisco) opened for trading at $12.85 after pricing 6 million shares of its common stock at a price to the public of $12.00 per share. Shares closed the week up 35% at $16.16. Credit Suisse Securities and Cowen & Co. are acting as joint book-running managers for the offering. Achaogen is a clinical-stage biopharmaceutical company committed to the discovery, development, and commercialization of novel antibacterials to treat MDR gram-negative infections. The company is developing plazomicin, its lead product candidate, for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE). Achaogen says through the Special Protocol Assessment procedure, the U.S. Food and Drug Administration “has agreed that the design and planned analyses of its single pivotal Phase 3 trial adequately address objectives in support of a New Drug Application.”

March 10, 2014 ...

CONSUMERS ALLOWED TO KEEP HEALTH PLANS FOR TWO MORE YEARS -- With midterm congressional elections bearing down, the government changed its regulation of Obamacare last week to give consumers and states more flexibility to decide on their health plans, insurers more time to sign up customers and taxpayers a chance to avoid more costs. The changes, announced by the U.S. Health and Human Services Department, will smooth enactment of the Patient Protection and Affordable Care Act, administration officials said. Republicans immediately accused President Barack Obama of making them to help congressional Democrats survive an unpopular law. Americans with health coverage that predates Obamacare can stay on their plans for two more years, insurers will have an extra month to enroll customers next winter and states will get more time to decide whether to manage the law themselves, officials said. Also, a program aimed at covering financial losses for insurers will be adjusted to help ensure it doesn’t cost taxpayers, the Obama administration said. “These policies implement the healthcare law in a common-sense way by continuing to smooth the transition for consumers and stakeholders and fixing problems wherever the law provides flexibility,” Kathleen Sebelius, the U.S. health secretary, said in a statement.

          Republicans have made clear they will try to make the troubled roll-out of the Affordable Care Act the defining issue of the November congressional elections, focusing on canceled plans, delayed features, the administration’s accommodations for insurers and employers and computer errors that prevented many Americans from signing up at the outset last October. “Each and every delay of Obamacare is an admission that the Democrats’ signature law is hurting Americans and an obvious attempt to try to save the jobs of vulnerable congressional Democrats come November,” Senator John Thune, a South Dakota Republican, said in a statement. The Obama administration said it developed the policies “in close consultation with members of Congress” including 13 Democratic lawmakers specifically named in the HHS statement. Among them were four U.S. senators who are running for re-election this year, including Senator Mary Landrieu of Louisiana, a top target for Republicans, and Representative Gary Peters, who is running for an open Senate seat in Michigan.

ALZHEIMER'S DEATHS MUCH MORE COMMON THAN REALIZED: STUDY -- Alzheimer’s, known mostly for the memory loss and confusion it causes, may be the nation’s third-most deadly killer, according to a study that suggests many more Americans die from the disease than is known. As many as a half-million people in the U.S. are killed by Alzheimer’s each year, or about five times more than the 83,494 now cited on death certificates, the research found. Many people fail to understand the destruction from Alzheimer’s disease, which is fatal when it impairs parts of the brain that control basic functions like breathing and swallowing. Heart disease and cancer remain the top U.S. killers. Alzheimer’s, however, would replace respiratory disease as No. 3 based on the study results, up from No. 6. The findings should increase urgency to spend more on research on an illness that’s becoming more common as the population ages, said Bryan James, the lead author and an epidemiologist at Rush University Medical Center in Chicago. It already costs more than $200 billion a year to care for patients with the disease, he said. “We think Alzheimer’s disease has been getting short shrift because it hasn’t been considered a major killer, when it’s really one of the top three in the country,” James said.

          The findings, published in the journal Neurology, also underscore the difficulty of identifying the ailments that cause people to die based on death certificates, which typically list only the immediate reason for the death, such as the heart stopping, James said. Some doctors may not know the patient’s history and others overlook the dementia. “Everyone knows Alzheimer’s disease is under-reported on death certificates,” he said. “There may be a long chain of events between being diagnosed with Alzheimer’s disease and dying years later of pneumonia.” James and his colleagues tracked two groups of people who enrolled in long-term studies and agreed to donate their brains after death. They noted who developed Alzheimer’s and who didn’t, and then compared death rates among the two groups. None of the 2,566 volunteers ages 65 and older had dementia at the start. After an average of eight years, 559 patients developed Alzheimer’s and 1,090 died. Patients with dementia were three to four times more likely to die than those who weren’t diagnosed with Alzheimer’s, and the median time from diagnosis to death was less than four years.

TRACKING WASHINGTON -- Gary Cohen, the top U.S. health insurance regulator accused by congressional Republicans of misleading them before the troubled start of the Obamacare insurance website, will resign. Cohen will step down as director of the Center for Consumer Information and Insurance Oversight at the end of the month, when the first enrollment period for the healthcare law concludes, Marilyn Tavenner, the administrator of the Centers for Medicare and Medicaid Services and Cohen’s boss, said last week. Cohen’s office is part of Tavenner’s agency. Cohen and Tavenner said his departure is voluntary. His agency devised the regulations for the Patient Protection and Affordable Care Act’s insurance exchanges, though it wasn’t responsible for building healthcare.gov, the federal exchange that failed in October, leaving millions of Americans unable to enroll in health plans. Cohen’s office also monitors insurers’ premiums and enforces consumer protections under the health law. “Under his leadership, CCIIO established the rules which have made the promise of the Affordable Care Act a reality for millions of Americans who now can have the security of health coverage without regard to their previous health condition, and can know that their insurance will cover all the most common services they will need,” Tavenner said.

          In other news, sounding an alarm about the growing threat of superbugs, the Obama administration is proposing a jump in spending to fight antibiotic-resistant germs in hospitals. Infections that can withstand some of the best antibiotics already are killing more than 23,000 Americans a year, and some bacteria are becoming resistant to drugs of last resort, according to the Centers for Disease Control and Prevention. In last week’s budget, the CDC is seeking $30 million to open specialized laboratories in five parts of the country to help local hospitals more quickly diagnose and combat drug-resistant infections, said CDC director Dr. Tom Frieden. The labs would offer rapid mapping of all of the bug’s genes to better spot outbreaks, and the program would work to help hospitals and communities tackle the problem, he said. If funded at $30 million annually for five years, the CDC estimated the program could cut in half the rate of one especially dangerous intestinal germ called Clostridium difficile, or “C-diff,” and thus prevent at least 20,000 deaths, 168,000 hospitalizations and over $1 billion in healthcare costs. That’s in addition to fighting other bacterial threats.

FDA/EMA ROUNDUP -- Endo Pharmaceuticals Plc (Dublin IRL) announced that it received U.S. approval for its long-acting testosterone injection Aveed, which joins a crowded field of hormone-boosting drugs aimed at aging American men. Endo said the Food and Drug Administration approved Aveed for men with low testosterone, a condition sometimes associated with fatigue, weight gain and low libido. Endo’s injection is to be taken once every 10 weeks, versus weekly or biweekly dosing for currently available products. The company said it expects to launch the drug this month. Endo already markets Fortesta, a prescription gel form of testosterone, the hormone that begins to decline after age 40. The FDA approval comes amid growing scrutiny of popular testosterone drugs. In January the FDA said it was reviewing the safety of the drugs after a study of 45,000 patients suggested testosterone therapy could double the risk of heart attack in men 65 and older.

          Elsewhere, Eli Lilly & Co. (Indianapolis IN) and Boehringer-Ingelheim GmbH (Ingelheim DEU) said the FDA didn’t approve their diabetes treatment empagliflozin because of concerns about a facility where the drug will be made. The companies said the FDA isn’t asking for new studies of empagliflozin. Empagliflozin is a tablet that is intended to be taken once per day as a treatment for type 2 diabetes. It is designed to reduce a patient’s blood sugar levels by blocking glucose reabsorption in the kidneys and removing excess glucose through urine. Unlike other diabetes treatments, it does not depend on a patient’s insulin levels to be effective. Shares of Eli Lilly closed the week off $1.00, or 2%, at $58.59.

          Regeneron Pharmaceuticals Inc. (Tarrytown NY) and Sanofi SA (Paris) must assess how their experimental cholesterol drug affects brain function after U.S. regulators learned of adverse events associated with this new class of medicines. The companies don’t know how the FDA learned of the side effect, Sanofi said Friday in a regulatory filing. Sanofi, Regeneron and Amgen Inc. are among companies in late-stage testing of the therapies, which are designed to inhibit the PCSK9 protein associated with high levels of LDL, or “bad” cholesterol.

          Anoro, a combination drug for chronic obstructive pulmonary disease (COPD) developed by GlaxoSmithKline Plc (London) and Theravance Inc. (S. San Francisco), has received the green light from European regulators, the companies said on Thursday. The drug is a combination of UMEC, a long-acting muscarinic antagonist, and VI, a long-acting beta agonist, in a single inhaler. It is expected to generate sales of more than $2 billion a year by 2018, according to analysts polled by Thomson Reuters. Recommendations for marketing approval from the European Medicines Agency are usually followed by the granting of full marketing authorization by the European Commission. The companies said they expected that decision during the second quarter of 2014. The drug, in a different strength formulation, was approved by regulators in the United States and Canada in December 2013.

          Genetic experts cautioned the FDA that it could take decades to confirm the safety of an experimental technique, meant to prevent children from inheriting debilitating diseases that would create babies from the DNA of three people. The agency heard from supporters and opponents of the controversial technique at a meeting last week, as the agency considers whether to authorize testing in women who have defective genes linked to blindness, organ failure and many other inheritable diseases. Preliminary testing in animals suggests that combining the DNA of two parents with that of a third female donor could allow prospective mothers to give birth to healthy children. But even experts in the field warned that researchers would have to follow the offspring for many years to see if they are truly healthy. “The end of the experiment will come decades later,” said Michigan State University’s Keith Latham, in a presentation before the FDA and its advisory panel. “It’s going to take us that long to figure out the health of the progeny produced from these procedures.” The FDA explicitly framed its public meeting as a “technical” discussion on the feasibility of safely testing the artificial fertilization technique in humans.

MEDICAL STOCK SPOTLIGHT -- Genocea Biosciences Inc. (Nasdaq) led advancing issues, soaring $7.78, or 53% over the week, to $22.45--a 52-week high. Analysts at Needham & Company assumed coverage on the Cambridge, MA-based company’s shares, setting a “buy” rating and a $22.00 price target on the stock. Several other analysts have also recently commented on the stock. Analysts at Stifel Nicolaus initiated coverage on shares of Genocea setting a “buy” rating and a $25.00 price target on the stock. Separately, analysts at Cowen & Company initiated coverage on shares setting an “outperform” rating and a $40.00 price target on the stock. Finally, analysts at Citigroup Inc. initiated coverage on shares setting a “buy” rating on the stock. Five investment analysts have rated the stock with a “buy” rating. The stock has a consensus rating of “buy” and an average price target of $29.00. Genocea is a clinical-stage company that develops T-cell vaccines.

          Elsewhere, analysts at Leerink Swann raised their price target on shares of Agios Pharmaceuticals Inc. (Nasdaq) from $38.00 to $51.00, and the stock rocketed $14.19, or 45%, to $45.45. Cambridge, MA-based Agios announced its earnings results last Thursday. The company reported ($0.40) earnings per share for the quarter, missing analysts’ consensus estimate of ($0.34) by $0.06. The company had revenue of $6.70 million for the quarter, compared to the consensus estimate of $6.19 million. On average, analysts predict that Agios will post $-1.04 earnings per share for the current fiscal year. Agios is a biopharmaceutical company. The company says it intends “to apply its deep understanding of metabolism, coupled with (its) ability to create medicines that can inhibit or activate metabolic enzymes, to fundamentally change the way cancer and inborn errors of metabolism are treated.”

          And Fate Therapeutics Inc. (Nasdaq) leaped $2.12, or 30%, to $9.09 after announcing the publication of an article in the journal Stem Cell Reports demonstrating high-throughput derivation of human induced pluripotent stem cells, or hiPSCs, that exhibit characteristics necessary for therapeutic application. The publication describes the use of the company’s hiPSC platform, consisting of stage-specific cell culture systems, to enable rapid, parallel derivation of hiPSC clones and their subsequent expansion as transgene-free, single cells in culture. The San Diego, CA-based company said its proprietary combinations of small molecule modulators, which include ROCK, GSK3 and MEK pathway inhibitors, used in the culture systems “were found to be critical in promoting characteristics of the ground state of pluripotency including pluripotent culture stability, homogeneity and survival.”

          But XOMA Inc. (Nasdaq) plunged $2.03, or 24%, to $6.33 after being downgraded by TheStreet Ratings from “hold” to “sell.” The Berkeley, CA-based company’s weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share. Selling pressure was exacerbated after XOMA announced that it would not proceed with late-stage studies of gevokizumab as an arthritis treatment, after two mid-stage studies failed to show a significant benefit in patients. Gevokizumab is the company’s lead drug candidate. But that doesn’t mean that gevokizumab is finished. XOMA is still testing the drug as a potential treatment for a variety of other indications, including acne, autoimmune ear disease, and non-infective scleritus.

IPO SECTOR -- Included among initial public offerings expected this week, Castlight Health Inc. (San Francisco) is looking to raise about $111 million in its IPO, according to an updated SEC filing. The company is offering 11.1 million shares in the IPO and its underwriters have the option to purchase an additional 1.65 million shares. The stock will be listed on the New York Stock Exchange under the symbol “CSLT.” Goldman Sachs and Morgan Stanley are lead underwriters. Castlight Health works with health plans and other organizations to help self-insured employers offer their employees more transparent healthcare price and quality data in the form of online consumer tools and via mobile apps. Over the past two years Castlight has inked deals with more than 95 customers, primarily large self-insured employers that include 24 Fortune 500 companies.

March 3, 2014 ...

HUMANA LEADS INSURERS AS PROPOSED MEDICARE CUTS LESS THAN FEARED -- Humana Inc. (Louisville) rose to its highest value in more than 33 years last week, leading insurance stocks higher after proposed government cuts to the Medicare Advantage program were less than previously expected. Humana, the second-largest Medicare Advantage insurer, jumped 10% over the week to close at $112.49 in New York, its highest value since at least July 1980, according to data compiled by Bloomberg. Health insurers who run Medicare Advantage, the private version of the government’s managed-care program for the elderly and disabled, face a base payment cut of about 3.55% next year, the U.S. government said on Feb. 21. Humana estimated the final reduction will be 3.5% to 4%, a smaller decline than the company’s previous estimate of 6% to 7%. “Although we still believe rate pressure of this magnitude will present a significant challenge to the company and industry, it is certainly much better” than previous estimates, said Chris Rigg, a New York-based analyst at Susquehanna International Group LLP. Rigg predicted a final rate cut of 3.5% to 4.5%. UnitedHealth Group Inc. (Minnetonka MN), the largest provider of Medicare Advantage plans, closed the week up 5% at $77.29. The proposed cuts are subject to negotiations with the industry and aren’t expected to become final until April 7.

          Before the announcement, insurers said their total payment reduction for 2015 might be as much as 7%. Analysts’ estimates last week for the final rate cut ranged from 3.5% to 7.5%. UnitedHealth CEO Stephen Hemsley had estimated rate cuts of as much as 7%, and had said reductions of that size would be “extraordinarily disruptive.” About 15.9 million people, or about 30% of Medicare beneficiaries, are enrolled in Advantage plans this year, according to February data from the government. These consumers are opting for managed care with benefits including lower out-of-pocket costs over the traditional government-run Medicare program for the elderly and disabled.

INTERMUNE MORE THAN DOUBLES ON LUNG-DRUG STUDY -- A drug being developed to treat a fatal scarring of the lungs has succeeded in an important clinical trial and could become the first medicine to be approved for that disease, known as idiopathic pulmonary fibrosis. The drug, pirfenidone, slowed the decline in lung function in patients with the disease, according to an announcement last week by the drug’s developer, InterMune Inc. (Brisbane CA). The company said it would apply to the Food and Drug Administration for approval of the drug early in the third quarter of this year. The results “met or exceeded my expectations on every metric,” Daniel G. Welch, the chief executive of InterMune, told analysts. The price of InterMune shares rose 218% over the week, closing at $30.04. Dr. Daniel M. Rose, chief executive of the Pulmonary Fibrosis Foundation, a patient advocacy group, said the news was encouraging. “This disease is deadlier than 60% to 70% of malignancies,” he said. Pirfenidone “does not cure the disease, it does not work in every patient, but there is a cohort of patients who do receive a benefit.”

          Idiopathic pulmonary fibrosis, which has no known cause, affects about 70,000 Americans, according to InterMune, though the advocacy group estimates the number could be as high as 200,000. The disease kills many people within two to five years as progressive scarring of the lungs makes it impossible to breathe. Steroids and some other drugs are sometimes used off-label to treat it. The FDA declined to approve pirfenidone in 2010 because the drug worked in one clinical trial but not in another, nearly identical study. The agency requested that InterMune run another trial. That trial’s results were announced last week. Regulators in Europe and Canada, however, did approve the drug based on the earlier trials, and it is sold in those places under the name Esbriet. It has also been sold in Japan since 2008 by Shionogi Inc. under the name Pirespa.

TRACKING WASHINGTON -- The Obama administration’s top Medicare official last week defended proposed changes to the popular Part D drug benefits program for the elderly and disabled that are fiercely opposed by a broad network of drugmakers, insurers, healthcare providers and patient advocates. The Centers for Medicare and Medicaid Services (CMS) proposed a new rule in January that would fundamentally alter the program’s private insurance coverage for certain drugs, change the pharmacy networks that some plans cover and limit the number of policies available to beneficiaries in any given region. That has stirred concern about the potential for turmoil that critics fear could leave some beneficiaries without coverage for the drugs they need and with fewer choices overall. But Medicare chief Jonathan Blum said in written testimony to a congressional panel that the 2015 policy changes are needed to head off higher costs to the program from expensive new biologic therapies and rising subsidies for insurers and lower-income consumers. “In order for Part D to remain successful, we have to celebrate its successes and address its vulnerabilities,” Blum told the House Energy and Commerce Health Subcommittee.

          CMS, which is part of the U.S. Department of Health and Human Services, is under mounting pressure to withdraw the proposed rule. More than 200 companies and groups called for the rule’s withdrawal “in the strongest terms” last week, saying in a letter to CMS Administrator Marilyn Tavenner that the changes were unnecessary for a program that has proved effective and popular up to now. The proposals have also become fodder for this year’s congressional election campaign, with Republicans warning that the changes would jeopardize the entire Part D program. Some Democrats have also expressed misgivings. Part D, a $70 billion program launched a decade ago under former President George W. Bush, provides private insurance for prescription drugs to nearly 40 million elderly and disabled Medicare beneficiaries. Over 10 years, its costs of $346 billion have been 45% lower than initially projected. Ninety-five percent of Part D beneficiaries say they are satisfied with the program, and government officials note that it has saved $8.9 billion on prescription drug costs for Medicare recipients.

FDA/EMA ROUNDUP -- Anika Therapeutics Inc. (Bedford MA) said the U.S. Food and Drug Administration approved its drug to treat pain and improve joint mobility in patients with osteoarthritis of the knee, more than four years after it first filed for approval. The company’s shares closed the week up 14% at $39.37 after the approval for Monovisc, which is already sold in Canada, the United Kingdom and countries in the Middle East, Europe and Asia. “Management did a tremendous job in pushing forward through multiple rejections at the FDA,” Summer Street Research analyst Mark Landy said. “We believe this product will be competitive in a market that is becoming more focused on single-shot injections.” Sanofi SA (Paris) and Zimmer Holdings Inc. (Warsaw IN) also market single-injection treatments for osteoarthritis of the knee. The single-injection Monovisc could be an advantage over Anika’s other knee osteoarthritis pain drug, Orthovisc, which is administered via three injections.

          Elsewhere, Bristol-Myers Squibb Co. (New York) said the FDA approved its drug to treat rare and potentially fatal disorders involving loss of body fat. The drug has been approved as a replacement therapy to treat complications caused by leptin hormone deficiency in patients with congenital or acquired generalized lipodystrophy. Generalized lipodystrophy patients experience a loss of fat tissue, especially under the skin, leading to low levels of leptin. Leptin deficiency causes serious imbalance in the body, leading to fat accumulation in muscles and organs such as the liver. The deficiency can lead to diabetes, pancreatitis and fatty liver disease. The drug, Myalept (metreleptin), is a form of leptin meant to reduce accumulation of fat in organs to better control blood sugar and high levels of triglycerides--a type of fat in the bloodstream associated with increased risk of heart disease.

          Teva Pharmaceutical Industries Ltd. (Petach Tikva ISR) won the backing of a European Medicines Agency committee for a new version of lung therapy Symbicort, paving the way for competition to one of AstraZeneca Plc’s (London) best-selling drugs. The generic formulation of budesonide and formoterol, to be marketed as DuoResp Spiromax and BiResp Spiromax, should be approved for the treatment of asthma and chronic obstructive pulmonary disease, the London-based EMA’s Committee for Medicinal Products for Human Use, or CHMP, said in a statement. The decision increases pressure on Symbicort, which generated $3.48 billion in sales for AstraZeneca last year.

          Anoro, a combination drug for chronic obstructive pulmonary disease (COPD) developed by GlaxoSmithKline Plc (London) and Theravance Inc. (S. San Francisco), has received the green light from European regulators, the companies said on Thursday. The drug is a combination of UMEC, a long-acting muscarinic antagonist, and VI, a long-acting beta agonist, in a single inhaler. It is expected to generate sales of more than $2 billion a year by 2018, according to analysts polled by Thomson Reuters. Recommendations for marketing approval from the European Medicines Agency are usually followed by the granting of full marketing authorization by the European Commission. The companies said they expected that decision during the second quarter of 2014. The drug, in a different strength formulation, was approved by regulators in the United States and Canada in December 2013.

          Genetic experts cautioned the FDA that it could take decades to confirm the safety of an experimental technique, meant to prevent children from inheriting debilitating diseases that would create babies from the DNA of three people. The agency heard from supporters and opponents of the controversial technique at a meeting last week, as the agency considers whether to authorize testing in women who have defective genes linked to blindness, organ failure and many other inheritable diseases. Preliminary testing in animals suggests that combining the DNA of two parents with that of a third female donor could allow prospective mothers to give birth to healthy children. But even experts in the field warned that researchers would have to follow the offspring for many years to see if they are truly healthy. “The end of the experiment will come decades later,” said Michigan State University’s Keith Latham, in a presentation before the FDA and its advisory panel. “It’s going to take us that long to figure out the health of the progeny produced from these procedures.” The FDA explicitly framed its public meeting as a “technical” discussion on the feasibility of safely testing the artificial fertilization technique in humans.

MEDICAL STOCK SPOTLIGHT -- Celladon Corp. (Nasdaq) led advancing issues, soaring $3.73, or 49% over the week, to $11.30. Laboratoires Servier wants to explore San Diego-based Celladon’s technology to see if there are some small molecule applications to diabetes and other metabolic conditions that warrant clinical development. The privately owned French biotech grabbed an option on the “Serca” technology for an undisclosed price, tying it to an unspecified package of potential upfronts and milestones if they can get through a series of in vitro and in vivo tests. The newly public Celladon is best known for its late-stage heart drug Mydicar, a gene therapy which uses a benign virus to insert the Serca2a gene into heart cells. The treatment is designed to spur an ailing heart to pump up blood flow in patients. In this new pact with Servier they’ll be working on Serca2b, an enzyme that directs calcium in the endoplasmic reticulum and is found lacking in stressed cells, which may play a role in the development of heart disease, diabetes and neurodegenerative diseases.

          Elsewhere, Cara Therapeutics Inc. (Nasdaq) surged $3.88, or 26%, to $18.88. Investment analysts at Needham & Company assumed coverage on shares of Cara Therapeutics, TheFlyOnTheWall.com reports. Needham set a “buy” rating and a $27.00 price target on the stock. Needham’s price target suggests a potential upside of 74.76% from the stock’s previous close. Shelton, CT-based Cara Therapeutics has a 52-week low of $14.20 and a 52-week high of $15.87. Analysts at Stifel Nicolaus initiated coverage and set a “buy” rating and a $21.00 price target on Cara’s stock. Separately, analysts at Canaccord Genuity initiated coverage and set a “buy” rating and a $25.00 price target on the stock. Cara Therapeutics is a clinical-stage biopharmaceutical company. The company is focused on developing and commercializing new chemical agents designed to alleviate pain by selectively targeting kappa opioid receptors.

          And vaccine developer Genocea Biosciences Inc. (Nasdaq) gained $2.62, or 22%, to $14.67. The company priced an initial public offering of 5.5 million shares at $12 a share last week, raising $60 million in an offering that was more modest than those of many biotechs that have gone public in recent months. Cambridge, MA-based Genocea’s IPO priced at the lower end of an earlier specified $12 to $14 a share range. Genocea is developing a new class of human vaccines based on a platform for the rapid discovery of antigens that induce T cell immunity. The company says its platform dramatically reduces the time to discover vaccine candidates and employs a proprietary, high-throughput approach that mimics the natural immune response in the laboratory.

          But Questcor Pharmaceuticals Inc. (Nasdaq) tumbled $15.76, or 21%, to $60.75 after a research report said that the Anaheim, CA-based company’s multiple sclerosis treatment didn’t contain any of its active ingredient. Citron Research, a stock commentary website, said that two batches of Questcor’s top-selling H.P. Acthar gel, marketed for multiple sclerosis and other difficult-to-treat autoimmune and inflammatory disorders, were tested at two laboratories and found to have “little to no” corticotropin, the active ingredient, and warned that the medicine faced a “severe risk of being pulled off the market by the FDA.” Citron declined to name the labs involved because of continuing testing, and said that more batches of Acthar were being analyzed. It submitted a report to the Food and Drug Administration, which said the lab findings “raise important regulatory concerns about the identity, purity and stability of Questcor’s drug product that warrant an FDA investigation.”

IPO SECTOR -- Included among recent SEC filings for initial public offerings, health site operator Everyday Health Inc. (New York) registered up to $115 million worth of common stock. The company’s content and apps deal with losing weight, exercise, pregnancy, diet, nutrition, and medical conditions. It also has news and tools for healthcare professionals. It owns websites such as EverydayHealth.com and My-Calorie-Counter.com and has licensing agreements with brands including South Beach Diet. Everyday Health did not say how many shares it expects to sell or when it intends to complete its IPO. In forms filed with the SEC the company disclosed a loss of $18.2 million in 2013, compared with $22.5 million in 2012. Its revenue grew 13% to $155.9 million. If Everyday Health completes the IPO, its shares will trade New York Stock Exchange under the symbol “EVDY.” The offering is being led by J.P. Morgan, Credit Suisse and Citigroup.

February 24, 2014 ...

ACTAVIS TO BUY FOREST LABS FOR $25 BILLION -- Actavis Plc (Dublin IRL) last week said it had reached an agreement to acquire Forest Laboratories Inc. (New York) for $25 billion in cash and stock in a deal that would create a huge pharmaceuticals company with a trove of both branded and generic drugs. The deal marks the biggest acquisition yet for one of the pharmaceutical industry’s most aggressive buyers, and a major win for Carl C. Icahn, who had been agitating for change at Forest. Actavis, based in Dublin but operating from Parsippany, NJ, has been an aggressive acquirer of other drug companies. The latest acquisition--its largest by far--will be its seventh since January 2013, according to Standard & Poor’s Capital IQ (New York). The combined revenues of the two fast-growing specialty pharmaceutical companies are expected to be more than $15 billion in 2015, the companies said. Under terms of the deal, Forest shareholders will receive $26.04 in cash and 0.3306 of a share of Actavis or $89.48. That represents a premium of 25% to Forest’s closing stock prior to news of the deal. The stock portion of the payment will be tax-free for Actavis.

          Actavis has historically been focused on generic drugs, but in recent years has expanded into selling more branded pharmaceuticals. Forest’s best known drugs are Lexapro and Namenda. This is the first major deal Actavis has announced since it completed its takeover of Warner Chilcott last year for about $5 billion. That deal expanded Actavis’s presence in specialty pharmaceuticals, and also allowed it to complete a so-called tax inversion, relocating its headquarters to Ireland and escaping the U.S. tax system. One big advantage of tax inversions, besides a lower statutory tax rate, is that deals can become more affordable. Once inverted, companies can more easily use overseas cash to pay for a deal, and the earnings from any acquired company are also taxed at the company’s new, lower rate. The deal is a huge win for Mr. Icahn, who led an unsuccessful proxy fight at Forest in 2011 before gaining a board seat and has advocated for changes at the drugmaker. He owns more than 11% of Forest, according to Dec. 31 filings. Forest shares closed the week up $25.49, or 36%, at $96.88. Actavis gained $26.53, or 14%, to $218.41.

RANBAXY, TEVA SETTLE WITH NY ATTORNEY GENERAL OVER COLLUSION -- The New York Attorney General and the U.S. units of Ranbaxy Laboratories Ltd. (Gurgaon IND) and Teva Pharmaceutical Industries Ltd. (Petach Tikva ISR) settled claims that an agreement between the two drugmakers unlawfully restricted competition. Shares of both companies rose after they agreed to pay $150,000 each to the state of New York and refrain from similar agreements in the future as part of the settlement. The companies neither admitted nor denied the allegations. The settlement ends an investigation into an agreement the companies signed in 2010 to sell a generic version of Pfizer Inc.’s (New York) cholesterol drug Lipitor in the United States, while not challenging each other’s exclusivity rights on other generic drugs. The agreement was drawn up as a contingency plan to allow Israel’s Teva to sell the generic Lipitor, or atorvastatin calcium, in case Ranbaxy’s version was not approved by the U.S. Food and Drug Administration before Lipitor lost its patent protection on November 30, 2011. While India’s Ranbaxy, majority-owned by Japan’s Daiichi Sankyo Co Ltd., eventually got FDA approval in time, the agreement remained in place and could have been used to protect other drugs made by the two companies.

          “Agreements between drug manufacturers to protect each other’s market positions violate fundamental principles of antitrust law, and can lead to higher drug prices,” Attorney General Eric Schneiderman said in a statement. The agreement related to the sale of only one drug, but by including the “no-challenge” clause, the companies shielded dozens of their drugs from legal and regulatory challenges by the other, the attorney general’s office said. The attorney general’s office however said that it had not identified any anti-competitive effects due to the agreement during its investigation. Schneiderman said the case represents the latest application of recent legal precedent arising out of challenges to “pay-for-delay” agreements between brand-name and generic pharmaceutical manufacturers. As a side note, Ranbaxy recently has been banned from exporting drugs to the United States after failing to adhere to the FDA’s manufacturing standards. Ranbaxy’s shares closed the week up 2% at 354.15 rupees on India’s National Stock Exchange. Teva shares gained 9% to $48.45 on the New York Stock Exchange.

TRACKING WASHINGTON -- Although officials have confidently claimed enrollment in ObamaCare is surging, Vice President Biden suddenly suggested during a stop in Minneapolis last week that the totals might be lower than projected.Initially, we talked about by the end of this period having seven million people lined up,” he told a group in a coffee shop on Wednesday. “We may not get to seven but we’re gonna get to five or six, and that’s a hell of a start with people.” That’s also a significant difference from the confident predictions last fall, just before the rollout, from Health and Human Services Secretary Kathleen Sebelius. “I think success looks like at least 7 million people having signed up by the end of March 2014,” she told NBC last September. The nonpartisan Congressional Budget Office stuck with that estimate for the exchanges until just recently, when it lowered its projection from 7 million to 6 million. But the vice president is the first to mention a number as low as 5 million, suggesting doubts in the administration. In its report on signups through the end of January, the administration claimed 9.6 million total had gotten health insurance--3.3 million in the federal and state exchanges, and another 6.3 million in Medicaid, the health care program for low-income Americans.

          But a nonpartisan healthcare firm says the number of new signups in Medicaid from ObamaCare is much lower than 6.3 million. “It’s about 1.3 to 1.8 million people who are new to the program. The rest are part of the regular churn that are in and out,” Matthew Eyeles, of the firm Avalere Health LLC (Washington DC), said. And those in the regular churn--those who come and go all the time--wouldn’t count as part of ObamaCare because they were already eligible before the healthcare law. For those new to Medicaid under the expansion encouraged by ObamaCare, the administration pays 100% of the cost for the first three years. But it pays no additional funds for those already eligible, which is often one of the top three items in state budgets. “The state pays that bill,” said former CBO Director Doug Holtz-Eakin. “If it’s the expansion, the federal government pays the bill. So it matters a lot whether it’s newly eligible or existing eligible who are signing up.”

FDA/EMA ROUNDUP -- The Food and Drug Administration has begun the nation’s first widespread testing program for generic drugs that make up almost 80% of U.S. prescriptions. The $20 million effort, coming as concerns grow over the quality of products from abroad, started in September without any public notice. At least a dozen academic centers are involved in a testing program that will run through 2017, agency officials confirmed. The research this year will focus on heart drugs, ADHD treatments, immunosuppressants, anti-seizure medicines, and antidepressants. Results aren’t yet available. Testing of generic drugs previously has been conducted only on a spot basis in the U.S. The program, testing medicines made domestically and overseas, reflects a new emphasis by the FDA on the quality of generic drugs. The agency has banned the import of treatments made at four India-based plants over the last nine months, and the FDA chief visited that country last week to talk with government officials and companies there. While the agency long wanted to test generics, “we didn’t have money for that,” said Kathleen Uhl, acting director of the FDA’s Office of Generic Drugs.

          Elsewhere, the Food and Drug Administration approved a new drug from Chelsea Therapeutics Ltd. (Charlotte NC) to treat a rare blood pressure disorder that causes dizziness and fainting in patients with Parkinson’s disease and similar conditions. Between 80,000 and 150,000 patients in the U.S. have the disorder, called neurogenic orthostatic hypotension. The drug, known chemically as droxidopa, is the first FDA approval for Chelsea Therapeutics, which has no other drugs on the market. Chelsea CEO Joe Oliveto said the company expects to launch Northera in the second half of 2014. The company has not yet priced the drug. The approval marks a major comeback for the company and its drug. The FDA previously rejected the drug in March 2012, asking the company for an additional study to demonstrate Northera’s effectiveness. Then last month FDA scientists raised serious questions about the drug’s long-term effectiveness at a public meeting advisory panel meeting.

          Teva Pharmaceutical Industries Ltd. (Petach Tikva ISR) won the backing of a European Medicines Agency committee for a new version of lung therapy Symbicort, paving the way for competition to one of AstraZeneca Plc’s (London) best-selling drugs. The generic formulation of budesonide and formoterol, to be marketed as DuoResp Spiromax and BiResp Spiromax, should be approved for the treatment of asthma and chronic obstructive pulmonary disease, the London-based EMA’s Committee for Medicinal Products for Human Use, or CHMP, said in a statement. The decision increases pressure on Symbicort, which generated $3.48 billion in sales for AstraZeneca last year.

          Anoro, a combination drug for chronic obstructive pulmonary disease (COPD) developed by GlaxoSmithKline Plc (London) and Theravance Inc. (S. San Francisco), has received the green light from European regulators, the companies said on Thursday. The drug is a combination of UMEC, a long-acting muscarinic antagonist, and VI, a long-acting beta agonist, in a single inhaler. It is expected to generate sales of more than $2 billion a year by 2018, according to analysts polled by Thomson Reuters. Recommendations for marketing approval from the European Medicines Agency are usually followed by the granting of full marketing authorization by the European Commission. The companies said they expected that decision during the second quarter of 2014. The drug, in a different strength formulation, was approved by regulators in the United States and Canada in December 2013.

          And Dynavax Technologies Corp. (Berkeley CA) said it had withdrawn a European marketing application for its experimental hepatitis B vaccine due to safety concerns raised by the European Medicines Agency. The EMA had said current safety data on the vaccine, Heplisav, was too limited to rule out a risk of “less common serious adverse events.” Heplisav is the company’s most advanced produced under development. The drug developer said it withdrew the application because it would not be able to gather sufficient data to respond to the regulator in the time required. An additional 8,000-subject trial intended to provide the data is expected to begin soon, the company said. Dynavax suffered a similar setback in February last year when the U.S. Food and Drug Administration rejected the vaccine.

MEDICAL STOCK SPOTLIGHT -- Emeritus Corp. (NYSE) led advancing issues, soaring $7.24, or 33% for the week, to $29.01. Brookdale Senior Living Inc. said it would buy Seattle, WA-based Emeritus for about $1.4 billion in an all-stock deal, creating the largest owner-operator of senior housing in the United States. Brentwood, TN-based Brookdale will also assume $1.4 billion of Emeritus’s debt. The transaction will expand Brookdale’s unit capacity by more than two-thirds to a total of about 112,700 units in 1,161 communities. The merger is expected to reduce operating expenses by up to $45 million annually, said Brookdale CEO Andy Smith, who will be the chief executive of the combined company. Brookdale said it would offer 0.95 of its shares to each Emeritus share held, at a premium of 32% to the closing price of each company’s stock prior to news of the deal. The offer translates into $28.41 per Emeritus share. Brookdale shares closed the week up 3% at $30.55. The deal is expected to close in the third quarter of 2014.

          Elsewhere, orphan drugmaker Ultragenyx Pharmaceutical Inc. (Nasdaq) surged $15.10, or 34%, to $59.10. The Novato, CA-based company has kept climbing after raising more than $115 million in the first San Francisco Bay Area IPO of the year in late January. Ultragenyx sold its IPO shares at $21 each. It originally planned to sell 4.8 million shares at between $14 and $17, then boosted that to sell 5.5 million shares at up to $20 each. The company has four drugs in clinical trials. Its lead drug treats hereditary inclusion body myopathy, disorders that waste the muscles. Another drug targets X-linked hypophosphatemia, a bone disease that causes bowed legs, shorter height and muscle weakness. The four-year-old company has no revenue and lost $23.7 million as of Sept. 30.

          And ANI Pharmaceuticals Inc. (Nasdaq) jumped $7.12, or 33%, to $28.59 after Roth Capital raised their price target on the stock from $27.00 to $33.00. Other equities research analysts have also recently issued reports about the stock. Analysts at Oppenheimer raised their price target on shares of Baudette, MN-based ANI from $29.00 to $31.00 on Wednesday. They now have an “Outperform” rating on the stock. ANI Pharmaceuticals issued its quarterly earnings data, reporting $0.35 earnings per share (EPS) for the quarter. The company had revenue of $10.53 million for the quarter, compared to the consensus estimate of $5.32 million. Analysts expect that ANI will post $1.35 EPS for the current fiscal year. ANI Pharmaceuticals is a specialty pharmaceutical company focused on developing products for female sexual health, menopause, contraception and male hypogonadism.

          But Onconova Therapeutics Inc. (Nasdaq), a clinical-stage biopharmaceutical company focused on developing therapies to treat cancer, plunged $5.24, or 37%, to $8.74. The company announced disappointing results from its phase 3 “ONTIME” trial of rigosertib in higher-risk myelodysplastic syndrome, or MDS, patients who had progressed or relapsed while using hypomethylating agents, or HMA. Newtown, PA-based Onconova said in a press release that rigosertib did not meet the primary endpoint compared to the best supportive care, or BSC, control arm. Median overall survival in the Onconova intent-to-treat group was 8.2 months, compared to 5.8 months in the BSC arm. The real concern is that if rigosertib proves to be a dud, Onconova has only two other ongoing early stage clinical studies. The remainder of its pipeline is preclinical in nature, meaning the company could still have additional downside left in its share price.

IPO SECTOR -- Included among recent SEC filings for initial public offerings, Protalix Biotherapeutics Inc. filed a registration to list on the Nasdaq Capital Market under the symbol “PRTX.” The Israeli company is offering $26.25 million of its common shares. Protalix uses cultured plant cells to manufacture bio pharmaceuticals. As of 2012, it has developed two such products, the second of which continues to undergo clinical trials. The first is Taliglucerase alfa--a recombinant glucocerebrosidase enzyme produced from transgenic carrot cell cultures. Known also as Elelyso, taliglucerase won approval from the U.S. Food and Drug Administration in May 2012 as an orphan drug for the treatment of Type 1 Gaucher’s disease. The second is PRX-105--a recombinant human Acetylcholinesterase, also produced from transgenic carrot cells, which can be used as a counter-measure against nerve agents attack. PRX-105 has completed Phase I clinical trials.

February 17, 2014 ...

OBAMACARE GAINED MORE YOUNG ADULTS IN JANUARY, U.S. SAYS -- Nearly 3.3 million people have signed up for health insurance through the marketplaces established by President Obama’s healthcare law, and about one-fourth of them are young adults, the administration said last week. The administration reported a modest uptick in the enrollment of young adults, a group highly sought by insurers because they are usually healthier and need fewer costly medical services. In a new report on enrollment, the administration said that 1.9 million people had selected health plans in the federal marketplace from October through January, while 1.4 million chose plans in state-run insurance exchanges. In January alone, officials said, more than 1.1 million people signed up for insurance in the federal and state exchanges. Administration officials said they were pleased with the numbers. “These encouraging trends show that more Americans are enrolling every day, and finding quality, affordable coverage in the marketplace,” said Kathleen Sebelius, the secretary of health and human services. “The covered population is getting younger,” Ms. Sebelius said. In January, 318,000 people age 18 to 34 selected health plans, bringing the total in this age group to 807,500, officials said.

          The administration’s goal was to have 4.4 million people signed up by now, according to a memorandum prepared in September by the Department of Health and Human Services. But the federal insurance website, HealthCare.gov, got off to a shaky start, thwarting many people who tried to sign up in October and November. The new data show that people buying insurance on the exchanges still tend to be older and potentially less healthy. Of those who signed up in the last four months, administration officials said, 53% are age 45 to 64--down slightly from 55% in the first three months. About 25% of those choosing a health insurance plan are 18 to 34. This group accounted for 24% of those picking plans in the first three months. People 55 to 64--the range just below the age at which people qualify for Medicare--represented the largest group, at 31%, down from 33% in the months from October through December. The open enrollment period continues until March 31, and White House officials predict a surge of applications just before the deadline.

AMA SUPPORTS OVERHAUL OF MEDICARE DOCTORS' PAY -- The American Medical Association last week announced its support for the new bipartisan, bicameral proposal to repeal and replace Medicare’s sustainable growth rate (SGR) formula, Modern Healthcare reports. But the top U.S. doctor group is staying silent on how best to pay for fixing Medicare’s flawed physician payment system after lawmakers unveiled a reform framework the week prior. The AMA said last week that it supports the proposal but would not comment on pay-fors (namely, spending cuts or increased taxes) until lawmakers offer their own ideas. “We are going to wait to offer an opinion until we see what the proposal package would look like,” said AMA President Ardis Dee Hoven. “We have to wait until they present us with a proposal.” The comments underscore the fragile nature of negotiations over how to pay for the roughly $150 billion permanent “doc fix.” Industry players, especially hospitals, are loathe to undergo more cuts in the name of greater pay stability for Medicare doctors. The previous week’s announcement of legislation to repeal the sustainable growth rate intensified an already heated lobbying battle on Capitol Hill. Hoven said her group would be in close contact with lawmakers over the next several weeks, urging them to pursue the overhaul before the current “doc fix” expires on April 1.

          The AMA will also launch a paid media campaign in support of SGR repeal, one official said. “The whole concept of continued patching is fiscally irresponsible,” said Hoven. “It undermines continually the stability of the program.” Physicians who treat Medicare patients are facing a pay cut of about 24% unless lawmakers act before the end of March. For more than a decade, Congress has averted similar reductions with short-term patches. Hoven implicitly pushed back at a proposal from House Republicans to attach a nine-month “doc fix” to legislation raising the debt ceiling. “If we keep opposing it or keep delaying it, is it going to make the process any easier?” she said. The idea was abandoned last week after opposition by lawmakers and doctor groups who want permanent SGR reform, according to aides.

TRACKING WASHINGTON -- Some backers of the 2010 healthcare law are pushing to create a new kind of insurance coverage that the measure essentially had ruled out: policies offering lower premiums but significantly higher out-of-pocket costs than those now available. The plans, dubbed “copper” because they would offer a lower level of coverage than the “gold,” “silver” and “bronze” options on the government-run healthcare exchanges, would be a departure from the minimum level of coverage that is one of the Affordable Care Act’s core principles. Many plans that offered less coverage were canceled when the healthcare law was rolled out because they didn’t meet its new requirements. Republicans accused President Barack Obama of backtracking on his promise that the law would allow people to keep their preferred health plans. In the face of an uproar, the Obama administration asked insurers to reinstate some of the millions of canceled policies for one year. Now, some insurers and a pair of Senate Democrats are trying to change the law permanently so that individuals and small businesses can buy so-called copper plans. The plans likely would have lower premiums, but purchasers would pay more of their ordinary health costs upfront. Greater coverage would kick in for serious, unforeseen health episodes that would require, for example, a hospital stay.

          Sens. Mark Begich of Alaska and Mark Warner of Virginia, both Democrats facing close re-election races this year, are sponsoring legislation that would allow people to buy copper plans on the exchanges. Moreover, insurance-industry officials have been talking up the idea with federal officials, though it is unclear whether the administration could make the change through regulations. The White House said it was weighing the proposal. Copper plans would cover, on average, 50% of medical costs, and while consumers’ out-of-pocket expenses would still be capped, that limit likely would be higher than the $6,350 maximum for individuals and $12,700 for families currently set by the law. People who selected the plan would be allowed tax credits toward the cost of premiums, as they already get for bronze plans, which cover 60% of costs; silver plans, which cover 70%; and gold plans, which cover 80%. The Council for Affordable Health Coverage, a coalition of employer groups and insurers including Aetna Inc. (Hartford CT) and Cigna Corp. (Bloomfield CT), is backing the proposal.

FDA/EMA ROUNDUP -- Medical robotics company Hansen Medical Inc. (Mountain View CA), which develops devices for positioning, manipulating, and controlling catheters, advanced 13% last week to $2.50 after reporting clearance from the U.S. Food and Drug Administration for its Magellan 6Fr Robotic Catheter. This new device is an improvement over the existing Magellan 9Fr Robotic Catheter in that it possesses novel dual-bend technology and features a smaller outer diameter catheter for use in smaller vessels in the peripheral vasculature, according to Hansen.

          Elsewhere, Pharmacyclics Inc. (Sunnyvale CA) and Johnson & Johnson (New Brunswick NJ) won approval for the companies’ breakthrough cancer drug Imbruvica to treat a second blood cancer. The medicine was cleared to treat chronic lymphocytic leukemia, the second therapy for the deadly disease to come to market in the last few months, the FDA said in a statement. Roche Holding AG’s Gazyva gained FDA approval in November for CLL. Both were deemed breakthrough drugs by the FDA. Almost 16,000 new cases of CLL are expected to be diagnosed this year, which totals about one-third of leukemia cases, according to the American Cancer Society. Peak sales for Imbruvica may reach $6.5 billion in 2026, with $3 billion coming from the U.S., said Michael Yee, an analyst with RBC Capital Markets.

          Johnson & Johnson (New Brunswick NJ) said Friday that the FDA has rejected--for a third time--its application to expand use of the blood thinner Xarelto to reduce dangerous blood clots and related problems in patients with coronary artery disease. The condition occurs when narrowed blood vessels restrict blood flow to the heart, increasing the risk of heart attack and other potentially deadly problems. The FDA’s rejection letter, announced by J&J, was expected after an FDA panel of experts unanimously voted against the broader use of the pill last month. The federal advisers said too much information was missing from company studies to accurately gauge Xarelto’s benefit.

          An advisory panel to the FDA said that available evidence does not prove that the painkiller naproxen, sold under the brand names Aleve and Naprosyn, carries a lower cardiac risk than rival products. The panel was convened after a retrospective analysis from multiple clinical trials published last year in The Lancet suggested naproxen was less dangerous to the heart than other nonsteroidal anti-inflammatory drugs, or NSAIDs, such as ibuprofen and Celebrex. Panelists recommended the FDA leave the current product labeling as is, at least pending the outcome of a large ongoing study, known as Precision, which compares naproxen with ibuprofen and Celebrex. The FDA is not bound to follow the advice of its advisory panels, but typically does so.

          And Indian regulators will be told when the U.S. Food and Drug Administration is inspecting plants that produce generic drugs in that country, and will join to observe FDA standards. The agreement between Indian government officials and FDA Commissioner Margaret Hamburg came during her visit to India last week, the FDA said. Hamburg, who last week said she will expand overseas plant inspections, also met in a closed-door session with 16 drug companies and affiliated groups in India to discuss manufacturing quality. U.S. lawmakers are scheduled to hear from doctors, researchers and patient advocates in a Feb. 26 briefing on whether substandard generic drugs are leaking into the U.S. medical system from overseas.

MEDICAL STOCK SPOTLIGHT -- LasikPlus vision-correction provider LCA-Vision Inc. (Nasdaq) led advancing issues, surging $1.38, or 34% over the week, to $5.44. PhotoMedex Inc. agreed to pay about $106.4 million in cash to acquire LCA-Vision in a deal that should add to the skin healthcare company’s earnings this year. PhotoMedex, which treats psoriasis, acne and other skin diseases, agreed to pay $5.37 a share in cash to acquire LCA-Vision, a 26% premium to LCA-Vision’s closing price prior to news of the deal. The deal will combine a skin healthcare provider that generates more usage of its laser treatments than LCA-Vision, PhotoMedex said. Cincinnati, OH-based LCA-Vision’s centers typically perform only one or two procedures a week, while on other days it focuses on patient screening and pre- and post-operative care.

          Elsewhere, American depositary shares of Genetic Technologies Ltd. (Nasdaq) rallied 31% to $1.90, as the genetic-testing services company received an upgrade from analysts at Ladenburg Thalmann--one day after the U.S. Patent and Trademark Office issued a further ExParte Reexamination Certificate to the Australia-based firm. The certificate follows the third request for ex parte re-examination of specific claims by Merial LLC. A re-examination is the process where a third party can have a patent claim again reviewed by the patent office to verify the subject matter is patentable. Ladenburg Thalmann now has a “Buy” rating on the stock, up from “Neutral.” It set a price target of $2.50.

          And Stereotaxis Inc. (Nasdaq) shares closed up 23% on the week to $5.60. The company was featured favorably in a SeekingAlpha article recently stating that the company “appears to be in a sweet spot for potential revenue growth and for becoming an acquisition target by larger companies that are in the fields of medical devices and/or robotics.” St. Louis, MO-based Stereotaxis designs, manufactures and markets an advanced cardiology instrument control system for the catheterization lab in a hospital or clinic that is used in the treatment of coronary artery disease and arrhythmias.

          But Ventrus Biosciences Inc. (Nasdaq) plunged $2.68, or 63%, to $1.58 after the company said its lead experimental treatment for anal fissures failed to reduce pain compared with a placebo in a second late-stage trial. The treatment, codenamed VEN 307, was found superior to a placebo for the same indication in another late-stage trial, the company said in May 2012. New York-based Ventrus said it planned to request a meeting with the U.S. Food and Drug Administration to determine the next steps in submitting a new drug application (NDA).

IPO SECTOR -- Included among recent SEC filings for initial public offerings, Dipexium Pharmaceuticals LLC (New York) registered up to $34.5 million worth of common. The company plans to list on the Nasdaq Global Market under the symbol “DPRX.” Oppenheimer & Co. and Feltl & Co. are lead underwriters on the deal. Dipexium says it is a late stage pharmaceutical company focused on the development and commercialization of Locilex (pexiganan acetate cream 1%), a novel, first-in-class, broad spectrum, topical antibiotic. Locilex is a chemically synthesized, 22-amino acid peptide isolated from the skin of the African Clawed Frog. Its novel mechanism of action kills microbial targets through disruption of bacterial cell membrane permeability. Locilex is initially being targeted for the treatment of mild infections of diabetic foot ulcers.

February 10, 2014 ...

NIH JOINS DRUGMAKERS, NONPROFITS ON CHRONIC DISEASES -- Ten big drug companies that have spent billions competing with one another to find breakthroughs on diseases like Alzheimer’s have formed an unusual pact to cooperate on a government-backed effort to accelerate the discovery of new medicines. Under a five-year collaboration announced last week, the companies and the National Institutes of Health have agreed to share scientists, tissue and blood samples, and data. They aim to decipher the biology behind Alzheimer’s, Type 2 diabetes, rheumatoid arthritis and lupus, and to thereby identify targets for new drugs. The price tag, roughly $230 million, is relatively small: The global drug industry spends about $135 billion a year on research and development. But the collaborators seek something money can’t buy. By pooling their brightest minds and best lab discoveries they hope to put together a research system that can decipher the diseases in ways each hasn’t been able to on its own. Diseases like Alzheimer’s and diabetes “are looming tsunamis,” says Elias Zerhouni, chief of R&D at Sanofi SA (Paris), a participant. Deciphering them “could not be done by any single organization. Even the NIH, with all of its might, doesn’t have all of the solutions inside it. And no one company can do it.”

          The pact is unusual because drug companies are traditionally secretive about their science, rushing to acquire patents to protect rights to potential future drugs. The new agreement bars participants from using any discovery for their own drug research until the project makes data public on that discovery. “The moment the project results are out,” says David Wholley, director of research partnerships of the Foundation for the NIH, “all-out competition resumes to develop the winning drug. And that’s what the patients want.” Taking a page from the “open-source” movement that has swept the software world, the group will share all findings with the public, for anyone to use freely to conduct their own experiments. The alliance involves rivals such as Bristol-Myers Squibb Co. (New York), Johnson & Johnson (New Brunswick NJ) and GlaxoSmithKline Plc (London). A number of foundations, including the American Diabetes Association and the Alzheimer’s Association, have agreed to back the project and to help recruit patients for trials. NIH Director Francis Collins, who spearheaded the effort and is well known for having led the federal human-genome project, announced the collaboration at the National Press Club.

OBAMACARE TO CUT WORK HOURS BY 2 MILLION JOBS: CBO -- Obamacare will reduce the total number of hours Americans work by the equivalent of 2 million full-time jobs in 2017, the Congressional Budget Office said, sparking renewed Republican criticism of the law and a fresh defense from the White House. The total number of hours worked will fall about 1.5% to 2% from 2017 to 2024 as a result of the healthcare overhaul, the CBO said last week in a report. The reduction, about twice the agency’s estimates in 2010, is due “almost entirely” to low-wage employees who may choose to give up extra hours of work to avoid losing subsidies or tax advantages under the law, the report said. Republicans said their warnings that the health law would discourage employment are proving correct. The report “is further evidence the president’s healthcare law is destroying full-time jobs,” U.S. Representative John Kline (R-MN), who is chairman of the House Education and the Workforce Committee, said. President Barack Obama’s advisers pushed back against Republican interpretations of the CBO report and assertions that the law would cause employers to cut jobs and hours. “Over the longer run, CBO finds that because of this law, individuals will be empowered to make choices about their own lives and livelihoods, like retiring on time rather than working into their elderly years,” White House Press Secretary Jay Carney said.

          The Patient Protection and Affordable Care Act, known as Obamacare, is expected to cover 6 million people through its insurance exchanges this year, according to the CBO report. About 8 million people will enroll in an expansion of Medicaid, the state-run health plan for the poor, under the law. Both figures represent reductions of 1 million from the agency’s estimates before the Obama administration’s faltering rollout of the insurance expansion began in October. The report indicates the CBO analysts realize “they’ve been overly optimistic about the ACA and they need to make some adjustments,” said Joseph Antos, a health economist at the nonprofit American Enterprise Institute (Washington DC) who advises the agency. “The proof of all this is actually having the law implemented and seeing what happens over the next few years with employment.”

TRACKING WASHINGTON -- House and Senate lawmakers have agreed on a five-year plan to change how physicians are paid for treating Medicare patients, an issue that has created a recurring scramble in Congress for over a decade. Under the deal announced Thursday, Medicare would increase the amount it pays physicians by 0.5% each year for the next five years. The agreement was the result of talks that included the top members of the Senate Finance, House Energy and Commerce, and House Ways and Means committees. The new bill would also offer bonuses to healthcare providers that agree to have their reimbursements based more on outcomes than on the volume of services they provide. The rates, a perennial issue in Congress since the early 2000s, stem from a 1997 budget law aimed at restraining the growth of Medicare payments. That law set a formula for physician rates that tied payment increases to economic growth, but when healthcare costs rose faster than the economy, Congress began to override the formula, in what became known as the “doc fix.” It wasn’t yet clear, however, how the repeal of the 1997 measure would be funded, or if lawmakers have reached a consensus on that.

          In other news, the Obama administration is considering an extension of the president’s decision to let people keep their individual insurance policies even if they are not compliant with the healthcare overhaul, industry and government officials said Thursday. Avalere Health (Washington DC) CEO Dan Mendelson said Thursday that the administration may let policyholders keep that coverage for as long as an additional three years, stressing that no decision has been made. Policymakers are waiting to see what rate hikes health insurers plan for the insurance exchanges that are key to the overhaul’s coverage expansions. “The administration is entertaining a range of options to ensure that this individual market has stability to it, and that would be one thing that they could do,” Mendelson said. He said his company was not advising the administration on exchange policy. Health and Human Services spokesman Joanne Peters confirmed that the issue is under discussion, saying: “We are continuing to examine all sorts of ways to provide consumers with more choices and to smooth the transition as we implement the law. No decisions have been made.”

FDA/EMA ROUNDUP -- The U.S. Food and Drug Administration cleared a bite-size camera to help screen patients who have trouble with colonoscopies. The ingestible pill camera from Given Imaging Ltd. (Yoqneam ISR) is designed to help doctors spot polyps and other early signs of colon cancer. The FDA cleared the company’s PillCam Colon for patients who have had trouble with the cringe-inducing colonoscopy procedure, which involves probing the large intestine with a tiny camera embedded in a four-foot long, flexible tube. The Israeli company’s technology, developed from missile defense systems, uses a battery-powered camera to take high-speed photos as it slowly winds its way through the intestinal tract over eight hours. The images are transmitted to a recording device worn around the patient’s waist and later reviewed by a doctor. In December, Irish medical device firm Covidien Plc said it would buy Given for about $860 million.

          Elsewhere, Ligand Pharmaceuticals Inc. (La Jolla CA) said that its drug Promacta has received “breakthrough” designation by the FDA for a new use in patients with a rare form of anemia. Ligand and its partner GlaxoSmithKline Plc (London) already market the pill to treat chronic hepatitis C and a rare condition called chronic immune thrombocytopenic purpura, in which the body attacks its own platelets. Now the companies are asking the FDA to approve Promacta to treat severe aplastic anemia, a rare condition in which the bone marrow fails to make enough new blood cells. Currently there are no drugs approved for patients who do not respond to existing immune system drugs. About 40% of patients in this group die of infection or bleeding within five years of diagnosis, according to the drugmakers. The FDA’s breakthrough drug program was authorized by Congress in 2012 with the aim of speeding up development of promising medicines. Ligand closed the week down 3% at $60.10.

          The head of the Food and Drug Administration will visit India this week amid growing concerns over the quality of generic medicines made in that country. Generic drugmakers Ranbaxy Laboratories Ltd. (Gurgaon) and Wockhardt Ltd. (Mumbai) have been banned from selling medicines in the U.S. from Indian plants based on quality issues. Most recently, Ranbaxy’s fourth facility was prohibited last month from sending products to the U.S. after FDA inspectors found drugs were re-tested to gain favorable results after initial analyses failed. FDA Commissioner Margaret Hamburg will visit Delhi, Cochin and Mumbai from Feb. 10-18, the agency said. In doing so, she will become only the second FDA chief to go to India in an official capacity. Hamburg plans to meet with government regulators from the country, which is the second-biggest drug provider and eighth-largest food exporter to the U.S.

          No serious safety concerns were raised over Merck & Co.’s (Whitehouse Station NJ) experimental pill for ragweed allergies, according to FDA documents Friday, ahead of a meeting this week of outside medical experts who will discuss whether the drug merits approval. The Allergenic Products Advisory Committee will meet on Tuesday to review Ragwitek, a pill placed under the tongue that, if approved, would be an alternative to regular injections administered by doctors for ragweed pollen allergies. At the meeting, the panel will be asked to discuss whether available clinical trial data supports the safety and the efficacy of the product in persons 18 years of age and older and make recommendations to the FDA. The committee will also be asked to recommend to the agency whether any additional studies of the drug might be needed.

          And workers at a Ranbaxy Laboratories Ltd. (Gurgaon IND) drug plant repeatedly distorted test results to make it appear that raw materials and active pharmaceutical ingredients met required standards when they didn’t, according to a report by inspectors from the Food and Drug Administration. FDA officials visited Ranbaxy’s Toansa factory in the northwestern Indian state of Punjab early this month and said they discovered workers retesting “until acceptable results are obtained” and deleting evidence of failed tests. Two weeks ago the FDA banned in the U.S. market the use of drug ingredients from Ranbaxy’s Toansa plant--a serious blow for Ranbaxy, since Toansa supplies many of the critical ingredients used in the company’s generic drugs.

MEDICAL STOCK SPOTLIGHT -- Furiex Pharmaceuticals Inc. (Nasdaq) led advancing issues, more than doubling over the week to $109.67 after its experimental drug alleviated diarrhea and abdominal pain caused by irritable bowel syndrome in two studies. The Morrisville, NC-based company’s studies were in the last of three rounds generally needed for regulatory clearance. The drug eluxadoline met targets for improvements in stool consistency and abdominal pain that were developed in conjunction with U.S. and European regulators, the company said. Furiex will apply for approval in June, Chairman Fred Eshelman said. He estimated annual sales of $750 million to $1 billion. Diarrhea-predominant irritable bowel syndrome is a chronic disorder that affects about 28 million patients in the U.S. and Europe, Furiex said in a statement.

          Elsewhere, Pernix Therapeutics Holdings Inc. (Nasdaq) surged 35% to $3.09 after announcing it has hired industry veteran Doug Drysdale as Chief Executive Officer. Mr. Drysdale’s appointment is supported by a group of institutional investors led by Athyrium Capital Management, who have agreed to purchase $65 million worth of debt obligations, providing the Woodlands, TX-based company with expansion capital for the acquisition of accretive specialty products to be added to Pernix’s portfolio. The drugmaker acquires, develops and markets medications for the pediatric market including treatments for dermatitis, statin-induced ubiquinone deficiency, deficiencies in active cultures due to diet and antibiotics, and upper respiratory conditions.

          And BioTelemetry Inc. (Nasdaq) climbed $1.39, or 19%, to $8.68 after announcing a victory in a patent infringement case against Mednet Healthcare Technologies Inc. and its subsidiaries, Heart-Care Corporation of America, Universal Medical Inc., and Universal Medical Laboratory Inc. Mednet entered into a consent judgment, declaring that the Mednet entities infringed on five patents owned by BioTelemetry and its subsidiary, Braemar Manufacturing, and that all five patents are valid. Conshohocken, PA-based BioTelemetry provides ambulatory outpatient management solutions for monitoring clinical information regarding an individual’s health. The company’s initial efforts are focused on the diagnosis and monitoring of cardiac arrhythmias, or heart rhythm disorders.

          But Oramed Pharmaceuticals Inc. (Nasdaq) plummeted $7.84, or 35%, to $14.25 after TheStreet.com’s Adam Feuerstein called the Israeli company’s oral insulin pill data completely worthless. Oramed soared 60% the week prior after claiming that its experimental insulin pill ORMD-0801 is safe and well tolerated, based on the positive outcome of a small and short (one week) phase IIa study. Feuerstein said the company’s data show adverse events reported by 40% of type 2 diabetics treated with the high dose of ORMD-0801. The adverse event rate in the low-dose ORMD-0801 arm was 30%. Fifty percent of the placebo-treated patients reported adverse events. Ten patients were treated in each arm--30 patients total; for one week, according to Feuerstein. Also missing is any disclosure of ORMD-0801’s efficacy, he said. The company claims all secondary endpoints of the one-week study were achieved but no data or proof has been provided, he added. Oramed had not responded to the report going into the weekend.

IPO SECTOR -- Included among recent SEC filings for initial public offerings, Applied Genetic Technologies Corp. (Alachua FL) registered up to $70 million worth of common stock. The company plans to list on the Nasdaq Global Market under the symbol “AGTC.” Barclays and BMO Capital Markets are the joint bookrunners on the deal. No pricing terms were disclosed. Applied Genetic Technologies was incorporated in 1999 and is a clinical-stage biotechnology company that uses its proprietary gene therapy platform to develop products designed for patients with severe inherited orphan diseases in ophthalmology. Its lead product candidates, which are each in the preclinical stage, focus on rare diseases of the eye, caused by mutations in single genes, which significantly affect visual function and currently lack effective medical treatments, according to the company. Much of the company’s technology is licensed from the University of Florida.

February 3, 2014 ...

PFIZER 4Q RESULTS BEAT FORECAST; GIVES CAUTIOUS 2014 VIEW -- Pfizer Inc.’s (New York) fourth-quarter profit plunged 59% because of discontinued operations, restructuring and other charges, and generic competition continuing to bleed sales of former blockbuster medicines. Despite those pressures and unfavorable currency exchange rates that reduced revenue by 3%, Pfizer easily topped Wall Street’s expectations. The world’s second-biggest drugmaker (next to Johnson & Johnson) said that net income fell to $2.57 billion, or 39 cents per share, from $6.32 billion, or 85 cents per share, a year earlier. Excluding one-time items, Pfizer said income would have been 56 cents per share. Analysts expected 52 cents. Net income was reduced by the animal health business spinoff last year and the sale of Pfizer’s nutrition business in late 2012. Revenue totaled $13.56 billion, down 2%. Analysts expected $13.36 billion. Sales of primary care drugs fell 10% to $3.44 billion, mainly on generic competition for cholesterol fighter Lipitor and Viagra in Europe. Lipitor, the world’s top-selling drug until U.S. generic competition hit two years ago, also faces cheaper versions in Europe and Australia. Those smaller revenues were shifted to the established products unit, where sales edged up 2% to $2.42 billion.

          Specialty drug sales dropped 7% to $3.4 billion, on generic competition overseas for two other drugs. Meanwhile, royalties from immune disorder drug Enbrel fell as Pfizer’s co-promotion deal winds down. The bright spot was Pfizer’s fledgling cancer drug business, up 26% to $468 million. But Pfizer’s new clot-preventing drug Eliquis, a potential blockbuster that’s lagged behind two competitors, brought in only $71 million in the quarter. Pfizer shares that with partner Bristol-Myers Squibb Co. (New York). Pfizer forecast 2014 adjusted profit of $2.20 to $2.30 per share and revenue of about $50.2 billion, despite expecting another $3 billion in revenue losses due to generic competition. Analysts are closely watching heavily touted palbociclib for advanced breast cancer, and which also is being tested against melanoma, lung and other cancer types. For all of 2013, Pfizer posted net income of $22 billion, up 51%, on revenue of $51.58 billion, down 6%. Pfizer’s stock closed the week up 31 cents, or 1%, at $30.40.

REPUBLICAN SENATORS PITCH REPLACEMENT FOR OBAMACARE IN 2017 -- Three prominent Republican senators last week called for replacing Obamacare with a package of election-year proposals intended to lower health insurance costs while retaining some elements of President Barack Obama’s health-reform law. Senators Richard Burr of North Carolina, Tom Coburn of Oklahoma and Orrin Hatch of Utah released a legislative blueprint that analysts say could help the Republican Party offer a much-needed vision for health care ahead of November’s mid-term congressional elections, voting that will determine which party controls Congress in the final two years of the Obama presidency. The proposals came a day before Obama was scheduled to defend his top domestic policy in his State of the Union address on Tuesday night. “The American people have found out what is in Obamacare--broken promises in the form of increased healthcare costs, costly mandates and government bureaucracy. They don’t like it and don’t want to keep it,” Burr said in a statement. Obama’s Patient Protection and Affordable Care Act has extended health coverage to millions of people, despite a botched October rollout. The administration says 6.3 million people have signed up for private insurance as a result of implementation. A similar number have been determined eligible for Medicaid coverage.

          The Republican alternative--dubbed the Patient Choice, Affordability, Responsibility and Empowerment Act, or CARE Act--would repeal Obamacare’s mandates, taxes and fees and replace the law with what aides called “common-sense, patient-centered” reforms intended to lower costs. As with earlier Republican initiatives, the approach would address costs by making consumers responsible for more of their medical bills, with assistance from health savings accounts funded with pre-tax dollars that could be used to pay for insurance premiums as well as healthcare services. The plan would keep in place two popular Obamacare provisions by banning lifetime limits on insurance benefits and allowing adult children to stay on their parents’ health plans until age 26. It would scale back Obamacare subsidies to help lower-income people buy private insurance, allow insurers to charge older people more and protect the sick against insurance market discrimination only if they remain continuously insured.

TRACKING WASHINGTON -- The House of Representatives last week voted to impose tighter restrictions on federal payments for abortions, thrusting the issue of a woman’s right to terminate a pregnancy into the polarizing politics of an election year. The bill stands no chance of being passed by the Democratic-controlled Senate. But that mattered little to members of both parties, who seemed to relish the chance to accuse their opponents of blatantly twisting the issue to their political advantage. The House vote was 227 to 188, mainly along party lines. Six Democrats voted yes, one Republican voted no and another voted present. “Here we go again,” said Representative Barbara Lee, Democrat of California. “It’s another battle in the war on women.” Republicans, bristling at accusations that they are hostile to women’s rights, said Democrats were unfairly characterizing their motives. “I will say it again,” said Representative Virginia Foxx of North Carolina, “we are not attacking women’s health care.” Existing laws like the Hyde Amendment already restrict federal financing for abortion services. But because the Hyde Amendment must be renewed every year, Republicans said their proposal would only codify what has been the law of the land.

          Though last week’s bill had solid support from the House Republican leaders, their near-unanimity during the vote on Tuesday obscured tensions within the party. Republicans have long sought to restrict abortion rights as a move to satisfy their social conservative base. The week prior, Eric Cantor of Virginia, the House majority leader, spoke at the March for Life, an annual Washington protest by opponents of legalized abortion. But the issue has become considerably more challenging for Republicans, both because of comments from Republican men, on and off the campaign trail, and an aggressive effort by Democrats to portray the party as anti-women. The timing of the vote was telling: the House leadership chose to bring the measure up on a day when all of Washington was consumed with President Obama’s State of the Union address. Republican leaders also decided to make the bill one of their first orders of business this year, disposing of it nearly 10 months before Election Day. A senior aide to Republican leadership said it would probably be the only time an abortion-related bill would come up this year.

FDA/EMA ROUNDUP -- Teva Pharmaceutical Industries Ltd. (Petach Tikva ISR) gained approval from the U.S. Food and Drug Administration for a longer-acting version of the Copaxone multiple-sclerosis drug, bolstering the company’s effort to defend its best-selling product as competitors seek to introduce cheaper copies this year. Teva can now market Copaxone for use as a 40-milligram shot three times a week, the company said in a statement. Teva sells a 20-milligram daily injection, which last year generated $4.2 billion in sales, based on analysts’ estimates. Teva closed the week up 2% at 15,680 shekels in Tel Aviv. The shares are down about 34% from their March 2010 peak.

          Elsewhere, Merck & Co.’s (Whitehouse Station NJ) experimental drug Ragwitek, a treatment for ragweed allergies, appears safe and effective for use in patients between the ages of 18 and 65, a panel of advisors to the FDA concluded. The panel voted 6 to 2 last week, with one abstention, that data supported the drug’s efficacy. It voted 8 to 0, with one abstention, that the data supported the drug’s safety. About 30 million people in the United States suffer allergies to ragweed pollen, according to the FDA. Analysts see eventual Ragwitek sales of about $300 million. However, Morningstar analyst Damien Conover believes sales could reach as much as $1 billion if enough allergy sufferers prefer Ragwitek, a pill, to injections.

          FDA staffers say the pain reliever in Aleve may be safer on the heart than other popular anti-inflammatory drugs taken by millions of Americans. An agency review posted online last week said naproxen--the key ingredient in Aleve and dozens of other generic pain pills--may have a lower risk of heart attack and stroke than rival medications like ibuprofen, sold as Advil and Motrin. FDA staffers recommend relabeling naproxen to emphasize its safety. The safety review was prompted by a huge analysis published last year that looked at 350,000 patients taking various pain relievers. The findings suggest naproxen does not carry the same heart risks as other medications in the class known as nonsteroidal anti-inflammatory drugs, or NSAIDs. The agency released its memo ahead of a public meeting next month where outside experts will discuss the new data and whether naproxen should be relabeled.

          No serious safety concerns were raised over Merck & Co.’s (Whitehouse Station NJ) experimental pill for ragweed allergies, according to FDA documents Friday, ahead of a meeting this week of outside medical experts who will discuss whether the drug merits approval. The Allergenic Products Advisory Committee will meet on Tuesday to review Ragwitek, a pill placed under the tongue that, if approved, would be an alternative to regular injections administered by doctors for ragweed pollen allergies. At the meeting, the panel will be asked to discuss whether available clinical trial data supports the safety and the efficacy of the product in persons 18 years of age and older and make recommendations to the FDA. The committee will also be asked to recommend to the agency whether any additional studies of the drug might be needed.

          And workers at a Ranbaxy Laboratories Ltd. (Gurgaon IND) drug plant repeatedly distorted test results to make it appear that raw materials and active pharmaceutical ingredients met required standards when they didn’t, according to a report by inspectors from the Food and Drug Administration. FDA officials visited Ranbaxy’s Toansa factory in the northwestern Indian state of Punjab early this month and said they discovered workers retesting “until acceptable results are obtained” and deleting evidence of failed tests. Two weeks ago the FDA banned in the U.S. market the use of drug ingredients from Ranbaxy’s Toansa plant--a serious blow for Ranbaxy, since Toansa supplies many of the critical ingredients used in the company’s generic drugs.

MEDICAL STOCK SPOTLIGHT -- Israel’s Oramed Pharmaceuticals Inc. (Nasdaq) led advancing issues, soaring $12.09, or 60% for the week, to $32.09. The Jerusalem-based company, which is racing Novo Nordisk of Denmark to develop the world’s first insulin pill, moved a step closer to its goal on Thursday by announcing successful results from a small mid-stage test. The oral drug delivery specialist said its insulin capsule had met all primary and secondary endpoints in a Phase IIa clinical trial and it now plans to launch a larger mid-stage study in the third quarter. The concept of oral insulin as a way to relieve diabetics of several daily injections has been around since the 1930s, but making it a reality is extremely difficult because insulin is destroyed by enzymes in the digestive system. The stock has surged from around $4 since the end of 2012 on rising hopes for its insulin pill.

          Elsewhere, Alexion Pharmaceuticals Inc. (Nasdaq), maker of the rare-disease drug Soliris, climbed $25.09, or 19%, to $158.73 after fourth-quarter earnings and its 2014 forecast exceeded analysts’ estimates. Alexion reached $169.98 at one point in the week, its highest intraday price since the company first sold stock to the public in 1996. The shares of the Cheshire, CT-based company had risen 41 percent in the 12 months through Friday. Alexion reported earnings, excluding one-time items, of 87 cents a share, topping analysts’ estimates by 3 cents. The drugmaker’s 2014 profit forecast of $3.70 to $3.80 a share was higher than estimates of $3.46.

          And tiny Australia-based Prana Biotechnology Ltd. (Nasdaq) rocketed $2.61, or 29%, to $11.60. The company’s shares gained 65% for the month of January alone. Some analysts said the meteoric rise is likely linked to the upcoming data release of the company’s two mid-stage trials for PBT2, an experimental treatment for Alzheimer’s disease and Huntington’s disease. According to these analysts, Prana’s executive management have been traveling to discuss the trials with institutional investors lately, which has probably helped drive some of the recent movement. They add that Prana will need to raise a significant amount of cash to move PBT2 into late-stage trials, if the mid-stage data warrants such a development.

          But KaloBios Pharmaceuticals Inc. (Nasdaq) tumbled $2.20, or 41%, to $3.12 after the company said it would stop developing an asthma drug that failed in a mid-stage study. The drug, KB003, failed to bring about a clinically meaningful improvement in the pulmonary function of patients with severe asthma when tested against a placebo in 160 patients. The San Francisco-based company said it would focus on developing other treatments in its pipeline, which include a drug for cancer and another to prevent a common gram negative bacterium.

IPO SECTOR -- Included among recent SEC filings for initial public offerings, Flexion Therapeutics Inc. (Burlington MA) registered up to $86.25 million worth of common stock. The company plans to list on the Nasdaq Global Market under the symbol “FLXN.” The offering is being led by BMO Capital Markets and Wells Fargo Securities. Flexion is a specialty pharmaceutical company focused on the development and commercialization of novel, long-acting, injectable pain therapies. Flexion took a drug it had originally acquired from AstraZeneca Plc (now called FX005) and used it to turn itself into an osteoarthritis specialist. Flexion now has three drug candidates in its portfolio targeting the disorder. Those three are FX006, a long-lasting form of the steroid triamcinolone; FX005, which inhibits a protein known as p38 MAP kinase that is implicated in inflammation; and FX007, which curbs pain by blocking a different kinase involved in inflammatory diseases.

January 27, 2014 ...

OBAMACARE COVERAGE ENROLLMENT HITS THREE MILLION MARK -- About 800,000 people signed up for private health plans through Obamacare in January, pushing total enrollment to 3 million as negative perceptions about the program give way to more practical needs. Kathleen Sebelius, Secretary of the Department of Health and Human Services, lauded the January figures in a speech Friday in Jacksonville, FL, which add to the 2.2 million who enrolled from Oct. 1 through December. Her agency later said in a blog post that “as our outreach efforts kick into even higher gear, we anticipate these numbers will continue to grow.” The acceleration may indicate increased familiarity and interest in the Patient Protection and Affordable Care Act among people who previously had heard only of its problems, said Ron Pollack, executive director of the advocacy group Families USA (Washington DC). Public opinion about Obamacare plunged after the Oct. 1 debut of the insurance exchanges greeted consumers with website breakdowns, higher prices and potentially broken promises. “People were bombarded about the politics and learned precious little about how it would affect their lives,” Pollack, whose organization has been promoting the health law, said. “You’re seeing a significant acceleration that is just going to be larger and larger as we move toward the end of March.”

          Higher enrollment should benefit WellPoint Inc. (Indianapolis IN), Humana Inc. (Louisville KY) and other managed-care insurers that rely on a large and diverse patient-mix to balance out the costs of coverage. If the pace of sign-ups continues, enrollment should be close to 5 million by the end of March, said Ana Gupte, an analyst at Leerink Partners in New York. “This is positive for HMO stocks that have made a bet in favor of the exchanges,” she said. WellPoint closed the week down 1.24, or 1%, at $84.25. Cigna Corp. (Bloomfield CT) dropped 3% to $86.70, while Humana lost 1% to $96.00. The Obama administration had a goal of signing up about 7 million people in private plans by the end of March, based on estimates from the Congressional Budget Office. The law’s first enrollment period ends March 31. “We continue to see strong interest nationwide from consumers who want access to quality, affordable coverage,” Marilyn Tavenner, the administrator of the U.S. Centers for Medicare and Medicaid Services, said in a blog post.

FDA APPROVES THIRD OF NEW DRUGS AFTER ONE STUDY -- Drugmakers can gain U.S. approval for medicines based on a wide variety of evidence the treatments work and are safe, including a single clinical trial, researchers said. Almost as many novel drugs approved from 2005 to 2012 were based on one study as those using two clinical trials, an analysis in the Journal of the American Medical Association found. Researchers from Yale University’s School of Medicine (New Haven CT) reviewed 188 novel therapies approved by the Food and Drug Administration for 206 uses during the time period. Clinical trials where people are randomly assigned to treatment groups, and double-blinded, meaning the patients and researchers don’t know who is taking the experimental medication, are considered the gold standard. Eighty-nine percent of pivotal trials were randomized and 80% were double-blinded, according to the study. “Such regulatory flexibility allows for a customized approach to approval, including the ability to rapidly approve potentially effective therapies for life-threatening diseases, such as certain cancers, or those diseases for which there is no existing effective treatment, such as orphan diseases,” the authors wrote.

          The week prior, an advisory panel to the FDA voted to back Chelsea Therapeutics International Ltd.’s (Charlotte NC) Northera for approval against sudden drops in blood pressure related to neurologic disorders, a rare disease known as neurogenic orthostatic hypotension that can cause dizziness and fainting. The panel’s 16-1 vote in favor of the drug came even as the FDA has twice expressed concern about Northera’s effectiveness. “I tend to lower the standard a little bit if there’s nothing else that really works,” said Michael Proschan, a panelist who is a mathematical statistician at the National Institute of Allergy and Infectious Diseases, after the vote Jan. 14. Three phases of clinical trials, including two rounds that assess the effectiveness of the medication against disease, typically are required for a new drug to gain FDA approval. The JAMA paper also found that approval of the medicines for 45% of the 206 illnesses were based on trials that relied on an assessed benefit that is reasonably likely to prove the drug works, such as a shrinking tumor, instead of a goal with a stronger correlation to effectiveness such as longer survival.

TRACKING WASHINGTON -- More than 6.3 million Americans were deemed eligible for government healthcare plans for the poor since the October 1 launch of President Barack Obama’s healthcare law through December, federal officials reported last week. The swelling rolls for Medicaid and the Children’s Health Insurance Program (CHIP) reflect both an expansion of Medicaid under Obama’s Affordable Care Act and what healthcare policy analysts call an “out-of-the-woodwork effect,” in which people who heard about Obamacare sought to obtain health insurance and discovered that they had qualified for Medicaid even before the law expanded eligibility. “We have people who for the first time will have some health security that they never had before,” Kathleen Sebelius, Secretary of the Department of Health and Human Services, said of the Medicaid numbers at the winter meeting of the U.S. Conference of Mayors in Washington, DC. It was not clear how much credit goes to the healthcare law, however. “What many people don’t read far enough to learn is that this number also can include people in some states who are eligible under pre-expansion--the woodwork effect--and whose Medicaid enrollment was simply renewed,” said Matt Salo, executive director of the National Association of Medicaid Directors (Washington DC).

          In other news, the percentage of adults without health insurance in the U.S. fell this month to the lowest level since the end of 2012 as the core provisions of Obamacare took effect, a Gallup Inc. (Washington DC) poll found. The uninsured rate dropped to 16.1% in the Jan. 2-19 poll, from 17.3% in December, according to the Gallup-Healthways Well-Being Index. The uninsured rate fell more for nonwhites and for those 35- to 64-years-old. The ability to extend health care to most of the nation’s 48 million uninsured will be a main measure of success for the 2010 Patient Protection and Affordable Care Act, known as Obamacare. The people benefiting most so far appear to be those who are unemployed, where Gallup said the uninsured rate fell 6.7 percentage points. “The unemployed remain the subgroup with the highest uninsured rate at 34.1%, but the initial decline among this group suggests the healthcare law may be working as intended for unemployed adults,” Jenna Levy, a methodologist at Gallup, wrote in the report. U.S. Representative Marsha Blackburn, a Tennessee Republican who is vice chairman of the House Energy and Commerce Committee, said the health law was “a far cry from ‘success’ by any measure.”

FDA/EMA ROUNDUP -- Amag Pharmaceuticals Inc. (Waltham MA) said the U.S. Food and Drug Administration rejected its application for wider use of its iron deficiency drug due to safety concerns and asked for more trial data, sending its shares down 3% for the week to $21.01. In a “complete response letter” to Amag, the FDA suggested that the company generate additional safety data for the wider patient population and evaluate the dosing or administration of the drug, Feraheme. Amag CEO William Heiden said, “We do have existing safety data from our two large late-stage trials; certainly we would look to that data to support the safety profile of Feraheme.” The FDA asked Amag to provide additional safety data related to serious hypersensitivity, cardiovascular events and deaths. Feraheme is already approved to treat iron deficiency anemia in adult chronic kidney disease patients.

          Elsewhere, Amarin Corp Plc (Dublin IRL) said the FDA rejected a preset testing process that was critical to the company seeking broader use of its blood fat-lowering drug. The Irish drugmaker said it planned to appeal the decision. The company may have to drop its bid to treat a wider population--for which it is currently conducting a large, multi-year study--if it doesn’t succeed, the company said. “We see a low probability of successful appeal and ultimate approval (for expanded use),” FBR Capital Markets & Co analysts wrote in a note. Analysts are skeptical of Amarin’s ability to run a profitable business without the new indication of its only approved drug, Vascepa. Advisers to the FDA had in October recommended that the agency not approve Vascepa for the new use until the larger 8,000-patient trial shows that lowering blood fats leads to reduced cardiovascular risk.

          The FDA said it is barring imported drugs from an overseas factory operated by Ranbaxy Laboratories Ltd. (Gurgaon), India’s largest drugmaker, due to quality control violations. The FDA ban effectively stops the company from shipping drugs and raw ingredients from its Toansa plant in the Punjab province. A Jan. 11 inspection by FDA staffers uncovered factory workers retesting drug ingredients that had failed quality testing, in an apparent effort to return positive results. Those practices and others found at the plant violate manufacturing standards for drugmakers that do business in the U.S. “The FDA is committed to ensuring that the drugs American consumers receive--no matter where they are produced--meet quality standards and are safe and effective,” said FDA compliance director Carol Bennett. Ranbaxy will be required to hire an outside inspector to review the plant and certify that it is meeting U.S. quality standards before the ban can be lifted.

          No serious safety concerns were raised over Merck & Co.’s (Whitehouse Station NJ) experimental pill for ragweed allergies, according to FDA documents Friday, ahead of a meeting this week of outside medical experts who will discuss whether the drug merits approval. The Allergenic Products Advisory Committee will meet on Tuesday to review Ragwitek, a pill placed under the tongue that, if approved, would be an alternative to regular injections administered by doctors for ragweed pollen allergies. At the meeting, the panel will be asked to discuss whether available clinical trial data supports the safety and the efficacy of the product in persons 18 years of age and older and make recommendations to the FDA. The committee will also be asked to recommend to the agency whether any additional studies of the drug might be needed.

          And Europe’s drugs regulator gave its backing on Friday for marketing approval to be granted for Bayer AG’s (Leverkusen DEU) pulmonary hypertension drug Adempas and for GlaxoSmithKline Plc’s (London) diabetes medicine Eperzan. The European Medicine Agency (EMA) also backed a new drug from Dainippon Sumitomo Pharma Co. Ltd. (Osaka JPN) called Latuda, for the treatment of schizophrenia, and Bemfola, a new biosimilar medicine for the treatment of infertility. But the regulator decided against recommending Teva Pharmaceutical Industries Ltd.’s (Petach Tikva ISR) new multiple sclerosis (MS) pill Nerventra, or laquinimod, which the Israeli firm is developing with Swedish partner Active Biotech, and recommended rejecting an application from Swiss drugmaker Novartis AG (Basel) to market its heart failure drug serelaxin. Recommendations for marketing approval by the EMA’s Committee for Medicinal Products for Human Use (CHMP) are normally endorsed by the European Commission within a couple of months.

MEDICAL STOCK SPOTLIGHT -- ThermoGenesis Corp. (Nasdaq) led advancing issues, soaring $1.73, or 259% over the week, to $2.82. The driving force was news that Rancho Cordova, CA-based ThermoGenesis and privately held TotipotentRX Corp. announced their co-sponsored Phase Ib clinical trial safety and efficacy results treating no-option patients suffering from critical limb ischemia with Totipotent’s CLIRST (Critical Limb Ischemia Rapid Stem cell Therapy) treatment. While the trial achieved both its primary safety and secondary efficacy endpoints at 12 months, the impressive statistical data was the driving force. The trial achieved statistical significance in the following areas: major amputation free survival rates (82.4%); both resting and walking pain reduction; improved walking distance; and open wound healing and generation of new blood vessels in the treated leg. There were also no serious adverse events.

          Elsewhere, BioDelivery Sciences International Inc. (Nasdaq) rocketed $2.94, or 45%, to $9.41 after the Raleigh, NC-based company reported positive clinical trial results for its experimental treatment for chronic pain. BioDelivery Sciences and Endo Pharmaceuticals announced late Thursday that results from the first phase of a Phase 3 clinical trial of BEMA Buprenorphine improved chronic pain relief when compared to a placebo. The results triggered a $10 million milestone payment from Endo to BioDelivery Sciences. The second phase of the trial is ongoing, and results are expected later this year. Those would also trigger a similar milestone payment for BioDelivery Sciences and, if successful, could lead to a new drug application for BEMA by the end of this year.

          And Uroplasty Inc. (Nasdaq) surged 24% to $4.49 after the medical device maker posted a smaller-than-expected loss for the third quarter, helped by strong sales growth of its Urgent PC Neuromodulation System for treating an overactive bladder. The Minnetonka, MN-based company forecast fourth-quarter revenue growth of 25-30% for the device in the United States. Roth Capital Partners raised its price target on the stock to $5 from $4.50, citing the strong quarterly results and outlook.

          But Cleveland BioLabs Inc. (Nasdaq) plummeted 40% to $0.69 after saying the U.S. Department of Health and Human Services has ended talks related to funding the development of its anti-radiation treatment. The Buffalo, NY-based company plans to pursue pre-Emergency Use Authorization for the treatment, which would make it available for procurement by federal agencies as a countermeasure against terrorist attacks even before regulatory approval. Cleveland BioLabs’ therapy, Entolimod, is being tested as a countermeasure following total body irradiation. There are no approved treatments for radiation poisoning, the company said. Entolimod, the company’s lead compound, is also being tested for use in advanced solid tumors.

IPO SECTOR -- Included among recent SEC filings for initial public offerings, Revance Therapeutics Inc. (Newark CA) registered up to $86.25 million worth of common stock. The company plans to list on the Nasdaq Global Market under the symbol “RVNC.” The offering is being led by Cowen & Co. and Piper Jaffray. Revance Therapeutics is a clinical stage specialty biopharmaceutical company focused on the development, manufacturing and commercialization of novel botulinum toxin products for multiple aesthetic and therapeutic applications. The company says potential therapeutic indications include migraine, rhinitis and other disease states for which botulinum toxin is an appropriate treatment.

January 20, 2014 ...

OBAMACARE ATTRACTING OLDER, LESS HEALTHY PEOPLE -- About 70% of Obamacare’s customers are 35 years of age or older, indicating at this point that the U.S. healthcare overhaul is initially attracting a less healthy population that may drive up insurance premiums. The federal- and state-run insurance exchanges signed up 2.2 million people for private health plans in the three months ended Dec. 28, the U.S. Department of Health and Human Services said in a report released last week. About 24% were 18- to 34-year-olds, and about one-third were 55 or older. The Obama administration wanted 18- to 34-year-olds to make up about 40% of total enrollment to help offset the cost of care for older and sicker people. Missing the target for the “young invincibles” may lead insurers to adjust prices if gains aren’t made by the March 31 end of enrollment. “It is more of a scale than a cliff,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s lobbying group in Washington. “The more young, healthy people participate, the more stable the marketplace will be and the more affordable premiums will be.”

          The report marks the first time the U.S. has released the demographics of customers on the exchanges that debuted Oct. 1 under the 2010 Patient Protection and Affordable Care Act. The patient-mix is important to health insurers who would have to decide by the end of May whether they want to keep selling exchange plans in 2015. Humana Inc. (Louisville KY) said last week it was evaluating its expectations for Obamacare after the initial wave of customers appeared to be sicker and costlier than anticipated. “We’re confident based on the results we have that we’ll have an appropriate mix enrolled in coverage,” Mike Hash, the director of HHS’s Office of Health Reform, said. Young adults should enroll in greater numbers as the March 31 deadline approaches, he said. Congressional analysts had projected the government-run insurance markets would attract about 7 million people in the initial six-month enrollment period. To keep the system financially stable, the White House had said it needs about 2.7 million of the new enrollees to be young, healthy customers.

J&J AGREES TO SELL ORTHO UNIT TO CARLYLE FOR $4 BILLION -- Carlyle Group LP (Washington DC) agreed to buy the Ortho Clinical unit of Johnson & Johnson (New Brunswick NJ) for $4.15 billion, a deal that would shed the healthcare products company’s only diagnostics division. The agreement is expected to close in the middle of the year, Carlyle said in a statement. Revenue has been slipping at the unit for blood and cholesterol tests, and it isn’t one of the market leaders, CEO Alex Gorsky said when J&J put the business up for sale last year. Carlyle will operate the business as a stand-alone entity, said people with knowledge of the matter before the offer was announced. The deal reflects an industry trend in which Pfizer Inc. (New York), Bristol-Myers Squibb Co. (New York) and Abbott Laboratories Inc. (Abbott Park IL) have in the past two years sold, spun off or split apart non-core businesses after patent losses on top products. J&J may not be done, said Danielle Antalffy, an analyst at Leerink Partners (New York). We’re inclined to believe J&J will continue to strategically prune its business segments,” Antalffy said. She said the company’s diabetes business “may be the target of future strategic alternatives.

          Carlyle, the world’s second-biggest manager of alternative assets such as private equity and real estate, has asked banks to line up about $3.3 billion in debt for the acquisition, with the rest funded by cash, said one of the people, who asked not to be named because the negotiations were private. “We expect to tap into rising demand for sophisticated medical diagnostic products and services worldwide,” Stephen Wise, a managing director at Carlyle, said in the statement. Ortho Clinical, which makes diagnostic equipment that tests blood for everything from cholesterol to fertility hormones, reported earnings before interest, taxes, depreciation and amortization of about $475 million in 2012. Carlyle plans to invest heavily in research and development as well as international expansion, said the person, who is familiar with the company’s strategy. J&J closed the week up 32 cents at $95.06 on the New York Stock Exchange.

TRACKING WASHINGTON -- Democrats are increasingly anxious about an onslaught of television ads hitting vulnerable Senate and House candidates for their support of the new health law, since many lack the resources to fight back in the early stages of the midterm campaign. Since September, Americans for Prosperity (Arlington VA), a group financed in part by the billionaire Koch brothers, has spent an estimated $20 million on television advertising that calls out House and Senate Democrats by name for their support of the Affordable Care Act. The unusually aggressive early run of television ads, which has been supplemented by other conservative initiatives, has gone largely unanswered, and strategists in both parties agree it is taking a toll on its targets. Building on the success, the deep-pocketed organization disclosed last Tuesday that it was expanding its Senate efforts with $1.8 million in airtime to attack Democratic House members running for the Senate in Iowa and Michigan, where Democrats are viewed as holding an early advantage. The group was also moving into Montana, a state where Democrats may struggle to defend a seat, on behalf of a Republican House member running for the Senate.

          In other news, people who buy insurance on health exchanges run by the federal government are eligible for tax credits to reduce their premiums, a U.S. judge ruled, dismissing claims that only state-run exchanges can offer the subsidies.The plain text of the statute, the statutory structure and the statutory purpose make clear that Congress intended to make premium credits available on both state-run and federally facilitated exchanges,” U.S. District Judge Paul Friedman in Washington said in a ruling dismissing a lawsuit. The ruling undercuts what one supporter of the Obama healthcare law called an “existential” threat to the law. Opponents say it forces consumers and businesses to participate in a program their state governments opted out of. The tax credits are intended to help low-income people pay for health insurance bought on the exchanges set up through the Patient Protection and Affordable Care Act. There are 14 state-run exchanges, while 36 states are covered by the federal exchange.

FDA/EMA ROUNDUP -- The Food and Drug Administration has cleared a first-of-a-kind blood test that can help predict intellectual disabilities in infants by analyzing their genetic code. The laboratory test from Affymetrix Inc. (Santa Clara CA) detects variations in patients’ chromosomes that are linked to Down syndrome, DiGeorge syndrome and other developmental disorders. About 2% to 3% of U.S. children have some sort of intellectual disability, according to the National Institutes of Health. The test, known as the CytoScan Dx Assay, is designed to help doctors diagnose children’s disabilities earlier and get them appropriate care and support. It is not intended for prenatal screening or for predicting other genetically acquired diseases and conditions, such as cancer.

          Elsewhere, Medtronic Inc.’s (Minneapolis MN) CoreValve, a device used to replace heart valves, was approved by the FDA for patients who can’t have open-heart surgery. Medtronic’s device can be inserted with a catheter while traditional valve replacement is done through an invasive operation. The FDA cleared the device without an advisory panel review, the company said in a statement. CoreValve, approved in Europe since 2007, will compete with Edwards LifeSciences Corp.’s Sapien. Medtronic may take 30% of the market for the non-surgical valves, said Michael Weinstein, a JPMorgan Chase & Co. analyst. That’s more than investors have expected, he said.

          Chelsea Therapeutics International Ltd. (Charlotte NC) said an independent panel to the FDA recommended an approval for the company’s drug to treat a rare form of low blood pressure. Analysts, however, were cautious as the FDA rejected the drug in March 2012 even after a positive recommendation from an advisory committee and cited the need for more data. The panel last week voted 16 to 1 in favor of the drug, Northera. “A degree of caution may be prudent until the FDA responds, however, given strength of regulatory opposition to the drug to date,” Needham analyst Alan Carr said. Carr raised his price target on the stock to $8 from $4. Company shares closed the week up $2.26, or 90%, at $4.76. The FDA usually follows the recommendation of advisory panels, but is not bound to do so.

          Advising the FDA to “do its due diligence” about bleeding risk, an FDA panel voted 10-1 in favor of Merck & Co.’s (Whitehouse Station NJ) anti-clotting drug vorapaxar, which would have the brand name Zontivity. The panel and Merck want to limit the drug’s use to heart attack patients without a stroke history, because of an increased bleeding risk among stroke patients. Aspirin and Bristol-Myers Squibb’s now off-patent Plavix (clopidogrel) seek the same goal--to prevent clots--but Reuters notes Merck’s potential market peer works differently, by inhibiting a PAR-1 receptor. The panel also says the drug should come with a weight minimum because lighter patients appear to be at a higher risk for bleeding.

          And Gilead Sciences Inc.’s (Foster City CA) high-profile new hepatitis C drug Sovaldi has won final European approval, the company said on Friday, paving the way for its launch across the European Union. The green light from the European Commission had been expected following a positive recommendation from the European Medicines Agency in November. The once-a-day pill, also known as sofosbuvir, is the first approved to treat certain types of hepatitis C infection without the need for interferon, an injected drug that can cause severe flu-like symptoms.

MEDICAL STOCK SPOTLIGHT -- Alimera Sciences Inc. (Nasdaq) was a big mover last week, as its shares soared $2.92, or 59%, to $7.88. The move came despite no company specific news. This continues the recent uptrend for Alimera, as the stock is now up almost 145% in the past one-month timeframe. Alpharetta, GA-based Alimera Sciences is a biopharmaceutical company that is engaged in the research, development, and commercialization of ophthalmic pharmaceuticals. The company presently focuses on diseases affecting the back of the eye, or retina, which are treated with current therapies. Its advanced product candidate is ILUVIEN, an intravitreal implant providing a therapeutic effect for up to 36 months in the treatment of vision impairment associated with diabetic macular edema (DME). The implant delivers “sustained sub-microgram levels a corticosteroid with demonstrated efficacy in the treatment of ocular disease,” according to Alimera.

          Elsewhere, Sarepta Therapeutics Inc. (Nasdaq) jumped $7.35, or 38%, to $26.78 after the company said its muscle disorder drug eteplirsen continued to help patients after more than two years of treatment. Cambridge, MA-based Sarepta reported results from an extended study of the drug. It said boys who were treated with eteplirsen continued to show stabilization of walking ability after 120 weeks of treatment. The results come from a mid-stage clinical trial involving 12 boys between the ages of 7 and 13. They have Duchenne muscular dystrophy, a rare and fatal genetic disease that causes increasing muscle weakness. It affects one of every 3,500 boys born worldwide. Sarepta does not have any drugs approved for sale. It is studying treatments for Duchenne muscular dystrophy and viruses like Ebola, Marburg and influenza. Eteplirsen is its most advanced experimental drug.

          And Agios Pharmaceuticals Inc. (Nasdaq) leaped $8.56, or 31%, to $35.93 despite no company specific news. This continues the recent uptrend of the company as the stock has now gained over 87% since Jan 6. Agios discovers and develops therapeutics in the field of cancer metabolism. The Cambridge, MA-based company is focusing on glycolysis, fatty acid metabolism, and autophagy. The biotech recently started dosing patients in an early-stage study of a new blood cancer drug candidate. The biotech, which raised $106 million in its initial public offering last July, said the Phase 1 study AG-221 will test safety and tolerability. The drug candidate will be given to patients with advanced hematologic cancers with a mutation of isocitrate dehydrogenase-2 (IDH2), including acute myelogenous leukemia (AML) and myelodysplastic syndrome. Agios believes based on its studies that IDH2 mutations contribute to cancer growth by blocking differentiation, or maturation, of primitive cells.

          But Geron Corp. (Nasdaq) slid 14% to $4.51 after Zacks restated their “neutral” rating on its shares. Zacks currently has a $5.50 price target on the stock. Zacks’ said, “Geron posted a net loss of $0.06 per share in the third quarter of 2013, in line with the Zacks consensus estimate but narrower than the year-ago loss of $0.13. Third quarter revenues of $181,000 were below the year-ago revenues of $636,000.” Geron’s third-quarter results were overshadowed by an abstract on its imetelstat drug candidate. Zacks says the data look encouraging and Geron may have another shot at developing imetelstat. Menlo Park, CA-based Geron did not have much success in developing imetelstat for breast cancer and non-small cell lung cancer earlier. In another blow, Geron got a “sell” rating at TheStreet Quant Ratings.

IPO SECTOR -- Included among recent SEC filings for initial public offerings, Eleven Biotherapeutics Inc. (Cambridge MA) registered up to $69 million worth of common stock. The company plans to list on the Nasdaq Global Market under the symbol “EBIO.” The offering is being led by Citigroup, Cowen & Company, and Leerink Swann. Eleven Biotherapeutics is a clinical-stage biopharmaceutical company with a proprietary protein engineering platform, called AMP-Rx, that the company applies to the discovery and development of protein therapeutics to treat diseases of the eye. Its therapeutic approach is based on the role of cytokines in diseases of the eye and the ability to design and engineer proteins to modulate the effects of cytokines. Eleven Biotherapeutics believes cytokines play a major role in the pathology underlying many eye diseases and that protein therapeutics are an effective means of modulating the effects of cytokines.

January 13, 2014 ...

HEALTH SPENDING RISES SLOWLY FOR FOURTH CONSECUTIVE YEAR -- National health spending grew slowly for the fourth consecutive year, increasing 3.7% in 2012 to $2.8 trillion, the federal government said. But officials disagreed over whether the Affordable Care Act or lingering effects of the recession were primarily responsible for the remarkable trend. As a share of the economy, health spending declined slightly, to 17.2% in 2012, from 17.3% in the prior year. For decades, health spending has grown faster than the economy, taking a bigger bite out of workers’ wages and the federal budget. Health spending averaged about $8,900 a person in 2012, according to the annual report issued by the government. The authors of the report--civil servants at the Centers for Medicare and Medicaid Services--said that the Affordable Care Act, adopted in March 2010, had only “a minimal impact on overall national health spending growth through 2012” and had not yet significantly reined in or accelerated its growth. “The relatively low rates of growth that we’ve seen over the last four years are consistent with the historical trends that we’ve seen when we look at health spending and gross domestic product,” said Aaron C. Catlin, an economist and co-author of the report. “It’s consistent with what we’ve seen in post-recessionary periods in the past.”

          But the White House said the data vindicated President Obama’s healthcare policies. “The years 2009 to 2012 saw the slowest growth in U.S. healthcare expenditures since the government started collecting this information in the 1960s,” said Jeanne M. Lambrew, a health policy coordinator at the White House. “While there is a debate about how much the Affordable Care Act has contributed to this health cost slowdown,” Ms. Lambrew said, “there is no doubt that it reduced Medicare spending growth, and most experts believe that Medicare savings spill over into the private sector.” Some experts, including the Congressional Budget Office, have reduced their projections of federal health spending, based in part on their belief that pervasive changes in the healthcare system would endure. However, the authors of the new report, published in the journal Health Affairs, were more cautious. “From our perspective,” they wrote, “more historical evidence is needed before concluding that we have observed a structural break in the historical relationship between the health sector and the overall economy.” (Source: New York Times)

FOREST AGREES TO BUY APTALIS FOR $2.9 BILLION -- Forest Laboratories Inc. (New York) is buying Aptalis Holdings Inc. (Bridgewater NJ), which specializes in treatments for gastrointestinal problems and cystic fibrosis, for $2.9 billion in cash. Forest Labs President and CEO Brent Saunders said in a statement that the transaction would help his company diversify its business. There’s an anticipated $125 million in cost savings from the combination by 2016. Aptalis shareholders include private investment firm TPG Capital (Fort Worth TX). Aptalis had $688 million in sales in fiscal 2013, which ended in September. Its top three U.S. products, Canasa, Carafate, and Zenpep, made up more than 60% of its total 2013 sales. International sales comprised about 15% of revenue. Third-party delivery technology provider and drugmaker Aptalis Pharmaceutical Technologies accounted for about 15% of revenue. Forest Labs said that it plans to fund the deal with available cash and debt. The company said due to the acquisition it has not yet started its previously announced accelerated stock repurchase program. Forest Labs said that once it completes permanent financing for the buyout that it will consider starting the accelerated stock repurchase program.

          The acquisition of Aptalis is expected to add about 78 cents per share to Forest Lab’s 2015 adjusted earnings and almost $700 million in revenue. The deal requires review by anti-trust authorities in the U.S. and Canada. The buyout is planned to close in the first half of 2014. Forest Labs’ stock closed the week up $9.38, or 16%, at $69.

TRACKING WASHINGTON -- Effective Jan. 1, Medicare began covering the costs of mental health care much as it does other medical expenses. For decades, older adults with depression, anxiety and other psychological conditions have received unequal treatment under Medicare. The program paid a smaller share of the bill for therapy from psychiatrists, psychologists or clinical social workers than it did for medical services. And Medicare imposed strict lifetime limits on stays in psychiatric hospitals, although no such limits applied to medical care received in inpatient facilities. There was never a good rationale for this disparity, and in 2008 Congress passed the Medicare Improvements for Patients and Providers Act. The law required Medicare to begin covering a larger share of the cost of outpatient mental health services in 2010 and to phase in additional increases over time. On Jan. 1, that process was complete, and for the first time since Medicare’s creation seniors who seek psychological therapy will be responsible for 20% of the bill while Medicare will pay 80%, the same percentage it covers for most medical services. (Payment starts once someone exhausts an annual deductible--$147 next year.) In 2008, Medicare covered 50% of the cost of psychological treatment. Last year, it covered 65%.

          In other news, the U.S. government will end its contract with CGI Federal Inc. (Fairfax VA) for the error-plagued Obamacare enrollment website HealthCare.gov, instead signing a contract with Accenture Plc (Dublin IRL), the Washington Post reported Friday in its online edition. HealthCare.gov’s technology failures in the weeks after its October 1 launch created a political crisis for President Barack Obama, threatening the rollout of his signature healthcare law to consumers and emboldening its foes among Republican lawmakers to call for its delay. CGI has been immersed in the effort to repair the site, which began working more smoothly for hundreds of thousands of consumers in December, allowing them to enroll in new health insurance plans offered under Obama’s Affordable Care Act. But the government’s dissatisfaction over the website’s early crash, as well as aspects of the site that still do not work, are behind plans to sign a one-year contract with Accenture instead, the Post report said, quoting a person familiar with the matter. U.S.-listed shares of CGI Group, the parent of CGI Federal, closed the week down $1.30, or 4%, at $31.58 on the New York Stock Exchange.

FDA/EMA ROUNDUP -- A diabetes pill from Bristol-Myers Squibb Co. (New York) and AstraZeneca Plc (London) won U.S. approval, becoming the second in a new class of medicines to treat the disease. The Food and Drug Administration cleared the drug, known as dapagliflozin. The FDA had rejected the Type 2 diabetes treatment, to be called Farxiga, in 2012 after advisers raised concerns about the bladder and breast cancer risk. Additional data downplayed the potential harm and advisers backed the pill in December. Johnson & Johnson gained clearance in March to sell Invokana, the first in a class of therapies called SGLT2 inhibitors that includes dapagliflozin. The Bristol-Myers and AstraZeneca drug, approved in Europe in 2012, may generate $160 million in sales this year for AstraZeneca, rising to $1.5 billion in 2020, Seamus Fernandez, an analyst with Leerink Partners has estimated. Bristol-Myers is selling its share of the diabetes alliance it has with AstraZeneca for as much as $4.3 billion. The partnership includes dapagliflozin, Onglyza, Byetta and Bydureon, Bristol-Myers said.

          Elsewhere, a combination treatment from GlaxoSmithKline Plc (London) for melanoma, the deadliest form of skin cancer, has won accelerated FDA approval. The green light for the combined use of Tafinlar, also known as dabrafenib, and Mekinist, or trametinib, from the FDA is the first of its kind for a form of the disease with a specific genetic profile. Both drugs are already approved for separate use but GSK believes they will have a longer-lasting effect if given together. Industry analysts also see a combination offering the greatest commercial potential. Tafinlar, which is similar to Roche Holding AG’s rival medicine Zelboraf, is designed to work in patients with a mutation of a gene known as BRAF. So-called BRAF inhibitors have been remarkably effective in shrinking melanoma tumors but most patients eventually develop resistance to the drugs. By combining Tafinlar with Mekinist, which works in a different way, the hope is that the cancer will be held off for longer. The FDA approval covers the treatment of melanoma that cannot be removed by surgery or which has spread to other organs.

          Ariad Pharmaceuticals Inc. (Cambridge MA), the cancer-drug maker that lost about 70% of its value this year, will return its only product to the U.S. market after the FDA approved a new prescribing and risk management plan. Iclusig, cleared last year for certain types of leukemia, will now be approved for a smaller patient population and have post-marketing requirements including increased oversight for safety concerns and a trial testing other doses, Ariad said. The company plans to start selling Iclusig again by mid-January. Sales of the drug were halted in the U.S. in October after the FDA saw an increased risk of blood clots, erasing more than $2.6 billion in Ariad’s market value. The company also stopped testing the drug in patients with newly diagnosed chronic myeloid leukemia, a broader indication that would have brought more revenue, and fired 40% of its workers in a restructuring to lower expenses.

          Antibacterial hand washes would have to be proven safe and healthier than plain soap to remain on store shelves under an FDA proposal that could affect about half of the $900 million in liquid soaps sold each year. Antibacterial soaps have gained “widespread consumer use” despite a lack of data showing added health benefits, the FDA said. The common ingredient, triclosan or triclocarban, also may be linked to hormone imbalances and antibiotic resistance, the FDA said, addressing 40 years of debate on overuse of the germ-killing chemicals. New safety standards would affect as many as 2,000 soap products such as Germany-based Henkel AG’s Dial, though many companies have already started phasing out triclosan, including Johnson & Johnson and Lysol-maker Reckitt Benckiser Group Plc. The rules also won’t apply to hand sanitizers such as Purell, and the FDA stopped short of addressing mouthwash, cosmetics and cleaners.

          In the European Union, Denmark has approved the sale of a generic copy of GlaxoSmithKline Plc’s (London) $8 billion-a-year inhaled lung drug Advair, threatening future sales of the British firm’s biggest product. Sandoz, the generics division of Swiss drugmaker Novartis AG (Basel CHE), and Vectura Group Plc, another British company, said they had received approval from Danish regulators for AirFluSal Forspiro, which was previously known as VR315. The green light marks the first approval of the product in Europe and analysts said more European approvals were likely to follow, with other Nordic countries and Germany seen among initial markets. Sandoz has completed authorization procedures in a further seven European countries but the group said the timing of final approvals in these markets would depend on national health authorities.

MEDICAL STOCK SPOTLIGHT -- Intercept Pharmaceuticals Inc. (Nasdaq), whose top owners include SAC Capital Advisors LP and Orbimed Advisors LLC, rose the most ever after a trial of its liver disease drug worked well enough for the testing to be stopped. Shares of New York-based Intercept exploded for a whopping 645% gain over the week to $445.83. Intercept uses obeticholic acid, or OCA, to treat nonalcoholic steatohepatitis, or NASH, a liver disease in which people who don’t drink or drink very little alcohol get liver damage that resembles that of heavy drinkers. Eventually, the disease can cause scarring and hurt the organ’s ability to function. About 2% to 5% of Americans have the disease, according to the National Institutes of Health. The stock got another lift Friday when Bank of America Corp. analyst Rachel McMinn raised her price target to $872 from $81, saying the market for treating nonalcoholic steatohepatitis has the potential to be “as big or bigger than Hepatitis C.”

          Elsewhere, Neurocrine Biosciences Inc. (Nasdaq) soared $9.50, or 98%, to $19.15 after news of a positive mid-stage study for one of its experimental drugs. The drug, labeled NBI-98854, did much better than a placebo in reducing symptoms in patients with tardive dyskinesia, and illness that causes involuntary spasms and movements. In the study, doctors who rated patient symptoms said 67% of patients were “much improved” or “very much improved” after six weeks of using the drug. Only 16% of patients in the placebo group showed similar progress. Nuerocrine still has to meet with the Food and Drug Administration about designing a late-stage study for the experimental drug. The San Diego, CA-based drug company hopes to file a proposed study in the first half of 2014.

          And Epizyme Inc. (Nasdaq), a developer of drugs for genetically defined cancers, rocketed $19.84, or 96%, to $40.41 after two programs met goals that yielded $29 million in milestone payments from partners. The Cambridge, MA-based company has gained 269% since its IPO last May at a price of $15 per share. One program partnered with Celgene Corp. met a proof-of-concept goal after patients with a particular genetic aberration responded to the drug, EPZ-5676, earning a $25 million payment, Epizyme said. Another program partnered with GlaxoSmithKline Plc met a development milestone for a $4 million payment.

          But Chelsea Therapeutics Inc. (Nasdaq) skidded 29% to $2.50 as a Food and Drug Administration panel preparing to review its drug Northera expressed some skepticism about the blood pressure treatment. A panel of FDA advisors is scheduled to discuss Northera this week. Based on materials posted to the FDA website, the agency appears to be skeptical about the drug. “The primary reason not to recommend approval is the lack of sufficient evidence of efficacy,” the FDA’s materials say, adding that only one clinical trial of the drug has been truly successful in the agency’s view. “Evidence from two longer-term studies suggest no durability to any statistically significant endpoint.” One reviewer said the FDA should ask Charlotte, NC-based Chelsea for more information because its research doesn’t provide enough evidence Northera works. The FDA is not required to follow the advice of its advisory panelists, but it often does so.

IPO SECTOR -- Included among recent SEC filings for initial public offerings, IMS Health Holdings Inc. (Danbury CT), backed by TPG Capital Funds LP, registered up to $100 million worth of common stock. IMS provides prescription data to the pharmaceutical industry, medical device makers, government agencies and other companies in the healthcare sector. Founded in 1954, the company has over 5,000 clients and operates in more than 100 countries, according to its website. TPG, Canada Pension Plan Investment Board (CPPIB) and Leonard Green & Partners LP took IMS private in 2010 for $5.2 billion, including debt. JPMorgan, Goldman Sachs, Morgan Stanley and BofA Merrill Lynch are among the underwriters for the IPO. The filing did not reveal how many shares the company planned to sell or their expected price. The company, which intends to list its common stock on the New York Stock Exchange under the symbol “IMS,” said that net proceeds from the offering would be used for debt refinancing and general corporate purposes. IMS’s operating income rose to $276 million in the nine months ended Sept. 30, from $173 million a year earlier. Revenue increased 4% to $1.87 billion.


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