Weekly Business Update for the Healthcare Industry
Monday, January 11, 2016 / Vol. 24 / No. 1
Copyright 1991-2016 MondayMorning / All Rights Reserved
01/11 (1) U.S. Says 11.3 Million Americans Have Signed Up for 2016 Obamacare Plans.
About 11.3 million people have signed up for 2016 health insurance policies under the Affordable Care Act, the U.S. said Thursday, exceeding the low end of government estimates. The Obamacare figures, which include federal data through Jan. 2 and state data through Dec. 26, are the most complete yet from the Health and Human Services Department. Most people have until the end of the month to sign up for 2016 health plans, and the government has estimated that 11 million to 14.1 million people will pick plans by then. But despite the decent enrollment number, the Obama administration so far is making little progress in getting more young adults to sign up for health policies on the federal insurance exchange. Twenty-six percent of people who signed up for coverage as of Dec. 26 in the 38 states that use the federal exchange were ages 18 to 34, according to a report from the Centers for Medicare and Medicaid Services, which administers the law. That figure is largely unchanged from a roughly comparable two-month period through Jan. 16, 2015. The numbers are below goals set by actuaries when the exchanges were launched in 2013. They estimated then that adults 18 to 34 would ideally make up 40% of the exchanges’ enrollment because the age group is generally healthier–which means they hold down premium rates by balancing out the greater medical spending of older enrollees.
Still, the percentage of new signs-ups among young adults is trending upward, federal officials said, though they said there isn’t comparative data to back up the contention. The officials said they typically see a surge of younger people in the final weeks of the enrollment period, which continues through Jan. 31. The number for 2016 also will rise once the state exchanges’ sign-ups are added. “We’re encouraged that marketplace consumers are increasingly young, engaged and shopping for the best plan,” Health and Human Services Secretary Sylvia Mathews Burwell said in a statement Thursday. In 2014, about 28% of people picking plans on the federal exchanges were 18 to 34 years old. The number of young people overall who are signing up–both young adults and children–was unchanged. Thirty-five percent of people who signed up or renewed coverage on the federal exchange as of Dec. 26 were under age 35, similar to the roughly comparable time period through Jan. 16, 2015.
01/11 (2) Breakthrough in Gene Editing Offers Hope to Those with Duchenne Muscular Dystrophy.
After decades of disappointingly slow progress, researchers have taken a substantial step toward a possible treatment for Duchenne muscular dystrophy with the help of a powerful new gene-editing technique. Duchenne muscular dystrophy is a progressive muscle-wasting disease that affects boys, putting them in wheelchairs by age 10, followed by an early death from heart failure or breathing difficulties. The disease is caused by defects in a gene that encodes a protein called dystrophin, which is essential for proper muscle function. Because the disease is devastating and incurable, and common for a hereditary illness, it has long been a target for gene therapy, though without success. An alternative treatment–drugs based on chemicals known as antisense oligonucleotides–is in clinical trials.
But gene therapy–the idea of curing a genetic disease by inserting the correct gene into damaged cells–is making a comeback. A new technique, known as Crispr-Cas9, lets researchers cut the DNA of chromosomes at selected sites to remove or insert segments. Three research groups, working independently, reported in the journal Science that they had used the Crispr-Cas9 technique to treat mice with a defective dystrophin gene.
Each of the three groups loaded the DNA-cutting system onto a virus that infected the mice’s muscle cells, and excised from the gene a defective stretch of DNA known as an exon. Without the defective exon, the muscle cells made a shortened dystrophin protein that was nonetheless functional, giving all of the mice more strength. The teams were led by Charles A. Gersbach of Duke University, Eric N. Olson of the University of Texas Southwestern Medical Center and Amy J. Wagers of Harvard University. “The papers are pretty significant,” said Louis M. Kunkel, a muscular dystrophy expert at Boston Children’s Hospital who discovered the dystrophin gene in 1986. The dystrophin protein plays a structural role, anchoring each muscle fiber to the membrane that encloses the muscle-fiber bundle. The dystrophin gene, which guides the protein’s production in the cell, sprawls across about 1% of the X chromosome and is the largest in the human genome. That gene has 79 sections, or exons, but can evidently maintain reasonable function even if a few exons in the middle are lost. The protein works as long as its two ends are intact. This is what happens in a milder disease known as Becker muscular dystrophy, in which mutations cause instructions from a few exons to be skipped during the protein-making process.
In the study published in Science, Dr. Olson’s team reported that they loaded the gene-editing system into a harmless virus, along with guides that directed it to cut the two ends of the 21st exon. The virus infected muscle cells throughout the mouse’s body, snipping out the exon from the dystrophin gene. The muscle cells repaired the DNA by joining the pieces of the cut chromosome and generated an effective dystrophin protein. The two other teams performed almost exactly the same experiment, each pursuing a consequence of its own previous research. Dr. Gersbach’s group reported earlier in 2015 that, with Crispr-Cas9 editing, they could remove the 45th to 55th exons of the dystrophin gene from Duchenne patient cells grown in laboratory cultures. With the damaged exons removed, the cells started to produce dystrophin proteins. “To launch a clinical trial, we need to scale up, improve efficiency and assess safety,” Dr. Olson said. “I think within a few years, those issues can be addressed.”
01/11 (3) Obama Vetoes Bill to Repeal Signature Healthcare Law.
Protecting his signature domestic achievement, President Barack Obama on Friday vetoed Republican-inspired legislation to repeal his healthcare law, saying to do so “would reverse the significant progress we have made in improving health care in America.” Republican lawmakers have pushed many repeal measures since 2010, when Obama signed the healthcare program into law. This bill was the first one to make it through Congress and reach his desk. Republicans have argued that the law is costly and doesn’t work. In his veto message to Congress, first reported by the Associated Press, Obama disagreed. Obama said the Affordable Care Act includes fairer rules and stronger consumer protections “that have made healthcare coverage more affordable, more attainable and more patient-centered. And it is working.” The veto was expected. But Republicans claimed victory nonetheless, arguing that they met two goals by finally passing a repeal bill: keeping a promise to voters in an election year, and showing that they are capable of repealing the law if a Republican wins November’s presidential election. All the GOP presidential candidates support repealing the law widely referred to as “Obamacare.” House Speaker Paul Ryan (R-WI) predicted it will be “a matter of time” before the law is finally overturned.
The Senate passed the measure last year under special rules that protected it from a Democratic filibuster, which can be cut off with at least 60 votes. The House passed it last week. For maximum visibility, Republican leaders made the legislation their first major vote of 2016. Although they don’t have the votes to actually override Obama’s veto, they hope to schedule an override vote to coincide with the Jan. 22 March for Life in Washington, an annual commemoration of the anniversary of the Supreme Court decision that legalized abortion. “We will hold a vote to override this veto, taking this process all the way to the end under the Constitution,” Ryan said. The bill would dismantle the health law’s key pillars, including requirements that most people obtain coverage and that larger employers offer it to workers. It would eliminate the expansion of Medicaid to cover more lower-income people and the government’s subsidies for many who buy policies on newly created insurance marketplaces. It would also end taxes the law imposed to cover its costs and cut federal funding for Planned Parenthood. More than 16 million people have gained health coverage since the law was enacted, according to government figures. They could risk losing it under the GOP approach.
01/11 (4) Medical Stock Spotlight
Axsome Therapeutics Inc. (Nasdaq) led a tiny group of advancing issues in the sector, leaping $2.59, or 28% for the week, to $11.86. The quiet period for Axsome’s initial public offering expired on Tuesday, December 29th. New York City-based Axsome Therapeutics had issued 5.67 million shares on November 19 at a price of $9 per share. Following the expiration of the company’s quiet period, a number of analysts commented on the stock. Ladenburg Thalmann assumed coverage on shares of Axsome issuing a “Buy” rating and a $25.00 price target for the company. Brean Capital assumed coverage on shares issuing a “Buy” rating and a $29.00 price target. Finally, Cantor Fitzgerald assumed coverage on shares of Axsome and issued a “Buy” rating and a $13.00 price target. Axsome is a clinical stage biopharmaceutical company developing novel therapies for the management of pain and other central nervous system, or CNS, disorders.
Elsewhere, Athersys Inc. (Nasdaq) jumped $21% to $1.25 after announcing a license agreement Friday with Tokyo-based Healios K.K. on a treatment for strokes. The companies will collaborate on a stem-cell therapy, known as MultiStem, that treats ischemic stroke and is being developed by Athersys. Ischemic strokes, which cause blood not to reach the brain, accounts for about 87% of all strokes, according to the National Stroke Association. Under the agreement, Healios, a regenerative medicine company, will have exclusive development rights to MultiStem in Japan, the companies announced. Cleveland, OH-based Athersys, which specializes in regenerative medicine, will receive an initial license fee of $15 million and is eligible for sales milestones that could reach $185 million.
And Auris Medical Holding AG (Nasdaq) surged 16% to $5.69 after its stock had an “Outperform” rating restated by equities research analysts at Leerink Swann. Leerink analyst, Joseph Schwartz believes Auris’s leading pipeline asset AM-101 could generate $350 million in risk-adjusted peak sales. Auris is pursuing groundbreaking neurotology research with two late-stage, Phase 3 pipeline candidates for the treatment of acute inner ear tinnitus (AM-101) and AM-111 for idiopathic sudden sensorineural hearing loss (sudden deafness). Top-line data for AM-101 are expected in 2Q16, and clinically meaningful efficacy would translate into solid upside, according to Leerink.
But ChemoCentryx Inc. (Nasdaq) plunged $3.33, or 41%, to $4.77 after its experimental drug was found to be as effective as standard-of-care in treating a rare autoimmune disease, but shares fell after the latest data raised doubts about the success of a late-stage study. “The small trial size and its design limits the confidence of the late-stage study being successful,” Cowen and Co. analyst Eric Schmidt, who has “market perform” rating on the stock, wrote. Schmidt said effects were driven by previously released data and the drug arm performed “directionally worse” in the newly treated patients. Interim data in November 2014 showed that the drug was as effective as the standard of care. Mountain View, CA-based ChemoCentryx is developing CCX168 to assess whether the drug can help reduce or replace the use of steroids in the treatment of Anti-neutrophil cytoplasmic antibody (ANCA)-associated vasculitis, or AAV. The condition, which affects about 40,000 people in the United States, is a type of rare autoimmune inflammation of the blood vessels. It leads to organ damage and failure and can be fatal if left untreated.
And Epizyme Inc. (Nasdaq) plummeted $5.31, or 33%, to $10.71 after the company announced the price of its secondary offering to be $9 per share. That was a 23% discount over the closing price prior to news of the offering terms. The Cambridge, MA-based company intends to sell 13.3 million shares in the offering, with gross proceeds estimated at $120 million. Initially, the company announced the planned secondary offering on Tuesday evening, which caused the stock to dip more than 23% the next day. Epizyme is a clinical stage biopharmaceutical company that discovers and develops epigenetic therapies for cancer patients. Epigenics is the use of tumor suppressor genes that put the brake on abnormal cell growth.
01/11 (5) Sanofi Cancels Marketing Deal with Developer of Inhaled Insulin.
French drugmaker Sanofi SA (Paris) is to stop selling an inhalable insulin developed by Mannkind Corp. (Valencia CA), following disappointing sales of the product since its launch in February 2015.
The decision to terminate the collaboration marks a blow for the idea of delivering insulin through an inhaler, rather than by injection, and shares in U.S.-based Mannkind fell 40% after the companies announced the move toward the end of December. Rights to Afrezza will revert to Mannkind from Sanofi in the next 90 to 180 days and Mannkind said it was reviewing strategic options for the product, although analysts questioned if the drug had any future. Sanofi first signed up the rights to Afrezza in August 2014 in the hope that an inhaled insulin would boost its flagging diabetes business, although many investors were skeptical from the start. Afrezza, which is delivered via a whistle-sized inhaler, acts more rapidly than insulin injections made by Sanofi or rivals such as Eli Lilly & Co. (Indianapolis IN) and Novo Nordisk A/S (Bagsvaerd DNK), but it also carries risks. The product can cause acute bronchospasm, or constriction of the airways of the lung, in patients with asthma and chronic obstructive pulmonary disease.
A Sanofi spokesman said Afrezza continued to suffer from a low level of prescriptions, despite substantial sales efforts. “The product never met even modest expectations and we do not project Afrezza reaching even the lowest patient levels anticipated at the time of entering the license and collaboration agreement, while costs are projected to remain very high for a significant period of time,” he said. Afrezza was developed in the shadow of another failed inhaled insulin from Pfizer Inc. (New York), called Exubera, which was approved in 2006 but eventually withdrawn due to poor sales.
Hours after MannKind announced Sanofi had pulled out of the agreement to license its Afrezza, a MannKind executive said the company does not plan to sell the drug and will seek a new marketing partner. “This is not the end of the line for Afrezza or MannKind by any means,” said Matthew Pfeffer, the company’s chief financial officer, on a conference call with investors. Company shares closed the week down 54% at $0.66 in New York. Sanofi fell 5% to 74.67 euros in Paris.
01/11 (6) Tracking Washington
2015 was a good year for innovation in medicine with the U.S. Food and Drug Administration approving 45 novel drugs, four more than in 2014 and the most since the all-time record of 53 set in 1996. Across the Atlantic, the European Medicines Agency recommended 93 new products, including generics, up from 82 in 2014. But despite the rosy statistics and the prospect for further progress in 2016, the pharmaceuticals industry faces challenges, with increased political focus on drug pricing having punctured both biotech and specialty pharma valuations in recent months. The prospect of Hillary Clinton becoming U.S. president could further undermine confidence in the sector’s profitability in 2016, given her pledge to rein-in drug costs. But any changes in the U.S. pricing model are likely to be gradual, according to Bernstein analyst Tim Anderson. Big pharmaceutical companies, meanwhile, are still struggling to get a decent return on the billions of dollars spent annually on research and development. Moreover, securing a strong launch for new drugs, which must compete with a growing roster of cheap generics, is often an uphill battle as healthcare providers push back against the high prices being charged. Modern cancer drugs can cost more than $10,000 a month, placing a heavy financial burden on governments, insurers and patients.
The rapid pace of new approvals reflects accelerated review times by regulators, who want to get life-saving treatments to patients, especially in cancer, as well as an improved scientific understanding of diseases. That will continue in 2016, analysts believe, with further advances in cancer treatments that work by boosting the immune system, and significant progress in drugs for autoimmune diseases. Switzerland’s Roche Holding AG (Basel), the world’s largest cancer drug company, could be a notable winner on both counts, with its cancer immunotherapy atezolizumab on track for potential fast approval in 2016. Roche may also be the first company with a drug to treat the progressive form of multiple sclerosis and some analysts already forecast annual sales for ocrelizumab of $5 billion. Full drug pipelines at many other companies suggest the strong rate of new drug launches is likely to continue for a while yet, with IMS Health Inc. (Danbury CT) forecasting a total of 225 new drug approvals between 2016 and 2020.
MondayMorning/January 11, 2016/Vol. 24/No. 1
01/11 (7) Valeant Planning to Appoint New CEO.
Valeant Pharmaceuticals International Inc. (Laval Quebec) said it had named an interim CEO while its leader remained in the hospital, where he is being treated for severe pneumonia. The drugmaker, which has been under scrutiny for its pricing and distribution policies, said Howard B. Schiller would be its interim chief executive as J. Michael Pearson recovered from his illness. Mr. Schiller, who serves on the company’s board, was Valeant’s chief financial officer for over three years, ending in June. The company said the timing of Mr. Pearson’s return was uncertain and that he would be on medical leave until further notice. Under Mr. Pearson’s leadership, Valeant grew into one of the world’s largest drug companies in less than a decade, but some of its tactics have been criticized–particularly the practice of acquiring old drugs and sharply raising their prices, often by several hundred percent. It also attracted scrutiny for its once-secret relationship with a mail-order pharmacy that bolstered sales of its expensive dermatology drugs. The company’s practices are now being investigated by Congress and federal prosecutors.
Valeant announced on Dec. 28 that Mr. Pearson, who also serves as chairman, was on medical leave and said it had created an “office of the chief executive,” which included several executives, to run the company. Valeant also created a board committee, which included Mr. Schiller, to oversee and support the new office of the chief executive.
A spokeswoman for Valeant said the office of chief executive was created as an immediate measure, but once it became clear that Mr. Pearson would be on an extended leave, the board decided to name an interim chief executive. Valeant also said that Robert Ingram, its lead independent director, would serve as interim chairman. “We appreciate the expressions of support and concern for Mike’s health that we have received from Valeant’s investors, employees, business partners and other stakeholders,” Mr. Ingram said in a statement. The prospect of a prolonged absence for Mr. Pearson has hurt the company’s stock price, which was already being battered by questions about Valeant’s practices and its future. Company shares closed the week down 10% at $91.06.
01/11 (8) IBM Watson Reveals Prototype of Diabetes App for Low Blood-Sugar.
IBM Inc. (Armonk NY) announced a deal with sports and fitness retailer Under Armour Inc. (Baltimore MD) to use machine learning technology from Watson and showed off an application for diabetic care developed with the supercomputer’s data, highlighting the company’s effort to expand Watson’s capabilities for the healthcare industry. IBM and Under Armour released an updated fitness application for Apple Inc.’s (Cupertino CA) iPhones that uses data powered by Watson, IBM CEO Ginni Rometty said in a speech at the International Consumer Electronics Show in Las Vegas. Separately, Medtronic Plc (Dublin IRL) CEO Omar Ishrak joined Rometty on stage to unveil a prototype for a diabetes-management app that tests have shown may be capable of predicting hypoglycemic events as early as three hours in advance. The application still needs to go through regulatory review–it will roll out this summer, Rometty said. The ability to predict the hypoglycemic events is a “breakthrough,” she said. “Up to three hours in advance is what prevents dangerous health events from happening.” Rometty is betting that Watson will be a major long-term growth area for International Business Machines Corp. as the company works to reverse a 14-quarter revenue slide by shifting its focus to cloud computing and analytics.
IBM has targeted Watson’s services on healthcare and the Internet of Things industries and has created company groups devoted to the two markets. The Watson technology provides what Rometty calls cognitive computing, using machine learning algorithms to produce prescriptive and predictive analysis. Revenue from the Watson unit–expected to reach $1 billion in the near term–now is included in the company’s analytics group, which recorded $17 billion in sales in 2014. Powered by Watson technology, Under Armour’s application, UA Record, aggregates and analyzes an individual’s health and fitness data to provide personalized coaching and advice. A few examples include the app telling a user the average steps taken daily and bed time for a person their age. Under Armour has spent about $700 million buying companies that make mobile workout apps, such as MapMyFitness. The goal is to create what CEO Kevin Plank has called a “halo effect” to entice more purchases and loyalty from customers of the company. It turned these acquisitions into a suite of software used by 155 million people that can integrate with a smartphone’s motion sensors and other devices like Fitbit Inc.’s wristbands. All the activity can be tracked through the UA Record mobile app, which is a health dashboard that also has a link to the company’s online store and its own social network.
Meanwhile, Medtronic sells an insulin pump for diabetics that turns off when blood sugar gets too low and has approval for a device that sends readings to a patient’s smartphone. Working with IBM, it wants to anticipate how each person’s behavior will affect their blood-sugar levels and help them make choices to improve their health, said Hooman Hakami, president of Medtronic’s diabetes group. Patients with diabetes either don’t produce or can’t properly break down the hormone insulin, which converts blood sugar into energy. More than 29 million Americans have the disease, according to the Centers for Disease Control and Prevention. The application demonstrated at CES gathers a patient’s readings from Medtronic insulin pumps and glucose monitors, and combines them with information taken from the individual’s activity trackers and diet. The system uses pattern recognition gleaned through IBM’s Watson to provide feedback on how a patient can manage their diabetes. The goal is to “make management of diabetes something you don’t notice,” Ishrak said at the event.
01/11 (9) Flatiron Health Secures $175-Million Round of Funding.
Just a few days into 2016, Flatiron Health Inc. (New York City), a start-up that gathers and analyzes data on cancer treatments and sells software based on those insights, said it had raised $175 million in a funding round led by the pharmaceutical giant Roche Holding AG (Basel CHE). Flatiron declined to disclose its valuation. As part of the deal Flatiron gets more than money, according to a report in The New York Times. Roche will buy several of Flatiron’s software products, which are based on subscriptions, in a move that is set to expand the start-up’s stream of recurring revenue and better position it for a future initial public offering. The partnership between the two companies is nonexclusive, and Flatiron can continue to work with other pharmaceutical companies. “We plan to go public in two to three years,” Nat Turner, Flatiron’s CEO and co-founder, said. “To do so, we’ll have to meet certain financial metrics, and this investment sets us up to do that.” The deal shows that sizable funding rounds for private companies are continuing, even after some investors said last year that they were beginning to see a drop in the number of venture firms writing huge checks to start-ups. Mutual fund investors had started to mark down the value of their stakes in privately held companies like Snapchat and Dropbox.
Much like the ride-hailing company Lyft, which recently announced it had raised $500 million from General Motors Corp. (Detroit MI), Flatiron is tapping a deep-pocketed corporate investor that wants to benefit from the expertise of a start-up. G.M.’s core business is threatened by changing car ownership patterns, a phenomenon it hopes to slow by teaming up with a potential rival to develop a network of self-driving cars and create short-term car rental hubs across the United States. And like many other big pharmaceutical companies, Roche is dealing with threats to its core business from generic drugmakers on the low end. It is also facing a shift in the healthcare payment system, in which insurers are paying more for treatments when they have been shown to be effective. Roche, a major player in the oncology market, said it would use Flatiron’s data to bring new drugs to market faster, keeping its drug pipeline full of innovative new treatments for which it can charge a premium. “Flatiron has tremendous data that helps us understand how medicine reacts in patients,” said Daniel O’Day, the chief operating officer at Roche. “This is a long-term strategic investment, and the strategic collaboration benefits us. The value in the investment is not to generate a financial return.”
01/11 (10) ELI LILLY & CO. (Indianapolis IN) has dropped a lower-than-expected 2016 forecast on Wall Street after wrapping up a year in which its stock soared above the broader market. The drugmaker said it expects adjusted earnings in the new year to range between $3.45 and $3.55 per share, excluding charges like deal integration costs. It predicts revenue of between $20.2 billion and $20.7 billion. Analysts forecast, on average, earnings of $3.65 per share on $21.36 billion in revenue, according to FactSet. Lilly’s outlook comes after the maker of the insulin Humalog topped analysts’ expectations for the first three quarters of 2015 and bumped up its annual forecast for that year in October. Lilly reaffirmed that forecast for adjusted 2015 earnings of between $3.40 and $3.45 per share. Bernstein analyst Dr. Tim Anderson said in a research note that Lilly’s forecast for 2016 actually calls for “quite healthy” earnings and revenue growth compared to its peers, when the impact of foreign exchange rates is excluded. Lilly has been recovering from the loss of patents protecting key products like the antidepressant Cymbalta from cheaper generic drugs. The company has invested heavily in developing new drugs, and that portfolio includes potential cancer treatments and an Alzheimer’s disease drug in late-stage testing.
Lilly now has nine potential treatments or diagnostic agents that are either in late-stage clinical testing or have been submitted for approval. “The pipeline looks good, and the (company’s) revenue is likely to hit expectations over a longer term,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business who follows the pharmaceutical industry. He added that analyst projections for Lilly’s 2016 earnings and revenue may have been a little aggressive.
Shares of Lilly closed the week down 4% at $81.26 after it released its forecast. The company’s stock soared 22% in 2015 and reached its highest prices in about 15 years before closing the year at $84.26. Meanwhile, the Standard & Poor’s 500 index fell less than 1%. The company plans to detail its fourth-quarter and full-year performance Jan. 28. Separately, Lilly’s new Jardiance diabetes treatment has begun stealing market share from rival drugs in its class, the company said, bolstered by clinical trial data showing it slashed deaths by 32% in patients with Type 2 diabetes.
01/11 (11) WALGREENS BOOTS ALLIANCE INC. (Deerfield IL) trumped Wall Street’s earnings expectation for its fiscal first quarter, and the nation’s largest drugstore chain started 2016 cautiously by narrowing its forecast for the new year. The company said it hiked the bottom end of a forecast it laid out in October by 5 cents per share. It now expects full-year earnings to range from $4.30 to $4.55 per share.
Analysts expect, on average, earnings of $4.44 per share for fiscal 2016, according to FactSet. Walgreens earned $1.11 billion in the quarter that ended Nov. 30, with adjusted results totaling $1.03 per share. Analysts expected, on average, earnings of 97 cents per share, according to Zacks Investment Research. The company posted revenue of $29.03 billion in the period, which missed analyst expectations for $29.56 billion. In October, Walgreens also said it will spend $9.41 billion to take over rival drugstore chain Rite Aid Corp. (Camp Hill PA) in a deal that could create a drugstore chain with more than 12,700 U.S. locations, far more than the nearest competitor, CVS Health Corp. (Woonsocket RI). Walgreens said Thursday it still expects the deal to close in the second half of this year. Last month, the Federal Trade Commission asked for more information about the acquisition, a request Walgreens said it expected.
The Rite Aid deal came less than a year after Walgreens bought European health and beauty retailer Alliance Boots, which runs the largest pharmacy chain in the United Kingdom. That deal closed at the end of 2014, which alters year-over-year comparisons of Walgreens financial results for its fiscal first quarter. Walgreens CEO Stefano Pessina told analysts Thursday morning that his company is interested in making more moves, even though it is still working on or digesting these deals. In particular, Walgreens would like to return to the pharmacy benefits management business, which involves running prescription drug coverage for big customers like employers and insurers. Pessina said that could happen through a merger, partnership or promotional agreement. Shares of Walgreens closed the week down 5% at $81.05. The company’s stock advanced about 12% last year.
01/11 (12) EDITAS MEDICINE INC. (Cambridge MA), the drugmaker whose backers include Bill Gates and Google Ventures (Mountain View CA), filed to become the first publicly traded company to specialize in a new technology to edit flaws in genes. The company, which uses a gene-editing technique called Crispr, filed for the IPO with an initial size of $100 million. That’s a placeholder amount used to calculate fees and will probably change. Gene-editing startups have drawn more than $1 billion in private venture-capital investments since 2013, according to Boston Consulting Group, with investors hopeful that new, more precise DNA-editing capabilities will yield treatments for conditions as diverse as blood diseases, cancers, auto-immune disorders and inherited eye disorders. Editas has raised $163.3 million from selling preferred stock, its filing said. Venture capital firms Flagship Ventures and Polaris Partners each hold more than 15% of the company before the offering. Google Ventures–the unit of Alphabet Inc. that goes by GV for short–has also bought private shares, along with Gates and Khosla Ventures.
Rodger Novak, CEO of Crispr Therapeutics Ltd. (Basel CHE), has said he would consider an IPO this year. Both companies have said their first in-human trials won’t start until 2017. Other closely-held gene editing firms include Intellia Therapeutics Inc. (Cambridge MA) and Poseida Therapeutics Inc. (San Diego CA). Bayer AG (Leverkusen DEU) and Crispr Therapeutics also started a joint venture in December with a $335 million investment from Bayer. Editas intends to use about $15 million to $20 million of the proceeds for preclinical studies and clinical trials of its lead program in Leber congenital amaurosis, an inherited form of progressive blindness, according to the filing. As much as $22 million of the net proceeds will be used for preclinical studies in the company’s collaboration with Juno Therapeutics Inc. (Seattle WA), a developer of cancer therapies. The company hasn’t generated revenue from product sales and said it doesn’t expect to “for the foreseeable future.”
01/11 (13) HUMANA INC. (Louisville KY) is the latest insurer to run into trouble in Obamacare’s individual health-insurance markets. The health insurer said that it probably won’t collect enough money to cover costs for some customers who bought individual plans, and will set aside what’s known as a premium deficiency reserve. The shortfall is for 2016 plans that comply with new rules under the Affordable Care Act, Humana said Friday. UnitedHealth Group Inc. (Minnetonka MN), the biggest U.S. health insurer, said in November that it might stop participating in Obamacare next year after taking losses. One analyst predicted that Humana would follow suit. “We expect Humana will exit Health Insurance Exchange marketplaces in 2017 in light of this data and focus on its Medicare Advantage book of business,” Ana Gupte, an analyst with Leerink Partners, said in a note to clients Friday. Medicare Advantage is the private-sector version of the U.S. program for the elderly. Humana, which is being acquired by Aetna Inc. (Hartford CT), said in a regulatory filing that it’s still working to determine the size of the shortfall. The insurer said it also expects its individual commercial membership to decline by about 200,000 to 300,000 people by Dec. 31, 2016. The enrollment figure includes plans sold under Obamacare along with older policies.
Humana said it plans to provide more information on its 2016 outlook when it releases fourth-quarter earnings on Feb. 10. Excluding costs tied to the premium deficiency reserve, 2015 adjusted earnings will probably be $7.75 a share, Humana said. The figure is in line with analysts’ expectations and the company’s November forecast. Humana is adding members in Medicare Advantage. Its prescription-drug plan is adding 300,000 to 330,000 customers, and its individual Medicare Advantage plans will gain 100,000 to 120,000 members, according to the filing. The group Medicare Advantage business will probably lose about 120,000 to 125,000 members this year, the company said. Humana closed the week down 3% at $172.89.
01/11 (14) FDA/EMA ROUNDUP: The U.S. Food and Drug Administration approved AztraZeneca Plc’s (London) drug Zurampic to treat a condition associated with gout to be used in combination with another type of drug that reduces production of uric acid in the body. Zurampic, known chemically as lesinurad, works by helping the kidneys to excrete uric acid. Gout is a painful form of arthritis caused by the buildup of too much uric acid in the body. As a condition of the approval, the FDA said it will require AstraZeneca to conduct a study to further assess the kidney and heart safety of the medicine. The drug’s label will include a warning alerting healthcare professionals to the risk of kidney failure with certain unapproved uses, such as with higher-than-approved doses of Zurampic, the agency said.
Elsewhere, Eli Lilly & Co. (Indianapolis IN) secured a win at the FDA with the agency approving the company’s insulin Basaglar, to improve glycemic control in patients with Type 1 and 2 diabetes. Basaglar is the first insulin product approved through an abbreviated approval that relied in part on the FDA’s finding of safety and effectiveness for Sanofi SA’s Lantus (insulin glargine). The FDA granted tentative approval for Basaglar in August 2014. Lilly provided Basaglar-specific data that included two clinical trials enrolling 534 and 744 patients with Type 1 and 2 diabetes mellitus, respectively. Basaglar is indicated to improve glycemic control in adults with Type 2 diabetes and in combination with mealtime insulin in adults and pediatric patients with Type 1 diabetes.
Gilead Sciences Inc. (Foster City CA) said the FDA granted a priority review of its experimental hepatitis C combination drug. The drugmaker filed a new drug application (NDA) for the treatment–a combination of the biopharmaceutical company’s Sovaldi with velpatasvir–in late October. The FDA is expected to decide whether to approve the combination therapy by June 28. The FDA also has given the Sovaldi-velpatasir combination treatment “breakthrough therapy” designation, which is granted to experimental medicines that may offer major advances over existing options. The company, which had been known for its HIV/AIDS treatments, recently has seen its sales driven by its hepatitis C drugs.
Regenxbio Inc. (Rockville MD) has won an FDA “rare pediatric disease” designation for its investigational gene-therapy candidate for the treatment of mucopolysaccharidosis type I (MPS I). RGX-111 uses an adeno-associated virus vector to deliver the human IDUA gene to the central nervous system, which MPS I lacks. The disease strikes about 1 in 100,000 newborns. Regenxbio has said it plans to file an IND application with the FDA in the first half of the year. Under the FDA’s Rare Pediatric Disease Priority Review Voucher program, a sponsor who receives an NDA or BLA approval may be eligible for a voucher, which can be redeemed to obtain priority review for any subsequent marketing application.
The FDA has granted “fast track” designation to MediciNova Inc.’s (La Jolla CA) ibudilast for patients with amyotrophic lateral sclerosis. Marketed in Japan and Korea since 1989 for post-stroke complications and bronchial asthma, the candidate suppresses pro-inflammatory cytokines and promotes neurotrophic factors. MediciNova licensed the product from Japan’s Kyorin Pharmaceutical Co. Ltd. for its potential in relapse-remitting multiple sclerosis.
And the FDA has granted priority review status to PaxVax Inc.’s (Redwood City CA) single-dose cholera vaccine Vaxchora. Vaxchora met Phase 3 primary endpoints and demonstrated efficacy in an immunogenicity study of adults between the ages of 46 and 64. The FDA has identified cholera as one of the eligible neglected tropical diseases under its priority review voucher program. The potential of being granted a voucher was a significant incentive for PaxVax to develop the vaccine for the U.S. market, the company says. If licensed, Vaxchora would be the only vaccine against cholera approved in the U.S.
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MondayMorning/January 11, 2016/Vol. 24/No. 1
Weekly Stock Performance (as of January 8, 2016). P/E multiples based on trailing 12-month results. NM-Not meaningful
GROUP CLOSE CHG %CHG RATIO
Amedisys 38.08 -1.24 -3.15 NM
Community Hlth 22.95 -3.58 -13.49 6.6
Fresenius 41.99 +0.15 +0.36 24.4
HCA 64.30 -3.33 -4.92 13.5
HealthSouth 34.87 +0.06 +0.17 19.9
Kindred HC 10.14 -1.77 -14.86 NM
Tenet Health 25.34 -4.96 -16.37 184.1
Aetna 107.04 -1.08 -1.00 16.4
Anthem 132.13 -7.31 -5.24 12.6
Cigna 138.82 -7.68 -5.24 17.1
Humana 172.89 -5.72 -3.20 19.9
UnitedHealth 110.11 -7.53 -6.40 17.6
AstraZeneca 31.77 -2.18 -6.42 47.4
Bristol-Myers 63.63 -5.17 -7.51 60.1
GlaxoSmithKline 39.42 -0.93 -2.30 6.6
Johnson&Johnson 98.13 -4.59 -4.47 18.8
Eli Lilly 81.26 -2.98 -3.54 36.7
Merck 51.09 -1.78 -3.28 13.6
Mylan 49.42 -4.65 -8.60 28.2
Novartis 81.59 -4.49 -5.22 23.7
Pfizer 30.99 -1.30 -4.03 23.2
Sanofi 40.40 -2.25 -5.28 18.5
CVS Health 93.55 -4.20 -4.30 21.0
Express Scripts 85.74 -1.67 -1.91 26.7
Abbott Labs 40.68 -4.23 -9.42 24.2
Abbvie 55.70 -3.53 -5.96 1.6
Amerisource 97.97 -5.74 -5.53 NM
Bard 180.18 -9.26 -4.89 105.6
Baxter 36.20 -1.95 -5.11 27.0
Cardinal 83.86 -5.41 -6.06 21.0
McKesson 182.39 -14.84 -7.52 20.6
Amgen 150.71 -11.62 -7.16 18.0
Biogen 280.59 -25.76 -8.41 18.3
Biomarin 95.75 -9.01 -8.60 NM
Celgene 108.98 -10.78 -9.00 54.9
Emergent Bio 35.26 -4.75 -11.87 37.4
Gilead 96.45 -4.74 -4.68 8.8
Incyte 94.78 -13.67 -12.60 NM
Regeneron 491.68 -51.19 -9.43 95.8
Vertex 110.71 -15.12 -12.02 NM
Boston Sci 17.43 -1.01 -5.48 NM
Intuitve Srg 536.54 -9.62 -1.76 37.1
Medtronic 73.75 -3.17 -4.12 38.5
St Jude 58.16 -3.61 -5.84 16.5
Stryker 87.89 -5.05 -5.43 28.5
Varian 76.55 -4.25 -5.26 18.7
Zimmer 101.55 -1.04 -1.01 101.0
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MondayMorning/January 11, 2016/Vol. 24/No. 1
01/11: Markets: U.S. stocks tumbled Friday in a late-afternoon selloff that sent major equity indexes to their worst weekly declines in more than four years, as investors found little relief in moves by China to restore calm to its sinking markets and data that showed resilience in the U.S labor market. Bank stocks led the late slide, with JPMorgan Chase & Co. and Citigroup Inc. falling at least 2.2% to cap the week with drops of nearly 11%. Energy shares in the Standard & Poor’s 500 Index lost 1.3% to press deeper into five-year lows. Seven of the benchmark’s 10 main industries sank more than 5.5% last week in the gauge’s worst five-day start to a year in data going back to 1928. The S&P 500 dropped 1.1% to 1,922.03 and fell 6% for the week. The Dow Jones Industrial Average sank 167.65 points, or 1%, to 16,346.45. The index lost more than 1,000 points this week in its worst opening five-days to a year ever. “When investors saw there was no traction and the market was unable to hold rallies over several attempts throughout the day, it just became fear of going into the weekend,” said Gene Peroni, a fund manager at Advisors Asset Management Inc. in Conshohocken, PA. “The market has just been so reactive to news, people will wait on the sidelines and see what the weekend brings. It has been a rough week.”
A report Friday showed a 292,000 gain in jobs last month, exceeding the highest forecast in a Bloomberg survey, after a 252,000 increase in November that was stronger than previously estimated. The unemployment rate held at 5%, a seven-year low. Worries over contagion from China briefly lessened Friday after officials in the Asian nation set a higher yuan reference rate, suspended a controversial circuit breaker system that had halted stock trading twice since it was implemented at the start of the week and directed state-controlled funds to buy local shares. The S&P 500 has fallen 7.3% since the Federal Reserve raised interest rates last month for the first time in nearly a decade. The central bank balked at boosting borrowing costs in September in part due to turbulence sparked by China’s August currency devaluation. The poor start to 2016 has left the benchmark index 9.8% below its all-time high set in May after coming within 1% of the record as recently as November. The Chicago Board Options Exchange Volatility Index rose 8.1% Friday to 27.01, after erasing an earlier 10% drop. The measure of market turbulence known as the VIX is at a three-month high and up 48% this month, which would be the most since August’s 135% jump.
For the week, the S&P plummeted 121.91, or 5.96%, to 1,922.03. The Dow plunged 1,078.58, or 6.19%, to 16,346.45. The Nasdaq cratered 363.78, or 7.26%, to 4,643.63.
01/11: IPO Sector: Included among recent SEC filings for initial public offerings, Visterra Inc., a drug developer focused on creating vaccines for infectious diseases prone to mutation and resistance, registered up to $69 million worth of common stock. The Cambridge, MA-based company, which was founded in 2007, plans to list on the Nasdaq under the symbol “VIST.” Leerink Partners and Stifel are the joint bookrunners on the deal. No pricing terms were disclosed.
Elsewhere, Spring Bank Pharmaceuticals Inc., which is developing a protein-modulating small-molecule platform to treat viral diseases, registered up to $58 million in an initial public offering. The Milford, MA-based company, which was founded in 2002 and booked $1 million in sales for the 12 months ended September 30, 2015, plans to list on the Nasdaq under the symbol “SBPH.” Spring Bank filed confidentially on August 3, 2015. William Blair, Wedbush PacGrow and BTIG are the joint bookrunners on the deal. No pricing terms were disclosed.
21st Century Oncology Holdings Inc., the largest integrated network of cancer care centers and affiliated physicians, withdrew its plans for an IPO. The company originally set terms to raise $100 million in May 2014 at a proposed market cap of $256 million. The Fort Myers, FL-based company was founded in 2007 and booked $796 million in sales for the 12 months ended March 31, 2014. It had planned to list on the NYSE under the symbol “ICC.” Morgan Stanley, J.P. Morgan and Wells Fargo Securities were set to be the joint bookrunners on the deal.
Syndax Pharmaceuticals Inc., a late-stage biotech developing a novel therapy for treatment-resistant breast cancer, re-filed with the SEC to raise up to $86 million in an IPO. The company originally set terms in June 2014 to raise $60 million, but withdrew its offering. The Waltham, MA-based company was founded in 2005 and plans to list on the Nasdaq under the symbol “SNDX.” Syndax Pharmaceuticals filed confidentially on August 25, 2015. Morgan Stanley and Citi are the joint bookrunners on the deal. No pricing terms were disclosed.
Corvus Pharmaceuticals Inc., which develops immuno-oncology therapies that utilize the immune system to fight cancer cells, registered up to $115 million in an IPO. The Washington, D.C.-based company, which was founded in 2014, plans to list on the Nasdaq under the symbol “CRVS.” Corvus Pharmaceuticals filed confidentially on November 6, 2015. Credit Suisse, Cowen & Company and Guggenheim Securities are the joint bookrunners on the deal. No pricing terms were disclosed.
Reata Pharmaceuticals Inc., which is developing protein-based antioxidant inflammation modulators (AIMs) for life-threatening diseases, registered up to $80 million in an IPO. The Irving, TX-based company, which was founded in 2002 and booked $51 million in sales for the 12 months ended September 30, 2015, plans to list on the Nasdaq under the symbol “RETA.” Reata filed confidentially on October 19, 2015. Citi, Cowen & Company and Piper Jaffray are the joint bookrunners on the deal. No pricing terms were disclosed.
Tabula Rasa HealthCare Inc., a provider of individualized technology solution to decrease adverse drug events (ADEs), registered up to $115 million in an IPO. The Moorestown, NJ-based company, which was founded in 2011 and booked $64 million in sales for the 12 months ended September 30, 2015, plans to list on the Nasdaq under the symbol “TRHC.” Tabula Rasa filed confidentially on November 13, 2013. Wells Fargo Securities, UBS Investment Bank and Piper Jaffray are the joint bookrunners on the deal. No pricing terms were disclosed.
Audentes Therapeutics Inc., which is developing gene therapy treatments for X-Linked Myotubular Myopathy (XLMTM), registered up to $86 million in an IPO. The San Francisco, CA-based company, which was founded in 2012, plans to list on the Nasdaq under the symbol “BOLD.” Audentes filed confidentially on November 6, 2015. BofA Merrill Lynch, Cowen & Company and Piper Jaffray are the joint bookrunners on the deal. No pricing terms were disclosed.
Bavarian Nordic A/S, which is developing vaccines that stimulate a t-cell response to fight infectious diseases and cancers, registered up to $86 million in an IPO. The Kvistgaard, Denmark-based company, which was founded in 1992 and booked $187 million in sales for the 12 months ended September 30, 2015, plans to list on the Nasdaq under the symbol “BAVN.” Bavarian Nordic filed confidentially on October 19, 2015. Cowen & Company, Piper Jaffray and Nomura Securities are the joint bookrunners on the deal. No pricing terms were disclosed.
Proteostasis Therapeutics Inc., which is developing combination therapeutics that use amplifier molecules to modulate proteins, registered up to $86 million in an IPO. The Cambridge, MA-based company, which was founded in 2006 and booked $4 million in sales for the 12 months ended September 30, 2015, plans to list on the Nasdaq under the symbol “PTI.” Proteostasis Therapeutics filed confidentially on May 8, 2015. Leerink Partners, RBC Capital Markets, Baird and H.C. Wainwright are the joint bookrunners on the deal. No pricing terms were disclosed.
Cancer Prevention Pharmaceuticals Inc., which is developing treatments for colorectal cancer risk factors, registered up to $29 million in an IPO. The Tucson, AZ-based company, which was founded in 2009 and booked $4 million in sales for the 12 months ended September 30, 2015, plans to list on the NYSE under the symbol “CPP.” Cancer Prevention filed confidentially on September 4, 2015. Aegis Capital Corp. is the sole bookrunner on the deal. No pricing terms were disclosed.
TiGenix NV, which is developing injectable stem-cell therapies for the treatment of perianal fistulas, registered up to $58 million in an IPO. The Leuven, Belgium-based company, which was founded in 2000 and booked $8 million in sales for the 12 months ended June 30, 2015, plans to list on the Nasdaq under the symbol “TIG.” Canaccord Genuity and Nomura Securities are the joint bookrunners on the deal. No pricing terms were disclosed.
And Pulse Biosciences Inc., which is developing treatments for solid tumors based on pulsed electric fields, registered up to $20 million worth of common in an IPO by offering 5.0 million shares at a price range of $4. At that price, Pulse Biosciences would command a fully diluted market value of $51 million. The Burlingame, CA-based company was formed in 2014 and plans to list on the Nasdaq. It did not disclose a proposed ticker symbol. MDB Capital Group is the sole bookrunner on the deal. No pricing date was disclosed.
MondayMorning/January 11, 2016/Vol. 24/No. 1
Weekly Key Rates Prev. Year
In% 1/8/16 Week Ago
Prime Rate 3.50 3.50 3.25
Fed Target Rate 0.50 0.50 0.25
1-Month Libor 0.42 0.35 0.17
3-Month Libor 0.62 0.53 0.25
US Unemployment Rate 5.00 5.00 5.60
30-Yr. Mortgage 3.80 4.01 3.87
Sources: Bankrate.com; Bloomberg.com
COMEX Gold: $1097.90
Crude oil: 33.16
30-Year Muni Bond 2.78
Certificates of Deposit
Sources: Bankrate.com; Bloomberg.com
MondayMorning/January 11, 2016/Vol. 24/No. 1
RESEARCH & TECHNOLOGY
01/11 (15) People with type 2 diabetes are at higher risk for dementia in general. And for one form, called vascular dementia, diabetes brings more risk to women than men, according to a new review. The most common cause of dementia is Alzheimer’s disease, which is non-vascular, said senior author Rachel R. Huxley of Curtin University in Perth, Australia.
Non-vascular means it’s not related to problems with blood vessels. “In Alzheimer’s disease, nerve cells throughout the brain die off, and abnormal proteins accumulate in the brain for reasons not entirely known,” Huxley said. “Vascular dementia, in contrast, is the result of impaired blood flow to the brain, usually by a series of small, imperceptible strokes.” Diabetes in women seems to confer more risk for other conditions as well, Huxley said. “These findings add to the evidence that diabetes confers a greater vascular hazard in women compared with men,” Huxley told Reuters Health. “Diabetes confers a greater risk of developing heart disease, stroke and now vascular dementia in women compared with men.” The authors reviewed 14 studies involving a total of more than 2 million individuals, including more than 100,000 dementia patients. They reported their findings in Diabetes Care. Overall, people with diabetes were 60% more likely to develop any dementia than people without diabetes.
Women with diabetes were more than twice as likely as those without it to develop vascular dementia, compared to a smaller increase in risk for men with diabetes. There needs to be more research into how sugar in the blood interacts with the blood vessels and whether that process is different in women in men, Huxley said. Women tend to be undertreated for vascular risks relative to men, she noted. “We can’t definitively say whether the relationship is causal or not because the studies were all observational (rather than randomized trials) and therefore there always remains the possibility that the relationship is confounded,” Huxley said. A third factor, like obesity, could have been part of the relationship between diabetes and dementia, she said. Keeping fit, maintaining a healthy diet, quitting smoking and giving your brain as well as your body regular work-outs can help decrease the risk of dementia for people with diabetes, Huxley said.
01/11 (16) Some small studies have suggested that oral contraceptive use may be associated with an increased risk of birth defects, possibly by altering vitamin levels in the blood. But a large new study has found that taking oral contraceptives around the time of pregnancy did not increase the risk. The study, in BMJ, used records of 880,694 infants born in Denmark over 14 years, through March 2011. Danish records include dates of prescriptions for oral contraceptives, and researchers divided women into four groups: those who never used the pill, those who stopped more than three months before pregnancy, those who stopped less than three months before, and those who were taking the pill when they became pregnant. The number of birth defects per 1,000 births was consistent: 25.1 for those who never used the pill, 25.0 for use more than three months before pregnancy, 24.9 for use 0 to 3 months before pregnancy, and 24.8 for those who became pregnant while using the pill.
“Our results are especially reassuring since we used approaches that previous research did not,” said the lead author, Brittany M. Charlton, an instructor at Harvard Medical School. “Most previous studies have relied on women recalling contraceptive use, but we had the registries. This eliminates any recall bias.”
01/11 (17) Men who take aspirin may have a lower risk of dying from prostate cancer, according to results of a large observational study presented at a press briefing ahead of the 2016 American Society of Clinical Oncology (ASCO) Genitourinary Cancers Symposium, held last week in San Francisco. “Men with prostate cancer who took aspirin regularly after diagnosis had a significantly reduced risk of death,” said Christopher B. Allard, MD, of the Harvard School of Public Health and Brigham and Women’s Hospital in Boston, during the briefing. Regular aspirin use in prostate cancer patients, defined as taking aspirin more than three times a week, was associated with a 39% lower risk of dying from the disease compared with men who reported less frequent aspirin use or no aspirin use (hazard ratio, 0.61). The study evaluated data from 22,071 men who took part in the Physicians’ Health Study. Men enrolled in this cohort were tracked from 1982 until 2009. After more than 27 years of follow-up, 3,193 men were diagnosed with prostate cancer and, of those, 403 developed either metastatic prostate cancer or died from the disease. Aspirin intake prior to a prostate cancer diagnosis was not shown to be beneficial, as aspirin use did not appear to affect the risk of prostate cancer development or rate of diagnosis.
Aspirin use also did not affect the frequency of diagnosis of high-grade prostate cancer or locally advanced prostate cancer, according to the study. “Regular aspirin intake may inhibit lethal prostate cancer,” said Allard, “probably by preventing cancer progression.” Regular use was associated with a 24% lower risk of developing lethal prostate cancer. These findings need to be confirmed in future studies. “More work is needed to identify particular subsets of men most likely to benefit from aspirin and to determine the optimal aspirin dose,” said Allard. According to Allard, this study suggests that men who take aspirin regularly for its effect on cardiovascular health may have one more reason to continue taking the nonsteroidal anti-inflammatory drug, but that recommendation to begin an aspirin regimen for prevention of lethal prostate cancer is not warranted based on this study alone. “While the work is provocative, it is important to keep in mind that the findings are from an observational study where surveys and reviews of hospital records were used to obtain information,” said Sumanta Pal, MD, medical oncologist at City of Hope in Duarte, CA.
01/11 (18) UniQure NV, the Amsterdam-based biotechnology company that developed the first gene therapy approved in Europe, said its experimental treatment for hemophilia B increased blood clotting ability in two patients. The shares rose as much as 21% in trading after the announcement. The therapy, known as AMT-060, was designed to fix a genetic flaw caused by missing or defective factor IX, a protein that clots blood. The two adult patients received a low dose of the treatment. Factor IX rose to 5.5% and 4.5% of the normal level from less than 2% in the patients, the company said. Three other people who received a low dose of the therapy in the trial haven’t yet reached the full 12 weeks of follow-up, UniQure said. Factor IX levels of more than 5% are considered a mild form of the disease, which results in bleeding happening only rarely, according to Gbola Amusa, an analyst at Chardan Capital Markets LLC in New York who recommends buying UniQure shares. The company plans to start enrolling patients who will receive a higher dose of the therapy in the trial this quarter. Gene therapies have shown mixed results in recent months. Spark Therapeutics Inc. said in October its treatment for rare form of blindness improved patients’ sight, while Bluebird Bio Inc. shares plunged the most ever in December after a company trial of a sickle cell disease therapy disappointed investors.
Current treatments for hemophilia B involve regular self-injections of the missing clotting factor IX to prevent prolonged internal and external bleeding episodes in case of injury. The market leader is Pfizer Inc.’s BeneFix, followed by Biogen Inc.’s Alprolix. Novo Nordisk A/S, which also makes a competing product, said Thursday it filed for approval of a long-acting factor IX product to European regulators. Available treatments cost $300,000 to $440,000 a year in the U.S. and can be as high as $1 million a year in some patients, according to Amusa. Hemophilia B can cost the health system more than $20 million per patient when medicines, doctors, nurses, and hospital storage are included in the bill, he said. UniQure closed the week up 10% at $18.19 in New York.
MondayMorning/January 11, 2016/Vol. 24/No. 1
01/11 (19) A study comparing the risks of in-hospital and out-of-hospital births in Oregon finds the odds of infant death are more than two times higher for planned out-of-hospital births. The results, published in the New England Journal of Medicine differ from those of a recent, larger Canadian study that found newborn death rates were not higher among women who gave birth at home. But the authors of both studies told Reuters Health the conflicting findings probably reflect underlying differences in the health systems in Oregon and in Ontario, where the Canadian study was done and where the medical guidelines for at-home births are more mature. “The findings are different, but I think that, on a system level, they paint a similar picture,” said the chief author of the Oregon study, Jonathan Snowden of the Oregon Health and Science University in Portland. “According to the Canadian study, when out-of-hospital births are integrated into the healthcare system and there are regulations in place for how to select women for out-of-hospital births, I think it can be a safe option,” he said. “In our Oregon study we found that, absent a lot of these systems, there were small but slightly increased risks of neonatal mortality in the out-of-hospital setting.”
The absolute risks of out-of-hospital births were still small, researchers noted. For example, in the Oregon analysis, the odds of death were 39 per 10,000 deliveries done at home or at a freestanding birth center. With a hospital delivery, the chances were 18 per 10,000.
No extra risk was seen among Oregon women who already had a child. The fact that the Oregon study didn’t screen out higher-risk pregnancies from the home birth group may also help explain why the newborn death rate was higher there, said Eileen Hutton of McMaster University in Hamilton, Ontario, chief author of the Canadian study. In Ontario, such women are not eligible for home birth, she said. Among the Canadian women, 25% attempting to give birth at home were ultimately transferred to a hospital. That’s much higher than the 16% who were transferred in Oregon, where birthing centers were included in the tally.
01/11 (20) Martin Shkreli put up his $45 million ETrade account to secure $5 million bail after federal authorities arrested him on fraud charges last month. The youthful founder of hedge funds and pharmaceutical companies attracted national attention in September for increasing the price of a life-saving drug more than 5,000%. Prosecutors say he lied to investors and used money from a company he ran to cover losses at his funds. He pleaded not guilty and was released on bond. A court filing offers some of the clearest evidence to date of the wealth Shkreli amassed as a healthcare entrepreneur and investor. Under the terms of the security arrangement, he can’t sell or transfer any of the assets in the account, which “have a current value of $45 million,” according to the filing. ETrade was directed to notify prosecutors if the value of the account fell below $5 million. Stocks used as security for bail often exceed the bond amount to account for market volatility, which is less of a concern for other assets that might be pledged such as real estate, said veteran defense lawyer Sally Butler, who is not involved in the case. Real property also has other characteristics that can make it “more reliable” than securities, she said. “It can’t be moved, for example.”
A frequent presence on social media and known to spend hours live-streaming himself on the Internet, Shkreli, 32, drew even more attention for buying a one-of-a-kind album by the Wu-Tang Clan and saying he had no immediate plans to play it. Speculation abounded at the time of his arrest over whether the album could be seized as part of the case, until the FBI said it hadn’t seized the record. While prosecutors accuse him of lying to investors in his hedge funds and deceiving officials at Retrophin Inc., a biopharmaceutical company he founded, Shkreli has said the drug-price increase, which isn’t part of the federal case, spurred the government to target him. Ousted by Retrophin in 2014, Shkreli stepped down as CEO from another company he founded, Turing Pharmaceuticals AG, after his arrest. Another company, KaloBios Pharmaceuticals Inc., fired him as CEO after the arrest and sought bankruptcy protection in late December. Investors have sued that company to recover $5.4 million.
01/11 (21) A new class of blood thinners that competes with widely used warfarin should get a boost next year when an “antidote” that can reverse the medications’ effects in an emergency is expected to enter the market, according to top U.S. heart doctors and investors. Xarelto, from Bayer AG (Leverkusen DEU) and Johnson & Johnson (New Brunswick NJ), and Eliquis, sold by Bristol-Myers Squibb Co. (New York City) and Pfizer Inc. (New York City), were approved as safer and more convenient alternatives for preventing blood clots and strokes than warfarin. But there was one snag: there was no way to quickly restore normal clotting for patients in need of emergency surgery or to stop a major bleeding episode, leading many doctors to hold off on prescribing the drugs. “It may be uncommon, but they’re memorable when they happen,” Dr. Charles Pollack, an emergency physician at Thomas Jefferson University Hospital in Philadelphia, said of major bleeding events. “We didn’t have a specific reversal strategy for these drugs, and I think that left people feeling a bit insecure,” added Pollack, who has done clinical work on a recently approved antidote to Boehringer Ingelheim GmbH’s (Ingelheim DEU) rival blood clot preventer Pradaxa.
All of that is about to change. Small drugmaker Portola Pharmaceuticals Inc. (South San Francisco) just applied for U.S. approval of a drug called andexanet alfa that rapidly reverses the effect of Xarelto and Eliquis. It is expected to enter the market in 2016. “It will make a big difference,” said Dr. Mariell Jessup, a cardiologist at the University of Pennsylvania Medical Center. “I have many physicians, particularly surgeons, who hate these drugs. They’re frightened of them because they’ve had to deal with the consequences of somebody coming in with trauma,” while using the new blood thinners. The new drugs cause fewer major bleeding episodes than warfarin and do not require dietary restrictions or constant monitoring as with the decades-old medicine. But major bleeding remains the most worrisome risk of all anti-coagulant therapy as it can be fatal or cause debilitating, long-term problems.
01/11 (22) IMS Health Holdings Inc. (Danbury CT), which tracks medical prescriptions and sells the data, paid its CEO a $23.5 million stock award, more than the entire pay packages for the heads of much larger drug companies such as Pfizer Inc. and Eli Lilly & Co. The restricted stock grant for IMS chief Ari Bousbib was disclosed in a financial filing. His entire compensation, including salary, will be released when IMS files its proxy statement later this year. By comparison, Ian Read of Pfizer, head of the largest U.S. drugmaker, was awarded total compensation of $22.8 million in 2014. John Lechleiter, CEO of Eli Lilly, which has a market value of $93 billion, received $22.3 million.
IMS Health, by contrast, carries a market capitalization of $8.1 billion. The company posted a $189 million loss in 2014 and is projected to earn $442.4 million in 2015, according to analyst estimates compiled by Bloomberg. Spokesman Tor Constantino said the grant “was awarded by the company’s board of directors to serve as a long-term retention vehicle.”
Bousbib was awarded $27.7 million in 2014, making him the 115th highest-compensated executive on the Bloomberg Pay Index. Pfizer’s Read and Eli Lilly’s Lechleiter ranked 159th and 165th. Half of Bousbib’s shares will vest at the end of 2017, and the remainder will vest at the end of 2019, according to the filing.
MondayMorning is published by MedContent International LLC. ISSN 1071-1368. Issues are comprised from major wire services and other news sources. Issues are transmitted weekly except Memorial Day, the last two weeks of August, and Christmas. Send correspondence about subscriptions or changes in fax or Email information to MondayMorning, Post Office Box 172, Cardiff, CA 92007, or contact [email protected] For subscription and general information go to http://www.mondaymorning.com, or call 760-807-4816 Monday — Friday, 9:00am — 6:00pm Pacific time.