Top Stories for Week of August 3, 2020

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SARS CoV-2 showing no signs of backing off in US, while Fauci, GOP lawmakers quarrel at hearing.

Florida, one of the US coronavirus hotspots, reported another record increase in COVID-19 deaths on Friday as the country’s top infectious disease expert shirked partisan squabbling at a congressional hearing and rebuked the GOP for lacking a national strategy to fight the pandemic.

The state health department said Florida registered 257 fatalities, Reuters reports, a record for the fourth straight day despite predictions that the US coronavirus epicenter could be shifting to the Midwest. In numerical terms, the one-day loss of life in Florida was roughly equivalent to the number of passengers on a single-aisle airplane. Florida also reported 9,007 new cases, bringing its total infections to over 470,000, the second highest in the country behind California.

Florida is among at least 18 states that saw cases more than double in July, when almost 25,000 people in the US died of COVID-19. Adding to the state’s woes, a hurricane was bearing down on Florida’s Atlantic coast. Gov. Ron DeSantis declared a state of emergency for counties on that coast with Hurricane Isaias expected to hit as early as Friday night.

Nationally, coronavirus deaths are rising at their fastest rate since early June and one person in the US died about every minute from COVID-19 last Wednesday, the day with the largest increase in deaths so far. In Washington, Anthony Fauci, the main infectious diseases expert at the National Institutes of Health, evaded efforts by a staunch ally of President Donald Trump to have him criticize holding protests about racial injustice during the pandemic. Fauci clashed with Representative Jim Jordan at a hearing of the US House of Representatives Subcommittee on the Coronavirus after the Ohio Republican asked him whether protests should be curbed or eliminated to control the coronavirus.

“Should we limit the protesting?” Jordan asked.

When Fauci said he was not in a position to make such a recommendation, the lawmaker retorted:

“You make all kinds of recommendations. You make comments on dating, on baseball and everything you could imagine. I’m not favoring anybody over anybody,” Fauci replied. “I’m not going to opine on limiting anything…. I’m telling you what is the danger, and you can make your own conclusion about that.”

Fauci also fended off attempts by Democrats to have him criticize the current state of COVID-19 testing. He repeatedly handed off Democratic lawmakers’ questions about testing to witnesses more directly involved with that effort. Fauci made headlines in March by describing US testing efforts as failing. The COVID-19 epicenter in the US has shown signs of shifting to the Midwest after ravaging New York and Sunbelt states.

On Friday, a travel order in Chicago went into effect requiring people who visited or are coming from neighboring Wisconsin to quarantine for 14 days. Wisconsin joined 21 other states that have seen a surge in new cases and been placed on Chicago’s travel quarantine list. Dr. Deborah Birx, coordinator of the White House coronavirus task force, said on Thursday that Ohio, Kentucky, Tennessee, Missouri, Kansas and Nebraska were particularly at risk “because of vacations and other reasons of travel.”

According to Johns Hopkins Medical, as of Saturday, Aug. 1, there were over 17.6 million COVID-19 global cases confirmed, and over 680,000 deaths. Confirmed cases in the US totaled 4.5 million with nearly 154,000 deaths. Both of the US figures comprise 26% and 23%, respectively, of the global totals.

COVID-19 Addenda: 1) Young children may carry the virus at high levels; 2) Roche’s Actemra/RoActemra fails in severe COVID-19-associated pneumonia study; 3) Singapore might have the best COVID-19 antibody; 4) Inovio vaccine candidate shows promise in nonhuman study; and (5) Masks may reduce viral dose some experts say.

A study published in JAMA Pediatrics introduced an unwelcome wrinkle into the narrative about how young children are affected by the virus, says The New York Times. Infected children have at least as much of the virus in their noses and throats as infected adults, according to the research. Indeed, children younger than five may host up to 100 times as much of the virus in the upper respiratory tract as adults, the authors found. That measurement does not necessarily prove children are passing the virus to others. Still, the findings should factor into the debate over reopening schools, several experts said.

“I’ve heard lots of people saying, ‘Well, kids aren’t susceptible, kids don’t get infected.’ And this clearly shows that’s not true,” said Stacey Schultz-Cherry, a virologist at St. Jude Children’s Research Hospital.

Roche Holding AG (Basel CHE) said that a Phase 3 study investigating Actemra/RoActemra (tocilizumab) in hospitalized adults with severe COVID-19-associated pneumonia failed to meet its primary endpoint of improved clinical status. The company launched the COVACTA trial in March in order to investigate the anti-IL-6 receptor biologic in a well-controlled study. The trial, which was conducted in collaboration with the US Biomedical Advanced Research and Development Authority (BARDA), evaluated intravenous Actemra/RoActemra added to standard-of-care compared to treatment with placebo plus standard of care. The primary endpoint of clinical status was measured by a seven-category ordinal scale that tracked patients’ clinical status based on the need for intensive care and/or ventilator use, as well as supplemental oxygen requirements.

A young company called Tychan Pte Ltd. (Singapore) that was one of the first to bring a COVID-19 antibody into the clinic is preparing to move into Phase 3, as its platform got its first validation in the New England Journal of Medicine. The small biotech, set up and backed by the Singapore government during the 2014-2016 West African Ebola crisis to respond quickly to emerging infections, published in NEJM a monoclonal antibody they developed for yellow fever virus, showing it was safe and neutralized the virus in patients exposed to the inactivated vaccine in a Phase 1b trial. Like several bigger name companies, Tychan developed an antibody that can bind to and neutralize SARS-CoV-2 and which can hopefully inoculate healthy people for a limited period of time and treat patients with early-stage or even late-stage disease. They started a Phase 1 on June 10, nine days after Eli Lilly started the first COVID-19 antibody trial in the world.

Inovio Pharmaceuticals Inc. (Plymouth Meeting PA) said on Thursday its COVID-19 vaccine candidate was effective in protecting rhesus macaques from the virus 13 weeks after the last vaccination. Results from the study of the vaccine, INO-4800, in monkeys demonstrate that it reduced viral load in lower lungs and nasal passages in those who received two doses of the vaccine four weeks apart. “INO-4800 could provide protection in a more real-world setting,” said CEO J. Joseph Kim referring to the study results, which were submitted to a peer-reviewed journal and also published on the non-peer reviewed preprint site, bioRxiv. Inovio in June said the experimental coronavirus vaccine, which is part of the Trump administration’s Operation Warp Speed program, showed promise and was found to be safe in an early-stage human trial.

And people wearing face coverings will take in fewer coronavirus particles, evidence suggests, making disease less severe. Researchers have long known that masks can prevent people from spreading airway germs to others–findings that have driven much of the conversation around these crucial accessories during the coronavirus pandemic. But now, as cases continue to rise across the country, experts are pointing to an array of evidence suggesting that masks also protect the people wearing them, lessening the severity of symptoms, or in some instances, staving off infection entirely.

Different kinds of masks “block virus to a different degree, but they all block the virus from getting in,” said Dr. Monica Gandhi, an infectious disease physician at the University of California, San Francisco. If any virus particles do breach these barriers, she said, the disease might still be milder. Dr. Gandhi and her colleagues make this argument in a new paper slated to be published in the Journal of General Internal Medicine.

Siemens Healthineers to acquire Varian for $16.4 billion.

Health group Siemens Healthineers AG (Erlangen DEU) agreed to buy Varian Medical Systems Inc. (Palo Alto CA) for about $16.4 billion in cash in the biggest medical acquisition of the year. The German medical technology company offered $177.5 a share for the California-based business, 24% more than its closing price on Friday. The bid will be financed through both debt and equity, Siemens Healthineers said in a statement on Sunday. Bloomberg was first to report the offer on Saturday.

The deal would give Healthineers a sizable market share in the rapidly growing field of cancer treatment where it has little presence currently. Siemens Healthineers said the purchase will a have a positive effect on earnings per share withing the first 12 months of the closing. The acquisition comes amid early signs of a pickup in deals after the spread of the coronavirus and a worsening economic outlook damped sentiment this year. Deal activity in the medical devices industry is also on the rise, with Thermo Fisher Scientific Inc.’s proposed acquisition of Qiagen NV for more than $10 billion and Smiths Group PLC mulling the sale of its medical equipment unit.

The purchase will bring together two partners that have collaborated for more than a decade in areas such as radiotherapy diagnostics for cancer treatments. Varian recently traded at 38 times estimated earnings, compared with a multiple of 18 for the S&P 500 Health Care index. The company’s shares are little changed this year, compared with a 3.4% advance in the S&P health index, leaving Varian with a market value of about $13 billion. Healthineers will finance the acquisition through a 15.2 billion-euro ($17.9 billion) bridge loan from Siemens AG, followed by a capital increase this year that the parent company will not participate in.

As a result, Siemen’s stake in Healthineers will decline to about 72% from 85%, Siemens said in a statement. The planned dilution of Siemens’s holding could pave the way for Healthineers to enter into Germany’s benchmark DAX Index. Healthineers will look at possible inclusion next year, CFO Jochen Schmitz said in an interview.

“It won’t be a short-term topic, but one we can look at next year,” Schmitz said.

Healthineers, which spun off from Siemens in 2018, has advanced 2.7% this year, boosting its market capitalization to 43.6 billion euros. Revenue in the third quarter was 3.31 billion euros while earnings before interest and taxes reached 461 million euros, the company said Sunday. The company also expects full-year earnings per share of between 1.54 euro and 1.62 euro, compared with 1.57 euro last year. CEO Bernd Montag said at the end of 2019 that the company’s next acquisition would be “close to home.”

Sanofi, GlaxoSmithKline win $2.1 billion Warp Speed funding for COVID-19 vaccination.

The Trump administration will provide as much as $2.1 billion to COVID-19 vaccine partners Sanofi SA (Paris) and GlaxoSmithKline PLC (London), the biggest US investment yet in fast-tracking shots and snapping up supplies, according to Bloomberg News. Part of Operation Warp Speed, the funding will support clinical trials and manufacturing while allowing the US to secure 100 million doses of the shot, if it’s successful, the companies said Friday. The country has an option to receive an additional 500 million doses longer term.

In a further boost to the Sanofi-Glaxo project, the European Commission said it’s moving to line up as many as 300 million doses of the vaccine. Financial details of the proposed contract to supply European Union member states were not disclosed. The US deal follows billions of dollars of American commitments to other experimental vaccines–all still needing to show their effectiveness in testing–and may stoke concerns that some countries will be left behind. Vaccines are seen as the key to leading the world out of the pandemic that has killed about 675,000 people in a matter of months.

Sanofi and Glaxo, two of the world’s biggest vaccine makers, signed a similar deal earlier last week with the UK government, which has also raced to lock up supplies. The companies plan to provide a significant portion of capacity in 2021 and 2022 to an initiative focused on accelerating development and production worldwide and deploying shots equitably. The challenges and stakes in getting a vaccine to the world are huge. If any succeed in the coming months, supplies are likely to be limited, making it difficult to immunize global populations and halt the virus’s spread.

Sanofi plans to start a study compressing the early and middle stages of clinical tests in September, followed by a final-stage study by the end of 2020. If the results are positive, the companies can seek US regulatory approval in the first half of 2021, they said Friday. Their vaccine candidate is based on technology Sanofi uses to make influenza vaccine and Glaxo’s adjuvants, which enhance the body’s immune response.

IPO Sector: AlloVir Inc., a Phase 2 biotech developing allogeneic T cell therapies for viral diseases, raised $276 million by offering 16.3 million shares at $17, the midpoint of the range of $16 to $18. The company offered 1.5 million more shares than anticipated. At pricing, the company commands a fully diluted market value of $1.1 billion. The company’s pipeline contains lead candidate Viralym-M, a multi-virus-specific T cell therapy targeting five viruses. The company is initially focusing on immunocompromised allogeneic hematopoietic stem cell transplant (HSCT) and solid organ transplant patients who are at high risk for life-threatening viral infections from the five viruses targeted by Viralym-M. AlloVir recently reported positive data from its completed Phase 2 trial and plans to initiate a total of three Phase 3 pivotal and three Phase 2 trials in 2020 and 2021. The Cambridge, MA-based company was founded in 2013 and lists on the Nasdaq under the symbol “ALVR.” Morgan Stanley, J.P. Morgan, SVB Leerink and Piper Sandler acted as lead managers on the deal. Shares closed the week up 46% to $24.90.

Acutus Medical Inc., which manufactures devices for electrophysiological mapping to treat arrhythmias, announced terms for its IPO. The Carlsbad, CA-based company plans to raise $125 million by offering 7.4 million shares at a price range of $16 to $18. At the midpoint of the proposed range, Acutus Medical would command a fully diluted market value of $457 million. The company’s diverse product portfolio includes its foundational product, the AcQMap imaging and mapping system. Early versions have been available in the US since May 2018 and in Western Europe since July 2016, though it fully commenced the launch of its commercial-grade console and software products in the 1Q20. Acutus Medical was founded in 2011 and booked $4 million in revenue for the 12 months ended March 31, 2020. It plans to list on the Nasdaq under the symbol “AFIB.” J.P. Morgan, and BofA Securities are the joint bookrunners on the deal. It is expected to price this week.

Oak Street Health Inc., which operates health centers that provide primary care for Medicare patients in the Midwest, has filed a new preliminary prospectus for its IPO of 15,625,000 common shares at $15 to $17 per share, expected to yield gross proceeds of $250 million at the midpoint. The company employs 260 primary care provider and 54 health centers, in 13 markets across eight states, which provided care for approximately 85,000 patients as of March 31, 2020. The Chicago, IL-based company was founded in 2012 and booked $641 million in revenue for the 12 months ended March 31, 2020. It plans to list on the NYSE under the symbol “OSH.” Oak Street Health filed confidentially on September 20, 2019. J.P. Morgan, Goldman Sachs, Morgan Stanley, William Blair and Piper Sandler are the joint bookrunners on the deal.

Inhibrx Inc., a Phase 1 biotech using protein engineering to develop targeted therapies for cancer and rare diseases, filed with the SEC to raise up to $100 million in an IPO. The biotech develops drugs directed to validated targets based on its single domain antibody platform, adding that it believes that its protein engineering technologies can overcome the limitations of other therapies. The company’s lead candidate INBRX-109, is a tetravalent death receptor 5, or DR5, agonist being evaluated in patients diagnosed with chondrosarcoma and mesothelioma, two difficult-to-treat cancers. The La Jolla, CA-based company was founded in 2017 and booked $6 million in sales for the 12 months ended June 30, 2020. It plans to list on the Nasdaq under the symbol “INBX.” Jefferies, Evercore ISI and Credit Suisse are the joint bookrunners on the deal. No pricing terms were disclosed.

Harmony Biosciences Holdings Inc., a commercial stage biotech developing therapies for narcolepsy and other CNS disorders, registered up to $100 million in an IPO. The company’s sole marketed product, WAKIX (pitolisant), was approved for the treatment of excessive daytime sleepiness in adult patients with narcolepsy in August 2019. Since its US commercial launch in November 2019, the product has generated ~$26 million in net sales. The company expects to start a Phase 3 trial for EDS and cataplexy in pediatric patients in the 2H21. It also plans to begin Phase 2 trials for EDS and other key symptoms in patients with Prader-Willi Syndrome in the 2H20 and in adult patients with myotonic dystrophy in the 1H21. The Plymouth Meeting, PA-based company was founded in 2017 and booked $26 million in net product revenue for the 12 months ended March 31, 2020. It plans to list on the Nasdaq under the symbol “HRMY.” Goldman Sachs, Jefferies, and Piper Sandler are the joint bookrunners on the deal. No pricing terms were disclosed.

Nano-X Imaging Ltd., which is developing affordable medical imaging systems, filed with the SEC to raise up to $125 million in an IPO. The company is developing lower cost medical imaging technology which it believes can achieve the same functionality as legacy X-ray imaging. Nano-X’s Nanox System is comprised of its Nanox.ARC hardware, which uses microelectromechanical system semiconductor cathode as opposed to X-ray analog cathodes, and its cloud-based imaging software Nanox.CLOUD. The Neve Ilan, Israel-based company was founded in 2018 and plans to list on the Nasdaq under the symbol “NNOX.” Cantor Fitzgerald, Oppenheimer & Co., Berenberg and CIBC are the joint bookrunners on the deal. No pricing terms were disclosed.

And Kymera Therapeutics Inc., a preclinical biotech developing small molecule protein degrader therapies for immunology-inflammation and oncology, registered up to $100 million in an IPO. The company uses its proprietary targeted protein degradation platform, Pegasus, to discover highly selective small molecule protein degraders with potent activity against disease-causing proteins throughout the body. Kymera expects to file an IND for KT-474, an orally bioavailable IRAK4 degrader, in the 1H21. The Watertown, MA-based company was founded in 2015 and booked $9 million in collaboration revenue for the 12 months ended June 30, 2020. It plans to list on the Nasdaq but has not selected symbol. Morgan Stanley, BofA Securities, Cowen and Guggenheim Securities are the joint bookrunners on the deal. No pricing terms were disclosed.

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