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Wednesday, October 31, 2018

Takeda hikes annual profit outlook by a third after second quarter profit jump

Japan’s Takeda Pharmaceutical Co Ltd boosted its annual operating profit outlook by a third after second-quarter earnings surged on strong global sales of its drugs for bowel disease and multiple myeloma.

It now expects to post 268.9 billion yen(1.87 billion pounds) in operating profit for the year ending in March, beating an average Refinitiv estimate of 222.7 billion yen from eight analysts.
Takeda is working to close a $62 billion acquisition of London-listed Shire. The upgraded forecast includes costs related to the acquisition incurred in the first half of the financial year but not costs from the latter half or projected earnings from Shire post-acquisition.
For the second-quarter, it booked an 86 percent rise in operating profit to 73.1 billion yen.
First-half sales figures showed sales of Entyvio, a treatment for Crohn’s disease and ulcerative colitis that is Takeda’s biggest selling drug, jumped 32.4 percent to 128.4 billion yen. Sales of Ninlaro, which treats multiple myeloma, a cancer of plasma cells, rose 35 percent.
Takeda has gained approval for the Shire deal, potentially the biggest-ever acquisition by a Japanese company, from U.S., Japan and China regulators but is still waiting for the nod from European authorities.
It has proposed selling a Shire Phase 3 inflammatory bowel disease drug to gain European approval for the deal and does not expect its talks with the European Commission will delay closure of the deal.
The Shire deal is aimed at strengthening Takeda’s late-stage pipeline. According to Takeda, the rare disease specialist has seven drug candidates in Phase 3 clinical trials while the Japanese firm has only three.
Takeda, which had a market value of roughly $31 billion, has secured a $30.9 billion bridge loan to help finance the acquisition. But some analysts say they remained concerned about how well the company will cope with its debt repayments – most of which have to be made in a year.

Generex Biotechnology Record & Payment Dates for 20:1 Stock Dividend

Generex Biotechnology Corporation ( (OTCQB:GNBT) ( today announced that the Record Date for the determination of the holders of the Company’s common stock entitled to participate in the Company’s previously announced 20:1 common stock dividend will be Monday, November 5, 2018. The dividend Payment Date will be Tuesday, November 13, 2018.
The stock dividend will result in 20 shares of common stock paid on November 13, 2018 for every one share of common stock owned as of the close of business on November 5, 2018.
About Generex Biotechnology Corporation
Generex is a strategic, diversified healthcare holdings company with offerings in a variety of services, diagnostics, medical devices, and pharmaceutical development.
The Company’s direct-to-patient services support its strategy of all-inclusive access to doctors, diagnostics, therapeutics, and additional health-related services to greatly improve the patient experience in receiving care.
On the provider side, Generex’s management services remove administrative burdens in multiple provider settings, including private practice and hospital, allowing doctors to devote more time to patient care.
Revenue from the Company’s subsidiaries will support clinical advancement of its wholly owned therapeutic products with a focus in immunotherapeutics based on stimulating critical members of the immune response, known as T helper cells, and its proprietary buccal administration of insulin.

Axonics Modulation Technologies Prices 8M Share IPO

Axonics Modulation Technologies, Inc. (“Axonics”), a medical technology company focused on the design, development and commercialization of innovative and minimally invasive sacral neuromodulation (“SNM”) solutions for the treatment of overactive bladder (“OAB”), fecal incontinence (“FI”), and urinary retention (“UR”), today announced the pricing of its initial public offering of 8,000,000 shares of common stock at an initial public offering price of $15.00 per share, before underwriting discounts and commissions. Axonics has also granted the underwriters a 30-day option to purchase an additional 1,200,000 shares of common stock at the initial public offering price, less underwriting discounts and commissions. All of the shares of common stock are being offered by Axonics.
The shares of Axonics’ common stock have been approved for listing on The Nasdaq Global Select Market and are expected to begin trading under the ticker symbol “AXNX” on October 31, 2018. The offering is expected to close on November 2, 2018, subject to customary closing conditions.
BofA Merrill Lynch and Morgan Stanley are acting as joint book-running managers for the offering. Wells Fargo Securities is acting as lead manager and SunTrust Robinson Humphrey is acting as co-manager for the offering.

FDA Works to Improve Plant and Animal Biotechnology Guidelines

Noting advances in genetic manipulation and gene editing, the Food and Drug Administration (FDA) announced a new Plant and Animal Biotechnology Innovation Action Plan.
The plan has three priority areas: advancing public health by promoting innovation; strengthening public outreach and communication; and increasing engagement with domestic and international partners.
The first two steps in implementing the plan include a Public Webinar on Genome Editing in Animals that will focus on the current science and potential risks. The second is a Veterinary Innovation Program (VIP), a new pilot program.
In a statement, FDA Commissioner Scott Gottlieb said, “As a first step, the FDA will adopt a comprehensive policy framework for the development and regulatory oversight of animal biotechnology products, including for intentionally genetically altered animals and the food and drug products derived from them. This modern, flexible framework will advance the agency’s commitment to safety while promoting innovation in this space. Our shared goal is to help usher in new, beneficial and safe products to consumers and animals as quickly and safely as possible.”
The agency plans to publish two guidance documents over the next year, which will clarify what the FDA plans to do and how it plans to apply it oversight processes in evaluating new animal biotechnology products.
The FDA’s Center for Veterinary Medicine (CVM) will hold the public webinar on December 3. In addition to discussing the current technology, the webinar will, according to Gottlieb, “address some of the common misconceptions about the FDA’s regulation of these products. At this webinar, the FDA’s Center for Biologics Evaluation and Research will also provide information about genome editing used in producing human products, including those for use in xenotransplantation, and how these products will be regulated.”
The Veterinary Innovation Program (VIP) is for developers of intentionally genetically altered (IGA) animals and animal cells, tissue and cell- or tissue-based products (ACTPs) that are looking for FDA approval of a new animal drug application. Gottlieb states, “The goal of the VIP is to facilitate advancements in the development of innovative animal products by enhancing certainty in the regulatory process, encouraging development and research, and supporting an efficient and predictable pathway to market for certain, innovative animal products.”
At the same time, the agency will publish guidance on its regulatory approach to plant biotechnology products for human and animal food. This appears to be focused on genetically-modified plants or animals used in food. Gottlieb noted that the agency had evaluated the safety of food from more than 180 varieties of genetically engineered plants already.
Gottlieb points out that the agency is interested in communications and engagement with all stakeholders, not just large corporations, but small and medium companies.
“As the final element of our Action Plan,” Gottlieb stated, “the FDA remains committed to efforts with domestic and international partners to foster efficiency and regulatory cooperation and enhance regulatory science.”
To do so, the agency expects to “engage in a dialogue” about biotechnology techniques such as genome editing and how it might be used to address vector-borne diseases like Zika virus.
And because so much of this new Action Plan will focus on possible food products, cooperation with the United States Department Of Agriculture (USDA) will be involved, as well.

Will GSK Move Away from Respiratory Treatments for a Focus on Oncology R&D?

Could GlaxoSmithKline, the maker of asthma drugs Advair and Breo Elipta, exit the respiratory business? Alex Hoos, head of oncology at GSK, indicated that could be a real possibility due to increased competition and loss of patent exclusivity.
In an interview with S&P Global Market Intelligence, Hoos said the company could narrow its drug development focus to aim at products that will generate growth. Hoos made the surprising comment during a meeting with reporters at the European Society for Medical Oncology Congress in Munich. Speaking with the reporters, Hoos indicated that there has been a change in focus at GSK under the leadership of Chief Executive Officer Emma Walmsley and Hal Barron, the head of research and development. Barron, Hoos indicated, could be looking to eliminate a number of assets, much like Novartis did this week with a 20 percent cut in research programs, and redirect the resources at big growth areas such as oncology.
Earlier this summer, Barron unveiled a long-term plan for R&D that is focused on the immune system and genetics. The company said it will focus on the development of medicines that target mechanisms of action with strong human genetic validations. Those targets have a higher probability of success, which means a shift to a genetics-driven portfolio, the company said.
For GlaxoSmithKline, respiratory medications have been a developmental cornerstone. However, as Hoos noted, respiratory sales were a bit underwhelming for the first half of the year. However, the company reported a significant increase in total respiratory sales. For the quarter respiratory drugs brought in £645 million, about $823 million. Will those numbers though stave off a potential divestiture of respiratory drugs?
In his conversation with reporters, Hoos noted the successful past GSK has had with its respiratory franchise. He said it’s been a driver at the company for a long time, but noted sales have been flat of late.
“There is not much growth to be expected. … This was a very successful business and continues to be — it’s just much harder to innovate in respiratory than it is to innovate in oncology,” Hoos said, according to &P Global Market Intelligence.
Hoos further explained that oncology has not been as significant a focus at GSK in the past, but the growth opportunities are immense. As a result, he said the company will be redirecting some resources toward continued development.
A move toward further oncology development will reverse the course the company took three years ago when it divested itself of a significant number of oncology products in a $20 billion deal with Novartis. GSK swapped out some oncology assets for Novartis’ vaccine business and a joint share of an over-the-counter consumer healthcare business – a business that Walmsley acquired in total earlier this year for $13 billion.
As GSK moves forward with the focus on oncology, Hoos noted that the company will need to “clean-up” some of its portfolios. He said there are a few projects not likely to succeed that will need to be stopped. He also said the company will likely divest some assets that are not part of the company’s focus to “liberate resources” that can be used to accelerate development of drug candidates likely to generate significant revenue returns.
“These choices to be made are big choices and they’re not easy — and we’re in that process right now,” Hoos said.
While the company does have some oncology drugs in development, Hoos said GSK could flex its M&A muscle to pick up some late-stage immuno-oncology or cell therapy assets as potential drivers.

Why Veracyte Gained

Shares of Veracyte (NASDAQ: VCYT) closed up 22.5% today after the company reported revenue growth of 34% for the third quarter, giving management the confidence to raise 2018 guidance.

Test volume increased 23% year over year, buoyed by Veracyte’s Afirma Genomic Sequencing Classifier, which tests thyroid nodules to see if they need to be removed.
Adoption of Veracyte’s lung cancer test, the Percepta Bronchial Genomic Classifier that launched almost a year ago, is picking up. Test volume increased 21% compared to the second quarter. The company thinks it’ll perform somewhere between 500 and 1,000 Percepta tests in the fourth quarter.
Veracyte still isn’t cash-flow positive, but it’s headed in the right direction, only burning through $2.4 million in the third quarter, a 58% decrease from the year-ago quarter.

Management increased 2018 revenue guidance to a range of $90 million to $91 million, up from its previous guidance of $87 million to $89 million. The top-line growth will help Veracyte burn less cash; the company now expects to go through $17 million to $18 million, down from previous guidance of $18 million to $21 million. Veracyte ended the third quarter with $77.8 million in the bank thanks to a secondary offering that raised approximately $55 million, so it has a multiyear runway to get to cash-flow positive.
Looking further ahead, Veracyte plans to do a full launch of Envisia Genomic Classifier, which is used to help diagnose a lung disease called idiopathic pulmonary fibrosis, next year, which should help the test-maker keep its momentum going.

PRA Health sees FY18 EPS $4.22-$4.27, consensus $4.19

Backs FY18 revenue guidance between $2.87B-$2.92B, consensus $2.91B.

Ironwood 18% selloff yesterday overdone, says Mizuho

Ironwood Pharmaceuticals (IRWD) sold off 18% yesterday on Allergan’s ((AGN) “unexpectedly muted outlook” for Linzess’ growth, Mizuho analyst Irina Koffler tells investors in a research note. The analyst views Ironwood as oversold and reiterates a Buy rating on the shares. She did, however, lower her price target for the stock to $23 from $27 on a reduced Linzess forecast and a zero value for the R&D company spin off.

Clovis price target lowered to $40 from $58 at Barclays

Barclays analyst Gena Wang lowered her price target for Clovis Oncology to $40 citing “disappointing” Rubraca revenue in Q3. Even considering the drawdown of inventory and increase in free drug giveaways in Q3, the adoption of Rubraca in second-line ovarian maintenance setting still appears slow, Wang tells investors in a research note. The analyst, however, remains constructive in the prospect of expanding Rubraca use into additional settings/indications such as prostate/bladder cancers. She maintains an Overweight rating on Clovis.

Medpace upgraded to Buy at SunTrust on valuation

As reported earlier, SunTrust analyst Sandy Draper upgraded Medpace to Buy from Hold and kept his $63 price target, citing its more attractive valuation of 11% discount relative to clinical research organization group vs. 6% premium in his last review. The analyst notes that he remains positive on the company’s “high exposure to small and medium biotech sponsors” and believes that its multiple is justified even after a “beat and raise” Q3 result.

NextGen Healthcare price target lowered to $23 from $26 at Cantor Fitzgerald

Cantor Fitzgerald analyst Steven Halper lowered his price target for NextGen Healthcare to $23 from $26 following the company’s “mixed” Q2 results. Revenue was slightly below the analyst’s estimate but adjusted earnings came in above. While the lowered fiscal 2019 outlook is disappointing, the shares offer an attractive risk/return profile, Halper tells investors in a post-earnings research note. He believes NextGen’s turnaround continues.

Community Health price target lowered to $4 from $6 at Cantor Fitzgerald

Cantor Fitzgerald analyst Joseph France lowered his price target for Community Health Systems to $4 citing reduced long-term growth expectations and a higher discount rate to account for a slower pace of debt reduction. The reported slightly higher than expected revenue and earnings , but the upside reflects delays in completing divestitures, because volumes are soft, France tells investors in a post-earnings research note. He keeps a Neutral rating on Community Health.

Intellia Therapeutics announces results from ATTR studies

Intellia Therapeutics (NTLA) announced results from its transthyretin amyloidosis, or ATTR, non-human primate, or NHP, studies, conducted in collaboration with Regeneron (REGN), related to its enhancements of the cargo components of its lipid nanoparticle, or LNP-based delivery system. These novel component enhancements, which are part of the ongoing development of its proprietary and modular in vivo delivery platform, have produced unprecedented results, achieving up to 78% liver editing in our most recent NHP study. The corresponding transthyretin, or TTR, protein reduction at 21 days showed a decrease from baseline of up to 96% after a single dose. This substantially improved level of liver editing, achieved with a lower dose and well-tolerated safety profile, compares with mean editing levels of 34 percent in Intellia’s previously reported NHP studies. Based on these new data, the company is pursuing confirmatory studies with the goal of integrating enhanced cargo components in its investigational new drug, or IND-enabling studies and submission of an IND for ATTR. In addition, the company intends to apply these technology improvements to the rest of its in vivo product pipeline.

Amgen price target lowered to $182 from $193 at RBC Capital

RBC Capital analyst Kennen MacKay lowered his price target on Amgen to $182 and kept his Sector Perform rating after its Q3 results. The analyst says the quarter was “in line” with “safe” expectations, even as the company’s core business competition is “slow” to impact sales. MacKay further cites an “astonishing” launch of Aimovig with 100K new patients, but also notes the sales decline against sequential volume growth for Amgen’s Repatha.

Merck price target raised to $84 from $79 at Citi

Citi analyst Andrew Baum raised his price target for Merck to $84 and reiterates a Buy rating on the shares. The analyst says his 20%-plus above consensus non-GAAP earnings estimates beyond 2022 are driven by a continued view that the market underestimates Merck’s market share in the PDx and PARP spaces with Keytruda and Lynparza respectively.

Eidos Therapeutics initiated at Roth Capital

Eidos Therapeutics initiated with a Buy at Roth Capital. Roth Capital analyst Yasmeen Rahimi started Eidos Therapeutics with a Buy rating and $28 price target. The analyst notes that the company’s Phase 2 results are anticipated at the AHA meeting on November 10, and views AG10 as a best-in-class transthyretin stabilizer for treatment of ATTR-CM.

GlaxoSmithKline reports Q3 adjusted EPS 35.5p, up 10% AER, up 14% CER

Reports Q3 group sales GBP8.1B. Pharmaceuticals GBP 4.2 billion, +1% AER, +3% CER; Vaccines GBP 1.9 billion, +14% AER, +17% CER; Consumer Healthcare GBP 1.9 billion, -1% AER, +3% CER. Adjusted Group operating margin of 31.2%, -0.3 percentage points AER; +0.2 percentage points CER. Pharmaceuticals 32.2%; Vaccines 43.0%; Consumer Healthcare 22.0%. Emma Walmsley, CEO, said: “GSK has made further good progress this quarter with CER sales growth in all three businesses, improvements in the Group operating margin at CER and Adjusted earnings per share growth of 14%. Strong commercial execution for key products and new launches, notably Shingrix, together with an effective focus on cost control is driving this improved performance and we now expect 2018 Adjusted EPS growth of 8-10% at CER. Looking further ahead, we remain confident in our ability to deliver the Group outlooks for sales and EPS growth we previously set for the period 2016-2020.”

Dicerna price target raised to $24 after Lilly, Alexion pacts: H.C. Wainwright

H.C. Wainwright analyst Ed Arce raised his price target on Dicerna (DRNA) shares to $24 from $20 after the company announced collaborations with Eli Lilly (LLY) and Alexion Pharmaceuticals (ALXN). Arce views these partnerships as further strong validation of Dicerna’s GalXC RNAi platform and keeps a Buy rating on the shares.

Catasys announces signing of agreement with Capital BlueCross

Catasys announced that it has entered into an agreement with Capital BlueCross, a community-based health insurer serving members in 21 counties in Central Pennsylvania and the Lehigh Valley. Beginning the first quarter of 2019, eligible Capital BlueCross commercial members will be able to take advantage of Catasys’ OnTrak solution, an integrated 52-week program that identifies, engages and treats members with untreated behavioral health conditions that exacerbate chronic medical disease and result in unnecessarily higher medical costs. OnTrak specifically addresses anxiety, depression and substance use disorders among health plan members who may avoid behavioral care, and whose untreated or undertreated behavioral conditions negatively impact co-morbid medical conditions. By uniquely engaging these members in a program that produces durable behavior change, OnTrak can significantly improve the quality of members’ lives while reducing healthcare costs.

MeiraGTx announces exclusive licensing agreement with NIDCR for AAV-AQP1

MeiraGTx announced an exclusive licensing agreement with the National Institute of Dental and Craniofacial Research, or NIDCR, a division of the National Institutes of Health, or NIH, an agency of the United States Department of Health & Human Services. Under the agreement, MeiraGTx will receive worldwide rights to adeno-associated virus vector mediated gene delivery of aquaporin-1, designated AAV-AQP1, for Sjogren’s syndrome patients with associated xerostomia or xerophthalmia. The license agreement includes standard and customary U.S. Government terms and provisions. MeiraGTx and the NIDCR are currently partnered in two cooperative research and development agreements, or CRADAs, one supporting preclinical work investigating AAV-AQP1 as a treatment for inadequate salivary gland function associated with Sjogren’s syndrome, and the other covering an ongoing Phase 1 dose escalation clinical study of AAV-AQP1 in patients with grade 2 or 3 radiation-induced xerostomia. Sjogren’s syndrome is a systemic autoimmune disorder that impairs one’s ability to secrete fluids such as saliva and tears. Symptoms include dry mouth, which can cause difficulty speaking, tasting food or swallowing, and dry eyes, which can be associated with itching, burning, blurry vision or intolerance to fluorescent lighting. Other serious symptoms can occur in Sjogren’s syndrome, such as fatigue and chronic pain or damage to major organs.

Gilead, Tango Therapeutics announce strategic collaboration

Gilead Sciences and Tango Therapeutics announced a global strategic collaboration to discover, develop and commercialize a pipeline of innovative targeted immuno-oncology treatments for patients with cancer. Under the multi-year collaboration, Tango will perform target discovery and validation and Gilead will have options to worldwide rights on up to five targets emerging from Tango’s proprietary functional genomics-based discovery platform. For two programs directed to these targets, Tango will retain the option to co-develop and co-detail in the U.S. The collaboration does not include Tango’s lead programs, for which Tango will retain all rights. Under the terms of the agreement, Tango will receive an upfront payment of $50M. Tango will also be eligible to receive approximately $1.7B in total additional payments across all programs in the form of pre-clinical fees and development, regulatory and commercial milestone payments; and up to low double-digit tiered royalties on net sales. For those programs that Tango opts in to co-develop and co-detail, the parties will split profits and losses 50/50 for the U.S., development costs will be shared in a manner that is commensurate with product rights, and Tango will be eligible to receive milestone payments and royalties on ex-U.S. sales.

Allergan price target lowered to $202 from $213 at Credit Suisse

Credit Suisse analyst Vamil Divan lowered his price target for Allergan to $202 from $213 following Q3 earnings. The analyst notes that Q3 quarterly performance and 2018 guidance raise was somewhat expected, but comments around the outlook of some important products and operating margins for 2019 highlight new challenges the company must overcome while waiting for the pipeline to deliver. He reiterates an Outperform rating on the shares.

Novo Nordisk acquires US, Canada rights to Macrilen growth hormone receptor

Novo Nordisk (NVO) announced the expansion of its biopharm business with an agreement to acquire the U.S. and Canadian rights to Macrilen, the first and only FDA-approved oral growth hormone receptor indicated for the diagnosis of Adult Growth Hormone Deficiency, a rare endocrine disorder, from Strongbridge Biopharma (SBBP). Novo Nordisk will pay $145M to Strongbridge as well as tiered royalties related to sales of Macrilen. In addition, Strongbridge’s current field organization will continue to promote Macrilen in the U.S. for up to three-year agreement. Novo Nordisk’s existing biopharm field force will also support the commercialization of Macrilen. As part of the partnership with Strongbridge, Novo Nordisk will acquire newly issued Strongbridge shares representing approximately 10% of the outstanding shares of Strongbridge at a share price of $7 per share, corresponding to an investment of approximately $37M. “The acquisition of Macrilen is in line with the strategy for our biopharm business with growth being driven by both organic and bolt-on initiatives. Macrilen is highly complementary to Norditropin and will allow Novo Nordisk to assist physicians and patients in the diagnosis as well as treatment of patients with growth hormone deficiency,” said Jesper Brandgaard, executive vice president and head of Biopharm. The transaction is expected to close in December 2018 and is subject to U.S. regulatory approval.

CVS Health launches new CarePass program in Boston

CVS Health’s retail division CVS Pharmacy announced that customers in the Greater Boston area can enroll in CarePass, a new pilot membership rewards program offering additional benefits to the company’s ExtraCare Rewards Program. CarePass offers members a suite of in-store and online perks including free delivery on most medications and purchases, access to a 24/7 pharmacist hotline and 20% off all CVS Health brand products. Customers can join CarePass for $5 a month or $48 a year.

Sage Therapeutics gains on postpartum depression drug briefing docs released

Shares of Sage Therapeutics (SAGE) are up about 1% in early trading after the FDA released briefing documents with background information for the panel members of the advisory committee being called to review the company’s New Drug Application for brexanolone for the treatment of postpartum depression. Sage Therapeutics’ Zulresso will face questions on effectiveness and safety at the committee meeting on Friday. The panel will also be asked to discuss a Risk Evaluation and Mitigation Strategy for the infusion

Orchard Therapeutics indicated to open at $18, IPO priced at $14

Orchard Therapeutics’ 14.3M share IPO priced at $14. JPMorgan, Goldman Sachs, Cowen and Wedbush are acting as joint book running managers for the offering.

Acadia depression data warrant 15% share upside, says Piper Jaffray

Acadia Pharmaceuticals this morning announced positive results with Nuplazid in major depressive disorder from its Phase 2 trial, Piper Jaffray analyst Danielle Brill tells investors in a research note titled “A Few Tricks, But Mostly Treats for ACAD Today: Data Overall De-Risk MDD Opportunity”. Nuplazid demonstrated statistically significant improvements across multiple efficacy endpoints, says the analyst. She interprets the results as an “overall positive given an evident trend of benefit with Nuplazid.” While the results aren’t a clear “homerun,” share upside of around 15% is warranted, Brill contends. She estimates such a move would reflect a 20%-30% risk adjusted major depressive disorder opportunity of $750M. Brill keeps an Overweight rating on Acadia with a $25 price target. The stock in morning trading is down 3%, or 68c, to $20.41.

Veritas, Elliott in advanced talks to acquire Athenahealth

Bloomberg reports

Twist Bioscience 5M share IPO indicated to open at $12.50, priced at $14

JPMorgan and Cowen acted as co-lead managers.

H.C. Wainwright ‘cautiously optimistic’ about Can-Fite after trial results delay

After Can-Fite BioPharma announced earlier today that top line efficacy results are now expected during the first quarter of 2019 in its Phase 2 clinical trial of drug candidate Namodenoson for the treatment of advanced hepatocellular carcinoma due to patient survival, H.C. Wainwright analyst Jason Kolbert said he is “cautiously optimistic” given that he finds it surprising that the trial has gone on this long. His understanding is that a six week or bigger difference between the active and control arms is considered clinically meaningful in this indication, adding that if the data is strong enough the trial is could be used as a registrational study given the unmet medical need. He keeps a Buy rating on Can-Fite shares, which were down 5% in morning trading.

Novartis’ Sandoz: FDA OK for rheumatoid arthritis biosimilar Hyrimoz

Sandoz, a Novartis (NVS) division, announced that the U.S. Food and Drug Administration approved its biosimilar, Hyrimoz. The FDA granted approval for the treatment of rheumatoid arthritis, juvenile idiopathic arthritis in patients four years of age and older, psoriatic arthritis, ankylosing spondylitis, adult Crohn’s disease, ulcerative colitis and plaque psoriasis. On October 11, 2018, Sandoz announced a global resolution of all intellectual property-related litigation with AbbVie (ABBV) concerning all indications of the proposed Sandoz biosimilar adalimumab for the reference medicine. The license enables patient access in the U.S. to Hyrimoz, or Sandoz adalimumab or Sandoz biosimilar, as of September 30, 2023.

Intuitive Surgical, Varian rise amid expanded surgical robot quota in China

Shares of Intutive Surgical (ISRG) and Varian Medical Systems (VAR) are rising after the Chinese government announced its medical equipment plans through 2020, including a new 154-system quota for Intuitive Surgical. PIPER RAISES PRICE TARGET ON INTUITIVE SURGICAL: On Wednesday, Piper Jaffray analyst JP McKim noted that the National Health and Family Planning Commission in China announced an “unexpected” new 154-system quota for Intuitive Surgical Wednesday, calling this a “clear accelerant” for its international procedure volume. The company has between 70 and 80 systems in China which are amongst the highest utilized systems in the world, so this should accelerate procedure growth as well, McKim added. He also said the system upgrade cycle remains underway as trade-in activity remain elevated despite being down from the second quarter. Given the new China quota, he raised his 2019 and 2020 sales and earnings estimates and increased his price target on Intuitive Surgical shares to $625 from $613. McKim kept an Overweight rating on the stock. CITI UPS VARIAN MEDICAL TARGET: Also on Wednesday, Citi analyst Amit Hazan raised his price target for Varian Medical Systems to $145 and kept a Buy rating on the shares. China posted medical equipment plans through 2020 which include new linear accelerators of nearly 1,400 total units, Hazan said, adding he views this as a “major positive” for radiation oncology players that “far exceeds expectations.” Inclusive in the quota are 188 Class A and 1,208 Class B systems, and Varian “is better positioned than ever before to capture both ends of the quality spectrum,” Hazan writes. PRICE ACTION: Intuitive Surgical was up 6.6% to $523.26 in afternoon trading, while Varian rose 6.7% to $119.67.

Judge orders J&J CEO be questioned over defense of baby powder

A Missouri judge has ordered Johnson & Johnson CEO Alex Gorsky to submit to questioning by lawyer Mark Lanier about the basis for his public statements that the company’s talc-based powder does not contain asbestos and does not pose a health risk, Bloomberg reports. Gorksy questioned on a call with analysts in July the medical premise that talc in the baby powder caused the development of ovarian cancer, the report notes.

Piper says Integra long-term prospects intact despite ‘concerning’ guidance

Piper Jaffray analyst Matt O’Brien noted that Integra LifeSciences lowered FY18 sales guidance by $13M at the midpoint following a Q3 revenue shortfall that was blamed on further year-over-year declines in Ortho Extremities and a weaker than expected Codman performance outside of the U.S. While the headwinds are “frustrating,” O’Brien still sees “a lot to like” about the margin and cash flow improvements and top-line outlook for the business. He reiterates an Overweight rating on Integra shares.

Gilead selloff on UnitedHeath HIV promotion seen as unwarranted

Mizuho analyst Salim Syed believes shares of Gilead Sciences (GILD) are sliding due to UnitedHealth’s (UNH) announcement of a new program called My ScriptsRewards that will “try to convince plan participants to take a cheaper HIV regimen in return for $500 debit cards.” However, the analyst views the worries as unwarranted, noting that an “inferior drug” is the “common thread” between all of the regimens that UnitedHealth’s program pushes. MY SCRIPTREWARDS: UnitedHealthcare has introduced My ScriptRewards, a new program that shares prescription cost savings directly with plan participants who choose doctor-approved, guideline-recommended and cost-effective medications. According to the company’s website, My ScriptRewards offers UnitedHealthcare plan participants the opportunity to realize additional cost savings and earn up to $500 in prepaid debit cards to use toward medical expenses, including other prescriptions and doctor’s office copays, when they consult their doctor to choose the lower-cost regimen that is right for them. “Select antivirals used to treat HIV will be the first medications included in My ScriptRewards due to the challenges that come with managing a high-cost medical condition. There are several HIV treatment regimens recommended by the Department of Health and Human Services, yet the cost among them can vary significantly. Through My ScriptRewards, plan participants can receive certain guideline-recommended HIV medications with proven effectiveness for no cost at the time of purchase,” the company stated. The most cost-effective treatment regimens available through UnitedHealthcare for $0 out of pocket include Cimduo plus Tivicay and Cimduo plus Isentress/Isentress HD. CONCERN SEEMS UNWARRANTED: In a research note to investors, Mizuho’s Syed blamed UnitedHealth’s introduction of the new program for weakness in shares of Gilead. However, the analyst argued that the worries appear unwarranted as Cimduo is the “common thread” between all of the regimens that UnitedHealth’s program calls out and it is an inferior drug to Gilead’s Biktarvy. Biktarvy is the backbone of the number one recommended regimen according to HHS treatment guidelines, noted Syed, who reiterated a Buy rating and $94 price target on Gilead shares. Voicing a similar opinion, Evercore ISI analyst Umer Raffat also attributed the pullback on Wednesday in shares of Gilead to concerns over the company’s HIV franchise given UnitedHealth’s promotions of cheaper alternatives. The analyst told investors in a research note of his own that he does not see risk to Gilead’s sales from the promotions. UnitedHealth’s is proposing a switch to two separate tablets, which is not in the HIV guidelines today, he contended. Raffat reiterated an Outperform rating on Gilead shares. PRICE ACTION: In afternoon trading, shares of Gilead have dropped about 5% to $68.65.

Express Scripts: 2019 retention rate for the 2018 selling season to exceed 98%

The Company now expects its 2019 retention rate for the 2018 selling season to exceed 98%, an all-time high for the Company. “We continue to earn the trust of those we serve through our ability to predict marketplace trends, create advantage for our clients, and develop innovative solutions that generate greater value. With trust comes the ability to help even more people achieve better outcomes. Now, more than ever, prospects and clients alike need more innovation, service and care, and we are well positioned to deliver. We are retaining our clients, winning prospects, and enrolling clients in more solutions and, as a result, expect to grow core business adjusted claims by 2% to 3% in 2019. From taking on the toughest challenges to uncovering innovative opportunities, Express Scripts is championing better healthcare every day,” said CEO Wentworth.

AbbVie: Phase 3 trial of leukemia combo met primary endpoint

AbbVie (ABBV) announced positive results from CLL14, a Phase 3, randomized clinical trial evaluating venetoclax plus obinutuzumab versus obinutuzumab plus chlorambucil, a standard of care, in patients with chronic lymphocytic leukemia and coexisting medical conditions who have not received a prior treatment. The study met its primary endpoint of investigator-assessed progression-free survival with a 12-month fixed duration of treatment. Preliminary analysis suggests the safety profile observed in the combination of venetoclax plus obinutuzumab is consistent with the known safety profile of each medicine alone.Results from the CLL14 trial will be presented at a future medical meeting. Venetoclax is being developed by AbbVie and Roche. It is jointly commercialized by AbbVie and Genentech, a member of the Roche Group (RHHBY), in the U.S. and by AbbVie outside of the U.S.

Molina Healthcare raises FY18 adj. EPS view to $9.05-$9.25 from $7.39-$7.59

Consensus $7.52

Augmented reality pre-surgery tech approved by US regulator

The US Food and Drug Administration (FDA) has approved a pre-surgery augmented reality imaging system that will allow doctors to see inside patients before a surgical procedure.
Tech firm Novarad’s OpenSight Augmented Reality System was given the green light by the US regulator, who granted 510(k) clearance.
The groundbreaking Augmented Reality (AR) system runs on the Microsoft HoloLens headset, allowing doctors to see 3D images at the same time as seeing the patient – in reality – simultaneously.
The ability to see the AR image as well as real-world surroundings avoids the
disorientation that can occur with virtual reality. AR is growing in popularity because it brings elements of the virtual world into the real world, enhancing what is seen, heard and felt.
OpenSight works by rendering 2D, 3D and 4D images of patients interactively, while overlaying them directly on to the patient’s body. It is superior to virtual reality because real world data is not overlooked, but is instead enhanced by AR.
Additionally, AR allows doctors to consult previous scans and could allow experts from remote sites to provide guidance on a medical case via the technology.
Dr Wendell Gibby, Novarad CEO and co-creator of OpenSight, said: “This is transformative technology that will unite preoperative imaging with augmented reality to improve the precision, speed and safety of medical procedures.
“This internal visualization can now be achieved without the surgeon ever making an incision, improving outcomes in a world of more precise medicine.”
Novarad explains that OpenSight AR allows doctors to have a better understanding of anatomical relationships, because the images are co-localised to the patient.
The software also enables doctors to carry out pre-operative planning, making it possible to highlight relevant anatomy and critical structures to avoid, as well as positioning virtual tools and guidance systems so that surgery can be planned with precision.
The headsets can be used in training, too, as several can be used simultaneously. A teaching version of the product is also available so that medical students can dissect cadavers virtually.

FDA clears cardiovascular claim for J&J’s Invokana

Johnson & Johnson finally has some good news to report for its diabetes blockbuster Invokana, after the FDA approved a new cardiovascular outcome claim on its label.
The US regulator has approved SGLT2 inhibitor Invokana (canagliflozin)  to reduce the risk of major adverse cardiovascular events – including heart attack, stroke or death due to a cardiovascular cause – in adults with type 2 diabetes and established cardiovascular disease.
J&J says Invokana is the only oral diabetes treatment to reduce the risk of these cardiovascular events and is hoping that the new indication will help reverse a steep slide in sales of the drug in recent months.
The approval is based on the results of the CANVAS trial, which is ironically also the source of Invokana’s recent sales fall, shrinking by almost a quarter to $653 million in the first nine months of the year.
CANVAS showed that Invokana reduced the combined risk of heart attack, stroke and cardiovascular death by 14% compared to placebo overall, with an 18% advantage over control in patients with established cardiovascular disease. The problem was that the trial also showed that Invokana almost doubled the risk of lower limb amputations, and that was added to the product’s label as a ‘black box’ warning.
Cue a decline in market share against rival SGLT2 inhibitors from Boehringer Ingelheim/Eli Lilly and AstraZeneca, which have been growing at the expense of Invokana, particularly in prescriptions for new patients. The companies have worked hard to show with clinical data that the amputation risk is not a class effect.
Jennifer Taubert, chairman of pharmaceuticals at J&J, said at a conference last month that Invokana “really has been hampered by the warning in the label, and we’re still working closely with the agency and generating data, and a lot of real world evidence, to make sure that we understand and appropriately characterise any level of risk there.”
In June, the company reported real-world data at the American Diabetes Association (ADA) meeting from more than 140,000 patients treated with the product, saying it observed no elevated risk of below-knee lower extremity (BKLE) amputations.
J&J is also hoping for a boost later this year from its CREDENCE renal outcome study in patients with diabetic nephropathy, which was halted earlier this year on the recommendation of its data monitoring committee after hitting the mark on pre-specified efficacy endpoints.
The company said in July it would present the data at a medical conference before the end of the year, and would also be discussing the results with regulatory authorities.
In the meantime, J&J’s woes helped sales of Boehringer/Lilly’s Jardiance (empagliflozin) drug more than double last year to top the $1 billion threshold, with AZ hitting similar heights for its Farxiga (dapagliflozin) product.
Analysts at Evercore ISI have suggested that Jardiance could hit sales of $4 billion at its peak, driven by the results of the EMPA-REG cardiovascular outcomes study in diabetics, which showed an improvement in cardiovascular death with the drug.
Meanwhile, Farxiga has become the latest SGLT2 inhibitor to show it can reduce cardiovascular risk in type 2 diabetes last month, when AZ reported the results of the DECLARE-TIMI 58 trial, showing the drug achieved a statistically significant reduction in the composite endpoint of hospitalisations for heart failure or cardiovascular death.

Anthem raises FY18 adjusted EPS view to greater than $15.60 per share

Prior view was greater than $15.40 per share. FY18 consensus $15.50.

United Therapeutics reports Q3 EPS $3.98, consensus $3.25

Acorda Therapeutics raises FY18 revenue view to over $400M from $330M-$350M

Jeff Osher Short Trupanion: Sohn San Francisco Conference 2018

We’re posting up notes from the Sohn San Francisco 2018 investment conference.  Next up is Jeff Osher of No Street Capital who pitched short Trupanion (TRUP).
Jeff Osher’s Sohn San Francisco Presentation: Short Trupanion (TRUP)
•    Short Trupanion (TRUP), a pet health insurance company
•    An insurance company that is looking for a SAAS-like multiple by using software nomenclature and getting coverage by software analysts
•    Believes that TRUP is an insurance company masquerading as a subscription software business by using software nomenclature and getting coverage by software analysts
•    Gross margins of 17% are nowhere near SAAS companies
•    Looks more like standard insurance company with policyholders than a subscription company with subscribers. Company drivers are net premiums earned and losses incurred just like other insurance companies
•    Company pays potentially illegal commissions through “rewards program” for veternarians based on referrals/sales and may be under regulatory investigation (although nothing disclosed) – Offering paid trips to vets and money to money to hospitals for policy activations = commissions
•    Believe they could have an adverse selection problem as they are distributing/selling primarily through vet hospitals and healthy pets do not visit the vet hospitals
•    Believes they are in an Inevitable Rate spiral which will result in a death spiral – Premiums have to be increased to offset higher claims and thus healthier pets unlikely to be signed up
•    Valuation: Trades at a 9x P/B – way higher than best in class insurance peers like Progressive which trades at 3.6x P/B; Believes intrinsic value is $7.05-10.60 representing 65% to 77% downside
Be sure to check out the rest of the Sohn San Francisco 2018 presentations.

Alex Gleser Long Philips: Sohn San Francisco Conference 2018

We’re posting up notes from the Sohn San Francisco 2018 investment conference.  Next up is Alex Gleser of TPG Public Equity Partners who pitched a long of Philips (PHG).
Alex Gleser’s Sohn San Francisco Presentation: Long Philips (PHG)
•    Portfolio has transformed dramatically with spin off of lower margin lighting business and sale of TV/electronics businesses (Went from a diversified conglomerate to a healthcare and personal care company but market still not viewing the company with the right lens)
•    Attractive secular growth ( End markets growth at 7%, have #1 or #2 share in their major categories)
•    Significant margin improvement opportunity (Diagnostic imaging is primarily where their margins lag and ability to increase their margin here; See 600 bps of margin improvement potential across the segments of the company; Management contemplating 100bps/year of expansion from 2017-2020)
•    Management has delivered hitting organic growth targets of 4-6% and 100 bps margin expansion over the last year
•    Attractive valuation: Trading at 9.2x EV/EBITDA  – lower than peers
•    Some optionality in other part of the business
•    Strong balance sheet provides a nice margin of safety
Be sure to check out the rest of the Sohn San Francisco 2018 presentations.

WeWork ditches unlimited beer in New York to keep tabs on startup party culture

When Stephanie, a 26-year-old New York advertising creative, quit drinking in March this year, the last place she expected to face temptation was in the workplace.
But often when she visited WeWork locations in New York City as well as her hometown of Dallas to work for a marketing startup she had launched with a friend, she found the drinking culture there inescapable.
WeWork is an international network of shared workspaces serving 175,000 people in 64 cities worldwide. Starting at $190 per month, the company provides subscription-based shared workspaces for startups, entrepreneurs, small businesses and freelancers. In many locations, that comes with perks, including unlimited free craft beer.
‘As a recent non drinker, the nearly constant presence of alcohol in the workplace does make me uncomfortable at times.’
—Susan, a New York advertising creative
“I’ve always found it a bit backwards that a free-for-all beer tap has become a must-have statement piece of a cool workspace,” Stephanie — whose last name has been withheld at her request to protect her anonymity — said. “As a recent non drinker, the nearly constant presence of alcohol in the workplace does make me uncomfortable at times.”
On Tuesday, WeWork announced in an email to users in New York City tat it’s experimenting with a pilot program to “help manage the provision of alcohol in our spaces.” Through the program, all taps will be controlled with the same key card used to get into the building. Employees will now be limited to four 12-ounce pours of beer per person, per day. The tap will be locked outside the hours of 12 p.m. to 8 p.m. to prevent early morning and late-night drinking.
“WeWork has been working on piloting an innovative, software-driven mechanism to help manage the provision of alcohol in our spaces for some time,” a spokeswoman told MarketWatch. “In addition to the supervision already provided by our community management team, mechanized tap controls will enhance this amenity we provide to our members.”
After the #MeToo movement put workplace harassment and drinking culture in the spotlight, many companies began to eliminate holiday parties
Silicon Valley startups have been criticized for the “bro culture,” a reputation that includes drinking in excess. Some commentators doubted WeWork has a problemwith on-site drinking, but many companies are still cracking down on alcohol consumption.
After the #MeToo movement put workplace harassment and drinking culture in the spotlight, many companies began to eliminate holiday parties over the past year or crack down on open bars in an attempt to limit bad behavior.
This is not WeWork’s only sweeping policy change this year: In July, it announced it will eliminate meat from all official office events and banned employees from expensing pork, red meat, or poultry when eating out on the company’s budget.
“New research indicates that avoiding meat is one of the biggest things an individual can do to reduce their personal environmental impact, even more than switching to a hybrid car,” the company said in a memo regarding the change. The carbon footprint of a beer is significantly smaller, but the policy could lead to fewer hangovers.

Sanofi reports Q3 business EPS EUR 1.84 vs. EUR 1.70 last year

Reports Q3 revenue EUR 9.39B vs. EUR 9.06B last year.

A Look Back at October Life Sciences IPOs

October was a busy month as multiple biopharma companies made their debut as publicly traded entities and even more companies filed their intentions to go public with an initial public offering. BioSpace takes a look back at some of the key IPOs of the month.
Related: Check out BioSpace’s list of October IPO Filings and Proceeds here.
The nine companies that initiated IPOs over the course of October raised more than $1 billion from their combined investors.
Gamida Cell Ltd. – Israel-based Gamida Cell raised $50 million to support the development of cell therapies for cancer and rare diseases. Initially, the company planned to raise $69 million. The stock, sold on the Nasdaq Exchange under the ticker symbol GMDA, made its debut at $8 per share. Since then the stock has climbed and hit a high of $9.72. Gamida Cell’s lead product is NiCord, a Phase III NAM-expanded cord blood cell therapy. The company believes it has the potential to serve as a universal curative stem cell graft for patients who need a hematopoietic stem cell transplant. The Phase III trial is enrolling patients with a number of hematologic malignancies, including high-risk leukemias such as acute myeloid leukemia (AML), acute lymphocytic leukemia (ALL), chronic myeloid leukemia (CML), myelodysplastic syndrome (MDS) and lymphomas.
LogicBio Therapeutics – When Cambridge, Mass.-based LogicBio announced the closing of its IPO on Oct. 23, the company said it snagged $80.5 million, about $10 million more than initially reported when it began selling on the Nasdaq on Oct. 19. LogicBio’s core platform includes its proprietary GeneRide technology and synthetic gene-therapy vectors derived from naturally occurring human adeno-associated viruses.  Shares were initially offered at $10 and climbed to $11.50, but have since fallen back to a low of $7.88 on Oct. 24.
PhaseBio Pharmaceuticals – Malvern, Penn.-based PhaseBio Pharmaceuticals raised $46 million in an IPO to support the development of novel therapies for orphan diseases, with an initial focus on cardiopulmonary. PhaseBio initially filed a prospectus for a $86 million IPO. The stock was initially priced at $5. Since its IPO, the stock has hit a high of $5.25, but has since fallen back. The company’s lead product is PB2452, a potentially first-in-class reversal agent for the antiplatelet drug ticagrelor that is being developed for the treatment of patients on ticagrelor who are experiencing a major bleeding event.
Osmotica Pharmaceuticals – Based in Wilmington, N.C., Osmotica Pharmaceuticals raised $46.6 million in an IPO. Since its debut on the Nasdaq, Osmotica, which trades under the symbol OSMT, hit a high of $9.20 on Oct. 22, but has since fallen back some to a low of $8 on Oct. 24. Earlier this year, the U.S. Food and Drug Administration (FDA) approved the company’s Osmolex ER for the treatment of Parkinson’s disease and for the treatment of drug-induced extrapyramidal reactions in adult patients.
SI-Bone, Inc. – Medtech company SI-Bone raised $108 million in its Oct. 17 IPO. The Santa Clara, Calif.-based company developed the iFuse Implant System, a minimally invasive surgical system for fusion of the sacroiliac joint to treat sacroiliac joint dysfunction. SI-Bone, sold on the Nasdaq under the symbol SIBN, was initially priced at $15. The stock hit a high of $21, but has slipped back some.
Equillium, Inc. – Biotech startup Equillium, Inc. raised $65.4 million in its IPO. The funds will be used to support the development of therapeutics for immune system disorders. Equillium’s initial product candidate, EQ001 (itolizumab), is a first-in-class monoclonal antibody that selectively targets the novel immune checkpoint receptor CD6. EQ001 is designed to modulate T cells that drive immuno-inflammation. La Jolla, Calif.-based Equillium’s stock, sold under the symbol EQ, was initially priced at $14. It hit a high of $14.97 on Oct. 25.
Allogene Therapeutics – Six months after launching, Allogene Therapeutics roared out of the gate with $372.6 million in its initial public offering – significantly above the $288 million the company initially anticipated from its IPO. South San Francisco-based Allogene announcedits intentions to file for an IPO last month. The company trades on the Nasdaq under the symbol ALLO. Founded by former Kite Pharma executives Arie Belldegrun, and David Chang, Allogene develops off-the-shelf CAR-T therapy products. Shares of Allogene were initially priced at $25 and hit a high of $29.96 on Oct. 15. Since then though, shares have dropped back and hit a low of $22.50 on Oct. 24.
Guardant Health – Bay Area biotech Guardant Health raised $237.5 million in its Oct. 4 IPO. The company develops blood tests for early and recurrent cancer detection. The liquid biopsies help physicians to match the most appropriate treatment to the patients. The company’s stock spiked nearly 70 percent on its first day of trading on the Nasdaq under the ticker symbol GH. The stock was first available at $19 per share and by the end of the first day of trading, it had climbed to $32.20 per share. One of its primary products is Guardant360 for advanced solid tumor cancers. Since that first day of trading, the stock has hit a high of $40.73 on Oct. 17. Shares have fallen back slightly since then, but have not slipped below the mark set on that first day of trading.
Kodiak Sciences – Another Bay Area company, Kodiak Sciences, secured $90 million in its Oct. 4 IPO. Kodiak went public weeks after it announced enrollment had been completed for its Phase I trial of KSI-301 to treat retinal vascular diseases, including neovascular age-related macular degeneration and diabetic eye disease. Kodiak, which trades on the Nasdaq under the symbol KOD, was initially available at a price of $10 per share. Since its launch, the stock has struggled to stay above its initial list price. On. Oct. 24 it hit a low of $9.27.