Shares of Tenet Healthcare Corp. THC, -1.36% rose more than 5% late Monday after the company reported first-quarter earnings and sales above Wall Street expectations and increased its outlook for the year. Tenet said it earned $99 million, or 96 cents a share, in the first quarter, versus a net loss of $53 million, or 53 cents a share, in the first quarter of 2017. Revenue reached $4.7 billion, compared with $4.8 billion a year ago. Analysts polled by FactSet had expected earnings of 25 cents a share on sales of $4.57 billion for the quarter. Tenet said it expects revenue between $17.9 billion and $18.3 billion for 2018. Analysts surveyed by FactSet expect 2018 sales around $18.05 billion. Tenet shares ended the regular session down 1.4%.
Monday, April 30, 2018
Nutrisystem beats, ups outlook
Nutrisystem (NASDAQ: NTRI) reported Q1 EPS of $0.09, $0.03 better than the analyst estimate of $0.06. Revenue for the quarter came in at $211 million versus the consensus estimate of $207.3 million.
GUIDANCE:
Nutrisystem sees Q2 2018 revenue of $186-191 million, versus the consensus of $190.5 million.
Nutrisystem raises FY2018 EPS to $2.04-$2.14, versus the consensus of $2.04. Nutrisystem raises FY2018 revenue of $693-708 million, versus the consensus of $697.43 million.
Inogen target upped to $190 by Piper
Inogen price target raised to $190 from $145 at Piper Jaffray. Piper Jaffray analyst JP McKim raised his price target on Inogen to $190 after the company’s Q1 earnings beat and raised FY18 revenue guidance after market close today. The analyst notes that most of the beat came from the BTB segment, though DTC and international business units were also “strong”. McKim is particularly impressed with the company’s 77% volume growth, adding that while the stock trades at a high multiple, its accelerating growth and low market penetration justify the Overweight rating.
Sermo’s ‘Yelp for drugs’ platform chalks up 665K doctor reviews in just 1 year
Sermo’s drug-rating system—by doctors for doctors—is soaring. A little less than a year after its launch, the Yelp-like platform now has 655,000 ratings on more than 4,000 medications, CEO Peter Kirk tells us.
More than half those drugs have at least 100 reviews—and 18 of them have more than 1,000.
For pharma companies, the database has come to serve as real-time feedback on physicans’ experiences with their particular drugs. It’s also a way to evaluate brand equity, check reactions to promo and educational messaging, and get competitive intelligence.
The system isn’t meant as a pharma tool, Kirk said, but drugmakers can certainly glean constructive info from it.
“Sermo should not be thought of as a toy for pharma, right? It is really for doctors and to democratize medical knowledge and how medicine works in the real world,” Kirk said. “That being said, there are a lot of potential valued insights for pharma … where the doctors are engaging with each other peer to peer. That could be from joining a conversation to trying to understand physician perceptions and experiences and what they’re saying about different therapies and issues.”
In its inaugural year, the private and anonymous drug ratings database has been used by 70,000 doctors, whether they’re posting or reading reviews or both. Sermo’s own research found that half of doctors changed their perceptions or opinions about a drug after reading the ratings. Eighty-three percent said they believe the ratings will help improve outcomes and 74% said they’ll use the ratings again when doing research for treatments.
One of the things that surprised Sermo in the first year is how much time and effort physicians are willing to put in to share their opinions, Kirk said.
Next up for the system is working on placement into electronic health records systems.
“We’re in early talks about getting drug ratings onto EMR systems, and we hope to do that by the end of the year so doctors would have access to them at point of care in the exam room,” Kirk said.
For Merck Gardasil 9, China hands out landmark nod with lightning speed
That was remarkably fast: Just nine days into its Gardasil 9 review, China’s revamped drug regulator handed Merck’s HPV vaccine a conditional green light—a new approval tool the agency is testing in its quest to speed new drugs to market.
It’s a move that could further compress the living space of GlaxoSmithKline’s Cervarix, already pressed by Merck’s previous version of Gardasil, which covered four HPV strains instead of the latest product’s nine.
China’s Food and Drug Administration based its decision on Gardasil data that previously led to the quadrivalent shot’s Chinese approval last May, and for the latest approval, considered foreign clinical trial data specifically on Gardasil 9, the agency said in a Sunday announcement (Chinese). The conditional approval comes with requirements for additional studies and postmarketing surveillance.
Even in the U.S., conditional approval is a fairly new tool that has only gained popularity at the FDA in recent years. China’s former CFDA largely followed its U.S. counterpart’s “accelerated approval” standards when the agency proposed its own conditional approval pathway in May 2017. The top government finalized that plan in principle last October—along with a provision that allows foreign clinical data into drug applications. But detailed guidance for those approvals just wrapped up public comment mid-January.
Under those new rules, Gardasil 9 took a smooth regulatory road toward its approval. After accepting Merck’s new drug application on April 20, the agency put the shot on its proposed expedited review list on April 23. A five-day window for comment followed, and the vaccine apparently immediately moved to its approval afterward. CFDA announced on Sunday that it had granted the conditional approval the day before.
GSK’s Cervarix and Merck’s previous version of Gardasil weren’t so lucky. At a time when the Chinese regulatory process was widely considered too slow, both vaccines took about 10 years to reach the Chinese market. To hasten the launch of novel drugs and to work through the notoriously large backlog of applications for clinical trial and new drug approvals, the Chinese agency made scores of game-changing new rules in recent months. Ruyi He, M.D., chief scientist of its Center for Drug Evaluation, has said on several occasions that by 2020 the agency plans to double the number of drug reviewers to 1,600 from 800—and that’s up from just about 170 in 2015.
Zooming into the HPV arena now, Gardasil 9 could pose an additional threat to Cervarix, which has already lost out to the Merck duo in major markets in the U.S. and Europe. China might be its last chance to garner a meaningful amount of sales.
Cervarix was officially launched in China late last July, a year after it became the first HPV shot approved in the country. For the fourth quarter of 2017 and first quarter of 2018, Cervarix enjoyed sales of £62 million ($85 million) and £52 million, respectively, with both quarters’ results more than double those of the same period of the previous year. The British pharma made it clear in its reports that the vaccine’s overall growth was “driven by its recent launch in China.”
Gardasil, which won its Chinese nod last May, was officially launched in November through local distributor Zhifei Biological Products. Given that Merck reported $2.31 billion in sales from the Gardasil family last year—up from $2.17 billion in 2016—China’s early contribution wasn’t singled out. But in revising an exclusive supply contract with Merck last September, Zhifei disclosed that it bought 542 million Chinese yuan ($85.6 million) worth of Gardasil in 2017. Another 1.37 billion yuan ($217 million) was planned for 2018, and 1.78 billion yuan and 2.23 billion yuan for the following two years.
It’s not clear whether Merck will tap Zhifei’s help again to market Gardasil 9 in China. But chances are high, given that the Chinese company also takes care of Merck’s hepatitis A vaccine Vaqta, pneumococcal vaccine Pneumovax 23, and pentavalent rotavirus vaccine RotaTeq, which was just greenlighted in China on April 12.
CMS Chief Slams Administration Critics
Seema Verma, the administrator of the Centers for Medicare & Medicaid Services, lashed out Monday at critics of the Trump administration’s changes to the Medicaid program and the Affordable Care Act (ACA), also known as Obamacare.
“I take exception to those out there who have made claims that we have tried to sabotage the healthcare of the American people, particularly when it comes to the healthcare exchanges,” she said here at the World Health Care Congress. “Obamacare was failing long before Donald Trump became president and I became CMS administrator.”
The reality, said Verma, is that health insurers have fled the exchange markets “after losing millions of dollars,” adding that with only one insurer offering policies, “half the counties in America, and 10 states in our country, don’t even have a choice of health insurer.”
Verma went on to detail some of the problems with the ACA’s insurance marketplaces. “We were promised that Obamacare would lower premiums by up to $2,500 for a typical family, but the reality is that premiums more than doubled since its inception,” she said, noting that in states such as Arizona, premiums rose by an average of 190%, and in Oklahoma, they rose 201%.
“These are plain, clear facts,” said Verma. “The stark reality was that when we came into the market, we were faced with health exchanges that were pricing Americans out of the system … and punishing them with penalties for being unable to afford government-mandated coverage.” In December, Congress repealed the individual mandate, which required all Americans to acquire health insurance or pay a penalty.
Supporters of the ACA have blamed Republicans in Congress for the exchanges’ increasing premiums, citing Congress’s failure to continue funding the “risk corridors” that would have helped health insurers pay for higher-cost patients; providing that funding, they say, would have encouraged more insurers to offer policies on the exchanges and made the marketplaces more competitive. They also are critical of the Trump administration’s canceling of the cost-sharing reduction payments the federal government had been making to help lower-income enrollees with their copays and deductibles.
Verma said the administration would “refuse to stand idly by while Americans are suffering,” so officials are “cleaning up regulations to provide states with more flexibility … to create more choice and competition to help drive down costs.”
“We have also proposed to expand the use of short-term insurance to now be used as an affordable option for people caught between individual market premiums they can’t afford and no coverage at all,” she said. These short-term plans are not required to include all of the benefits mandated by the ACA and can therefore be sold more cheaply than plans on the exchanges.
In addition, “it’s impossible to address Obamacare without addressing the strain it put on the Medicaid program,” Verma said. For patients who are severely disabled, and for their families, “Medicaid is more than a safety net — it’s a lifeline, one that needs to be preserved and protected for those who truly need it.”
However, the ACA’s Medicaid expansion has resulted in the addition of able-bodied adults to the Medicaid rolls, and with increased reimbursement rates for this population. “That stretches the safety net for fragile populations who are still on the waiting lists for [services like] home care,” argued Verma, and puts millions of people “into a program that wasn’t designed to meet their needs.”
The Obama administration was resistant to efforts aimed at allowing states to tailor their programs to better serve this population, said Verma. The Trump administration is remedying this problem by allowing states to require able-bodied Medicaid recipients to either work, take classes, or volunteer — a mandate known as “community engagement.” Three waivers for community engagement have already been approved, she said, “and we have 11 more we should be making decisions on pretty soon.”
Currently, eight in 10 adults who are receiving Medicaid are in families in which at least one family member is working, according to a report from the Kaiser Family Foundation. In total, 60% of Medicaid recipients are working themselves; of those who aren’t working, most cite impediments such as a disability, illness, or caregiving responsibilities as the reason, the report found.
“I hope it’s clear to everyone in this room that through all our actions we start with the goal of putting patients first,” Verma concluded. “We need to work together to create a healthcare system that pays for value, not merely volume.”
Karyopharm to pursue FDA OK for multiple myeloma drug based on study
A typically reliable method of securing U.S. approval for a cancer drug these days is to run a small, single-arm clinical trial in patients no longer responsive to all approved therapies. Eke out a modest benefit for patients from the study, and FDA is often willing to greenlight approval.
This is the path Karyopharm Therapeutics is pursuing with its experimental pill selinexor. The small biotech announced Monday evening that 25 percent of multiple myeloma patients responded to treatment with selinexor in a single-arm clinical trial. The median duration of response was 4.4 months.
Karyopharm enrolled into the clinical trial 122 patients with multiple myeloma whose disease continued to advance despite previous treatment with a minimum of five currently available drugs, including the recently approved monoclonal antibody therapy Darzalex.
The most common side effects reported in the study were nausea, vomiting, and reduced appetite, although more specific details were not disclosed by Karyopharm Monday night.
Based on these study results, Karyopharm said it will seek approval of selinexor with the FDA in the second half of the year.
If approved, selinexor sales potentially could top $500 million, Jefferies analyst Maury Raycroft forecast in a research note ahead of Monday’s Karyopharma announcement.
Karyopharm shares closed Monday at $13.08 but were trading up by 27 percent in the after-hours session.
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