Editas Medicine (EDIT) in its earnings release last night announced an expanded oncology collaboration with Juno Therapeutics, a unit of Celgene (CELG). The expanded collaboration with Celgene will develop and commercialize chimeric antigen receptor and engineered T cell receptor medicines including Celgene's lead program for human papillomavirus-associated solid tumors, Editas said in a statement. As a result of the expansion and progress of the collaboration, Editas will receive an additional $10M in cash and will be eligible to receive a fourth independent milestone and royalty stream. Shares of Editas Medicine are up 10%, or $3.12, to $34.72 in early trading.
https://bit.ly/2HVcrIh
Friday, May 4, 2018
Integer Holdings Corp (ITGR) to Sell Assets to MedPlast for $600M
Integer Holdings Corporation (NYSE: ITGR) has entered into an agreement to sell its Advanced Surgical and Orthopedics (“AS&O”) product lines to MedPlast, LLC for $600 million in cash. The transaction is expected to close in the third quarter of 2018 and is subject to customary closing conditions, including U.S. and foreign antitrust clearances.
“Integer is a global leader in medical device outsourcing, with an unmatched breadth of design, development and manufacturing capabilities,” said Joe Dziedzic, Integer’s president and chief executive officer. “After this divestiture and paying down debt with the proceeds, we expect to be a $1.2 billion company with higher margins, increased net earnings, greater returns on invested capital, and significantly lower debt leverage. This increased financial flexibility will enable us to grow our leadership position in our Cardio & Vascular and Cardiac & Neuromodulation product lines as we partner with customers to deliver life-changing innovation.”
Integer’s AS&O capabilities will bolster MedPlast’s portfolio of manufacturing solutions and transform MedPlast into one of the world’s leading outsourced contract manufacturers of medical devices. In addition to expanding MedPlast’s offering into a broad range of metals manufacturing capabilities, including machining, stamping, coating and metal forming, it will further strengthen MedPlast’s front-end design, development and prototyping services. Once complete, the acquisitionwill double MedPlast’s size to nearly $1 billion in sales, as well as its global footprint, with an expanded presence in Europe. MedPlast will employ nearly 6,000 engineers, technicians and assembly workers at manufacturing facilities across Asia, Central America, Europe and the United States.
“MedPlast is incredibly excited about the addition of Integer’s AS&O capabilities to our existing platform,” said MedPlast Chief Executive Officer Brian King. “This acquisition will further broaden our offerings and strengthen our ability to provide our customers with innovative solutions to meet their challenging needs. It also will provide additional scale and new growth opportunities for MedPlast. We are excited to be working with the AS&O team and look forward to collectively growing our company and continuing to deliver outstanding service to our customers.”
MedPlast’s agreement to acquire Integer’s AS&O business is the third acquisition MedPlast has facilitated in the past year. In 2017, MedPlast acquired Vention Medical’s Device Manufacturing Services business and Coastal Life Technologies to extend its portfolio of services into assembly and packaging. The strategic acquisitions follow MedPlast’s partnership in 2016 with Water Street Healthcare Partners and JLL Partners, two strategic investment firms specializing in the health care industry.
The transaction does not include Integer’s Portable Medical product line, which will remain a part of Integer.
Piper Jaffray & Co. is serving as financial advisor to Integer while Hodgson Russ LLP is serving as legal advisor.
Portola gets FDA OK for bleeding therapy
Breakthrough Product is a Major Advance in the Treatment of Patients Hospitalized with Life-Threatening Bleeding –
– Company to Host Conference Call on Friday, May 4, 2018 at 8:30 a.m. ET –
Portola Pharmaceuticals, Inc.® (PTLA) today announced that the U.S. Food and Drug Administration (FDA) has approved Andexxa® [coagulation factor Xa (recombinant), inactivated-zhzo], the first and only antidote indicated for patients treated with rivaroxaban and apixaban, when reversal of anticoagulation is needed due to life-threatening or uncontrolled bleeding.
Andexxa received both U.S. Orphan Drug and FDA Breakthrough Therapy designations and was approved under the FDA’s Accelerated Approval pathway based on the change from baseline in anti-Factor Xa activity in healthy volunteers. Continued approval for this indication may be contingent upon post-marketing study results to demonstrate an improvement in hemostasis in patients.
“Today’s approval represents a significant step forward in patient care and one that the medical community has been eagerly anticipating,” said Stuart J. Connolly, M.D., ANNEXA-4 Executive Committee chairman and professor in the Department of Medicine of the Faculty of Health Sciences at McMaster University in Hamilton, Ontario. “Andexxa’s rapid reversal of the anticoagulating effects of rivaroxaban and apixaban will help clinicians treat life-threatening bleeds, where every minute counts.”
The use of Factor Xa inhibitors is rapidly growing because of their efficacy and safety profile compared to enoxaparin and warfarin in preventing and treating thromboembolic conditions such as stroke, pulmonary embolism and venous thromboembolism (VTE). This growth has come with a related increase in the incidence of hospital admissions and deaths related to bleeding, the major complication of anticoagulation. In the U.S. alone in 2016, there were approximately 117,000 hospital admissions attributable to Factor Xa inhibitor-related bleeding and nearly 2,000 bleeding-related deaths per month.
“We are grateful to the patients who participated in our trials, our clinical trial collaborators, our employees and the FDA for their help in bringing this new drug to market for the benefit of patients with Factor Xa inhibitor-related bleeding,” said Bill Lis, chief executive officer of Portola. “We are proud that Andexxa is a first-in-class medicine discovered in our labs. In addition to Bevyxxa, the first and only anticoagulant approved for extended VTE prevention in acute hospitalized medical patients, Andexxa is our second FDA-approved product with the potential to save lives and have a major impact on global public health. We remain committed to our scientific leadership in the fields of thrombosis and hematologic cancers.”
Thursday, May 3, 2018
Big Medical Tourism Boom? Actually, Not So Much
Remember the excitement around the medical tourism industry? Visions of thousands of U.S. patients heading to India and elsewhere to have medical procedures done at a fraction of the cost in the U.S.?
Well, that hasn’t worked out so well, experts said here Monday at the World Health Care Congress.
In 2008, the consulting firm Deloitte predicted that the number of U.S. tourists traveling out of the country for medical care could reach as high as nearly 24 million by 2017, said Irving Stackpole, president of Stackpole & Associates, a consulting firm in Newport, Rhode Island. “These numbers are patently ridiculous,” Stackpole said. “I believe roughly 2.6 to 3.4 million Americans have been leaving the country [each year] to purposely consume medical services elsewhere.”
The bulk of those trips, he added, have been patients in the Southwestern U.S. traveling to Mexico for low-cost, high-value medical and dental care. And currently, there is only one health insurer that will pay for such travel: “a healthcare provider in the farm workers’ union in southern California,” where many of the workers are Mexican Americans.
“These numbers have a legacy, and [it’s] the preposterous idea that medical tourism is an industry, that it’s a sector in the economy,” Stackpole said. “The amount of spending by those U.S. citizens in foreign destinations is a pimple on a duck’s butt — it’s 0.001% of the trillions of dollars spent in the U.S. on healthcare … It’s not a sector and I’d argue it’s not even a business.”
Keith Pollard, editor-in-chief of the International Medical Travel Journal, agreed. “Patient interest turned out to be much lower than predicted,” he said. “People didn’t buy in at the numbers everyone hoped for.”
Why didn’t the medical tourism industry take off? Pollard listed several possible reasons:
- Savings are insufficient to trump concerns about quality. People are always trying to balance value and risk, “and in their mind is always ‘This is a risk — it’s a different culture, people I don’t know, hospitals I may not trust,'” he said. “People are not yet convinced that this is a safe thing to do.”
- There is a lack of recourse if something goes wrong. “When something goes wrong, where does it end up?” Pollard said. “On the front page of the newspaper, on CNN, on BBC News. ‘This patient went to this country for this, and it was a disaster.’ In many countries, medical tourism does not have a very positive image. The providers tend not to handle stuff very well when things go wrong.”
- Insurers are reluctant to invest in this concept. “In the U.K., our [employer’s] insurance company would not fund me to go to Croatia” for a procedure, said Pollard. “The reason for that is they can’t measure the risk.” A few years ago, Pollard said, he invested in a startup medical travel-based insurance product that would allow patients to travel to certain approved hospitals within Europe. “It took 2 years to find an underwriter who would underwrite this product,” he said. The insurers were having trouble figuring out “How do we compare the risk of going to Barcelona or Dubrovnik or Zagreb or Poland or wherever?”
The medical tourism industry can learn from marketers’ past mistakes, Pollard continued. One mistake was that “too many people believed the hype” about the market, and they didn’t have a clear strategy in place before they jumped in. Instead, the attitude was “‘Let’s go sell what we’ve got before getting our product and service right,'” he said. “That’s one reason [medical] tourism has a bad image in the media; the clinics providing the service haven’t done a good enough job of providing an outstanding patient experience.”
Marketers also need to think more about which markets to target. “There were lots of [medical tourism] providers coming to the U.S. 4-5 years ago because they thought that was a big opportunity,” but that didn’t pan out, he said. “The message is, think local, not global — think about countries within a 3-hour flight time.”
Targeting the proper customers is also important. “Who is going to pay for this — employers? Governments? Patients? Insurance?” said Pollard.
Several new trends are beginning to affect the medical tourism business, said Elizabeth Ziemba, president of Medical Tourism Training, a medical travel consulting business, also in Newport. Technology is bringing more commodification of services, including online marketplaces for consumers to shop for healthcare internationally. “This works better in the traditional [medical tourism] services of in vitro fertilization, dental care, and cosmetic [procedures]” than for complex medical cases, she said.
In the “business to business” arena, “the traditional model has been healthcare providers and hospitals in high-income countries partnering with hospitals in lower-income countries to exchange knowledge and technology, and transfer skills,” although that was often just a way to get more patients to come to places like the U.S. for treatment, Ziemba said. “That model has changed quite a bit.” Now the providers in high-income countries are actually setting up shop in other places — such as the Cleveland Clinic’s building of a facility in Abu Dhabi — “a more serious and more balanced approach to the transfer of skills and knowledge, to help other countries build their own infrastructure.”
Self-insured employers are also having an effect on medical tourism, she added. For example, the Blue Lake Rancheria Indian tribe in northern California contracted with providers in France to send its casino employees there, she said.
“Government to business” contracts — in which governments arrange with providers to provide services across borders — are also popping up, said Ziemba. “We’re starting to see this with small countries that can’t provide their own complex care … like the Maldives contracting with [providers in] India, or Palau contracting with the Philippines.”
All in all, “it’s a fascinating time and a confusing time” to be in the medical tourism marketplace, she said.
Anika has Q1 miss and product recall
Thinly traded small cap Anika Therapeutics (ANIK -28.1%) slumps on double normal volume, albeit on turnover of only ~250K shares, after it released Q1 results after the close yesterday.
Revenue was down 9% to $21.3M. The company says the shortfall was due in part to $1.1M related to its voluntary recall of HYALOFAST, HYALOGRAFT-C and HYALOMATRIX. It says it took action as a precautionary measure after internal quality testing indicated that the products were at risk of not maintaining certain parameters throughout their shelf life.
Production and shipments are not expected to resume until year-end, however, while it identifies and implements an operational fix to address the issue.
Theranos Cost Business and Government Leaders More Than $600M
A who’s who of government, business and international finance lost a total of more than $600 million they had invested in scandal-plagued Theranos Inc., according to previously sealed documents made public in a lawsuit.
High on the list is Education Secretary Betsy DeVos, whose family invested $100 million in the Silicon Valley blood-testing company, the documents show. Mrs. DeVos had previously disclosed that her family was a Theranos investor in a government filing, but the size of the investment wasn’t known.
“The investment was made by many members of the DeVos family,” not just Mrs. DeVos, says Greg McNeilly, chief operating officer of Windquest Group, Mrs. DeVos and her husband’s family holding company. “To say they’re highly disappointed in Theranos as a company and an investment is an understatement.”
President Donald Trump’s education secretary is among a number of prominent figures who poured money into Theranos between 2013 and 2015 before a series of Wall Street Journal articles revealed that the company was encountering problems with its technology and misleading its investors.
These investments now are essentially worthless. In an April 10 email to shareholders reviewed by the Journal, Theranos founder Elizabeth Holmes raised the likelihood that the company would be liquidated by August. Earlier that day, she informed most of Theranos’s remaining 125 employees they would lose their jobs and paychecks on June 12, according to people familiar with the matter.
Other investors facing big losses include the heirs of Walmart Inc. founder Sam Walton, members of Atlanta’s billionaire Cox family, Mexican tycoon Carlos Slim, the scion of a Greek shipping fortune and members of a South African diamond dynasty, according to the documents, which Theranos provided to the lawsuit’s plaintiffs as part of the discovery phase of the case. Rarely have so many high-profile figures been known to have lost so much money on a single investment.
Ms. Holmes claimed she had invented groundbreaking technology that could perform the full range of laboratory tests from just a drop or two of blood pricked from a finger. In civil-fraud charges filed in March against Ms. Holmes, the Securities and Exchange Commission alleged that claim was a lie and that Theranos used commercial machines made by other companies for the vast majority of its blood tests.
Ms. Holmes settled the charges without admitting or denying wrongdoing by giving back a big chunk of her Theranos stock, relinquishing voting control of the company and paying a $500,000 penalty. She also agreed to be barred from being an officer or director in a public company for 10 years.
The SEC filed separate civil-fraud charges against Theranos’s former president and chief operating officer, Ramesh “Sunny” Balwani, who jointly ran the company with Ms. Holmes for seven years before he retired in May 2016. Mr. Balwani has denied the agency’s allegations and is fighting them in a San Jose federal court. His lawyer previously said in a statement that Mr. Balwani “accurately represented Theranos to investors to the best of his ability.”
Theranos also remains under criminal investigation by the U.S. attorney’s office in San Francisco, according to people with knowledge of that probe. Theranos has said it is cooperating with the investigation.
The investors facing the biggest losses are the Walton family, who invested $150 million in Theranos through two separate firms, the documents show. The Journal had previously reported that the Waltons were investors but not the amount they invested.
Other Theranos investors facing big losses include Mr. Slim, Greek shipping heir Andreas Dracopoulos and members of South Africa’s Oppenheimer family, which controlled the diamond company De Beers until it was sold to Anglo American PLC in 2011. Mr. Slim invested $30 million, while Mr. Dracopoulos and the Oppenheimers invested $25 million and $20 million, respectively, according to the documents.
Among U.S. investors, the Coxes invested $100 million, the documents show. Riley Bechtel, the former chairman of construction giant Bechtel Corp., invested $6.2 million. New England Patriots owner Robert Kraft invested about $1 million.
Representatives for Mr. Slim, the Oppenheimers, the Waltons, the Coxes, Mr. Bechtel and Mr. Kraft didn’t immediately respond to requests for comment. Mr. Dracopoulos declined to comment.
The documents revealing the identities of Theranos investors and the size of their shareholdings were unsealed Thursday in a lawsuit brought against Theranos by former Robertson Stephens & Co. co-founder Robert Colman in a San Francisco federal court. In the lawsuit, Mr. Colman alleges that the company made false and misleading claims about its operations and technology while soliciting money from investors.
Theranos has denied the suit’s allegations and is fighting them.
Mr. Colman invested in Theranos through the Lucas Venture Group, a venture-capital firm. Indirect shareholders like him who invested through venture funds collectively put about $70 million into Theranos, according to the documents. Mr. Colman declined to comment through his lawyer.
The largest individual investor in Theranos was Rupert Murdoch, who invested $125 million in March 2015, only to sell back his shares to the company for one dollar in early 2017, according to people familiar with the matter.
Under the terms of that buyback deal, Mr. Murdoch, who is executive chairman of 21st Century Fox Inc. and News Corp, the Journal’s parent company, received an additional $4 million from Theranos when the firm reached a separate legal settlement with a hedge-fund investor, the people familiar with the matter say.
The hedge fund, San Francisco-based Partner Fund Management, invested $96 million in Theranos in early 2014. After it sued the company for fraud in October 2016, Theranos agreed in a settlement to pay it $43 million in the spring of 2017 without admitting or denying wrongdoing, according to people with knowledge of the settlement’s terms. The Partner Fund settlement triggered the additional payment to Mr. Murdoch, these people say.
Mr. Murdoch and his shareholdings don’t appear in the documents unsealed Thursday because he had sold back his stock when the Colman suit’s discovery phase began.
Also absent from the documents are the identities and shareholdings of earlier investors who invested another nearly $100 million in Theranos before 2013.
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