LivaNova initiated with a Buy at Stifel. Stifel analyst Rick Wise initiated LivaNova with a Buy rating and $115 price target. Wise said he believes LivaNova’s valuation multiples will likely increase, as the company “continues making consistent and steady progress across key commercial, regulatory and pipeline initiatives.”
Thursday, June 7, 2018
Genomic Health gains on test for breast cancer chemo benefit
Shares in Genomic Health gained by about one-third in pre-market trading following the publication of a study showing a genetic test made by the company could be used to predict which women with early stage breast cancer would benefit from chemotherapy. The study, based on a trial of more than 10,000 patients, showed chemotherapy did not improve their survival prospects in about 70 per cent of cases and could mean hundreds of thousands of women diagnosed with the disease could be spared the gruelling post-surgery treatment. Genomic Health makes the genetic test, called Oncotype DX. Shares in the Californian diagnostics company were up 33.5 per cent in pre-market trading on the Nasdaq. Among companies that are major players in the oncology drugs market, shares in Novartis were up 0.7 per cent in pre-market trade, Celgene was up 1 per cent, Johnson & Johnson was up 0.3 per cent. Bristol-Myers Squibb was down 0.9 per cent.
Philip Morris plans to target Indian smokers with iQOS device
Philip Morris International Inc (PM.N) is planning to launch its iQOS smoking device in India, four sources familiar with the matter told Reuters, as the tobacco giant seeks a foothold in a country with the world’s second-biggest smoker population.
Philip Morris says the sleek, penlike iQOS heats but does not burn tobacco, producing a nicotine-containing vapor rather than smoke and making it less harmful than conventional cigarettes. The company says it wants to one day stop selling cigarettes altogether.
India has stringent laws to deter tobacco use, which the government says kills more than 900,000 people every year. But the country still has 106 million adult smokers, second only to China according to the World Health Organization, making it a lucrative market for Philip Morris to target.
A government source said New Delhi would keep an “open mind” if Philip Morris approached it to discuss a device that helped people quit smoking, but added such devices, including e-cigarettes, could be banned if found to be harmful.
The health ministry did not respond to a request for comment. (Graphics of ‘Philip Morris’ iQOS device – tmsnrt.rs/2LuUsd8)
Philip Morris plans to start strategist an iQOS launch in India, which would include work on branding and pricing, as well as reaching out to media and regulators, sources aware of the plan said. The company’s top corporate affairs executive in India, R. Venkatesh, has been interviewing candidates for a senior executive who would focus on iQOS, the sources said.
The company wants “to put together a strategy to achieve its acceptability as a reduced risk product”, said one of the sources, adding that Philip Morris wanted to have a public relations strategy in place before moving ahead.
A Philip Morris spokesman said “we do not comment on our launch plans, but are committed to working hard to replace cigarettes with scientifically substantiated smoke-free products”. Venkatesh did not respond to a request for comment.
But the company appears to have already started building a public case for iQOS in India.
On “World No Tobacco Day” last week, Venkatesh wrote a column for India’s Economic Times newspaper, calling for “effective regulations” for alternative smoking devices.
“With alternatives to cigarettes available and countries already delivering on their smoke-free ambitions, the incentive is there for lawmakers to support Indian smokers – who deserve a better option,” Venkatesh said.
INDIA’S TOBACCO MARKET
Philip Morris has for years promoted its Marlboro cigarettes in India. Though its market share has quadrupled in recent years, Marlboro still accounts for only about 1.4 percent of India’s $10 billion cigarette market.
According to internal documents published by Reuters last year here:%2033738-the-philip-morris-files, the company sees India as a “high potential market” where it aimed at “winning the hearts and minds” of people between 18, the minimum legal age to buy tobacco products, and 24.
IQOS is currently used by nearly 5 million people in more than 30 countries, led by Japan which effectively bans regular e-cigarettes but allows “heat not burn” devices.
India could offer Philip Morris a huge opportunity due to its burgeoning middle class, said Shane MacGuill, head of tobacco research at Euromonitor International.
FILE PHOTO: The Philip Morris iQOS heat-not-burn electronic cigarette is pictured in this illustration photo, April 23, 2018. REUTERS/Toru Hanai/Illustration/File Photo
“It’s a bet on the future,” MacGuill said. “In the longer term, there could be very big rewards for them in India.”
Philip Morris’ so-called reduced risk products, such as iQOS, helped the company clock $3.8 billion in net revenues last year, compared with $739 million in the previous year.
To garner support for iQOS in India, Philip Morris plans to reach out to influential people who could voice public support for the device ahead of its launch, two of the sources said.
Still, if Philip Morris seeks Indian approvals, it would need to convince a government that has in recent years raised cigarette taxes, ordered companies to print bigger health warnings on tobacco packs and launched a quit-smoking helpline.
Prakash C. Gupta, director at the Healis Sekhsaria Institute of Public Health near Mumbai, criticized Philip Morris’ plans.
“They point out some of the toxicants may be less than cigarettes, but that doesn’t establish the safety of the product,” Gupta said. “It will be used by affluent youth, which will be harmful for public health.”
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Philip Morris has also applied to the U.S. Food and Drug Administration (FDA) for permission to market the device as being less harmful than cigarettes. In January, a panel of FDA advisers said iQOS exposes users to lower levels of harmful chemicals, but added the company had not shown that lowering exposure to those chemicals was reasonably likely to translate into a measurable reduction in disease or death.
REGULATION PUZZLE
India’s health ministry has for years said it wants to regulate e-cigarettes – devices which use a nicotine-laced liquid. Still, there is no federal regulation for the product that activists say is harmful and acts as a gateway to tobacco.
In a filing to a Delhi court that is hearing a plea to regulate e-cigarettes, the federal health ministry in April described such Electronic Nicotine Delivery Systems (ENDS) as “new emerging threats”.
The ministry, in its filing seen by Reuters, said it was developing guidelines for regulating – including possibly banning – the manufacture, import or sale of e-cigarettes.
“Glamorizing marketing techniques of ENDS as less harmful products purely mimics the marketing techniques used by the cigarette industry,” the ministry said, without specifically mentioning heat-not-burn smoking devices such as iQOS.
Despite that stance, the government source said the health ministry was still undecided on whether to ban or regulate e-cigarettes, and wanted more consultation to decide whether their efficacy as an aid to help people stop smoking regular cigarettes outweighed any potential harm.
Globally, Philip Morris also lobbies regulators to not classify iQOS as a regular cigarette, an argument that, if won, can lead to lower taxes. The company says the tobacco plugs inserted into the iQOS do not produce smoke, and the device itself is an electronic product.
It plans to do the same in India.
“The first thing is to ensure the customs duties are not prohibitively high,” said one of the sources.
Many migraine sufferers skip effective behavioral treatment
Even when a headache specialist refers migraine patients for proven behavioral treatments like biofeedback, relaxation training or cognitive behavioral therapy, barely half of them go, suggests a small U.S. study.
Of 69 migraine sufferers treated at a large academic headache practice and referred for behavioral therapy, just 57 percent got as far as making an appointment with the behavioral practitioner, researchers found.
The patients who ignored their doctor’s recommendation cited time limitations as the main barrier to treatment. Concerns about cost and insurance coverage were also an issue. And some were skeptical about whether the treatment would work; others worried about the potential stigma of seeing a psychologist, the study team reports in the journal Pain Medicine.
“I hope that the impact of this study will be that more physicians, patients and payors will realize that these evidence-based treatments are being underutilized and are having an effect on the opioid epidemic,” lead author Dr. Mia Minen, chief of headache research at NYU Langone Medical Center in New York City, said in a telephone interview.
One in seven people in the U.S. experience migraine headaches, but they are most common in women and may afflict up to one in four women aged 18 to 44.
The severe headache pain of migraines can be accompanied by sensitivity to light and sound as well as blurred vision, nausea and vomiting. These headaches can be disabling and result in missed work and frequent doctor visits.
Opioids are still being prescribed as the first line of treatment for migraines when evidence shows that behavioral therapy is more effective and safer in treating migraines, Minen said.
“There should be more doctors initiating behavioral therapy and fewer insurance restrictions and limitations placed on these treatments to make them more accessible to patients so they can pursue them,” she added.
“I don’t think that people realize that behavioral therapy alone can result in a 50 percent reduction in headache days. It’s not only effective alone, but when combined with medications it can have a synergistic effect.”
For their study, Minen and her colleagues enrolled 234 patients with migraines who came to the NYU Langone headache center from July 2016 to March 2017.
Of these, 69 were referred for behavioral migraine treatment with a trained therapist, but Minen’s team was only able to reach 53 of them when they followed-up two to three months later. At that time, 30 patients had, at a minimum, taken the step of setting up an appointment for behavioral migraine treatment.
Apart from it’s small size, the study is limited by the fact that patients treated at an academic specialty headache practice might not represent all migraine sufferers, the authors note.
Minen said that patients who had previously seen a psychologist for any reason were more likely to actually begin behavioral therapy.
More than 80 percent of the patients had consulted with a primary care physician for their headaches. Patients had also sought help for their migraines in emergency rooms or with ophthalmologists. “This suggests that patients perceived greater barriers to accessing behavioral, compared with medical treatments for migraine,” the study team writes.
“For many years, a lot of patients with migraines were told the disorder was all in their head, or they were depressed or stressed out. It’s important that as headache specialists we emphasize to our patients that we are not sending them for psychotherapy when we recommend behavioral migraine treatment,” said Dr. Amaal Starling, a neurologist at the Mayo Clinic in Phoenix, Arizona, who wasn’t involved in the study.
“We need to explain that behavioral techniques teach skills to help manage migraines,” Starling said in a telephone interview.
“These patients fall through the cracks,” said Dr. Nauman Tariq, director of the Johns Hopkins Headache Center in Baltimore, Maryland. “They become a little defensive if we don’t do a good job of explaining why we want them to see a psychologist, but they are an important and necessary part of the headache team,” he noted.
“Behavioral therapy improves patients’ quality of life. They perceive less pain, miss less work and can enjoy their activities again,” said Tariq, who was not involved in the study.
SOURCE: bit.ly/2sLYaHu Pain Medicine, online June 5, 2018.
New Enterprise Associates buys DaVita’s Paladina Health
- Venture capital firm New Enterprise Associates has acquired DaVita’s direct primary care business Paladina Health, the subsidy announced Wednesday. The deal is for around $100 million, CNBC reports.
- Paladina operates more than 50 physician offices across 10 states, including Colorado, Ohio, Florida and Texas, and plans to continue to expand, according to the company.
- The deal comes about six months after UnitedHealth’s Optum announced it would acquire DaVita Medical Group for $4.9 billion.
The deal is the latest amid a growing number: In 2017, there were 579 healthcare deals, the second highest number on record, according to a recent report by Mergermarket and West Monroe Partners.
The shift from fee-for-service to value-based care appears to be a major component of the pact.
“We’ve closely followed the ongoing shift to value-based care in the U.S., and believe that Paladina Health is a pioneer in the space,” said Mohamad Makhzoumi, NEA general partner and head of healthcare services and healthcare IT investing, in a statement.
Makhzoumi pointed to Paladina’s direct primary care model as desirable, saying it has shown high patient and provider satisfaction while keeping down costs. Under the model, physicians collect a monthly fee from employers to provide care for their workers, rather than accepting insurance.
But the model has shown some shakiness. Last year, Seattle-based DPC provider Qliance was forced to close its doors.
“DPC is no longer a new concept, but there remains a sufficient amount of execution risk,” Chris Miller, CEO of Paladina, previously told Healthcare Dive. “Strong players have exited the market, mostly due to business models that haven’t worked and the lack of barriers to entry.”
DPC models seems to be gaining traction as more businesses contract directly with providers for their employees’ healthcare needs. A recent survey from Willis Towers Watson found while only 6% of large employers currently have such an agreement, 22% are considering it for 2019.
Medicare Part D spending spikes 77% even with prescriptions down 17%
Medicare spending and out-of-pocket costs on brand-name drugs is up despite a decrease in prescriptions, a government watchdog says.
The Department of Health and Human Services’ Office of Inspector General found (PDF) that Medicare spending on brand-name drugs jumped 77% from 2011 to 2015. That spike in spending occurred even with a 17% decrease in prescriptions for such drugs.
Part D spending accelerated six times faster than inflation, the OIG also found. A report released earlier this year by Sen. Claire McCaskill, D-Mo. showed brand-name drug prices have jumped by 12% each year from 2012 to 2017.
“Generally, plan sponsors base their pharmacy reimbursement amounts on the prices that manufacturers set for their drugs,” the watchdog said. “Increasing manufacturer prices for brand-name drugs may result in increasing costs for Medicare and its beneficiaries, especially those beneficiaries who need access to expensive maintenance drugs.”
After accounting for manufacturer rebates, the watchdog found that brand-name drugs still increased by 62% during the same time frame.
Consumers have also felt the pinch of higher costs in their wallet.
The number of people who paid more than $2,000 in out-of-pocket costs nearly doubled during the five-year period, according to the OIG.
UnitedHealth part of $2.2B acquisition of hospitalist staffing company
UnitedHealth Group’s OptumHealth is part of a $2.2 billion deal to acquire a Washington-based hospitalist staffing company.
OptumHealth will be one of the two primary owners of Sound Inpatient Physicians Holdings, a physician staffing firm based in Tacoma, Washington, according to a ratings action issued by Moody’s on Thursday.
UnitedHealth’s care delivery arm will own the company alongside the private equity firm Summit Partners, which agreed to purchase the controlling stake of Sound from the Germany-based dialysis provider Fresenius Medical Care in April.
The announcement from Fresenius referenced an “investment consortium led by Summit.” UnitedHealth’s involvement has not been previously disclosed.
A UnitedHealth spokesperson had no immediate comment.
Moody’s assigned Sound Inpatient Physicians Holdings a “stable” rating based, in part, on the ownership stake by OptumHealth. The rating agency noted that “Sound will remain a highly leveraged physician staffing company with a high concentration within hospital medicine.”
UnitedHealth’s involvement in the transaction comes as the company is putting a bigger emphasis on care delivery, particularly through provider acquisitions. Last year, the insurer bought DaVita Medical Group for $4.9 billion. The acquisition added nearly 300 medical clinics across six states.
Last year, OptumHealth brought in $20.6 million in revenue and $1.8 million operational earnings.
During a presentation (PDF) at Berstein’s annual conference, CEO David Wichmann indicated that although the company’s M&A allocation was equally divided between benefits, services and international expansion between 2008 and 2012, the vast majority of M&A capital has been devoted to services over the last five years. And there are no signs the company is slowing down.
Although Wichmann did not mention the Sound acquisition, he pointed to new OptumCare markets “in the formative stages” of value-based payment approaches.
“We will methodically spend a decade or more to accomplish our long-term goals of entering and building out care delivery operations in 75 targeted markets serving 60% of the U.S. population,” he said.
Moody’s expects Sound’s revenues to grow 10% over the next two years, reaching $1.4 billion in 2019. The staffing firm has roughly 3,500 employees.
Moody’s noted that Sound’s rating was constrained because it relies on profits generated through the Centers for Medicare & Medicaid Services’ Bundled Payments for Care Improvement Initiative.
“The stable outlook reflects Moody’s view that Sound will remain a highly leveraged physician staffing company with a high concentration within hospital medicine,” Moody’s analysts wrote. “It also reflects Moody’s expectation that Sound will grow primarily through organic means.”
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