As a result of “uncertain and unpredictable markets, Novo Nordisk is considering abandoning its longterm financial target and slashing 3,000 jobs from its global workforce, Endpoints News reports, citing Danish business newspaper Borsen. The giant diabetes drugmaker intends to unveil its cost reduction package along with its Q2 results in August, the report says. Such plans include an adjustment of its growth forecast, which the company put at 5% as recently as May, the report notes. Shares of Novo Nordisk are down 2.1% in New York after the news
Friday, June 8, 2018
AbbVie, Roche leukemia med OKd by FDA
AbbVie (ABBV) announced the U.S. Food and Drug Administration has approved, under priority review, VENCLEXTA in combination with rituximab for the treatment of patients with chronic lymphocytic leukemia or small lymphocytic lymphoma, with or without 17p deletion, who have received at least one prior therapy. The approval is based on MURANO Phase 3 clinical trial data which demonstrated a significant improvement in progression-free survival for relapsed/refractory CLL patients, reducing the risk of disease progression or death by 81 percent when compared to bendamustine in combination with rituximab, a standard of care chemoimmunotherapy regimen. is being developed by AbbVie and Roche (RHHBY); it is jointly commercialized by AbbVie and Genentech, a member of the Roche Group, in the U.S. and by AbbVie outside of the U.S.
Acorda makes case for patent as price soars
Shares of Acorda Therapeutics (NASDAQ:ACOR) rose over 30% today after the company’s lawyers made oral arguments in front of a panel at the U.S. Court of Appeals for the Federal Circuit late Thursday. The appeal was made in response to an earlier decision by a U.S. District Court to invalidate four of the company’s patents for its multiple sclerosis drug Ampyra, which is the top revenue generator for the business and is expected to deliver at least $330 million in sales in 2018. That’s down from $493 million in 2016.
The timing is important. Acorda Therapeutics has one remaining patent on Ampyra, but it expires in July. That means the Federal Circuit decision on the appeal could be the difference between generic versions of the drug hitting the market this summer or sometime much later, perhaps as late as 2027.
As of 11:49 a.m. EDT, the stock had settled to a 22% gain.
The company didn’t issue a press release or SEC filing because a decision on the appeal is still pending, but the higher-than-usual trading volume today indicates bullishness by an institutional investor or two about what was said during the arguments. Investors can listen to audio of the oral arguments in Acorda Therapeutics Inc. v. Roxane Laboratories Inc. that were made in front of the panel yesterday, although it may be difficult to draw conclusions one way or the other.
According to FiercePharma, Acorda CEO Ron Cohen tried to quell angst among the company’s sales representatives by stating that even if Ampyra loses intellectual property protections, the plan is to transfer everyone to accounts selling Parkinson’s disease drug Inbrija. That’s either a bullish comment on the drug’s prospects, since it’s currently awaiting a decision on marketing approval from the Food and Drug Administration, or exactly what investors would expect the CEO to say.
There’s some degree of uncertainty surrounding Acorda Therapeutics right now. The month of June promises to be a volatile one for investors, considering that the Federal Circuit will soon decide whether or not to grant the company’s appeal (and restore the invalidated Ampyra patents) and that the only currently valid patent expires in July. Today’s move may be a bit premature, however, so investors should probably remain on the sidelines until more certainty is provided.
Thursday, June 7, 2018
Trump OMB Appointee Blasts Obama-Era Value Programs
The Obama-era strategy to move the healthcare system from volume to value is too complicated and isn’t working well, a Trump administration health official said here Wednesday.
The volume-to-value push has resulted in “a big sprawling complicated series of byzantine programs that few people understand” and it “sucks more value out of the system than it delivers,” Joseph Grogan, associate director for health programs for the Office of Management and Budget (OMB), said at the start of a three-day conference on accountable care organizations (ACOs), bundled payments and MACRA. The OMB oversees $3 trillion in healthcare spending.
Grogan took specific aim at the Center for Medicare & Medicaid Innovation (CMMI), a division of the Centers for Medicare & Medicaid Services (CMS) created by the Affordable Care Act. He said his office recently sent a rescission package that includes an $800 million cut from what Congress has appropriated to CMMI, “because so far, CMMI has failed to deliver.”
Take, for example, CMMI’s experiment with ACOs — groups of doctors and hospitals working together to deliver high-quality, low-cost care to a defined group of patients. When the Congressional Budget Office scored ACOs in 2011, it estimated that the ACO model called the Medicare Shared Savings Program “would save $4.9 billion over 10 years,” Grogan said. But so far, programs using that model have cost over $384 million, according to CMS actuaries.
“There were a lot of broken promises and failed estimates in the ACA. But the hope and promise of these complicated value designs is certainly one of them,” he added.
In effect, these designs are trying to get doctors and hospitals to act more like insurance companies, absorbing any losses if their enrollees and beneficiaries end up using too many expensive services, Grogan said. But the complexity of these program designs has become overwhelming.
The Trump administration, he said, is trying to reduce reporting requirements, use broader claims data, begin to move toward passive data collection efforts, “and see if we can get people to spend less time treating codes and entering on an iPad, and concentrate more on the patient.”
One problem is the way defenders of these models have tried to justify them, saying the metrics used are unfair, and if different data were used, the picture would be different, Grogan said. “If we’re constantly using counterfactuals to evaluate (the programs) and waiting for another study to bear out … They’ll never be termed as failures.”
Under the current system, he said, it takes 18 months for a new model to get off the ground at CMMI because it must work through at least six different government offices. “Is that because we can’t find simple examples of waste to be wrung out of the system, with $1.3 trillion in healthcare spending, there’s no low-hanging fruit?”
Solutions are on their way under CMMI’s new director, former Landmark Health CEO Adam Boehler, appointed in May by HHS secretary Alex Azar, Grogan said. “He understands the need for simple high-impact models that can be stood up quickly and deliver value to taxpayers,” or be shut down fast if they don’t work.
One example of Azar’s efforts to improve the system is drug pricing proposals designed to reduce costs, which “may be the most promising area for value to be captured from the system,” Grogan said.
MiMedx Audit Results In Restatement Of 5 Years Of Financials
MiMedx Group Inc MDXG 23.39% plunged nearly 21 percent Thursday after announcing:
- The departure of its CFO;
- The board-directed requirement to restate financial results related to sales recognition for the 2012 through 2016 fiscal years and interim periods of 2017; and
- The related withdrawal of all guidance for 2018.
The financial disclosure more than offset concurrent news of international progress demonstrating “meaningful operational progress which will result in expanded revenue contribution” over the next few years.
“The company’s underlying business remains strong,” a press release said.
Why It’s Important
MiMedx intimated investors may have been acting on inaccurate revenue figures through the last two quarters.
Additionally, it suggested the metric may be further adjusted throughout an ongoing audit committee investigation that’s evaluating sales, distribution practices and customers, which could expand the scope of restated financial items.
What’s Next
The company said it will not release additional updates until the investigation is closed, and it did not provide a timeframe for the filing of restated statements.
“It is diligently pursuing completion of the restatement and intends to make such filings as soon as reasonably practicable,” MiMedx’s release said.
Bayer CEO Predicts ‘Great Value And Growth’ After Monsanto Acquisition
Germany drugmaker Bayer’s acquisition of Monsanto closed this week after a challenging two-year-long review process. Despite creating the world’s largest seed and agricultural chemicals maker, the “highly competitive environment” will remain unchanged, Bayer CEO Werner Baumann told CNBC on Thursday.
What Happened
One of the biggest challenges facing the combined entity is satisfying its “very smart” customer base, Baumann said. Customers have multiple choices, including Syngenta, Corteva Agriscience or the “substantially strengthened” BASF, to which Bayer sold some of its agricultural assets as part of the merger.
Why It’s Important
Bayer’s Monsanto acquisition could give it an advantage over rivals, as it could innovate using 2.4 billion euros, or $2.84 billion, in R&D funding annually, Baumann said. The company expects to invest in seeds, biological and digital initiatives to generate “better yield, better quality and, frankly, a better environmental footprint.”
What’s Next
The “first, second and third priority” for Bayer is to integrate Monsanto’s business into its own, Baumann said. Liam Condon, the president of Bayer’s crop science division, has been tasked with leading a combined executive team that will feature a “balance” of executives from both legacy businesses.
While Bayer’s European-listed stock is trading at a discount to its peers, Baumann expressed confidence that the investment community will develop greater confidence in the company, as any merger-related uncertainty has “gone away,” he said.
“I’m absolutely certain our shareholder base [and] new shareholders who come in to the stock see the great value and growth that the company is going to provide going forward.”
Lilly CEO Calls For Uniform Prices, Better Use Of Technology In Health Care
The American health care system is an unsustainable, half-century-old design that engages in price discrimination and has failed to employ technology to its potential to lower costs and expand access, Eli Lilly And Co LLY 0.06% CEO David Ricks told the Detroit Economic Club Thursday.
The pharma exec’s proposed solution is threefold: the health care system must be digitized to “unleash the power of data,” consumers need to be empowered to manage costs and the payment system for health care products and services should be based on the value they produce.
Ricks, 49, who has served as Eli Lilly’s CEO since 2017 and worked there for 20 years, offered a stark projection to illustrate the need for reform.
“Thirty years from now, one disease — Alzheimer’s — will generate more spending in Medicare and Medicaid than the entire military budget.”
A Call For Uniform Drug Pricing
Insulin, Eli Lilly’s No. 1 product, shows the wide gap between the amount paid by government-sponsored insurance with “artificially depressed” prices and the amount paid by individuals, Ricks said.
Medicaid pays 10 cents per vial, the lowest price for insulin in the world, he said: “I can assure you that’s far below our cost to produce it.”
Cash patients pay $300 per vial and are barred from receiving rebates, Ricks said.
“Their payments are actually subsidizing the Medicaid system.”
On June 1, the FDA approved Olumiant, Eli Lilly’s rheumatoid arthritis drug with partner Incyte Corporation INCY 0.69%.
Olumiant is being launched at a 60-percent discount to competitors, Ricks said Thursday.
“This is a kind of experiment to test out a low-price, low-rebate, less cost-shifting type of model.”
At many hospitals, the average markup for drugs is 250 percent, and medicine is used to generate profit, Ricks said.
Ricks spoke optimistically of the health care initiative formed by JPMorgan Chase & Co. JPM 0.4% CEO Jamie Dimon, Amazon.com, Inc. AMZN 0.38% CEO Jeff Bezos and Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett.
“If these three companies can use their scale and technology to create real change and move to value-based payments, it could help move the [health care] system forward.”
Targeting Costs, Outcomes With Technology
Advancements in digital technology such as telehealth services, remote monitoring and artificial intelligence present opportunities for cost savings and better outcomes in health care, Ricks said.
The CEO described the proposed shift from a largely destination, or inpatient, health care system to a delivery model as an “Amazon-like” solution to cost control.
“More than a decade after we have iPhones and Skype … there’s still spotty reimbursement and scant use of something like telehealth.”
The Australian health care system provided remote coordination services to Type 2 diabetes patients, Ricks said.
Patients recorded a corresponding 1-percentage point drop in blood glucose levels — “that’s a large enough effective size to get a new drug approved by the FDA,” Ricks said — and saw their costs fall by $900 annually.
Mergers, Opioids, The ACA And ‘Right To Try’
Ricks offered his take Thursday on other topics at the forefront of health care policy discussions.
The opioid crisis
The number of Americans dying from opioid overdoses daily is equivalent to an airplane crash, Ricks said.
“Believe me, if we were crashing an airplane everyday, we’d be doing something radically different about it.”
The most important thing the industry can do is to invent non-addictive pain medication, he said. Eli Lilly has several late-stage non-opioid candidates, he said, including one it plans to submit to the FDA in late 2019 or early 2020 for osteoarthritis and chronic back pain indications.
The Right To Try Act
Eli Lilly has supplied medication “for years” to the patient population affected by The Right To Try Act signed May 30 by President Donald Trump and participated in the FDA’s expanded access program for experimental drugs, Ricks said.
Right-to-try could simplify the paperwork for doctors, the FDA and drug companies “a little bit,” Ricks said. “We’re sympathetic to the population. This is one more avenue to address what has been a longstanding request. We’ve been very forward leaning and accommodating of those requests.”
M&A
When asked about mergers such as CIGNA Corporation CI 1.25%‘s proposed purchase of Express Scripts Holding Co ESRX 2.12% and the CVS Health Corp CVS 0.09%–Aetna Inc AET 0.41% tie-up, Ricks said the deals could help break down silos in health care and apply technological benefits to medical services.
The Affordable Care Act
The drug industry was supportive of the ACA when it was introduced because it promised to expand access to care, Ricks said. “What we’ve learned is that access does not equal affordability,” he said, adding that ACA rules that drove up costs resulted in states and insurance companies shifting costs to individuals.
The question now is whether to pursue a consolidated nationwide system or a localized one with more customization, Ricks said.
“We strongly favor choice in this debate. That’s not uniformly true, but that’s our company’s position.”
Subscribe to:
Posts (Atom)