Biotech Analyst Says Ignoring Wall Street Brings Bigger Payday

If you want to make money in biotech you are better off doing the opposite of what your sell side analyst tells you to do.

That’s the conclusion Cowen & Co. senior research analyst Phil Nadeau came to after looking at four years of data on Nasdaq Biotech companies and their investment ratings. While Cowen found an inverse relationship between analysts’ ratings and biotech performance since 2015, rating upgrades and downgrades were an even worse predictor of stock performance.

Whenever there was a change toward a strong buy rating on a company, the worse the prognosis for shares. Ratings trending toward a strong sell performed better. Equity analysts are also heavily weighted toward buy ratings and don’t tend to change their views much despite market volatility and shifting investor sentiment, says Nadeau. Nadeau himself rates 35 companies — with 27 of those buys, six holds and no sells — according to Bloomberg data.

Where does all this leave investors?

“Unfortunately (for our job security and sense of self-worth),” Nadeau advises clients in a note that “a non-consensus investment strategy that goes against the consensus sell-side opinion could generate superior returns.”

https://bloom.bg/2Kutsyc

Piper on the fence on volume growth of Supernus Trokendi XR

Supernus Pharmaceuticals (SUPN -4.7%) slips on below-average volume on the heels of a note from Piper Jaffray’s David Amsellem (Neutral/$47) stating that the results from an in-house survey of 25 neurologists suggested weakening volume growth for top seller Trokendi XR which accounted for 77% of the company’s 2017 product sales ($226.5M/294.1M).

Mr. Amsellem adds that the significance of the pressure on volume/sales growth is “unclear” but he believes Trokendi XR will not be a significant revenue growth drive in the coming years.

https://bit.ly/2KFPASa

Trump administration names new U.S. drug enforcement chief

The Trump administration on Monday named a top White House lawyer as the new head of the U.S. Drug Enforcement Administration after the agency’s prior acting administrator announced his retirement last month.

Uttam Dhillon, who most recently served as deputy White House counsel, was named as the DEA’s acting administrator at a time when the agency is devoting much of its attention to grappling with a national opioid epidemic.

According to the Centers for Disease Control and Prevention, 42,000 people died from opioid overdoses in 2016. U.S. President Donald Trump declared the crisis a public health emergency in October.

“The work of the Drug Enforcement Administration is critical to fighting this crisis, and President Trump and I are committed to continuing to give it the strong leadership it deserves,” Attorney General Jeff Sessions said in a statement.

Dhillon replaces Robert Patterson, a 30-year agency veteran who became the DEA’s acting head in October following the departure of Chuck Rosenberg, who himself had led the DEA in an acting, rather than Senate-confirmed, capacity since 2015.

Patterson in an email to employees on June 18 said he “realized that the administrator of the DEA needs to decide and address priorities for years into the future — something which has become increasingly challenging in an acting capacity.”

Dhillon earlier in his career served under President George W. Bust as director of the Department of Homeland Security’s Office of Counternarcotics Enforcement. Before that, he served as an associate deputy attorney general in the Justice Department.

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Amedisys hikes borrowing capacity for ‘acquisition opportunities’

Amedisys, the publicly-traded home health company based in Baton Rouge, is nearly doubling its borrowing capacity by $250 million, to $550 million, in an effort to capitalize on new acquisition opportunities.

The new credit facility also has an expansion option to allow for further upsizing, Amedisys said in a news release. The firm will use the proceeds to pay of its existing senior term loan and revolving credit line balance. Additional proceeds will be used to “capitalize on a strong pipeline of acquisition opportunities.”

“The new facility will provide us with increased operational flexibility, reduced pricing and incremental capital for acquisition opportunities in our pipeline,” President and CEO Paul Kusserow said in a statement.

Amedisys, with a market cap of nearly $3 billion, is one of the largest home health companies in the U.S. The company has grown over the years through aggressive acquisitions of other home health and personal care companies.

https://bit.ly/2KH9NKL

Evolent Health work requirement ruling mitigates risk, says Piper

Piper Jaffray analyst Sean Wieland kept his Overweight rating and $30 price target on Evolent Health, saying the ruling by a federal judge in Kentucky to vacate the approval for Medicaid work requirement waiver secures continued coverage and mitigates the risk for the company in that state. The analyst notes that further regulatory changes are now expected to boost Evolent’s value proposition and boost demand for its services.

https://bit.ly/2NeA41z

Can aspirin treat Alzheimer’s?

A regimen of low-dose aspirin potentially may reduce plaques in the brain, which will reduce Alzheimer’s disease pathology and protect memory, according to neurological researchers at Rush University Medical Center, who published the results of their study today in the July issue of The Journal of Neuroscience.

“The results of our study identifies a possible new role for one of the most widely used, common, over-the-counter medications in the world,” said Kalipada Pahan, Ph.D., the study’s senior author and lead research investigator, who also is the Floyd A. Davis, MD, Endowed Chair of Neurology and professor of neurological sciences, biochemistry and pharmacology in Rush Medical College.

Alzheimer’s disease is a fatal form of dementia that affects up to 1 in 10 Americans age 65 or older. To date, the FDA has approved very few drugs for the treatment of Alzheimer’s disease-related dementia and the medications that exist can only provide limited symptomatic relief.

The exact cause of Alzheimer’s disease progression is unknown; however, poor disposal of the toxic protein amyloid beta in the brain is a leading mechanism in dementia and memory loss.

Activating the cellular machinery responsible for removing waste from the brain therefore has emerged as a promising strategy for slowing Alzheimer’s disease.

Amyloid beta forms clumps called amyloid plaques, which harm connections between nerve cells and are one of the major signs of Alzheimer’s disease. Building on previous studies demonstrating a link between aspirin and reduced risk and prevalence of Alzheimer’s disease,

Pahan and his colleagues were able to show that aspirin decreases amyloid plaque pathology in mice by stimulating lysosomes—the component of animal cells that help clear cellular debris.

Aspirin treatment reduces amyloid beta burden in the hippocampus of 5XFAD mouse model of AD. Credit: Chandra et al., JNeurosci (2018)

“Understanding how plaques are cleared is important to developing effective drugs that stop the progression of Alzheimer’s disease,” said Pahan.

A protein called TFEB is considered the master regulator of waste removal. The researchers gave aspirin orally for a month to genetically modified mice with Alzheimer’s pathology, then evaluated the amount of amyloid plaque in the parts of the brain affected most by Alzheimer’s disease.

They found that the aspirin medications augmented TFEB, stimulated lysosomes and decreased amyloid plaque pathology in the mice.

“This research study adds another potential benefit to aspirin’s already established uses for pain relief and for the treatment of cardiovascular diseases,” said Pahan. “More research needs to be completed, but the findings of our study has major potential implications for the therapeutic use of aspirin in AD and other dementia-related illnesses.”

 Explore further: New tools could uncover important answers for Alzheimer’s researchers

More information: Sujyoti Chandra et al, Aspirin induces Lysosomal biogenesis and attenuates Amyloid plaque pathology in a mouse model of Alzheimer’s disease via PPARα, The Journal of Neuroscience (2018). DOI: 10.1523/JNEUROSCI.0054-18.2018 , dx.doi.org/10.1523/JNEUROSCI.0054-18.2018

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Chronic pain remains the same or gets better after stopping opioid treatment

Stopping long-term opioid treatment does not make chronic, non-cancer-related pain worse and, in some cases, makes it better, Washington State University researchers have found.

The research marks a crucial first step towards understanding how ending long-term opioid therapy affects patients with different types of chronic pain and could help medical practitioners identify effective, alternative treatments to opioids.

“On average, pain did not become worse among patients in our study a year after discontinuing long-term opioid therapy,” said Sterling McPherson, associate professor and director for biostatistics and clinical trial design at the WSU Elson F. Floyd College of Medicine. “If anything, their pain improved slightly, particularly among patients with mild to moderate pain just after discontinuation. Clinicians might consider these findings when discussing the risks and benefits of long-term opioid therapy as compared to other, non-opioid treatments for chronic pain.”

In the study

McPherson and colleagues at the Veteran Affairs Portland Health Care System and the Oregon Health & Science University used survey responses from 551 VA patients who had been on long-term opioid therapy for chronic, non-cancer-related pain for at least a year before discontinuing the medication.

Eighty-seven percent of the patients were diagnosed with chronic musculoskeletal pain, 6 percent with neuropathic pain, and 11 percent with headache pain, including migraines.

Survey subjects rated their pain over two years, scoring it on a scale of 0-10 where 0 equals no pain and 10 equals the worst possible pain. The researchers used biostatistical analysis and computer modeling to characterize changes in pain intensity 12 months before the patients ended opioid therapy and the 12 months after.

While patients differed widely in the intensity of pain they experienced before and after stopping opioids, as a whole, their pain did not get worse and remained similar or slightly improved.

“Our results indicate that long term opioid therapy does not effectively manage patient pain intensity any more effectively than not receiving long-term opioid therapy,” McPherson said. “There are a variety of treatments available for the management of chronic pain other than opioids and our hope is that this research will help promote conversations about these alternatives between doctors and their patients.”

Next steps

McPherson plans to collect additional data and conduct qualitative interviews with patients over the next year to try and determine why some patients experience greater reductions in pain than others after discontinuing long-term opioid therapy

“As part of our study, we grouped our patients into one of four categories based on the amount of pain they reported before and after discontinuing long-term opioid therapy,” McPherson said. “We are now going to try and understand what different mechanisms may be at work for reducing or increasing chronic pain for each of these sub-groups. Our hope is this will lead to being able to target specific sub-populations with different types of treatment for their chronic pain. In addition, we hope to continue to characterize potential adverse effects from being discontinued from long-term opioid therapy.”

A national problem

Backaches, headaches and other chronic, non-cancer-related pains affect one-third of Americans and will afflict even more as the prevalence of diabetes, obesity, arthritis and other diseases grows in the United States’ aging population.

From the early 1990s through 2012, powerful opioid painkillers were increasingly used to treat these maladies in the United States. But a growing number of opioid-related overdose deaths has caused U.S. doctors and policymakers to reexamine this approach. According to the Centers for Disease Control and Prevention, more than 63,600 Americans died from drug overdose deaths in 2016, a toll five times higher than in 1999. Two thirds of these deaths, 42,249, involved opioids.

McPherson’s study, which appears in the June edition of the journal Pain, is one of the first to investigate what, if any, are the potential adverse effects of discontinuing long term opioid therapy for chronic, non-cancer-related pain.

 Explore further: Opioid tapering may improve outcomes for chronic pain sufferers

More information: Sterling McPherson et al, Changes Ii Pain Intensity Following Discontinuation of Long-Term Opioid Therapy for Chronic Non-Cancer Pain, PAIN (2018). DOI: 10.1097/j.pain.0000000000001315

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