Merck Performance Materials Gives Strategy Update

• Performance Materials positions itself as a leading provider of solutions for the electronics industry
• After 2019, the business sector is expected to show an average annual sales growth rate of between 2% and 3%
• Lasting EBITDA pre margin of 30% aimed for

Merck KGaA, Darmstadt, Germany, a leading science and technology company, today presented its strategy to secure the future prospects of Performance Materials. The business sector comprises the specialty chemicals business of Merck KGaA, Darmstadt, Germany and supplies solutions for displays, computer chips and surfaces of every kind. After 2019, Merck KGaA, Darmstadt, Germany expects Performance Materials to resume earnings growth.

‘With ‘Bright Future’ we have implemented a transformation program designed to put Performance Materials back on a growth track. We want to further expand our position as a leading supplier of solutions for the electronics industry. To do so, we will align ourselves even more closely with the needs of this key market of the future and drive market-oriented innovations forward,’ said Kai Beckmann, CEO of Performance Materials and Member of the Executive Board of Merck KGaA, Darmstadt, Germany.

In 2017, Performance Materials generated € 2.4 billion or 16% of Group sales. The business sector is currently facing massive market shifts in liquid crystals for display applications. In the coming years, Merck KGaA, Darmstadt, Germany expects to see a continuing market decline, which will also impact sales. However, this development should be more than offset by growth in OLED materials and photoresists as well as in the Semiconductor Solutions and Surface Solutions business units. In particular, Semiconductor Solutions, is expected to be a main driver of this growth. Consequently, Merck KGaA, Darmstadt, Germany assumes that average annual sales growth will range between 2% and 3% in Performance Materials after 2019. The EBITDA pre margin is expected to amount to around 30% in the long run, representing above-average profitability within the specialty chemicals market.

Performance Materials serves attractive growth markets in the electronics, automotive and cosmetics industries. Particularly the electronics sector is benefiting from megatrends such as digitalization, mobility and urbanization, supplies a wide variety of end-user markets and is thus more stable and less susceptible to industry cycles. Merck KGaA, Darmstadt, Germany aims to further expand the leading role of Performance Materials as a supplier of solutions for the electronics industry. The company is also working to establish sustainable success out of the positive trend seen in the growth market of China in recent months. Merck KGaA, Darmstadt, Germany opened an OLED technology center in Shanghai in June.

Over the past year, Performance Materials has replaced almost its entire leadership team and organized itself into the three business units Display Solutions, Semiconductor Solutions and Surface Solutions. An integrated research and development team is steering the entire innovation process, thereby ensuring the efficient deployment of resources. To strengthen its technological leadership in the various markets and to secure long-term growth, Performance Materials will continue to invest heavily in innovations. New business fields and innovations such as liquid crystal windows offer additional growth potential.

Notes for editors: The teleconference for media representatives will also be webcasted live as of 11:00 a.m. (CET) (in German and English) The respective presentation can be found here

https://bit.ly/2Nma6t9

CMS proposes paying home health agencies for remote monitoring

CMS is considering paying home health agencies for remote patient monitoring.

Remote patient monitoring involves the use of digital tools to collect health data such as vital signs, weight, blood pressure, blood sugar, blood oxygen levels, heart rate, and electrocardiograms.

“Today’s proposals would give doctors more time to spend with their patients, allow home health agencies to leverage innovation and drive better results for patients,” CMS Administrator Seema Verma said in a statement released Monday announcing the annual home health proposed payment rules. “The redesign of the home health payment system encourages value over volume and removes incentives to provide unnecessary care.”

That’s especially important as more care is delivered in the home.

In 2016, about 3.4 million Medicare beneficiaries received home health services, and the program spent about $18.1 billion on home health care services. In that year, over 12,200 agencies participated in Medicare, according to the Medicare Payment Advisory Commission.

Studies show remote patient monitoring results in more live-time data sharing which can lead to more tailored care and better health outcomes.

The rule also outlines a new pay model for home health services which was called for in the Bipartisan Budget Act of 2018.

The current system pays for 60-day episodes of care and also sets payment on the number of therapy visits a patient receives. The new Patient-Driven Groupings Model will no longer count therapy sessions and will pay for 30-day periods of care.

The new structure would move Medicare towards a more value-based payment system while also reducing administrative burden on home health agencies. The PDGM model would will launch January 1, 2020 if finalized.

In all, the CMS is proposing a 2.1% or $400 million increase in Medicare payments for home health agencies. That’s a change from the 0.4% or $80 million cut from last year.

https://bit.ly/2NfyXyF

Opioid use among Part D members is down but ‘remains concerning’

Data from the Medicare Part D program show fewer beneficiaries are receiving high amounts of opioids, but a watchdog agency says usage “remains concerning,” while urging insurers to further restrict at-risk patients with lock-in programs.

The number of beneficiaries receiving high amounts of opioids through Part D coverage declined 8% in 2017 from just over 500,000 in 2016 to nearly 459,000, according to a report (PDF) by the Office of Inspector General.

The number of beneficiaries that received an “extreme” amount of opioids—defined as a daily dose more than two-and-a-half times the CDC’s recommendation for chronic pain patients over the course of the year—dropped 17% in the last year, from 69,500 to 57,600.

Doctor shopping declined even more precipitously, with 14,800 beneficiaries receiving excessive amounts of opioids at from multiple prescribers or pharmacies in 2017 compared to 22,300 the previous year.

However, 1 in 3 Part D beneficiaries still received at least one prescription opioid, and the overall level of opioid use “continues to raise concerns,” the OIG said.

While OIG has ramped up efforts to identify instances of inappropriate prescribing by partnering with states to identify instances of fraud, the agency called on insurers to implement new lock-in authority under the Comprehensive Addiction and Recovery Act of 2016, which allows Part D sponsors to restrict at-risk beneficiaries to select pharmacies and prescribers.

“We also call on Part D sponsors to work with pharmacies to ensure that the new point-of-sale care coordination alerts are implemented and effective,” the OIG wrote. “Specifically, sponsors should ensure that when these controls are triggered, the pharmacists consult with the prescribers before dispensing additional opioids.”

On the enforcement side, this week the OIG along with the Department of Justice announced charges against 601 individuals with fraud crimes totaling $2 billion. A sizable portion of that national takedown was devoted to opioid fraud, with 76 doctors charged for their role in diversion schemes.

https://bit.ly/2KKVYrl

Hemophilia Drug Prices and the Market

Miracles, it seems, have a high price tag. At least, if those miracles are miracle drugs. There’s no doubt that trends in gene therapy and immuno-oncology are producing drugs that are as close to miraculous as we’re likely to get, doing a great job, generally, in beating back diseases that to this point were untreatable or didn’t respond well to other therapies.

It’s also true that many of these drugs have astoundingly high price tags. The most expensive drug in the U.S. is Horizon Pharma ’s Actimmune for a rare disease, chronic granulomatous, which runs about $52,321 for a single month’s treatment, for example. Sarepta Therapeutics’Exondys 51 for Duchenne muscular dystrophy has a yearly price tag of about $300,000.

One disease that is getting some attention lately for its costs is hemophilia. It is a rare bleeding disorder. A gene mutation prevents blood from clotting properly. It is generally passed from mother to son.

But according to a 2015 Express Scripts report, the drugs to treat hemophilia cost more than $270,000 annually on average. And that’s for patients who don’t have complications from their disease, where the annual price can climb above $1 million.

In the U.S., there are about 20,000 patients, but AllianceBernstein, an investment research firm, estimates the hemophilia market in the U.S. is worth about $4.6 billion.

There are currently 28 different hemophilia drugs available in the U.S., with another 21 in development. They are typically biologics, with no current biosimilars available. Biologics are notoriously expensive. One of the peculiarities of the hemophilia market is that with so much competition, the prices haven’t come down. Jerry Avorn, a professor at Harvard Medical School, told NPR, that this hasn’t brought prices down in the way someone “operating at the level of undergrad Econ 101 would expect.”

NPR points out, “The problem is that companies have no incentive to lower prices. Patients generally don’t push back because insurers pay the bulk of the cost. And insurers tend not to object because the market for the drugs—expensive as they are—is small and the patients are especially vulnerable.”

Acorn noted to NPR, “It’s a magical formula: Lifesaving drug, child at risk of bleeding to death—it kind of casts anybody who looks at costs into the role of some evil Scrooge-like person. The insurers don’t want to end up on the front page of the newspaper saying Little Timmy bled to death because his drug wasn’t covered.”

And, of course, no company wants to be the first one to cut prices in a potential drug war.

The first products to treat hemophilia came out in the mid-1960, were which derived from human blood plasma. But in the 1980s, when HIV emerged, these products, unfortunately, spread HIV into the blood supply, infecting about 4,000 hemophilia patients.

In the 1990s, cloning human clotting proteins in animal cells using recombinant DNA technology took over, which is difficult to make. Bayer, for example, has a factory in Berkeley, California that produced the drug Kogenate. When at full capacity, it produced less than a pound of clotting factor annually. But when diluted with other ingredients, it is used to treat thousands of patients in 80 countries.

But it’s still an area of interest for many companies, no doubt because of the profitability related to a lifetime chronic disease whose medications justify six-figure price tags, but also because the technology is advancing where therapies are improving. Here are a few examples.

On May 22, 2018, BioMarin Pharmaceutical announced an update to its previously reported Phase I/II trial of valoctocogene roxaparvovec, a gene therapy for severe hemophilia A. The company has six clinical studies ongoing in its comprehensive gene therapy treatment of severe hemophilia A. There are two Phase III trials, a Phase I/II trial, and two additional and separate studies, one to evaluate seroprevalence in people with severe hemophilia A and one non-interventional study to evaluate baseline characteristics in hemophilia A patients.

In the 6e13 vg/kg cohort, the trial to date showed continued and substantial decrease in bleeding requiring Factor VIII infusions with a 97 percent reduction in mean Annualized Bleed Rate (ABR), with no spontaneous bleeds and elimination of all bleeds in targets joints in the second year.

Also on May 22, Spark Therapeutics, along with Pfizer, released data from an ongoing Phase I/II clinical trial of SPK-9001 for severe or moderately severe hemophilia B. The companies reported that all 15 participants had discontinued routine infusions of factor IX concentrates, none of them experienced serious adverse events, and there were no thrombotic events or factor IX inhibitors.

“We are pleased to see all 15 participants, notably including the first four participants who have been followed for more than two years, continue to show that a single administration of SPK-9001 has resulted in dramatic reductions in bleeding and factor IX infusions, with no serious adverse events,” said Katherine High, Spark Therapeutics’ president and head of research & development in a statement at the time.

And on June 4, the U.S. Food and Drug Administration (FDA) accepted Genentech’s supplemental Biologics License Application (sBLA) and granted Priority Review for Hemlibra (emicizumab-kxwh) for adults and children with hemophilia A without factor VIII inhibitors. A decision will be made by October 4, 2018. The therapy was approved in November 2017 for routine prophylaxis to prevent or reduce the frequency of bleeding episodes in adults and children with hemophilia A with factor VIII inhibitors. It was also approved for the same population by the European Commission in February 2018.

Hemlibra is a bispecific factor IXa- and factor X-directed antibody designed to bring together factor IXa and factor X, proteins needed to activate the natural coagulation processes and restore the blood clotting process for hemophilia A patients.

https://bit.ly/2MHIYU8

FDA Withdraws Draft Guidance on Biosimilar Development

The U.S. Food and Drug Administration (FDA) withdrew its draft guidance on statistical methods to evaluate the analytical similarity between branded drugs and biosimilars.

The guidance “Statistical Approaches to Evaluate Analytical Similarity” was initially issued in September 2017. The FDA withdrew the draft guidance on June 21. The guidance was intended to provide advice for biosimilar developers regarding the “evaluation of analytical similarity between a proposed biosimilar product and a reference product,” the FDA said. The FDA withdrew its guidance following public input that expressed some concerns. One of the filers was Sarfaraz K. Niazi, an adjunct professor specializing in biosimilar development at the University of Illinois and the founder of Pharmaceutical Scientist, Inc., a consulting company. In his petition, Niazi said the FDA should waive bridging studies for qualified non-US comparators and encouraging payers to reimburse only for biosimilars when prescribed for new patients.

Additionally, Niazi raised concern over errors in the analytical similarity testing protocols. As a result, Niazi offered alternative approaches that limit the testing to non-release quality attributes to reduce the number of reference product batches required. Doing so would create a mechanism to make reference samples freely available and allow more ethical in vitro immunogenicity testing, according to a statement issued by Pharmaceutical Scientist.

The FDA said it will withdraw the guidance as it “give further consideration” to the scientific and regulatory issues that are involved. The comments raised concerns over cost and efficiency of biosimilar development, which included the number of reference product lots that the 2017 draft guidance recommended biosimilar developers sample in the “evaluation of high similarity and the statistical methods” for the evaluation, the FDA said. The regulatory agency added that by addressing the raised issues in the future, it can “advance principles that can promote a more efficient pathway for the development of biosimilar products.”

“Biosimilars foster competition and can lower the cost of biologic treatments for patients, yet the market for these products is not advancing as quickly as I hoped. I believe that the FDA can do more to support the development of biosimilars, as well as promote the market acceptance of these products. As the cost to develop a single biosimilar product can reach hundreds of millions of dollars, it’s important that we advance policies that help make the development of biosimilar products more efficient, and patient and provider acceptance more certain,” FDA Commissioner Scott Gottlieb said in a statement.

Biosimilars are designed to have active properties that are similar to an approved drug, called a reference drug by the FDA. They are always uniquely different in composition, which differentiates them from generic drugs, which are exact replicas of other drugs. Biosimilars have been widely available in Europe since 2006, but the FDA was only granted the right to review and approve them when Obamacare was passed in 2010. Since they were allowed in the United States, the FDA has approved 11 biosimilar treatments, with the most recent being Mylan’s Fulphila (pegfilgrastim-jmbd), a biosimilar to Amgen’s Neulasta (pegfilgrastim). Fulphila was approved in June to reduce the duration of fever or other signs of infection with a low count of neutrophils, a type of white blood cells in chemotherapy patients.

Gottlieb added that one of the central aspects of biosimilar development is the analytical studies that used to demonstrate that the biosimilar product is “highly similar” to its reference product, meaning the medication it is similar to. Gottlieb said the agency will take a fresh look at its draft considerations and will continue to work with biosimilar developers as it moves forward with a new guidance draft.

“By supporting the more efficient development of biosimilars over the long term and helping reduce barriers to bringing these products to market, we can help ensure patients get access to affordable, safe and effective treatment options,” Gottlieb said.

https://bit.ly/2KBPZIB

Why Nevro Corp. Was Downgraded By Morgan Stanley

The bullish case for Nevro Corp NVRO 8.29% — a medical device company that focuses on the treatment of chronic pain — no longer applies for three reasons, according to Morgan Stanley.

The Analyst

Morgan Stanley’s David Lewis downgraded Nevro from Overweight to Equal-weight with a price target lowered from $94 to $88.

The Thesis

The bullish case for Nevro’s stock was based on the following expectations, Lewis said in a Monday downgrade note:

• Material market share gains.
• An expansion of the total addressable market through new initiatives.
• Clinical superiority for the Senza spinal cord stimulation system.

All three catalysts now hold risk, Lewis said.

Nevro’s commercial message of boasting clinically superior therapies isn’t resonating as much as expected, while competing platforms like Abbott Laboratories ABT 0.02% Burst and Medtronic PLC MDT 0.49%‘s Intellis have gained market traction, the analyst said.

Expectations for expansion into new markets not only hasn’t occurred, but Nevro is stuck in a “near-term catalyst void,” Lewis said, giving the example of the company’s diabetic neuropathy and non-surgical back pipelines. After timeline delays, the candidates are slated to begin enrollment in mid-2019, the analyst said.

The superiority of Nevro’s Senza could face challenges from Saluda’s Evoke system in January 2019 or beforehand, Lewis said. The Saluda platform can be programmed to automatically adjust stimulation levels to a patient’s preferred level and could be statistically superior to traditional SCS treatments, negatively affecting Nevro’s commercial message, he said.

https://bit.ly/2tZDfRF

School security is a rapidly growing business

They’re investing in video surveillance, entry control systems, lockdown training and armed police on site. And some are considering newer gadgets that claim to fill security gaps, including door barricades and bulletproof backpacks.

School security is a rapidly expanding business, according to research by Jim Dearing, senior security analyst at IHS Markit. The education sector of the security market grew to $2.7 billion last year, up from $2.5 billion in 2015. The proportion of schools using video surveillance grew to 70% in 2013, up from 20% in 1999.

The market for security equipment is flattening now that the vast majority of schools are stocked up, Dearing said.

Scrambling to find safety solutions

This year’s National Active School Shooter Conference has had to increase its exhibition hall size by three times, said Sean Burke, president of the School Safety Advocacy Council. The number of exhibitors at the conference, taking place in Orlando in July, has gone up 25% compared to last year.

“Security companies are adapting products for the school market,” he said. “Some aren’t proper for a school environment.”

Dearing agrees that some schools that already have “real security” are exploring another wing of the market, representing more niche, non-traditional devices.

Many schools are using these gadgets as quick fixes, to show the community they’re doing something, said Rick Kaufman, an emergency management consultant who led the crisis response team at Columbine High School. He now advises school districts on their security plans.

“Schools are scrambling,” he said. “They’re not looking at what might be the best solution.”

Some of these gadgets pose a number of safety problems of their own, he said. For example, door jams are a violation of many state egress codes, because wheelchair-bound students can’t exit.

“Additional tools”

Shooter Detection Systems uses military technology to detect gunfire and trigger school video management systems. CROTEGA is an “interior suppression system” that sprays a non-toxic, vinegar-like irritant from ceiling fittings with the goal of disorienting a shooter.

BulletBlocker is a manufacturer of bulletproof backpacks and clothing. Founder Joe Curran said sales have shot up by 400% since Parkland. Though school districts don’t typically purchase his products, Curran said he’s now receiving many inquiries from concerned parents. Some have bought backpacks in bulk and donated them to their kids’ schools.

Many districts have purchased a door barricade called the Bolo Stick. It would keep classroom doors shut during a shooting in an effort to buy time for a police response.

“We’re getting calls left and right,” said founder Bill Barna. It was barely an industry before, he said, but it’s now surging. In the first quarter of 2018, the company’s made more sales than in all of 2017. Since 2014, it has grown five-fold.

“I’m not here to make a million dollars,” said Barna, the Bolo Stick founder. “I’m here to save a million lives.”

Unlocking funding

The historical holdback for schools in deciding which tools to implement has been the lack of funding.

But since Parkland and other recent mass shootings, districts have generally freed up funds, said Kaufman, allowing sales to rise.

Financing safety is a balancing act that relies on a combination of local and state tax dollars and grant money. Various private grant programs now award funding to schools that apply. A handful of states make use of modest state grants. And some states — like Minnesota, where Kaufman now works — allow districts to enact levies to raise additional revenue for security.

In California, funds are scarce, said Dale Marsden, superintendent of the San Bernadino Unified School District. He prefers to spend the little cash they receive on preventative measures and to promote a culture of safety.

“We don’t want to become emotionally reactive,” he said. “It’s about staying one step ahead of the bad guys.”

https://cnnmon.ie/2tMgv8M