DEA Is Rescheduling Epidiolex, But Not (Yet) Cannabis Or CBD

The U.S. Food and Drug Administration (FDA) last week made history: By giving approval for U.K.-based GW Pharmaceuticals PLC-ADR GWPH 0.75% application to market Epidiolex (to medically treat severe forms of epilepsy), it marked the FDA’s groundbreaking admission that cannabis has medical value.

That said, despite some companies trying to leap into the fray of a perceived new CBD market, nothing else has (yet) changed. Cannabis and raw CBD remain federally illegal. For now, Epidiolex itself remains illegal for sale, pending the DEA’s scheduling decision (likely as Schedule IV), due by September 23.

“There is misunderstanding that cannabis or CBD will be immediately rescheduled, but that is not the case; itwill be Epidiolex itself. Yet the potential for marijuana or CBD is groundbreaking,” explained attorney Shawn Hauser, senior associate with Vicente Sederberg LLC, and director of the Denver-based law firm’s Hemp and Cannabinoid Group. “What is getting scheduled is the Epidiolex itself, pursuant to the new drug application, relating to its medical efficacy and low potential for abuse,” she said. “That will inform the federal law for the future. Marijuana is still a Schedule I substance; CBD is not scheduled itself, but as a substance derived from marijuana.”

The DEA has said that it has no plans to reschedule or deschedule cannabis per se, but that there is “discussion” about rescheduling CBD. Neither is likely to be changed with Epidiolex’s approval since individual drugs often receive their own schedule. Nevertheless, for the federal government to acknowledge the medical applications is huge.

Research scientists, doctors, and hospital administrators are governed by federal — not state — law, which has made the study of cannabis a risky, time-consuming endeavor. That’s now about to change, once the DEA schedules Epidiolex. Preliminary evidence suggests that CBD has use not just for epilepsy, but a whole host of neurological diseases, from Alzheimer’s and Parkinson’s, to multiple sclerosis, and some forms of brain cancers. Neuroscientists are anxious to examine the potential and parameters for cannabis’ medical applications; they will finally be at liberty to do their work.

“It will have a positive impact on the industry as a whole while providing patients with treatment for a severe form of epilepsy,” Hauser added. The approval also serves as a reminder that itis important for marijuana and hemp businessesnot to make unlawful drugclaims.  Businesses should be aware that’s illegal and creates significant risk.”

As an FDA-approved pharmaceutical, Epidiolex can only be sold in licensed pharmacies, not dispensaries. Conversely, dispensaries are licensed by state agencies, and can only sell products authorized within a state program. Meanwhile, Epidiolex will likely be more expensive than CBD treatments within a state medical program, which typically cost $200 to $500 a month. But as an FDA-approved drug, Epidiolex can be covered by insurance, while state-authorized medical cannabis is not.

The dynamic begs the need for regulated standards. For a 2017 study published in the Journal of the American Medical Association, researchers tested 84 products purchased from 31 different online CBD sellers. About 70 percent of them had different levels of CBD than labeled, with nearly 50 percent having more CBD than indicated, and 25 percent having less. And 18 (or 21 percent) of the samples tested positive for THC, though not listed on the label.

“Hopefully we will see an expansion of research and other legitimatepharmaceutical medicines,” Hauser concluded. “There is a need for development of cannabis-based medicines, and forpatients to have access to cannabis as medicine. This could be a milestone that allows for more opportunities for research into cannabis; we as a country have been behind Israel and countries with fewer barriers on research into marijuana. I do not think that there will be any immediate avalanche effect on federal legislation, but I think it is generally positive for the industry to have a pharmaceutical lane for cannabis in addition to adult-use and nutraceutical lanes.”

https://bit.ly/2Nn7UkX

TRIGR Therapeutics Licenses Oncology Asset from ABL Bio in $554.3M+ Deal

TRIGR Therapeutics, based in Irvine California, signed a deal with South Korean company ABL Bio Corporation. TIRGR is licensing the global commercial rights to ABL Bio’s pipeline of antibodies to treat cancer.

The antibodies include blood-brain barrier (BBB) penetrating bispecific antibodies, immune cell engaging bispecific antibodies, and a monoclonal antibody against an undisclosed target.

Under the terms of the deal, TRIGR will pay $4.3 million upfront to license global rights except for South Korea to five antibodies currently being developed by ABL Bio. ABL Bio is eligible or various milestone payments that could exceed $550 million, in addition to royalties. Also, TRIGR will share licensing revenue with ABL Bio in case it out-licenses any of the products to a third party.

“We are honored to be chosen as the partner of ABL Bio for their oncology pipeline,” said George Uy, TRIGR founder and chief executive officer, in a statement. “These assets include: a) BsAbs designed to cross the blood-brain barrier more efficiently combating brain tumors and b) immuno-modulating BsAbs engineered for dual engagement of the body’s immune cells (T cells and NK cells) against tumor-associated antigens in the tumor microenvironment. The antibodies truly represent the next wave in cancer immunotherapy.”

Uy went on to say, “It is TRIGR’s mission to identify and develop novel and paradigm-shifting immunotherapies. The delivery of antibodies into the brain, a privileged tissue in the human body and one of the last frontiers of drug delivery, to treat malignant gliomas and other brain cancers might enable TRIGR to bring new desperately-needed therapies to patients and their caregivers. Our new portfolio of unique immuno-modulatory BsAbs designed to activate patient T cells as well as NK cells in the tumor will allow TRIGR to establish itself as a leading biotechnology company. The BsAbs should also be valuable agents for combination therapies with cellular immunotherapies, such as CAR-T cell therapies and NK cell therapies.”

ABL Bio was founded in 2016, and since then has brought in $24.92 million in investments from Korea Investment Partners, DSC Investment and other institutional investors

Very little is known about TRIGR, although it is privately owned. It is focused on the Pacific Rim for clinical and commercial development, and is pulling together a management team based in the U.S. and China/Hong Kong as it activates its development programs with ABL Bio. It was founded by George Uy, a pharmaceutical sales executive who started with Roche, moved to Abraxis Oncology before it was acquired by Celgene, then was later senior vice president of Commercial Operations for Spectrum Pharmaceuticals. He was recently chief commercial officer of Sorrento Therapeutics. He is also currently chief executive officer of JUST C, maker of ARYA Curcumin+ line of health drinks and gummies. He also founded Hope Biosciences.

https://bit.ly/2Kxdp2E

Pfizer Raises Prices of 40 Drugs, Some by Nearly 10%

In May President Donald Trump predicted a “massive drops” in drug prices following the signing of the Right-to-Try legislation, as well as a Health and Human Services initiative he called “the most sweeping action in history” to lower the cost of prescription drug prices.

The president’s predictions for lower drug prices fell on deaf ears at pharma giant Pfizer. The Wall Street Journal reported that the company increased the price of 40 of its most popularly-prescribed medications by nearly 10 percent. The Journal noted that some of the drugs that saw a price increase include cancer drug Xalkori (+ 9.4 percent), pain treatment Lyrica (+ 4 percent), cholesterol drug Lipitor (+ 9.4 percent), anti-smoking drug Chantix (+ 7 percent), depression drug Zoloft (+ 9.4 percent) and blood pressure medication Norvasc (+ 9.4 percent). This was the second time this year that Pfizer has increased the prices of some of its prescription medications, the Journal reported.

For the pharma companies, most argue that they do not profit much from the increase in prices due to the discounts and rebates offered to drug benefits managers.

In response to the Journal, Pfizer said many of its medications are sold at a discount. The company also noted that it is not responsible for “how much patients must bear in copays or other out-of-pocket costs,” the Journal said. For the majority of Pfizer medications, the company said its list price remains unchanged.

“We are modifying prices for about 10 percent of our medicines, including some instances where we’re decreasing the price,” the company told the Journal.

Pfizer wasn’t alone in its move to increase prices this week. The Journal also reported that Sanofi SA increased the costs of eczema drug Dupixent by 3 percent. Sanofi and its development partner Regeneron told the Journal that the 3 percent increase is the only planned increase for that medication this year.

In a noted to investors, Raymond James analyst Elliot Wilbur said that “Sub-6 percent inflation levels are here to stay,” the Journal said.

The price of prescription medications has been a political hot-button for several years. Prior to being sworn in as president, Trump said that pharmaceutical companies are “getting away with murder” when it comes to the prices the companies charge for medication.

With the outcry, many drugmakers have pledged to only address potential price increases once per year. Last year Merck pulled back the curtain on its pricing practices in the United States by publishing a “Pricing Action Transparency Report” for 2016. In its disclosure, Merck noted that the pricing takes into account rebates, discounts and returns. Allergan’s Chief Executive Officer Brent Saunders publicly vowed to keep price increases on the company’s drugs under 10 percent in 2017. Last month Celgene Chief Executive Officer Mark Alles posted a note on the company website that set fort its approach to price increases. Alles said any increase posted by Celgene “will be limited to no more than once a year and at a level no greater than the Centers for Medicare and Medicaid Services projected an increase in National Health Expenditures for the year.” For 2018, that rate is 5.3 percent, Alles wrote. However, Alles also noted that there could be “exceptional circumstances” that might force the company to increase a price beyond that threshold.

In a separate article, the Journal noted that July is a popular month for pharmaceutical companies to quietly raise the prices of their medications. It’s something that the Trump administration is apparently paying some attention to. HHS Secretary Alex Azar told a congressional panel last week that he hopes companies will “practice restraint” when it comes to increasing the prices of prescription drugs, the Journal reported.

https://bit.ly/2KutFSa

Novartis Walks Away from 2015 Aveo’s Antibody Agreement

Shares of AVEO Oncology are falling this morning after the company revealed Novartis has walked away from its development deal for the company’s proprietary antibody AV-380, as well as other antibodies that inhibit Growth Differentiation Factor 15.

Novartis initially struck the licensing agreement with Aveo in 2015. The deal was worth an estimated $326 million, which included $15 million in upfront payments and $311 million in milestones. At the time the initial deal was announced Aveo’s AV-380 asset was seen as a potentially promising treatment for cachexia secondary to multiple disease states, including cancer, chronic kidney disease, congestive heart failure and chronic obstructive pulmonary disease.

That promising treatment though has not gone as far, or as rapidly, as Aveo likely hoped. Cambridge, Mass.-based Aveo quietly announced the end of the AV-380 agreement in a filing with the U.S. Securities and Exchange Commission this week. According to the filing, Novartis announced its termination one day after Aveo reached out to the Swiss company regarding the slow development of the asset. Aveo said it provided Novartis with a notice that disputed Novartis’ compliance with the obligations laid out in the 2015 licensing agreement.

One day after Aveo reached out, Novartis announced it was discontinuing the program and returning the asset to Aveo. In the filing, Aveo said that Novartis said the AV-380 Program is an important asset, however, developmental delays and a shift in management and strategic priorities at the Swiss pharma company resulted in the termination of the agreement. The termination is expected to be finalized on Aug. 28, 60 days after Novartis announced the termination of the development agreement.

Aveo said it hopes to settle matters at the managerial level, but if dispute resolution procedures cannot be resolved there, then it will likely seek arbitration. The dispute resolutions could run parallel to the termination process, Aveo said.

Aveo said that Novartis’ decision to terminate the AV-380 program is without cause and triggers the termination of all licenses and other rights granted by Aveo to Novartis with regard to the AV-380 program. Additionally, the agreement calls for Novartis to transfer all preclinical, technical, manufacturing and other data to Aveo.

While Novartis will return the asset, Aveo said in the filing that Novartis has not included any of the potential milestone or other potential payments under that $311 million licensing agreement. That loss of income will not impact Aveo’s cash guidance, the company said in its filing. It has however caused some investors to balk at the stock this morning, causing the price to dip in morning trading.

https://bit.ly/2tZHAo9

ViewRay started at buy by Jefferies

Jefferies analyst Anthony Petrone started ViewRay with a Buy rating and $12 price target. The analyst believes the company is best positioned to capture early MR-linac adoption given its first mover advantage and growing body of clinical evidence. He believes ViewRay’s MRIdian has competitive advantages over Elekta’s MR-linac system.

https://bit.ly/2u2Oid4

Juniper agrees to be acquired by Catalent for $11.50 per share

Juniper Pharmaceuticals (JNP) announced it has entered into a definitive agreement with Catalent (CTLT) for Catalent to acquire all of the outstanding shares of Juniper at a price of $11.50 per share in cash. The transaction represents a total equity value of approximately $139.6M on a fully-diluted basis, and a premium of 59.7% to Juniper’s unaffected share price on January 30, 2018, the last trading day prior to the date on which Juniper announced its intention to explore strategic alternatives. Under the terms of the merger agreement, Catalent will promptly commence a tender offer to acquire all of the outstanding shares of Juniper’s common stock at a price of $11.50 per share. The closing of the tender offer will be subject to a majority of Juniper’s outstanding shares being tendered in the tender offer. In addition, the transaction is subject to other customary closing conditions. Following completion of the tender offer, Catalent will acquire all remaining shares at the same price of $11.50 per share through a second step merger. The closing of the transaction is expected to take place in the third quarter of 2018. Rothschild & Co is acting as financial advisor and Goodwin Procter LLP is acting as legal counsel to Juniper. Chestnut Securities also provides advisory services to Juniper.

https://bit.ly/2z5MvK7

Eloxx started at buy by Citi

Eloxx Pharmaceuticals initiated with a Buy at Citi. Citi analyst Joel Beatty started Eloxx Pharmaceuticals with a Buy rating and $31 price target.

https://bit.ly/2Kv75sn