Cerner sinks $266M into Lumeris deal targeting Medicare Advantage plans

Cerner will become a minority owner in the parent company of the population health services platform Lumeris as part of a 10-year strategic partnership that includes a new value-based technology offering geared towards Medicare Advantage plans.

The deal allows Cerner to tap into an established Medicare Advantage plan in Missouri, operated by Lumeris. The two companies plan to use data and digital processes to help providers “maximize outcomes” for patients enrolled in value-based arrangements, including Medicare Advantage and provider-sponsored plans.

As part of the deal, Cerner subsidiary Cerner Capital will become a minority stakeholder in Lumaris’ parent company, Essence Group Holdings, purchasing $266 million in stock, according to a financial filing. The company also owns Essence Healthcare, a Lumeris-operated Medicare Advantage plan with 65,000 beneficiaries in Missouri.

Together, Lumeris and Cerner plan to release an “EHR-agnostic” solution called Maestro Advantage, with deployments expected by the end of the year and broad market implementation in 2019. The companies plan to identify systems “best positioned to succeed with the offering, particularly large organizations pursuing multi-year growth strategies.”

Lumeris will also adopt Cerner’s HealtheIntent population health platform.

“By using data to reduce or eliminate unnecessary costs and ineffective transitions of care, providing doctors and their patients a more complete view of their medical history and a health plan that consistently receives high quality scores from CMS, this collaboration with Lumeris aligns well with our mission and illustrates the potential of Cerner technology to positively impact health care economics and outcomes in deeper, more impactful ways than before,” said Cerner CEO Brent Shafer.

John Doerr, Lumeris board member and chairman of Kleiner Perkins added that the value-based care transition has been “impeded by disjointed technology, cumbersome processes, misaligned incentives and inadequate management of clinical and financial outcomes,” pointing to the partnership’s focus on data transparency and provider empowerment.

The population health management market is expected to grow rapidly over the next decade, reaching $69 billion by 2025, according to Transparency Market Research.

https://bit.ly/2L5qBLS

Analysts Call Verrica A Buy For Vast Molluscum Opportunity

Investors who bought into Verrica Pharmaceuticals Inc VRCA 6.22%at its June 15 IPO are celebrating 13.1-percent returns.

The gains should continue, in the view of two new sell-side bulls.

The Ratings

Bank of America Merrill Lynch analyst Jason Gerberry initiated coverage of Verrica with a Buy rating and $26 price target.

Cowen analyst Ken Cacciatore initiated coverage with an Outperform rating and $35 target.

The Theses

The analysts are bullish on Verrica for its lead candidate, VP-102, which is in Phase 3 trials for the treatment of molluscum.

The therapy — a non-invasive alternative to cryotherapy and surgery — is poised to become the first approved molluscum drug for a potentially underdiagnosed population growing by an estimated 1 million U.S. patents per year.

Bank of America expects dermatologists to be receptive to VP-102 considering the drug’s familiar active ingredient.

“Supportive Phase 2 data suggests VP-102 can achieve high clearance rates, which have made the API popular with dermatologists,” Gerberry said in a Tuesday note. (See the analyst’s track record here.)

BofA forecast a 60-percent possibility of success and anticipates favorable Phase 3 data will boost the likelihood to 85 percent. Cowen’s Cacciatore expressed similar optimism.

“With what we believe will be a very reasonable pricing strategy that should secure broad coverage, combined with FDA guidelines that mandate the discontinuation of compounded versions of approved products — as well as what appears to be limited raw material supplies — we believe that Verrica’s formulation will quickly capture, penetrate, and expand the current treatment market,” the analyst said in a Tuesday note. (See Cacciatore’s track record here.)

Indication expansion into common warts could drive additional upside for Verrica.

https://bit.ly/2KLFWSe

MorphoSys Licensee Janssen Starts Phase 2/3 for Crohn’s Disease Med

MorphoSys AG (FSE: MOR; Prime Standard Segment, TecDAX; NASDAQ: MOR) announced today that its licensee Janssen Research & Development, LLC, part of the Janssen Pharmaceutical Companies of Johnson & Johnson (Janssen), has initiated a pivotal phase 2/3 clinical program to evaluate the efficacy and safety of Tremfya(R) (guselkumab) in the treatment of patients with moderately to severely active Crohn’s disease. Expected to enroll approximately 2,000 patients, the program, which is named GALAXI, consists of three separate studies, a phase 2 study (GALAXI 1), followed by two phase 3 studies (GALAXI 2 and GALAXI 3).

Tremfya(R) is a fully human anti-IL-23 monoclonal antibody developed by Janssen, and was generated utilizing MorphoSys’s proprietary HuCAL antibody technology.

In connection with the start of the GALAXI program, MorphoSys will receive two milestone payments from Janssen. Financial details were not disclosed.

Dr. Markus Enzelberger, Chief Scientific Officer of MorphoSys AG, said: ‘We are very pleased that our licensee Janssen has started a pivotal phase 2/3 development program in Crohn’s disease, a severe illness where significant unmet needs exist despite the availability of some effective therapies. If successful, this could result in a further expansion of the therapeutic range of Tremfya(R).’

Crohn’s disease is a type of inflammatory bowel disease (IBD) affecting any part of the gastrointestinal tract. In addition to the clinical development in Crohn’s disease, Tremfya(R) is currently being investigated in two phase 3 trials in psoriatic arthritis. Tremfya(R) has been approved in the U.S., Canada, the European Union, and several other countries for the treatment of plaque psoriasis and in Japan for the treatment of both psoriasis and psoriatic arthritis.

More information about Tremfya(R) (guselkumab) clinical studies is available on clinicaltrials.gov.

https://bit.ly/2uoALws

Achaogen to Update on Plans Post FDA OK of Anti-Infective

Achaogen, Inc. (NASDAQ:AKAO), a biopharmaceutical company developing and commercializing innovative antibacterial agents to address multi-drug resistant (MDR) gram-negative infections, will host a lunch updating investors on the market opportunities for plazomicin, including the treatment of serious bacterial infections due to MDR Enterobacteriaceae with perspectives from key opinion leaders Steven Burdette, M.D. and Joshua Rosenberg, M.D., on Thursday, July 12, from 12:00pm – 1:30pm Eastern Time in New York City.

Achaogen management will present an update on the commercial strategy for ZEMDRI^TM(plazomicin), which recently received U.S. Food and Drug Administration (FDA) approval for treating adults with complicated urinary tract infections (cUTI), including pyelonephritis, caused by certain Enterobacteriaceae in patients who have limited or no alternative treatment options. Key opinion leaders Dr. Burdette and Dr. Rosenberg will discuss their perspectives on current and novel approaches to treating these infections.

Dr. Burdette is a Professor of Medicine at Wright State University Boonshoft School of Medicine where he serves as the program director for the Infectious Diseases Fellowship. He is the medical director of antimicrobial stewardship for Miami Valley Hospital and Premier Health. He also serves as medical director of infection prevention for Miami Valley Hospital (which includes three acute care hospitals), Indu and Raj Soin Medical Center and Greene Memorial Hospital. He has authored 15 book chapters and 36 PubMed referenced articles. Research interests currently include management of bacteremia and the role of rapid diagnostics in antimicrobial stewardship. Dr. Burdette completed his Internal Medicine Residency and Infectious Diseases Fellowship through Wright State University.

Dr. Joshua Rosenberg is the Chair of Critical Care, Director of Surgical Intensive Care, and Infection Control at The Brooklyn Hospital Center in Brooklyn, New York. He currently practices both Critical Care Medicine and Infectious Diseases in a hospital-based setting. Dr. Rosenberg is Board Certified in Critical Care Medicine, Infectious Diseases, and Internal Medicine. Dr. Rosenberg completed his Internal Medicine Residency and fellowships in Infectious Diseases and Critical Care Medicine at SUNY Downstate Medical Center in Brooklyn, New York. He received his medical degree from Sackler School of Medicine, Tel Aviv University, Tel Aviv, Israel. Dr. Rosenberg has been in practice in Brooklyn NY since graduation from his critical care fellowship. His training brought him to multiple hospitals in Brooklyn and Staten Island. He currently also serves as Clinical Associate Professor with St. George’s School of Medicine in Grenada, West Indies and is the clinical site advisor for medical students rotating at The Brooklyn Hospital. Dr. Rosenberg has designed and implemented adult sepsis protocols in multiple institutions as well as supervising clinical document improvement hospital wide. His interests lie in prevention and treatment of health care acquired infections, antimicrobial stewardship, and treatment of complex multi-drug resistant gram-negative infections.

This event is intended for institutional investors, sell-side analysts, investment bankers, and business development professionals only. Please RSVP in advance if you plan to attend, as space is limited. For those who are unable to attend in person, a live webcast and replay of the event will be accessible here.

https://bit.ly/2KN4WZv

Trump says Pfizer is rolling back drug price hikes

 U.S. President Donald Trump on Tuesday said Pfizer Inc was rolling back drug prices after he spoke with Pfizer’s chief executive officer and U.S. Health and Human Services Secretary Alex Azar.

“We applaud Pfizer for this decision and desire other companies do the same,” Trump said in a tweet. On Monday, Trump took aim at Pfizer and other U.S. drugmakers after they raised prices on some of their medicines on July 1, saying his administration would act in response.

https://bit.ly/2mats84

Japan’s Takeda gains U.S. approval for $62 billion Shire buy

Takeda Pharmaceutical Co Ltd on Tuesday said it has received U.S. approval for its $62 billion acquisition of London-listed Shire Plc, taking the Japanese firm one step closer to its goal of becoming a global top 10 drugmaker.

Takeda in a press release said it received unconditional clearance from the United States Federal Trade Commission.

The Tokyo-listed firm is still awaiting approval from regulators in China, the European Union and elsewhere, as well from shareholders of both parties.

Chief Executive Christophe Weber has been working to persuade investors about the deal’s cost-saving merits. However, concerns of the financial burden the combined company will carry has weighed heavily on Takeda’s stock price.

Takeda shares closed flat on Tuesday ahead of the announcement. The stock is down 16 percent since the firm first said at the end of March it was considering bidding for Shire.

The drugmaker expects the deal to close in the first half of 2019.

https://bit.ly/2L7dRRF

Risk adjuster suspension positive for Centene and Molina, says Piper

Centers for Medicare & Medicaid Services suspending risk adjusters for the health exchange will likely cost the government and consumers more, but it could be positive for Centene (CNC) and Molina Healthcare (MOH), Piper Jaffray analyst Sarah James tells investors in a research note. Both companies are in a net payable position for 2017 and not having to pay these funds would allow the plans to retain cash, the analyst adds. James also sees a positive read-through for UnitedHealth (UNH), Aetna (AET) and Cigna (CI). The analyst finds it most likely that CMS will seek to adjust the risk adjusters in the end rather than cancel the program, but she adds the agency only has a few weeks for them to sort this out, which she feels is not enough time.

https://bit.ly/2KQOVSo