Updated Staffing Data Lowers Ratings for Many Nursing Homes

Star ratings for staffing levels at nearly 1,400 nursing homes across the United States were lowered by Medicare when updated ratings were released on July 25.

The changes for about one in 11 nursing homes nationwide were made because they had too few registered nurses or did not provide payroll data proving they had required nursing coverage, The New York Times reported.

The revised staff ratings gave one star out of possible five to 1,387 of the nation’s 15,616 skilled nursing facilities. The lowered star ratings for staffing are disappointing and largely due to a shortage of workers, according to Katie Smith Sloan, president of LeadingAge, an association of nonprofit providers of aging services, including nearly 2,000 nursing homes, The Times reported.

Medicare uses a five-star rating system to help families select a nursing home. The ratings are on the federal government’s Nursing Home Compare website. On the website, Medicare said the nursing homes with a one-star staffing rating either lacked a registered nurse for “a high number of days” over three months, provided unverifiable payroll data, or didn’t supply any payroll data, The Times reported. Medicare requires every nursing home to have a registered nurse working at least eight hours every day.

The New York Times Article
Nursing Home Compare

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Arrowhead Pharmaceuticals Earns $10 Million Milestone Payment from Amgen

Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR) today announced that it has earned a $10 million milestone payment from Amgen following the administration of the first dose of AMG 890, formerly referred to as ARO-LPA, in a clinical study. Amgen is evaluating AMG 890 in a Phase 1 clinical study designed to assess its safety in volunteers with elevated levels of lipoprotein (a) (Lp(a)). Emerging research has shown that elevated levels of Lp(a) are strongly associated with cardiovascular disease. AMG 890 is an RNAi therapeutic designed to lower Lp(a) for the treatment of cardiovascular disease.

Chris Anzalone, Ph.D., president and CEO at Arrowhead said, “We are thrilled that Amgen has advanced AMG 890 into a Phase 1 clinical study, resulting in a $10 million milestone payment to Arrowhead. Amgen has extensive expertise in developing and commercializing innovative cardiovascular medicines and we view our collaboration as further validation of the potential for Arrowhead’s proprietary Targeted RNAi Molecule, or TRiM™, technology platform to generate compelling product candidates. Importantly, AMG 890 represents the third drug candidate enabled by TRiM™ to enter clinical development this year, following ARO-AAT and ARO-HBV.”

“Amgen has a long-standing commitment to advancing innovative cardiovascular programs and the AMG 890 program is no exception,” said David M. Reese, M.D., executive vice president of Research and Development at Amgen. “We’re excited to embark on the AMG 890 clinical program in which we hope to translate strong genetic insights and Arrowhead’s exciting new RNAi technology into a treatment for patients with cardiovascular disease and elevated levels of Lp(a).”

Under the terms of the two cardiovascular agreements announced in September 2016, Arrowhead is eligible to receive up to $617 million in option payments, and development, regulatory, and sales milestone payments. Arrowhead is further eligible to receive up to low double-digit royalties for sales of products under the AMG 890 agreement and single-digit royalties for sales of products against an undisclosed target.

https://bit.ly/2OCBRyb

Endomag Breast Cancer Device Receives FDA Approval

Endomag, the surgical guidance company, announced that it has received premarket approval (PMA) from the U.S. Food and Drug Administration (FDA) for Magtrace, the first non-radioactive, dual-tracer for lymphatic mapping in patients with breast cancer undergoing a mastectomy. Magtrace is a liquid marker designed to follow the route that cancer cells are most likely to take when they spread from the primary tumour.

Magtrace will help U.S. hospitals reduce their reliance on radioactive tracers and, along with Magseed, allows surgeons to perform both lesion localisation and sentinel node biopsy with the Sentimag platform, both incredibly important operations for breast cancer patients with thousands performed every week.

According to the American Cancer Society, approximately 266,000 new cases of invasive breast cancer and 65,000 cases of carcinoma in situ (the earliest form of breast cancer) will be found in the United States this year – a figure expected to double by 2030. Thankfully, if breast cancer is caught at an early stage, 99% of patients are likely to be alive five years after diagnosis, however, surgery is generally still needed.

For those affected, the gold-standard of treatment is to remove the tumour surgically and determine whether the cancer has spread to other parts of the body with a lymphatic mapping procedure. Typically, this involves the use of radioactive drugs and blue dyes, which are limited in their availability, can cause scheduling delays and are considered to be very painful and uncomfortable for patients. Magtrace is a non-radioactive alternative that has been developed to improve this process for both patients and surgeons.

Unlike existing methods, Magtrace can be injected up to a week before surgery as the tracer is optimally sized; both small enough to move rapidly through breast, yet big enough to be filtered by the first draining or ‘sentinel’ lymph nodes, the ones most likely to carry cancer. The collection of Magtrace in these nodes allows the surgeon to accurately target them for removal, without disrupting the rest of the nodes in the armpit. This is critical in determining the tumour stage and deciding on the patient’s best treatment pathway.

Prof Michael Alvarado, Professor of Surgery from UCSF and Principal Investigator for the US Magtrace trial, said: “We’ve been watching this technology become established in Europe over the past few years, and have been eagerly awaiting its availability in the US. During the SentimagIC trial I was impressed with how easy the technique was to learn, how intuitive the system was to use, and ultimately, as Principal Investigator for the trial, that our clinical outcomes matched the results that have been seen in the numerous European trials of Magtrace.

After 18 months of using the Sentimag platform with Magseed for lesion localization, we’re really excited to add the sentinel node biopsy capability with Magtrace. Being able to carry out both seed localization and sentinel node biopsy with one instrument, made this the only option for us. Magtrace and Magseed not only help to reduce the hospital staff and patients from exposure to radioactivity, they also offer us flexibility and so many more options when deciding on how to approach our breast cancer patients.”

Eric Mayes, CEO at Endomag, said: “This achievement demonstrates our team’s ability to innovate for the benefit of clinicians and their patients. The Sentimag® platform is the first and only non-radioactive solution approved in the U.S. that can perform lesion localisation and sentinel node biopsy. The addition of Magtrace to the platform offers clinicians greater options and more flexibility when treating their patients and will help transform the way breast cancer is treated in the U.S.”

Magtrace will be exclusively distributed in North America by Leica Biosystems – the breast health specialist with world-renowned brands such as Mammotome, Hydromark and Neoprobe – the current market leader for sentinel lymph node biopsy. The Sentimag platform can help hospitals to reduce their reliance on radioactive tracers, reduce the exposure of their staff and patients to radioactivity and become the new standard in breast cancer treatment.

If you would like to know more, register for our upcoming Magtrace Webinar: https://bit.ly/2n0eUbx

For more information on Endomag and their recent announcements, visit www.endomag.com

https://bit.ly/2LLZTZJ

Athenahealth revenue up, bookings down amid ‘eventful’ Q2

• Athenahealth on Monday disclosed a 7.4% increase in total revenue for the second quarter of 2018 to $323.3 million.
• Bookings for the health IT company declined 4.8% during Q2, down to $74.9 million compared to $78.7 million for the same period in 2017.
• On a call with investors, CFO Marc Levine said athenahealth endured “quite an eventful quarter.” In May, Elliott Management sent the company an unsolicited acquisition offer valued at as much as $7 billion. Also, former CEO Jonathan Bush stepped down in June after news surfaced that he assaulted he ex-wife several years ago and amid additional allegations of sexual harassment.

Athenahealth is in the process of considering its options, whether that be a sale or the decision to remain an independent company. Levine told curious investors he is “limited” as to what he can reveal, but did say there’s “strong interest in athenahealth.”

Elliott Management, which has about 9% stake in the company, has made two acquisition offers, the latest being a $7 billion bid placed a month before Bush’s exit. After receiving nothing but a “boilerplate” response to its bid in May, the asset management group sent a seething letter to athenahealth’s board scolding the company’s leadership.

Elliott Management’s offer still stands, but athenahealth chairman of the board Jeffrey Immelt said the company has no timeline for deciding on a future transaction.

When asked how clients have reacted to the news of the past quarter and how those events have impacted business relations, Levine said every company in the industry is preoccupied with its own potential M&A. “You guys are all healthcare analysts,” Levine said. “You know the amount of change that’s going on in the industry and the amount of big, seismic changes underway.”

Oppenheimer analyst Mohan Naidu maintained a buy rating on athenahealth following the company’s second quarter earnings release. Its decline in bookings, Naidu writes, is “reflective of market conditions.”

“We continue to believe that athenahealth is a unique asset that has the potential to be the base for significant disruption in healthcare and believe in high likelihood of a transaction,” Naidu writes.

Levine said the company showed solid sequential improvement in bookings in Q2. Bookings declined during the first quarter to $52.2 million, down from $77.3 million during the first three months of 2017. “Bookings can be lumpy in any given quarter do to the mix of large deals in the period,” he said.

Athenahealth updated its fiscal year 2018 guidance to reflect its performance over the first six months of the year and, while financial measures for the guidance have all increased, Levine said the company expects to fall “slightly behind” its full-year investment plan.

https://bit.ly/2M4Y7Pm

CMS pitches covering cardiac catheterization at surgical centers

• CMS is proposing to add 12 cardiac catheterization procedures to its coverage list for ambulatory surgical centers (ASC) as the agency looks to accelerate a shift to the lower-cost settings. The changes are part of a broader proposed rule that would revise the Medicare hospital outpatient prospective payment system (OPPS) and ASC payment system for 2019.
• CMS estimated that if 5% of cardiac catheterization procedures migrated from the hospital outpatient setting to the ASC setting as a result of the proposed policy, Medicare payments would be reduced by about $35 million in 2019, and total beneficiary co-payments would decline by about $14 million.
• The agency said it has assessed each of the procedures against the regulatory safety criteria and believes they may be appropriately performed in an ASC. CMS is requesting comments from stakeholders on any specific safety concerns related to performing the 12 cardiac catheterization procedures in an ASC, due Sept. 24.

Dive Insight:

More and more outpatient surgical procedures are being performed at non-hospital facilities such as freestanding ambulatory surgical centers and physician offices, instead of in hospital-based departments. Amid the shift, some hospitals and health systems have acquired ambulatory surgery centers or formed joint ventures with surgeons in these centers.

Cardiac catheterization is often done on an outpatient basis at the hospital to detect or evaluate heart conditions. The procedure involves advancing a small catheter to the heart from a vessel in the groin or the arm. CMS said the 12 cardiac procedures it would add to the ASC coverage list are not expected to require active medical monitoring and care of the patient following the procedure.

CMS said the changes would mean lower costs for patients. Beneficiary coinsurance is always 20% for procedures in ambulatory centers but ranges from 20% to 40% for outpatient procedures performed in hospitals. In addition, ASC payment rates are almost always lower than OPPS rates for the same procedures, CMS said.

Hospitals and surgeons are also watching CMS coverage changes on lucrative total knee replacement procedures. CMS removed total joint replacements from the inpatient-only list in 2018, and in July proposed adding the procedures to the ASC coverage list. CMS is seeking comments on that proposal until Sept. 11.

Jefferies analysts expect CMS will eventually add coverage for knee replacements at ambulatory surgical centers.

“We continue to believe that total knee replacements are likely to be added to the ASC covered procedure list in 2020 or 2021 based on the procedure’s removal from the Inpatient-only list in last year’s payment rule, and that total and partial hip replacements are likely to soon follow, given that these procedures are routinely performed in ASCs on non-Medicare patients,” the analysts said in a research note.

https://bit.ly/2LQAy01

Otsuka leukemia med fails in Phase 3

Otsuka’s guadecitabine has missed its coprimary endpoints in a phase 3 acute myeloid leukemia (AML) trial. The DNA hypomethylating agent failed to beat the complete response or overall survival rates achieved in the control arm, leaving Otsuka looking to ongoing trials in other indications to save the drug.

Guadecitabine, which Otsuka acquired in its $886 million takeover of Astex, is designed to reverse aberrant DNA methylation, thereby restoring the expression of tumor suppressor genes. Otsuka’s own Dacogen has a similar mechanism of action but its short half-life diminishes its efficacy in forms of leukemia, resulting in sub-20% complete response rates. Guadecitabine is resistant to the enzyme that degrades Dacogen, potentially prolonging its half-life and increasing its efficacy.

The phase 3 trial in 815 AML treatment-naïve patients ineligible for intense induction chemotherapy dents that theory. Guadecitabine failed to achieve statistically-significant improvements in complete response or overall survival over a control arm made up of patients who received Dacogen, Celgene’s Vidaza or low-dose cytarabine. Otsuka is still assessing the secondary endpoint and safety data.

Astex and Otsuka attributed the failure to the inclusion/exclusion criteria.

“The study used very strict criteria of ineligibility to receive intensive chemotherapy based on age or poor performance status or comorbidities, which made it a difficult population to show superior benefit of guadecitabine,” Astex president Mohammad Azab, M.D. said in a statement.

Guadecitabine’s failure against the coprimary endpoints eliminates the near-term prospect of the DNA hypomethylating agent coming to market as a treatment for elderly AML patients. However, the setback leaves scope for guadecitabine to advance in other patient populations, either as a single agent or in combination with chemotherapy or immunotherapy.

Otsuka is currently enrolling patients with previously-treated AML in one phase 3 clinical trial, and people with previously-treated myelodysplastic syndromes or chronic myelomonocytic leukemia in another. Further back, Otsuka and independent investigators are assessing guadecitabine as a single agent and as part of combination therapies in range of hematological cancers and solid tumors.

The mechanism of guadecitabine means there is reason to think it may prosper in combinations even if it struggles as a monotherapy. By restoring the expression of tumor suppressor genes, Otsuka’s drug could sensitive cancer cells to the effects of other drugs, including checkpoint inhibitors.

https://bit.ly/2MbvLmP

Idexx Laboratories price target raised to $236 from $211 at Piper Jaffray

Piper Jaffray analyst William Quirk raised his price target on Idexx Laboratories to $236 and kept his Overweight rating after its Q2 earnings beat and raise of FY18 organic revenue growth outlook. The analyst expects continued favorable conditions in the Companion Animal Group to benefit the stock, raising his target forward earnings price multiple to 46-times from 42-times.

https://bit.ly/2LHwr77