Bausch Health aims top-seller Xifaxan at new diseases to pump up growth

What do you do when you need growth, and one drug is far and away your biggest? Pump up that product as much as you can.

That’s what Bausch Health, formerly Valeant, is looking to do with Xifaxan, its gastrointestinal drug that brought in $294 million last quarter (PDF), up 26% year over year. With an already-expanded salesforce promoting the medication and an extended-release version moving up the pipeline, Xifaxan is now getting some more clinical-trial action in hopes of broadening its reach to a variety of new patients.

CEO Joe Papa was a bit cagey about the trial plans during the company’s second-quarter earnings call Wednesday. “We are looking at some additional GI indications,” he said. “I’m not going to go into the specifics of it. But as we post those trials on clinicaltrials.gov, you’ll see those additional GI indications.”

The new studies will test the immediate-release version of Xifaxan—the one that’s now on the market—and the still-in-development slow-release formula. The newest late-stage Xifaxan trial listing in the U.S. government’s official clinical trial database is a phase 2/3 study in Crohn’s disease, first posted May 25.

The indication push comes as Xifaxan is gaining market share, thanks to the field sales team—expanded by 250 reps last year—targeting primary care physicians, Papa said. New-to-brand share is up by 20 points to 44% among prescriptions written by primary care doctors—and those prescribers are “largely” driving volume growth.

It also comes as Bausch is threatened by earlier-than-expected copycat versions of the drug. Generics giant Teva has a Xifaxan copy in the works, and the two companies are already in a patent fight that’s suspended while Teva gets its approval application together for filing. But repeated delays suggest the Israeli company is having problems with meeting some new FDA approval criteria.

“Management increasingly believes that Teva may not have an ANDA that meets the revised FDA draft guidance,” Jefferies analyst David Steinberg wrote in a Wednesday note, adding that, with Xifaxan patents extending all the way out to 2029, he’s expecting the drug to retain its exclusive lock on the market for “years to come.”

Another potential hitch: Pricing scrutiny and new U.S. proposals for reining in price hikes. As Wells Fargo analyst David Maris pointed out, the company didn’t specify how much price contributed to growth overall, or for its biggest products. But judging from the percentages quoted in the earnings presentation—26% sales growth for Xifaxan versus retail prescription growth of 8%. “In our view, this indicates price still matters a great deal to Bausch Health’s business model and its largest product,” Maris wrote.

And then there’s Cosmo Pharmaceuticals and its would-be rival to Xifaxan, rifamycin, now in phase 2 testing for the same indication Xifaxan bears, IBS with diarrhea, or IBS-D. But it’s also under FDA review for traveler’s diarrhea, and could hit the market as soon as next year. “A launch of Cosmo’s drug in traveler’s diarrhea would result in competition with Valeant’s Xifaxan both directly in traveler’s diarrhea and potentially indirectly with off-label use in IBS-D,” Maris said in January, adding that investors don’t recognize the drug as a threat.

https://bit.ly/2MjfRtQ

Express Scripts’ new formulary ejects some drugs once thought ‘untouchable’

On Tuesday, Express Scripts released its annual list of formulary exclusions, which included several drugs to treat rare diseases like hemophilia, HIV and hepatitis C. Many of these products, including Gilead’s Atripla for HIV, seemed safely ensconced on Express Scripts’ preferred formulary.

Not anymore, Express Scripts said. And that change of strategy could hit the top lines of not just Gilead but also AbbVie, Sanofi and several smaller players, analysts fear.

Of the 48 drugs that are being kicked off the formulary for 2019, 11 are specialty drugs that have low-cost branded rivals or biosimilar alternatives. They included Atripla, CSL Behring’s Berinert to treat hereditary angioedema, and five factor VIII products to treat hemophilia.

All told, Express Scripts “is excluding products in several categories that were once likely considered untouchable,” wrote Credit Suisse analysts in a note to investors.

Among the exclusions is Sanofi’s factor VIII drug Eloctate. That product was at the center of Sanofi’s $11.6 buyout of Bioverativ in January, and U.S. sales account for about 70% of Eloctate’s haul, according to Credit Suisse. “We assume Sanofi [was] unable to give enough price concessions to secure access in a competitive area,” the analysts wrote. Now Eloctate and the other factor VIII drugs have been kicked off the preferred formulary and replaced by lower-priced alternatives, including Shire’s Adynovate and Advate.

One of the most worrisome changes for Express Scripts’ 2019 formulary, analysts said, is the exclusion of AbbVie’s hepatitis C high-flyer Mavyret. That product’s strong pickup drove AbbVie’s hep C sales up 100% in the second quarter to $973 million. Analysts were expecting Mavryet to soar past $1 billion in sales next year. But now the product could be facing serious competition from Merck’s lower-priced Zepatier, which moved from excluded to preferred status on Express Scripts’ formulary.

Credit Suisse analyst Vamil Divan reported that during a conference call after the new formulary was released, Express Scripts executives commented that Zepatier and Gilead’s Harvoni were given preferred status in hepatitis C because of the companies’ willingness to “keep prices low.” They indicated they would be open to discussions with AbbVie about dropping Mavyret’s list price.

At first glance, it would seem that Gilead is coming out a winner from Express Scripts’ Mavryet decision, but the actual outcome could be a bit more nuanced, analysts say. Leerink analyst Geoffrey Porges said in a note to investors that Gilead could grab market share in hepatitis C from the 50% or so of people who would have otherwise been prescribed Mavryet. That could bump up Gilead’s hep C sales by as much as 6% next year, Porges wrote.

“However, it is unlikely that the full positive effect of these gains would be realized since Gilead has likely increased their relative positioning on the Express Scripts formulary through greater discounts and/or rebating which will reduce the profitability of these incremental revenue gains,” Porges explained.

And the exclusion of Atripla from Express Scripts’ preferred formula likely won’t help Gilead drive revenue gains, either. Atripla is a combination of three drugs, two of which are available as generics. Express Scripts chose a half-dozen lower priced alternatives for the formulary, including Mylan’s Symfi, which replaces the branded part of Gilead’s three-ingredient pill with a less expensive but similar pill.

So could Express Scripts’ exclusions actually make Mylan a winner in all this? That’s certainly possible, considering Symfi “gained zero traction” after it was launched earlier this year, said Evercore analyst Umer Raffat in a note to investors. The only “rational explanation has been some PBM/rebating game” by rivals, he added. The formulary update “seems to be fixing that finally,” and fixing it in favor of Mylan, Raffat predicted.

https://bit.ly/2MBUeBV

Corium Reports FQ3 Financial Results and Corporate Highlights

Corium International, Inc. CORI, +21.18% a commercial-stage biopharmaceutical company focused on the development, manufacture and commercialization of specialty transdermal products, today announced unaudited financial results for the third fiscal quarter and the nine months ended June 30, 2018 and reported on recent corporate developments. Corium’s fiscal year ends on September 30.

Corporate Highlights

• Corplex(TM) Donepezil on track for filing — Corium has completed treatment in all of the ancillary clinical studies required for its New Drug Application (NDA) for Corplex Donepezil, a once-weekly patch that delivers the most commonly prescribed medication for Alzheimer’s patients. These studies included standard skin tolerability, alternative patch application site and heat effect studies. Corium remains on track to submit a Section 505(b)(2) NDA in the first quarter of calendar 2019. In addition, Corium reported clinical pharmacodynamic results at the Alzheimer’s Association International Conference [(R)] 2018 that provide additional validation of the therapeutic equivalence between Aricept [(R)] and Corplex Donepezil.
• First two key patents issued for Corplex Donepezil– In June and July, Corium announced the issuance of two U.S. patents, including composition elements, unique design features of the drug product and methods to achieve sustained, controlled and effective delivery of donepezil across the skin for a 7-day wear period. Eligible for listing in the FDA Orange Book, these patents establish the foundation of a strong IP portfolio for the transdermal delivery of donepezil and extend patent coverage of the product to at least July 2037. Corium has several additional pending patent applications relating to various features of Corplex Donepezil, as well as similar products.
• Pipeline advances in additional indications — Corium has progressed its development and feasibility evaluation of several pipeline product candidates, leveraging nonclinical and clinical studies that the company has already performed. The pipeline candidates include programs in several important disease areas including multiple sclerosis, Alzheimer’s and pain management. Corium anticipates advancing select programs into clinical pharmacokinetic and safety studies during fiscal 2019.
• Commercial production commenced using expanded capacity for P&G– Corium’s expanded commercial manufacturing capacity for Procter & Gamble’s Crest [(R) ] Whitestrips is now fully operational and in production. Part of an extended supply agreement with P&G, the additional production provides the companies with greater ability to meet significant increases in demand for Crest Whitestrips.

“We remain on track to file our Corplex Donepezil NDA in the first quarter of 2019 and look forward to delivering an important new treatment option for patients with Alzheimer’s disease and their caregivers,” said Peter D. Staple, President and Chief Executive Officer of Corium. “We are executing on our strategic plan to leverage our Corplex technology to expand our proprietary pipeline with the development of additional “first-in-patch” transdermal therapeutics. We’ve identified several promising candidates in therapeutic areas with significant unmet needs that, based on our initial formulation and feasibility work, meet our technical and commercial criteria for further development.”

https://on.mktw.net/2OWzgPE

Ligand price target raised to $257 from $248.75 at H.C. Wainwright

H.C. Wainwright analyst Joseph Pantginis raised his price target for Ligand Pharmaceuticals to $257 after the company announced the acquisition of Vernalis for $43M. The transaction brings in over eight fully-funded partnered programs at various stages of development, ranging from approved to pre-clinical, as well as an established library and unpartnered programs in various disease areas, Pantginis tells investors in a research note. He reiterates a Buy rating on Ligand.

https://bit.ly/2Mba0r0

ISS recommends Cigna investors vote for Express Scripts deal

https://bit.ly/2KKJn6L

Illumina price target raised to $372 from $310 at Argus

Argus analyst Jasper Hellweg raised his price target on Illumina to $372 and kept his Buy rating while also raising his FY18 EPS view to $5.47 from $4.87. The analyst expects the company to “benefit from a recent CMS decision to provide Medicare coverage for cancer testing using the company’s next-generation sequencers”. Hellweg also cites Illumina’s continued platform investments as they lower the “barriers to entry for smaller labs while increasing the functionality of its gene-sequencing systems”.

https://bit.ly/2KIFqzn

Planet Fitness price target raised to $56 from $50 at Baird

Baird analyst Jonathan Komp raised his price target on Planet Fitness to $56 from $50 following Q2 results. The analyst said the fundamentals remain strong, citing its better than expected comps and unit growth. He said he remains a buyer, especially on pullbacks. Komp reiterated his Outperform rating on Planet Fitness shares.

https://bit.ly/2MAltN6