California hospital chain with ties to Soon-Shiong files for bankruptcy

Verity Health System of California Inc, a non-profit operator of six California hospitals managed by billionaire former surgeon Patrick Soon-Shiong’s NantWorks LLC, filed for bankruptcy on Friday to help resolve a cash crunch while it seeks a buyer.

The health system’s bankruptcy filing follows a series of deals that left it saddled with more than $1 billion in pension liabilities and bond debt. Verity, which serves low-income communities in Los Angeles and San Jose, secured a $185 million loan to help it stay operational through the bankruptcy.

Verity Chief Executive Officer Richard Adcock told Reuters he expected the operator to remain in bankruptcy protection from creditors for a couple years as it restructures and works with potential buyers.

“We’ve had over 100 parties formally reach out to us,” he said of the sale process, which Verity started in July. He said potential suitors include large national operators, and could include deals for individual facilities.

He emphasized the bankruptcy would allow the operator to maintain patient care while restructuring.

The health system employed more than 6,000 people as of 2017.

Soon-Shiong, who has founded and sold multiple biotech companies and earlier this year invested in the Los Angeles Times and other California newspapers, acquired Verity’s management company in 2017 with the goal of helping to revitalize the hospital chain.

Adcock said Verity will examine all of its contracts, including the management deal with Soon-Shiong.

Verity filed for bankruptcy in the central district of California, Los Angeles division.

Its hospitals are St. Francis Medical Center and St. Vincent Medical Center in southern California, and O’Connor Hospital, St. Louise Regional Hospital, Seton Medical Center and Seton Medical Center Coastside in northern California. The non-profit also runs a physician network and medical foundation that encompasses urgent care centers and doctors’ offices.

Any sale would need approval of a bankruptcy court judge, as well as from regulators.

Verity has been losing close to $175 million per year on a cash flow basis, Adcock said.

U.S. hospitals are suffering from costs that are rising faster than revenue and the industry is on an unsustainable path, credit rating agency Moody’s said in a report this week.

Daughters of Charity of St. Vincent de Paul, Province of the West, a religious organization, originally owned Verity. In 2015, the Daughters selected hedge fund BlueMountain Capital Management LLC to recapitalize the system with an investment of about $250 million.

https://www.reuters.com/article/us-verity-bankruptcy/california-hospital-chain-with-ties-to-billionaire-files-for-bankruptcy-idUSKCN1LG24F?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=

Vertex launches 1st CRISPR clinical trial backed by U.S. companies

The first clinical trial of CRISPR-Cas9 sponsored by U.S. companies has launched, testing the genome-editing technique in patients with the blood disorder beta thalassemia, according to an announcementposted Friday on the U.S. clinical trials website.

The Phase 1/2 clinical trial, co-sponsored by Vertex Pharmaceuticals and using an experimental treatment from CRISPR Therapeutics, will be conducted at a single hospital in Regensburg, Germany, and aims to recruit up to 12 adults with the inherited disease. Although it was only a matter of time before the start of the first company-sponsored CRISPR clinical trial, Editas Medicine’s experimental treatment for a rare form of blindness was widely expected to be the first in the clinic.

The gene-editing therapy that will be tested, called CTX001, is intended to treat both β-thalassemmia and sickle cell disease.

Beta thalassemia is caused by a mutation in the HBB gene that reduces the amount of the oxygen-carrying blood protein hemoglobin a patient is able to produce.

Rather than correcting the disease-causing mutation in gene directly, the therapy targets a region of DNA that acts like a brake on production of a form of hemoglobin that the body usually stops making after the first months of life, called fetal hemoglobin. In the rare cases when a genetic variant keeps production turned on well into childhood and even adulthood, even people with β-thalassemia (or sickle cell) have enough healthy hemoglobin to avoid the worst symptoms of those sometimes-fatal diseases.

The CRISPR therapy being tested is called ex vivo, meaning that blood cells are taken from a patient and altered in the lab (much like CAR-T cancer therapy) and then returned to the patient. In this case, CRISPR molecules are introduced to the blood cells via a virus, and the genome editor alters the fetal hemoglobin “brake.” If all goes well, the CRISPR’d cells will then produce red blood cells that contain fetal hemoglobin.

In May, CRISPR Therapeutics and Vertex announced that the Food and Drug Administration had placed a “clinical hold” on the companies’ application to test CTX001 in sickle cell in a U.S. study, but that the planned Phase 1/2 trial in Europe in adults with β-thalassemia was on track. That is the trial that is now recruiting patients.

A spokesperson for CRISPR Therapeutics did not immediately respond to a request for comment.

A handful of CRISPR studies are underway at research centers in China. A trial led by researchers at the University of Pennsylvania is testing the use of the gene-editing technology in some cancers.

https://www.statnews.com/2018/08/31/human-trial-of-crispr-for-blood-disorder-launches/

Quest, city agree on tax deal

Quest Diagnostics’ proposed facility at the former Roche campus on Route 3 will be exempt from property taxes for three decades, thanks to a deal the City Council approved Aug. 21.

Instead of a requirement for property taxes, the city and Quest came to terms on a payment in lieu of taxes, or PILOT, agreement. It means that instead of taxes based on the property’s assessed value, Quest will pay an annual flat sum – about $800,000 in the first year – to the city.

Over 30 years, the annual payments will increase to about $1.4 million.

Councilman Steven Hatala called this a good deal for the city because the payment will bring in about four times what the city currently collects in taxes for the 12 acres that are being redeveloped.

It also means a number of jobs, some that are to be relocated to the facility and others that are being created there, Hatala said.

“If you do it right, you can make a grand slam out it,” he said.

Quest is one of several companies that have come since Prism Capital of Bloomfieldpurchased the campus.

Prism, which has been marketing the campus as ON3, bought the site shortly after Roche announced its plans to close the location in 2012 and lay off about 1,000 workers.

Clifton and Nutley lost $15 million in annual taxes, and officials in both communities were eager to to redevelop the property with industries offering high-paying jobs. Through ON3’s plans to redevelop the site, both municipalities are hoping to recoup the lost jobs and taxes.

Quest would occupy roughly 250,000 square feet of space, relocate some 754 jobs from its Teterboro location and create an additional 384 jobs, according to figures Quest provided to the state’s Economic Development Authority.

Of the additional jobs, 269 would be relocated from Pennsylvania and Maryland, and 115 more would be new. The median wage of these jobs is $54,000, according to the development authority.

The influx of people working at Quest, combined with the students, faculty and staff at the Hackensack Meridian School of Medicine at Seton Hall and a cancer research lab, are expected to boost the sales at nearby shopping hubs like the Styertowne Shopping Center and Clifton Commons.

Clifton Councilman Joseph Kolodziej said he agreed with Hatala’s assessment, even though with the PILOT agreement the city’s schools won’t receive additional revenue. The number of jobs that come with Quest’s developing of the site make it worthwhile.

“Now there’s an anchor on both ends of the property, the medical school and Quest,” Kolodziej said.

Quest officials declined to comment on the PILOT agreement.

In addition to the local property tax exception for Quest, the EDA, through the Grow New Jersey Assistance Program, approved $5.51 million in annual sales and use tax exemptions for 10 years to Quest.

Quest’s plan to build the new facilty, which includes a multilevel parking garage, has already been approved by the city Planning Board. Demolition work has begun to remove several structures that existed on the site.

Quest officials declined to provide a time line for when they expect to be able to occupy their new facility.

https://www.marketscreener.com/QUEST-DIAGNOSTICS-12290/news/Quest-Diagnostics-CITY-OKS-TAX-DEAL-FOR-QUEST-DIAGNOSTICS-FACILIY-27192021/

Glaxo Gets Euro OK for Med for Children With Severe Asthma

GlaxoSmithKline (LSE/NYSE: GSK) today announced that the European Commissionhas granted marketing authorisation for Nucala (mepolizumab) as an add-on treatment for severe refractory eosinophilic asthma in paediatric patients aged six up to 17 years. As a result of this licence extension Nucala is now approved for use for severe refractory eosinophilic asthma in both adult and paediatric patients in the 31 European countries covered by the European Medicines Agency (EMA).

Dr Hal Barron, Chief Scientific Officer and President, Pharmaceuticals R&D, GlaxoSmithKline, said: “Asthma is the most common chronic disease in children. The availability of Nucala as the first targeted treatment available for young children with severe asthma, will help provide asthma control for these children and reassurance to their parents.”

Nucala is the first and only approved biologic therapy for paediatric patients with severe asthma that targets interleukin-5 (IL-5), which plays an important role in regulating the function of eosinophils.

There is a high unmet need in this population as the severity of disease is greater among children and adolescents than adults, and they are at greater risk of fatal or near-fatal events. Children are also in need of new treatment options as they currently have very limited options for severe asthma. In addition, long-term use of the current standard of care, oral corticosteroids, is associated with many of the adverse events observed in adults, with the additional burden of impaired growth in children.

https://www.marketscreener.com/GLAXOSMITHKLINE-9590199/news/GlaxoSmithKline-European-Commission-Approves-Nucala-for-the-Treatment-of-Children-With-Severe-Asth-27192120/

Cochlear: World-First Study Into Cochlear Implants and Impact on Speech

The University of Sydney issued the following news:

Researchers from the University of Sydney and Cochlear Limited in world-first study that could lead to more accurate predictions of how those with cochlear implants understand speech, allowing for tailoring to individual hearing loss.

Biomedical researchers from the University of Sydney, working in collaboration with Cochlear Limited, have conducted a world-first study that could lead to more accurate predictions of how cochlear implant recipients are able to understand speech. Ultimately, this could allow for a cochlear implant to be tailored to the specific characteristics of the hearing loss of the individual using the device.

In the study, just published in the journal Ear & Hearing, the experts have found a correlation between a computer model and the speech intelligibility in implant recipients. This might mean that by improving the performance of the model, the performance of individuals with cochlear implants may benefit in ways that have never before been explored.

” Cochlear implants are remarkable devices that have changed lives over the past several decades. ”

Greg Watkins, PhD candidate, School of Aerospace, Mechanical and Mechatronic Engineering

“Cochlear implants are remarkable devices that have changed lives over the past several decades,” said lead author, PhD candidate Greg Watkins from the University of Sydney’sSchool of Aerospace, Mechanical and Mechatronic Engineering.

“However, despite this astonishing history, listening to and understanding another person’s speech when there is a lot of background noise is still much more difficult for people with cochlear implants than it is for people with normal hearing.”

Evidence-based research

Greg, who received a cochlear implant himself in February, explained that: “Computerised speech intelligibility models are powerful tools that allow us to evaluate how a hearing impairment may affect a cochlear implant recipient’s ability to understand speech in background noise.”

The researchers compared the accuracy of four different models of a recipient’s likelihood to understand speech. They discovered that a new model, known as the ‘output signal to noise ratio’ or OSNR was superior in predicting the improvements or decline in sentence recognition of actual cochlear implant recipients.

“The OSNR appears to have the capability to predict what will happen as a result of changing the parameters available to clinicians when tailoring the implant performance to the specific needs of a patient,” said Professor Gregg Suaning, a global leader in implantable bionics from the School of Aerospace, Mechanical and Mechatronic Engineering and co-author of the study.

“The result might be that changes that were never considered as possible improvements may now be used to achieve a better outcome for recipients of cochlear implants.”

” The output signal-to-noise ratio appears to have the capability to predict what will happen as a result of changing the parameters available to clinicians when tailoring the implant performance to the specific needs of a patient. ”

Professor Gregg Suaning, School of Aerospace, Mechanical and Mechatronic Engineering

Volunteers are vital

Brett Swanson, Principal Research Engineer at Cochlear Limited, highlighted another important aspect of the study.

“A cochlear implant stimulates the auditory nerve directly, so if you’re a researcher with normal hearing, you can’t listen to it yourself. Instead, we rely on dedicated volunteers with cochlear implants who spend hours in sound-proof rooms listening to sentences in noise and telling us what they hear. It is vital work, but mentally draining. OSNR has the potential to drastically reduce the amount of time that we need from our volunteers,” he said.

The next steps in this work include working with cochlear implant recipients to make changes in their implant based on the model predictions and demonstrating the outcome is indeed an improvement in speech recognition.

https://www.marketscreener.com/COCHLEAR-LIMITED-6491483/news/Cochlear-World-First-Study-Into-Cochlear-Implants-and-Impact-on-Speech-27192308/

Genmab gets Euro OK for multiple myeloma med

• DARZALEX approved in Europe in combination with bortezomib, melphalan and prednisone in patients with newly diagnosed multiple myeloma
• Approval follows positive opinion by European Committee for Medicinal Products for Human Use (CHMP) in July
• Genmab to receive milestone payment of USD 13 million from Janssen upon first sale of DARZALEX in the newly approved indication

Genmab A/S (Nasdaq Copenhagen: GEN) announced today that the European Commission (EC) has granted marketing authorization for DARZALEX^® (daratumumab) in combination with bortezomib, melphalan and prednisone (VMP), for the treatment of adult patients with newly diagnosed multiple myeloma who are ineligible for autologous stem cell transplant (ASCT). The EC approval follows a positive opinion issued for DARZALEX by the CHMP of the European Medicines Agency (EMA) in July 2018. In August 2012, Genmab granted Janssen Biotech, Inc. (Janssen) an exclusive worldwide license to develop, manufacture and commercialize daratumumab.

Genmab will receive a milestone payment of USD 13 million from Janssen in connection with the first commercial sales of DARZALEX under the expanded label. The sales are expected to occur quickly after the approval. This milestone payment was included in the financial guidance issued by Genmab originally on February 21, 2018 and then reiterated in subsequent quarterly financial reports, most recently on August 8, 2018, and as such there is no change to the company’s financial guidance following this approval.

“Approved in this indication in the U.S. since early May, DARZALEX in combination with bortezomib, melphalan and prednisone will now become an option for newly diagnosed multiple myeloma patients in Europe,” said Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab. “We are very pleased that many more patients in need will have the opportunity for treatment with this regimen and we look forward to seeing this combination launched in Europe.”

The positive opinion of the CHMP was based on data from the Phase III ALCYONE (MMY3007) study that showed a reduction of the risk of disease progression or death by 50 percent (Hazard Ratio [HR] = 0.50; 95 percent CI [0.38-0.65], p<0.0001) in patients with newly diagnosed multiple myeloma ineligible for ASCT when daratumumab is combined with VMP. The safety of DARZALEX combination therapy was consistent with the known safety profiles of DARZALEX monotherapy and of therapy with bortezomib, melphalan and prednisone, respectively. This data was presented as a Late-Breaking Abstract at the 2017 American Society of Hematology (ASH) Annual Meeting and simultaneously published in The New England Journal of Medicine in December, 2017.

https://www.marketscreener.com/GENMAB-1412914/news/Genmab-Announces-European-Marketing-Authorization-for-DARZALEX-daratumumab-for-Front-Line-Multi-27192461/

BioTelemetry price target raised to $67 from $52 at SunTrust

SunTrust analyst Bruce Nudell raised his price target on BioTelemetry to $67 and kept his Buy rating to reflect his updated FY18 revenue model of $394.7M vs. $385.6M prior view. The analyst also raised his FY18 EPS view to $1.50 from $1.34 as part of his new assumption of a 9% top-line growth over the next 3 years, saying the mobile cardiac outpatient telemetry market where the company has a 70% market share is growing by over 9%. Nudell further notes BioTelemetry opportunity in the Extended Holter business where the company remains a “minority player”.
https://thefly.com/landingPageNews.php?id=2784583