Adam Feuerstein of STAT tweeted following Johnson & Johnson’s (JNJ) pharmaceutical business update conference call: “I still believe $JNJ will drop $GERN imetelstat. I guess we wait for later this month to see if I’m right or wrong. Nothing today changes my bearish view. If anything, NOT focusing on imetelstat today is a negative.”
Thursday, September 13, 2018
Cantor boosts Corbus target to Street-high $36 after Roche study ‘fell short’
Cantor Fitzgerald analyst Elemer Piros raised his price target for Corbus Pharmaceuticals to a Street-high $36 following abstracts from the American College of Rheumatology meeting, which is taking place in October. Among the abstracts, Phase 3 data from Roche’s (RHHBY) Phase 3 systemic sclerosis study with competitive agent tocilizumab fell short on its primary endpoint in modified Rodnan skin score, Piros tells investors in a research note partially titled “Lenabasum’s Gain, Following Tocilizumab’s Loss.” The analyst believes the results establish Corbus’ lenabasum, in Phase 3 now for systemic sclerosis, as the” only compelling treatment option for patients in this rare and life-threatening disease.” Further, Additionally, Piros believes lenabasum’s resolution of inflammatory activity was further validated in an assessment of interferon response in patients with dermatomyositis. The analyst reiterates an Overweight rating on the shares. Corbus Pharmaceuticals in afternoon trading is up 7.5c to $5.28.
https://thefly.com/landingPageNews.php?id=2790277
Brookdale Senior Living: Hurricane Evacuation Plan Update
Updated 9:00 a.m. CST – 09/13/18
Please review the latest updates noted below in response to Hurricane Florence.
Storm Preparedness Plan
The safety and well-being of our residents is our highest priority. Our coastal communities have a storm preparedness plan in place and are equipped with water, food, permanent or ready-to-deploy temporary generators and supplies to care for residents. We are taking appropriate actions to keep them safe throughout the storm, watching the storm closely and we will follow the directions of authorities.
Evacuation Plan
We are actively monitoring the zones that the Brookdale communities are in. While there may be an evacuation order within the county of your loved one’s community that does necessarily not mean the location of your loved one’s community is within that specific zone. The safest option is for residents to be sheltering in place in locations out of the higher risk zones unless otherwise directed by authorities.
The following communities have been evacuated at this time. If your loved one’s community is not listed, that means they are sheltering in place at this time. Calls can be directed to their community.
North Carolina Communities
The North Carolina governor has ordered mandatory evacuations for several coastal counties.
We have detailed plans in place that include moving residents to a safer area with accompanying care associates, providing temporary accommodations as well as food, beverages and personal belongings.
Brookdale Morehead City
We evacuated Brookdale Morehead City on Wednesday, Sept. 12, to Brookdale Country Day Road in Goldsboro, N.C.
Brookdale New Bern
We evacuated Brookdale New Bern on Wednesday, Sept. 12, to Brookdale Durham in Durham, N.C.
Brookdale Wilmington
We evacuated Brookdale Wilmington on Wednesday, Sept. 12, to Brookdale Wake Forest in Wake Forest, N.C.
South Carolina Communities
The South Carolina governor has lifted some mandatory evacuations on Tuesday morning due to updated predictions from the National Hurricane Center. Mandatory evacuations remain in effect for some northern counties in South Carolina.
We have detailed plans in place that include moving residents to a safer area with accompanying care associates, providing temporary accommodations as well as food, beverages and personal belongings.
Brookdale Charleston
We evacuated Brookdale Charleston Tuesday morning, Sept. 11.
- Assisted living residents were relocated to the Lexington Hotel & Conference Center – Jacksonville Riverwalk in downtown Jacksonville, Fla. hotel.
- Memory care residents were relocated to the Brookdale Atrium Way community in Jacksonville, Fla.
Brookdale Hilton Head
We evacuated residents from Brookdale Hilton Head on Thursday morning.
- Assisted living residents are going to Brookdale Mandarin in Jacksonville, Fla.
- Independent living residents are being relocated to Lexington Hotel & Conference Center – Jacksonville Riverwalk in downtown Jacksonville, Fla. hotel.
Brookdale Hilton Head Village
We evacuated residents from Brookdale Hilton Head Village on Thursday morning to Brookdale Mandarin in Jacksonville, Fla.
Brookdale Hilton Head Court
We evacuated residents from Brookdale Hilton Head Court to Brookdale Atrium Way in Jacksonville, Fla.
We will continue to follow the direction of authorities as the storm moves closer. If you have a specific question about a loved one, we encourage you to contact the community directly.
We are monitoring the storm and will follow the directions of authorities should additional Brookdale evacuations be needed.
We will update this website and community Facebook pages with updated information as we receive it. Subscribe to email news alerts here.
Smiths and ICU Medical healthcare merger talks collapse
British engineering firm Smiths Group Plc said on Thursday talks with U.S.-based ICU Medical Inc over a possible 7 billion pound-plus merger of their healthcare businesses had fallen through.
Shares of ICU Medical, which makes devices used in infusion therapy and oncology, fell about 8 percent to $278.5 on the Nasdaq, while Smiths’ shares closed down 0.2 percent at 15.765 pounds, after hitting a five-month low.
Discussions ended because the parties were unable to agree on terms, Smiths said.
“The board recognised the complementary strengths of both businesses. However, it was important that any such combination did not undervalue Smiths Medical and its prospects,” it said.
Smiths, a provider of hospital equipment, industrial services and sensors to detect explosives, said in May it was in very early stage discussions about a potential combination of its medical division with ICU.
California-based ICU has had a good track record of takeovers after it bought https://www.reuters.com/article/us-pfizer-divestiture-icu-medical-idUSKCN12616X top shareholder Pfizer Inc infusion therapy business in 2016 and medical device maker Medical Australia Ltd late last year.
ICU has a market value of $6.2 billion, while analysts at Jefferies and Liberum say Smiths Medical was likely to have been valued at more than $3 billion.
“We don’t expect this to be the end of the story. The ICU talks show that [Smiths] management is now more open to offloading Medical (either partially or totally), which we think would be a sensible move,” said Liberum’s Ryan Gregory.
Smiths said it would continue to review all options for its businesses.
ICU Medical was not immediately available for comment.
TROUBLES AT MEDICAL
Smiths Medical, the group’s largest unit, has been struggling of late, after being hit by delays to new product launches, some products losing certifications under new regulation and the loss of two contracts in the United States.
Smiths said last month it expected full-year revenue at its medical arm to drop 2 percent, but added its overall full-year performance would be in line with expectations.
“Medical has struggled for growth for most of the past decade; FY18 was supposed to see a return to growth, but instead it is set to show a decline,” Gregory said.
Sky News said last month the two sides were close to abandoning the merger. http://bit.ly/2MoStI5
“The breakdown in talks wasn’t a surprise given rumours in recent weeks, and I think that’s been reflected in Smiths share price which closed pretty much flat,” Gregory added.
Fate is first to reprogram iPSC cells with CRISPR, says Piper Jaffray
Fate Therapeutics this morning announced an exclusive licensing agreement for intellectual property from the Gladstone Institutes to employ CRISPR gene editing to program induced pluripotent stem cells into cell therapies, Piper Jaffray analyst Edward Tenthoff tells investors in a research note. The analyst believes gene editing holds promise over the present method of using small molecules and biologics to drive iPSC differentiation. While several other players are using CRISPR to modify cellular therapies, Fate is the first to reprogram iPSC cells with CRISPR, Tenthoff writes. The analyst reiterates an Overweight rating on Fate Therapeutics with a $20 price target. The stock in afternoon trading is up 6c to $11.90.
https://thefly.com/landingPageNews.php?id=2790267
More Medicare Advantage upcoding, higher costs, could follow court ruling
A federal judge’s recent decision to vacate a 2014 CMS rule that UnitedHealthcare said resulted in underpayment for Medicare Advantage insurers leaves the federal government with fewer tools to combat upcoding practices that cost the taxpayer-funded Medicare program billions of dollars.
U.S. District Judge Rosemary Collyer last week vacated the 2014 overpayment rule, which required Medicare Advantage plans to return overpayments to the government within 60 days of identifying them or they would be considered in violation of the False Claims Act and potentially subject to civil lawsuits, damages and penalties. Overpayments include diagnostic codes sent to the CMS for payment that are not documented in a patient’s medical chart.
Whistleblower lawsuits have challenged Advantage insurers, including UnitedHealthcare, for combing patient medical charts to find and report all possible diagnoses to submit for additional Medicare payments—a practice known as upcoding—but not deleting codes they knew were inaccurate.
Healthcare experts said that the overpayment rule was meant to help curb upcoding and fraudulent billing; vacating it paves the way for more of the same. It also gives insurers more tools to defend themselves against False Claims Act liability. Already, UnitedHealth has filed a statement in a pending Medicare Advantage whistleblower suit explaining that Judge Collyer’s decision could affect the whistleblower’s claims.
The ruling “is really harmful to taxpayers and to the Medicare program in that all the levers in the Medicare Advantage program are lined up for plans to be able to control their coding destiny,” said Tim Gronniger, a former CMS official who is now senior vice president of development and strategy at Caravan Health. “The idea that CMS should be handcuffed in tracking behavior of Medicare Advantage plans is totally backwards.”
Payments to Medicare Advantage insurers are based on a risk-adjustment model that takes into account traditional fee-for-service Medicare costs as well as individual enrollees’ demographic information and medical diagnoses. Patients with more diagnoses have a higher “risk score” that results in higher payment from the CMS. Patients with fewer diagnoses have a lower risk score and thus insurers receive lower payment.
The CMS aims to pay traditional Medicare and Advantage plans in a way that is “actuarially equivalent.” But the judge decided the payments are not actuarially equivalent and violate federal law because the CMS does not audit traditional Medicare data, which are known to be riddled with errors. The agency requires Medicare Advantage data to be 100% accurate or insurers have to pay back payments. Basing Advantage payments on “flawed data” makes those plans’ patients look healthier than they are, resulting in lower payments, Collyer wrote.
“The effect of the 2014 overpayment rule, without some kind of adjustment, is that Medicare Advantage insurers will be paid less to provide the same healthcare coverage to their beneficiaries than CMS itself pays for comparable patients,” Collyer wrote in the order.
Experts watching the decision argued research flies in the face of these conclusions. According to MedPAC’s latest report, payments to Medicare Advantage were 2% to 3% higher in 2016 than they would have been if those same patients were treated under fee-for-service Medicare. That’s because Advantage plans’ coding practices have resulted in their enrollees having an average risk score that’s 8% higher than similar Medicare fee-for-service beneficiaries, despite strong evidence that Advantage members are not sicker.
Gronniger argued that Medicare Advantage insurers need extra CMS oversight because the payment model incentivizes upcoding, whereas fee-for-service providers don’t have that same incentive because they not paid based on patient diagnoses.
Edwin Park, research professor at Georgetown University’s Center for Children and Families, agreed that the ruling is “taking away a tool the CMS is using to ensure accurate documentation” and that “would mean likely higher payments.”
He pointed out that Advantage insurers are profiting as enrollment in the plans grows steadily year over year. Payments to Medicare Advantage plans totaled $210 billion in 2017 to manage the care for 19 million seniors. Advantage insurers’ profits—their margins average between 4% and 5%, according to S&P Global—are helped by programs like retrospective chart reviews to comb patient medical records for additional diagnosis codes.
“If you don’t have penalty on insurers to adequately ensure accurate documentation, you will have coding practices to distort payment going forward,” Park said.
The judge’s opinion also dealt with whether the 2014 overpayment rule puts a more burdensome obligation on insurers to identify and report overpayments to the CMS than the False Claims Act does. Few pages of the opinion are devoted to this question, but the conclusion has big consequences, legal experts said.
Under the False Claims Act and the ACA, insurers are liable for false claims if they had actual knowledge, deliberately ignored or recklessly disregarded the fact that a false claim was submitted to the government.
But UnitedHealth alleged, and the judge agreed, that the 2014 overpayment rule imposed a more stringent standard: negligence. Under that holding, insurers would be liable for violating the FCA if they should have known that there was an overpayment and didn’t report it.
UnitedHealth argued that insurers should be held accountable only for overpayments they know about.
Collyer agreed, writing, “Not being Congress, CMS has no legislative authority to apply more stringent standards to impose FCA consequences through regulation.”
Timothy Adelman, a partner at law firm Hall Render, explained that the 2014 overpayment rule compelled insurers and providers to “really search and ferret out” potential errors in their data by conducting audits and reviews. The ruling relieves some of that burden and could mean the industry won’t be as proactive in uncovering errors, such as diagnostic codes that aren’t supported by the patient’s medical chart.
“Do I think it’s going to adversely affect the ability to identify upcoding? Yes, it certainly will,” Adelman said, though he cautioned that the ruling does not mean insurers “can completely turn a blind eye” to errors. The FCA will still come down on insurers that identified overpayments and intentionally did not return them.
Brad Robertson, a partner at law firm Bradley in Birmingham, Ala., said the opinion calls into question any overpayment case that is based on negligence, and there are many of those. So in a case where an insurer has not actually identified an overpayment but the government alleges it should have known about one, the ruling “gives the insurer more arguments than it had before in its defense,” Robertson said.
That doesn’t mean it’s a good idea for insurers to abandon all compliance programs, because the CMS is could either appeal the judge’s ruling or issue a new overpayment rule.
Roche steps up efficiency drive to take sting out of biosimilars
Roche (ROG.S), the world’s biggest producer of cancer drugs, is stepping up cost cuts in an efficiency drive made unavoidable by competition from cut-price copies of three mega-brands from its famed U.S. Genentech biotech stable.
Even though the Swiss company has some of the pharmaceutical industry’s most admired research and development labs, it is now battling to increase medicine sales as its biotech portfolio ages and rivalry intensifies.
Chief Executive Severin Schwan told Reuters he was confident he could fill the sales gap but expects only “moderate growth” into 2019 – helped by newer drugs such as Ocrevus for multiple sclerosis (MS) – before a “re-acceleration” around 2021-22. “If you have such a sharp portfolio shift as we have now, then of course you have to reallocate resources in a more dramatic way,” Schwan said. “That’s what we are doing.”
The company will have to run fast to stand still. Roche estimates it could have a $10 billion sales gap to fill by 2022 from rival incursions into cancer treatment, territory the Swiss drugmaker has long dominated. Roche’s three best-selling drugs – all for cancer – had combined sales of $21 billion last year, accounting for 40 percent of overall sales.
But the drugs – Rituxan, Herceptin and Avastin – now face a steep decline here due to cheap near-copies, known as biosimilars, made by rivals including Switzerland’s Novartis (NOVN.S) and South Korea’s Celltrion (068270.KS).
Adding to the pain, a key technology patent will expire next year, lopping another $600 million or so from cash flow.
In Europe, where biosimilars are already making deep inroads, Roche’s cost-cutting is more advanced, with some commercial operations being trimmed back.
Now, the United States is on the block with Roche cutting 223 positions at Genentech’s South San Francisco campus. The company is also streamlining global business units as part of a separate, wide-reaching move that could impact scores of jobs.
It is a prescription that investors are likely to appreciate. “There is room to improve efficiency in the business,” said Berenberg analyst Alistair Campbell.
BOLT-ON ACQUISITIONS
Still, Roche intends to ring-fence research and development (R&D) and is sticking by a long-standing strategy of using only small to mid-sized bolt-on acquisitions to shore up its drugs pipeline, rather than buying in a big new medicine business.
To some extent that is pragmatic. “Typically, we cannot make the economics work,” Schwan said.
The shifting sands mean Roche may look rather different when it finally emerges from the shadow of biosimilars, with non-cancer drugs playing an increasingly important role – a trend already being set by Ocrevus in MS and Hemlibra for haemophilia.
In particular, while other companies including Pfizer Inc (PFE.N) have pulled back in neuroscience, Roche hopes to restock its medicine cabinet with drugs against autism, Alzheimer’s and Huntington’s disease.
These are high-risk, high-reward diseases but Roche believes its understanding of the latest science means it could become as well known for treatments of brain and nervous system disorders as for cancer.
Roche Holding AG239.7
ROG.SVIRT-X LEVEL 1
-0.30(-0.12%)
“The jury is still out,” Schwan said. “There is actually now a reasonable chance that we diversify into other areas in a meaningful way.”
Meanwhile, its cancer R&D effort continues.
Schwan acknowledged Roche’s Tecentriq immunotherapy had lost ground to Merck & Co’s (MRK.N) Keytruda in first-line lung cancer treatment but he still sees important new opportunities, notably in certain hard-to-treat forms of breast cancer.
Among Roche’s biggest potentials is a bispecific antibody, a dual-action drug that brings tumor cells and immune cells closer together to fight blood cancers.
One patient who failed previous treatments, including CAR-T cell therapy in which the body’s immune cells are reprogrammed, achieved full remission for a year after getting Roche’s experimental bispecific therapy, it reported on Thursday.
“If you see such a response for very, very sick patients like that, that of course is extremely promising,” Schwan said. “That is one of our molecules we put a lot of hope into.”
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