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Monday, October 1, 2018

Leerink: Improving Fundamentals Drive Teva Upgrade


TEVA Pharmaceutical Industries TEVA 0.56%‘s fundamentals have substantially improved over the last few months, giving the stock a more balanced risk-reward profile, according to Leerink.

The Analyst

Leerink analyst Ami Fadia upgraded TEVA Pharmaceutical from Underperform to Market Perform and raised the price target from $16 to $24.
Goldman Sachs analyst Jami Rubin reiterated a Buy rating on Teva with a $30 price target. The analyst added Teva to Goldman’s Conviction List.

The Thesis

Leerink’s Fadia considers a more stable pricing environment and improved indicators of FDA approval to be the pharma stock’s main growth drivers.
Teva is well-positioned to exceed its 2018 sales target of $1.5 billion due to a slow switch to generic alternatives to its drugs, the analyst said.
The recent approval of Ajovy puts the company second in the calcitonin gene-related peptide race, while Austedo continues to receive strong physician feedback and preference, Fadia said.
Leerink projects a 25-percent decline in U.S. generic sales, as well as an improvement in overall pricing trends and contributions from new products.
Goldman Sachs analyst Rubin said she’s “puzzled” by Teva’s underperformance.
“Various press reports (Bloomberg) and feedback from investors have attributed the weakness to the Street lowering estimates and concerns around the approval of Eli Lilly And Co LLY 0.29%‘s CGRP, both of which we believe are not thesis-changing and well-understood.”
The analyst named the following as catalysts for Teva:
  • Management’s communication of 2018 headwinds, which will likely keep estimates in the guidance range.
  • Teva’s position in the market — despite competitive approvals. “We are encouraged by the fact that TEVA’s promotional activities for Ajovy will be competitive with a zero-copay offering through the end of 2019, slightly longer than LLY’s through the end of 3Q19 and Amgen, Inc. AMGN 0.18%‘s, which is only for a few months post-launch.”
  • The pharma company is set for a return to top-line growth and a delevering to 4x by 2020, giving the stock “meaningful upside,” Rubin said.
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What Analysts Say About Insmed Following Arikayce Approval


Insmed Incorporated INSM 22.16% stock crashed Monday after the U.S. Food & Drug Administration approved the company’s antibiotic Arikayce. In addition to “sell the news” traders moving on following the FDA approval, some sellers are likely concerned about the revelation that some Arikayce cause lung issues “led to hospitalizations in come cases.”
Several Wall Street analysts weighed in on Insmed. Here’s a sampling of what they had to say.

Voices From The Street

H.C. Wainwright analyst Andrew Fein said the good news of the FDA approval was widely anticipated, whereas the black box warning about lung-related hospitalizations was not.
“We think the boxed warning, inevitably casted a layer of uncertainty around the uptake of Arikayce in the eyes of investors (buysiders must now re-survey physicians seeking the degree to which the black box warning will impact penetration),” Fein wrote.
Credit Suisse analyst Marty Auster said investors should expect Insmed stock to recover in coming months.
“We are comfortable with Arikayce’s initial prospects as the drug is intended for a high unmet need population (refractory NTM MAC patients) without treatment options,” Auster wrote.
Stifel analyst Adam Walsh said investors should be concerned about the black box warning and should expect robust Arikayce uptake.
“Regardless, we see solid value in INSM shares at current levels based on the Arikayce refractory opportunity alone, independent of planned future label-expansion possibilities (i.e. front-line, maintenance, etc.),” Walsh wrote.

Ratings And Targets

Insmed’s stock closed at $15.74, down 22.16 percent.
Despite Monday’s sell-off, most analysts are still bullish about Arikayce and Insmed:
  • H.C. Wainwright has a Buy rating and $43 target.
  • Credit Suisse has an Outperform rating and $35 target.
  • Stifel has a Buy rating and $43 target.
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Medicare Advantage enrollees seen topping 22M in 2019 as premiums drop


Medicare Advantage premiums will continue to decrease into 2019, according to the Centers for Medicare & Medicaid Services, in stark contrast to the commercial insurance market.
CMS expects average monthly premiums to decrease 6% to $28 per month, down from an average of $29.81 in 2018. The agency anticipates lower premiums will drive enrollment to an all-time high, with 36% of Medicare beneficiaries purchasing Medicare Advantage coverage in 2019, a total of 22.6 million people.
Medicare Part D premiums are also expected to drop, from $33.59 in 2018 to $32.50 next year. It’s the second straight year that Part D premiums have declined.
“Medicare Part D and Medicare Advantage demonstrate the successes possible when we harness consumer choice and private-sector innovation to improve care and lower cost,” said Department of Health and Human Services Secretary Alex Azar in a statement.
The projection would mean a four-year streak of Medicare Advantage premium decreases since hitting $32.91 in 2015. Premiums in MA plans are tied to income, so about 46% of enrollees will have a zero premium next year.
The agency said 83% of current enrollees will see their premium stay the same or decrease from 2018.
The popularity of MA plans has enabled CMS to expand its range of programs. Next year, the program will offer about 600 more plans than in 2018 to a total of approximately 3,700 plans across the country. The agency said 91% of beneficiaries will have access to 10 or more plans next year.

“The popularity of programs, such as Medicare Advantage, and with the various new supplemental benefits and policy changes that have been adopted, we expect plan choices to be even more robust moving forward,” said CMS Administrator Seema Verma.
In addition, MA plans will be able to offer supplemental benefits such as adult day care services, in-home support services, caregiver support services, home-based palliative care and therapeutic massages. They will also be able to offer reduced cost sharing for beneficiaries with chronic conditions like diabetes, CMS said.
A spending bill passed earlier this year also including legislation that will allow MA plans toincorporate telehealth benefits beginning in 2020.
MA plans aren’t without fault. A recent report issued by the HHS Office of Inspector General indicated MA insurers overturn 75% of denials on appeal, raising concerns that plan sponsors are limiting access to care in the name of higher profits.
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Dialysis companies just got a reprieve in California — at least for now


Shares of dialysis providers DaVita Inc. and Fresenius Medical Care AG & Co. rose in heavy Monday trade after California Gov. Jerry Brown vetoed a bill late Sunday that would have significantly affected their revenue.
The bill, SB 1156, would have restricted the financial assistance that dialysis companies offer patients. The assistance, however, maximizes how much companies are reimbursed for their dialysis services and has the effect of raising health insurance premiums, according to the bill’s sponsor.
Brown said in a memo to the California senate that the legislation “goes too far as it would permit health plans and insurers to refuse premium assistance payments and to choose which patients they will cover.”

“I encourage all stakeholders to continue to work together to find a more narrowly tailored solution that ensures patients’ access to coverage,” he wrote.
Individuals with kidney disease need regular dialysis to remove waste from the body and keep blood pressure under control, functions that are normally handled by healthy kidneys.
The legislation in question had the support of the Service Employees International Union and health insurer Blue Shield of California and was opposed by dialysis providers, as well as the non-profit American Kidney Fund, which runs the need-based programs. DaVita said in a statement that the bill, had it gone through, would have let health plans “discriminate against low-income dialysis patients who rely on charitable assistance to pay their insurance premiums.”

Though the latest development marked a win for dialysis providers, the battle may well rage on.
California voters will vote on a ballot measure, Proposition 8, next month that would limit how much revenue dialysis providers can earn from commercially insured individuals.

The SEIU and the bill’s other supporters also plan to reintroduce the bill, SB 1156, next year under a new governor, according to Height Capital Markets analyst Andrea Harris.
DaVita DVA, +3.36%  shares rose 3.4% in Monday trade and FreseniusFME, +2.56%   shares rose 3.3%.
DaVita stock has lifted 6.6% over the last three months and Fresenius stock has risen 5.8%, compared with a 7.6% rise in the S&P 500 SPX, +0.36% and a 9.8% rise in the Dow Jones Industrial Average DJIA, +0.73%
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Fewer Concussions After Football Rule Change


Markedly fewer concussions occurred following a minor-seeming rule change in Ivy League college football, an analysis of team physician reports found.
Concussion rates dropped 81% — from 10.93 to 2.04 per 1,000 plays — after kickoffs were moved up 5 yards to the 40-yard line in 2016, which had the effect of cutting the frequency of returns, reported Douglas Wiebe, PhD, of the University of Pennsylvania in Philadelphia, and co-authors in JAMA.
The rule change in 2016 was designed to limit kickoff returns, which previously had accounted for 21% of concussions but only 6% of overall plays in the Ivy League, a top-level conference in American college football. Overall, fewer injuries occur during kickoffs that result in touchbacks than on kickoffs that are returned.
“The kickoff is the most violent play in football,” explained Robert Cantu, MD, of Boston University’s Chronic Traumatic Encephalopathy (CTE) Center and the Concussion Legacy Foundation, who was not involved with the study.
“You have people from opposite ends of the field running toward each other at a very high rate of speed. It’s not a surprise that particular play would lead to a disproportionate amount of injuries,” Cantu told MedPage Today.
Starting in 2016, Ivy players kicked off from the 40- instead of the 35-yard line and touchbacks were placed at the 20-yard line. Ivy coaches supported this experimental rule change, hoping it would lead to more touchbacks and fewer violent collisions.
With kickoffs from the 40-yard line, 48% in Ivy games were touchbacks — no returns because the ball was downed in the end zone or kicked through it — up from 17.9% when kickoffs were at the 35.
Wiebe and colleagues analyzed data from the Ivy League’s concussion surveillance system — a web-based repository of team physician reports with 95% participation — and National Collegiate Athletic Association (NCAA) archives during 2013-2015 prior to the rule change and during 2016-2017 after it went into effect:
  • During 68,479 plays from 2013 through 2017, a total of 159 concussions occurred, for an overall concussion rate of 2.3 per 1,000 plays
  • 126 concussions occurred in 2013-2015 versus 33 in 2016-2017
  • For other types of plays, the concussion rate was 2.56 per 1,000 plays before the rule change and 1.18 after
  • A difference-in-differences analysis identified that 7.51 fewer concussions occurred for every 1,000 kickoff plays after the rule change versus before
These results show “how targeted policy changes can reduce sport-related concussion” and “may inform the NCAA as it considers adjusting the kickoff rules in football in all collegiate conferences,” Wiebe and colleagues wrote.
Concussion is not the only potential harm in kickoffs, Cantu noted: “That play also is at significant risk for neck injuries, and there have been a number of quadriplegic injuries that have happened.”
And it’s not just the Ivy League that’s paying attention to kickoffs. In 2011, the National Football League (NFL) moved the kickoff up 5 yards from the 30-yard line to the 35. More recently, there have been other changes in NFL kickoff play and discussions about whether the kickoff would be changed further or eliminated.
To make the play safer, the NCAA also changed its kickoff rules this year to allow the receiving team to “fair catch” the kick (i.e., signal that it won’t be returned) between the goal and the 25-yard line and have it be treated as a touchback.
Limitations to the Ivy League study include possible confounding by another rule implemented in 2016, which banned full-contact hitting during practices, and by other changes to player or game characteristics that may have occurred over time.
This research was part of the Ivy League–Big Ten Epidemiology of Concussion Study, an initiative of the Big Ten–Ivy League Traumatic Brain Injury Research Collaboration. The concussion surveillance system and repository is funded by the Presidents of the Ivy League Universities and the Big Ten athletic conference. The researchers were funded through a contract from the Ivy League and supported by the Penn Injury Science Center, which is funded by the CDC. Two co-authors were employed by the Ivy League. No other relationships were reported.
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Telemed Docs Often Prescribe Antibiotics for Respiratory Tract Infections


Two out of three patients who sought treatment for respiratory tract infections (RTIs) through direct-to-consumer telemedicine services were prescribed antibiotics, according to Cleveland Clinic researchers.
In addition, patients who received largely unneeded antibiotic drugs also tended to be happier with their remote physician encounters. Also, telemedicine encounters were, on average, shorter than those of RTI patients prescribed non-antibiotic drugs or no drugs at all, reported Kathryn Martinez, PhD, MPH, of the Center for Value-Based Care at the clinic, and colleagues in two separate articles in JAMA Internal Medicine and the Annals of Internal Medicine.
The researchers examined RTI prescribing practices of a large commercial telemedicine platform.
Despite the fact that antibiotics are rarely warranted in the treatment of RTIs, which are mostly viral, they continue to be prescribed frequently because patients expect them, Martinez told MedPage Today.
With regard to reducing unnecessary antibiotic use, she said the findings highlight the unique challenges posed by the increasingly common practice of treating RTIs through direct-to-consumer telemedicine.
“Telemedicine is a rapidly growing field, and respiratory tract infections are the most common reason that people use telemedicine,” she said.
Because telemedicine systems automatically record encounter length, the setting was ideal to examine the impact of RTI prescribing practices on patient-physician encounter times, Martinez added.
The study sample included telemedicine encounters for patients diagnosed with RTIs from Jan. 1, 2013 to Aug. 31, 2016 through the commercial online care group American Well.
Specific diagnoses included sinusitis, pharyngitis, bronchitis, or other RTIs, according to physician-recorded codes from the International Classification of Diseases (9th and 10th Revisions). Prescriptions were recorded as none, antibiotic, or non-antibiotic. Encounter length was defined as the time patients were connected to and interacted with the physician, recorded automatically by the system in minutes.
In their analysis of 8,437 encounters for RTIs with 85 physicians, 5,580 encounters (66.1%) resulted in the prescribing of an antibiotic, while 1,309 (15.5%) resulted in the prescribing of a non-antibiotic, and 1,548 (18.3%) resulted in no prescription.
Most encounters (87%) received the highest (5-star) satisfaction rating from patients, with patients prescribed antibiotics most likely to give a 5-star rating (90.9% vs 86.0% among patients receiving non-antibiotics and 72.5% among patients prescribed no drug treatments).
Compared with receiving no prescription, receipt of a prescription for an antibiotic was strongly associated with a rating of 5 stars (adjusted OR 3.2, 95% CI 1.80-2.71). For individual physicians, frequent prescription of antibiotics was associated with better satisfaction ratings.
In a sample of 13,438 encounters (49% sinusitis, 14% pharyngitis, 12% bronchitis, and 25% other RTIs) antibiotics were prescribed 67% of the time.
Adjusted modelling revealed that physician encounters resulting in no prescriptions lasted 0.33 minutes longer than those resulting in antibiotic prescriptions (95% CI 0.13-0.53 minutes). Encounters resulting in the prescribing of non-antibiotics lasted, on average, 1.12 minutes longer (95% CI 0.90-1.35 minutes).
“Although prescribing non-antibiotics has been suggested as a way to improve patient satisfaction while avoiding unnecessary antibiotic prescriptions, doing so seems to take more time than prescribing nothing,” the researchers wrote.
Given that patient encounter volume is often used to determine clinician remuneration in telemedicine, antibiotic stewardship efforts may be a particular challenge in this setting, they pointed out.
Martinez said telemedicine providers are starting to adopt some strategies being used by traditional providers to address antibiotic overuse, such as keeping track of individual provider prescribing practices.
“It is not clear at this point what incentives will be needed in telemedicine specifically, because these physicians work from all over the country and they aren’t necessarily part of a single practice group,” she said. “Some incentives in telemedicine, like shorter visit length and high patient satisfaction, might be different, so it could be harder to overcome some of the incentives to reduce antibiotic overprescribing.”
Martinez and co-authors disclosed no relevant relationships with industry.
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Nobel Prize in Medicine Awarded to Checkpoint Inhibitor Pioneers


Harnessing the body’s own immune system to fight cancer has been one of the key focuses of drugmakers over the past several years. This year, the Nobel committee recognized two research pioneers for their trailblazing efforts in this field.
The Nobel committee awarded American doctor James Allison and Japan doctor Tasuku Honjo with the 2018 Nobel Prize in Medicine. In its announcement, the Nobel committee pointed to the wide-spread effects of cancer and lauded the two doctors for their “discovery of cancer therapy by inhibition of negative immune regulation.” Allison, the committee said, studied a protein at MD Anderson Cancer Center that functions as a brake on the immune system and developed the concept into an approach for fighting cancer. Honjo, a professor at Kyoto University, also discovered an immune cell protein that acts in a similar braking manner, although with a different action.
“By stimulating the inherent ability of our immune system to attack tumor cells this year’s Nobel Laureates have established an entirely new principle for cancer therapy,” the committee said in a statement.
Honjo has been credited with discovering the PD-1 protein that is expressed on T-cells. In his research, Honjo explored how the protein served as a break in the immune system. After years of research, the committee said a 2012 clinical study “demonstrated clear efficacy in the treatment of patients with different types of cancer.”
PD-1 inhibitors are now key lynchpins in the pipelines of several companies, particularly Merck and its leading drug Keytruda and Bristol-Myers Squibb’s Opdivo.
In the 1990s, Allison studied the T-cell protein CTLA-4. While others looked at harnessing the discovery for autoimmune diseases, the Nobel committee said Allison developed an antibody that could bind to CTLA-4 and block its function. Allison continued his research with mice and discovered what the committee called a cure in the mice. Allison continued his research and the committee said a 2010 clinical study “showed striking effects in patients with advanced melanoma.” Several of the patients saw signs of their cancer disappear, the committee said.
In the pharmaceutical industry, PD-1 inhibitors have demonstrated a greater efficacy, and more of those types of checkpoint inhibitors are on the market. There are some CTLA-4 inhibitors, including BMS’ Yervoy. AstraZeneca is also on the hunt for an approved CTLA-4 inhibitor with its experimental treatment tremelimumab.
The committee noted that there is research showing promise for combination therapies, treatments that target CTLA-4 and PD-1, can be even more effective in treating some cancers. Because of the groundbreaking work of Allison and Honjo, the Nobel committee said a large number of checkpoint therapy trials are currently underway against most types of cancer, and new checkpoint proteins are being tested as targets.
“For more than 100 years scientists attempted to engage the immune system in the fight against cancer. Until the seminal discoveries by the two laureates, progress into clinical development was modest. Checkpoint therapy has now revolutionized cancer treatment and has fundamentally changed the way we view how cancer can be managed,” the Nobel committee said.
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