Tuesday, December 11, 2018
Roche, Merck to collaborate to develop companion diagnostic test
Roche (RHHBY) announced that it entered into a collaboration with Merck (MRK) to develop a companion diagnostic test to identify patients eligible for anti-PD-1 therapy based on the status of a biomarker in advanced solid tumors. The companies will collaborate on the development of a pan-cancer companion diagnostic to detect mismatch repair deficiency in solid tumors. The companion diagnostic currently under development is an IHC test for use on the Roche BenchMark ULTRA instrument, which, as the most widely installed IHC/ISH staining platform globally, will provide broad testing access to patients.
https://thefly.com/landingPageNews.php?id=2835445
Lannett Amends Credit Agreement
Lannett Company, Inc. (NYSE: LCI) today announced that it has entered into an amendment of its credit agreement effecting the term A loans thereunder (Term A Loans) to provide the company greater flexibility with regard to its financial leverage ratio covenant applicable to such Term A Loans. With the amended leverage ratios, the company expects to be well within its financial covenants through the maturity date of the Term A Loans.
The amendment increases the required Secured Net Leverage Ratio applicable to the financial leverage ratio covenant from 3.25 times to 4.25 times as of December 31, 2019, with a step-down to 4.00 times as of September 30, 2020. Currently, the required Secured Net Leverage Ratio stands at 3.75 times.
In exchange, the company agreed to i) include a Minimum Liquidity Covenant of $75 million; ii) a 25 basis point increase to the interest rate margin paid on the Term A Loans; and iii) a consent fee equal to 50 basis points, paid only to consenting lenders. A full description of the details of the amendment will be filed on a Form 8-K.
“We are pleased to have the support of our lenders and appreciate their confidence in Lannett, due in part to the excellent progress we are making expanding our pipeline and launching new products, while also reducing our costs,” said Tim Crew, chief executive officer of Lannett. “This amendment provides further financial flexibility and better positions us to capitalize on additional growth opportunities. We continue to diversify our product base, build strategic relationships, advance our drug development program and evaluate a range of alternatives regarding our long-term capital structure.”
Economic Damage From California Fires Spreads Further Than Blazes
The California city of Chico escaped the wrath of last month’s Camp Fire that destroyed communities 15 miles to the east. But now, it is facing the blaze’s economic fallout.
A major part of Chico’s workforce, including contractors, hospital staff and employees of the city’s California State University branch, lived in or near the town of Paradise, which was completely destroyed. About 20,000 have moved into Chico, according to local officials, worsening what was already a growing housing crisis. Others have had to move away, putting pressure on a tight labor market.
It’s the latest example of how extreme wildfires across California in recent years are squeezing local economies from the north to the south.
“Not only did we lose 17% of the county’s housing units, but 10% of our workforce lost their homes,” said Kate Leyden, executive director of the Chico Builders Association, which is setting up an RV park to shelter some 1,400 contractors, roofers and painters who previously lived in Paradise.
Chico, population 93,000, had a rental vacancy rate of just 1% before the fires. There were zero apartment vacancies in the city as of late November, while the number of single-family homes for sale had plunged to 50 from 250 before the fire, said David Bronson, president of Sierra North Valley Realtors.
“The fear is that people are going to leave,” said Chico Mayor Sean Morgan, making it harder on businesses in the city, where the unemployment rate was 4.2% in October. Major employers, from the Sierra Nevada Brewing Co. to the local hospital, are scrambling to arrange temporary shelter for their staff, the mayor said.
Construction workers are a particular concern, because they are in such high demand across the West Coast, Mr. Morgan added. In pricey Northern California, Paradise was a more affordable place for them to live than bigger towns nearby, including Chico.
“This has been a huge disruption to our industry, and there was already a massive shortage of labor before,” said Rick Carpenter, a 67-year-old roofing company owner in Paradise. He said he is down to two workers, compared with eight before the fires. Four left the region, and two are still sorting out where to live, he said.
Mitch Byers, 25, a foreman at a fencing company in Paradise, lost his home in the Camp Fire and moved his family to Arizona less than two weeks later.
“We didn’t really want to leave California,” said his wife, Roxanne Doty, 36, “but I did look up and down the state for places we could possibly afford.” She said she found that many were either in high-crime areas or high fire-danger zones.
Mr. Byers said the decision to live with his wife’s grandmother in Clarkdale, Ariz., while they started anew was tough: “I had a really good job.”
John Ross, owner of Northern California Fence, said Mr. Byers was one of three employees, out of a total of eight, who left his company because they couldn’t find anywhere to live after the fire.
Mr. Ross lost his home and business, including tools and trucks, and is now regrouping out of an RV trailer where he is living with his family about an hour north of town.
In Sonoma County, where a wildfire last year destroyed 5,300 homes, winery-related tourism has rebounded and officials are focused on helping residents rebuild. Yet only 98 homes have been completed a year on because of insurance delays and worker shortages.
Sonoma’s bigger employers have grappled with how to keep or hire people into the housing-starved region. Medtronic, a medical-device maker, has subsidized a commuter van to attract employees from farther cities and made working from home an option, the company said.
The overall economic damage from wildfires is tough to measure. Goldman Sachs estimates the Camp Fire and Southern California’s Woolsey Fire will shave about 0.1 percentage point off annualized U.S. gross domestic product in the fourth quarter.
California has spent $2.22 billion fighting fires in the fiscal year that began in July, according to state estimates — a number that’s expected to rise. Firefighting costs for the entire prior fiscal year were $2.33 billion, the highest since 2000.
In the short run, spending on firefighting and rebuilding creates jobs and adds to GDP, said William Shobe, an economist at the University of Virginia.
That doesn’t account for the wealth lost from property damage, however. Moody’s Analytics Inc. estimates the economic cost of the Camp and Woolsey fires at between $6 billion and $8 billion, partly because of the latter area’s pricey property valuations.
The 2017 and 2018 wildfire seasons in California — the state’s worst in terms of lives lost, acres burned and damages sustained — wiped out at least 24,000 homes, with nearly 14,000 of those destroyed in November’s Camp Fire, the deadliest and most destructive in state history.
Other long-term costs, like reduced tax revenue or chronic illness from smoke exposure, may not become apparent for years.
Pfizer downgraded to Neutral from Overweight at JPMorgan
JPMorgan analyst Christopher Schott downgraded Pfizer to Neutral with an unchanged price target of $46. The shares closed yesterday up 48c to $44.40. The analyst cites valuation for his move to the sidelines after a “strong” 2018 which has to the stock up over 20% year-to-date. Further, he believes Pfizer’s product pipeline needs to expand following the patent expiration of Lyrica in 2019.
https://thefly.com/landingPageNews.php?id=2835009Altria could partner with Philip Morris on JUUL stake, says Piper Jaffray
Even after its $1.8B investment in Cronos Group (CRON) for a 45% ownership interest, Altria Group (MO) still has “significant” spending flexibility, Piper Jaffray analyst Michael Lavery tells investors in a research note. The company remains focused on e-vapor category leadership, suggesting it may be preparing to acquire a stake in JUUL, adds the analyst. However, Altria will likely remain committed to its investment grade debt rating, which could cause it to consider partnering with Philip Morris (PM) for a stake in JUUL, especially if a deal is done at higher valuation levels, says Lavery. The analyst believes Altria can deliver double-digit earnings growth over 2018-2020, above its long-term 7%-9% growth target, driven by pricing, tax savings, managing spending, share buybacks and falling interest expense. He keeps an Overweight rating on the shares with a $75 price target.
https://thefly.com/landingPageNews.php?id=2835055
Goldman downgrades Acorda Therapeutics to Sell with $10 price target
Goldman Sachs analyst Salveen Richter downgraded Acorda Therapeutics to Sell from Neutral and cut his price target for the shares to $10 from $19. The stock closed yesterday up 40c to $19.03. The analyst expects “significant erosion” to Ampyra revenue beginning in Q4 due to generic entry. This places “considerable focus” on Inbrija to serve as the next growth driver, and Street expectations are for an approval by the January 5 FDA action date, Richter tells investors in a research note. The analyst, however, sees risk “given precedent around a one-cycle review for a drug/device combination.” Further, he believes the drug has a “limited” commercial outlook and projects Inbrija U.S. peak sales of $550M, lower than Acorda’s guidance of greater than $800M, based on physician feedback. One doctor noted that Inbrija should be a niche drug given existing therapies that are easily titrated to mitigate off-period side effects and potential risk of dyskinesia from increasing levodopa concentration, Richter writes. In addition, the analyst sees “limited optionality” on Acorda’s pipeline as the assets are “still early or risky.” Thus, the shares face a lack of near-term catalysts, cautions Richter.
Pharmacists can aid in protecting patients from inappropriate meds
To promote use of safer drugs and to lower risk of patient harm, pharmacists can guide patients and physicians in deprescribing potentially dangerous medications.
KEY TAKEAWAYS
Inappropriate medications pose potential harm to patients, including adverse drug events and cognitive impairment.
To deprescribe inappropriate medications, pharmacists can overcome physician reluctance to act such as fear of withdrawal symptoms.
Efforts to educate patients about inappropriate medications include explaining alternative therapies.
A pharmacist-led educational intervention can effectively discontinue inappropriate medication prescriptions, recent research shows.
Medications are listed as inappropriate under guidelines such as the American Geriatrics Society Beers Criteria because of the availability of safer therapies and risks of patient harm, including adverse drug events, falls, cognitive impairment and emergency hospitalizations. In 2015, an estimated 29% of Medicare beneficiaries filled at least one prescription for an inappropriate medication.
Pharmacists can play a key role in helping physicians discontinue inappropriate medications among older adults, researchers wrote recently in the Journal of the American Medical Association.
“Deprescribing is the act of reducing or stopping medication that is no longer necessary or that may cause harm. Primary care physicians express a lack of time, poor awareness of the harms of medications, and fear of withdrawal symptoms or patient criticism as barriers to deprescribing. Pharmacists can assist physicians in optimizing medication management,” the researchers wrote.
In a study featuring 489 older adults, the researchers examined the impact of a pharmacist-led education intervention to deprescribe inappropriate medications. They found 43% of patients receiving the intervention achieved discontinuation of inappropriate medications after six months compared to 12% receiving usual care.
Patients receiving usual care had normal care delivered in everyday practice with no educational materials from pharmacists.
“Pharmacists in the intervention group were encouraged to send patients an educational deprescribing brochure in parallel to sending their physicians an evidence-based pharmaceutical opinion to recommend deprescribing. The pharmacists in the control group provided usual care,” the researchers wrote.
Pharmacist-led intervention to deprescribe inappropriate medications
For patients, educational material featured a drug-specific brochure. Pharmacists distributed the brochures in person or via mail. The brochures explained how the medication could be inappropriate and alternative therapy options. For sedative-hypnotics, patients were given a visual taperingprotocol.
“The patient brochure was eight pages and had true and false questions about the risks of medications, an explanation why the medication may no longer be safe, alternative and safer treatments, a peer champion story, and a tapering protocol where appropriate,” Cara Tannenbaum, MD, MSc, a co-author of the JAMA research, told HealthLeaders last week.
For physicians, educational material featured an evidence-based pharmaceutical opinion that pharmacists could use or adapt for each study participant’s clinician.
The pharmaceutical opinion included an explanation of why deprescribing was being recommended, potential medication harms, sources of recommendations, options for safer therapies, and study participant data.
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