Brookdale Senior Living Extends Debt Maturities, Lowers Credit Costs

Brookdale Senior Living Inc. (NYSE: BKD) announced today that the Company has recently completed two significant financing transactions.

Steven Swain, Brookdale’s Executive Vice President and Chief Financial Officer, commented, ‘We are pleased to have closed the two transactions before year end. The transactions are net-neutral to our current liquidity, and they play a key role in providing flexibility in our capital structure, extending maturities and diversifying our exposure to fixed and variable interest rates. We would like to thank Capital One and the other members of our lending group for amending and extending our previous revolving credit facility and to express appreciation to Freddie Mac and Berkadia as well for partnering with us on Freddie Mac’s new and innovative loan structure.’

Credit FacilityOn December 5, 2018, the Company entered into an amended and restated credit agreement with lenders led by Capital One, National Association as lead arranger and sole book runner. The amended agreement replaced the Company’s former credit agreement and extended the maturity date from January 3, 2020 to January 3, 2024. The amended credit agreement provides commitments for a $250 million revolving credit facility with a $60 million sublimit for letters of credit and a $50 million swingline feature. Benefits from the new credit facility include a lower variable rate margin over LIBOR, a small expansion of the letter of credit sublimit, and a slightly more flexible fixed charge coverage covenant. Participating lenders include Wells Fargo Bank, N.A., PNC Bank, National Association, Morgan Stanley Senior Funding, Inc., Bank of America, N.A., Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., and First Tennessee Bank National Association.

The revolving credit facility is currently secured by first priority mortgages on 15 communities and negative pledges on two communities, and allows for both the removal and addition of collateral. Available capacity under the facility will vary from time to time based upon borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and the Company’s consolidated fixed charge coverage ratio. The amended agreement also provides the Company an accordion option to increase the revolving credit facility by an additional $100 million, subject to obtaining commitments for the additional amounts. Amounts drawn on the credit facility may be used for general corporate purposes.

Freddie Mac FinancingOn November 16, 2018, the Company obtained $327 million of mortgage financing from Berkadia Commercial Mortgage LLC in a Freddie Mac Structured Pool Transaction. The non-recourse mortgage financing has a ten-year term and is secured by first priority mortgages on 28 senior living communities, most of which had collateralized the former credit facility or other loans with near-term maturity dates. Approximately 65% of the principal bears interest at a fixed rate, with the remainder at a variable rate. The mortgage financing allows for certain asset substitutions and partial releases.

https://www.marketscreener.com/BROOKDALE-SENIOR-LIVING-11849/news/Brookdale-Senior-Living-Completes-Financing-Transactions-Extends-Maturities-and-Lowers-Credit-Fac-27739529/

UnitedHealthcare Renews Contract with Envision

UnitedHealthcare announced today that it has agreed to extend its nationwide contract with Envision Healthcare. The agreement ensures that all UnitedHealthcare plan participants will have in-network access to Envision’s hospital-based services.

UnitedHealthcare said, “This agreement ensures the people we serve have continued access to Envision’s hospital-based services while delivering better value to our customers and consumers.”

https://www.marketscreener.com/UNITEDHEALTH-GROUP-14750/news/UnitedHealthcare-Renews-Contract-with-Envision-Healthcare-27737446/

GW Pharmaceuticals initiated at Oppenheimer

GW Pharmaceuticals initiated with a Perform at Oppenheimer. Oppenheimer analyst Esther Rajavelu started GW Pharmaceuticals with a Perform rating and $142 price target. With Epidiolex, a first-in-class phytocannabidiol medication for the treatment of certain types of seizures, the company is well positioned for both revenue growth and pipeline expansion, Rajavelu tells investors in a research note. However, the analyst believes GW’s positive drivers are fairly reflected in the stock at current levels.
https://thefly.com/landingPageNews.php?id=2835625

Aeglea BioTherapeutics announces design of Phase 3 PEACE trial

Aeglea BioTherapeutics announced the design of its global pivotal Phase 3 PEACE trial to evaluate the safety and efficacy of pegzilarginase, the company’s lead investigational therapy, in patients with Arginase 1 Deficiency, or ARG1-D. The company has aligned the trial design and endpoints with input from the FDA and the European Medicines Agency, or EMA and plans to conduct a single, global pivotal trial to support registration. Aeglea expects to dose the first patient in the PEACE trial in Q2 of 2019 and expects topline data will be available in Q1 of 2021.PEACE is a global, randomized, double-blind trial designed to assess the effects of treatment with pegzilarginase versus placebo over 24 weeks with a primary endpoint of statistically significant plasma arginine reduction from baseline. The primary endpoint is intended to assess the effectiveness of pegzilarginase in lowering plasma arginine levels given the evidence that improved plasma arginine control has the potential to improve the clinical status and slow disease progression in patients with ARG1-D. Secondary endpoints assessing changes in clinically meaningful outcomes including mobility, adaptive behavior, safety and pharmacokinetics will be used to describe the broader impact of pegzilarginase relative to placebo on multiple aspects of ARG1-D. The company plans to enroll 30 patients with ARG1-D. Patients enrolled in the trial will be randomized on a two-to-one basis to receive weekly infusions of pegzilarginase, or placebo for the double-blind treatment period of 24 weeks. Dose adjustments during this period can be made to optimize plasma arginine control for levels outside the range of 50 to 150 microM. Patients will be considered eligible for the PEACE trial if they exhibit average plasma arginine of greater than 250 microM, are greater than two years of age and have a deficit in mobility or adaptive behavior. All assessments and dose adjustments will be conducted in a blinded fashion at pre-specified intervals. Patients will remain on current disease management for the duration of the Phase 3 PEACE trial. In addition to the primary endpoint of plasma arginine reduction, secondary endpoints in the Phase 3 PEACE trial will evaluate pegzilarginase relative to placebo through a multi-dimensional assessment of clinical outcome. Measures of clinical outcome are defined as a patient exhibiting improvement from baseline in mobility or adaptive behavior. Additional secondary endpoints include a response rate for each individual assessment, the total number of mobility and adaptive behavior responses per patient, the proportion of patients with plasma arginine below medical guidance of 200 microM, safety and pharmacokinetics.
https://thefly.com/landingPageNews.php?id=2835629

Piper boosts Tandem target to $60 after surveying Animas patients

Piper Jaffray analyst JP McKim says the “biggest swing factor” to his model for Tandem Diabetes next year is the company’s Animas opportunity. After surveying 73 Animas patients “to see how many are still left out there,” the analyst is “incrementally more bullish” on the upside opportunity for Tandem. The survey shows that 75% of patients are still on the market for a new pump and 60% are planning to switch in 2019, McKim tells investors in a research note. He believes Tandem’s international opportunity looks to be larger than expected with 78% of those patients planning to switch in 2019. Australia is a key market where those Animas patients get a free upgrade to Tandem Diabetes, says McKim. He boosted his price target for the shares to $60 from $56 and keeps an Overweight rating on the name.
https://thefly.com/landingPageNews.php?id=2835635

J&J chief: Amazon could shake up pharma’s distribution, rebates and more

There’s been plenty of speculation about Amazon’s intentions in pharmaceuticals, and now Johnson & Johnson’s CEO has weighed in on how the tech giant could affect drug markets by shaking up pharma distribution and reimbursement.

Speaking with Fortune’s Susie Gharib, J&J CEO Alex Gorsky said megamergers in healthcare, such as the Aetna/CVS megamerger and Cigna’s Express Scripts buyout, demonstrate that “there is a lot of pressure in the system right now.” And as J&J knows firsthand from its consumer products business with Amazon, the retail giant’s vaunted distribution efficiencies and broad consumer reach could help ease some of that pressure.

“We have conversations at all levels going on with Amazon. I think Jeff (Bezos) and as importantly Amazon is a very innovative organization, and they see this as an opportunity to make a difference,” Gorsky said. “Just as we are partnering with them today in areas of our consumer products, we’ll look forward to partnering with them in the future in some of these other areas as well.”

It’s clear what Amazon could offer in distribution expertise, but the company could also explore changes in reimbursement, where drugmakers have complained about growing rebates for years.

“We all know there are inefficiencies in the current system,” he said during the interview. “So whether it’s distribution, whether it’s reimbursement, whether it’s the way that we insure, all of those are significant opportunities. At J&J, we would welcome those kind of entrants into the market.”

The conversation comes amid a time of significant change in the U.S. drug pricing ecosystem brought about by years of attention to price increases and rebate growth. Notable developments in the field recently have been Amgen’s move to cut its list price on PCSK9 cholesterol drug Repatha by 60%, Gilead’s decision to launch authorized generics of its own drugs and mergers between PBMs and insurers.

Amazon, for its part, has reportedly been eyeing pharmaceuticals for more than a year. In January, the company teamed up with Berkshire Hathaway and JPMorgan to form a joint venture aiming to lower healthcare costs.

Then, in June, Amazon purchased independent pharmacy PillPack, giving it access to the startup’s pharmacy distribution system. PillPack, which packages each patient’s drugs by date and time of dosing, is authorized to ship drugs in 49 states, Reuters reported at the time. In the wake of the deal, Evercore ISI analysts wrote that it’s “undeniable” Amazon is entering the pharmacy industry, according to CNBC.

Gorsky isn’t the only pharma CEO to weigh in on Amazon. Amid heated speculation about Amazon’s intentions in pharma late last year, Pfizer’s Ian Read said “any system of distribution that can cut costs and get a wide availability of products to patients is something that the whole industry would be interested in.” Allergan CEO Brent Saunders said the “whole ecosystem is ripe for disruption.”

https://www.fiercepharma.com/pharma/amazon-could-shake-up-distribution-reimbursement-for-pharma-j-j-ceo

NeuroMetrix reports agreement with GSK on 2019 Quell joint development program

NeuroMetrix reports agreement with GSK on 2019 Quell joint development program  (NURO) reported under terms of the collaboration entered into in the first quarter of 2018, the company and GSK Consumer Healthcare (GSK) committed to co-fund future development of Quell technology beginning in 2019, subject to agreement on an annual program of product initiatives. The company reported that agreement has been reached on the 2019 development program and it will commence in January 2019. The parties modified the terms of the collaboration to reallocate the up to $13.8M remaining to be paid by GSK upon the achievement of certain development and commercial milestones. These modifications accelerated a portion of the remaining milestones timing into the next twelve months while reducing the aggregate milestone amount payable by an interest charge. NeuroMetrix received a $2M milestone payment from GSK in connection with such modifications. “We are pleased with the progress in our working relationship with GSK Consumer Healthcare. Both parties are committed to our shared goal of making the Quell technology available on a global basis,” said Shai N. Gozani, President and CEO of NeuroMetrix.
https://thefly.com/landingPageNews.php?id=2835555