India Has a Banner Year for Deals and Overtakes China as a Favored Target

India is having its busiest year ever for corporate deal making, as foreign buyers are now spending more here than in China.

Companies and investors alike are betting the world’s fastest-growing large economy–once seen as bureaucratically sclerotic and unpredictable–is turning into a destination that offers opportunity driven by hundreds of millions of consumers. Other deal drivers include industry consolidation, a better bankruptcy system and a growing willingness among owners of large family businesses to cash out.

In all, mergers and acquisitions targeting Indian companies totaled $93.7 billion this year–up 52% from a year earlier–which is the highest tally since the economy started opening up in the 1990s, according to Dealogic. The value of overseas purchases in India has overtaken those in China. Acquirers spent $39.5 billion in India versus $32.8 billion in China, where growth is slowing and a trade battle with the U.S. is underway.

Prime Minister Narendra Modi is striving to make life easier for business. He has eased foreign direct investment rules, implemented a new bankruptcy code, replaced a complex web of taxes with a nationwide goods and services levy and promised policies to end “tax terrorism,” which in the past left some international firms with surprise retrospective bills. The country leapt 23 places in the World Bank’s ease-of-doing-business ranking this year.

“Overall the environment is far more conducive to deal activity,” said Pramod Kumar, managing director and head of banking at Barclays in India.

Growth is now faster than China’s and holds the promise of a huge group of higher-spending consumers. India’s gross domestic product will almost double to $5 trillion by 2030, according to a report by government think tank NITI Aayog.

Enthusiasm is reflected in the nation’s public markets as well. The S&P BSE Sensex index is up 4.2% this year, making it one of the few benchmarks in the world in positive territory. India’s currency hit record lows earlier this year but the rupee has recovered some ground as oil prices have tumbled. India is a major importer of energy.

“Anything which touches the domestic consumption story has to be of interest,” said Sundareswaran S., executive director at Morgan Stanley in Mumbai.

Earlier this month, Unilever NV said it agreed to buy Horlicks, a malted-drink brand that is hugely popular in India, from GlaxoSmithKline PLC as part of a $3.75 billion deal. These kinds of large purchases allow companies to leapfrog the arduous process of establishing new businesses on the ground.

In the year’s biggest transaction, Walmart Inc. invested $16 billion for a majority stake in Indian e-commerce firm Flipkart Pvt Ltd. Technology firms have also attracted investors like SoftBank Group Corp, Naspers Ltd. and Alibaba Group Holding Ltd.’s Ant Financial Services Group. On Thursday, Naspers said it led a $1 billion fundraising for Swiggy, a food-delivery app company. In September, SoftBank led a $1 billion investment in hotel-booking startup OYO Hotels.

Executing deals is still difficult in India. A merger begun last year between Vodafone India and Idea Cellular Ltd. took 18 months to complete. Bankers say acquisitions of listed companies are still too complex. And a general election next year could temporarily slow the pace of takeovers.

Since the introduction of the bankruptcy code, hundreds of companies have entered insolvency proceedings and their owners are losing control, which was unimaginable just two years ago.

That is enabling deals like Tata Steel Ltd.’s $8.3 billion acquisition of domestic steelmaker Bhushan Steel Ltd. Hopes for an infrastructure and construction boom have led to fierce bidding for some assets from the bankruptcy court.

“It’s not a surprise that you have all these big guys who have been in steel, 10, 20, or 100 years getting so excited. In how many other countries are people so excited about buying steel assets?” said Kaustubh Kulkarni, head of investment banking at JP Morgan India Pvt. Ltd.

At the same time, energy and telecommunications markets are consolidating as larger players buy out struggling smaller counterparts. Reliance Jio Infocomm Ltd.’s aggressive push to sign up hundreds of millions of mobile users two years ago with low prices turned the industry upside down and spurred deals like Bharti Infratel Ltd.’s acquisition of Indus Towers Ltd. this year for $6.5 billion.

Sovereign wealth and pension funds are targeting local property and infrastructure assets. And bankers say the families behind some closely held companies are warming to the idea of selling controlling stakes, creating opportunities for private equity.

“Ownership is gradually becoming more financial than familial,” said S. Ramesh, CEO of Kotak Investment Banking.

https://www.marketscreener.com/WAL-MART-STORES-4841/news/Wal-Mart-Stores-India-Has-a-Banner-Year-for-Deals-and-Overtakes-China-as-a-Favored-Target-27796992/

FDA Action Alert: Wrapping up 2018 and Heading Into 2019

With the holidays upon us, along with the end of 2018 and the beginning of 2019, the U.S. Food and Drug Administration (FDA) squeezed some target action dates into the last weeks and beginning of the new year. As it turned out, these appear to be a mixed bag of extensions, resubmissions and supplemental applications, some of which are still pending while others have been approved earlier. Here’s a look.

Merck’s Keytruda … Again … Or Not

By now, everyone seemingly knows that Keytruda (pembrolizumab) is Merck & Company’s anti-PD-1 therapy, otherwise called a checkpoint inhibitor. There are more than 850 ongoing clinical trials using Keytruda in a broad range of cancers and treatment settings. As of October 22, the drug had been approved in 61 countries for second-line recurrent or metastatic head and neck squamous cell carcinoma (HNSCC). Merck had a target action date of December 28, 2018 for its supplemental Biologics License Application (sBLA) for Keytruda in previously treated patients with recurrent or metastatic head and neck squamous cell carcinoma. The application was based on data from the Phase III KEYNOTE-040 clinical trial.

However, on October 22, the company released significantly improved overall survival data for Keytruda from its Phase III KEYNOTE-048 trial. The company stated at that point, with the data so good, it planned to file an sBLA for Keytruda for a first-line indication based on the KEYNOTE-048 data that will include data from KEYNOTE-040 as supportive data. “Based on these results,” the company stated, “Merck has withdrawn the sBLA for KEYNOTE-040 for KEYTRUDA as a second-line treatment in patients with recurrent or metastatic HNCSC, which was previously assigned a Prescription Drug User Fee Act (PDUFA) or target action date of Dec. 28, 2018.”

Ocular Therapeutix’ Dextenza for Eye Pain after Surgery

Ocular Therapeutix, based in Bedford, Mass., had a target action date of December 28 for its Dextenza (dexamethasone insert) for ocular pain after ophthalmic surgery. This is classified as a resubmission as a class 2 response to the FDA’s July 2017 Complete Response Letter.

On December 3, the FDA approved Dextenza. “We are extremely pleased to announce the approval of Dextenza, coming so soon after our pre-approval inspection and approximately one month ahead of the PDUFA date,” stated Antony Mattessich, Ocular Therapeutix’ president and chief executive officer.”

Portola Pharmaceuticals’ Andexxa Manufacturing Process

Headquartered in South San Francisco, Portola Pharmaceuticals has a target action date of December 31 for its Prior Approval Supplement (PAS) filing for the large-scale Generation 2 manufacturing process for Andexxa (coagulation factor Xa (recombinant), inactivated-zhzo).

Andexxa was approved on May 3, 2018 under the FDA’s Accelerated Approval pathway. It is the first and only antidote indicated for patients treated with rivaroxaban and apixaban, when anticoagulation is needed to be reversed because of life-threatening or uncontrolled bleeding. What the PAS means is the company was planning significant changes to its manufacturing of the drug, which needed approval by the FDA before it could continue. If accepted and approved, the PAS will let Portola begin a broad commercial launch of Andexxa in the U.S.

Acorda Therapeutics’ Inbrija

On September 13, the FDA extended its review of Acorda Therapeutics’ Inbrija, a form of orally inhaled levodopa therapy for the treatment of symptoms of OFF periods in patients with Parkinson’s disease taking a carbidopa/levodopa regimen. The extension was related to submissions Acorda made in response to FDA requests for more information on chemistry, manufacturing and controls (CMC). Because of the amount of data, the agency classified it as a major amendment and extended the target action date from October 5 to January 5.

https://www.biospace.com/article/2-fda-action-alert-wrapping-up-2018-and-heading-into-2019/

Annexon Biosciences Closes $75 Million Financing

Proceeds support the clinical development of multiple product candidates inhibiting the classical complement pathway in autoimmune, ophthalmic and neurodegenerative disorders

Annexon Biosciences, a clinical stage biopharmaceutical company focused on the development of novel therapeutics through inhibition of the classical complement pathway, today announced that it has closed a $75 million Series C financing. The financing was led by new investor Bain Capital Life Sciences, with participation by Surveyor Capital (a Citadel company), and Adage Capital Partners. Existing investors, including NEA, Blackstone Life Sciences, Novartis Venture Fund and Satter Investment Management, also participated in the round.

“The classical complement pathway plays a central role in immunity. Malfunction or disruption of this pathway is at the core of many diseases and represents an attractive target for therapeutic intervention,” said Doug Love, Esq., Chief Executive Officer and President of Annexon. “We have made great strides in building a portfolio of product candidates across multiple indications over the past two years. Proceeds from this financing will fund our lead programs in antibody-mediated autoimmune, ophthalmic and neurodegenerative indications through several clinical stages, including completion of proof-of-concept trials. Further, these funds will also support the rapid advancement of our next generation drug candidates in autoimmune and neurodegenerative settings.”

Annexon’s lead programs are ANX005, a monoclonal antibody drug candidate designed for treatment in autoimmune and neurodegenerative diseases, and ANX007 IVT, an antigen binding fragment (Fab) drug candidate designed for use in ophthalmic settings, currently in Phase 1b proof-of-principle studies that are expected to read out in 2019.

“We are impressed by the progress made by the Annexon team in the field of classical complement to address diseases of high unmet need,” said Ricky Sun, Ph.D., a Partner at Bain Capital Life Sciences. “We look forward to partnering with Doug and his team to advance the development of Annexon’s promising pipeline into transformative therapies for patients.” In conjunction with Bain Capital’s investment, Dr. Sun joined Annexon’s Board of Directors.

https://www.marketwatch.com/press-release/annexon-biosciences-closes-75-million-financing-2018-12-19

B. Riley FBR likes Intercept, NASH players Viking, Galmed

Intercept Pharmaceuticals (NASDAQ:ICPT) initiated with Buy rating and $155 (48% upside) price target at B. Riley FBR.

Viking Therapeutics (NASDAQ:VKTX) initiated with Buy rating and $16 (69% upside) price target at B. Riley FBR citing upside with lead drug VK2809 in NASH.

Galmed Pharmaceuticals (NASDAQ:GLMD) initiated with Buy rating and $28 (254% upside) price target at B. Riley FBR citing rosy prospects for Aramchol in NASH.

https://seekingalpha.com/news/3416356-b-riley-fbr-likes-nash-players-viking-therapeutics-galmed-pharma-premarket-analyst-action

NJ urges patients at facility to check for HIV infection

New Jersey health officials have urged more than 3,700 former patients of a surgical facility to get blood tests “out of an abundance of caution,” because they may have been exposed to HIV, hepatitis B and hepatitis C.

Although the risk of infection is low, patients who had procedures at the HealthPlus Surgery Center in Saddle Brook in northern New Jersey between Jan. 1 and Sept. 7 may have been exposed to infections, the state Department of Health said in an email on Tuesday.

“The department is not aware of any illness as a result of the infection control issues,” it said.

HealthPlus has notified 3,778 former patients that a health department investigation found that “lapses in infection control in sterilization/cleaning instruments and the injection of medications” may have exposed them to HIV, hepatitis B and hepatitis C.

“You can be infected with these diseases and not feel sick at all,” said the HealthPlus letter, which was provided by the department in its email.

HealthPlus told patients it would pay for all costs associated with the testing.

https://www.reuters.com/article/us-new-jersey-health/new-jersey-urges-patients-at-facility-to-check-for-hiv-infections-idUSKCN1OO0SQ

‘Rapidly taking patients off opioids might not be a good idea’

Forcing patients off opioid painkillers could sometimes do more harm than good, international medical experts warn in an open letter to health authorities.

The letter, published in the journal Pain Medicine, outlines risks associated with forced tapering of the addictive drugs and petitions U.S. policymakers to develop guidelines that are not “aggressive and unrealistic.”

Nearly 18 million Americans are long-term opioid users because of chronic pain. In the wake of an opioid addiction crisis that has claimed thousands of lives, health regulators and the medical community have doubled down on reducing the number of opioid pills prescribed to patients.

The U.S. Centers for Disease Control and Prevention advocates tapering and, in some cases, discontinuing opioids in patients using them as long-term therapy for chronic pain.

However, in their letter, Beth Darnall of Stanford University in California and coauthors say mandated opioid tapers requiring “aggressive” dose reductions over a defined period, even when that period is an extended one, could be problematic.

They call for “compassionate systems for opioid tapering” in carefully selected patients, with close monitoring and realistic goals. They also call for “patient advisory boards . . . to ensure that patient-centered systems are developed and patient rights are protected.”

“The assumption that forced opioid taper is reliably beneficial is not supported by evidence, and clinical experience suggests significant harm,” said Ajay Manhapra of Yale University, who co-authored the letter.

For example, the letter notes, rapid forced tapering can destabilize patients, lead to a worsening of pain, precipitate severe opioid withdrawal symptoms and cause a profound loss of function.

Some patients may seek relief by sourcing illicit, and more dangerous, opioids, while others risk becoming “acutely suicidal”, the paper adds.

“With the opioid tapering culture, pain specialists are making a killing,” Manhapra said. “Our clinical experience is that with rapid tapers the healthcare costs go up due to excessive use of other costly services like emergency rooms and spine specialists.”

“Whether it’s a fast taper or a slow taper, the big question is – well, what do you do after that?” said Dr. Richard Blondell, vice chair for addiction medicine at the University at Buffalo in New York, who was not among the authors of the letter.

“What we really need is better science, not more politics . . . In my experience, when you have global recommendations based on expert opinions and you try to apply those to individual patients at individual clinics there’s a lot that gets lost in translation.”

The letter petitions the U.S. Department of Health and Human Services to consider patient data and include pain specialists when developing opioid tapering guidelines.

Manhapra believes the onus remains on policymakers.

“It appears that the storm blew one way from 1980’s to 2016 and now it is blowing hard the other way, while we (doctors) stand staggering at the same spot trying to take care of our patients who are suffering,” he said.

SOURCE: bit.ly/2T8FBbZ Pain Medicine, online November 29, 2018.

https://www.reuters.com/article/us-health-opioid-tapering/rapidly-taking-patients-off-opioids-might-not-be-a-good-idea-experts-say-idUSKCN1OO0SO

China issues nationwide ‘negative’ investment list

China issued on Tuesday a so-called “negative” list that specifies industries where investors, domestic or foreign, are either restricted or prohibited, as part of efforts to standardize market entry rules for all players.

Of the 151 sectors on the list, four are prohibited and the rest requires government approval, according to an 83-page document released by the National Development and Reform Commission (NDRC) at a news conference.

Industries not on the list are open for investment to all and require no approval.

The prohibited areas include “illegal financing” and “unlawful internet activities”, according to the document. Areas that require approval include mining, agriculture and manufacturing.

The list, long anticipated by the market, applies to all parts of the country and to all kinds of investors – foreign or domestic.

The first version of the list was issued in 2016 on a trial basis in four provincial regions with free trade zones. It was extended to another 11 provinces and cities last year.

China’s trading partners have repeatedly called on Beijing to take concrete steps to further open its market to foreign firms and provide a level playing field.

The new list is different from the negative list for foreign investment issued by the commerce ministry in June, according to Xu Shanchang, director of Economics System Reform at NDRC.

“For areas that are not on the negative list for foreign investment, we will supervise in accordance with the principle of being equal to domestic and foreign business,” Xu said at the news conference.

For foreign investors looking to invest in China’s markets, they should look at the negative list for foreign investment first, Guo Liyan, an NDRC researcher, told Reuters.

“And if it’s not on the list, you can look at the national list – it does not discriminate against any form of market entities,” Guo said.

https://www.marketscreener.com/news/China-issues-nationwide-negative-investment-list–27796646/?countview=0