BeiGene announced that the U.S. Food and Drug Administration has granted Breakthrough Therapy designation for its investigational Bruton’s tyrosine kinase inhibitor, zanubrutinib, for the treatment of adult patients with mantle cell lymphoma who have received at least one prior therapy. “We are very excited to receive the Breakthrough Therapy designation from the FDA,” said Jane Huang, M.D., Chief Medical Officer, Hematology, at BeiGene. “Zanubrutinib has been designed to maximize BTK occupancy and minimize off-target effects. We believe that the Breakthrough Therapy designation underscores the potential of zanubrutinib as a meaningful treatment for patients with MCL who have received at least one prior therapy. More than 1,300 patients worldwide have been treated with zanubrutinib, and it’s being developed in a broad clinical program that currently includes seven Phase 3 or pivotal trials conducted globally or in China.”
Monday, January 14, 2019
FDA approves expanded use of Sanofi’s Adacel vaccine
The Food and Drug Administration has approved the expanded use of Adacel to include repeat vaccination to help protect against tetanus, diphtheria and pertussis. It is now the first and only Tdap vaccine in the U.S. approved for a repeat dose in people 10 through 64 years of age 8 years or more after the first vaccination. Adacel is also the only Tdap vaccine available in a syringe made without natural rubber latex, which may help reduce risk to patients with an allergy.
Bristol-Myers: EC approves Opdivo plus low dose Yervoy for treatment of RCC
Bristol-Myers announced that the European Commission has approved the combination of Opdivo 3 mg/kg plus Yervoy 1 mg/kg for the first-line treatment of patients with intermediate- and poor-risk advanced renal cell carcinoma. This decision represents the first approval of an Immuno-Oncology combination therapy for patients with this type of cancer in the European Union.
https://thefly.com/landingPageNews.php?id=2848517
Encompass: 5 JP Morgan takeaways
President and CEO Mark Tarr on the Company’s strategy moving into the new year at one of the leading healthcare conference for investors.
Encompass Health finished strong in 2018, completing the rollout of its new brand and name and is poised for another year of growth in 2019, Mark Tarr, the Company’s president and CEO, told investors at the 37thAnnual J.P. Morgan Healthcare Conference. Held Jan. 7-10 in San Francisco, the conference is one of the largest healthcare conferences for investors. Here are five takeaways from Mark’s presentation on the state of Encompass Health and its strategy in the new year.
- Collaboration will continue to be key. The rebranding brought the Company’s two business segments – inpatient rehabilitation and home health and hospice – under one name with the goal of integrating care between the two segments in markets where there is both an Encompass Health hospital and a home health location within the service area. As of December 31, 2018, the Company has 81 overlap markets, and its clinical collaboration rate, the percentage of patients who leave an Encompass Health hospital to enter its home health, continues to climb, nearing 35 percent.
‘You’ll see that we’ve made very nice progress on this collaboration percentage,’ Mark said. ‘Our near-term goal that we’ve stated on this is to reach 35 to 40 percent, so we’re well on our way of reaching that near-term goal.’ - 2019 will be another year of growth. The Company will continue to focus on growth of both business segments with a goal of opening four to six new hospitals this year.
Though only a few weeks into the new year, the Company is well on its way to reaching its growth goal in the inpatient rehabilitation segment with four new hospitals already set to open later this year.
Encompass Health plans to invest another $50 to $100 million in home health and hospice acquisitions this year, as well. - Building on the success of its stroke program will be a priority. Of Encompass Health’s 130 inpatient rehabilitation hospitals, 112 hold stroke-specific certifications. Given the overall need – Mark noted some 800,000 strokes occur in the U.S. each year – building on the Company’s clinical capabilities to treat stroke patients has and will continue to be a priority. ‘Now not all those patients will need post-acute care,’ he added. ‘but you can see a large number of those patients will need either inpatient or home health or a combination of the two.’
Encompass Health and the American Heart Association/American Stroke Association recently announced their sponsorship of ‘Together to End Stroke,’ in an effort to educate the public on stroke care and stroke prevention. - Encompass Health to offer post-acute solutions. As one of the nation’s largest networks of post-acute providers, Encompass Health is using its clinical expertise and large, post-acute database and EMR technologies to produce predictive models with the goal of ensuring patients are placed in the proper post-acute setting and not readmitted to an acute care hospital.
In 2018, the Company piloted a 90-day post-acute readmission model in its Tyler, Texas hospital; a second pilot launched in November in Petersburg, Virginia.
‘So you’ll be able to see us continue to enhance our capabilities in this area,’ Mark said. ‘It’s something that we can do that no other post-acute provider can do because of the investments that we’ve made in both segments relative to our IT platform.’ - The Company is well-positioned to adapt to regulatory changes. Encompass Health has been running the CARE Tool and FIM™, Functional Independence Measure, simultaneously since the fourth quarter of 2016 in its inpatient rehabilitation segment. For reporting and payment purposes, CMS is replacing the FIM™ measure with the CARE tool measures effective Oct. 1, 2019. This change will likely impact Medicare revenue per discharge for certain cases.
Encompass Health is also preparing its home health segment for implementation of the Patient Driven Groupings Model (PDGM). Starting in 2020, the PDGM will go from 60-day episodes for payment to 30-day payment periods. ‘It relies more heavily on the clinical characteristics of the patient, and it will eliminate therapy service use thresholds in case-mix adjustments, which we’re supportive of,’ Mark said.
What the Company disagrees with is that CMS assumed behavioral changes will offset a 6.4 percent reduction in the base rate. Mark said the Company would continue to provide feedback and work with CMS and trade associations to ensure the questions surrounding these adjustments are fully answered.
‘So, in spite of the changes, we feel that we’re very well-positioned as a company to embrace these changes,’ Mark said.
For the full transcript and presentation visit (add investor link here).
US healthcare stocks seen maintaining momentum after strong 2018
One of the rare market bright spots last year, the U.S. healthcare sector remains a Wall Street darling despite a slow start to 2019.
As 2019 begins, healthcare <.SPXHC> is the most favored of the 11 main S&P 500 sectors, according to a Reuters review of ratings from 13 large Wall Street research firms, which recommend how to weigh those groups in investment portfolios.
Healthcare shares overall rose 4.7 percent last year, one of only two S&P 500 sectors, along with utilities, to post positive returns in 2018 as the benchmark index fell 6.2 percent.
Proponents cite the healthcare sector’s reasonable valuations, strong balance sheets and dividend payments among many companies, as well as the group’s upbeat outlook for earnings, which are less susceptible to economic cycles than other businesses.
If economic growth is slowing, some investors are wary of being too invested in cyclical sectors that thrive during an upswing, but do not want to be too defensive either.
“We are trying to find things that skirt both of those two categorizations, and healthcare is a really nice diversified earnings stream,” said Noah Weisberger, managing director for U.S. portfolio strategy at Bernstein.
Such diversity stems from the variety of companies comprising the sector: manufacturers of prescription medicines, makers of medical devices, such as heart valves and knee replacements, health insurers, hospitals and providers of tools for scientific research.
From a stock perspective, that means the sector includes potential fast-growing stocks, such as biotechs that can carry more risk and more reward, or large pharmaceutical companies and others that offer steadier, slower growth.
Investment advisory firm Alan B. Lancz & Associates sold some pharmaceutical holdings late last year that had posted big gains, such as Merck & Co, to move into biotech stocks it believed were undervalued, said Alan Lancz, the firm’s president.
“We have maintained our overweighting, which is unusual for us with a sector that has outperformed so dramatically,” Lancz said. “But mainly there are segments within the sector that still offer opportunity.”
Led by Tandem, small-cap medtechs pump up the value in 2018
A new standard has been set; a new champion has emerged. Tandem Diabetes Care has achieved a 12-month percentage share price growth of unprecedented and almost incredible proportions, and has set a record that must surely stand for years to come. The price of the insulin pump maker’s stock rose by more than 1,500% in 2018.
Among the mid-cap groups increases were more modest. The leader, Haemonetics, recorded an increase of just 75%, a slower rate of growth than the big cap medtechs (The fourth quarter sell-off hurt big medtech less than big pharma, January 10, 2018). Perhaps this mid-range cohort might get more interesting next year – after all, Tandem might well be among them by that time.
Haemonetics makes products to help blood donation centres and hospitals manage donated blood, from software to track samples to large plasmapheresis systems. It was the latter that was responsible for the group’s steady progress throughout 2018 – until the fourth quarter, anyway, when the broader market fall took a toll.
Sales of Haemonetics’ NexSys plasmapheresis machine were better than expected in the second quarter, with over 2,000 of the systems being placed, allowing the group to raise its guidance.
| MID CAP ($2.5-10BN) MEDTECH COMPANIES: TOP RISERS AND FALLERS IN 2018 | |||
|---|---|---|---|
| Share price 12-mth chg | Market cap at Dec 31 ($bn) | Market cap 12-mth chg ($bn) | |
| Top 5 risers | |||
| Haemonetics ($) | 72% | 5.2 | 2.1 |
| Novocure (£) | 68% | 3.1 | 1.3 |
| Elekta (SKr) | 55% | 4.3 | 1.2 |
| Nihon Kohden (¥) | 37% | 2.8 | 0.7 |
| Penumbra ($) | 30% | 4.2 | 1.0 |
| Top 5 fallers | |||
| Dentsply Sirona ($) | (43%) | 8.3 | (6.8) |
| Sysmex (¥) | (41%) | 9.8 | (6.6) |
| Convatec ($) | (33%) | 3.6 | (1.7) |
| Cantel Medical ($) | (26%) | 3.2 | (1.1) |
| Biomérieux (€) | (23%) | 7.8 | (2.6) |
As for the small caps, a number of factors contributed to Tandem’s rise, though it is arguable whether any can be said actually to explain it. The June approval of the group’s t:slim X2 insulin pump in the US was its most significant achievement in terms of its products, and pushed its share price up by 25% (Tandem comes out the winner of the diabetes device approvals, June 22, 2018).
The t:slim X2 incorporates an algorithm, Basal-IQ, that enables interoperability with Dexcom’s G6 blood glucose sensor, and this increased its appeal to patients and drove Tandem’s second-quarter sales to a level that emphatically beat the street’s expectations. Dexcom, of course, was the leader of the big-cap medtech risers.
Tandem also benefited, as did many diabetes device developers, from Johnson & Johnson closing its Animas insulin pump business in October 2017. J&J chose Medtronic as its preferred partner in an agreement that saw former Animas patients given the option to transfer to a Medtronic pump – even so, the appeal of the t:slim X2 allowed Tandem to poach an estimated 3,000 of the 15,000 US Animas patients.
Perhaps the main factor is that the company is springing back from a low point. In November 2016 the approval of Medtronic’s MiniMed 670G, a basic artificial pancreas, knocked 60% off Tandem’s stock (High sugar bloodbath for Tandem and Dexcom, November 3, 2016). Even with 2018’s 1,500% rise the company has still not regained its ground.
| SMALL CAP ($250M-2.5BN) MEDTECH COMPANIES: TOP RISERS AND FALLERS IN 2018 | |||
|---|---|---|---|
| Share price 12-mth chg | Market cap at Dec 31 ($m) | Market cap 12-mth chg ($m) | |
| Top 5 risers | |||
| Tandem Diabetes Care ($) | 1,509% | 2,178 | 2,154 |
| CareDx ($) | 243% | 1,025 | 815 |
| Glaukos ($) | 119% | 2,024 | 1,137 |
| Staar Surgical ($) | 106% | 1,408 | 770 |
| Veracyte ($) | 93% | 510 | 288 |
| Top 5 fallers | |||
| Cyberdyne (¥) | (75%) | 591 | (1,769) |
| Accelerate Diagnostics ($) | (56%) | 623 | (828) |
| El En (€) | (51%) | 281 | (309) |
| IBA Group (€) | (46%) | 444 | (397) |
| Nevro ($) | (44%) | 1,173 | (873) |
Cyberdyne, the Japanese robotic exoskeleton maker that shares its name with the cybernetics company in the Terminator films, had an appropriately dystopian year. The group shed three quarters of its value on poor sales of its Hal product range, partly caused by the expiry of a Japanese government subsidy programme for the lumbar support version of Hal.
2018 was a quiet year for M&A, and as such generally allowed listed companies to rise or fall based on their underlying performance. Perhaps in the coming year inorganic moves might play more of a role.
Why Novo Nordisk should buy Amarin
Fresh from success with its omega-3 project Vascepa, Amarin is being touted as an acquisition target. Amgen, Renegeron and Sanofi have all been linked with the company, and last week Pfizer joined the list of rumoured suitors after a bullish JP Morgan presentation by Amarin’s chief executive, John Thero.
But a smaller player, Novo Nordisk, might want to take a look at Amarin, too. With a stalling core diabetes business the Danish company has made no secret of its wish to expand its presence in obesity and get into Nash and cardiovascular disease. The latter makes Amarin a good fit.
Crossover
Vascepa is already approved for severe hypertriglyceridaemia. But a surprise win in the Reduce-it trial could see it get a broader mixed dyslipidaemia label, which could take the addressable population to around 75 million and transform Amarin from a niche player to a mainstream contender.
This primary care setting is well within Novo’s wheelhouse; indeed, the link between diabetes and high lipid levels means there could be cross-selling potential for the Danish group’s existing sales force.
Novo has long relied on internal R&D, but signalled its desire to look outside the company for innovation after a restructuring in September. Still, it has so far stuck to small, early-stage deals, the most recent being with Staten, which like Amarin is targeting dyslipidaemia (Novo sets up antisense challenge with Staten deal, 17 December 2018).
This is not to say that Novo is not interested in bigger buys: it tried to acquire Ablynx last year, but ended up losing out to Sanofi, which was prepared to pay more.
Perhaps this gets to the nub of the matter. If Novo is interested in Amarin it runs the risk of getting outbid by the likes of Pfizer, particularly if the Danish company is determined to stick to its guns again on what it sees as fair value.
Another factor that might be holding Novo back is a lack of understanding of exactly how Vascepa works: the positive effect in Reduce-It was not fully explained by the product’s lowering of triglyceride levels, though this drawback would clearly apply to all potential buyers (AHA 2018 – Amarin goes hard on Vascepa but questions remain, 11 November 2018).
However, if this has made other players cautious about making a bid for Amarin, for a science-driven company like Novo it could be a deal-breaker. The omega-3 field will get another chance for validation with readout from the Strength study of Astrazeneca’s Epanova, due to complete later this year, so perhaps this could serve as a deal trigger for bidders biding their time.
Strengthening the case?
Still, the two products are not directly comparable: Vascepa is a pure form of eicosapentaenoic acid (EPA), while Epanova is a mixture of EHA and docosahexanoic acid (DHA). Amarin has long argued that DHA has a deleterious effect.
Potential Amarin suitors might therefore not be awaiting the Strength results, but they could be standing by to see how the broader Vascepa launch goes. If other recent solo attempts are anything to go by, any hint of disappointment could trigger an investor exodus and make Amarin suddenly more affordable.
But a successful launch could see Amarin’s market cap, which currently sits just under $6bn, rocket. For a group with deep pockets, like Pfizer, this is probably neither here nor there – if it wants Amarin it will pay what it needs to get the deal done.
This is a more important consideration for Novo. The company needs fresh blood, and Amarin fits the bill. It should make a move sooner rather than later, or risk missing out again.
Subscribe to:
Posts (Atom)