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Monday, January 28, 2019

Prosecutors: Insys execs gave doctors bribes and lap dance to prescribe drug


Federal prosecutors laid out their racketeering case against five Insys Therapeutics Inc. executives, including a former exotic dancer who allegedly gave a lap dance to a doctor to get him to prescribe the company’s opioid painkiller.
In opening arguments Monday in U.S. District Court in Boston, Assistant U.S. Attorney David Lazarus told the jury Sunrise Lee, a former stripper who became one of Insys’s regional sales directors, “got personal” with a doctor in exchange for a Subsys prescription.
Her lawyer, Peter Charles Horstmann, said it was “simply a night out” at The Underground, a dance club he said was reputed to be one of America’s “sexiest” nightclubs.
As the only female defendant, Lee is a “lightning rod,” said Horstmann, who accused prosecutors of “objectifying” her to make their case more salacious.
The main focus of Lazarus’s opening argument was Insys Therapeutics Inc. founder John Kapoor, executive chairman of its board of directors.
From 2012-15, Kapoor and his co-defendants — Lee, vice president of managed markets Michael J. Gurry, director of sales Richard M. Simon and regional sales director Joseph A. Rowan at the time — conspired to pay out more than $1 million in bribes to doctors across the country to prescribe Subsys “at ever-increasing doses” and con insurance companies into paying for the fentanyl-based drug, at an average monthly cost of $19,000 per patient, the prosecutor said.
“Fentanyl is an incredibly powerful … addictive opioid; if it’s misused, it can kill you,” Lazarus said. “This is a case about greed … and what happens when you put profits over people.”
Subsys was approved in 2012 for cancer patients with “breakthrough pain,” extreme pain that strikes while a patient is already medicated with a long-acting painkiller.
“They wanted to expand the market to all pain patients,” Lazarus said. “They were targeting doctors who did not have a lot of cancer patients.”
Kapoor’s lawyer, Beth Wilkinson, argued that he didn’t know Insys employees were cutting side deals.
Alec Burlakoff, former vice president of sales, wanted “free rein,” so he tried to prevent the executive chairman from reviewing payments to doctors who wrote prescriptions for Subsys, Wilkinson said.
“All the criminal activities lead back to one person only: Alec Burlakoff,” she said.
Steven A. Tyrrell, Simon’s attorney, said he never offered bribes to doctors and had no contact with insurance companies.
“Rich’s job was to try to put out the fires that Burlakoff was setting on a regular basis,” Tyrrell said.
Burlakoff, who pleaded guilty in November to racketeering conspiracy, and former CEO Michael Babich, who pleaded guilty this month to conspiracy to commit mail fraud, are expected to testify for the prosecution.
The case marks the first prosecution of a drug company CEO connected to the opioid crisis, which claims more than 130 lives in the U.S. daily, according to the National Institute on Drug Abuse.
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Tivity Health Previews Preliminary Fourth Quarter 2018 Financial Results


Tivity Health®, Inc. (NASDAQ:TVTY) today announced preliminary unaudited financial results for the quarter and year ended December 31, 2018.  The Company anticipates reporting fourth quarter 2018 results of operations on February 19, 2019.
Fourth Quarter and Full Year 2018 Preliminary Highlights
  • Revenues of $152 million to $154 million expected for the fourth quarter and $605 million to $607 million for full year 2018.
  • Income from continuing operations of $27.5 million to $29.5 million expected for the fourth quarter and $97 million to $99 million for full year 2018.
  • EBITDA of $33 million to $35 million expected for the fourth quarter and $137 million to $139 million for full year 2018. Adjusted EBITDA, which excludes project costs incurred in connection with potential and pending acquisitions, of $36 million to $38 millionexpected for the fourth quarter and $141 million to $143 million for full year 2018. See page 4 for a reconciliation of non-GAAP financial measures.
  • Cash flow from operations of $33 million to $35 million expected for the fourth quarter and $108 million to $110 million for full year 2018.
  • Cash and total debt balances of approximately $2 million and $31 million, respectively, expected at December 31, 2018.
  • SilverSneakers® visits of approximately 102 million to 103 million expected for full year 2018 and Prime® Fitness enrollees of approximately 295,000 to 296,000 expected at December 31, 2018.
“I am pleased to report our preliminary financial results for the fourth quarter.  We had an excellent start to the fourth quarter driven by continued positive momentum we observed in the previous two quarters in SilverSneakers® visits.  While we believe adverse winter weather caused some disruption to visits in late November and early December, our engagement and awareness initiatives continue to yield positive results. Our strong operational and financial results for 2018 illustrate the power of our flagship SilverSneakers brand while our Prime® Fitness offering continues to be our fastest growing line of business,” said Donato Tramuto, Tivity Health’s Chief Executive Officer.  “Our strong free cash flow has allowed us to continue to pay down debt and make investments that we believe will address the major drivers of healthcare costs in our nation.”
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High rates of opioid prescriptions may be linked to poor labor force participation


Prescription opioids may be negatively affecting labor force participation and unemployment nationwide, according to findings in a new study co-authored by economists at the University of Tennessee, Knoxville, and published in The Journal of Human Resources.
The study, which looked at county-level data from across the US, found that a 10 percent increase in opioid prescriptions per capita led to a 0.6 percentage point drop in labor force participation rates and a 0.1 percentage point increase in county unemployment rates.
The study, measuring causal effects of opioids on the labor force, is the first of its kind to be published in a peer-reviewed journal, said Matt Harris, assistant professor in UT’s Boyd Center for Business and Economic research and co-author of the study.
“The effects are really large,” said Harris. “Prescription opioids may explain up to half of the decline in labor force participation since 2000.”
Harris co-authored the paper, “Prescription Opioids and Labor Market Pains,” with UT’s Larry Kessler, Matt Murray, and Beth Glenn, now a postdoctoral scholar at Tulane University. The researchers were prompted to investigate a link between labor markets and opioid usage after employers began asking why no one was applying for job openings.
“We found that opioids have this strong adverse effect on labor force participation but only a marginally significant effect on the , which leads us to believe that opioids are leading individuals to exit the labor force entirely,” said Kessler.
Tennessee is among the states with the highest number of heavy opioid-prescribing practitioners. On average, providers in Tennessee write 1.4  per person per year. At the average dosage per prescription, this rate is equivalent to prescribing 80 opioid doses to every man, woman, and child in Tennessee each year.
The researchers emphasize that addressing the opioid epidemic is going to require considerable funding and an increased focus on treatment therapy. In addition to quelling the adverse health effects of the epidemic, they said, there are considerable economic gains to be attained from addressing the core issue of addiction.
“The results suggest that in Tennessee, you could effectively boost income among residents by $800 million per year if you reduce opioid usage 10 percent,” said Harris.
Other key findings include:
* The detrimental effect of  on  markets holds true for both rural and nonrural counties.
* Prescription opioids have the strongest adverse effects in counties with higher  participation rates and lower unemployment rates, perhaps suggesting that -related damage has already been done in areas with low .
Explore further
More information: Matthew C. Harris et al, Prescription Opioids and Labor Market Pains: The Effect of Schedule II Opioids on Labor Force Participation and Unemployment, Journal of Human Resources (2019). DOI: 10.3368/jhr.55.4.0517-8782R1
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Compound could be next-gen treatment for aggressive form of leukemia


Researchers have been struggling for years to find a treatment for patients who have a recurrence of acute myeloid leukemia (AML), an aggressive blood cancer that is one of the most lethal cancers. About 19,520 news cases are diagnosed a year, and about 10,670 people a year die from it, according to the American Cancer Society.
Purdue University researchers are developing a series of drug  that have shown promise in treating such cases. About 30 percent of AML  have a mutation caused by a kinase called FLT3, which makes the  more aggressive. Inhibitors of FLT3, such as Radapt, approved last year by the U.S. Food and Drug Administration, have shown good initial response to treating leukemia. Gilteritinib, another FLT3 inhibitor, was recently approved toward the end of 2018. But AML patients on FLT3 inhibitor therapy often relapse because of secondary mutations in the FLT3 and existing treatments have not been fully successful in treating those cases.
Researchers on a team led by Herman O. Sintim, the Drug Discovery Professor of Chemistry in Purdue’s Department of Chemistry, say they have developed a series of compounds that work not only on AML with common FLT3 mutation, but also drug-resistant AML harboring problematic mutations, such as the gatekeeper F691L mutation, which some leukemia patients who relapse harbor.
“These compounds have a great potential to be the next-generation AML therapeutics for relapsed patients who no longer respond to first- or second-generation FLT3 inhibitors,” Sintim said.
The results of the study were published Friday in the journal EBioMedicine.
Results of the study are encouraging because, while advancements have been made in many other forms of cancer over the past three decades, advancement for AML has been slow.
AML, which accounts for only about 1 percent of all cancers, occurs when blood cells fail to mature or differentiate and multiply unchecked, causing a lack of adequate oxygen-carrying red blood cells. AML is uncommon before the age of 45, but it does occur in children. The five-year survival rate is about 30 percent, and for patients over the age of 65, the five-year survival rate is less than 10 percent.
The compounds the Purdue researchers are studying, alkynyl aminoisoquinoline and alkynyl napthyridine, have been successful in preclinical studies, Sintim said. “In mouse studies, almost no leukemia burden was visible after compound treatment for only a few weeks. Crucially this new class of FLT3 inhibitor also works against drug-resistant secondary mutations, such as the problematic F691L mutatio,” Sintim said.
In the clinic, the goal is to reduce leukemia levels enough so that a patient can undergo a bone marrow transplant. Most often if the leukemia burden is not drastically reduced before , there is a high likelihood that the AML will return.
Sintim said the compounds the researchers are developing have shown no signs of toxicity. Observations in clinical testing show that high doses of the compounds result in no weight loss, irritability or essential organs dysfunction. Another advantage of the compounds the Purdue researchers are developing is they can be taken orally, which makes it easier for patients to take at home compared with an injection.
Sintim said there’s much still to be learned about AML.
“Acute myeloid leukemia is not caused by only one mutation. It’s caused by many . What that means is that you might have an acute myeloid leukemia patient who would have one type of a mutation and you could have another one with another type of mutation and you cannot give them the same drug. Even when a patient initially presents with one type of mutation, during treatment a new mutation could emerge” he said. “So to effectively treat a cancer you need to know what the aligning mutation is, this is what is called precision medicine; tailoring a drug to a particular disease driver.”
Explore further
More information: Amino alkynylisoquinoline and alkynylnaphthyridine compounds potently inhibit acute myeloid leukemia proliferation in mice, EBioMedicine (2019).
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Reason heart attack triggers arrhythmia in some indicates potential treatment


A team of researchers led by the University of California San Diego has identified a genetic pathway that causes some individuals to develop an abnormal heart rhythm, or arrhythmia, after experiencing a heart attack. They have also identified a drug candidate that can block this pathway.
The team reported their findings in a study published Jan. 28 in Nature Biomedical Engineering.
“We now know one reason why a significant fraction of the public could develop secondary complications post  attack, like an arrhythmia,” said Adam Engler, a bioengineering professor at the UC San Diego Jacobs School of Engineering. “We have identified the that cause this comorbidity in certain patients and can begin to develop drugs to treat and prevent it.”
This pathway from heart attack to arrhythmia is triggered by  located in a region of the genome called the 9p21 locus. These mutations are present in about 23 percent of the population.
“Past studies have suggested that mutations in the 9p21 locus could be linked to these cardiovascular diseases, but there was no understanding of why and how. Now we have specific answers to these questions,” said first author Aditya Kumar, a bioengineering Ph.D. student in Engler’s lab.
Engler, Kumar and colleagues discovered that when a heart attack hits, the mutations activate a key player in the pathway—a signaling protein called JNK. Normal heart  can keep JNK in check after a heart attack. But in cells with the mutations, JNK sends signals to downstream targets that ultimately break electrical connections between heart cells and cause them to beat out of sync.
Researchers also showed they could reverse and prevent this damage by blocking JNK. They used a molecule called SP600125. It’s a known JNK inhibitor, but according to Engler its derivatives have not been tested clinically for cardiac conditions related to 9p21 as they may have off-target effects.
“In the future, we envision that cardiac patients could have their genomes sequenced and if they have the 9p21 mutations, they could be given a drug based on this inhibitor so they are better off in the event of a heart attack and won’t develop arrhythmia,” said Engler.
‘Heart attack in a dish’
The team made their discovery using stem cells and hydrogels that mimic how the heart stiffens as a result of a heart attack. Engler calls it a “heart attack in a dish.” The hydrogels are made of a biomaterial called methacrylated , which can be stiffened to varying degrees by exposure to UV light.
Researchers first stiffened the hydrogels enough to mimic the stiffness of healthy heart tissue. They then seeded the gels with heart cells derived from induced pluripotent . Some gels were seeded with cells obtained from individuals with mutations in the 9p21 locus. Others were seeded with cells from individuals without the mutations. After, the gels were stiffened even more to mimic what happens in a .
Researchers then looked at how the heart cells responded to this stress. Those with the mutations were beating abnormally because their  were no longer intact. Meanwhile, the cells without the mutations continued to beat normally.
“It’s remarkable that stiffening by itself was a sufficient stress to cause the changes that we saw in the cells with mutations,” said Engler.
“The hydrogel was the enabling technology here,” said Kumar. “We can change its stiffness dynamically to better model the stress that’s happening in vivo. If we put the cells on a substrate with static stiffness, they don’t exhibit any adverse phenotypes.”
Ongoing studies will examine whether these effects will be seen in actual patient tissue. The team will further explore treatment using JNK inhibitors.
Explore further
More information: Aditya Kumar et al, Mechanical activation of noncoding-RNA-mediated regulation of disease-associated phenotypes in human cardiomyocytes, Nature Biomedical Engineering (2019). DOI: 10.1038/s41551-018-0344-5
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Ligand Pharma boosts share buybacks $150M


The board of Ligand Pharmaceuticals (LGND -1.8%) has authorized a $150M increase to its existing $200M stock repurchase program. The expiration date remains September 20, 2021.
As of last week, the company has bought back 745,811 shares for a total of $105.6M.

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Goldman provides color on $168/share target on Ligand


Goldman Sachs analyst Dana Flanders provides the numbers behind his Street-low fair value target of $168 (46% upside) for Ligand Pharmaceuticals (LGND -2.1%) which makes money via licensing deals.
He values its base business at $47/share, assuming that Novartis’ Promacta (eltrombopag) and Amgen’s Kyprolis (carfilzomib) reach $1.7B in peak sales and won’t face generic competition until 2024 and 2026, respectively.
Mr. Flanders has $550M in milestones in his model through 2032, on the conservative side considering that the company says its $3B milestone target does not include all of the expected $1.5B from Viking Therapeutics’ pipeline.
His price target assumes $21/share for preclinical and future partnerships, $16/share from Phase 1 assets, $21/share from Phase 2 assets and $15/share from Phase 3 assets.
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