Merck analysts to CEO: What’s so great about your pipeline beyond Keytruda?

Sales of Merck & Co.’s immuno-oncology heavy hitter Keytruda soared 66% in the fourth quarter to $2.15 billion, surpassing Wall Street’s expectations yet again. But Merck can’t rely solely on one blockbuster’s dutiful performance to drive sales and earnings growth going forward.

Analysts’ worries about that fact only intensified on Friday after Merck put up sales projections for this year. The company said it expects 2019 sales of between $43.2 billion and $44.7 billion and non-GAAP earnings per share to hit between $4.57 and $4.72. On average, analysts were expecting sales of $44.5 billion, according to Refinitiv, so with the lower end of its guidance, Merck essentially warned the Street to tone down its expectations.

Keytruda growth helped drive total sales for the fourth quarter up 5% to $11 billion, in line with expectations. Non-GAAP EPS came in at $1.04, beating the Street’s estimate by a penny.

Analysts didn’t exactly embrace those numbers, though. Fourth-quarter results, said Credit Suisse analysts in a note to investors, are merely “good enough” given concerns that currency fluctuations and “continued investment in Keytruda might [impact] 2019 guidance.” They added that “continued strong commercial uptake of Keytruda and the release of additional positive clinical data” will be key to Merck’s ability to live up to expectations.

Merck CEO Ken Frazier urged investors to focus on the company’s long-term pipeline, which includes not only multiple market-expansion opportunities for Keytruda but also new treatments for cancer, innovative vaccines and other assets.

“In fact, Merck has one of the broadest and most promising pipelines we’ve had over the past few decades,” Frazier said at the beginning of the call.

That didn’t sit well with some analysts who were listening in, either. “What are we missing?” asked Cowen & Co. analyst Steve Scala during the question-and-answer session, after commenting that Frazier’s “broadest pipeline” assertion was “quite a statement given Merck’s rich research history.”

Frazier said the company’s long-term pipeline houses oncology medicines addressing 20 unique mechanisms, as well as opportunities that include next-generation pneumococcal vaccines. “I continue to believe that Merck’s longer-term revenue growth prospects are underappreciated,” he said.

During the fourth quarter, Merck did turn in strong performance from its vaccines unit, with sales of Pneumovax 23 growing 22% year over year to $322 million. Sales of HPV vaccine Gardasil rose 32% to $835 million, though that missed Wall Street’s projection of $877 million in sales. No doubt the high expectations were driven by Gardasil’s monster performance in the third quarter, when revenues from the HPV franchise jumped 55% to $675 million.

So for now, investors will continue to rely on Keytruda to drive sales growth. Merck R&D chief Roger Perlmutter said during the call that renal cell carcinoma and gastric cancer represent “special highlights” for expanding the product’s market. Earlier this month, the company released data showing that the drug slashes the risk of death by 31% in patients with esophageal or esophagogastric junction carcinoma who express high levels of the biomarker PD-L1. Renal cell data will be presented in mid-February, he said.

“We are expanding into new areas” and testing Keytruda in combination with Merck’s own pipeline medicines and other companies’ marketed cancer drugs, Perlmutter said. “So there’s just a huge set of opportunities.”

But Merck is still under pressure to diversify its pipeline, and one way to achieve that would be to make some deals. Frazier admitted as much during the earnings call, declaring that business development is a priority for the company.

“First and foremost, we look for those scientific innovations that we believe will enhance our pipeline, because we believe that’s what important ultimately to drive long-term growth and value for shareholders,” he said. He added that in 2018, the company completed about 60 transactions “spanning licensing and technology deals, clinical collaborations,” and more. They included a partnership with Eisai and the acquisition of Viralytics, the latter of which boosted Merck’s immuno-oncology pipeline, he contended.

But that reminder did little to soothe nervous analysts looking ahead for signs of life beyond Keytruda. Wolfe research analyst Tim Anderson mentioned during the call that investors perceive Merck’s pipeline of new molecular entities to be “on the thin side.” He suggested that R&D spending on Keytruda might be grabbing resources from other opportunities. CFO Robert Davis acknowledged that the bulk of R&D spending is still devoted to Keytruda, though much of that has shifted to combination studies. Whether that will be any comfort to investors, however, is an open question.

https://www.fiercepharma.com/pharma/merck-analysts-to-ceo-frazier-what-s-so-great-about-pipeline-beyond-keytruda

Elizabeth Warren Apologizes To Cherokee Nation For DNA Test

Call it a 1/1024th apology.

Having resisted calls to apologize for her October DNA test gimmick as recently as December, Democratic presidential hopeful Elizabeth Warren appears to have seen her polling figures with Indians (and other minorities) and she finally caved.

According to the Intercept and NYT, Senator Warren, who is running for the Democratic presidential nomination on a platform of taxing America’s billionaires, and who previously claimed she was of Indian ancestry, has apologized to the Cherokee Nation for her decision to take a DNA test to prove her Native American ancestry, a move that the NYT said “had angered some tribal leaders and ignited a significant political backlash.”

The apology comes just as Warren is set to formally kick off her presidential run after recent visits to early nominating states like Iowa, New Hampshire, and South Carolina. It also comes after repeated calls for her to apologize from tribal leaders, political operatives, and her own advisers, who said her October decision to take the DNA test “gave undue credence to the controversial claim that race could be determined by blood — and politically, played into President Trump’s hands.“

And so, bury the tomahawk, on Thursday, Warren called Bill John Baker, chief of the Cherokee Nation, to apologize for the DNA test, said Julie Hubbard, a spokeswoman for the tribe. She called it a “brief and private” conversation.

“I understand that she apologized for causing confusion on tribal sovereignty and tribal citizenship and the harm that has resulted,” Ms. Hubbard said. “The chief and secretary of state appreciate that she has reaffirmed that she is not a Cherokee Nation citizen or a citizen of any tribal nation.”

The unexpected apology breaks from Warren’s previous public stance, in which she refused to admit fault and as recently as December she rebuffed calls for an apology; however that changed after Warren’s advisers said she has privately expressed concern that she may have damaged her relationships to Native American groups “and her own standing with activists, particularly those who are racial minorities.”

In other words, her sincere apology was the outcome of careful strategy sessions about how her polling could be affected by the DNA test.

“I put it out there. It’s on the internet for anybody to see,” Ms. Warren said in an interview. “People can make of it what they will. I’m going to continue fighting on the issues that brought me to Washington.”

The apology follows the publication of an opinion collumn by Chuck Hoskin Jr, the secretary of state of the Cherokee Nation, in the Tulsa World on Wednesday titled, “Elizabeth Warren can be a friend, but she isn’t a Cherokee citizen.”

In the column, Hoskin said Warren’s test, which her office said showed strong evidence that Ms. Warren has Native American pedigree “6-10 generations ago,” did not take into account that, for most Native Americans, culture and kinship is what creates tribal membership — not blood, and certainly not 1/1024th thereof.

“This concept of family is key to understanding why citizenship matters,” Mr. Hoskin wrote. “That is why it offends us when some of our national leaders seek to ascribe inappropriately membership or citizenship to themselves. They would be welcome to our table as friends, but claiming to be family to gain a spot at the table is unwelcome.”

https://www.zerohedge.com/news/2019-02-01/elizabeth-warren-apologizes-cherokee-nation-dna-test

Novartis’ CAR-T Treatment Kymriah Snags Second UK Approval

Four months after getting the green light in the U.K. for treatment of children with acute lymphoblastic leukemia (ALL), Novartis’ CAR-T treatment Kymriah, known as Tisagenlecleucel in the U.K., has gained approval for treatment of adults with diffuse large B-cell lymphoma (DLBCL).

The National Institute for Health and Care Excellence made its recommendation to provide Kymriah this morning. The CAR-T treatment will be offered to people whose disease has not responded or those whose disease has relapsed after treatment with two or more courses of chemotherapy, the agency said.

According to U.K. health data, there were 11,690 new cases of non-Hodgkin’s lymphoma (NHL) in England in 2015 with 4,688 of these being diffuse large B-cell lymphoma. CAR T-cell therapies are specifically manufactured for each individual patient. This involves taking some of the patient’s own white blood cells which are then re-engineered in a laboratory so they can recognize and attack cancer cells before being infused back into the patient.

Meindert Boysen, director of the Centre for Health Technology Evaluation at NICE said recommending the CAR-T treatment for another indication represents a “step forward for personalized medicine.” Boysen said it is exciting that patients will have an opportunity for a treatment that could provide significant health benefits.

“CAR T-cell therapy is expensive, however, the treatment is specific to each individual and could be a potential cure for some, although it is early days. Our recommendation for Tisagenlecleucel on the Cancer Drugs Fund means people can benefit while more data is collected,” Boysen said in a statement.

The list price for Tisagenlecleucel in the U.K. is £282,000 and it is given as a single intravenous infusion. Novartis agreed to offer the therapy at a confidential discounted price. It is estimated 200 people will be eligible for treatment each year in the U.K. and NHS England is working closely with several hospitals across the country to deliver this complex treatment, NICE announced this morning.

Regarding the deal signed with Novartis, John Steward, director of Specialized Commissioning at NHS England said the agency reached another deal with Novartis on pricing, which means more patients will benefit from the treatment.

“Providing the latest cutting edge treatments for patients through competitive drug deals and offering more personalized medicines like CAR T-cell therapy are just two of the ways that the NHS Long Term Plan will transform cancer care across the country,” Stewart said in a statement.

Kymriah, or Tisagenlecleucel, was approved as a treatment for ALL in September, after Novartis and U.K. health officials negotiated pricing for the drug. That approval came a month after NICE wasn’t so nice to another CAR-T program. In August, NICE rejected rival CAR-T treatment Yescarta, which is developed by Gilead Sciences. At the time, NICE said the cost of the therapy was too expensive to justify. Gilead ultimately struck a deal with NICE to provide access to Yescarta.

While the CAR-T treatments will be provided to a limited number of patients in the U.K., doctors are struggling to keep the hype of possible treatment in check across England, PharmaPhorumreported. During a conference in London, doctors discussed managing patient expectations when it comes to the revolutionary CAR-T treatments. Patients are well aware of the capabilities of CAR-T, but few are eligible or have the coverage to receive treatment.

At the same time that doctors struggle with hype, Gilead and Novartis are struggling to keep up with CAR-T manufacturing demands, PharmaPhorum said. The companies are looking at improving efficiency when it comes to manufacturing the CAR-Ts.

https://www.biospace.com/article/novartis-car-t-treatment-kymriah-snags-second-approval-in-the-u-k-/

A Deeper Look at Drug Shortages in the U.S.

Drug shortages can occur for a number of reasons. The Pharmaceutical Research and Manufacturers of America (PhRMA) lists the most common as changes in clinical practices, inventory practices of wholesalers and pharmacies, raw material shortages, changes in hospital and pharmacy contractual relationships with suppliers and wholesalers, natural disasters, and manufacturing issues.

Brexit in the UK and European Union has caused pharmaceutical companies that supply drugs there to stockpile drugs in order to guarantee inventories. But the U.S. doesn’t have that excuse.

Recently, in the U.S., there has been a shortage of an anti-anxiety drug, buspirone. The American Society of Health-System Pharmacists (ASHP) lists shortages, and as of Jan. 31, 2019, noted shortages of buspirone tablets manufactured by Accord Healthcare, Mylan and Teva Pharmaceutical, and that the companies “did not provide a reason for the shortage.”

Accord’s were on back order with an estimated release date of late-March 2019. Mylan said theirs were also on back order and estimated a release date of late-January to early-March, although for some dosages they had no estimated release date. Teva also suggested release dates of early- to mid-February or early-March for some dosages.

There were, however, buspirone tablets available from Par Pharmaceutical.

“This is potentially messing with people’s clinical stability,” Dennis Glick, a psychiatrist in Greenbelt, Md., told The New York Times. “When you have a patient with a complicated and balanced regimen, you really don’t want to just arbitrarily have someone come off the medicine.”

Glick said he had been in practice for 34 years “and I honestly don’t recall issues like this interfering with care until maybe a couple of years ago.”

Another example of a shortage is the new shingles vaccine, Shingrix. Although the vaccine, marketed by GlaxoSmithKline, was approved and recommended for adults 50 years and older in October 2017, it has been extremely difficult to find, with physicians unable to acquire it and recommending patients check with local drugstore pharmacies, which also are reporting back orders and shortages. GSK’s response is there was “unprecedented demand.”

The New York Times writes, “Persistent shortages have plagued hundreds of drugs in recent years, from morphine to intravenous fluids, and many psychiatric medications used to treat schizophrenia, as well as some stimulants used to treat attention deficit hyperactivity disorder, are in short supply. Some of the worst shortages are of generic, or non-brand-name, drugs like buspirone, whose prices have been driven so low that many manufacturers say they cannot turn a profit on them.”

The generic shortages have been common and severe enough that in January 2018, five healthcare system, the U.S. Department of Veterans Affairs (VA), Intermountain Healthcare, Ascension, SSM Health and Trinity Health, formed a not-for-profit generic drug company called Civica Rx.

Civica Rx expects to offer 20 generic drugs this year and within three to five years, believes it will offer up to 100 generic medicines. The interest from hospitals dramatically exceeded expectations, and Civica Rx now has about 800 participating hospitals and raised more than $160 million from its members, which along with the original groups now includes HCA Healthcare, the Mayo Clinic, The Catholic Health Initiatives and others.

The New York Times reports that the buspirone shortage seems to be caused by interrupted production at Mylan’s factory in Morgantown, West Virginia, which supplies about a third of the U.S.’s supply of the drug. The U.S. Food and Drug Administration (FDA) has, The Times reports, “said the facility was dirty and that the company failed to follow quality control procedures.”

Although that is one reason for a shortage in a specific market, the generic market’s competitive issues appear to be at least part of the problem. Civica Rx suggests that in the generic market, consolidation of the generic companies, manufacturing problems, and resultant steep price increases, have caused the shortages. It has also led, in some cases, to a generic drug being manufactured by only a single company, which can then set the prices high.

“There are very, very old drugs that have been used not only for decades, some for almost a century,” Civica Rx chief executive officer Martin VanTrieste told Reuters. “When hospitals can’t have them, they are forced to cancel patient treatments or find alternative treatments. In most cases, that is suboptimal care or no care at all.”

And in fact, a study conducted at the University of Chicago on behalf of three healthcare organizations and released in January 2019, found more than 90 percent of U.S. hospitals had to “identify alternative therapies to mitigate the impact of drug prices increases and shortages.”

https://www.biospace.com/article/a-deeper-look-at-drug-shortages-in-the-u-s-/

Gossamer Bio Goes With Conventional IPO Pathway… Again

You have to give San Diego-based Gossamer Bio credit for the way it’s adapted its plans for an initial public offering (IPO) to deal with the government shutdown. The company launched in 2018 with $100 million in financing. It raised another $230 million since then. Then, it initially filed with the U.S. Securities and Exchange Commission (SEC) for its IPO on Dec. 21, 2018, the day before the U.S. federal government shut down.

With the government shutdown, the SEC’s automated website was accepting IPO registration, but review wasn’t occurring. As the shutdown dragged on for a record 35 days, a number of companies that had filed IPOs began considering alternate approaches using a loophole. One such approach was to change the language of the registration filing and skip over the rest of the SEC review, going directly to market. The company picks its IPO prices and waits 20 days. Then the listing is fixed at that price.

The approach isn’t without its risks, but during the shutdown, with President Trumpthreatening that the shutdown could last “months or even years,” companies were trying to make plans amidst all the uncertainty.

On Jan. 23, Gossamer filed for the alternate IPO path. In it, the company proposed selling about 16.5 million shares, as well as about 2.2 million shares to underwriters, at $16 each. That path locked the price for 20 days. However, two days later, Trump agreed to open the government for three weeks.

On Jan. 30, Gossamer Bio announced it had filed an amended Form S-1 with the SEC, restoring the amended language and picking the traditional pathway. The IPO terms are unchanged, but it is requesting accelerated review of the IPO paperwork to allow it to go public before the 20-day date its amended offering would have automatically become effective.

Of the 20-day alternate pathway, Vasilios Kofitsas, managing director of Boston-based Back Bay Life Advisors, told Xconomy, “There’s certainly risk from a company perspective should you go this route and price successfully and the SEC comes back and notices it has issues with lack of disclosures, for example. Also, there is market risk: investors have to be really comfortable with your disclosures as well. This is a risk you don’t take in a traditional IPO, since it has been cleared by the SEC, for all intents and purposes.”

Gossamer Bio plans to use the funds raised from the IPO to advance its clinical trials, including one for its lead candidate, GB001. GB001 is an oral therapeutic for a difficult-to-treat type of eosinophilic asthma. The drug, a DP2 antagonist, is also being developed as a potential treatment for chronic rhinosinusitis with nasal polyps and chronic spontaneous urticaria. Phase II trials are planned for both later indications, while a Phase IIb is currently in progress for eosinophilic asthma.

Gossamer also has GB004 that came out of a deal with Aerpio. GB004 is an HIF-1 alpha stabilizer being developed as a potential therapy for inflammatory bowel disease.

https://www.biospace.com/article/gossamer-bio-rolling-with-the-punches-again-changes-back-to-conventional-ipo/

Piper says OncoSec’s TAVO resensitizing anti-PD-1 progressers ‘impressive’

After OncoSec (ONCS) reported updated data for the registrational KEYNOTE-695 study evaluating TAVO plus Merck’s (MRK) Keytruda, Piper Jaffray analyst Edward Tenthoff noted that TAVO’s ORR improved and called the fact that TAVO resensitized anti-PD-1 progressers “impressive.” He reiterates an Overweight and $3 price target on OncoSec shares.

https://thefly.com/landingPageNews.php?id=2857829

Alphabet’s Verily working on health-tracking shoes, CNBC reports

Alphabet’s Verily life sciences unit has been working on health-tracking shoes to measure movement, weight and falls, CNBC’s Christina Farr reports, citing three people familiar with the project. Two people familiar with the matter tell Farr that Verily has recently pitched the prototype in hopes of securing a co-development partner, and that Verily is working on a wide range of health-related hardware projects, including “smart” contact lenses and a “smart” spoon to make it easier for people with movement disorders to eat.
https://thefly.com/landingPageNews.php?id=2857869