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Friday, February 1, 2019

Big At-Home DNA Testing Firm Secretly Sharing Data With FBI

Just one week ago, we warned that the government — helped by Congress (which adopted legislation allowing police to collect and test DNA immediately following arrests), President Trump (who signed the Rapid DNA Act into law), the courts (which have ruled that police can routinely take DNA samples from people who are arrested but not yet convicted of a crime), and local police agencies (which are chomping at the bit to acquire this new crime-fighting gadget) — was embarking on a diabolical campaign to create a nation of suspects predicated on a massive national DNA database.
As it turns out we were right, but we forgot one key spoke of the government’s campaign to collect genetic information from as many individuals as possible: “innocent”, commercial companies, who not only collect DNA from willing clients, but are also paid for it.

FamilyTreeDNA, one of the pioneers of the growing market for “at home”, consumer genetic testing, confirmed a report from BuzzFeed that it has quietly granted the Federal Bureau of Investigation access to its vast trove of nearly 2 million genetic profiles.
While concerns about unrestricted access to genetic information gathered by testing companies had swelled since April, when police used a genealogy website to ensnare a suspect in the decades-old case of the Golden State Killer, that site, GEDmatch, was open-source, meaning police were able to upload crime-scene DNA data to the site without permission. However, the latest arrangement marks the first time a commercial testing company has voluntarily given law enforcement access to user data.
Worse, it did so secretly, without obtaining prior permission from its users.
The move is of significant concern to much more than just privacy-minded FamilyTreeDNA customers. As Bloomberg notes, one person sharing genetic information also exposes those to whom they are closely related. That’s how police caught the alleged Golden State Killer. And here is a stunning statistics – according to a 2018 study, only 2% of the population needs to have done a DNA test for virtually everyone’s genetic information to be represented in that data.
Thanks to its millions of customers, FamilyTreeDNA’s “cooperation” with the FBI more than doubles the amount of genetic data law enforcement already had access to through GEDmatch. According to BuzzFeed, and as confirmed by the company, on a case-by-case basis the company has agreed to test DNA samples for the FBI and upload profiles to its database, allowing law enforcement to see familial matches to crime-scene samples.
There is one caveat: FamilyTreeDNA said law enforcement may not freely browse genetic data but rather has access only to the same information any user might. Which of course, is ridiculous when the FBI has the same access as every single user.
Needless to say, the genealogy community has expressed dismay.
Last summer, FamilyTree DNA was among a list of consumer genetic testing companies that agreed to a suite of voluntary privacy guidelines, but as of Friday morning, it had been crossed off the list after it was revealed that the company had been lying all along.
“The deal between FamilyTreeDNA and the FBI is deeply flawed,” said John Verdi, vice president of policy at the Future of Privacy Forum, which maintains the list. “It’s out of line with industry best practices, it’s out of line with what leaders in the space do and it’s out of line with consumer expectations.”
Some in the field have begun arguing that a universal, government-controlled database may be better for privacy than allowing law enforcement to gain access to consumer information: after all what’s the difference if the companies will simply hand over all the information secretly. At least this was the public will know that Uncle Sam – and who knows who else – will have access to one’s genetic code.
FamilyTreeDNA said its lab has received “less than 10 samples” from the FBI. It also said it has worked with state and city police agencies in addition to the FBI to resolve cold cases.
“The genealogy community, their privacy and confidentiality has always been our top priority,” the company said – supposedly with a straight face – in an email response to questions submitted by Bloomberg.
And why would it tell the truth: just like search engines and social networks, where the user is the product, and all the information about the user is carefully collected, isolated and stored, then sold to the highest bidder, or quietly handed over to the government, consumer DNA testing has become a giant business: Ancestry.com and 23andMe Inc. alone have sold more than 15 million DNA kits. Concerns about an industry commitment to privacy could hamper the industry’s rapid growth.
To be sure, there are some fringe benefits – like authorities actually doing what they said they would do – since the arrest of the suspected Golden State Killer, more than a dozen other suspects have been apprehended using GEDmatch. By doubling the amount of data law enforcement have access to, those numbers are likely to rise. But at what cost?
“The real risk is not exposure of info but that an innocent person could be swept up in a criminal investigation because his or her cousin has taken a DNA test,’’ said Debbie Kennett, a British genealogist and author. “On the other hand, the more people in the databases and the closer the matches, the less chance there is that people will make mistakes.’’
And, of course, if every person’s DNA is in one giant genetic database, there would be no mistakes. Now if only the risk of abuse of this information was also nil, then everything would be great. Alas, as Snowden revealed when he exposed the flagrant abuses at the NSA years ago, this will never be the case especially when the “objective and impartial” FBI is involved.

Aphria rises after Citron sells, MedMen sued by former CFO

Short seller Andrew Left said early Friday he was exiting his position in Canadian cannabis producer Aphria Inc. and had begun to short Cronos Group Inc., citing its high valuation relative to analyst price targets.
Left’s Citron Research said Dec. 18 that it expected Aphria shares to climb to $8by the end of 2018, and in a Friday tweet said the stock had gained more than 60%. In the December report Citron said it expected Aphria to gain 40% by the end of last year. Aphria APHA, +0.73% APHA, +10.34%  stock closed up 10% Friday, and has gained more than 80% since Citron made its call. Aphria said Friday that it has transferred plant cuttings from four weed straings to Denmark-based Schroll Medical. Aphria will now be one of the first pot growers to produce its own pot in Europe.
Citron did not return a request for comment.
In the same tweet, Citron said that it was short Cronos CRON, +1.06%CRON, +6.06%  because the stock was trading 70% above sell-side analyst estimates. According to FactSet, there are seven analysts covering the name, with an average target price of $17.61. Including Friday’s rise of 5.7%, Cronos is trading roughly 55% above the average target price, according to FactSet.

Cronos stock rose 60% since it announced the $1.8 billion investment in the company by Marlboro-maker Altria Group Inc. MO, -0.30%  Thursday, Altria’s CEO said he expects the global cannabis market to reach $40 billion in 10 years with no new cannabis legalization laws, and $250 billion if pot were legal the world over. He said the company wasn’t planning to stop at Cronos when investing in the industry.
Cannabis stocks largely gained Friday, with the Horizons Marijuana Life Sciences Index ETF HMMJ, +2.20%  rising 2.2%, and the ETFMG Alternative Harvest ETFMJ, +1.99%   increasing 2% for the day. The world’s largest pot company, Canopy Growth Corp. CGC, -0.20% WEED, -0.81%  fell 0.2%, Aurora Cannabis Inc.ACB, +4.37% ACB, +4.30%  was up 4.4%, and Tilray Inc. TLRY, +1.76%  closed up 1.8%.
– MedMen Enterprises Inc. MMNFF, -6.21%  Chief Financial Officer James Parker, who resigned from his post in November amid an equity raise which it cut in half, is suing the company in Los Angeles Superior Court for breach of contract and wrongful termination, among other things. At the time, MedMen refused to comment on the CFO departure and said cutting the financing nearly in half was due to a “significant selloff” in the global market. MedMen closed down 6.2% Friday.
The American pot retailer said early Friday that it expects to report fiscal second-quarter earnings Feb. 27 after the closing bell.
– Canadian weed producer The Green Organic Dutchman TGOD, +3.13%TGODF, +4.25%  — which has not yet sold any pot in the recreational market but is valued by investors at roughly $1 billion — also rose Friday, after it said would be able to increase its capacity to grow cannabis to 202,500 kilograms a year from 156,000 kilograms a year at its facilities in Canada. However, the company also said several phases of construction would be complete either at the long-end of the company’s previous projected schedule, or delayed until 2021. Dutchman stock closed up 4.3% in Friday trading.

– Weekend Unlimited Inc. WKULF, +163.96%  said Friday that it was the winner of Canada’s lottery for the POT ticker. Weekend Unlimited is a tiny cannabis company with a market capitalization of $46 million and no revenue to speak of in 2018, according to FactSet.
“There has been tremendous excitement generated globally for the POT symbol. The POT lottery served to raise the profile of Canada’s leadership in legal recreational cannabis and we believe it will also serve to raise Weekend Unlimited’s leadership profile,” Chief Executive Paul Chu said in a statement. Weekend Unlimited’s over-the-counter shares rose 164% to close at $0.2159.

Underage marijuana use, impaired driving common in Col., Wash. State

A new study by the University of Minnesota School of Public Health, published in the International Journal of Drug Policy, shows law enforcement agencies in Colorado and Washington—states where marijuana is legalized—report common problems with underage marijuana use (under age 21) and driving under the influence of marijuana in their communities.
“There’s a general public zeitgeist that  is a pretty safe drug,” said study co-author and Associate Professor Darin Erickson. “In actuality, there hasn’t been a lot of research regarding how marijuana is used, its safety or its harms.”
To learn how both states were enforcing age-restriction and driving laws regarding marijuana use, Erickson surveyed 50 local enforcement agencies in Colorado and Washington in 2016 and 2017 on: if they find underage  and impaired driving to be common problems in their cities; the types of enforcement they are using to counteract it; and the resources they have to aid them.
The study showed:
  • all local agencies reported underage use was somewhat or very common in their jurisdictions;
  • most agencies in both states reported marijuana-impaired driving was somewhat or very common in their jurisdictions;
  • 30 percent of local agencies conducted enforcement targeting underage use or possession;
  • 20 percent of agencies overall conducted underage compliance checks at licensed stores, with more agencies conducting checks in Colorado (32 percent) than Washington (8 percent);
  • one local agency in each state specifically targeted marijuana-impaired driving;
  • the state-level agency in Washington reported that its agency is the one primarily responsible for enforcing marijuana retail laws and it conducted routine underage compliance checks at all licensed marijuana stores three times per year.
“In general, we found that enforcement is not a high priority for most places,” says Erickson. “That said, we know enforcement strategies work to curb illegal substance use. Enforcing alcohol laws reduces underage drinking and related problems—and it could be used to improve the situation with marijuana.”
For solutions, Erickson recommends that states earmark tax money from retail marijuana sales to fund policy enforcement programs. He also suggests conducting additional research to develop roadside tests for impaired driving as well as  to learn how people typically use marijuana, such as in conjunction with alcohol.

Explore further

More information: Terra Wiens et al. Law enforcement practices in the first two states in U.S. to legalize recreational marijuana, International Journal of Drug Policy (2018). DOI: 10.1016/j.drugpo.2018.08.018

New clues to controlling HIV

The immune system is the body’s best defense in fighting diseases like HIV and cancer. Now, an international team of researchers is harnessing the immune system to reveal new clues that may help in efforts to produce an HIV vaccine.
SFU professor Mark Brockman and co-authors from the University of KwaZulu-Natal in South Africa have identified a connection between infection control and how well antiviral T cells respond to diverse HIV sequences.
Brockman explains that HIV adapts to the human immune system by altering its sequence to evade helpful antiviral T cells.
“So to develop an effective HIV vaccine, we need to generate host immune responses that the virus cannot easily evade,” he says.
Brockman’s team has developed new laboratory-based methods for identifying antiviral T cells and assessing their ability to recognize diverse HIV sequences.
“T cells are  that can recognize foreign particles called peptide antigens,” says Brockman. “There are two major types of T cells—those that ‘help’ other cells of the , and those that kill infected cells and tumours.”
Identifying the T cells that attack HIV antigens sounds simple, but Brockman says three biological factors are critical to a T cell-mediated . And in HIV infection, all three are highly genetically diverse.
He explains that for a T cell to recognize a peptide antigen, the antigen must first be presented on the cell surface by human leukocyte antigen proteins (HLA), which are are inherited.
And since many thousands of possible HLA variants exist in the human population, every person responds differently to infection. In addition, since HIV is highly diverse and evolves constantly during untreated infection, the peptide antigen sequence also changes.
Matching T cells against the HLA variants and HIV peptide antigens expressed in an individual is a critical step in the routine research process. But, says Brockman, “our understanding of T cell responses will be incomplete until we know more about the antiviral activity of individual T cells that contribute to this response.”
It is estimated that a person’s T cell “repertoire” is made up of a possible 20-100 million unique lineages of cells that can be distinguished by their T cell receptors (TCR), of which only a few will be important in responding to a specific antigen.
So to reduce the study’s complexity, the team examined two highly related HLA variants (B81 and B42) that recognize the same HIV peptide antigen (TL9) but are associated with different clinical outcomes following infection.
By looking at how well individual T cells recognized TL9 and diverse TL9 sequence variants that occur in circulating HIV strains, the researchers found that T cells from people who expressed HLA B81 recognized more TL9 variants compared to T cells from people who expressed HLA B42.
Notably, a group of T cells in some B42-expressing individuals displayed a greater ability to recognize TL9 sequence variants. The presence of these T cells was associated with better control of HIV infection.
This study demonstrates that individual T cells differ widely in their ability to recognize peptide variants and suggests that these differences may be clinically significant in the context of a diverse or rapidly evolving pathogen such as HIV.
Much work needs to be done to create an effective vaccine. However, says Brockman, “Comprehensive methods to assess the ability of T  to recognize diverse HIV sequences, such as those reported in this study, provide critical information to help design and test new vaccine strategies.”

Explore further

More information: Funsho Ogunshola et al, Dual HLA B*42 and B*81-reactive T cell receptors recognize more diverse HIV-1 Gag escape variants, Nature Communications (2018). DOI: 10.1038/s41467-018-07209-7

Novo accelerates launch plans for oral semaglutide

Novo Nordisk has said it is accelerating launch preparations for its new diabetes pill semaglutide, after investing in a voucher that will allow a fast review of the drug in the US.
The FDA grants priority reviews for drugs that it considers to be a significant improvement over available therapies for serious diseases.
After buying a special voucher from another company, Novo Nordisk is asking the FDA to to grant a fast-track review following a filing expected at the end of this quarter.
Although semaglutide is already available as a weekly injection known as Ozempic, diabetes patients may well prefer to take the GLP-1 class drug as a pill instead of an injection.
Novo Nordisk’s chief executive Lars Fruergaard Jørgensen revealed details in a briefing with journalists to accompany the firm’s Q4 results this morning.
The likely six month review period, as opposed to the standard ten month review, means the company is now in talks with payers to move forward the launch date.
He said: “Now we expect to shorten the review time with the FDA which means that the time we can start making contracts in the U.S. has also advanced.”
However Jørgensen did not reveal details about the pricing of oral semaglutide.
There is strong competition in the market for GLP-1 class drugs, as Eli Lilly has made significant inroads with its Trulicity (dulaglutide) weekly injection.
This has put pressure on Novo’s daily GLP-1 Victoza (liraglutide), although Ozempic is gaining traction after launching in the US last year. AstraZeneca also has a weekly GLP-1 injection Bydureon (exenatide).
In 2018, Ozempic’s sales were $276 million, and overall sales of GLP-1 drugs increased 18% in local currencies.
Shares in Novo rose almost 4% after the company revised its outlook and off the back of the sales from Ozempic, which were above forecasts.
The company expects 2019 sales growth of 2-5% and operating growth of 2-6%, in local currency.

J&J’s Erleada has big shoes to fill, and a tough competitor

  • Erleada, a prostate cancer drug from Johnson & Johnson, met the dual primary endpoints of a late-stage study testing it in patients with metastatic, castration-sensitive forms of the disease.
  • A pre-planned interim analysis of the study, called TITAN, showed patients taking a combination of Erleada and androgen deprivation therapy (ADT) were living significantly longer without their cancer progressing and without dying than those who were getting ADT plus placebo.
  • Investigators unblinded TITAN at the recommendation of an independent data monitoring committee to give participants in the placebo group the opportunity to join the experimental group. J&J said it will continue to evaluate overall survival and long-term safety, and plans to use the study data in an additional regulatory filing for Erleada.

J&J has for years held a dominant position in the prostate cancer therapy market with Zytiga (abiraterone acetate). In 2018 alone the drug raked in $3.5 billion for the big pharma, up nearly 40% from the year prior.
But that growth story won’t last much longer. Generic competition to Zytiga entered the U.S., which accounts for around half of drug’s worldwide sales, during the fourth quarter and has been snagging market share. Between the end of October and Jan. 25, Zytiga’s share of total stateside prescriptions slid from 56% to 31%, according to Iqvia data cited by investment bank Credit Suisse.
On an earnings call earlier this month, J&J noted that Zytiga sales declined 13% in the U.S. over the last quarter because of copycats, leading to a more modest year-over-year growth of 4%.
The situation isn’t entirely dire, however, as both analysts and J&J foresee Erleada (apalutamide) making up for some of Zytiga’s losses.
Though Erleada sales haven’t been astronomical since it came to market almost a year ago, the expectation is that it will be a key growth driver moving forwardThe drug carries an approval for prostate cancer that hasn’t spread yet and continues to grow in spite of hormone therapy. With supportive data from TITAN, that label may soon expand.
Erleada’s path forward does face at least one challenge. Astellas and Pfizer’s Xtandi (enzalutamide) has since 2012 been approved for metastatic castration-resistant prostate cancer.
Last July, Xtandi received a label expansion of its own, making it the only oral medication available for both metastatic and non-metastatic prostate cancer. And in December it hit the primary endpoint of a Phase 3 study assessing the drug plus ADT in men with metastatic, hormone-sensitive prostate cancer — a market Pfizer claims sees 38,000 new patients annually.
Pfizer noted on its own January earnings call that six months after gaining an approval in the non-metastatic, castrate-resistant setting, Xtandi’s market share was quadruple that of Erleada’s. Newly minted CEO Albert Bourla said his company remains “focused on demonstrating the value of moving Xtandi into earlier treatment settings” and expects the drug to be “one of the pillars of our oncology portfolio for years to come.”
Xtandi has already demonstrated its value to Pfizer’s top line, as the big pharma recorded $699 million of revenue from the drug during 2018, up from $590 million in 2017.
J&J, meanwhile, contends it can grow market share for Erleada.
Joseph Wolk, the big pharma’s chief financial officer, said on the Jan. 22 earnings call that J&J will continue to mold its payer strategies to best convey the benefits of its products.
“We’ll continue to change our contracting with the landscape,” Wolk said. “We do have some outcomes-based pilots out there that are across a number of therapeutic areas. We think that’s a way that could potentially be a long-term solution.”

Payers balk at HHS proposal to end federal PBM rebates

The Trump administration’s announcement Thursday to end safe harbor protections for drug rebates to pharmacy benefit managers, Medicare Part D plans and Medicaid managed care organizations hit payer stocks Friday and has riled up the health insurance sector.
The policy change was expected. Sky-high drug prices have been a frequent target of President Donald Trump and his HHS Secretary, and PBMs have often received part of the blame. Those companies — now largely owned by the biggest payers like CVS and UnitedHealth — however, say they play an important role in the pharmaceutical supply chain and end up protecting consumers by saving them out-of-pocket costs.
In addition to the rebate changes, which would go into effect in January 2020 under the current proposal, the rule would create new legal safe harbors for fixed fee agreements between PBMs and drug manufacturers as well as discounts patients receive at the pharmacy counter.
Overall, it looks to be a blow for payers and PBMs. While the new rule would not apply directly to commercial plans, ripple effects are likely with such a major change.
Leerink analysts said that without the federal rebates, commercial rebates are likely to shrink, lest they look like an illegal bribe for better formulary changes. Smaller rebates are less effective, so if the proposal is implemented as is, “commercial rebates could very likely be eliminated,” analysts wrote in a note Friday.
Analysts at Jefferies, on the other hand, predicted the proposal’s impact on PBMs would be minimal, though the largest may lose some competitive advantage “as they will no longer be able to subsidize premium bids with rebate dollars.”
Express Scripts spokesman Brian Henry told Healthcare Dive that “rebates are just one funding mechanism in the basket of services” it offers, adding, “it is short-sighted to look at one component of our offering as having a disproportionate impact on our business model.”
The health insurance lobby nonetheless was quick to denounce the proposal. America’s Health Insurance Plans criticized the administration’s decision as “well-intentioned but misguided” and insisted that rebate savings go directly to consumers, saving them on premiums and cost-sharing.
“From the start, the focus on rebates has been a distraction from the real issue — the problem is the price,” said AHIP CEO Matt Eyles, in a statement. “Manufacturers have complete control over how drug prices are set. Already this year, more than three dozen drug makers have raised their prices on hundreds of medications.”
Eyles suggested HHS “go back to the drawing board and start over with this proposed rule.”
Pharmaceutical Care Management Association CEO JC Scott echoed that sentiment. Eliminating safe harbor protections “would increase drug costs and force Medicare beneficiaries to pay higher premiums and out-of-pocket expenses, unless there is a viable alternative for PBMs to negotiate on behalf of beneficiaries,” he said in a statement.
The move comes as the sector is rapidly evolving and major insurers have snapped up increasingly lucrative PBMs.
In a recent interview, Leerink analyst Ana Gupte told Healthcare Dive that putting medical and pharmaceutical benefits under one umbrella makes sense. “I think it’s a natural evolution of where this industry needs to go,” she said. “At the end of the day, the pharmacy benefit is integral to management of an insured member as a whole person.”
Cigna just closed its acquisition of Express Scripts, one of the country’s largest PBM, for $67 billion. During the company’s fourth quarter earnings call Friday, CEO David Cordani said he didn’t think the rule would have a “meaningful impact” on Cigna’s growth. He suggested the change could accelerate value-based programs with pharmaceutical companies.
As market and policy analysts pore over the 123-page proposed rule, much is still unclear about what the policy change would mean for PBMs and patients if finalized. For most Part D beneficiaries, the change would likely mean an increase in monthly premiums but a decrease in cost-sharing.
Tricia Neuman, senior vice president of the Kaiser Family Foundation, noted on Twitter the HHS analysis has 10-year budget impact estimates that range from $99.6 billion to $196.1 billion.
“That range in savings/spending estimates illustrate the complexity of financial arrangements between drug companies, pharmacy benefit managers, plans & beneficiaries, [and] the difficulty in predicting how each will respond if the current rebate system is upended to address problems,” she wrote.
HHS admits as much in its proposal: “It is difficult to predict the full extent of the transfers created by this proposed rule in the absence of information about strategic behavior changes by manufactures and Part D plan sponsors in response to this rule.”
A senior HHS officials said on a Thursday call with reporters, though, that because Part D “is such a premium-sensitive market,” the department expects plan sponsors “are going to negotiate more aggressively or make other changes such that they won’t have to increase premiums while still passing on lower costs at the pharmacy counter.”