Bristol-Myers Squibb and Celgene are strongly urging shareholders to submit their proxy votes as quickly as possible whether they plan to attend the April 12, 2019 Special Meeting or not. The meeting is when the official vote on whether Bristol-Myers Squibb will buy Celgene will take place.
The notification feels as if it has special urgency, with bold capital letters saying, “YOUR VOTE IS IMPORTANT! WHETHER OR NOT YOU EXPECT TO ATTEND THE BRISTOL-MYERS SQUIBB SPECIAL MEETING IN PERSON, WE URGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE.”
The original bid to acquire Celgene was announced on January 3, 2019. Under the terms of the deal, Celgene shareholders will receive 1.0 Bristol-Myers Squibb share and $50 in cash for each share of Celgene. Celgene shareholders will also receive one tradeable Contingent Value Right (CVR) for each share of Celgene. This entitles the holder to receive payment when Celgene hits specific future regulatory milestones. The total equity value of the deal is about $74 million.
CVRs are a bit of a puzzle when it comes to mergers and acquisitions. The concept of milestone payments, dubbed “biobucks,” is common enough. This is most common when a pharma company buys or licenses drugs from a smaller company. The company offering the license gets paid at various milestones—hitting Phase II, Phase III or even various commercial milestones, like FDA approval. In this case, it’s an incentive for BMS shareholders that says, yes, we know Celgene's Revlimid is facing a patent cliff, but we think their pipeline is going to make up for it.
One example of how this shook out previously was when Sanofi acquired Genzyme in 2011 for $20 billion. Genzyme was evaluating Lemtrada in multiple sclerosis in the clinic at the time. But Genzyme’s shareholders thought Sanofi’s $20 billion offer didn’t take into account Lemtrada’s potential value. As a result, Sanofi agreed to issue one CVR right for every Genzyme share in the acquisition. As Lemtrada hit various milestones, the shareholders had the potential of picking up an additional $3.8 billion.
At the time of the merger, Genzyme estimated each CVR was worth $5.58, and recommended that shareholders approve the buyout, which they did.
The Bristol-Myers Squibb-Celgene deal has also hit a snag. One of its biggest shareholders, Wellington Management Company LLP, has objected to the acquisition. Wellington owns about an 8 percent stake in Bristol-Myers Squibb. Wellington says BMS should be active in business development and M&A, but doesn’t believe the Celgene deal “is an attractive path towards accomplishing this goal.”
Wellington says BMS shareholders have to accept too much risk. They also disagree with the terms offered to Celgene stockholders. Wellington also argues that the deal is likely to be more difficult than BMS claims. Thirdly, the investment firm argues that “alternative paths to create value” for BMS shareholders could be more attractive.
Another BMS shareholder, Starboard Value, also opposes the deal. Starboard has about a 1-percent ownership share. Starboard, in an open letter, called it “poorly conceived and ill-advised.” They also are concerned about Celgene’s expiring patents and that BMS has not accounted for projected Revlimid revenue declines of 90 percent by 2026 as the result of patent cliffs.
Another group, Dodge & Cox, who opposes the deal, has a 2-percent stake.
Bram de Haas provides an in-depth analysis of whether Wellington and others can kill the deal on Seeking Alpha. He actively dismantles the three points Wellington brings up in their opposition. For example, with their note that BMS should be active in business development and M&A, he notes, “This is in contrast to a common activist theme the company should instead return money to shareholders. The latter argument would be much easier to campaign on, in my opinion.”
He also notes that their argument that BMS is asking investors to shoulder too much risk “does not make sense. As risk tends to accompany higher return prospects. For example, in this deal, the leverage increases but also earnings per share.”
The argument that the deal will be more difficult to pull off than BMS says seems to be an oblique way of saying Wellington doesn’t think BMS management can pull it off. “In that case,” de Haas writes, “the rational thing seems to be to kick out management or sell.”
Bram de Haas seems particularly amused by the “alternative pathways could be more attractive” argument. He writes, “There are always alternative paths that could be more attractive. I’m sure management would be delighted to hear which they are. Without more substance, this will not convince a lot of other shareholders. Which alternative paths? Invest more in R&D? Do smaller tuck-in acquisitions? Hire more salespeople? Do a merger with a larger rival (potentially benefitting from an acquisition premium itself)?”
In an analysis of major shareholders other than the three mentioned, the most notable are Norinchukin Zenkyoren Asset Management with 10.14 percent, Vanguard Group with 7.02 percent and BlackRock with 7.02 percent. Vanguard also owns 7.5 percent of Celgene and BlackRock owns 7.43 percent of Celgene. De Haas argues that these are unlikely to vote against the deal because they would be hurting themselves, have a deep understanding of the industry, and, “If you are going to shoot down a deal because you believe the acquirer is overpaying, you look dumb if you actually own the acquisition target.”
https://www.biospace.com/article/a-deeper-look-at-the-bristol-myers-squibb-celgene-deal/
Tuesday, March 5, 2019
AI Goes Head-to-Head With Radiologists for Mammography
An artificial intelligence (AI) system performed very similarly to 101 radiologists in detecting breast cancer on digital mammography (DM), a large multi-center, cancer-enriched study of mammograms found.
AI was statistically non-inferior to the average of 101 radiologist readers, according to Ioannis Sechopoulos, PhD, of Radboud University Medical Centre in Nijmegen, the Netherlands, and colleagues.
At the range of low-to mid-specificity, AI had a slightly greater area under the receiver operating characteristic curve (AUC), a plot of the true-positive rate against the false-positive rate: 0.840 (95% CI 0.820-0.860) versus 0.814 (95% CI 0.787-0.841) for radiologists (difference 0.026, 95% CI –0.003 to 0.055), they reported in the Journal of the National Cancer Institute.
In addition, the AI system had an AUC higher than that of 62 out of 101 (61.4%) radiologists, as well as higher sensitivity than 55 out of 95 (57.9%) radiologists. Its performance, however, was consistently lower than that of the best radiologists.
“Our results clearly show that recent advances in AI algorithms have narrowed the gap between computers and human experts in detecting breast cancer in digital mammograms,” the authors wrote.
Designed to parallel a population-based screening setting, the retrospective study drew on nine multi-reader, multi-case datasets previously used for different research purposes in Sweden, the U.K., the Netherlands, Italy, the U.S., Spain, and Austria. The AI vendors were Siemens, General Electric, Hologic, and Sectra.
Each dataset consisted of DM exams acquired with systems from the four vendors, multiple radiologists’ assessments per exam, and ground truth verified by histopathological analysis or follow-up. In total, there were 2,652 exams (653 malignant) and 28,296 independent interpretations among the 101 radiologists.
The mammograms were examined for a level of suspicion of cancer presented ranging from 1 to 10. Performance between AI and radiologists was compared using a non-inferiority null hypothesis at a margin of 0.05. Because the data were enriched with both cancer and benign lesions, the screening recall operating point of radiologists was fixed at the mid-range in specificity, and AI achieved higher sensitivity than the majority of radiologists.
According to the authors, the study’s large and heterogeneous case sample suggested the findings might hold true for different lesion types, mammographic systems, and country-specific practices.
“In a population-based screening setting, the possibilities of work flow enhancement via implementation of an AI system are ample,” Sechopoulos’ group wrote. “One of the biggest potential benefits lies in the possibility of using such a system in countries that lack experienced breast radiologists, which might, for instance, impede the development, expansion, or continuation of screening programs.”
They cautioned, however, that the drawbacks of AI systems as stand-alone readers need clarification. “Regulations to define the medicolegal consequences when AI fails would have to be established,” they wrote. “Equally, trade-offs between patient outcome and cost-effectiveness have to be carefully addressed.”
In 2018, MedPage Today reported that an AI program was able to alter malignant features of DM images, highlighting the vulnerability of machine-based analysis to potential manipulation.
Stamatia Destounis, MD, of the University of Rochester in New York, called the results “extremely encouraging” for the development of AI algorithms.
“However, I would caution that this is a retrospective review with study cases from multiple collections that are enriched for cancers and also with benign false-positive findings,” she told MedPage Today.
In addition, the study was “an artificial representation of screening in a population,” said Destounis, who was not involved in the study.
She also noted that prior-year mammograms were available only for some mammograms, and this could have led to “differing interpretation comfort levels for radiologists. And the radiologists all knew these cases were enriched, which leads to bias.”
“To validate the AI algorithm, prospective screening studies would be needed, requiring very large numbers of patients, close collaboration with many centers, and considerable time intervals and expense,” Destounis continued.
Destounis pointed out that the study included U.S. radiologists, who typically have higher recall rates, and European radiologists, who use double reading, consensus, and/or arbitration to keep their recall rates down. “This is another variable that can confound the results,” she explained.
However, Destounis acknowledged that “AI could be used as an intelligent second reader, especially in locations with a scarcity of radiologists performing breast imaging interpretation, and it could help reduce the false-negative rate of mammography.”
Some co-authors disclosed employment with Siemens Healthineers and ScreenPoint Medical BV. One co-author disclosed support from Siemens Healthineers.
Sechopoulos and Destounis disclosed no relevant relationships with industry.
Primary Source
Journal of the National Cancer Institute
FDA approves new nasal spray med for treatment-resistant depression
The U.S. Food and Drug Administration today approved Spravato (esketamine) nasal spray, in conjunction with an oral antidepressant, for the treatment of depression in adults who have tried other antidepressant medicines but have not benefited from them (treatment-resistant depression). Because of the risk of serious adverse outcomes resulting from sedation and dissociation caused by Spravato administration, and the potential for abuse and misuse of the drug, it is only available through a restricted distribution system, under a Risk Evaluation and Mitigation Strategy (REMS).
“There has been a long-standing need for additional effective treatments for treatment-resistant depression, a serious and life-threatening condition,” said Tiffany Farchione, M.D., acting director of the Division of Psychiatry Products in the FDA’s Center for Drug Evaluation and Research. “Controlled clinical trials that studied the safety and efficacy of this drug, along with careful review through the FDA’s drug approval process including a robust discussion with our external advisory committees, were important to our decision to approve this treatment. Because of safey concerns, the drug will only be available through a restricted distribution system and it must be administered in a certified medical office where the health care provider can monitor the patient.”
Patients with major depressive disorder who, despite trying at least two antidepressant treatments given at adequate doses for an adequate duration in the current episode, have not responded to treatment are considered to have treatment-resistant depression.
The Spravato labeling contains a Boxed Warning that cautions that patients are at risk for sedation and difficulty with attention, judgment and thinking (dissociation), abuse and misuse, and suicidal thoughts and behaviors after administration of the drug. Because of the risk of sedation and dissociation, patients must be monitored by a health care provider for at least two hours after receiving their Spravato dose. The REMS requires the prescriber and the patient to both sign a Patient Enrollment Form that clearly states that the patient understands they should make arrangements to safely leave the health care setting to get home and that the patient should not drive or use heavy machinery for the rest of the day on which they receved the drug. Additionally, Spravato must be dispensed with a patient Medication Guide that outlines the drug’s uses and risks.
The patient self-administers Spravato nasal spray under the supervision of a health care provider in a certified doctor’s office or clinic, and the spray cannot be taken home. The health care provider will instruct the patient on how to operate the nasal spray device. During and after each use of the nasal spray device, the health care provider will check the patient and determine when the patient is ready to leave.
The patient self-administers Spravato nasal spray under the supervision of a health care provider in a certified doctor’s office or clinic, and the spray cannot be taken home. The health care provider will instruct the patient on how to operate the nasal spray device. During and after each use of the nasal spray device, the health care provider will check the patient and determine when the patient is ready to leave.
The efficacy of Spravato was evaluated in three short-term (four-week) clinical trials and one longer-term maintenance-of-effect trial. In the three short-term studies, patients were randomized to receive Spravato or a placebo nasal spray. In light of the serious nature of treatment-resistant depresison and the need for patients to receive some form of treatment, all patients in these studies started a new oral antidepressant at the time of randomization and the new antidepressant was continued throughout the trials. The primary efficacy measure was the change from baseline on a scale used to assess the severity of depressive symptoms. In one of the short-term studies, Spravato nasal spray demonstrated statistically significant effect compared to placebo on the severity of depression, and some effect was seen within two days. The two other short-term trials did not meet the pre-specified statistical tests for demonstrating effectiveness. In the longer-term maintenance-of-effect trial, patients in stable remission or with stable response who continued treatment with Spravato plus an oral antidepressant experienced a statistically significantly longer time to relapse of depressive symptoms than patients on placebo nasal spray plus an oral antidepressant.
The most common side effects experienced by patients treated with Spravato in the clinical trials were disassociation, dizziness, nausea, sedation, vertigo, decreased feeling or sensitivity (hypoesthesia), anxiety, lethargy, increased blood pressure, vomiting and feeling drunk.
Patients with unstable or poorly controlled hypertension or pre-existing aneurysmal vascular disorders may be at increased risk for adverse cardiovascular or cerebrovascular effects. Spravato may impair attention, judgment, thinking, reaction speed and motor skills. Patients should not drive or operate machinery until the next day after a restful sleep. Spravato may cause fetal harm and women of reproductive potential should consider pregnancy planning and prevention; women should not breastfeed while being treated.
Esketamine is the s-enantiomer of ketamine. Ketamine is a mixture of two enantiomers (mirror image molecules). This is the first FDA approval of esketamine for any use. The FDA approved ketamine (Ketalar) in 1970.
The FDA granted this application Fast Track and Breakthrough Therapydesignations.
The FDA granted the approval of Spravato to Janssen Pharmaceuticals, Inc.
Riva Leaving Gilead Sciences for CEO Post at Glenmark
Gilead Sciences Inc. (GILD) said Tuesday that Alessandro Riva, M.D, the company’s executive vice president of Oncology Therapeutics, will leave at the end of the month, and Glenmark Pharmaceuticals said he is joining their newly spun off innovation company as the new chief executive officer.
Glenmark said Dr. Riva’s appointment will be effective April 2.
“We are pleased that Alessandro will assume the role of CEO of the new innovation business,” said Glenn Saldanha, chairman and managing director of Glenmark Pharmaceuticals. “His extensive and diverse industry experience leading global R&D will no doubt be invaluable in driving our pipeline toward commercialization. We are excited for this major step as a company and are confident Alessandro’s talent and leadership will shape the innovation business into a major global biotech company.”
Dr. Riva joined Gilead in January 2017 with the title senior vice president, Hematology and Oncology Therapeutics Area Head. He was instrumental in expanding the company’s oncology programs, playing a critical role in the acquisition of Kite Pharma and guiding the strategy and development of Gilead’s broader oncology pipeline, the company said.
“Under Alessandro’s oversight, Gilead has expanded its work in the field of oncology and established itself as the leader in cell therapy with the acquisition of Kite,” said John McHutchison, AO, MD, the company’s chief scientific officer and head of research and development.
Gilead Sciences has commenced a search for Dr. Riva’s replacement.
United loses in court on behavioral health coverage rules
A federal judge ruled Tuesday that United Behavioral Health breached its fiduciary duty to patients by using unreasonable and overly restrictive guidelines to make coverage decisions for tens of thousands of mental health and substance abuse patients.
The decision, if upheld on appeal, could have wide ramifications of what insurers must cover in the fast-growing behavioral healthcare sector.
The case stems from two consolidated class-action lawsuits filed in 2014 against UnitedHealth Group’s United Behavioral Health, the nation’s largest behavioral health insurer. It went to trial in October 2017 before U.S. Chief Magistrate Judge Joseph Spero in San Francisco.
The plaintiffs claimed United breached its fiduciary duty to its members under the federal Employee Retirement Income Security Act by adopting an unreasonable interpretation of plan rules. Those rules required coverage for treatment that was consistent with generally accepted standards of care.
Experts say different insurers use widely different criteria for covering behavioral care, even though medical experts have sought to standardize those guidelines. Many states require providers and carriers to use criteria developed by the American Society of Addiction Medicine, or ASAM, for addiction-treatment coverage. Those are the criteria the plaintiffs want United to adopt.
In his decision in the consolidated cases, Wit v. United Behavioral Health and Alexander v. United Behavioral Health, Spero found that United had a structural conflict of interest in applying its own restrictive coverage rules because it felt pressure to keep benefit expenses down so it could offer competitive rates to employers.
The judge said United included administrators from its finance and affordability departments on the committees that approved the guidelines and that committee members received detailed financial information about whether utilization targets set by United were being met.
“UBH’s refusal to adopt the ASAM criteria was not based on any clinical justification,” Spero wrote. “Indeed, all of its clinicians recommended that the ASAM criteria be adopted. The only reason UBH declined to adopt the ASAM criteria was that its finance department wouldn’t sign off on the change.”
D. Brian Hufford of Zuckerman Spaeder, the co-lead attorney for the plan members, called the ruling “a monumental win for mental health patients, who face widespread discrimination in attempting to get the coverage they were promised and that the law requires.”
In a written statement, UnitedHealthcare said “we look forward to demonstrating in the next phase of this case how our members received appropriate care. We remain committed to providing our members with access to the right care for the treatment of mental health conditions and substance use disorders.”
The company did not indicate whether it planned to appeal, though Hufford said he expected United to appeal after the remedy phase of the case is completed and a final judgment is issued.
Now the parties will present arguments to the court about the appropriate remedy. The members want United to change its coverage guidelines going forward and reconsider prior coverage decisions. They may request an independent monitor oversee that process.
A major issue in the case was the adequacy of United’s coverage of behavioral and substance use disorders as chronic rather than acute conditions. The plaintiffs said United’s guidelines inappropriately limited coverage once patients’ symptoms subsided, rather than covering the range of services needed to maintain patient’s stable health conditions over a longer term.
Judge Spero wrote that “one of the most troubling aspects of UBH’s guidelines is their failure to address in any meaningful way the different standards that apply to children and adolescents with respect to the treatment of mental health and substance abuse disorders.”
A few lawsuits against large carriers such as Health Care Service Corp. resulted in settlements in which the insurers agreed to revise their coverage policies on residential treatment and other behavioral healthcare services. In addition, there are other pending suits alleging unlawful coverage and reimbursement policies for behavioral healthcare against United, Blue Shield of California, Aetna and Cigna.
Many providers and patients say that despite federal and state laws requiring insurers to cover behavioral care on parity with care for physical conditions, they often have significant problems getting carriers to pay for needed treatment. Those problems also exist under self-insured employer health plans, which are governed by ERISA rather than federal and state parity statutes and which cover tens of millions of Americans.
Intuitive Surgical CEO: We are excited about our expansion in China
In an interview on CNBC’s Mad Money, Intuitive Surgical CEO Gary Guthart said: I think we are quite well positioned… We are very interested in helping the Chinese healthcare market, but right now we are supply-constrained… We are excited about our expansion in China and expect to make a difference there.
https://thefly.com/landingPageNews.php?id=2874817
https://thefly.com/landingPageNews.php?id=2874817
Fasting-mimicking diet holds promise for treating inflammatory bowel disease
What if a special diet could reduce inflammation and repair your gut?
USC researchers provided evidence that a low-calorie “fasting-mimicking” diet has the potential to do just that. Published in the March 5 edition of Cell Reports, the study reports on the health benefits of periodic cycles of the diet for people with inflammation and indicated that the diet reversed inflammatory bowel disease (IBD) pathology in mice.
Results showed that fasting-mimicking diet caused a reduction in intestinal inflammation and an increase in intestinal stem cells in part by promoting the expansion of beneficial gut microbiota. Study authors say the reversal of IBD pathology in mice, together with its anti-inflammatory effects demonstrated in a human clinical trial, indicate that the regimen has the potential to mitigate IBD.
“This study for the first time combines two worlds of research,” said Valter Longo, a study author and the director of the USC Longevity Institute at the USC Leonard Davis School of Gerontology and professor of biological sciences at the USC Dornsife College of Letters, Arts and Sciences. “The first is about what you should eat every day, and many studies point to a diet rich in vegetables, nuts and olive oil. The second is fasting and its effects on inflammation, regeneration and aging.”
By combining these fields of research using the fasting-mimicking diet, the authors were able to reduce the inflammation and pathology associated with intestinal diseases.
Longo said for people with a poor diet, a “once in a while” fix is the periodic use of a low-calorie, plant-based diet that causes cells to act like the body is fasting. Earlier clinical trials conducted by Longo and colleagues allowed participants to consume between 750 and 1,100 calories per day over a five-day period and contained specific proportions of proteins, fats and carbohydrates. Participants saw reduced risk factors for many life-threatening diseases.
“Fasting is hard to stick to and it can be dangerous,” Longo said. “We know that the fasting-mimicking diet is safer and easier than water-only fasting, but the big surprise from this study is that if you replace the fasting-mimicking diet, which includes pre-biotic ingredients, with water, we don’t see the same benefits.”
In the study, one group of mice adhered to a four-day fasting-mimicking diet by consuming approximately 50 percent of their normal caloric intake on the first day and 10 percent of their normal caloric intake from the second through fourth days. Another group fasted with a water-only diet for 48 hours.
The study demonstrated that two cycles of a four-day fasting-mimicking diet followed by a normal diet appeared to be enough to mitigate some, and reverse other, IBD-associated pathologies or symptoms. In contrast, water-only fasting came up short, indicating that certain nutrients in the fasting-mimicking diet contribute to the microbial and anti-inflammatory changes necessary to maximize the effects of the fasting regimen.
“We’ve determined that the dietary components are contributing to the beneficial effects; it’s not just about the cells of the human body but it’s also about the microbes that are affected by both the fasting and the diet,” Longo said. “The ingredients in the diet pushed the microbes to help the fasting maximize the benefits against IBD.”
The research team observed activation of stem cells and a regenerative effort in the colon and the small intestine, which increased significantly in length only in the presence of multiple cycles of the fasting-mimicking diet. They concluded that fasting primes the body for improvement, but it is the “re-feeding” that provides the opportunity to rebuild cells and tissues.
“It is really remarkable, that in the past 100 years of research into calorie restriction, no one recognized the importance of the re-feeding,” Longo said. “Restriction is like a demolition where you take the building down. But you have to rebuild it. If you don’t do that, there’s no benefit. You are left with an empty lot, and what have you achieved?”
In the current and previous studies, the authors showed that in patients with elevated C-reactive protein (CRP), a marker for inflammation, fasting-mimicking diet cycles are able to reduce CRP and reverse the associated increase in white blood cells. Together with the results in mice, these data indicate that fasting-mimicking diet cycles have the potential to be effective against human IBD, including Crohn’s disease and ulcerative colitis.
IBD afflicts an estimated 1.6 million Americans and is associated with acute and chronic inflammation of the intestine. Study authors say a randomized clinical trial involving the use of fasting-mimicking diet cycles to treat IBD is necessary to determine the safety and efficacy of these dietary treatments in humans, and are currently finalizing a clinical trial protocol.
Explore further
More information: Cell Reports, Rangan and Choi et al. “Fasting-Mimicking Diet Modulates Microbiota and Promotes Intestinal Regeneration to Reduce Inflammatory Bowel Disease Pathology” https://www.cell.com/cell-reports/fulltext/S2211-1247(19)30181-0 , DOI: 10.1016/j.celrep.2019.02.019
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