New MOMENTUM 3 data show the best outcomes seen in a randomized controlled clinical trial for left ventricular assist device (LVAD) therapy
– The late-breaking results were presented at the American College of Cardiology’s 68th annual Scientific Session and simultaneously published in The New England Journal of Medicine
Diabetes. Chances are, you know someone who has the disease. Maybe that someone is even you. It’s a major health problem, not only in the U.S. but across the world. But where there are problems, there are also opportunities.
Lots of companies are feverishly working to develop products to manage and treat diabetes. Many of these companies are publicly traded. We asked three Motley Fool healthcare contributors to pick the top diabetes stocks they think investors should especially watch in March. Here’s why they chose AstraZeneca(NYSE: AZN), DexCom(NASDAQ: DXCM), and Medtronic(NYSE: MDT).
A key piece of the puzzle
George Budwell (AstraZeneca): After a lengthy bout with the patent cliff, Anglo-Swedish drugmaker AstraZeneca finally turned the corner in late 2018, thanks to six key growth products. While the company’s oncology franchise has grabbed the bulk of the credit for this return to form, Astra’s diabetes franchise has played a crucial role as well.
In particular, Astra’s type 2 diabetes medicine Farxiga (Forxiga in the EU) has become a core element of the company’s growth engine over the last few years. Farxiga’s sales, for example, grew by an impressive 30% year over year in 2018, making it one of the best-selling SGLT2 inhibitors last year.
Nevertheless, this top diabetes drug still has a lot more room to grow from a sales standpoint. If regulators agree to expand Farxiga’s label to include type 1 diabetes patients and those at-risk of heart failure, for instance, Wall Street thinks the drug’s sales can nearly double from current levels to reach a whopping $2.7 billion by 2023.
So why is AstraZeneca’s stock worth watching this month? The company is set to unveil new analyses from Farxiga’s cardiovascular outcomes trial, Declare, in type 2 diabetics at the American College of Cardiology’s 68th Annual Scientific Session this weekend. As Farxiga is a key piece of Astra’s overall growth story, the market could react strongly — either positively or negatively — to this presentation over the course of next week. Billions in future sales, after all, could be at stake
The leader in a fast-growing market
Keith Speights (DexCom): It’s no exaggeration to say that quickly responding to out-of-whack blood sugar (glucose) levels can often be a life-saving move for individuals with diabetes. But to respond requires knowing the blood sugar level in the first place. That’s where continuous glucose monitoring (CGM) systems come into play. These systems enable people with diabetes to always know what their blood sugar levels are.
Around 415 million people across the world have diabetes. Only 6% of them, though, achieve their desired outcomes. Around 70% of the time, these individuals have blood sugar levels that are outside of a healthy range. The market is enormous for CGM systems and continues to grow — and one company is the leader in this fast-growing market: DexCom.
DexCom’s share price more than doubled in 2018. This fantastic performance was driven primarily by success of the company’s G6 CGM system. The G6 doesn’t require finger sticks like most CGM systems do. It also integrates with top insulin patch pumps, smart insulin pens, and insulin pumps.
I think sales for the G6 will continue to skyrocket, propelling DexCom stock even higher. The company is also working on its next-generation CGM system, the G7, which will offer individuals with diabetes a fully disposable, real-time glucose monitoring system at a relatively low cost. DexCom looks like a diabetes stock to watch in March — and for a long time to come.
This med-tech kingpin is a smart bet
Sean Williams (Medtronic): Although diabetes devices comprise less than 10% of aggregate sales at Medtronic, a medical device conglomerate that’s perhaps best known for manufacturing cardiovascular and spinal devices, I believe it to be the most interesting diabetes stock as a result of its growth and innovation.
In September 2016, Medtronic made waves when its first-ever “artificial pancreas” device, the MiniMed 670G, was approved six months ahead of schedule by the U.S. Food and Drug Administration for type 1 diabetics. The company’s closed-loop system uses a protruding needle that’s slipped under the skin to measure insulin levels, which then relays those readings to a worn insulin pump that can then deliver insulin on an as-needed basis. While no insulin pump is perfect, the 670G is designed to significantly reduce dangerous hypoglycemic events for type 1 diabetics.
Although we’re talking about only roughly 1.25 million people out of the 30.3 million kids and adults with diabetes in the United States, these 1.25 million people have a much harder time controlling their blood glucose levels. According to the company’s fiscal third-quarter results, released in February, more than 157,000 users worldwide are benefiting daily from the 670G. This figure continues to increase, with Medtronic having ramped up manufacturing capacity for the device in the U.S. and the company pushing into overseas markets.
Additional innovation with the Guardian Connect continuous glucose monitoring system, which debuted last summer, is also helping generate superior diabetes sales growth. Guardian works with a user’s smartphone to map out the highs and lows of a person’s blood glucose levels in order to better help a patient track and tackle their diabetes.
In recent years, diabetes has been Medtronic’s fastest-growing segment, with high single-digit, or steady double-digit, increases to sales. I would look for this to continue, and for the ramp-up of Guardian Connect and the international rollout of the MiniMed 670G to “pump up” operating results in fiscal 2019 and 2020. For these reasons, Medtronic is my diabetes stock to monitor this month.
Merck KGaA is doubling down on AI through a new collaboration agreement with tech firm Iktos, using its generative modelling technology to speed up the discovery and design of promising new compounds.
Iktos’ AI tech, which is based on deep generative models, automatically designs virtual novel molecules that have desired activities for treating a given disease.
The company says that this tackles one of the key challenges in drug design: rapid identification of molecules which simultaneously satisfy multiple drug-like criteria for clinical testing.
The technology is already established in other fields, such as image processing and automatic translation, but has only recently been applied to chemistry.
“This agreement is another illustration of how we aim to enrich our discovery engine with strategic technology-focused collaborations,” said Belén Garijo, member of the executive board and CEO of healthcare at Merck. “Artificial intelligence is emerging as a pillar in the biopharmaceutical R&D model, giving us exponential opportunity to complement our existing expertise with further speed and better precision. For patients, this could mean faster access to novel treatment options.”
This is Merck’s second foray into AI in the space of a few months: late last year the German firm began a year-long licensing agreement with Canadian R&D company Cyclica using AI to uncover new drug targets and predict any side effects.
While traditional development of small molecule drugs focuses on specific, disease associated protein targets, Cyclica’s approach tries to factor in the dozens, and perhaps hundreds of other interactions that can occur before it is eliminated from the body.
As the technology can model how a small molecule will interact with any known protein, it can help identify desirable ‘on-target’ interactions, as well as ‘off-target’ adverse effects elsewhere.
Merck is just one of many companies collaborating with AI firms to enhance their drug discovery efforts, and the tech is now becoming ubiquitous across the industry.
Recently Novo Nordisk signed a deal with UK biotech e-Therapeutics to use its AI-based drug discovery technology to find new therapies for type 2 diabetes.
Meanwhile InveniAI has joined with Kyowa Hakko Kirin to find new uses for drugs already in the pipeline at the Japanese pharma.
And Merck’s German rival Bayer is also looking to improve patient safety data monitoring using AI. The company signed a multi-year contract with Genpact for use of its Pharmacovigilance AI products.
Boston Scientific Corporation (NYSE: BSX) announced data from the AF-FICIENT I study during a late-breaking clinical trial session today at EHRA 2019, the annual congress of the European Heart Rhythm Association in Lisbon, Portugal. The data demonstrated positive safety and efficacy results with the LUMINIZE™ Radiofrequency (RF) Balloon Catheter for isolation of pulmonary veins (PV) when treating patients with atrial fibrillation (AF).
Patients with arrhythmias such as AF are often treated with anti-arrhythmic drugs as well as cardiac ablation. The LUMINIZE RF Balloon Catheter uses RF energy – the most common energy source for cardiac ablation procedures – to isolate the areas of the heart muscle responsible for the abnormal heart rhythm. The single-shot catheter also features built-in digital cameras for visual guidance, sensing electrodes on the balloon to assess real-time vein isolation and customizable ablation electrodes with the ability to deliver tailored levels of energy around the circumference of the balloon.
The global AF-FICIENT I study examined acute procedural success and safety for the single-shot LUMINIZE RF Balloon Catheter in two phases. Phase one tested the original design of the device and phase two included changes to enhance maneuverability and add dedicated pacing and sensing electrodes. Phase one study data showed PV isolation was achieved in 88.9% of veins. In phase two, with the enhanced steering capability and electrodes activated, PV isolation increased to 99.4% of veins. Additionally, the median time the balloon was in the left atrium – known as balloon dwell time – decreased from 92 minutes in phase one to 29 minutes in phase two, bringing the total procedure time down to a median 71 minutes.
“The study assessed the safety and effectiveness of isolating PVs through the combined benefits of RF and balloon-based ablation, both of which are found in the LUMINIZE RF Balloon Catheter,” said Amin Al-Ahmad, M.D., principal investigator and cardiac electrophysiologist at Texas Cardiac Arrhythmia in Austin, Texas. “The data underscore the potential for this catheter to improve procedural efficacy and patient outcomes.”
The Bristol-Myers Squibb–Pfizer Alliance today announced results from the Phase 4 AUGUSTUS trial evaluating Eliquis® (apixaban) versus vitamin K antagonists (VKAs) in patients with non-valvular atrial fibrillation (NVAF) and recent acute coronary syndrome (ACS) and/or undergoing percutaneous coronary intervention (PCI). Results show that in patients receiving a P2Y12 inhibitor with or without aspirin (antiplatelet therapies), the proportion of patients with major or clinically relevant non-major (CRNM) bleeding at six months was significantly lower for those treated with Eliquis compared to those treated with a VKA (10.5% vs. 14.7%, respectively; hazard ratio [HR]: 0.69, 95% confidence interval [CI]: 0.58-0.81; p-superiority<0.001). These data are featured as a late-breaking oral presentation at the American College of Cardiology’s (ACC) 68th Annual Scientific Session 2019 in New Orleans, LA (Abstract 405-08) and simultaneously published in the New England Journal of Medicine.
Late-Breaking Trial Results Presented at ACC Scientific Sessions and Published in The New England Journal of Medicine
WRAP-IT is the Largest Randomized Global Trial Ever Conducted with Cardiac Implanted Electronic Devices
Medtronic plc (NYSE:MDT) today announced results from the landmark Worldwide Randomized Antibiotic Envelope Infection Prevention Trial (WRAP-IT), which demonstrated the TYRX(TM) Absorbable Antibacterial Envelope (TYRX envelope) reduced the risk of major infection by 40 percent, and pocket infection by 61 percent, in patients with cardiac implantable electronic devices (CIEDs), compared to standard-of-care pre- operative antibiotics. The trial results were presented today in a late-breaking session at the American College of Cardiology’s 68(th) Annual Scientific Sessions (ACC.19), and published simultaneously in The New England Journal of Medicine.
“CIED infections are associated with significant morbidity, mortality and cost. Until now, in addition to adhering to strict surgical techniques, only one intervention, pre-operative antibiotics, has been shown to significantly reduce infections,” said Khaldoun Tarakji , M.D., M.P.H., associate section head of cardiac electrophysiology at Cleveland Clinic, principal investigator of the trial, and a paid consultant to Medtronic. “This study shows that, in addition to pre-operative antibiotics, the use of the antibacterial envelope significantly reduced the risk of CIED infections, and with no increased risk of complications.”
The trial met its primary endpoint showing effectiveness of the TYRX envelope in reducing major infections by 40 percent in patients at increased risk for infections resulting from CIED implantation: at 12 months, 1.2 percent of patients in the control group experienced a major infection, while only 0.7 percent of patients who received the TYRX envelope had a major infection (p=0.04). The trial also showed a 61 percent reduction in pocket infections with the envelope (p<0.01).
As part of its plan to lower prescription drug prices, the Trump administration wants to force a major change in the way industry middlemen make their money. But that change is already happening naturally — and drug prices aren’t falling.
The big picture: Pharmaceutical companies place the blame for high drug prices on pharmacy benefit managers and their complex system of rebates. The Trump administration largely agrees with that assessment, and has proposed a major overhaul that would make rebates a lot less lucrative for PBMs.
Yes, but: Rebates are already a shrinking part of PBMs’ profits, and list prices of drugs aren’t coming down.
PBMs are keeping a smaller share of rebates and passing more along to their clients.
Instead, PBMs are collecting more revenue through various fees — the same shift the Trump administration envisions — and through a practice called “spread pricing,” according to a Pew analysis.
Express Scripts, one of the largest PBMs, explicitly told investors last year it would find “an alternate funding / pricing structure” to offset lost rebate dollars.
The bottom line: “One can call something a rebate, a flat fee or an elephant. It still represents a lucrative flow of money, and the influence that goes along with it,” said Robin Feldman, a UC Hastings law school professor who recently wrote a book exploring these deals.
