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Friday, April 5, 2019

Coherus sees up to $38M in Q1 Udenyca sales; shares up 5% after hours

On a preliminary basis, Coherus BioSciences (NASDAQ:CHRS) expects Q1 sales of Neulasta biosimilar UDENYCA (pegfilgrastim-cbqv) to be $36M – 38M, well above consensus of $2.8M.
The company will provide additional details during its Q1 conference call on May 9.
The European Commission approved the product in September 2018 followed by the FDA in November 2018.
Shares are up 5% after hours.

Cancer Patients Who Smoke Cost Nation Billions

Cancer patients who continue to smoke cost the healthcare system billions of dollars annually, thanks to smoking’s contribution to first-line treatment failures, a modeling study found.
The model estimated the cost of continuing to smoke to be nearly $11,000 per patient in treatment costs after failure of the initial cancer treatment protocol, or $2.1 million per 1,000 cancer patients (smokers and nonsmokers), reported Graham Warren, MD, PhD, of the Medical University of South Carolina in Charleston, and colleagues in JAMA Network Open.
Multiple variables were used to determine smoking-related costs, including expected first-line treatment failure rates in nonsmoking patients, smoking prevalence, and the cost of cancer treatment after first-line treatment failure.
“We know that smoking is bad for patients undergoing cancer treatment,” Warren told MedPage Today, citing a 2014 Surgeon General’s report concluding that smoking increases the risk for overall mortality, cancer-related mortality, cancer-treatment toxicity and developing a second primary cancer.
“With the increasing focus on value-based care in the treatment of cancer, we started to think about how to put a cost on this,” he said.
The researchers noted that widely discussed principles for value-based care in cancer include “patient-centered solutions, optimal care, and cost-containment strategies that do not limit patient access or innovation.”
Drug costs have been a focus, but a recent analysis suggested that many widely used drugs do not meet survival goals.
“Whereas drug cost and efficacy have been the primary focus for considering value in cancer care, relatively little consideration has been given to other potentially modifiable factors that could affect cancer treatment costs, including health behaviors such as smoking,” they wrote.
The model Warren and colleagues developed did not directly quantify the potential financial savings associated with smoking cessation; at this stage, it only addressed the extra costs incurred with treatment failures associated with smoking.
Specifically, using data from the 2014 U.S. Surgeon General’s report, it considered expected failure rates of first-line cancer treatments in nonsmoking patients, smoking prevalence, odds of first-line cancer treatment failure attributed to smoking, and cost of cancer treatment after such failure.
In the model, smoking-attributable failures peaked when expected cure rates among nonsmoking patients were high, in the range of 50% to 65%.
“Under the [2014 Surgeon General report] conditions of a 30% expected treatment failure rate among nonsmoking patients, 20% smoking prevalence, 60% increased risk of failure of first-line cancer treatment, and $100,000 mean added cost of treating a first-line cancer treatment failure, the additional incremental cost per 1,000 total patients was estimated to be $2.1 million, reflecting an additional cost of $10,678 per smoking patient,” the researchers wrote.
They added that extrapolation of the cost to 1.6 million patients in the U.S. with a cancer diagnosis annually “reflects a potential $3.4 billion in incremental costs.”
“By providing estimates across smoking prevalence rates, risk of failure among smokers vs nonsmokers, and expected cure rates, this model may be applied to estimate outcomes across a breadth of potential cancer conditions and their associated costs,” the researchers wrote.
In an editorial published with the study, Cara Petrucci, MBA, MPH, and Andrew Hyland, PhD, of Roswell Park Comprehensive Cancer Center, Buffalo, New York, wrote that analysis models like the one developed by Warren and colleagues will be more and more relevant as healthcare “is increasingly focused on delivering value-based care that accounts for both clinical effectiveness and cost of treatment.”
“The effects of continued smoking during cancer treatment have been well documented, but resources for smoking cessation services remain inadequate,” they wrote. “Coverage for smoking cessation by insurance companies is limited and tends to disproportionately favor medical interventions, such as smoking cessation medications, compared with evidence-based interventions.”
Because the economic benefits of smoking cessation have been hard to quantify, smoking cessation interventions do not “attract the attention of systems and clinicians who, although concerned with the health of their patients, operate within the constraints of an increasingly tight financial environment,” they added.
“To show the clinical association of smoking with first-line cancer treatment failure in financial terms places continued smoking during cancer treatment alongside surgery and chemotherapy as a significant contributor to cancer treatment costs.”
Researcher Michael Cummings, PhD, reported receiving personal fees from Pfizer during the conduct of the study and receiving personal fees from plaintiff law firms outside the submitted work.

Ladenburg Bullish on Zynerba: ‘FDA Clarifies Views’ on Nonprescription CBD

The FDA has started looking into how it might legalize CBD-laced food products, and this is good news for Zynerba (ZYNE) investors.
This week, the agency announced it will hold its first public hearings on CBD, as it weighs rules allowing companies to add the popular cannabis-based compound to food. The hearing will be taking place on May 31. In reaction, Zynerba stock skyrocketed nearly 20% in Tuesday’s trading session.
Ladenburg analyst Michael Higgins believes “the FDA will be taking further steps in 2019 to remove any non-prescription products being sold that include THC and CBD, while allowing the “…production and marketing of hemp, defined as the plant Cannabis sativa L.” This would support the market adoption of Zynerba’s Zygel, a CBD gel treatment for children and adolescents with Fragile X syndrome, the most common form of inherited learning disability and attention deficit disorder.
As a result, Higgin reiterates a Buy rating on ZYNE stock, along with a price target of $26.
Higgin commented, “We believe the removal of current CBD-containing foods, lotions, snacks, oils and other embodiments containing CBD favors the market adoption of Zynerba’s Zygel (CBD gel via a sachet). We have long expected the availability of OTC CBD products during Zygel’s marketing (assuming positive pivotal data in Fragile X patients in 2H’19 and approval in 2H’20), but the stance of the agency suggests less availability of CBD-containing products for which consumers to choose from. From our research, today’s CBDinfused products deliver substantially lower levels of CBD with some containing other active ingredients from the marijuana plant, including THC. We believe this morning’s publication reflects the agency’s loss of patience with these products as the number of and marketing of these products have become more ubiquitous and aggressive. While 33 states allow “medical” marijuana the FDA lists marijuana as, “…Schedule I of the CSA (Controlled Substances Act) due to its high potential for abuse, which is attributable in large part to the psychoactive effects of THC, and the absence of a currently accepted medical use for marijuana in the United States” (today’s Fed Reg). In our view, the agency is not relenting, rather, it is leaning on the regulatory statutes several times in this morning’s publication.”

Plan to End Drug Rebates Adds Protections for Insurers

The Trump administration on Friday said the federal government would reimburse health insurers for financial losses caused by the administration’s plan to ban certain pharmaceutical-industry rebates in Medicare.
The backstop on most of insurers’ losses could help prevent premiums from rising significantly as a result of the rebate-rule changes, while making taxpayers responsible for a greater share of cost overruns in Medicare’s prescription-drug program.
The offer to assume most of the financial risk for the loss of the discounts is a sign the administration is likely to move ahead with its push to end rebates and could address some critics’ concerns. The idea has faced heated criticism from some Democrats, with House Speaker Nancy Pelosi saying last month that such a move would raise premiums and do little to lower drug costs.
The drug-rebate proposal is a marquee part of the administration’s push to lower drug prices. The rule would halt billions of dollars in discounts that drugmakers give insurers and companies such as CVS Health Corp. and UnitedHealth Group Inc. that administer Medicare prescription plans.
Health and Human Services Secretary Alex Azar has said it would spur manufacturers to pass discounts directly on to patients and bring new transparency to prescription drug markets.
But how the change will affect the complex financial structure of the Medicare drug program known as Part D is hard to predict. The government’s plan to protect companies that administer Medicare’s drug benefit could help minimize disruption to a program that insures more than 40 million people during an election year.
Federal spending is projected to increase by $196.1 billion over a decade as a result of the rebate-rule change, according to estimates by the CMS Office of the Actuary done prior to Friday’s announcement. Premiums paid by beneficiaries would rise by $58 billion over the same period, but beneficiaries taking high-priced drugs would see their out-of-pocket costs decline by around $83.2 billion. Medicare is a federal health insurance program for people age 65 and older and the disabled.
Drug makers, meanwhile, would save $39.8 billion over the decade because mandatory discounts they provide during a gap in Medicare coverage known as the “donut hole” would be reduced, according to the actuary.
These estimates don’t reflect the new risk-sharing program announced Friday.
Rebates are a little-known but important part of the U.S. drug pricing system. Drugmakers set list prices. But then many also offer rebates, or discounts, that reduce the amount that companies and the federal government actually pay.
The rebates can shape decisions about what drugs are offered and how much patients pay out-of-pocket. Drugmakers say the practice has led them to raise list prices to keep up with demands for greater rebates by companies that administer drug plans — which seldom use the money to reduce out-of-pocket patient costs. That view has been adopted by Mr. Azar, a former Eli Lilly & Co. executive.
Critics also say they lead to higher prices without passing savings on to consumers.
But health insurers and businesses that administer Medicare drug plans say the rebates keep down premiums for all beneficiaries, a contention many experts agree with. The base monthly premium for Medicare drug benefits has declined for the past two years.
The administration in January revealed a proposal to end rebates that go to insurers and companies that run drug plans in Medicare and Medicaid by Jan. 1, 2020. Instead, the Trump administration said it would create a protection for discounts offered to directly to patients.
Insurers and companies that set up prescription drug plans have balked. They also were concerned because they would have to submit bids to offer drug plans in Medicare in early June without knowing the fate of the rule or how drug prices could change.
Now the Centers for Medicare and Medicaid Services is saying it will shoulder most of the risk, if the rebate rule is finalized. After the first 0.5% of unforeseen profits or losses experienced by insurers or others that administer drug plans, the federal government would cover 95% of extra losses or get back of 95% of extra profits. The risk sharing would be optional for companies and last for two years.
“They are trying to deal with the uncertainty,” said Tricia Neuman, who heads the Medicare policy program at the Kaiser Family Foundation, a nonprofit that focuses on health information.
Changes to the rebate system in Medicare could have a trickle-down effect in the health system. Because the program represents such a big market, rebates could also fade in the private sector if they are ended in Medicare, some health analysts aside.
Steps in that direction are already under way. Sen. Mike Braun (R., Ind.) introduced legislation last month that would also end such rebates in the commercial sector.

CMS head says insurers, PBMs can assume Medicare rebates in 2020: Axios

Seema Verma, Administrator of the Centers for Medicare & Medicaid Services, or CMS, said in a memo that insurers and pharmacy benefit managers can assume drug-pricing rebates in Medicare Part D will still exist as they design their 2020 plans, reported Axios’ Bob Herman. The Trump administration has proposed eliminating such Medicare rebates beginning in 2020, the report noted. Pharmacy benefit managers include Express Scripts (ESRX), CVS Health (CVS) and UnitedHealth (UNH). Drug distributors include AmerisourceBergen (ABC), Cardinal Health (CAH) and McKesson (MCK). Publicly traded drugmakers include AstraZeneca (AZN), Bristol-Myers (BMY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY). Publicly traded health insurers include Anthem (ANTM), Centene (CNC), Cigna (CI), Health Net (HNT), Humana (HUM), Molina Healthcare (MOH), UnitedHealth (UNH) and WellCare (WCG).

LivaNova pullback on disappointing Q1 results overdone, says Piper Jaffray

Piper Jaffray analyst Matt O’Brien noted that LivaNova (LIVN) shares are trading down over 25% after the company preannounced disappointing Q1 revenues, which he views as overdone. At current levels, the stock reflects a “modest multiple” for the core business and “essentially nothing” to LivaNova’s pipeline, said O’Brien, who thinks the company’s pipeline opportunity in Treatment-Resistant Depression, or TRD, is significant. The company blamed its neuromodulation sales miss to the launch of a competitive drug product from GW Pharma (GWPH), but O’Brien believes this business should stabilize by the end of the year, he added. He maintains an Overweight rating on LivaNova shares with a price target of $120.
https://thefly.com/landingPageNews.php?id=2889297

Stephens Reiterates Overweight Rating on Myriad Genetics

Stephens analyst Drew Jones reiterated an Overweight rating and $52 target price.