Wells Fargo analyst Jim Birchenough views Intercept Pharmaceuticals as fairly valued following his review of the secondary endpoint per protocol analysis from the Phase 3 Regenerate study of obeticholic acid in non-alcoholic steatohepatitis. The analyst modestly raised his price target for the stock to $104 and keeps a Market Perform rating on the name. While the per protocol analysis should strengthen the conviction in obeticholic acid benefit in reversing histologic features of NASH in patients adhering to longer term treatment, the intent to treat analysis provides a better integrated perspective on expected real-world benefit, accounting for missed doses, non-adherence, drug discontinuations and other contributors to the “significant” number of patients in Regenerate that didn’t meet per protocol requirements, Birchenough tells investors in a research note. The analyst increased the probability of approval for obeticholic acid in NASH following yesterday’s data, but leaves his estimates unchanged as he believes that “breadth of use may be limited by potential liver biopsy requirements, high rate of pruritus, and potential drug discontinuation rates and that product labeling and reimbursement considerations will be key.”
Friday, April 12, 2019
Kaleido Biosciences presents Microbiome Metabolic Therapy data at ILC
Kaleido Biosciences presented clinical study and ex vivo data supporting its Microbiome Metabolic Therapy, or MMT, programs in diseases resulting in hyperammonemia at The International Liver Congress, or ILC. The gut microbiome plays a significant role in the production and consumption of ammonia, which is central to the pathogenesis of several ammonia processing-related diseases. Kaleido is currently advancing novel MMT product candidates, KB195 and KB174, targeted at reducing net ammonia production by modulating the metabolic output and profile of the microbiome. In an ex vivo screening of more than 300 compounds across healthy human microbiome samples, KB195 showed an effect on ammonia reduction. In ex vivo testing, KB195 reduced ammonia levels in 95% of microbiome samples from patients with hepatic impairment. In 74% of the samples, KB195 also resulted in a greater reduction in ammonia than lactulose, an approved treatment for hepatic encephalopathy. The safety and tolerability of KB195 and its effect on microbiome nitrogen metabolism were subsequently evaluated in a randomized, controlled, double-blind, non-Investigational new drug, or non-IND, clinical study in healthy human subjects. The study enrolled 47 subjects, who were administered a high-protein diet and randomized to receive either KB195, a comparator glycan, or negative control, and the dose was escalated during the study. A lactose-15N-ureide tracer was used to evaluate changes in nitrogen metabolism in the gut; a reduction of this tracer in the urine is consistent with a reduction in net ammonia production by the gut microbiome. The KB195 group had a decrease of 40.5% in urinary 15N excretion compared to negative control at a dose of 36g twice daily (72g/day), independent of starting microbiome composition. Overall, there were no safety signals following KB195 treatment. Most treatment-emergent adverse events during the study were mild in severity. Of the two subjects who reported, none were deemed related to KB195. Tolerability was evaluated using the gastrointestinal tolerability questionnaire, which assesses symptoms like flatulence and abdominal cramping, and the Bristol Stool Scale, which assesses stool consistency. KB195 was well tolerated and comparable to the negative control at all doses in both the GITQ and BSS. Treatment with KB195 also resulted in fewer subjects reporting diarrhea than with the comparator glycan.
TRACON Pharmaceuticals to host conference call
Conference call to discuss details on the TAPPAS trial and TRACON’s clinical stage pipeline will be held on April 12 at 8:30 am.
Exact Sciences upgraded to Conviction Buy from Buy at Goldman Sachs
Goldman Sachs analyst Patrick Donnelly added Exact Sciences to the firm’s Americas Conviction List, citing his view that the stock is set-up well for the remainder of 2019. Cologuard is a unique growth story, competing liquid biopsy products are likely years away from commercial launches and optionality from pipeline products is currently underappreciated, Donnelly tells investors. He keeps a $120 price target on Exact Sciences shares.
Collegium Pharmaceutical initiated at Janney Montgomery Scott
Collegium Pharmaceutical assumed with a Buy at Janney Montgomery Scott. Janney Montgomery Scott analyst Esther Hong assumed coverage of Collegium Pharmaceutical with a Buy rating and $29 fair value estimate.
Thursday, April 11, 2019
If The Court Strikes Down Obamacare, How Bad Would That Be?
The Trump administration has decided to challenge the constitutionality of the Affordable Care Act (Obamacare) in court. Some Republicans in Congress and even some in the administration resisted this decision. Critics assume that if there is no Obamacare, we would revert to the pre-Obamacare health system. If so, how bad would that be?
Let’s take a look.
More private insurance. The most important goal of Obamacare was to increase the number of people with private health insurance, primarily through individual and employer mandates and generous subsidies in health insurance exchanges.
Yet, the day Barack Obama left office, the percentage of people with private coverage was only slightly higher than the day he was elected (67.5% in 2016 versus 67.2% in 2008). The economy was coming out of a deep recession during those years and ordinarily the number of people with private coverage would have risen in lockstep with the growth of the civilian labor force.
We have been spending more than $100 billion a year on private insurance subsidies, with little to show for it.
Better insurance. Although the Obamacare individual mandate is gone, people who are sick still need health insurance. Under Obamacare, people who must purchase insurance on their own have seen (1) their premiums double, (2) their deductibles double and triple and (3) their access to care increasingly restricted to an ever-narrower network of providers.
All three problems arise for the same reason: under current law, insurance plans have perverse incentives – to attract the healthy and avoid the sick. The way insurance companies hold down costs is by paying rock-bottom fees for medical services and engaging only those providers who will accept those low fees.
The race to the bottom in the individual insurance market is producing plans that are little better – perhaps even worse – than Medicaid with a high deductible.
Portable insurance. Prior to Obamacare, some employers used Health Reimbursement Arrangements (HRAs) to give employees tax-free funds with which they could buy their own insurance. Individually owned insurance has the virtue of traveling with the worker from job to job and in and out of the labor market.
Under the Obama administration, however, employers who did this could be fined as much as $100 per employee per day, or $36,500 per employee per year – the largest fine in all of Obamacare.
The Trump administration is proposing to get rid of those fines and is encouraging the purchase of individually owned insurance with employer funds. Achieving portable insurance would be easier if there were no Obamacare from the get-go.
Insurance tailored to family needs. Suppose you have a choice between a plan with a $10,000 deductible and $1 million of coverage and a plan with no deductible but only $25,000 of coverage. Suppose the premium for the two plans was the same. Which would you prefer?
For people with high incomes and high net worth, the former option is a no-brainer. Yet young, healthy, low-income families living paycheck-to-paycheck often prefer the latter option. How do we know that? Because that’s the kind of insurance they and their employers chose to buy before there was Obamacare.
Limited benefit insurance won’t pay every medical bill. But it will get people into the health care system, where early treatment may avert the need for expensive, catastrophic care. Obamacare’s high deductibles, by contrast, are inducing people to wait until it may be too late.
Less waste in Medicaid. As a result of Obamacare, roughly 10 million additional people are now enrolled in Medicaid. How much difference does that make?
The most through study of the matter was the Oregon Health Insurance Experiment, in which researchers found no difference in the physical health of new Medicaid enrollees versus a similar group of people who did not enroll. This doesn’t mean the insurance was worthless. It provided families with additional financial security, for example. But research showed the value the enrollees placed on Medicaid coverage was as little as 20 percent of its actual cost.
Surely there are a lot better uses for the $50 billion a year we are spending on Medicaid expansion, including investments in public health.
Relief for the victims of Medicaid expansion. Obamacare has been paying 95 percent of the cost of expanding Medicaid to mostly healthy people, while traditional Medicaid has been paying only 50 or 60 percent. This has given the states an incentive to take from the care of the low-income sick to serve the low-income healthy.
Nationwide, there are more than 650,000 people on Medicaid waiting lists. About two-thirds of these are patients with severe intellectual disabilities, severe developmental disabilities, or traumatic brain and spinal cord injuries. To live outside an institution with their families they need a variety of services including home health aides, adult day care, respite care for family caregivers, and homemaker services.
The Foundation for Government Accountability estimates that 21,904 people have died while waiting.
A more reliable safety net. Prior to Obamacare, very few people were ever denied health insurance because of a pre-existing condition. The short-lived Obamacare risk pool only attracted 115,000 enrollees. Most states had their own risk pools. These were not always fully funded and some states had waiting lists. But with $150 billion a year of Obamacare money freed for other uses, states should easily be able to find better ways to take care of pre-existing conditions as well as a host of other problems.
Under Obamacare almost 28 million people are uninsured. Another 10 million have deductibles so high that many regard their insurance as almost worthless.
An additional 66 million are trapped in a Medicaid system that rations by waiting. For example, it’s not unusual for a patient to spend all day going back and forth with bus transfers to get a simple blood test that could have been done by the MinuteClinic in the shopping center next door.
Surely, we can do better than that.
Hospital closure hurts town’s ability to attract retirees
The epidemic of rural hospital closures is threatening small towns such as Celina, Tenn. The town of 1,500 has been trying to position itself as a retiree destination but that task has grown more difficult since the March 1 closure of 25-bed Cumberland River Hospital.
KEY TAKEAWAYS
Celina became the 11th rural hospital in Tennessee to close in recent years — more than in any state but Texas. Both states have refused to expand Medicaid in a way that covers more of the working poor.
The closest hospital is now 18 miles away. That adds another 30 minutes through mountain roads for those who need an X-ray or bloodwork. For those in the back of an ambulance, that bit of time could mean the difference between life or death.
When a rural community loses its hospital, health care becomes harder to come by in an instant. But a hospital closure also shocks a small town’s economy. It shuts down one of its largest employers. It scares off heavy industry that needs an emergency room nearby. And in one Tennessee town, a lost hospital means lost hope of attracting more retirees.
Seniors, and their retirement accounts, have been viewed as potential saviors for many rural economies trying to make up for lost jobs. But the epidemic of rural hospital closures is threatening those dreams in places like Celina, Tenn. The town of 1,500, whose 25-bed hospital closed March 1, has been trying to position itself as a retiree destination.
“I’d say, look elsewhere,” said Susan Scovel, a Seattle transplant who arrived with her husband in 2015.
Scovel’s despondence is especially noteworthy given she leads the local chamber of commerce effort to attract retirees like herself. She considers the wooded hills and secluded lake to hold scenic beauty comparable to the Washington coast — with dramatically lower costs of living; she and a small committee plan getaway weekends for prospects to visit.
When she first toured the region before moving in 2015, Scovel and her husband, who had Parkinson’s, made sure to scope out the hospital, on a hill overlooking the sleepy town square. And she has rushed to the hospital four times since he died in 2017.
“I have very high blood pressure, and they’re able to do the IVs to get it down,” Scovel said. “This is an anxiety thing since my husband died. So now — I don’t know.”
She can’t in good conscience advise a senior with health problems to come join her in Celina, she said.
When Seconds Count, Delays In Care
Celina’s Cumberland River Hospital had been on life support for years, operated by the city-owned medical center an hour away in Cookeville, which decided in late January to cut its losses after trying to find a buyer. Cookeville Regional Medical Center executives explain that the facility faced the grim reality for many rural providers.
“Unfortunately, many rural hospitals across the country are having a difficult time and facing the same challenges, like declining reimbursements and lower patient volumes, that Cumberland River Hospital has experienced,” CEO Paul Korth said in a written statement.
Celina became the 11th rural hospital in Tennessee to close in recent years — more than in any state but Texas. Both states have refused to expand Medicaid in a way that covers more of the working poor. Even some Republicans now say the decision to not expand Medicaid has added to the struggles of rural health care providers.
The closest hospital is now 18 miles away. That adds another 30 minutes through mountain roads for those who need an X-ray or bloodwork. For those in the back of an ambulance, that bit of time could mean the difference between life or death.
“We have the capability of doing a lot of advanced life support, but we’re not a hospital,” said Natalie Boone, Clay County’s emergency management director.
The area is already limited in its ambulance service, with two of its four trucks out of service.
Once a crew is dispatched, Boone said, it’s committed to that call. Adding an hour to the turnaround time means someone else could likely call with an emergency and be told — essentially — to wait in line.
“What happens when you have that patient that doesn’t have that extra time?” Boone asked. “I can think of at least a minimum of two patients [in the last month] that did not have that time.”
Residents are bracing for cascading effects. Susan Bailey hasn’t retired yet, but she’s close. She has spent nearly 40 years as a registered nurse, including her early career at Cumberland River.
“People say, ‘You probably just need to move or find another place to go,’” she said.
Bailey and others are concerned that losing the hospital will soon mean losing the only three physicians in town. The doctors say they plan to keep their practices going, but for how long? And what about when they retire?
“That’s a big problem,” Bailey said. “The doctors aren’t going to want to come in and open an office and have to drive 20 or 30 minutes to see their patients every single day.”
Closure of the hospital means 147 nurses, aides and clerical staff have to find new jobs. Some employees come to tears at the prospect of having to find work outside the county and are deeply sad that their hometown is losing one of its largest employers — second only to the local school system.
Dr. John McMichen is an emergency physician who would travel to Celina to work weekends at the ER and give the local doctors a break.
“I thought of Celina as maybe the ‘Andy Griffith Show’ of healthcare,” he said.
McMichen, who also worked at the now-shuttered Copper Basin Medical Center, on the other side of the state, said people at Cumberland River knew just about anyone who would walk through the door. That’s why it was attractive to retirees.
“It reminded me of a time long ago that has seemingly passed. I can’t say that it will ever come back,” he said. “I have hopes that there’s still some hope for small hospitals in that type of community. But I think the chances are becoming less of those community hospitals surviving.”
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