Search This Blog

Monday, May 6, 2019

Hedge funds target Centene, may oppose WellCare deal

Hedge funds Corvex Management LP and Sachem Head Capital Management LP have built stakes in U.S. health insurer Centene Corp and are exploring challenging its planned $17.3 billion acquisition of WellCare Health Plans Inc, people familiar with the matter said on Monday.
The hedge funds believe that Centene may be able to do more to establish if another company such as Humana Inc would be interested in acquiring it, the sources said.
The hedge funds are seeking to take advantage of the fact that Centene needs to secure approval from its shareholders for the WellCare deal, according to the sources, who asked not to be identified because the matter is confidential. There is no certainty that the funds will agitate against the deal, the sources added.
“We remain as committed to our combination with WellCare today as we did when we announced it on March 27,” said Marcela Hawn, Centene’s chief communications officer.
Corvex and Sachem Head declined to comment. WellCare and Humana did not immediately respond to requests for comment.

It was unclear whether Humana would take an interest in acquisition of Centene.
When asked during a May 1 earnings conference call with analysts about his view on Medicaid growth in light of Centene’s acquisition of Wellcare, Humana’s chief executive, Bruce Broussard, said the company was “confident in our organic direction”, but that its strategy involved always looking at the market for M&A possibilities.

AstraZeneca: Calquence met primary endpoint in Phase 3 ASCEND trial

AstraZeneca announced results from the Phase 3 ASCEND trial of Calquence in previously-treated patients with chronic lymphocytic leukaemia, or CLL. Results showed a statistically-significant and clinically-meaningful improvement in progression-free survival with Calquence monotherapy compared to a combination regimen of rituximab plus physician’s choice of idelalisib or bendamustine. “Importantly, the safety and tolerability of Calquence was consistent with the known profile,” the company stated. Calquence is currently approved for the treatment of adults with relapsed or refractory mantle cell lymphoma in the U.S., Brazil, the UAE, and Qatar, and is being developed for the treatment of CLL and other blood cancers. Jose Baselga, Executive Vice President, R&D Oncology said: “Calquence is the first BTK inhibitor to show benefit in a Phase III trial as a monotherapy compared to current standard-of-care combinations used in relapsed or refractory chronic lymphocytic leukaemia. We look forward to presenting detailed results at a forthcoming medical meeting.”
https://thefly.com/landingPageNews.php?id=2904001

Glenview’s Robbins short 3M, long Cigna, Humana, UnitedHealth

Glenview Capital Management CEO Larry Robbins said Monday that he’s shorting shares of industrial conglomerate 3M and likes health-care stocks like CignaHumana and UnitedHealth Group.
Despite his long call on HMO equities, Robbins said he doesn’t like pharmaceutical stocks due to the political risk, with many Democratic presidential hopefuls — as well as President Donald Trump — opposed to lofty drug prices.
“In pharmaceuticals … the president can act unilaterally to reduce drug pricing,” Robbins warned from the 2019 Sohn Conference in New York. “The same drug in the United States costs three times as much as other” developed countries.
Robbins said Glenview has three long and 16 short positions in the pharmaceutical space and recommends investors short any ETF that tracks the space. Long a fan of health-care stocks, Robbins in 2018 picked Express ScriptsCignaCVSAetna and McKesson as his winners in the field.

Regulus up on improved finances

Thinly traded nano cap Regulus Therapeutics (RGLS +11.9%) is up on below-average volume on the heels of recent financing developments.
It will sell stock and warrants totaling ~$41.8M in a two-tranche private placement with institutional investors. The initial tranche, valued at ~$16.7M, consists of ~9.7M common shares and accompanying warrants at a combined price of $1.205. Certain investors have also agreed to 416K share of non-voting Class A-1 convertible preferred stock, each convertible into 10 common shares, at $10.80 per share along with five-year warrants to buy up to ~4.16M common shares at $1.08 per share at $0.125 per warrant. The transaction should close no later than May 7.
The second tranche of ~$25.1M of convertible preferred stock and accompanying warrants will be contingent on the restart of a Phase 1 study of RGLS4326 in autosomal-dominant polycystic kidney disease.
It has restructured its $14.7M term loan with Oxford Finance providing for a new 12-month period of interest-only payments and a new maturity date of May 2022.

FDA Grants Breakthrough Device Designation to Natera’s Signatera Test

Natera, Inc. NTRA, -2.27%today announced that the U.S. Food and Drug Administration (FDA) has granted “Breakthrough Device” designation for its Signatera™ test for use in the post-surgical detection and quantification of circulating tumor DNA (ctDNA) in the blood of patients previously diagnosed with certain types of cancer and in combination with certain drugs. The designation will help accelerate FDA assessment and review of Signatera as an in vitro diagnostic for use in pharmaceutical trials.
Signatera is the first ctDNA test custom-built for each patient based on the unique mutations in an individual patient’s tumor. Signatera has been shown in numerous clinical studies, across non-small cell lung, bladder, breast and colorectal cancers, to identify molecular residual disease significantly earlier (up to two years earlier) than standard imaging. [1-5 ] Studies have also shown that Signatera test status is the most significant predictor of long-term patient outcomes after surgery and treatment, relative to all other clinical and pathological factors. [1-5]

Sunscreen Chemicals Enter Bloodstream at Potentially Unsafe Levels: Study

For years, you’ve been urged to slather on sunscreen before venturing outdoors. But new U.S. Food and Drug Administration data reveals chemicals in sunscreens are absorbed into the human body at levels high enough to raise concerns about potentially toxic effects.
Bloodstream levels of four sunscreen chemicals increased dramatically after test subjects applied spray, lotion and cream for four days as directed on the label, according to the report.
The levels far exceed the FDA-set threshold which require topical medications to undergo safety studies, said Dr. Kanade Shinkai, a dermatologist with the University of California, San Francisco School of Medicine.
“It’s not like they went a little bit over,” she said. “It’s really quite high, orders of magnitude higher than that.”
However, experts are quick to say you shouldn’t stop using sunscreen because of this study. At this point, the known risk of harm from the sun’s rays exceeds the potential risk posed by these chemicals.
“I am concerned that people are going to stop wearing sunscreen,” Shinkai said. “We know ultraviolet light from the sun has very deleterious effects on the skin. It causes photoaging. It causes sunburn. And, as such, it causes melanoma and [other] skin cancer.”
Dr. Michele Green, a dermatologist with Lenox Hill Hospital in New York City, agreed.
“I think it’s confusing,” Green said. “While it’s more than the FDA recommends for their toxicology, we really don’t know what that means in terms of human health. I would not want people to stop using sunscreen based on this one study.”
Possible effects on hormones
The sunscreen study was led by the FDA’s Dr. David Strauss, and appears May 6 in the prestigious Journal of the American Medical Association, one of the nation’s leading medical journals.
Most sunscreens on the shelf use chemicals such as oxybenzone, avobenzone and octocrylene to block harmful rays. These organic chemicals absorb ultraviolet radiation and convert it into a small amount of heat.
However, animal studies have raised concerns that the chemicals, oxybenzone in particular, might disrupt normal hormone patterns in people, the FDA researchers noted in their study.
“These molecules are chemical rings, essentially, and they absorb light,” said Shinkai, who co-wrote an editorial accompanying the study. “Chemical rings are also the fundamental basis for a lot of hormones, and chemical rings tend to enter cells.”
Oxybenzone has been found in human breast milk, amniotic fluid, urine and blood, the FDA researchers said.
For its study, the FDA randomly had 24 adults apply either a sunscreen spray, lotion or cream four times a day for four days. The participants applied the sunscreen to three-quarters of their body surface.
The study took place in a lab, and the agency drew 30 blood samples from each participant over a week to see whether the chemicals in the sunscreen got absorbed through the skin.
Levels of oxybenzone, avobenzone, octocrylene and ecamsule increased in the bloodstream after sunscreen use, researchers found.
“There is definitely reason for concern, because if you think about it, any medication you buy over the counter, you would expect that everything in there has been tested, it’s safe, it’s effective,” Shinkai said. ‘This has never been proven for sunscreen.”
More real-life data needed
But it was a very small-scale laboratory study that simply shows the need for more research, said Dr. Raman Madan, a dermatologist with Northwell Health’s Huntington Hospital in Huntington, N.Y.
“While this is a starting point, the relevance of this result is unknown,” Madan said. “There needs to be further studies done to show what this really means. While it could have real-world consequences, it could very well mean nothing.”
The study also differs from real life in that people applied the sunscreen while hanging about a lab, Shinkai said.
“They weren’t doing the things people typically do when they use sunscreen,” such as swimming or working in the yard, Shinkai said. Because of this, their exposure might differ from that of everyday people.
The Consumer Healthcare Products Association (CHPA), a group representing sunscreen makers, also said it’s far too soon for consumers to have doubts about these products.
“Sunscreen manufacturers, FDA, and dermatologists are aligned on the goal of protecting the public from the harmful effects of the sun,” the group said in a statement. “Sunscreens save lives.”
CHPA said the FDA is committed to learning more about the safety of chemicals within sunscreens, however, and the new data “is consistent with these efforts.”
Options are out there
The FDA has been tussling with sunscreen manufacturers over studies to test the safety of their products, said Shinkai.
The agency has set a November 2019 deadline for manufacturers to provide safety data on their sunscreens, including evaluations of systemic absorption, the risk of cancer from the chemicals, and their effect on reproductive health, Shinkai said in her editorial.
The publication of this study might be intended to put pressure on the sunscreen industry to meet the deadline, she said.
“The FDA is a regulatory agency. It’s not a testing agency. For them to perform a research study is highly unusual,” Shinkai said. “I think that’s an important thing that suggests how concerned they were about this issue, and maybe perhaps the frustration on their part.”
People who are concerned about the safety of chemical sunscreens can opt to use mineral sunscreens, Shinkai said.
Those sunscreens rely on zinc oxide and titanium dioxide to reflect sunlight from the skin, rather than absorbing it like chemical sunscreens.
“These we know are safe,” Shinkai said of mineral sunscreens. “This is something that is evidence-based.”
More information
Harvard Medical School has more about sun protection.
SOURCES: Kanade Shinkai, M.D., Ph.D., dermatologist, University of California, San Francisco School of Medicine; Michele Green, M.D., dermatologist, Lenox Hill Hospital, New York City; Raman Madan, M.D., dermatologist, Northwell Health’s Huntington Hospital, Huntington, N.Y.; Consumer Healthcare Products Association, statement, May 6, 2019; Journal of the American Medical Association, May 6, 2019

Athenex (ATNX) Announces $100 Million Private Placement of Common Stock

Athenex, Inc. (Nasdaq: ATNX), a global biopharmaceutical company dedicated to the discovery, development and commercialization of novel therapies for the treatment of cancer and related conditions, today announced that it has directly entered into an agreement for the sale of its common stock in a private placement with three institutional investors, namely Perceptive Advisors, Avoro Capital Advisors (formerly known as venBio Select Advisor) and OrbiMed. The transaction is expected to result in gross proceeds to Athenex of approximately $100 million, before deducting offering expenses. Net proceeds from the transaction are expected to be used to fund clinical development and regulatory activities of Oraxol (oral paclitaxel and encequidar (also known as HM30181A)); clinical regulatory activities of KX2-391 ointment for the treatment of actinic keratosis; commercialization activities, including pre-launch activities for Oraxol; manufacturing infrastructure; and working capital and general corporate purposes.
The Company will issue 10 million shares of common stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $100 million. The closing of the private placement is expected to occur on or about May 7, 2019, subject to customary closing conditions.
“We are extremely delighted by the support from these leading healthcare investment firms,” said Dr. Johnson Lau, Chairman and Chief Executive Officer of Athenex. “We believe the financing from this private placement will position us well to further advance our Phase 3 clinical programs for Oraxol and KX2-391 ointment and support our pre-launch and commercialization efforts.”