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Monday, June 17, 2019

Pfizer to acquire Array Biopharma

Pfizer (NYSE:PFE) inks a deal to acquire Array BioPharma (NASDAQ:ARRY) for a total enterprise value of ~$11.4B.
Pfizer agreed to acquire Array for $48 per share in cash in the deal that has already been approved by the boards of both companies
The addition of Array Biopharma is expected to strengthen Pfizer’s biopharmaceutical business and is anticipated to accelerate its growth trajectory particularly in the long term
The deal is also seen expanding Pfizer’s pipeline with multiple high-potential targeted investigational cancer therapies and adds a large portfolio of royalty-generating out-licensed medicines
“The proposed acquisition of Array strengthens our innovative biopharmaceutical business, is expected to enhance its long-term growth trajectory, and sets the stage to create a potentially industry-leading franchise for colorectal cancer alongside Pfizer’s existing expertise in breast and prostate cancers,” says Pfizer CEO Albert Bourla.
Pfizer expects to finance the majority of the transaction with debt and the balance with existing cash.
The transaction is expected to be dilutive to Pfizer’s EPS by $0.04 -$0.05 in 2019, $0.04 -$0.05 in 2020, neutral in 2021 and accretive beginning in 2022, with additional accretion and growth anticipated thereafter.
PFE +0.28% premarket to $42.88. ARRY +60.4% premarket to $47.45.

Rewalk Robotics upgraded to Buy from Neutral by Wainwright

Target to $9 from $4

Ideaya started at Buy by Jefferies

Target $14

Endo cut to Neutral from Buy by Citi

Target to $5 from $19

Bicycle started at Overweight by Piper

Target $20

After 2 years, diabetics gain with startup’s digital coaching, some dropoff

Plenty of health-tech startups have been buoyed by early data suggesting that their coaching and monitoring tools are generating improvements in patients with chronic diseases.
But a big question remains: Just how durable are those gains?
New data from one such company, Virta Health, underscore a tricky challenge for the burgeoning field: Even when an intervention looks promising, the apparent benefits often erode over time.
Virta, a San Francisco startup that uses digital coaching and monitoring to try to help patients reverse type 2 diabetes, is running a five-year study testing its approach. Promising results from year one were published last year. On Wednesday, the journal Frontiers in Endocrinology published results at the two-year mark.
After two years, the group of 262 patients enrolled in Virta’s program saw improvements that the group of 87 patients getting usual care did not. Those in the former group used less medication and lowered their weight, blood pressure, and a measure of glucose in the blood known as A1C. (Keep in mind that the study design has a crucial flaw — the patients were not randomly assigned between the two groups — that limits its power.)
On several metrics, however, Virta’s results didn’t look as good at the two-year mark compared to the one-year point: 26% of patients had dropped out of Virta’s program by two years, compared to just 17% one year in. And among patients who remained, 55% had reversed their condition two years in, compared to 60% a year earlier. (Virta defines type 2 diabetes reversal as reaching an A1C level below 6.5 percent and eliminating all diabetes medications except for metformin.)
That dropoff isn’t surprising after two years, nor should it be cause for alarm, said Dr. Ethan Weiss, a cardiologist at the University of California, San Francisco, who has advised Virta. “Even though they are seeing some attrition and some kind of reversion to the mean, they’re still doing really well,” Weiss said.
More broadly, Weiss said, the field must find ways to help more patients stay on track over time.
“This is the key, right? You don’t want people just to get better for a year or two — and then bounce back to where they were, which historically is what happens in almost all these scenarios,” Weiss said. (Weiss is also a co-founder and adviser at Keyto, a small San Francisco startup working on a device resembling a vaping pen to help dieters monitor when their body is in ketosis, a state in which fat, rather than carbohydrates, are burned for energy.)
The question of durability is also key to these companies’ business models, because insurers will be reluctant to pay for their services in the long term if patients’ health improvements prove to be short-lived.
Virta’s competitors are racing, too, to run longer and more rigorous studies in a quest to gather data that might help win over insurers. Omada Health ran a nonrandomized study of its program that found that engaged participants with prediabetes lost weight and lowered their A1C levels after three years. The company has another study in progress, this time randomized, that will report on patients’ outcomes after one year.
Another company, Livongo, recently published one-year results from a nonrandomized study it ran with the drug maker Eli Lilly; it found that diabetes patients in its program had lower medical spending than people employed by the same companies who did not sign up for Livongo. The company has other studies underway looking at outcomes over longer time periods.
For Virta’s part, the startup’s CEO and co-founder Sami Inkinen hailed the results published Wednesday as a validation of the company’s approach. In a phone interview with STAT, he drew a contrast between his company’s investment in research and some competitors’ touting of results from three-month studies.
“Three-month results mean nothing,” Inkinen said. “If you have one-year results, then you kind of have a reason to exist in treating type 2 diabetes. But I think two years is something that really gets everyone’s attention.”
Virta makes most of its money by charging health plans and employers for its services. Last fall, the startup announced a new business model: a health plan or employer would pay Virta only if its service works. Virta receives an initial fee only if the patient is sufficiently engaged with its program after one month. The second payment comes after a year, only if patients lower their A1C to a certain level determined on a case-by-case basis.
In both the clinical trial and the commercial setting, patients who enroll in Virta’s program get access to a digital messaging platform where Virta’s clinicians provide coaching. The company doesn’t endorse a specific diet, though its coaches do encourage many of its patients to adhere to a diet high on fat and low on carbohydrates, similar to the popular keto diet. Patients also get equipment that helps Virta monitor them, including a smart body-weight scale, a device for measuring levels of glucose and ketone in the blood, and lancets for sampling blood.

Insurers form coalition to push surprise billing reforms

Two of the biggest insurance industry groups have teamed up to advocate for policies related to surprise billing.
America’s Health Insurance Plans and the Blue Cross Blue Shield Association headline the Coalition Against Surprise Medical Billing, which was formally unveiled earlier this week. Other groups involved in the organization include the National Association of Health Underwriters and America’s Physician Groups.
The coalition backs “common-sense reforms” to address surprise medical bills, which have been a dominant health policy topic of late, according to the announcement. Notably, it’s pushing for legislators to use a set rate for out-of-network services, a proposal that’s popular among payers who are skeptical of arbitration.
The coalition estimates that reforms like rate setting and offering patient protections for out-of-network emergency care could save more than $25 billion over the next decade.
“By establishing patient safeguards for emergency care and the federal benchmark for rates, doctors and health insurance providers avoid the costly, bureaucratic arbitration processes that drive up premiums and increase costs for taxpayers and employers,” the group said in the announcement.
This position pits the coalition directly against major hospital groups, who have teamed up to support surprise billing policies as well.
The American Hospital Association favors arbitration over set rates and has submitted several principles it hopes legislators consider in a surprise billing solution alongside the Association of American Medical Colleges, America’s Essential Hospitals and the Federation of American Hospitals.
That these two wings of the industry are so strongly opposed has been frustrating to lawmakers, who at a hearing on Wednesday warned that if payers and providers can’t self-regulate, Congress will be forced to step in and find a solution that’s unlikely to please any of the industry players.
“If ya’ll don’t want to solve it, we’re going to,” Rep. Markwayne Mullin, R-Oklahoma, said in the hearing. “All we’re saying is: ‘Do it. Solve it.’”
The payer-led coalition intends to issue advertisements in Washington, D.C., and nationally via social media in the coming weeks to oppose arbitration and push for other types of reforms.