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Tuesday, June 25, 2019

Allergan (AGN)/AbbVie (ABBV) Deal Spread Closes at Wide 9.1% on First Day


‘Text neck’ may be causing bone spurs in young people

Researchers at the University of the Sunshine Coast in Australia have claimed that dipping the head while using smartphones and tablets could be causing horn-like spurs to grow on the skull, especially in young people.
Vlad Teodor
According to study authors David Shahar and Mark Sayers, 41% of young adults have the growths and men are more likely to develop them than women.
While it is already well-known that exercise leads to improvements in muscle and lung function, for example, it is only recently that researchers are starting to realize that the skeleton is also malleable. Increased activity causes bones to become stronger and even change shape, while inactivity causes them to become brittle.
Shahar and Sayers say the head is in a balanced position when a person sits or stands, but that a dipped head posture shifts the load weight from the spine to the muscles at the back of the skull and neck. They believe this causes tiny horn-like spikes called external occipital protuberance (EOPs) to grow in response to the strain.
Scientists had previously thought that the growths only developed in older individuals, as a normal part of the aging process. However, Shahar and Sayers have now published three papers showing that the bone spurs are also found in young people and have suggested that the increased use of technological devices has changed the timeline for this form of bone growth.
I have been a clinician for 20 years, and only in the last decade, increasingly I have been discovering that my patients have this growth on the skull.”
David Shahar

Discovery of the growths

For their first study, the researchers considered a growth to be an EOP if it was 5mm long and the threshold for an enlarged EOP (EEOP) was 10 mm. Applying these criteria to X-rays that were taken, the researchers found that 41% of young adults (aged 18 to 30 years) had EEOPs on their skulls.
After discovering how common the growths are among young people, the team decided to see how prevalent they are in the general population. They recruited 1,200 participants aged 18 to 86 years and found that the growths were present in 33% of them. For each ten-year increase in age, there was a drop in growth rate.
The growths have been observed previously, but Shahar and Sayers are the first to suggest that they may be “linked to sustained aberrant postures associated with the emergence and extensive use of hand-held contemporary technologies, such as smartphones and tablets.
The team says the findings raise concerns about the future musculoskeletal health of the young adult population and reinforce the need for prevention intervention through posture improvement education.

Critics disagree

However, critics have disagreed with the researchers’ ideas, with one saying that the study “doesn’t hold water” and another saying that their hypothesis is only speculative.
Professor John Hawks from the University of Wisconsin-Madison says the study lacked a results table detailing the findings and that there are inconsistencies between the data and text.
We have no data linking phone use with EEOP. We have, however, suggested that EEOP is linked with excessive FHP (forward head posture) and sustained cervical flexion. The confusion with our analysis seems to stem from misinterpretation of one of our graphs, which shows the percentage of EEOP within each sex. These are not overall or absolute data.”
Mark Sayers
The last point Sayers makes here is important, since it is the lack of data that critics are complaining about.
Director of the Tissue Biomechanics Laboratory, Dr Mariana Kersh, says there is definitely no cause and effect demonstrated in the study: “There is no information about the duration or frequency of hand-held device usage in this study, so it is not possible to draw any correlation between the observations of enlarged EOPs and hand-held device usage.”
The hypothesis that hand-held devices are linked to the spurs is only speculative and not based on any of the data presented, she adds.
The study also did not include control groups and the participants had all visited chiropractors because they had neck problems that were severe enough to require an X-ray, suggesting they may not be representative of the general population.
Kersh is also sceptical that a change in posture would be enough to cause such significant bone changes, saying that bone adaption generally arises in response to dynamic repetitive movements that the body is not accustomed to seeing: “Inducing bone adaptation through musculoskeletal loading is possible, but requires increased, repetitive, atypical loading which are different from the hypothetical loads suggested by Shahar and Sayers.”

Shahar sticks to his guns

However, Shahar stands by the research, saying that the detection of EOPs in young adults is evidence that musculoskeletal degenerative processes can start and progress silently from an early age.
Our hypothesis, linking these degenerative changes with the use of modern technologies, provides a warning to the premature development of preventable musculoskeletal degenerative processes with the sustained inappropriate posture.
The findings of this project suggest that mechanical load is not to be overlooked in the management of conditions that are associated with structural remodeling of the skeleton.”
Shahar and Sayers are keen to raise awareness of this problem and although some people have criticized the research, there is also a significant amount of interest surrounding the issue they have raised.
“We’re really pleased that our paper has raised so much interest. As a result, we encourage researchers to do their own data collection and analysis,” concludes Sayers.
Source:
Journal reference:
Shahar, D. & Sayers, M. (2019). Prominent exostosis projecting from the occipital squama more substantial and prevalent in young adult than older age groups. Nature Scientific Reports. doi.org/10.1038/s41598-018-21625-1

Help in kick-starting ageing immune system

The thymus is the powerhouse producing the immune system’s T cells, which combat infection in our body. Yet this vital organ is one of the first to diminish in function as we age, resulting in a gradual loss of T cell production and eventually increased susceptibility to infections and cancer in the elderly.
Monash Biomedicine Discovery Institute (BDI) researchers have for the first time identified factors affecting the  in the thymus that set in motion this loss and the mechanisms behind this.
Their study, published in Cell Reports today, paves the way to develop targeted strategies for the recovery of T cells to help combat infections and cancers.
Associate Professor Ann Chidgey, senior author, said it had been known for some time that the thymus—a small organ located below the collarbone—degenerated from puberty onwards. However, the mechanisms underlying this were unclear.
“Our thymus is most productive soon after birth and produces a full repertoire of T cells, but then slowly begins to lose function. As we live longer, the diversity of our T cells diminishes and we become more susceptible to infections,” she said.
“It also becomes more difficult to recover our T cell immunity after damage from cancer treatments such as chemotherapy which destroy a lot of our immune cells.”
The study showed what was behind this degeneration; factors affecting the  in the thymus.
“This study identifies BMP4 and Activin, as growth and differentiation factors important for the self-renewal and differentiation of thymic epithelial stem cells, and how a change in their production during ageing causes a loss of mature epithelial cells. This leads to a reduced capacity to support the production of T cells,” Associate Professor Chidgey said.
“This is the first time anyone has identified the basis for mature thymic epithelial cell loss and the molecules that are involved in the dysfunction of the thymic epithelial stem cells in ageing. By doing this we can now focus on how to reverse that and ‘switch on’ the  again, even just transiently, to replenish our T cell diversity,” she said.
“We believe these changes can be reversed and are beginning new investigations to see if we can develop a treatment focussed on thymic epithelial cell regeneration.”

Explore further

More information: Cell Reports (2019). DOI: 10.1016/j.celrep.2019.05.045http://dx.doi.org/10.1016/j.celrep.2019.05.045

Second Sight up 22% after hours on encouraging Orion data

Second Sight Medical Products (NASDAQ:EYES) jumps 22% after hours in response to positive data on six blind patients receiving its Orion Visual Cortical Prosthesis System. The results were presented at the World Society for Stereotactic and Functional Neurosurgery Annual Meeting in New York.
Four of the six patients have reached the 12-month follow-up point. Three of the four were able to locate a high-contrast target more effectively when the device was turned on compared to off. Three of the four were also able to determine the direction of motion of a high-contrast target significantly better when the device was on versus off.
On the safety front, two of the six participants experienced an adverse event, including one serious (seizure). There were a total of five non-serious adverse events, none unanticipated.
Orion converts images captured by a eyeglass-mounted miniature video camera to a series of electrical pulses transmitted wirelessly to electrodes implanted on the brain’s visual cortex.

Medtronic prices €5B debt offering

Medtronic (NYSE:MDT) has priced its offering euro-denominated senior notes.
€250,000,000 principal amount of floating rate senior notes due 2021.
€750,000,000 principal amount of 0.00% senior notes due 2022.
€1,000,000,000 principal amount of 0.25% senior notes due 2025.
€1,000,000,000 principal amount of 1.00% senior notes due 2031.
€1,000,000,000 principal amount of 1.50% senior notes due 2039.
€1,000,000,000 principal amount of 1.75% senior notes due 2049.
Net proceeds will be used to rollover existing debt.

J&J: Okla. 30-year plan to abate opioid crisis eyes hiring 1,734 state employees

Oklahoma’s proposed $17.5 billion plan to abate the state’s opioid crisis calls for hiring 1,734 new employees, an attorney for Johnson and Johnson stated Monday during testimony in Cleveland County District Court.
Salaries and benefits for those employees would total more than $123.5 million during the first year alone, attorney Stephen Brody said, as he cross-examined a key state witness about the reasonableness of the abatement remedies the state has recommended.
Brody also noted that the $232 million the state was requesting for addiction treatment services during the first year of the plan was more than two-thirds of the entire budget of the Oklahoma Department of Mental Health and Substance Abuse Services for fiscal year 2019.
Jessica Hawkins, senior director of prevention services for the state’s mental health agency, acknowledged the numbers are large but insisted they are reasonable.
“It’s all relative to the size of the crisis that was created and the scope of the response that is required,” Hawkins said. “It’s entirely necessary.”
John Sparks, Oklahoma counsel for Johnson & Johnson and Janssen Pharmaceuticals Inc., strongly disagreed.
“The State’s untested, litigation-driven proposal demands that Janssen foot the bill for services already covered by the federal government and for programs not directed to opioid abuse and addiction,” Sparks said in a prepared statement. “It also bears no relationship to the use of any Janssen products. The State’s claims and testimony provided by their witnesses continue to be far removed from the facts.”
Hawkins said the state’s plan is based on an estimate that there are 35,000 Oklahomans who suffer from opioid abuse disorder. She said she believes that estimate is “conservative” and that some have estimated that 150,000 to 200,000 Oklahomans suffer from the disorder and need treatment.
Hawkins’ testimony came during day 20 of a trial in Cleveland County District Courtwhere Oklahoma’s attorney general has accused opioid maker Johnson & Johnson and its subsidiaries of helping cause the state’s opioid epidemic through false and deceptive marketing efforts.
State attorneys allege the company waged sophisticated marketing campaigns that understated the addictive risks of opioids while overstating their therapeutic benefits.
They allege the actions of Johnson & Johnson and other opioid makers had tragic consequences, resulting in more than 6,100 prescription opioid-related deaths in Oklahoma from 2000-2017. Attorney General Mike Hunter wants District Judge Thad Balkman to rule that the drug makers’ actions created a public nuisance and order the companies to pay for the state’s abatement plan.
Brody spent much of the day Monday questioning Hawkins about why huge portions of the state’s plan called for taking money from Johnson & Johnson and using it to pay for programs that were already in existence and being funded through other sources.
For example, Brody asked Hawkins why Johnson & Johnson was being asked pay $1.3 billion over 30 years to provide universal screenings that would identify substance abuse problems in SoonerCare patients when that state program is already in place with federal Medicaid assistance picking up 62.38% of the cost.
Similarly, Brody asked Hawkins why the state was asking Johnson & Johnson to pay for $2.4 billion for pain services and $171.1 million for prenatal screenings for SoonerCare patients when those programs also were already in existence with Medicaid paying the same percentage of the cost.
Hawkins repeatedly testified she believes Johnson & Johnson should be paying for those services rather than taxpayers.

AbbVie looks beyond Humira with $63 billion deal for Botox-maker Allergan

Drugmaker AbbVie Inc said on Tuesday it would acquire Allergan Plc for about $63 billion, giving AbbVie control over the lucrative wrinkle treatment Botox and buying time to seek new growth before its blockbuster arthritis treatment Humira loses U.S. patent protection.

AbbVie has long been under pressure to diversify its portfolio and its shares have lost more than a third of their value since January 2018 over concerns about Humira.
The world’s top-selling drug brought in sales of $20 billion last year. But it now faces competition from cheaper versions in Europe and a 2023 expiration of its patents in the United States, by far the most profitable market.
AbbVie Chief Executive Richard Gonzalez said the company was able to buy Allergan because of the massive amount of cash that Humira generates. A U.S. corporate tax overhaul under the Trump administration, which helped companies bring back revenue earned overseas, also helped, he said.
“Humira is buying the assets that replace it over the long term,” said Gonzalez, who plans to lead the combined company and remain chairman and CEO through 2023.
Chief among those assets is Allergan’s Botox, an injection of a purified form of botulinum toxin that paralyzes muscles, smoothing frown lines and wrinkles in the forehead and around the eyes. It is also approved to treat chronic migraine headaches, overactive bladder and other medical uses.
But when used as a cosmetic treatment, patients must pay for Botox out of pocket, buffering it from the pricing pressure that health insurers and government health agencies have put on prescription medicines. Gonzalez said he does not expect a biosimilar version of Botox “for a long, long time, if ever.”
Botox had 2018 sales of about $3.6 billion, with $1.55 billion coming from cosmetic uses. Both therapeutic and cosmetic Botox are expected to keep growing, with analysts forecasting total 2019 sales of $3.9 billion and reaching nearly $6 billion by 2025, according to Refinitiv data.
“We believe the increasing concern about AbbVie’s growth potential following the U.S. Humira biosimilar competition in 2023 will be partially alleviated with the increased portfolio of assets that Allergan brings,” said Morningstar analyst Damien Conover.
The deal, coming months after Bristol-Myers Squibb Co agreed to buy Celgene Corp for $74 billion, also highlights renewed interest in major acquisitions by the pharmaceutical industry.
Shares of other specialty drugmakers and potential targets Mylan NV, Bausch Health Co Inc and Teva Pharmaceutical Industries Ltd rose, with Teva up 7.6%.
AbbVie shares were down 15.7% at $66.11, while Allergan shares were up 26.7% at $164.20.
MAJOR ACQUISITION NEEDED
AbbVie’s board decided about a year ago that the company needed a major acquisition ahead of Humira’s U.S. patent expiration, Gonzalez said.
He said he first approached Allergan CEO Brent Saunders six or seven weeks ago. In late April, Saunders traveled to Chicago for a meeting and returned a few weeks later to discuss valuation.
AbbVie was looking for a partner with $10 billion to $15 billion in durable revenue that was not expected to decline. Allergan 2019 sales are forecast to be about $15 billion.
The motivation for this deal differs significantly from AbbVie’s unsuccessful bid in 2014 to buy Irish drugmaker Shire Plc. At that time, AbbVie was looking to take advantage of lower corporate tax rates in Europe, Gonzalez said.
Allergan, formerly based in California, itself was part of a tax “inversion” deal, after European generic drugmaker Actavis bought Allergan for $66 billion in 2015 and adopted the Botox-maker’s name, moving its headquarters to Dublin.
The combined AbbVie and Allergan will be based in AbbVie’s home of North Chicago.
“The fact that we had tax reform (in the United States) allowed us … to take the company back to the U.S. It reinforces the benefit of tax reform,” Gonzalez told reporters.
ALLERGAN ISSUES
The deal follows a string of acquisitions for Allergan under Saunders, who will join AbbVie’s board. Over the last decade, Saunders remade Allergan into one of the world’s biggest pharmaceutical companies, but also saddled it with debt, leaving it less able to invest in research and development
His efforts culminated in a proposed $160 billion purchase by Pfizer Inc. But Pfizer walked away from the transaction in 2016 after the Obama administration cracked down on U.S. companies’ ability to rebase in countries with lower tax rates.
Allergan has since struggled to find new growth. Its shares have lost around half their value and shareholders have pressured Saunders to break up or sell the company. Activist investor David Tepper also ran a campaign urging Allergan to hire an independent chairman.
Under terms of the deal, Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each share held, for a total of $188.24 per Allergan share, a premium of 45% to the stock’s Monday close. Including debt, the deal values Allergan at $83 billion.
The transaction is expected to add 10% to AbbVie’s adjusted earnings per share over the first full year following the close, the companies said.
AbbVie said it expects annual pretax savings and other cost reductions of at least $2 billion in its third year after the deal closes in early 2020. Some cost savings are likely to come cuts to Allergan’s research and development operations.
“This is yet another transaction driven by diversification, scale and low borrowing costs, rather than portfolio or top line synergies,” SVB Leerink analyst Geoffrey Porges said in a note.
Morgan Stanley and PJT Partners were financial advisers to AbbVie, while Kirkland & Ellis provided legal advice. JPMorgan Chase & Co was Allergan’s financial adviser, and its legal counsel were Wachtell, Lipton, Rosen & Katz and Arthur Cox.