AI drug prospector Atomwise to screen 10B compounds for child cancer therapies

Atomwise has launched a drug discovery initiative that aims to screen up to 10 billion virtual compounds for potential therapies against childhood cancer in collaboration with global chemical supplier Enamine.

Dubbed the 10-to-the-10 program, the artificial intelligence-driven project will simulate the binding of billions of small molecules to target cancer proteins to find the ones that may offer safer pediatric treatments.

“Many of our partners have successfully identified early drug candidates, including submicromolar hits, by screening only 10 million compounds with our AI virtual screening platform,” Atomwise co-founder and CEO Abraham Heifets said in a statement. “We’ve barely scratched the surface of what is possible—imagine what will be found when we screen a chemical library that is a thousand times larger.”

The research will be directed by academic cancer researchers including those at the University of North Carolina, according to the companies, with many compounds being examined for druglike properties for the first time. The targets themselves range from applications in slowing cancer growth to halting metastasis.

Using scalable cloud computing and Enamine’s enormous virtual library of easily synthesized compounds, Atomwise hopes to deliver drugs that could take years to find using traditional discovery methods. The companies said they plan to publish the results of the initiative in peer-reviewed journals.

Earlier, Atomwise signed on to a multiyear collaboration with Eli Lilly, setting a price of $1 million a pop for each AI-sifted molecule. The San Francisco-based company could reap up to $550 million if as many as 10 of its discoveries pay off in the Big Pharma’s clinical testing and gain FDA approval, and Atomwise also gets to retain the compounds Lilly decides not to pursue.

https://www.fiercebiotech.com/medtech/ai-drug-prospector-atomwise-to-screen-10-billion-compounds-for-potential-childhood-cancer

What does AbbVie need to do to win FTC clearance for Allergan buy?

With mergers and acquisitions come antitrust reviews. And with the U.S. Federal Trade Commission (FTC) cracking down on pharma deals these days, it’s only natural to ask whether AbbVie’s proposed $63 billion acquisition of Allergan could face anti-competition scrutiny, despite across-board complaint from industry watchers over the lack of similarities between the two firms.

AbbVie’s answer to that question is simple. “We don’t anticipate any significant issues with the FTC approval process,” AbbVie’s Chief Legal Officer Laura Schumacher said during a briefing on Tuesday. But she did say “there are a few small product overlaps that we’ve agreed to divest promptly.”

Where exactly could the ax fall? Credit Suisse analyst Vamil Divan has some ideas.

Based on his review of the two companies’ portfolios, Divan highlighted two Allergan drugs that could be jettisoned: brazikumab and Zenpep.

Brazikumab is an IL-23 inhibitor, which acts on the same target as AbbVie’s blockbuster potential Skyrizi, and it’s in phase 2/3 development for ulcerative colitis and Crohn’s disease, Divan noted in a Wednesday report to clients. While Skyrizi is currently approved in psoriasis, it’s also in phase 3 trials for inflammatory bowel disease. Besides, AbbVie’s megablockbuster Humira also has a strong presence in IBD, controlling over one-third of the gastroenterology market, Divan said.

One company, a GI-focused player that Divan believes could pick up brazikumab, is Ironwood. The company is “somewhat uniquely positioned” based on its ongoing partnership with Allergan on IBD drug Linzess, he said.

Zenpep and AbbVie’s Creon, meanwhile, both contain pancrelipase as an enzyme replacement therapy for patients who cannot digest food normally due to pancreatic deficiencies. Given that Zenpep only sold $237 million in 2018, versus the AbbVie drug’s $938 million, it is also top on the to-go list, Divan figures.

The analyst also pointed to “some overlap” between AbbVie’s Orilissa and Allergan’s Esmya in endometriosis. But he doesn’t see a need for Esmya’s divestment given its limited potential due to some safety problems.

Wells Fargo analyst David Maris interpreted Schumacher’s words to mean that AbbVie has already talked to the FTC and has agreed on a selloff plan. But unexpected scrutiny over two other pharma deals suggests a shift in how the FTC is looking at competition—and analysts are calling for extra caution.

For one, Roche’s proposed $4.3 billion buyout of Spark Therapeutics has already been pushed back several times because of FTC delays. Roche recently unveiled that it has received a “second request” from the antitrust agency for additional information and documents. A “second request” is issued when the initial review raises competition concerns.

Analysts were left scratching their heads, trying to make sense of the FTC’s logic. The most likely scenario, in Jefferies analyst Michael Yee’s view, that hemophilia gene therapy is the problem field. But it’s also “the most competitive and ‘crowded’ field in gene therapy,” he noted a few days ago.

Then there’s Bristol-Myers Squibb, which said this week it would be forced to sell Celgene’s Otezla in exchange for the FTC’s blessing of its $74 billion merger. Though the companies had previously flagged an FTC concern related to psoriasis, “it is unusual for FTC to be worried about an unapproved product,” Wolfe Pharma analyst Tim Anderson recently said.

Otezla’s overlap was with BMS’ own TYK-2 inhibitor BMS-986165, which is also in development for psoriasis. “However, given how competitive the psoriasis market is and the drugs’ different mechanisms of action, we did not expect the FTC to have concerns with the overlap,” Credit Suisse’s Divan said in a Monday note. Not to mention the fact that the BMS drug may never reach the market, as it’s still in development.

The FTC’s extra caution looks like a relatively new change. Unlike its European counterpart, it didn’t take issue with Takeda’s blockbuster IBD drug Entyvio and Shire’s investigational SHP647 in their recent $62 billion merger.

But now, as Yee put it, the Otezla roadblock “is a potential read-through that the FTC is being tougher on regulating competition,” and it could mean future dealmakers may need to be more careful.

https://www.fiercepharma.com/pharma/after-roche-s-spark-delay-and-bristol-s-otezla-sale-what-does-abbvie-need-to-let-go-to-win

Analysts hit AbbVie, Allergan’s $63B deal, cite culture, strategy, other concerns

AbbVie made a major splash Tuesday with its proposed $63 billion buyout of Allergan that’ll create a top-5 pharma giant. But analysts and investors were hardly impressed. One day after the announcement, feedback continues to pour in, with analysts questioning the fit and motivation for the tie-up.

The deal “essentially combines two challenged businesses,” one analyst wrote. Some were left “surprised.” AbbVie shares, meanwhile, fell 15% in the hours after the news as Allergan’s shares jumped more than 25%. Here, we’ve dug into some of the prevailing themes from early industry-watcher feedback.

Strategic fit 

Numerous analysts understood the financial rationale for the deal but questioned the strategic side of the tie-up. In a note to clients, Piper Jaffray analyst Christopher Raymond praised numerous financial metrics, but wrote that the “lack of an obvious strategic fit or a clear line of sight toward substantially backfilling” Humira’s upcoming revenue loss … “and management’s assertions that the combined entity will have even more firepower to do midsized deals, give us pause.” AbbVie has said Humira’s U.S. loss of exclusivity in 2023 was a big motivator for the deal, with CEO Richard Gonzalez putting it bluntly on Tuesday. “Essentially, Humira is buying the assets that replace it over the long term,” the helmsman said.

Raymond wrote that the tie-up “essentially combines two challenged businesses” and “feels to us like more of the same.” Raymond also raised concern over AbbVie’s plans to scout future deals with Allergan in hand because of challenges inherent with more M&A, including high valuations across biopharma. Wolfe Research analyst Tim Anderson wrote that the combined business will have flat revenues after 2023, according to his team’s calculations.

For his part, UBS analyst Navin Jacob wrote that he also understands the financial reasons behind the megamerger, but the “primary driver” for the buy “appears to be the ability to offset” Humira’s loss of exclusivity in 2023. He called the Allergan purchase a “shift away from its positive momentum in innovation,” a sentiment shared by other analysts.

A rival bid? 

There’s been some speculation about the possibility of a rival bid for Allergan, but RBC Capital Markets analyst Randall Stanicky and Wolfe’s Anderson don’t see that as a likelihood. Among Anderson’s covered companies, AbbVie is the only one with a “substantially troubled future—by contrast, almost every other company we cover has an improving outlook.”

“It is precisely because of [AbbVie’s] troubled future (in 2023+) that we are not surprised they are doing a big deal, prior management commentary to the contrary notwithstanding,” Anderson wrote in his note dissecting the deal.

Market watchers have speculated Pfizer and Johnson & Johnson could make a bid, but Stanicky wrote that the companies aren’t “obvious candidates” and that AbbVie’s deal price already “appears fair.”

Creating value, or not? 

After the deal announcement, Allergan’s shares shot up while AbbVie’s sank. In all, the reaction destroyed about $8 billion in market cap in a day, RBC analyst Kennen MacKay pointed out. Allergan gained about $10 billion in value, while AbbVie lost about $18 billion.

Looking forward, John Rountree, managing partner at the consultancy Novasecta, told CNBC it’s “tough to find something good” in the deal. He said it’s “not creating value” and that instead it’s a defensive move. He doesn’t see how AbbVie “can add any value to Allergan.”

The companies will look for $2 billion in cost cuts, with $1 billion expected to come from R&D.

Upbeat take 

While numerous analysts questioned the merits the proposed transaction, Leerink analyst Geoffrey Porges praised the deal—even after AbbVie’s shares sank considerably on Tuesday. He said there’s a “high probability” AbbVie can generate more than $2 billion in savings and that product revenue could “easily exceed expectations.”

AbbVie investors can benefit in several ways after Tuesday’s share price drop, he wrote. If the deal doesn’t happen, the stock will likely recover from Tuesday losses, he figures. Further, the deal “assumes very little opportunity from either company’s pipelines and future capital allocation.” The combined company should at minimum be able to generate $12 to $13 in annual earnings per share through 2024 and $58 billion in sales in 2023, the analyst wrote.

Differing cultures 

At least two analysts wondered how the companies’ cultures would fit under one umbrella. Wells Fargo analyst David Maris pointed out that Allergan initiated the “social contract” discussion on drug pricing years ago, while AbbVie has repeatedly raised Humira’s price and testified about the megablockbuster’s price in Congress. Last year, Humira generated nearly $20 billion, or about 60% of AbbVie’s sales.

For integration efforts, AbbVie intends to “ring fence” key Allergan meds and keep their current operations in place, Maris wrote.

Vamil Divan, an analyst with Credit Suisse, spoke with AbbVie management following the announcement and learned that the company plans to keep Allergan’s medical aesthetics business as a “self-contained” unit operating out of Southern California. He wrote that “integration risk” is his team’s main concern with large deals, but that AbbVie’s management is confident it can integrate Allergan because two-thirds of the purchased company is in traditional therapeutic areas rather than aesthetics.

A ‘graceful exit’ 

After years of struggles at Allergan and a declining share price, numerous analysts praised the deal from the perspective of Allergan investors. Maris called it a “graceful exit” as AbbVie’s offer represents a premium to Allergan’s current share prices, but he questioned if the deal is better for Allergan investors in the long run given the expected challenges for AbbVie after Humira’s loss of exclusivity in 2023. AbbVie is offering 0.866 AbbVie shares and $120.30 in cash for each Allergan share.

Stanicky also called the deal a “welcome exit” because Allergan was expected to pursue a break up to unlock value. The buyout will allow Allergan investors to realize the “rough value of what we see [Allergan] worth in a successful break-up much more quickly,” Stanicky wrote.

https://www.fiercepharma.com/pharma/a-culture-clash-questions-over-strategic-fit-and-more-analyst-feedback-63b-abbvie-allergan

Louisiana to pay up to $58M yearly for Gilead hepatitis C drugs

Louisiana Department of Health has signed an agreement with Asegua Therapetics, a subsidiary of Gilead Sciences Inc., for an unlimited supply of a generic version of Hepatitis C drug Epclusa.

The deal, which state officials announced Wednesday, will allow the state unlimited access to the drug at an annual cost not to exceed $58 million for five years. That’s the same estimated cost of treating just 1,141 patients over the past 12 months. The innovative payment model is aimed at lowering the overall cost of treating at-risk patients.

Under the new agreement, the state’s goal is to treat 31,000 of the 39,000 patients in Louisiana’s Medicaid program and prison system with Hepatitis C by the end of 2024, according to Dr. Rebekah Gee, secretary of the Louisiana Department of Health.

The deal for the drug, which cures up to 98% of Hepatitis C patients, has been three years in the making.

Louisiana is the first state in the nation to start plotting a subscription model like this one, dubbed the ‘Netflix model’ based on the unlimited-access, single-price approach, said Governer John Bel Edwards at a press conference.

“It is time that Louisiana lead,” Edwards said to applause from a room full of Louisianahealth care providers and policy makers. “And we are leading.”

The deal has been signed and approved by Centers for Medicare and Medicaid Services, which approved a similar deal for Washington state earlier this month.

“The high cost of prescription drugs is one of the greatest challenges in our healthcare system, and Louisiana’s innovative approach to leveraging a subscription model to promote access to Hepatitis C therapy is a great example of how states can lead in designing solutions,” said CMS Administrator Seema Verma in a statement.

The yearly value of the new plan will depend on when people with the disease are treated. If the state treats all 31,000 patients it has identified as its goal at a steady rate over five years, the cost to treat each person could work out to around $9,350. The medicine Asegua is providing is typically $24,000 per treatment. In order to break even, the state would have to treat just over 2,400 people per year.

But providers hope that the effects of such a program will ripple much farther than providing treatment for Hepatitis C, eradicating a disease that increases the risk of diabetes, heart disease, stroke, liver disease and liver cancer.

“Make no mistake, this is a Hepatitis C elimination strategy,” said Gov. Edwards.

Providing treatment to a vulnerable community is also a way to get people in the door for other treatments. Louisiana plans to link this program to other services like needle exchange programs, HIV testing and addiction services, said Alex Billioux, the assistant secretary of health for the Louisiana Health Department.

And importantly, access to a cure will remove shame associated with the disease and encourage people to get tested, officials said.

“No more stigma — for anyone,” said Gee.

Hepatitis C kills more people in the United States than all other infectious diseases combined, according to the health department. The new plan begins on July 15, though officials anticipate it may take more time to get the medicine into the hands of Hepatitis C patients. It does not cover everyone with Hepatitis C without private insurance, like people on disability who chose a Medicare plan without part D.

https://www.marketscreener.com/GILEAD-SCIENCES-4876/news/Gilead-Sciences-In-deal-with-drug-firm-Louisiana-to-pay-up-to-58M-yearly-for-Hepatitis-C-drugs-28819555/

Abbott Buys Sonic Healthcare Stake in GLP Systems

Sonic Healthcare Limited (“Sonic”) (ASX: SHL ; ADR: SKHHY) is pleased to announce that it has sold its 85% shareholding in GLP Systems GmbH (“GLP”; headquartered in Hamburg, Germany) to Abbott (headquartered in Abbott Park, IL, United States). Abbott has also acquired the remaining 15% interest in GLP.

With the significant assistance of Sonic Healthcare staff and laboratories, GLP has developed a cutting-edge laboratory automation system which has been installed in eight Sonic laboratories in Australia, the UK and Germany, with more planned. GLP’s automation solutions have also been installed in third-party laboratories in eight European countries.

Sonic has determined that GLP’s potential will be more fully realised in conjunction with a suitable partner in the IVD equipment market, and that GLP is not core to Sonic’s business. As a leading global player in this market, Abbott is the ideal partner for GLP, its customers and team of 70 staff.

The sale of GLP will generate an after-tax profit to Sonic of around €30 million (~A$48 million). Approximately €80 million (~$A130 million) of cash (comprising sale proceeds and shareholder loan repayments) will be returned to Sonic, which will be used to repay existing Euro debt, creating additional balance sheet capacity for further laboratory acquisitions. FY 2019 revenue for GLP is approximately €14 million (~$A23 million).

The sale documentation includes a long-term collaboration agreement between Sonic and Abbott, as Sonic will continue to be an important customer of GLP.

https://www.marketscreener.com/SONIC-HEALTHCARE-LIMITED-6491434/news/Sonic-Healthcare-Sale-of-GLP-Systems-Opens-in-a-new-Window-28819676/

Lilly’s empagliflozin Fast Track’d for CV benefit claim in heart failure

Eli Lilly (NYSE:LLY) and development partner Boehringer Ingelheim announce that the FDA has designated type 2 diabetes med Jardiance (empagliflozin) for Fast Track review for reducing the risk of cardiovascular death and hospitalization for heart failure in patients with chronic heart failure.

The companies are currently assessing the SGLT2 inhibitor for the indication in two large-scale Phase 3 studies, EMPEROR-Reduced and EMPEROR-Preserved.

https://seekingalpha.com/news/3473799-lillys-empagliflozin-fast-trackd-cv-benefit-claim-heart-failure-patients

Higher doses of Lilly’s Trulicity successful in late-stage T2D study

Eli Lilly (NYSE:LLY) announces positive results from a Phase 3 clinical trial, AWARD-11, evaluating the safety and efficacy of weekly 3.0 mg and 4.5 mg doses of type 2 diabetes (T2D) med Trulicity (dulaglutide) compared to the current 1.5 mg weekly dose.

Results showed that the higher doses were superior to 1.5 mg in reducing HbA1C levels after 36 weeks. They also demonstrated superiority in weight reduction.

The safety and tolerability profile was consistent with the known profile of 1.5 mg.

The study will continue through week 52. The data will be submitted for presentation at future medical conference.

Lilly plans to file marketing applications in Q4.

https://seekingalpha.com/news/3473804-higher-doses-lillys-trulicity-successful-late-stage-t2d-study