Biotech Week Ahead, July 1

Biotech stocks headed south last week, reversing decent gains made in the previous week. Unfavorable FDA decisions, botched trials and weaker broader market sentiment all weighed down on the sector.

Here are the key catalysts of the unfolding week.

Conferences

• European Cardiology Congress – July 1-2, in Prague, Czech Republic
• 11th International Virology Summit – July 1-2, in Valencia, Spain
• ESMO 21st World Congress on Gastrointestinal Cancer – July 3-6, in Barcelona, Spain
• 12th World Congress on Diabetes & Endocrinology – July 5-6, in Columbus, Ohio
• 27th Congress of the International Society of Thrombosis and Haemostasis – July 6-10, in Melbourne, Australia

PDUFA Dates

The FDA is set to rule on Karyopharm Therapeutics Inc KPTI 2.12%‘s NDA for selinexor in combination with dexamethasone for treating patients with relapsed refractory multiple myeloma who have received at least three prior therapies and whose disease is refractory to at least one proteasome inhibitor, one immunomodulatory agent, and one anti-CD38 monoclonal antibody. The PDUFA date is scheduled for Saturday, July 6.

Clinical Trial Readouts

CELYAD SA/ADR CYAD 2.3% will present at the ESMO conference Phase 1 data for its CYAD-1 and FOLFOX in colorectal cancer

Uniqure NV QURE 3.75% is due to present at the ISTH conference July 5 nine-month data from the Phase 2b study of AMT-061 in hemophilia B

Sangamo Therapeutics Inc SGMO 2.12% is scheduled to present at the ISTH conference July 5 initial Phase 1/2 data for SB-525 in hemophilia A.

Catalyst Biosciences Inc CBIO 3.78% will release at the ISTH conference final Phase 2 data for marzeptaacog alfa in hemophilia.

Pending Data Releases

(expected in Q2 or the first half of 2019)

Novo Nordisk A/S NVO 0.35% – Phase 2 data for anti-interlukin 21 monoclonal antibody glucagon-like peptide-1 receptor (Type 1 diabetes)

Reata Pharmaceuticals Inc RETA 3.07% – initial Phase 1 data from healthy volunteers for RTA 1701 (autoimmune and inflammatory disorders)

Vertex Pharmaceuticals Incorporated VRTX 2.68% – Phase 2b data for VX-150 (acute pain following bunionectomy surgery)

Bellicum Pharmaceuticals Inc BLCM 9.55% – Phase 2 pediatric top-line data for BPX-501 (adjunct T-cell therapy administered after allogeneic hematopoietic stem cell transplantation)

Gilead Sciences, Inc. GILD 0.72% – Phase 2 data for GS-9688 (hepatitis B virus)

Jaguar Health Inc JAGX 0.84% and Roche Holdings AG Basel ADRRHHBY 0.43% – interim Phase 2 data for Mytesi (cancer-related diarrhoea)

TRACON Pharmaceuticals Inc TCON 11.9% – Phase 1 data for TRC253 (prostate cancer)

FibroGen Inc FGEN 1.44% – initial Phase 2 data for FG-3019 in Duchenne muscular dystrophy

ASLAN PHARMACEU/ADR ASLN 3.91% – Part 1 data from the Phase 1 study of ASLAN003 in acute myeloid leukemia

Obseva SA OBSV 3.66% – interim analysis of Part B data from a Phase 2a trial of OBE022 in pre-term labor

Sorrento Therapeutics Inc SRNE 23.3% – Phase 2 repeat dose data from a Phase 2/3 study of SP-102 (lumbosacral radicular pain)

https://www.benzinga.com/general/biotech/19/06/13995181/the-week-ahead-in-biotech-pending-clinical-readouts-in-focus

Vaccine no match against flu bug that popped up near end of season

The flu vaccine turned out to be a big disappointment again.

The vaccine didn’t work against a flu bug that popped up halfway through the past flu season, dragging down overall effectiveness to 29%, the U.S. Centers for Disease Control and Prevention reported Thursday.

The flu shot was working well early in the season with effectiveness put at 47% in February. But it was virtually worthless during a second wave driven by a tougher strain, at just 9%.

There was “no significant protection” against that strain, said the CDC’s Brendan Flannery.

Flu vaccines are made each year to protect against three or four different kinds of flu virus. The ingredients are based on predictions of what strains will make people sick the following winter.

This season’s shot turned out to be a mismatch against the bug that showed up late.

That pushed down the overall effectiveness to one of the lowest in recent years. Since 2011, the only season with a lower estimate was the winter of 2014-2015, when effectiveness was 19%. A mismatch was also blamed then.

Vaccines against some other infectious diseases are not considered successful unless they are at least 90% effective. But flu is particularly challenging, partly because the virus can so quickly change. Overall, flu vaccine has averaged around 40%.

Flu shots are recommended for virtually all Americans age 6 months or older. Officials say the vaccine is still worthwhile since it works against some strains, and it likely prevented 40,000 to 90,000 hospitalizations over the winter flu season.

The CDC bases vaccine effectiveness on preventing cases bad enough to send someone to the doctor.

https://www.apnews.com/343b72f67a8d4ad29bd3b69a052dcd39

Health panel: Millions of US kids should get hepatitis shot

A scientific panel is recommending that more than 2 million U.S. kids get vaccinated against hepatitis A.

Thirteen years ago, the Advisory Committee on Immunization Practices recommended hepatitis A shots for all U.S. children at age 1. On Thursday, the panel said the shots should be given to older children who weren’t vaccinated earlier, including 14- to 18-year-olds who turned 1 before the recommendation was made.

The panel also recommended the shots for every person with HIV. About 1.1 million Americans are estimated to have HIV, the virus that causes AIDS. People with HIV tend to develop more severe hepatitis A illnesses.

U.S. hepatitis A infections and deaths have risen in the last two years, spurred by outbreaks among the homeless and drug users.

https://www.apnews.com/f7446e2ec13a41dfbab138c163ee1580

Feds seek part of Oklahoma’s $270M opioid deal

The U.S. government wants a portion of Oklahoma’s $270 million settlement with Purdue Pharma that stemmed from the state’s ongoing lawsuitagainst opioid makers.

The U.S. Centers for Medicare and Medicaid Services wrote to the head of Oklahoma’s Medicaid agency that it has determined the federal government is entitled to part of Oklahoma’s proceeds.

The June 12 letter from CMS’ regional director Bill Brooks also seeks detailed information from the Oklahoma Health Care Authority and warns that failure to return a portion of the settlement money could result in the withholding of federal funds. Medicaid is jointly funded by the federal government and states.

Details of the letter were first reported Thursday by The Washington Post.

The Oklahoma Health Care Authority requested a 90-day extension from CMS to provide the federal agency with the requested information, and that request was granted this week, giving the state until Oct. 12 to provide its response.

A spokesman for Attorney General Mike Hunter says his office is reviewing the CMS request. Spokesman Alex Gerszewski also said the federal government’s request won’t affect state revenue.

It’s not clear how much of the state’s settlement the federal government is seeking or where the money would come from. Oklahoma’s settlement in March with Purdue, the maker of OxyContin, and the company’s controlling family called for nearly $200 million to go into a trust for the creation of a National Center for Addiction Studies and Treatment at Oklahoma State University in Tulsa. Private attorneys who handled the case for Oklahoma received about $60 million, while an additional $12.5 million was earmarked for local governments.

CMS says it is entitled to a portion of the funds under a provision of the federal Social Security Act that applies to money recovered by the state. A CMS spokesman says anytime the agency becomes aware of a settlement that might involve a Medicaid overpayment, the agency works with states to determine what portion may need to be returned to the federal government.

Federal agencies requesting a portion of such money is not unprecedented. In 2015, the federal government received half of a $1.375 billion settlement agreement with the rating agency Standard & Poor’s Financial Services LLC, but in that case the U.S. Department of Justice was involved in the lawsuit, along with 19 states and the District of Columbia.

The letter did not reference Oklahoma’s $85 million settlement with Israeli-owned Teva Pharmaceuticals or the state’s ongoing public nuisance lawsuit against consumer products giant Johnson & Johnson. Witnesses for the state have suggested the cost of abating the opioid crisis in Oklahoma could be as much as $17.5 billion over the next 30 years.

The idea the state could be on the hook to pay millions of dollars to the federal government didn’t sit well with Oklahoma state Rep. Mark McBride, R-Moore.

“As far as I’m concerned, that’s the state’s money,” said McBride, one of several lawmakers critical of the way the Purdue settlement was structured. “It seems like the federal government is seeing that the attorney general won with these two settlements, and now they have their hand out, and I think that’s just wrong.”

After the Purdue settlement was announced, the Oklahoma Legislature approved a new law clarifying that any settlement proceeds go directly into the state treasury.

https://www.apnews.com/4db5bbed5cec497bafd9973b31e7354d

Flint, Michigan, hears from prosecutors who dropped water charges

Prosecutors who dropped charges against eight people in the Flint water scandal explained their decision in a public forum Friday night, telling frustrated, shocked and saddened residents they must look at hundreds of mobile devices and millions of documents that a previous investigative team never reviewed.

Michigan Solicitor General Fadwa Hammoud and Wayne County Prosecutor Kym Worthy spoke to about 100 residents Friday night at a union hall in the city, two weeks after dismissing charges against the former state health director and other officials. The three-year probe has started over, and charges could be refiled.

“We have received information that is absolutely relevant to our investigation that we have never had before,” said Hammoud, who took over the investigation of Flint’s lead-contaminated water in January following the election of Dana Nessel, a Democrat who succeeded Republican Attorney General Bill Schuette. Nessel is not involved in the criminal probe because she is working to resolve Flint residents’ lawsuits against the state.

Hammoud cited the need to review 20 million documents and said her team uncovered in a month, with search warrants , what previous investigators had not retrieved in three years.

The prosecutors criticized how their predecessors cut seven other officials plea deals resulting in no jail time or criminal records.

“I’ve never seen anything like it,” said Worthy, who also joined the criminal team.

Some residents were shocked by the massive amount of new materials being reviewed and that the statute of limitations for one felony crime — misconduct in office — could expire in nine months. Others thanked the new prosecutors, agreeing the prior investigation was inadequate.

Arthur Woodson said defendants who pleaded no contest “got less time for poisoning over 98,000 people than somebody stealing a slice of pizza. People have died. … I have PTSD. It’s hard to trust. But what I heard here today: Y’all have been totally honest.”

A tearful Marijoyce Campbell said she had a “heavy heart” after learning about the new documents and being told some materials the previous investigative team had were heavily redacted.

“I cannot believe something like this can happen,” she said. “Please, please tell me some heads are going to roll, that somebody is going to pay for all this murder, all this criminal activity.”

Other people demanded charges against Republican former Gov. Rick Snyder, who has apologized for his administration’s role in the crisis, and a closer look at local officials involved in the construction of a regional pipeline that was a factor in the temporary switch to using water from the Flint River. The prosecutors said they will go where the evidence takes them.

“A lot of us are really angry, and we want to see some justice,” said Claudia Perkins-Milton, adding that the new prosecutors “are the ones to do it.”

“There’s a lot of criminals in this case,” she said. “It’s wide open.”

Another resident, Laura MacIntyre, criticized how prosecutors announced their decision.

“Do you not realize how it felt when you released to the press dropping the charges without coming here first? Without any kind of communication?” she said.

She said the public forum should have been held sooner. Hammoud apologized for the delay.

Flint faced a man-made health emergency after lead from old pipes leached into drinking water in 2014 and 2015 due to a lack of corrosion-control treatment following a change in the water source while the financially strapped city was under state emergency management. The switch also has been linked to a deadly Legionnaires’ disease outbreak.

Four of the eight defendants were facing the most serious charge — involuntary manslaughter — including former state Department of Health and Human Services Director Nick Lyon, who was accused of failing to timely warn the public about the spike in Legionnaires’ cases, and former chief medical executive Eden Wells. Both were in Snyder’s Cabinet. Legal experts have questioned if the manslaughter charges will be revived, noting the difficulty proving that high-level officials directly caused deaths.

Schuette again defended his team’s work Friday.

“We took the steps that preserved the evidence in this case. And our work was not done,” he said in a statement. “Two judges bound significant cases over for trial. And we were prepared to go forward with robust prosecutions. But this is not about prosecutor versus prosecutor. This has always been, and only been, a fight for justice for the families of Flint. We acknowledge it’s their case now and we wish them success in their pursuit of justice for the people of Flint.”

https://www.apnews.com/9279c263c5694dad848feebebe41d0f4

Big Pharma Has to Bet Big on M&A– Investors Don’t

AbbVie Inc.’s  $63 billion purchase of Botox maker Allergan Inc. is the third super-sized drug deal announced in the past 14 months, and the second just this year after Bristol-Myers’s Squibb Co.’s even bigger $74 billion purchase of Celgene Corp. These huge combinations are no fluke: In the last decade, the biopharmaceutical industry has pursued more $40 billion-plus transactions than any other sector, according to data compiled by Bloomberg.

These big deals happen for a reason. Drug development is difficult, unpredictable and time consuming; even when the billions pharmaceutical companies spend on R&D or strategic purchases and partnerships bear fruit with top-sellers, those blockbusters still face the prospect of expiring patents and an eventual decline in sales. That pressures drugmakers into bigger acquisitions, in spite of their mixed track record and inherently risky and complicated nature. In AbbVie’s case, the company needs to find a replacement for its $19 billion-a-year arthritis drug Humira, while Bristol-Myers is too dependent on two key drugs.

If pharma giants can’t keep themselves from making big and risky M&A bets, that doesn’t mean investors have to follow suit, or that they’d get much of an edge from doing so. While big pharma deals have resulted in longer-term gains for very patient investors in many cases, the returns don’t look as good compared to the broader market. Of the eight biopharma deals worth more than $40 billion that closed in the last 20 years, only one delivered better returns than the S&P 500 five years after it closed: Merck & Co.’s $47 billion acquisition of Schering-Plough Corp. in 2009 (1):

That deal is arguably something of an accidental winner. Long-term success didn’t come from any of the products Merck targeted in the merger; instead, an afterthought of an antibody that was initially set to be sold off  became Keytruda, a cancer drug that’s projected to generate $15 billion in sales in 2021.

Investors shouldn’t count on buried pipeline treasure to bail out the latest crop of big drug acquisitions. A better bet? Try an index fund.

(1) Not included in the group is Takeda Pharmaceutical Co.’s $62 billion purchase of Shire Plc, which closed in January, making return comparisons less useful.

https://finance.yahoo.com/news/big-pharma-bet-big-m-150029963.html

J&J accused of introducing deceptive information in Oklahoma opioid trial

An attorney for the state accused Johnson & Johnson of providing false and deceptive information to the court Friday as action heated up in a trial where the company and its subsidiaries have been accused of helping cause the state’s opioid crisis through false and misleading marketing.

Friday’s most heated court action centered around a 2003 letter to the editor of the Louisville Courier-Journal that advocated for the use of opioids by pregnant women.

The author of that letter was Steven P. Passik, one of the individuals whom Johnson & Johnson at times paid to serve as a key opinion leader in its efforts to persuade doctors that untreated chronic pain is a major problem in this country and that opioids should be used more widely.

Under cross-examination by a Johnson & Johnson attorney earlier in the week, Terri White, Oklahoma commissioner of mental health and substance abuse services, was repeatedly questioned about a document prepared by Johnson & Johnson that indicated that Passik wasn’t paid by the company as a key opinion leader in 2003, when he wrote the letter to the editor, or any of the four preceding years or five years afterward.

https://www.marketscreener.com/JOHNSON-JOHNSON-4832/news/Johnson-Johnson-accused-of-introducing-deceptive-information-in-Oklahoma-opioid-trial-28833420/