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Monday, July 8, 2019

Biophytis files for 8.75M-share U.S. IPO at $7-$9/ADS

France’s Biophytis has filed an amended registration statement to offer 8.75M American Depositary Shares in its U.S. initial public offering.
It says in the amendment that it expects the ADS to price between $7 and $9 each, which comes out to €0.62-€0.80 per ordinary share.
It’s applied to list the ADS on Nasdaq under the symbol BPTS.
Amid companies looking to develop treatment to prevent or treat aging-related diseases, it exepcts to compete with Cytokinetics/Astellas (CYTK/OTCPK:ALPMY), Eli Lilly (NYSE:LLY), Novartis (NYSE:NVS), Pfizer (NYSE:PFE), and Sanofi/Regeneron (SNY/REGN). On DMD, it expects to compete with PTC Therapeutics (NASDAQ:PTCT) and Sarepta Therapeutics (NASDAQ:SRPT), among many others.
And for dry AMD, it believes it will compete with companies including Allegro Ophthalmics, Apellis Pharmaceuticals (NASDAQ:APLS), Astellas, Hemera Biosciences, Ionis Pharmaceuticals (NASDAQ:IONS), Ophthotech, and Stealth BioTherapeutics (NASDAQ:MITO).

Phibro Animal Health: ‘Significant Advance’ in African Swine Fever Vax

Phibro Animal Health Corporation (PAHC) today announced it is pursuing patent protection following a significant advance in the on-going development of a vaccine for African Swine Fever (ASF).  This important step in the vaccine development process involves the identification of immunogenic epitopes and proteins that show strong potential to form the basis for a vaccine against ASF.
Phibro’s R&D team and its collaborators made this identification through the use of a unique bioinformatics analysis tool in order to select for the highest potential epitopes and proteins capable of eliciting protective immune response.
Phibro’s approach is to create a specific epitope-based vaccine, rather than following the more conventional path of an attenuated live vaccine.  If successful, this approach would not only be an effective response to ASF but would result in a vaccine that presents no risk of further spreading the disease.

Medical group deals face growing antitrust scrutiny as price worries rise

Recent actions by antitrust enforcers and courts to block or regulate purchases of physician practices by hospitals and insurers may signal increasing scrutiny for such deals as policymakers intensify their focus on boosting competition to reduce healthcare prices.
Last month, the Federal Trade Commission announced a settlement with UnitedHealth Group and DaVita unwinding United’s acquisition of DaVita Medical Group’s Las Vegas operations.
At the same time, Colorado Attorney General Phil Weiser separately reached a deal imposing conditions on UnitedHealth’s acquisition of DaVita’s physician groups in Colorado Springs.
Also in June, the 8th U.S. Circuit Court of Appeals upheld a District Court rulingblocking Sanford Health’s proposed 2015 acquisition of the multispecialty Mid Dakota Clinic in the Bismarck, N.D., area. That antitrust case originally was filed by the FTC and North Dakota Attorney General Wayne Stenehjem in 2017.
And in May, Washington Attorney General Bob Ferguson settled an antitrust lawsuit with CHI Franciscan setting conditions on the health system’s 2016 affiliation with the Doctors Clinic, a multispecialty group, and its purchase of WestSound Orthopaedics, both in Kitsap County. CHI Franciscan will pay up to $2.5 million, distributed to other healthcare organizations to increase access to care.
The cases represent the most significant antitrust developments involving physician acquisitions since federal and state antitrust enforcers won a 9th U.S. Circuit Court of Appeals ruling in 2015 upholding a lower-court decision forcing Idaho’s St. Luke’s Health System to unwind its 2012 acquisition of Saltzer Medical Group.
The agreements with UnitedHealth in Nevada and Colorado show a new willingness by federal and state antitrust enforcers to use seldom-cited vertical merger theory. Under that theory, acquisitions of physician groups by insurers or hospitals may foreclose competition by making it more difficult or costly for rivals to obtain physician services.
“I am concerned about the state of consolidation,” Weiser said in an interview. “Healthcare costs in Colorado have risen at an alarming rate. Protecting competition needs to be a central part of our strategy to provide affordable and quality healthcare.”
These recent antitrust actions come as concerns mount over the growing consolidation of hospitals and physician practices and the impact on pricesand total health spending. Sixty-five percent of metropolitan statistical areas are highly concentrated for specialist physicians, while 39% are highly concentrated for primary-care doctors, according to Martin Gaynor, a health economist at Carnegie Mellon University.
Hospital acquisitions of physician practices have led to higher prices and health spending, researchers have found. Average outpatient physician prices in 2014 ranged from 35% to 63% higher, depending on physician specialty, in highly concentrated California markets compared with less-concentrated markets, according to a 2018 study by researchers at the University of California at Berkeley. The link between physician market concentration and prices is similar across the country, experts say.
Market consolidation in California
That’s why some elected officials and antitrust attorneys say it’s past time to step up oversight of physician practice acquisitions by hospitals, insurers and private-equity firms. These deals traditionally have received less scrutiny than hospital and insurance mergers, partly because they are smaller transactions that federal and state antitrust enforcement agencies may not have known about beforehand.
The recent cases suggest state attorneys general may play a growing role in policing physician acquisition deals by hospitals and insurers, given that they are in a better position than the feds to find out about brewing local deals. Most of the growth in physician group size has come from piecemeal acquisitions of small group practices, a Health Affairs study found last year.
Washington and at least two other states have passed laws requiring healthcare providers to give state officials advance notice before finalizing a merger or acquisition. That gives state AGs another advantage over the FTC, which under federal rules only must receive advance notice of deals exceeding $78.2 million in value. Few physician acquisitions meet that threshold.
Others worry, however, that the absence of clear federal guidelines for challenging vertical mergers between hospitals and physicians has made the FTC and the courts overly cautious, and that it now may be too late because many physician markets are already highly concentrated. In March, the FTC and the Justice Department said they were working on new vertical merger guidelines, which were last updated in 1984.
“The horse may be out of the barn in a number of markets where there have been very large acquisitions of physician practices,” said Tim Greaney, a visiting professor at the University of California Hastings College of Law. “It’s not clear what you can do about that.”
But hospitals, insurers and other physician aggregators argue that making it harder to buy physician groups would hamper their ability to establish cost-saving, high-quality delivery models emphasizing care coordination.
That’s how Sanford Bismarck President Dr. Michael LeBeau responded to last month’s 8th Circuit ruling against his organization’s merger with Mid Dakota Clinic. “Sanford continues to believe that combining with Mid Dakota Clinic would lead to the enhanced provision of and access to healthcare for patients in central and western North Dakota,” he said in a written statement.
Researchers have raised doubts, however, about whether hospital acquisitions of medical practices have truly achieved efficiencies and cost savings, and whether any cost savings have been passed on to payers and patients.
Going forward, hospitals, insurers and other healthcare organizations need to prepare themselves for an era of closer state and federal examination of physician acquisition deals, antitrust experts agree. That also may apply to private-equity firms, which have accelerated their investment in physician groups and have sought to build market power in particular specialties.
The FTC did not respond to requests for an interview.
Healthcare organizations pursuing physician deals must be ready to cite circumstances where competition continues to thrive following a merger. But that may not be easy, conceded Lisa Gingerich, an antitrust attorney at Michael Best & Friedrich.
“The challenge now is there has been so much consolidation that it’s harder and harder to find those circumstances,” she said.
Scaling back integration in Nevada and Colorado
The UnitedHealth Group-DaVita case may present the clearest warning shot to organizations contemplating large physician acquisitions, attracting both federal and state attention.
The FTC argued that the proposed acquisition by United’s OptumCare of DaVita’s HealthCare Partners of Nevada would result in a near-monopoly controlling more than 80% of the market for services delivered by managed-care provider organizations to Medicare Advantage plans.
The merger would be both horizontal—combining OptumCare’s and DaVita’s competing physician groups—and vertical, as it would combine a Medicare Advantage insurer and a physician group. That, the FTC said, would increase costs and decrease competition on quality, services and amenities by forcing rival Medicare Advantage plans to pay more for physician services.
Under the FTC settlement, UnitedHealth agreed to sell DaVita’s Nevada medical group to Intermountain Healthcare, which offers a Medicare Advantage product in Las Vegas through its SelectHealth insurance arm.
Meanwhile, under a separate consent judgment with Attorney General Phil Weiser in Colorado, UnitedHealth will lift its exclusive contract with Centura Health for at least 31/2 years, expanding the provider network available to other Medicare Advantage plans. In addition, DaVita Medical Group’s agreement with Humana, United’s main competitor in Colorado Springs, will be extended through at least 2020.
All four FTC commissioners approved the enforcement action in Nevada. But the two Republican-appointed commissioners and the two Democratic-appointed commissioners disagreed on whether to ask a judge to block United’s acquisition of DaVita’s medical group in Colorado, a purely vertical merger. The 2-2 split meant no federal action was taken.
The Democratic commissioners. Rebecca Kelly Slaughter and Rohit Chopra, said the merger would harm competition and consumers, and welcomed the Colorado attorney general’s remedial conditions. “We hope all state attorneys general actively enforce the antitrust laws to protect their residents from harmful mergers and anticompetitive practices,” they wrote.
But the Republican commissioners, Noah Joshua Phillips and Christine Wilson, opposed action in Colorado on the grounds that the law on vertical mergers is “relatively underdeveloped” and that there was mixed evidence on whether the Colorado merger was pro- or anti-competitive.
Weiser said his office had to intervene to protect the ability of Humana and other Medicare Advantage insurers to compete with United by having access to physicians and hospitals. “State attorneys general will be a critical part of protecting competition, both because we’re close to our citizens and because of a lack of action by the federal government,” he said.
To other observers, the Nevada and Colorado agreements were notable because they invoked seldom-used vertical merger theory, which the FTC has been reluctant to use because it generally saw vertical mergers as helping reduce costs and increase competition.
“This shows that in the proper case, the FTC won’t hesitate to pursue vertical theory to reverse the course of” a physician group acquisition, said Douglas Ross, a veteran antitrust attorney at Davis Wright Tremaine in Seattle.

A muddier outcome in Washington state
Washington Attorney General Bob Ferguson’s settlement of his antitrust case against CHI Franciscan was less definitive than the outcomes in the other recent cases.
He had accused the hospital system of engineering the purchase of WestSound Orthopaedics and the affiliation with the Doctors Clinic to capture a large share of orthopedists and other physicians in Kitsap County, fix prices at a higher level, and shift more services to its Harrison Medical Center in Bremerton. But the settlement left in place CHI Franciscan’s purchase of WestSound and its tight professional services agreement with the Doctors Clinic, while placing relatively modest conditions on joint contracting by the hospital system and the clinic.
Ferguson’s bargaining position was weakened by a federal District Court decision in March granting CHI Franciscan’s motion to summarily dismiss his allegation that the acquisition of WestSound reduced competition and violated antitrust law. That may be the first time since the 1990s that a defendant won summary judgment on a horizontal merger claim in an antitrust case, one expert said.
In addition, the judge required the parties to go to trial on whether the transaction between CHI Franciscan and the Doctors Clinic was a true merger, as the two organizations claimed, or whether they remained two competing provider groups. If Ferguson lost on that issue, his antitrust case would be dead because a merged entity cannot be cited for price-fixing.
The attorney general settled that claim with CHI Franciscan and the clinic by requiring a $2.5 million payment to other healthcare providers and expanding the types of value-based contracts they could participate in. But the two sides differed sharply in their characterization of the settlement.
“This was a matter where we identified anticompetitive effects and ongoing harm to consumers and saw a need to act quickly,” said Jonathan Mark, senior assistant attorney general in Washington. “We believe the remedies in the consent decree are sufficient to address the anticompetitive effects we alleged.”
For its part, CHI Franciscan said there never was any court judgment or admission that it engaged in anticompetitive conduct, noting that the settlement preserved its deals with WestSound and the Doctors Clinic. It was particularly important for hospitals all over the country that Ferguson failed to establish that a professional services agreement with a physician group constituted price-fixing, an attorney for the hospital system said.
“The AG lost this lawsuit and is now twisting the facts to match his baseless allegations,” said Cary Evans, the hospital system’s vice president for government affairs. “Had we not affiliated, the closing of the Doctors Clinic and WestSound would have resulted in less choice, decreased access, and high costs for residents.”
A classic example in North Dakota
The outcome in the North Dakota case was more conventional than the others.
There, the 8th U.S. Circuit Court of Appeals affirmed the District Court’s preliminary injunction blocking Sanford Health’s acquisition of Mid Dakota Clinic as a horizontal merger.
That was fairly predictable because of the huge physician market share Sanford—whose physician group competed with the clinic—would capture if it completed the deal, experts said.
Sanford would control 99.8% of general surgeon services, 98.6% of pediatric services, 85.7% of adult primary-care services, and 84.6% of OB-GYN services in the Bismarck-Mandan market, the 8th Circuit panel found.
The appeals court also upheld the lower court’s finding that a competitor, Catholic Health Initiatives’ St. Alexius Health, would not be able to enter the market quickly after the merger, at least partly because it faced difficulty recruiting physicians in the Bismarck-Mandan area.
“That case really seemed like a no-brainer to me,” said Tim Greaney, a visiting professor at the University of California Hastings College of Law.
A key takeaway was the 8th Circuit’s rejection of Sanford’s “powerful buyer” defense. Sanford had argued that Blue Cross and Blue Shield of North Dakota, the state’s dominant insurer, had enough market power to resist any price increases sought by the newly merged entity.
But analysis of claims data and testimony by a Blues plan representative demonstrated that the merged provider would have the market power to force the insurer to raise prices or leave the market, the 8th Circuit panel wrote.
“If antitrust authorities see someone getting more bargaining power and being able to charge higher prices, that’s something they’ll worry about, even if the (payer) has significant bargaining power as well,” said Debbie Feinstein, a former top Federal Trade Commission official who heads Arnold & Porter’s global antitrust group.
Sanford didn’t say whether it planned to abandon the deal.

J&J defense to proceed

The judge overseeing the state’s opioid case against Johnson & Johnson ruled Monday the trial will go forward.
The drugmaker had asked the judge to end the trial “here and now” and rule in its favor.
Cleveland County District Judge Thad Balkman denied the defense request after listening to legal arguments Monday morning.
The judge said he had determined there is sufficient evidence of the state’s nuisance claim for the trial to proceed.
Defense attorneys filed the request Wednesday morning after the state’s final witness, a former drug sales rep, testified. Such motions made at the midpoint of civil trials are often routinely rejected with little discussion.
At the trial, the state of Oklahoma is asking the judge to hold Johnson & Johnson and its subsidiaries accountable for an opioid epidemic that has killed close to 7,000 Oklahomans. The state wants the judge to order the drugmaker to pay more than $17.5 billion to abate a public nuisance.
Johnson & Johnson contends it actually was an afterthought in a case built for much of the past two years against Purdue Pharma “and its flagship product, OxyContin.” The state settled with Purdue Pharma before trial for $270 million and with generic drugmaker Teva Pharmaceuticals USA for $85 million.
“Having compromised with the manufacturers of the drugs that fueled its crisis, the State and its contingency counsel pivoted, training their sights on a defendant they believe can satisfy an astronomical judgment,” defense attorneys told the judge in a 121-page legal filing.
In the legal filing, the attorneys argue a judgment in favor of Johnson & Johnson is warranted on both legal and factual grounds including their claim the state shares blame for the crisis.
The state asked for the trial to proceed.
“If the kind of conduct that you have seen and heard and witnessed with your own eyes over the last month and a half isn’t the kind of conduct that rises to a nuisance here in the state of Oklahoma, then we should all go lock ourselves in a very safe and secure dungeon and make sure we never come out again,” state attorney Brad Beckworth told the judge last week.
In a response Sunday, the state told the judge defense attorneys had raised nothing new in last week’s legal filing — “nothing this Court has not already rejected.”
In the legal filing and a one-page summary sent to the media, Johnson & Johnsonsharply criticized Attorney General Mike Hunter for making the public nuisance claim. “Even as the attorney general argues for a far-reaching application of public nuisance law in this case, the attorney general argues just the opposite in a climate change case in California” involving oil producers, Johnson & Johnson said in the summary.
In a statement about the criticism, Hunter told The Oklahoman it was absurd to compare the opioid epidemic to climate change.
“The opioid epidemic can be curtailed through a discernible and focused series of actions, including education, prevention, treatment and enjoining deceptive marketing practices. Climate change, on the other hand, is a hypothetical global phenomenon with countless factors and influences, such that attempted abatement via a judicial order … is totally inapplicable,” Hunter said.
In blaming Johnson & Johnson for the opioid epidemic, the state put on evidence two former subsidiaries sold the raw materials to other drugmakers.
“Johnson & Johnson created a mutant strain of poppy in 1994 that allowed it to manufacture and supply massive amounts of opioids,” Hunter said in a news release last week after the state rested its case. “For years, Johnson & Johnson supplied more than 60 percent of all active ingredients for opioids manufactured and sold in the United States.”
Johnson & Johnson told the judge, though, that the U.S. Drug Enforcement Administration carefully regulated and specifically authorized those sales.
“The theory fails because Tasmanian Alkaloids and Noramco sold their products under strict international and federal regulatory systems that state tort law cannot second-guess,” defense attorneys wrote in the legal filing.
More defense witnesses will testify this week. Six have testified so far. Testimony could wrap up this week or early next week. The judge will then hear closing arguments and announce the verdict in August.

Judge dismisses J&J request to toss out lawsuit over opioids crisis

Pharmaceutical giant Johnson & Johnson has a legal case to answer over accusations that it drove the US opioid epidemic now claiming 130 lives a day, an Oklahoma judge has ruled.
After a fiery hearing on Monday, with accusations of lying, Judge Thad Balkmandismissed a motion by the company to toss out a multi-billion dollar lawsuit by Oklahoma’s attorney general. He said the state has presented sufficient evidence for the trial to continue.
The state has spent the past month laying out evidence alleging that Johnson & Johnson played a leading role in creating the epidemic with marketing strategies that dangerously misrepresented the risk of opioid addiction to doctors, manipulated medical research and drove prescribing of high strength narcotics to patients who didn’t need them.
The Oklahoma ruling will bolster hundreds of other lawsuits in the pipeline against leading opioid makers, drug distributors and pharmacy chains by counties, cities and states across the US blighted by an epidemic estimated to have claimed more than 400,000 lives over the past two decades.
On Monday, Johnson & Johnson argued that Oklahoma’s attempt to sue it under a public nuisance statute was wrong because the law was intended to address problems such as property disputes. The company’s lawyer, Stephen Brody, argued that if the state were to prevail then public nuisance laws could be used to make McDonald’s pay for the obesity crisis, gun manufacturers for shootings, and the oil industry for climate change.
Brody also said Johnson & Johnson’s promotion of opioids was protected by the First Amendment and the supreme court’s landmark Citizens United ruling, which prevents the government from restricting corporate spending on political advertising.
Brody added that the state failed to prove that Johnson & Johnson’s opioid subsidiary, Janssen, played any role in causing the epidemic because its drugs were only a fraction of the market.
The state’s lawyer, Brad Beckworth, was visibly angry as he repeatedly accused the company of lying.
“That may be the most recalcitrant, strident and offensive argument I’ve ever heard. And that’s saying something because me and my firm have prosecuted the tobacco industry to the tune of $17.2bn. We represented the state of Florida against British Petroleum for the worst environmental disaster this country has ever known to the tune of $3bn,” Beckworth told the court. “I have never seen conduct as reprehensible and as offensive as I have seen at the hands of Johnson & Johnson.”
Beckworth derided the free speech argument.
“No man or woman has ever laid down their life for this country so that a pharmaceutical company could come out and lie or hook kids on opioids,” he said.
He challenged Johnson & Johnson’s claim it was selling its drugs within the guidelines set by the federal regulator, the US Food and Drug Administration. The FDA, he said, had sent it an order to desist from marketing one of its opioid for all types of chronic pain when it had only been approved for a much smaller group of patients.
Beckworth went on to say “this company is perpetuating the opioid crisis as we sit here today”.
Johnson & Johnson challenged accusations that its marketing helped cause the opioid epidemic by saying that while ice cream sales and crime went up in the summer “that does not mean that ice cream causes homicides”. Beckworth said he was astonished by the parallel, calling it “offensive”.
“This company has literally compared the opioid epidemic to ice cream sales,” he said.
Beckworth said Johnson & Johnson’s attempt to dismiss the case was mostly a PR stunt because the company’s share price dropped sharply after the state laid out damning evidence about the part it played in league with other opioid makers to drive up prescribing of their drugs with an intense campaign targeting doctors with false claims about their safety and effectiveness.
“It’s a PR stunt. That’s all it is,” he said. “It was fear these TV cameras were going to show the public the truth about Johnson & Johnson.”
Brody responded by saying he was caught off guard by the intensity of Beckworth’s presentation.
“I’m somewhat surprised by the invective,” he said.

J&J Darzalex shows treatment effect in mid-stage study in certain myelomas

Genmab A/S (OTCPK:GNMSF -2.3%announces that a Phase 2 clinical trial, GRIFFIN, evaluating licensee Johnson & Johnson (JNJ +0.3%) unit Janssen Biotech’s Darzalex (daratumumab), combined with Celgene’s Revlimid (lenalidomide), Takeda’s Velcade (bortezomib) and dexamethasone (VRd), in newly diagnosed multiple myeloma patients eligible for high-dose chemo and autologous stem cell transplantation met the primary endpoint.
Patients receiving Darzalex + VRd showed a 42.4% rate of stringent complete responses compared to 32.0% for VRd alone.
No new safety signals were reported.
Darzalex is currently approved in the U.S. for multiple myeloma patients ineligible for autologous stem cell transplantation.

Juror urges U.S. judge to uphold $80 million Roundup verdict against Bayer

A juror who was part of a panel that delivered an $80 million award against Bayer AG (BAYGn.DE) after finding that its glyphosate-based weed killer Roundup caused a man’s cancer has urged the presiding judge to uphold the decision.
A letter from the juror written on July 4 was posted to the court docket on Monday as part of legal filings by Bayer. The company accused the juror of bias and called on the judge to disregard the letter in his decision making.
In the letter, the unidentified juror told U.S. District Judge Vince Chhabria in San Francisco that the $80 million in awards “were no accident” and the result of “meticulous planning” by the jury.
The letter was a response to statements by Chhabria during a court hearing last week, when the judge said he would have to reduce the $75 million punitive damages portion of the award on constitutional grounds.
Following a four-week trial, a federal jury on March 27 awarded $5 million in compensatory and $75 million in punitive damages to Edwin Hardeman, who was diagnosed with non-Hodgkin’s lymphoma in 2014.
U.S. Supreme Court rulings limit the ratio of punitive to compensatory damages to 9 to 1, which in this case would put the maximum for punitive damages at $45 million.
In the letter, the juror said higher damages ratios were allowed in extraordinary cases, echoing arguments Hardeman’s lawyers made during Tuesday’s hearing, when they urged Chhabria to affirm the total award.

“Based on the evidence provided, ‘reprehensible’ is much too kind a word to describe the actions of the Monsanto employees,” the juror wrote.
Bayer, which bought Roundup maker Monsanto for $63 billion last year, says Roundup and its active ingredient glyphosate are safe for human use and not carcinogenic. It faces Roundup cancer lawsuits by more than 13,400 plaintiffs.
The company in filings on Monday only identified the writer as “juror #5.”
A lawyer for the company said he had observed the juror attending Tuesday’s hearing, talking to Hardeman’s lawyers and hugging Hardeman and his wife. Bayer said the juror had also displayed bias against the company during jury selection.
Last week’s letter marks the second time jurors in the Roundup litigation called on judges to uphold their verdicts.
In October, several jurors who delivered a $289 million verdict against Monsanto, finding Roundup caused a man’s terminal cancer, wrote to the San Francisco trial court judge, asking her to “respect and honor the verdict.”
The judge ultimately upheld the jury’s finding but reduced the award to $78 million. The case is on appeal.

Legal experts at the time said the letters were unusual, as jurors generally do not engage with post-trial proceedings following a verdict.
Bayer on Monday said the letters deprived it of fair trials.
“The fact that jurors from both trials wrote letters in support of constitutionally impermissible verdicts is highly unusual, and generates further anti-Monsanto bias in the Bay Area that will infect future Roundup trials,” the company said.