Revenue of $473.58M (+7.2% Y/Y) beats by $1.86M.
Thursday, July 25, 2019
J&J’s ponesimod successful in late-stage MS study
Johnson & Johnson (NYSE:JNJ) unit Janssen Pharmaceuticals announces positive results from a Phase 3 clinical trial, OPTIMUM, evaluating ponesimod compared to Sanofi’s (NASDAQ:SNY) Aubagio (teriflunomide) in adults with relapsing multiple sclerosis (MS).
The study met the primary endpoint, the annualized relapse rate up to the end of the study, and most secondary endpoints.
No new safety signals were reported.
MS is a chronic autoimmune inflammatory disorder of the central nervous system (CNS). Ponesimod modulates a protein called sphingosine-1-phosphate receptor 1 (S1P1) which reduces the number of circulating lymphocytes by trapping them in the lymph nodes which reduces the number of the pro-inflammatory cells that can cross into the CNS thereby dampening inflammation.
More detailed data will be presented at ECTRIMS in Stockholm in September.
The company plans to file marketing applications in the U.S. and Europe later this year.
The company acquired the rights to ponesimod via its acquisition of Actelion two years ago.
Opdivo’s lung cancer latest: one fail, one shrug
Bristol-Myers Squibb’s byzantine Checkmate-227 study yields one flop and one technical success that, in reality, counts for nothing.
Most biopharma watchers have now accepted that Merck & Co’s Keytruda has an unassailable grip on first-line metastatic lung cancer. Yet the predictable failure of Opdivo in this setting initially sent Bristol-Myers Squibb down, suggesting that some investors had, after all, held out hope.
The result, revealed by Bristol after market close yesterday, concerns the extensively overhauled and confusing Checkmate-227 trial. To be fair, only one analysis was a clear fail, but that was the important readout; Bristol also claimed a hit in a separate part of ‘227, but this concerned an effectively irrelevant setting.
The ‘227 study had been overhauled to look initially at a combined subgroup cut by tumour mutation burden (TMB), and gave the company an arguable win backing an Opdivo/Yervoy combo. Still to read out was overall survival for Opdivo/Yervoy in PD-L1 ≥1% expressers (part 1a) and for Opdivo plus chemo in all non-squamous subjects (part 2).
Yesterday Bristol said part 2 had failed, yielding a non-significant median OS of 18.83 months versus 15.57 months for chemo alone. Had this succeeded it could have put Opdivo plus chemo on a par with Keytruda, which thanks to the stunning result of Keynote-189 has a stranglehold on the first-line chemo combo setting.
As for the supposed success, this related to ‘227 part 1a. But this is irrelevant because the PD-L1 ≥1% population can already get Keytruda monotherapy, based on the Keynote-042 trial, and there is no logic in adding on top of PD-L1 blockade a highly toxic drug like Yervoy.
On an analyst call today Bristol insisted that the latest result potentially differentiated its approach by virtue of chemo sparing. This extraordinary claim is presumably backed by an exploratory analysis of part 1a in PD-L1-negative subjects, though even so the rationale of replacing chemo with Yervoy is questionable.
Bristol lost 2% in the premarket, before climbing 3% today after second-quarter financials were released.
Controversy
Of course, even the earlier purportedly positive TMB analysis (part 1 combined) is now shrouded in controversy. In January Bristol pulled its US filing for TMB-high NSCLC after an FDA data request, suggesting that the US regulator saw little relevance in TMB status (Bristol makes investors squirm a little more, January 24, 2019).
The data the FDA had asked for concerned ‘227 part 1a, and were not available at the time. They are available as of yesterday, but even though they are positive all they do is reiterate the importance of PD-L1 status.
An interesting point in the post-mortem over ‘227 part 2 is the extent to which Keytruda’s benefit in Merck’s corresponding chemo combo trial, Keynote-189, was driven by underperformance of the chemo comparator cohort.
| CROSS-STUDY COMPARISON IN FIRST-LINE METASTATIC NSCLC | ||||
|---|---|---|---|---|
| Trial | Active treatment | Population | mOS data | Result |
| Checkmate-227 part 1 | Opdivo + Yervoy | TMB high (≥10mut/Mb) | 23.0mth vs 16.4mth | Unclear* |
| Neptune | Imfinzi + tremelimumab | TMB high (≥20mut/Mb) | H2 2019 | TBC |
| Keynote-042 | Keytruda | PD-L1 ≥1% | 16.4mth vs 12.1mth | Hit |
| Checkmate-227 part 1a | Opdivo + Yervoy | PD-L1 ≥1% | Not disclosed | Hit |
| Keynote-189 | Keytruda + chemo | Non-squamous all-comers | 22.0mth vs 10.7mth | Hit |
| Checkmate-227 part 2 | Opdivo + chemo | Non-squamous all-comers | 18.8mth vs 15.6mth | Miss |
| Keynote-407 | Keytruda + chemo | Squamous all-comers | 15.9mth vs 13.2mth | Hit |
| Checkmate-227 part 2 | Opdivo + chemo | Squamous all-comers | 18.3mth vs 12.0mth | Exploratory** |
| Poseidon | Imfinzi + chemo +/- tremelimumab | All-comers | H2 2019 | TBC |
| Checkmate-9LA | Opdivo + Yervoy + chemo | All-comers | H1 2020 | TBC |
| *Called into question by a similar result in TMB low subjects and the FDA’s request for more data; **number of subjects in this non-prospective analysis not disclosed. | ||||
For its part, Bristol today bemoaned the fact that chemo alone in ‘227 outperformed expectations. Still, this was surely down to control arm subjects getting second-line anti-PD-(L)1 therapy, reflecting the real-world setting that all companies have to live with.
To the extent that it is still worth trying to compete against Keytruda in first-line metastatic NSCLC, Bristol investors now have the Checkmate-9LA study to look forward to. This tests Opdivo plus Yervoy and chemo, and is due to read out next year.
And Astrazeneca today confirmed that its Neptune and Poseidon trials were still on track to read out in the second half. On today’s second-quarter call Astra made no mention of the failed Mystic trial, which it had claimed showed a benefit if cut by TMB, suggesting that it was waiting for Neptune and/or Poseidon before deciding on a way forward.
Perhaps if you wait long enough a Keytruda competitor will deliver an unequivocally positive result.
Livongo enters the medtech float hall of fame
The deal is 2019’s second-biggest medtech flotation, and the fourth-biggest ever.
On Monday Livongo upsized its flotation from the previously named figure of $246m, saying it would instead aim to raise $278m. Today it smashed even that target, bringing in a haul of $355m. And the money kept rolling after that: in early trading today the shares were up 50%.
The deal is further evidence of healthcare investors’ boundless appetite for all things digital. Livongo makes devices and software to help diabetes patients manage their disease and has an unusual business model, whereby it partners with large organisations that then offer Livongo’s technology to their employees.
Premium pricing
So far 2019 has been a good year – sort of – for medical device makers seeking capital on the public markets. There has only been a handful of new issues, but most of those that have gone ahead have listed at a premium to their pre-announced range and seen their stock appreciate in value (Few medtechs go public, but those that do, do nicely, July 12, 2019).
Livongo has achieved the premium, certainly, going out at a price 12% higher than the $24-26 per share range it gave on Monday. This was itself a jump from its earlier filed price of $20-23. In the end the company sold 12.7 million shares – two million more than it had previously suggested – at $28 apiece, raising $355m and claiming a market value of around $2.5bn.
| TOP 5 MEDTECH IPOS IN HISTORY | ||||||
|---|---|---|---|---|---|---|
| Date | Company | Amount raised ($m) | Offering price | Exchange | Discount/ premium | Focus |
| Mar 2018 | Siemens Healthineers | 5,125 | €28.00 | Frankfurt | (2%) | Diagnostic imaging |
| Oct 2016 | Convatec | 1,948 | £2.25 | London | (10%) | Drug delivery; wound management |
| Apr 2019 | Medacta Group | 588 | SFr104 | SIX Swiss | 8% | Neurology; orthopaedics |
| Jul 2019 | Livongo | 355 | $28.00 | Nasdaq | 12% | Healthcare IT |
| Jun 2019 | Adaptive Biotechnologies | 345 | $20.00 | Nasdaq | 25% | In vitro diagnostics |
| Source: EvaluateMedTech. | ||||||
Livongo’s technology offering is almost closer to consumer health than traditional medical devices. Members of the Livongo for Diabetes programme receive an FDA-cleared cellular-enabled glucometer with two-way messaging, free unlimited blood glucose test strips, and access to diabetes “educators” for support and goal-setting.
The programme is paid for through subscription by the patients’ employers. At the end of March Livongo had 679 clients, and over 164,000 patients had enrolled in Livongo for Diabetes. In its IPO filing the company lists several dozen customers which it says generated more than $100,000 in revenue in 2018, including Citigroup, Merck & Co and Microsoft.
Livongo is also signing people up into programmes covering hypertension – this comes with a proprietary blood pressure cuff – prediabetes, weight management and behavioural health.
Tech, not drugs
The company has received a fairly hefty amount of venture financing, raising $232m over the past five years, and its backers will be delighted with the success of today’s IPO.
But the company is not turning a profit, and indeed its net loss in 2018, of $33.4m, widened significantly from the year earlier. When the shares start trading later today the market will learn just how keen investors are for digital heath technologies like this.
Medtech stocks are currently outplaying those of biopharma companies; a potential concern for investors in the latter is the US government’s unclear but potentially threatening plan to rein in spending on drugs (Drug pricing concerns return for pharma, July 12, 2019). Perhaps Livongo is a beneficiary.
Some potential shareholders might also be tempted by the possibility of a buyout. These kinds of deals are happening: Roche bought the digital health group Flatiron Health for $2bn in early 2018, and the diabetes algorithm developer Typezero was taken out by Dexcom last year. But if a buyer had been sniffing around Livongo the company would surely have taken that deal in preference to an IPO; a takeover would seem less likely post-float.
Still, stranger things have happened. Livongo is one to watch.
Eliquis, Orencia sales propel Bristol-Myers to strong second quarter
Bristol-Myers Squibb Co, which is set to buy biotechnology company Celgene Corp for $74 billion, posted better-than-expected second-quarter profit on Thursday on strong sales of blood thinner Eliquis and rheumatoid arthritis treatment Orencia.
Shares of the New York-based drugmaker were up 4.8% at $45.30 in afternoon trading.
The earnings follow mixed results released on Wednesday from a closely watched lung cancer trial of its blockbuster immunotherapy Opdivo in combination with either chemotherapy or its other immuno-oncology drug, Yervoy.
“While some of the drug data was disappointing, there was enough positivity for the combination of Opdivo and Yervoy that would suggest there is potential for that to gain share for a longer period of time,” said Jeremy Bryan, portfolio manager at Gradient Investments.
Sales of Eliquis, which Bristol-Myers shares with Pfizer Inc, rose 24% to $2.04 billion, while Orencia sales rose 9% to $778 million, both exceeding Wall Street expectations.
Opdivo sales rose 12% to $1.82 billion.
Despite the solid growth for Opdivo, there has been widespread investor concern over the dominance of rival drug Keytruda from Merck & Co in the lucrative lung cancer market. Keytruda has surpassed Opdivo in sales in recent quarters and the company said it expects additional pressure on Opdivo sales next year.
The latest lung cancer data is unlikely to allay those concerns.
Opdivo combined with chemotherapy failed to extend overall survival more than chemotherapy alone as an initial treatment for advanced non-squamous non-small cell lung cancer (NSCLC). Keytruda plus chemotherapy has demonstrated a survival benefit in clinical trials.
Opdivo did extend overall survival when used with Yervoy in certain NSCLC patients.
Some analysts and investors have suggested that one reason Bristol launched its bid for Celgene was over concerns about Opdivo losing ground to Keytruda.
Bristol said it still expects the Celgene deal to close in late 2019 or early 2020.
Excluding one-time items, the drugmaker said it earned $1.18 a share for the quarter, beating analysts’ expectations by 11 cents, according to IBES data from Refinitiv.
Bristol-Myers increased its full-year profit forecast by 10 cents and now expects to earn $4.20 to $4.30 a share.
Revenue in the quarter was $6.27 billion, topping Wall Street expectations of $6.11 billion.
The company reported a net profit of $1.43 billion, or 87 cents a share, compared with $373 million, or 23 cents a share, a year earlier.
Dental visits decline as people get older — and there may be a painful price to pay
U.S. adults are less likely to visit the dentist around age 80, according to new research. And that trend that could have far-reaching health and economic consequences.
The study, published in the journal Research on Aging, analyzed the use of dental services among adults aged 50 and older using five waves of the University of Michigan’s Health and Retirement Study. It found, in part, that “as people became older, the use of dental services declined.”
Fewer older people have dental coverage. Around two in three Medicare beneficiaries in the U.S. — equivalent to nearly 37 million people — have no dental coverage, according to a Kaiser Family Foundation analysis.
Cost could be one factor, suggested study co-author Bei Wu, a professor of nursing at New York University. Another theory: For older adults on a fixed income, oral health may compete for priority alongside chronic health conditions or illnesses. Transportation poses another potential barrier, Wu said, as does cognitive function, which can deteriorate with age.
Minorities and foreign-born people were even less likely to seek out care, the research found: The decline in use of dental services was “more evident” among black and Hispanic people than it was among white people, the authors wrote, with the rate of dental visits by white people declining at a slower pace. This gap could be related to access to care, Wu said.
Foreign-born respondents, moreover, were less likely to use dental services (62%) than those born in the U.S. (71%), though these gaps generally closed as they got older, potentially due to acculturation. U.S.-born respondents were older and had a higher average income than their immigrant counterparts, in addition to being more likely to have a college education and health-insurance coverage.
Foreign-born respondents were less likely to use dental services than those born in the U.S., though these gaps closed as they got older. U.S.-born respondents had a higher average income.
Letting preventive dental care fall by the wayside can lead to more serious ramifications like tooth loss, tooth pain and inflammation, Wu said. Research shows associations between poor oral health and stroke and cardiovascular disease risk; oral health is also related to dietary intake and diabetes.
“You may pay less for preventative care. But your benefit will be greater overall,” Wu said.
Dental care poses financial challenges to more people than does any other type of health-care service, regardless of age, insurance type or income, according to a 2016 analysis published in the journal Health Affairs.
Meanwhile, Medicare, which provides insurance for people aged 65 and older, does not cover most dental care, procedures or supplies, according to the U.S. Centers for Medicare & Medicaid Services. That means the traditional benefits don’t cover services like cleanings, dentures or crowns.
19% of beneficiaries who used dental services spent more than $1,000 out-of-pocket on dental care. With half of Medicare beneficiaries living on less than $26,200 per year, this is a significant portion of their incomes.
Around two in three Medicare beneficiaries — translating to nearly 37 million people — have no dental coverage, according to a Kaiser Family Foundationanalysis. Beneficiaries with dental coverage receive it through Medicare Advantage plans, which are offered by private companies, or through Medicaid or private insurance.
“Almost one-fifth (19%) of beneficiaries who used dental services spent more than $1,000 out-of-pocket on dental care,” Kaiser found. “With half of Medicare beneficiaries living on less than $26,200 per year, this is a significant portion of their incomes.”
The average U.S. life expectancy in 2017 was 78.6 years, according to the most recent figures available from the Centers for Disease Control and Prevention, while a person’s probability of surviving from birth to age 80 is nearly 58%.
“Older Americans with the poorest oral health tend to be those who are economically disadvantaged, lack insurance, and are members of racial and ethnic minorities. Being disabled, home-bound, or institutionalized (e.g., seniors who live in nursing homes) also increases the risk of poor oral health,” the CDC says.
“Many older Americans do not have dental insurance because they lost their benefits upon retirement and the federal Medicare program does not cover routine dental care.”
Epizyme hit after filing tazemetostat NDA for epithelioid sarcoma
Epizyme (EPZM -3.3%) slips on modestly higher volume after announcing that the FDA has accepted for review its marketing application seeking accelerated approval for tazemetostat for the treatment of epithelioid sarcoma. As is typical for a filing like this, the bulk of the supporting efficacy data were generated in a Phase 2 study.
The aim of accelerated approval is to enable more timely patient access to drugs that meet unmet medical needs. It is conditional since it is based on a smaller dataset than a customary application based on Phase 3 studies. In order to apply for full approval, drug makers have to conduct at least one late-stage (Phase 3) study to confirm safety and efficacy which is what Epizyme plans to do.
Investors appear concerned about an additional study, but it is to be expected and should not affect the accelerated review timeline or dampen commercial sales (assuming a positive outcome).
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