Bayer new legal issue as more Brazil farmers challenge soy patent

Germany’s Bayer AG (BAYGn.DE), which completed the takeover of U.S.-based Monsanto last year, has been dealt a legal blow in Brazil as more farmers joined a lawsuit challenging the protection of a key soy seed patent.

A Brasília appeals court authorized producers from another 10 states to join Mato Grosso state farmers as plaintiffs in a case challenging the validity of Monsanto’s Intacta RR2 PRO patent, according to court filings.

That means Bayer, which had been ordered to deposit royalties received from the Mato Grosso growers in an escrow account, will have to do the same with royalties from the new plaintiffs, said Sidney Pereira de Souza Jr, an attorney representing the soy growers who cited court decisions granted in July 26 and on Feb. 25.

The Mato Grosso farmers sued Monsanto, now Bayer, in late 2017 aiming to cancel the Intacta patent, which they claim lacks any real technological innovations.

The legal dispute underscores the operating risks for firms like Bayer in Brazil, where companies face the prospect of more such lawsuits, Souza said.

Recently, Brazilian cotton growers challenged Bayer’s patent protection for the Bollgard II RR Flex seed.

Souza said Brazil’s farmers are “more organized” and are increasingly demanding to know whether the technology they are buying is new.

Royalties from Intacta sales in Mato Grosso were an estimated 800 million reais ($211 million) per harvest, Souza said. When royalties from farmers in the other 10 states are accounted for, the amount to be deposited in a judicial account could rise to as much as 2.7 billion reais, he said.

A Bayer spokeswoman said the company did not have a specific comment on the latest court ruling because it has not been formally notified of the decision.

She said it has been depositing royalties paid by the Mato Grosso farmers relative to the 2017/2018 crop cycle in an escrow account as ordered by the lower court overseeing the case in July 2018.

Mato Grosso growers claim Bayer has only deposited an estimated 4% of the royalties they paid. Souza said the latest court ruling reiterated a prior decision obliging the firm to deposit 100%.

Bayer declined to say how much it has deposited.

Intacta’s patent protection extends through October 2022.

https://www.reuters.com/article/us-bayer-patent-litigation/germanys-bayer-dealt-new-legal-blow-as-more-brazil-farmers-challenge-soy-patent-idUSKCN1UO22N

No, Obamacare Did Not Lower U.S. Health Costs

Total healthcare spending in the U.S. has risen relentlessly for the last half-century. Obviously, this cannot go on forever. To curb this disastrous increase in healthcare costs, politicians and their advisors must help the public understand which cost-control policies work and which ones fail. A recent STAT News op-ed by Ezekiel Emanuel, MD, a University of Pennsylvania ethicist and former health policy advisor to President Barack Obama, illustrates how wishful thinking can misinform the public about health policy, in this case, the Affordable Care Act (ACA).

Emanuel’s essay correctly notes that Obamacare reduced the ranks of the uninsured, but his claim that it reduced healthcare spending is false. Emanuel concluded that the ACA, which he helped write, “reduced healthcare spending a total of $2.3 trillion” from 2010, the year the ACA was enacted, to 2017. He went on to make an equally astonishing and erroneous claim about health insurance premiums. He alleged they fell by $1,000 per worker, and “about $4,000” for family coverage from 2010 to 2017.

The figures below reveal at a glance that Emanuel was wildly off the mark on both counts. Figure 1 shows that healthcare spending as a percent of gross domestic product continued to rise after 2010 at about the same rate it has risen for the last 50 years. Figure 2 shows that premiums for family coverage for American workers also rose after 2010 at the same rate as before 2010.

How did Emanuel persuade himself that total spending fell after 2010 when the reverse is true? He did so by dusting off a report published in 2010 by the Office of the Actuary (OACT) of the Department of Health and Human Services that sought to estimate the impact of the ACA on total medical spending over the next decade (2010-2019). The report’s authors virtually shouted at their readers not to rely on it. OACT warned readers its estimate was “subject to much greater uncertainty than normal” and “should be interpreted cautiously in view of [its] limitations.”

But Emanuel ignored OACT’s warnings. He based his entire argument upon OACT’s 2010 guesstimate of what total spending might be in each of the years from 2010 to 2017. As it turned out, OACT’s guestimate of spending over those years exceeded actual spending by $2.3 trillion. The rational explanation for the difference is that OACT’s guesstimate was inaccurate. But Emanuel concluded the ACA cut expenditures — a fatal methodological flaw disqualifying it from scientific discussion.

Emanuel made much of the fact that OACT was the author of not only the 2010 guesstimate but of the annual reports on actual spending for the years 2010 through 2017 (these reports are the source for data in Figure 1). Not one of OACT’s annual reports after 2010 even hinted that the ACA lowered national spending. Instead, OACT reported the ACA’s impact was either negligible or inflationary.

For example, the OACT report on 2012 spending stated, “The … ACA had a minimal impact on overall national health spending growth,” and its report on 2015 spending stated the ACA was the “primary” reason why healthcare costs rose at an unusually high rate. OACT’s 2018 report does not even mention the ACA. And most economists agree with OACT’s analysis. The prestigious Leonard Davis Institute of Health Economics at the University of Pennsylvania (Emanuel’s university) found “little evidence that ACA cost containment provisions produced changes necessary to ‘bend the cost curve.'”

Emanuel’s arguments would be more credible if he had identified even one ACA policy that reduced costs. But the only ACA policy he mentioned was a program that, he writes, “required reducing … wasteful readmissions.”

This would be the Hospital Readmissions Reduction Program (HRRP), a dangerous program that should be terminated immediately. The HRRP’s proponents claimed it would cut costs and improve health by penalizing hospitals for “too many” hospital readmissions. But the evidence now indicates this program is backfiring. Well-controlled studies show the HRRP may have raised the mortality rate among heart failure and pneumonia patients by reducing necessary readmissions, and it has not cut costs.

We share Emanuel’s commitment to an efficient healthcare system with evidence-based price controls. But cheerleading from academic leaders about the false achievements of futile, and sometimes harmful, cost-containment policies has unintended consequences for health and efficiency, and it undermines our ability to build a universal, affordable healthcare system. We already have reliable methods to evaluate the successes and failures of national cost-control policies. Congress and the President must base future health policies on solid evidence of benefits without patient harms. And if we have the guts to be honest, we will acknowledge that learning from failure can be the key to future success.

Kip Sullivan, JD, is a member of the policy advisory board for Health Care for All Minnesota and the Minnesota chapter of Physicians for a National Health Program. Stephen Soumerai, ScD, is professor of population medicine, founding and former director of the Division of Health Policy and Insurance Research, and teaches research methods at Harvard Medical School.

https://www.medpagetoday.com/publichealthpolicy/healthpolicy/81275

Tenet up 7% on increased Glenview stake

Tenet Healthcare (THC +7%) adds to its recent rally on almost double normal volume on the heels of a recent purchase of 827K shares at an average price of $19.62 by investor Glenview Capital who now owns ~18.7M shares.

The company is scheduled to report Q2 results on Monday, August 5 after the close.

https://seekingalpha.com/news/3482931-tenet-7-percent-increased-glenview-stake

Cellect Bio up 26% ahead of ApoGraft milestones

Thinly traded nano cap Cellect Biotechnology Ltd. (APOP +25.5%) is up on almost an 8x surge in volume, albeit on turnover of only 523K shares, on no readily available news.

A big upcoming event is the launch of its ApoGraft02 study. Scientific Advisory Board approval and the filing of an IND should happen this quarter. If all goes according to schedule, patient dosing should commence in H1 2020.

At the end of 2018, it had ~$4.8M in cash and equivalents while operations consumed $7.8M during the year.

https://seekingalpha.com/news/3482926-cellect-bio-26-percent-ahead-apograft-milestones

Mylan CEO Bresch set to exit after years of controversy—and one last big deal

During Mylan CEO Heather Bresch’s 28-year stint there, the company has utterly transformed into a generics giant—and courted controversy along the way.

And now, Bresch says she’s stepping aside to clear the way for an even bigger version of Mylan.

Mylan is joining forces with Pfizer’s Upjohn business, the companies said Monday, and when the deal’s done in mid-2020, Bresch will retire. Mylan’s executive chairman Robert Coury will stay on in the same role, as will President Rajiv Malik, who’s been named in a generics price-fixing suit brought by state attorneys general.

Bresch’s tenure as CEO has spanned a series of controversies, from a résumé scandal at the beginning through price hikes, executive pay pushback, federal investigations and a congressional hearing. Through all of that, Mylan snapped up one generics company after another to expand geographically and diversify beyond garden-variety generic pills.

Mylan’s stock price hasn’t necessarily kept pace, though, and in recent quarters, market watchers and investors have pushed for change. Last year, the company said it would take on a “strategic review,” but hadn’t said much since then—until now.

Bresch is set to collect about $37.6 million with the change in leadership, per a Mylan proxy filing highlighted in a Monday note by Wells Fargo analyst David Maris. She’s been among the highest-paid CEOs across pharma in years past, although the didn’t make the top 20 in 2018.

Bresch’s predecessor Robert Coury—who is now Mylan’s executive chairman and is himself among the highest-paid in the industry—implemented a growth-by-M&A strategy that led to significant job cuts. When Bresch started as a data entry clerk at Mylan in 1992, the company employed 300 people and pulled in $100 million yearly.

Fast forward nearly three decades later and the company has more than 45,000 employees and more than $20 billion in annual revenue from 165 countries.

Bresch’s time at Mylan featured confusion back in 2008 when the Pittsburgh Post-Gazette found that she hadn’t earned enough credits for the MBA listed on her résumé. In the end, West Virginia University rescinded a degree it retroactively awarded—but turned out, Bresch didn’t need it to keep her post.

More recently, Mylan disclosed that it is among a group of generics companies facing price-fixing allegations from dozens of states, and federal prosecutors are investigating the issue on their own. Mylan’s president, Rajiv Malik, is among the executives personally named in the lawsuit, although Mylan has stood by its president.

But Mylan first became something of a household word back in 2016, when the EpiPen pricing controversy broke. News surfaced that the drugmaker had been hiking prices for years on its lifesaving epinephrine injector to the point where many parents had a hard time paying for their back-to-school packages. Lawmakers struck up investigations and consumers blasted the drugmaker’s motives.

Bresch, for her part, defended Mylan’s pricing by pointing to the drug pricing and rebating system in the U.S. Along with the EpiPen fiasco, Mylan paid $465 million to the federal government to settle claims it underpaid Medicaid rebates.

In a letter to employees, Bresch reflected on her 28 years of service at Mylan, saying ensuring patient access has always been a core mission. She’s served as chief integration officer, COO and president, and numerous other roles. She said the journey “has been life-altering, and the many relationships I have forged will be life-long,” she wrote.

Bresch also said she’s always worked to “break down barriers to access” for medicines.

Before the Upjohn announcement, Mylan’s share price has been struggling lately—analysts believed some investor frustration was due to management.

https://www.fiercepharma.com/pharma/following-eventful-8-years-mylan-ceo-heather-bresch-set-to-retire-after-upjohn-deal

Twist Bio up 5% on launch of new product line

Synthetic DNA producer Twist Bioscience (TWST +4.9%) is up on below-average volume in reaction its the launch of long oligonucleotides, up to 300 bases, that it says is the longest commercial “oligo” made by continuous chemical synthesis.

Twist explains that, historically, making oligos longer than 150 -200 bases is a very challenging due to chemical reaction inefficiencies which increase the risk of error as each base is added. It claims that it has developed a proprietary process for making oligos up to 300 bases with a low 1:1500 error rate.

Longer oligos are useful in drug discovery and development, data storage and as an enabler of certain CRISPR gene editing and protein engineering applications.

https://seekingalpha.com/news/3482781-twist-bio-5-percent-launch-new-product-line

Dr. Reddy’s Names Erez Israeli as New CEO

Dr. Reddy’s Laboratories Ltd. (RDY) has chosen an executive who joined the generic-pharmaceutical maker last year as its next chief executive.

The Indian firm said Monday that Erez Israeli will take over as CEO on Aug. 1. He joined the company in April 2018 as operations chief.

Dr. Reddy’s current CEO, GV Prasad, will step down from the job but continue serving as co-chairman, the company said.

For its fiscal first quarter, Dr. Reddy’s reported a profit of $96 million, or 58 cents a share, up from the $66 million, or 40 cents a share, a year earlier.

Revenue rose 3% compared with last year to $558 million. Analysts expected $585 million, according to FactSet.

https://www.marketscreener.com/DR-REDDY-S-LABORATORIES-9058869/news/Dr-Reddy-Laboratories-Reddy-s-Names-Erez-Israeli-as-New-CEO-28975527/