Banker exits, zombie accounts: China’s Shanghai free trade zone sputters

When China launched the expansion of the Shanghai free trade zone (FTZ) recently and announced six new FTZs in July, officials touted the efforts to attract foreign investment and deepen trade ties with neighboring countries.

Yet, for many businesses the FTZs have simply failed to live up to their hype, undermined in part by Beijing’s capital controls as an escalating trade war with the United States slows China’s economic growth to 30-year lows.

Back in Shanghai, in the first FTZ area, chairs lie overturned and desks sit empty behind padlocked glass office doors. Food courts that once overflowed with business diners have seen small eateries steadily shut up shop this year, leaving used chopsticks and plastic packaging scattered on the ground.

While the Shanghai FTZ, opened in September 2013, has long struggled to live up to its initial promise of free-flowing currency and easier international trade, more businesses are increasingly deserting the 28.78 square kilometer Waigaoqiao zone.

China Merchants Bank, now the country’s fifth largest by assets and profits, disbanded a 10-strong FTZ corporate business team at the end of last year, said two people with knowledge of the situation, spreading the staff among other branches after the lender found that the FTZ’s promised benefits were rendered useless as capital controls tightened.

Moreover, according to several bankers, hundreds of specialized accounts lie untouched across the FTZ as capital controls and regulatory scrutiny make free movement of currency – the hot selling point of the zone – untenable.

The people could not be named as they were not authorized to speak to the media.

CMB did not respond to repeated requests for comment. A spokesperson for the Shanghai government said the authority was not aware of the capital control snags.

“The FTZs have reduced opportunities for local government taxes and also contradict Beijing’s attempt to reduce capital flight,” said Andrew Collier, managing director of Orient Capital Research.

“There are many conflicting desires in the FTZ – and they can’t be as effective ultimately as Beijing would hope,” he said, adding that the same issues will affect the new FTZs.

LESS TRADE ZONE?

The idea in 2013 was that an onshore yuan account opened in a free trade zone bank branch could be used as if it were already offshore, meaning it could be exchanged, or used in payment free of domestic restrictions.

But bankers found the reality far from the hype and as concerns over capital flight led regulators to clamp down on yuan leaving the country from 2015, usability deteriorated further.

Users of an FTZ account “have to tick more than 40 boxes before they conduct one transaction.  After all the due diligence, the FTZ account is no longer convenient,” said Ding Jianping, professor at Shanghai University of Finance and Economics.

“Convenience, and the concept of auto transaction used to be the selling point,” he added.

And even though Beijing plans to expand the zones, capital controls will remain strict for the foreseeable future, meaning the FTZ is unlikely to improve for lenders.

There are currently 119 finance firms in Shanghai with a registered office including the words “free trade zone”, according to a data grab on Qichacha, an information provider that uses official company registration sources.

Out of the 119 finance firms, only 3 currently have a Waigaoqiao area address.

Shanghai Huarui Bank shut its Waigaoqiao branch back in 2015, only to open another in a different part of the free trade zone when the government expanded the pilot area. While the new branch is still handling FTZ business, the prospect for growth is losing steam, said a person with direct knowledge.

The Bank of Ningbo currently has four branches in the FTZ, but while they’re still expanding, most of the work done is normal banking business.

Each transaction in connection with a free trade account needs to be reported, and money inside cannot be transferred to an ordinary account, “which makes the account useless,” said a person who works at one of the FTZ branches.

In one of the four FTZ branches of the Bank of Ningbo, there are between 20 to 30 FTZ accounts and they are rarely used, she said.

Over at the Bank of Nanjing, management is not keen on expanding the FTZ business, said a person who works in the zone branch.

The bank is unable to offer products that would really assist a client, said the person, such as an offshore loan without onshore deposits due to risk controls and regulatory hurdles.

The FTZ business is “to fulfil targets set by the government” and not because there is real opportunity, the person added.

Shanghai Huarui Bank, Bank of Ningbo and the Bank of Nanjing did not respond to repeated requests for comment.

While for banks, the FTZ has not been a golden goose, firms in other industries say reforms, such as the streamlining of registration procedures have made it easier to do business.

And the Shanghai branch of the Bank of China and Bank of Shanghai said they still engage actively in FTZ business in their annual reports.

https://www.marketscreener.com/news/Banker-exits-zombie-accounts-China-rsquo-s-Shanghai-free-trade-zone-sputters–29144899/?countview=0

Review finds association between cesarean delivery and autism, ADHD

A systematic review found a significant association between cesarean deliveries and certain developmental and psychiatric disorders in children.

Published in JAMA Network Open, the review ultimately identified 61 studies comprising more than 20 million births. It demonstrated a statistically higher incidence of autism spectrum disorder (ASD) and attention deficit hyperactivity disorder (ADHD) among children experiencing C-section delivery compared to those born via vaginal delivery.

Children delivered by C-section were 33% more likely to develop ASD and 17% more likely to develop ADHD.

While the study provides a stronger sense of the strength of the association between C-section births and mental disorders, study author Tianyang Zhan cautions the data don’t prove C-section deliveries cause these disorders. Without further research to establish a mechanism that produces ASD and/or ADHD, it’s difficult to draw any concrete conclusions as to the relative risks involved in different modes of delivery.

“Since we cannot provide evidence that c-sections cause mental problems in children, we cannot draw conclusions that healthy women should absolutely avoid C-sections. However, it is well recognized by the international healthcare community that there is no evidence showing that C-section deliveries are beneficial for healthy women,” Zhan told FierceHealthcare.

However, it does offer evidence of another reason pregnant women should take a measured look as they make decisions about their delivery preferences, according to Zhan. “Women should be informed of the potential risks and benefits for themselves, their babies, and subsequent pregnancies before they make a decision, especially in countries where culture preferences and financial factors play important roles,” she said.

The review points out that C-section deliveries have not been associated with benefits to children, either.

Prior research has associated C-section deliveries with physical ailments such as obesity, asthma, Type 1 diabetes, allergies and acute lymphoblastic leukemia. According to this review, previous research has theorized that deliveries performed prior to the onset of labor might provide a potential explanation.

The review does not note a significant difference between deliveries categorized as elective C-sections compared to those categorized as emergencies. The authors speculate that the absence of a specific definition of an elective procedure might have influenced the results and suggest future studies take a more careful approach to winnowing one category from the other.

Zhan noted there is a general consensus in the healthcare community that C-section deliveries are overused in some areas and underused in others.

Getting a better handle on the reasons for elective C-sections, particularly in areas where they appear to be overused, would help illuminate the underlying factors in these increases and generate a better basis for balancing the potential risks to children against the potential benefits to mothers giving birth via C-section.

“Our study does not provide irrefutable proof that C-sections cause neurodevelopmental disorders, therefore we cannot weigh the potential benefits and the potential risk of ADHD/ASD,” Zhan said.

https://www.fiercehealthcare.com/hospitals-health-systems/study-finds-link-between-cesarean-delivery-and-psychiatric-disorders

Health tech funding: Insurtech Ethos lands $60M in GV-led round, Nurx $52M

Insurtech company Ethos snagged $60 million in funding in a Series C round led by GV (formerly Google Ventures), Alphabet’s venture arm, and backed by Goldman Sachs, the company announced on August 27.

The company, founded in 2016, is focused on disrupting the life insurance industry and uses predictive analytics and big data to issue life insurance policies. Existing investors Sequoia Capital and Accel also participated, bringing the total funding to-date to more than $100 million.

Ethos is now valued at nearly $500 million, Venture Beat reports.

Here’s a snapshot of other health IT funding deals over $5 million in August:

• Prescription delivery: Health technology company Nurx, which sells prescription drugs including birth control online, closed a $52 million Series C funding round led by Kleiner Perkins Digital Growth Fund and Union Square Ventures.
  Investors Reproductive Health Investors Alliance, Dreamers VC, Lowercase Capital, and Y Combinator also participated in the funding round. The San Francisco-based company, founded in 2014, has raised more than $90 million in debt and equity funding to date, with the latest infusion bringing its valuation to nearly $300 million, according to TechCrunch.

RELATED: Venture capital investment in AI and mental health startups surges in Q2: report

• Jobs marketplace: Nomad Health, an on-demand medical jobs marketplace that also advertises telemedicine positions, picked up $34 million in new equity and debt financing. Icon Ventures, a Palo Alto-based venture capital firm, led the financing with additional investment from prior investors Polaris Partners, RRE Ventures, .406 Ventures, and Silicon Valley Bank.
• Healthcare data IT:  Startup MDClone, based in Israel, raised $26 million in Series B funding led by health tech venture capital fund aMoon and joined by earlier investors OrbiMed Israel Partners and Lightspeed Venture Partners. The company’s U.S. clients include Washington University School of Medicine in St. Louis, Intermountain Healthcare and the Regenstrief Institute.
• Patient engagement: Luma Health landed $16 million in a Series B equity funding, bringing total equity funding to $25.7 million. Led by PeakSpan Capital and with strategic investments from Cisco Investments, the Texas Medical Center, and continued investment from U.S. Venture Partners, Luma Health will use the round of funding to scale and hire new staff.

• AI diagnoses: Buoy Health, an online symptom checker that uses artificial intelligence to diagnose patients, closed a $15 million Series B funding round led by Hambrecht Ducera Growth Ventures. Health insurance company Humana joined the round as a strategic investor, and earlier backers F-Prime Capital (Fidelity Investments) and Optum Ventures also contributed.
• Digital health tools: Hello Heart reeled in a $12 million Series B round led by Khosla Ventures to help bankroll the expansion of its sales and engineering teams, according to FierceBioTech.
• Diagnostics platform: MIT-spinout Figur8 launched a digital platform to measure and track body movement as a biomarker with a boost in $7.5 million in seed funding. The company says its technology will help clinicians make better clinical decisions through advanced human movement data. Figur8’s diagnostics platform captures 3D skeletal movement in conjunction with muscle output to help trainers, therapists and physicians objectively measure musculoskeletal performance and recovery. The funding round was led by P5 Health Ventures, with participation from E14 Fund.

• Surgery optimization: PeerWell developed a digital platform focused on addressing workers’ compensation surgery issues, from pain management and surgery avoidance to surgery optimization and guided recovery. The company picked up $6.5 million in a Series A funding round. The funding was led by OMERS Ventures, with participation from XSeed Capital. The funding will help the company fast-track the commercial rollout of a new platform focused on musculoskeletal surgery therapy.
• Breathalyzer: Also, a reserve deputy sheriff and SWAT team member, Mike Lynn, who also is an emergency room doctor and former biotech venture capitalist, started a company called Hound Labs that is working on the first dual marijuana and alcohol breathalyzer. Hound Labs raised $30 million in a Series D financing round. Intrinsic Capital Partners led the round, with investors NFP Ventures and Main Street Advisors also contributing, as well as existing backers Icon Ventures and Benchmark.

https://www.fiercehealthcare.com/tech/health-tech-funding-snapshot-insurtech-ethos-lands-60m-gv-led-round-nurx-raises-52-million-and

July was a bright spot for hospital volumes after rough June — Kaufman Hall

In July, the consulting company’s August 2019 National Flash Report of metrics from more than 600 hospitals showed health systems saw discharges, emergency department visits and adjusted volume metrics improved about 3% to 4% from the previous month.

After a rather lackluster financial performance in June, U.S. hospitals appeared to bounce back in July thanks to an unexpected uptick in inpatient and emergency department volumes, a new report from Kaufman Hall found.

In general, over the last year Kaufman Hall has seen institutions largely responding well to the larger trend of reducing inpatient volumes and managing their cost structures accordingly, Managing Director Jim Blake told FierceHealthcare.

But “what we saw last month was a little bit of the wheels falling off the bus,” Blake said. “We saw the volume decreases were bigger, the profitability on the month-over-month and year-over-year bases were much worse. We saw institutions, on average, not handling it. It was a pretty bad month.”

Then, in July, the consulting company’s August 2019 National Flash Report of metrics from more than 600 hospitals showed health systems saw discharges, emergency department visits and adjusted volume metrics improved about 3% to 4% from the previous month. Operating room minutes rose 8.1%, and adjusted patient days were up 4.5%.

“Just as June was unexpectedly bad, July was unexpectedly good,” Blake said.

While that unexpected bump was good news for hospitals, it also indicates many of these organizations—particularly the largest and smallest hospitals—don’t have the ability to flex with the shorter-term market fluctuations, said Kaufman Hall Vice President Erik Swanson.

“When we look at how hospitals respond to some of those factors that they cannot control, like volumes, what we’ve been seeing as an overall trend is the inability to necessarily flex particularly well with volumes,” Swanson said. “What we saw in June and what we’ve seen as a trend over the last year or so is at many of these organizations, as volumes decrease on the inpatient side, their profitability in general decreases. When the volumes increase, they tend to do pretty well.”

Beyond that, while Swanson said there have been continued indicators of more efficient management of labor expenses, those efficiencies appear to be slowing in recent months.

“The rate of that decrease is slowing meaning that many of those organizations are starting to get less juice for the squeeze in some of that because their beginning to hit those limits of traditional blocking and tackling of labor management and its not until they move to some more data-driven approaches that they’re able to do a little better.”

On the non-labor side of costs, Swanson pointed out hospitals are still grappling with continued pressures from increasing drug expenses that exceed inflation. Last month’s increased inpatient volumes and patient acuity drove some pretty substantial increases in drug and supply expenses, he said.

“The drug companies continue to hold the hospitals over the barrel with price increases that just continue and continue and continue,” Black said. “Any one month isn’t enough to make a difference. But if you add it up over the 13 months we’ve been watching this closely, there’s a shift in materiality. Drug prices—if you extend it back several years before this trend started—were fairly steady year over year for a bunch of years and the pharma companies, whatever they’re doing, they’re knowing how to become more profitable.”

https://www.fiercehealthcare.com/hospitals-health-systems/july-was-a-bright-spot-for-hospital-volumes-after-rough-june-kaufman-hall

Phase 2 data of aprocitentan, Idorsia dual endothelin receptor antagonist, at ESC

• Phase 2 dose-finding study demonstrated the blood pressure lowering effect of aprocitentan
• A global Phase 3 study “PRECISION” in patients whose blood pressure remains uncontrolled despite receiving at least three antihypertensive medications is ongoing
• As part of the Phase 3 program, the company is initiating an additional study “INSPIRE-CKD” for the treatment of patients with uncontrolled blood pressure and chronic kidney disease stage 3 or 4

Idorsia Ltd (IDIA.SW) today announced that the results of the Phase 2 study with aprocitentan were presented at the European Society of Cardiology (ESC) 2019 Congress in Paris, France.

Hypertension (high blood pressure) is one of the most common cardiovascular risks, and its prevalence continues to rise. According to a recent study, there are more than 1 billion people living with hypertension worldwide. Left uncontrolled, hypertension can lead to life-threatening conditions such as stroke, ischemic heart disease, or kidney disease.

Aprocitentan is an orally active dual endothelin receptor antagonist (ERA). Aprocitentan at doses of 12.5 and 25 mg is currently being investigated for the treatment of patients whose blood pressure is uncontrolled despite receiving triple antihypertensive medications (categorized as resistant hypertension) in a global Phase 3 registration study, “PRECISION”. The doses were selected based on a Phase 2 dose-finding study which evaluated the efficacy, safety and tolerability of a once-a-day oral regimen of four dose levels of aprocitentan in patients with essential hypertension. Results of this Phase 2 study were presented at ESC Congress 2019.

Phase 2 study in adults with essential hypertension presented at ESC
Parisa Danaietash, PhD from Idorsia gave an oral presentation entitled “Efficacy and safety of various doses of the new dual endothelin receptor antagonist aprocitentan in the treatment of hypertension”.

https://finance.yahoo.com/news/phase-2-data-aprocitentan-idorsia-100000984.html

Supplemental Oxygen Fails Once Again in Acute Coronary Syndrome

Another study testing the use of supplemental high-flow oxygen therapy in all patients with suspected or confirmed acute coronary syndrome has failed to demonstrate a reduction in the risk of death at 30 days when compared with a standard protocol that provided oxygen only if saturation levels fell below normal.

Presenting the New Zealand Oxygen in Acute Coronary Syndrome (NZOTACS) study at the European Society of Cardiology (ESC) Congress 2019, Ralph Stewart, MD (Green Lane Cardiovascular Service/Auckland City Hospital, New Zealand), reported that 30-day mortality was 3.1% in patients treated with the liberal oxygen strategy and 3.0% in those treated with the standard protocol, a nonsignificant difference.

There was a trend toward benefit in the roughly 10% of patients with low oxygen saturation levels (SpO2 < 95%), with the absolute risk of death 1.0% lower at 30 days among hypoxemic patients who received supplemental high-flow oxygen compared with those treated with the standard protocol.

“Overall, there was no real difference—not harmful but not beneficial,” said Stewart during a press conference announcing the results. “We did find that when the patients’ oxygen level in the blood falls below normal, and it’s not as much below normal as people currently think, mortality increases substantially. In those patients we can’t be so sure there was no benefit or harm. There may be a benefit.”

The key message here is that if a patient is having a suspected heart attack and the oxygen in the blood is normal, then you don’t need oxygen, although it probably won’t do any harm.RALPH STEWART“”

Supplemental oxygen has been given to patients with MI for more than 50 years and yet there has never been a clinical trial showing that it improves outcomes, said Stewart. In fact, the AVOID trial raised the possibility that supplemental oxygen might cause myocardial injury when given to acute MI patients without hypoxemia. The DETO₂X-AMI study, presented 2 years ago at this same meeting, showed supplemental oxygen wasn’t harmful, but also that its routine use did not lower the risk of death at 1 year in patients with suspected acute MI with hypoxemia.

More recently, a meta-analysis combining eight randomized trials of various sizes, of which DETO₂X-AMI was the largest with more than 6,600 patients, also showed there was no harm or benefit to supplemental oxygen therapy in patients who were not hypoxemic.

Is Further Study Needed? Maybe, Says Investigator

With NZOTACS, which was presented during a late-breaking Hot Line session today, investigators conducted a cluster, randomized, crossover trial comparing the two oxygen protocols in 40,872 patients with suspected or confirmed acute coronary syndromes in ambulances and hospitals in New Zealand. The supplemental high-flow protocol included oxygen for ischemic symptoms regardless of SpO₂ levels. The standard protocol included oxygen supplementation only if SpO₂ levels dropped below 90% (the goal was to reach a target SpO₂ of 94% or greater).

Given the trial design, Stewart said they also captured patients without ACS. When they restricted their analysis to patients with STEMI, 30-day mortality was 8.8% in patients treated with liberal high-flow oxygen therapy and 10.6% in patients treated with the standard protocol (OR 0.81; 95% CI 0.66-1.00). Nevertheless, Stewart said the STEMI subgroup analysis should be viewed as hypothesis-generating only and needs to be confirmed in a larger study.

Most patients studied in the trial had normal SpO2 levels, but for those with hypoxemia, mortality at 30 days was more than fourfold higher than in patients with normal oxygen saturation. For the 3,273 patients with SpO2 levels less than 95% on ambulance arrival, 30-day mortality was 10.1% for patients who received supplemental oxygen and 11.1% for those who only received oxygen if SpO2 levels dropped below 90%.

“The key message here is that if a patient is having a suspected heart attack and the oxygen in the blood is normal, then you don’t need oxygen, although it probably won’t do any harm,” said Stewart. “If the oxygen level is below normal, it might be beneficial, but we need another big study to know that for sure.”

Steen Dalby Kristensen, MD, DMSc (Cardiovascular Research Centre, Aarhus University, Skejby, Denmark), who was not involved in the trial, said that in the past there wasn’t much physicians could do for patients with MI. “One of the things we could do was to give them oxygen,” he told TCTMD. “Now I think we know that if the patient doesn’t have low oxygen levels, then it doesn’t work. This is what I think we’ve learned.”

At his hospital, supplemental oxygen is given only to patients with low levels, meaning SpO2 less than 94%. The 2017 ESC guidelines for the management of STEMI patients only recommend oxygen in hypoxemic patients. Routine oxygen is not recommended in patients with SpO₂ levels (percentage of oxygen saturated with hemoglobin) 90% or higher. Kristensen noted that individuals with low oxygen levels tend to be in heart failure, and this poor pump function can lead to lung congestion and low arterial oxygen saturation.

In the 2017 DETO₂X-AMI study, investigators only randomized patients into the trial once consent was given, an approach that tended to exclude sicker MI patients. Oxygen administration was more prolonged in the DETO₂X-AMI , whereas the NZOTACS investigators provided oxygen only as long as myocardial ischemia was present. Despite these differences in trial design, Stewart said their study lines up with the absence of benefit observed in the DETO₂X-AMI study.

For Robin Hofmann, MD, PhD (Karolinska Institute, Stockholm, Sweden), the principal investigator of DETO₂X-AMI and scheduled discussant during the ESC session, the NZOTACS trial strengthens the evidence against the routine use of oxygen in patients with acute MI with ST-segment elevation. Regarding the subgroup analyses suggesting potential benefit in those with low oxygen levels, or in the STEMI subgroup, he said such findings need to be validated in future studies.

Sources

• Stewart R, Jones P, Dicker B, et al. The New Zealand Oxygen in Acute Coronary Syndromes trial. Presented at: ESC 2019. September 1, 2019. Paris, France.

Disclosures

• The NZOTACS was funded by the National Heart Foundation of New Zealand.
• Stewart, Kristensen, and Hofmann report no relevant conflicts of interest.

https://www.tctmd.com/news/supplemental-oxygen-fails-once-again-acs-patients-nzotacs

PhaseBio Announces Presentation of PB2452 Data at ESC Congress 2019

PhaseBio Pharmaceuticals, Inc. (PHAS), a clinical-stage biopharmaceutical company focused on the development and commercialization of novel therapies for orphan diseases, today announced that pharmacodynamic data from the Phase 1 clinical trial of PB2452, a novel reversal agent for the antiplatelet drug ticagrelor, have been selected for oral presentation at ESC Congress 2019, being held August 31 – September 4, 2019, at the Expo Porte de Versailles in Paris, France.

Presentation details are as follows:

Title: Evaluation of the Pharmacodynamics of a Ticagrelor Reversal Agent PB2452
Session: New Developments in Anti-Thrombotic Drug Therapy
Date / Time: Sunday, September 1, 17:32 – 17:50 GMT/ 11:32 – 11:50 AM EDT
Location: Reykjavik – Village 2
Presenter: Lisa K. Jennings, Ph.D., University of Tennessee Health Science Center

Additional information can be found on the ESC Congress website here.

https://finance.yahoo.com/news/phasebio-announces-presentation-pb2452-data-120000447.html