Maintains Buy
Monday, September 9, 2019
Judge allows public nuisance claim in nationwide opioid trial
U.S. District Judge Dan Polster in Cleveland ruled six weeks before the first scheduled federal trial over the epidemic, in a case brought by Cuyahoga and Summit counties in Ohio.
Polster also rejected efforts by Purdue, pharmacies such as Walgreens Boots Alliance Inc and drug distributors such as AmerisourceBergen Corp to exclude testimony from a Harvard Medical School economist who believes the two counties suffered as much as $223.4 million of damages from 2006 to 2018.
The decisions follow a series of rulings from Polster on Sept. 3 favoring the counties, including that they could pursue civil conspiracy claims against the defendants.
Purdue, which makes OxyContin, and its billionaire owners, the Sackler family, have been trying to negotiate a settlement over its responsibility for the opioid epidemic.
Addiction to the painkillers has claimed roughly 400,000 lives in the United States from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention.
Purdue is expected to seek bankruptcy protection this month absent a settlement, three people familiar with the matter said last week.
The Stamford, Connecticut-based company said on Monday that “negotiations continue” with state attorneys general and other plaintiffs, repeating its statement from a day earlier.
“While the company is prepared to defend itself vigorously in the opioid litigation, Purdue has made clear that it prefers a constructive global resolution,” it said.
Paul Hanly, a lawyer for the counties, said Polster offered “numerous sound reasons” not to dismiss the litigation.
Polster oversees roughly 2,000 opioid lawsuits by various municipalities and entities, and the outcome of the scheduled Oct. 21 trial could affect those cases.
A bankruptcy filing would likely remove Purdue from that trial.
Polster said the Ohio counties offered enough evidence for jurors to conclude that Purdue intentionally misrepresented the risks of opioid use, for the purpose of increasing sales.
He also said the economist, Thomas McGuire, had offered “outside, neutral and authoritative sources” showing his methodology for estimating damages.
The drugmakers Allergan Plc, Endo International Plc and Mallinckrodt Plc have settled with the counties for a combined $39 million in cash.
Other defendants in opioid cases include Johnson & Johnson; pharmacy operators CVS Health Corp, Rite Aid Corp and Walmart Inc; distributors Cardinal Health Inc and McKesson Corp and generic drugmaker Teva Pharmaceutical Industries Ltd.
https://www.reuters.com/article/us-usa-opioids-litigation/u-s-judge-allows-public-nuisance-claim-in-opioid-trial-idUSKCN1VU1GP
Polster also rejected efforts by Purdue, pharmacies such as Walgreens Boots Alliance Inc and drug distributors such as AmerisourceBergen Corp to exclude testimony from a Harvard Medical School economist who believes the two counties suffered as much as $223.4 million of damages from 2006 to 2018.
The decisions follow a series of rulings from Polster on Sept. 3 favoring the counties, including that they could pursue civil conspiracy claims against the defendants.
Purdue, which makes OxyContin, and its billionaire owners, the Sackler family, have been trying to negotiate a settlement over its responsibility for the opioid epidemic.
Addiction to the painkillers has claimed roughly 400,000 lives in the United States from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention.
Purdue is expected to seek bankruptcy protection this month absent a settlement, three people familiar with the matter said last week.
“While the company is prepared to defend itself vigorously in the opioid litigation, Purdue has made clear that it prefers a constructive global resolution,” it said.
Paul Hanly, a lawyer for the counties, said Polster offered “numerous sound reasons” not to dismiss the litigation.
Polster oversees roughly 2,000 opioid lawsuits by various municipalities and entities, and the outcome of the scheduled Oct. 21 trial could affect those cases.
A bankruptcy filing would likely remove Purdue from that trial.
Polster said the Ohio counties offered enough evidence for jurors to conclude that Purdue intentionally misrepresented the risks of opioid use, for the purpose of increasing sales.
He also said the economist, Thomas McGuire, had offered “outside, neutral and authoritative sources” showing his methodology for estimating damages.
Other defendants in opioid cases include Johnson & Johnson; pharmacy operators CVS Health Corp, Rite Aid Corp and Walmart Inc; distributors Cardinal Health Inc and McKesson Corp and generic drugmaker Teva Pharmaceutical Industries Ltd.
https://www.reuters.com/article/us-usa-opioids-litigation/u-s-judge-allows-public-nuisance-claim-in-opioid-trial-idUSKCN1VU1GP
New York governor proposes ban on flavored e-cigarettes
New York Governor Andrew Cuomo proposed legislation on Monday to ban flavored e-cigarettes statewide in an effort to protect young people from the unknown consequences of vaping.
“Common sense says if you don’t know what you’re smoking, don’t smoke it,” Cuomo told reporters at a news conference. “And right now, we don’t know what you’re smoking in a lot of these vaping substances,” he said.
The governor’s announcement comes after a nationwide surge in mysterious, serious lung illnesses possibly related to vaping, which has also been linked to five deaths in the United States.
U.S. public health officials on Friday announced that they are investigating about 450 cases of the illness across 33 states and one U.S. territory, including 41 cases in the state of New York. The U.S. Centers for Disease Control and Prevention and the U.S. Food and Drug Administration said they have not linked the illnesses to any specific e-cigarette product or ingredient.
If the proposed legislation were to become law, New York would become the second state to ban flavored e-cigarettes, following Michigan, which passed a ban on Wednesday.
While e-cigarettes are promoted as a product to help smokers cut down or quit, health officials have expressed concerns that many e-cigarette flavors are designed to get a new generation hooked on nicotine.
Many of the reported illnesses involved vaping products, including cannabis products, containing vitamin E acetate, an oil derived from vitamin E that is potentially dangerous if inhaled,
Cuomo, sitting beside New York Commissioner of Health, Dr. Howard Zucker, also announced that the state’s Department of Health was issuing subpoenas to three e-cigarette companies, Honey Cut Labs LLC, Floraplex Terpenes and Mass Terpenes LLC. The Department of Health obtained samples from the three companies and found high levels of vitamin E acetate in their products.
Cuomo said stores that sell e-cigarettes will be required to disclose potential health consequences.
“It’s quite simple: Don’t do it,” Cuomo said. “Don’t do it because we don’t know if it’s safe.”
Hospitals claim their mergers cut costs, unlike other studies’ findings
A report commissioned by the American Hospital Association purports to demonstrate the benefits healthcare consolidation brings to patients.
KEY TAKEAWAYS
The hospitals’ report argues that mergers lead to better healthcare and lower costs for patients.
Independent research has shown that mergers tend to lead to greater leverage and higher prices.
Displeased with the numerous studies that have shown mergers among healthcare providers tend to lead to higher costs, the American Hospital Association released its own report Wednesday to defend the rapid consolidation in which its members have participated.
The report, which updates a previous iteration that AHA released in 2017 with similar findings, includes information derived from interviews with hand-picked leaders from health systems that have participated in some form of acquisition or affiliation. It also analyzes the financial impacts of hospital mergers, which AHA President and CEO Rick Pollack said are a valuable tool as the industry metamorphosizes.
“Mergers have become one of the critical means through which hospitals can provide their communities with high-quality, convenient and cost-effective care,” Pollack said in a statement. “The benefits of mergers allow hospitals to create connected networks of care and keep the focus where it belongs: on improving care for the patient.”
The report says hospital acquisitions benefit patients by leading to “better care at reduced cost.” Rather than directly studying the cost shouldered by patients and payers, however, the report used changes in hospital revenue as a proxy. Revenues per admission at acquired hospitals fell a statistically significant 3.5% compared to non-merging hospitals, according to the report. “These results suggest that savings that accrue to merging hospitals are passed on to patients and their health plans,” the report’s executive summary states.
The report also found that hospital acquisitions reduced annual operating expenses by a statistically significant 2.3% at acquired hospitals and improved key quality metrics on readmissions and mortality.
Hospital mergers are about efficiency, not market power, Pollack said.
A group of academics who hosted their own webinar Wednesday after the AHA’s report was released, however, pointed to several studies that affirm conventional wisdom: that consolidation leads to greater negotiating leverage and that post-merger entities use that leverage to their financial advantage.
Leemore Dafny, PhD, a professor of business administration at the Harvard Business School and former deputy director of healthcare and antitrust in the Bureau of Economics at the Federal Trade Commission, cited her research during the webinar that shows health systems in separate metropolitan areas tend to raise prices when they merge.
Zack Cooper, an associate professor of public health and economics at Yale University, cited his research based on commercial insurance claims data as showing that hospitals facing less competition demand higher prices and contracts that favor them. He also pointed to research published last year by RAND Corp.
Not all healthcare consolidation is necessarily bad, but regulators should rigorously review proposed transactions on a case-by-case basis, the academics argued.
How Do Controversial Blood Pressure Targets Stack Up in Stroke?
When it comes to blood pressure (BP) targets, tailoring for certain groups is probably better than specifying a blanket "optimal" level for all stroke patients, clinicians agreed during a debate here.
Current American College of Cardiology/American Heart Association (ACC/AHA) BP guideline recommendations for acute stroke management and secondary prevention are "reasonable" but one "must be careful about lowering BP," according to stroke neurologist Philip Gorelick, MD, MPH, of Thorek Memorial Hospital in Chicago. "It's not just the BP level -- it's the variability of BP."
BP fluctuations have been shown to predict neurological deterioration and worse functional outcomes. "Consider early stabilization of BP in an attempt to avoid variability of BP and persistently elevated BP," he told the audience during a session at the AHA's annual Hypertension meeting.
Gorelick discussed the guidelines alongside Paul Whelton, MD, MSc, of Tulane University School of Medicine in New Orleans, who offered his perspective as the chair of the ACC/AHA guideline writing committee.
Current American College of Cardiology/American Heart Association (ACC/AHA) BP guideline recommendations for acute stroke management and secondary prevention are "reasonable" but one "must be careful about lowering BP," according to stroke neurologist Philip Gorelick, MD, MPH, of Thorek Memorial Hospital in Chicago. "It's not just the BP level -- it's the variability of BP."
BP fluctuations have been shown to predict neurological deterioration and worse functional outcomes. "Consider early stabilization of BP in an attempt to avoid variability of BP and persistently elevated BP," he told the audience during a session at the AHA's annual Hypertension meeting.
Gorelick discussed the guidelines alongside Paul Whelton, MD, MSc, of Tulane University School of Medicine in New Orleans, who offered his perspective as the chair of the ACC/AHA guideline writing committee.
Acute Stroke
As in the previous version, the 2017 ACC/AHA guidelines say that acute ischemic stroke patients should be kept at BPs under 185/110 mm Hg before tissue plasminogen activator (tPA) treatment and 180/105 mm Hg in the 24 hours after drug therapy; if there is no alteplase or endovascular treatment, it may be reasonable to lower BP by 15%.
The literature suggests that BP-lowering therapies are generally safe in acute ischemic stroke but do not reduce the risk of death or major disability. And in the absence of these benefits, there's actually concern that secondary outcomes could worsen with BP-lowering medication, according to Gorelick.
It may therefore be reasonable to withhold BP-lowering medication if there is no compelling reason to reduce it, at least until the patient is medically and neurologically stable, he said.
Whelton noted that CATIS, the largest trial to date assessing acute BP lowering in acute ischemic stroke, found that immediate BP reduction made no difference in death or major disability.
But perhaps the investigators intervened too early back then: CATIS-2 is now underway with 5,000 patients getting BP-lowering intervention 24-48 hours after stroke onset, according to the guideline leader.
As for acute intracerebral hemorrhage, the guidelines say that bringing systolic BP under 140 mm Hg is harmful to patients, and Gorelick agreed: "Too precipitous and too low a target may be dangerous," he said, citing the INTERACT-2 and ATACH-2 trials showing no reduction in hematoma growth, death, or disability with intensive BP control.
He suggested modifying the AHA/American Stroke Association systolic BP target to 140-150 or 160 mm Hg in this setting.
Preventing Recurrent Stroke, Dementia
A 130 mm Hg systolic target is now recommended by the ACC/AHA for secondary stroke prevention.
Gorelick said it's reasonable to go down to less than 140 mm Hg or less than 130 mm Hg -- the latter especially after lacunar infarctions -- using diuretics, angiotensin-converting enzyme inhibitors, and other classes of BP-lowering agents.
Most trials in secondary prevention have been underpowered, suggesting trends toward fewer events with intensive BP therapy without reaching statistical significance, according to Whelton.
Recently, however, the RESPECT trial and a recent meta-analysis both showed that intensive BP treatment significantly reduced stroke recurrence over standard treatment.
Meanwhile, the rationale for lowering BP to preserve cognition also remains controversial.
For elderly patients over 80 years old and those with cognitive impairment, Gorelick advised caution, as there is concern about cerebral autoregulation when BP goes too low.
"There's a lot of observational data that patients who start developing cognitive impairment do worse when BP drops. [The question is] whether we need to boost BP to keep it high, so they can perfuse better," according to the stroke neurologist.
Whelton argued that the subgroup of SPRINT participants who were 75 years or older "seemed to do as well as anybody in the trial" on intensive BP control and as a very high-risk cohort even showed low numbers-needed-to-treat.
Concern over the BP "J-curve" has made some people nervous about going too low. However, "I would say as an observational epidemiologist, we see J-curves in everything. Take weight, cholesterol, sodium ... It's almost inevitable. When you look at a J-curve, it's usually reverse causality [driven by] sick people," Whelton said.
"It's not to say you should be cavalier about BP therapy," he clarified. "But the high-risk individuals who benefited most from the intervention are the people who we might be too cautious with."
Gorelick reported financial relationships with Bayer, Novartis, Amgen, and Vindico Medical Education.
Primary Source
Hypertension
Source Reference: Gorelick PB "Is there a best blood pressure target post-stroke for outcome improvement? Neurologist's perspective" Hypertension 2019.Secondary Source
Hypertension
Source Reference: Whelton PK, et al "Is there a best blood pressure target post-stroke for outcome improvement: ACC/AHA BP guideline perspective" Hypertension 2019.- https://www.medpagetoday.com/meetingcoverage/ash/82049
Lilly drug nabbed in Loxo buyout hits 68% overall response rate in lung cancer
Now within the ownership of Eli Lilly, Loxo Oncology has presented new data at the World Conference on Lung Cancer for its RET inhibitor LOXO-292 as it plots an NDA in the coming months.
The drug, aka selpercatinib, showed a 68% objective response rate (ORR) in heavily pretreated RET fusion-positive non-small cell lung cancer (NSCLC) in the phase 1/2 LIBRETTO-001 trial.
This is compared to data presented at several U.S. cancer congresses last year when the drug (then still owned by Loxo) hit a similar overall response rate, which is impressive, especially given these patients had already been through the ringer with other treatments.
The latest data drop also showed an 85% ORR in treatment-naive RET fusion-positive NSCLC patients for Lilly’s RET signaling inhibitor, which is also in trials for thyroid cancer. Selpercatinib, in addition, hit a central nervous system ORR of 91%, and has a median progression-free survival rate of more than 18 months, Lilly told FierceBiotech ahead of the results presented today in Barcelona, Spain.
In terms of safety, the FDA breakthrough-tagged drug also appeared to perform well, with only nine patients (1.7%) stopping treatment as a result of toxicity out of more than 500 across the study.
“In this large cohort, selpercatinib’s response rate, durability, robust CNS activity, and safety show promise. Furthermore, this continues to confirm that RET fusions are clinically targetable alterations, placing them in the company of activating EGFR/ALK/ROS1 alterations,” said Alexander Drilon, M.D., lead investigator at the Memorial Sloan Kettering Cancer Center in New York City.
“We are encouraged by these data as there is currently an unmet need to provide genomically tailored therapy to patients with RET fusion-positive NSCLCs.”
Josh Bilenker, M.D., interim senior vice president of oncology research and early phase development at Lilly and CEO of Loxo Oncology, said these data would form the basis of its NDA with the U.S. regulator, planned before the end of the year.
Lilly/Loxo aren’t the only players in this space, with Blueprint Medicines and Stemline Therapeutics also working on rival RET drugs, namely pralsetinib and SL-1001, respectively. Lilly, though, via its $8 billion Loxo buyout, seems to be ahead of these two, for once at the forefront of oncology R&D.
BeiGene hits back at short seller’s accusations of 60% sales inflation
BeiGene, a wonderkid in China’s booming biotech sector, leapfrogged onto the commercial stage thanks to its 2017 acquisition of Celgene’s Chinese operations. But now, the very assets that helped boost the firm’s Nasdaq shares past $200 per share last year have attracted some serious allegations.
New York-based investment shop J Capital Research Thursday released a damning report (PDF) on BeiGene, accusing the Chinese biotech of faking sales figures, which all come from in-licensed Celgene cancer drugs Revlimid, Abraxane and Vidaza in the country. The short seller claimed BeiGene inflated those sales numbers by almost 60%.
BeiGene’s Nasdaq and Hong Kong shares both slid around 15% over two days even as the company said Friday the accusations were “blatantly false.”
Management hopped on the phone Sunday for an emergency call to calm investors. “We stand by our reported numbers,” Xiaobin Wu, BeiGene’s China general manager and president, whom CEO John Oyler poached from Pfizer mid-2018, said on Sunday’s call.
J Capital says it based its allegations on a variety of sources: a survey with 10 oncologists from different hospitals and interviews with BeiGene’s master distributor—state-backed China Resources Pharmaceutical—two secondary distributors, and 15 former sales reps for BeiGene and competing drugmakers, among others.
The gist? Sales of the licensed Celgene drugs are far below what BeiGene had reported—57% below, by J Capital’s estimates. In the first half of 2019, BeiGene posted product sales of $115.6 million, up 111% year over year.
BeiGene Chief Financial Officer and Chief Strategy Officer Howard Liang said J Capital’s sources couldn’t possibly deliver valid numbers.
“For those of us who have done research and have done much bigger physician surveys but still had a hard time predicting sales, it is extraordinary to see someone claim that they can estimate our sales by purportedly interviewing 10 oncologists and use that as the basis to accuse a company of falsifying 60% of sales,” Liang said.
The investment firm claims BeiGene bought its own drugs and registered the costs to a shell company in Guangzhou with a fake address and no operations. Known as BeiGene Pharmaceuticals Guangzhou (BPG), that company raised its registered capital three times last year to $90 million on Dec. 27, 2018, from merely $200,000 on June 11, 2018, J Capital’s report said. Each increase came “just before the end of a quarter and [in an amount that] would have provided the company with enough capital to purchase inventory,” the report alleges.
BeiGene set up BPG by acquiring local firm Huajian Pharmaceuticals, which until last February was called Guangdong Jianbang Pharmaceutical. The company’s name was changed twice more until settling onto BPG, a “maneuver” J Capital interprets as “to trick auditors into thinking that the purchaser of Celgene product is different.”
To hear Liang tell it, however, BeiGene bought that company to fund development costs for and future commercialization of BeiGene’s PD-1 candidate tislelizumab, because Huajian holds a drug distribution license. Such licenses are necessary to sell drugs in China, but nearly impossible to obtain from scratch these days as the country works to consolidate its pharma sector.
Tislelizumab had until recently been licensed to Celgene, but the Big Biotech returned its rights after agreeing to merge with Opdivo maker Bristol-Myers Squibb. But BeiGene had been taking care of most of the drug’s development activities, BeiGene has told FiercePharma before. “In order to fund these expenses, we’re required to make periodic capital increases,” the CFO said.
Liang said the name changes are “common practice in China for acquisitions.” BPG’s immediate parent company, BeiGene Guangzhou, does have employees, and the address on file is only for registration because it has yet to finish construction of a permanent site. He also pointed out that a $25 million BPG transaction classified as “other non-current asset”—allegedly used to buy back its drugs—was in fact paid to Boehringer Ingelheim for contract manufacturing of the PD-1 drug.
J Capital also cited BeiGene’s relatively slow decline in margins as evidence of the company inflated revenue. The three drugs took price cuts of between 37% and 63% to enter China’s national reimbursement list, and that should have hit margins, the firm figures.
Going by those price cuts, J Capital estimates the company’s margin should have fallen by 21 points, though BeiGene only reported changes of 8 points to 73% in first quarter 2019 from 81% in the fourth quarter of 2017, when it reported sales for the first time.
Liang, however, said the firm’s timeline is off. Revlimid was the first of the three products to be included in China’s national formulary in a round of additions unveiled in July 2017—and it took the biggest price cut. That means the discount was already reflected in BeiGene’s reported margin since the fourth quarter of 2017, he explained.
J Capital added that BeiGene had overstated its R&D expense by about $65 million in 2018, according to its calculations based on peer expenditures. Take local biopharma major Jiangsu Hengrui Medicine as a comparator: That company reports it spends $129,457 per R&D employee, while BeiGene’s per-employee spend was $608,000, J Capital noticed.
In rebuff, CEO Oyler pointed to BeiGene’s largest oncology-focused clinical team in China as well as engagement in activities globally as reasons behind its high costs.
More than 7,000 patients have enrolled in BeiGene trials, including costly head-to-head trials such as two phase 3 studies testing BTK inhibitor zanubrutinib against Imbruvica, Oyler said. The drug just won FDA priority review in second-line mantle cell lymphoma, with a decision expected Feb. 27.
BeiGene’s programs also include six pivotal studies for tislelizumab. The company’s strategy, despite being late to the Chinese PD-1 game, is to win as many indications as it can—as fast as it possibly can—so that they can all be reimbursed. “Only with reimbursement can a PD-1 affordably reach the vast number of patients in need in China,” Oyler said.
In a regression analysis BeiGene did to show peer company R&D spending versus the number of phase 3 trials, the company indeed falls below the global trends. But it does stand above its Chinese peers, including Hengrui and fellow PD-1 players Innovent and Junshi. That, according to Oyler, is “because we’re running a large number of global programs.”
Those were some of the serious allegations management addressed. Others—such as alleged insider trading with a company that’s owned by a Wang Xiaoqiang simply because the name sounds similar to BeiGene co-founder Wang Xiaodong—Liang categorized as “just laughable.”
Then there’s the “factually wrong,” according to BeiGene. Company execs and directors have sold $322 million worth of shares since listing in 2015, J Capital claimed. While the other allegations might be “wild speculations,” this one falls to bad math, Liang said; J Capital appears to have double-counted planned sales and actual sales. Oyler, for example, has sold about 16% of his holdings since founding BeiGene and still maintains a 10% interest, he noted.
The BeiGene snafu comes as traditional Chinese medicines-focused Kangmei Pharmaceutical, one of the largest local drug manufacturers and once an MSCI global index constituent firm, is embroiled in a scandal in which local securities watchdog found it recorded 29.9 billion yuan ($4.3 billion) in cash using false documents and records.
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