Acadia Pharma’s psychosis drug proven better than placebo in dementia patients

Acadia Pharmaceuticals Inc said on Wednesday dementia patients taking its drug Nuplazid were nearly three times less prone to a psychotic relapse than those on placebo.

The drugmaker’s late-stage trial testing Nuplazid, stopped in September after positive results, enrolled 392 patients aged 74.5 years on average.

Patients on the drug experienced a 65% reduction rate in relapses of dementia-related psychotic episodes, the company said.

Chief Executive Officer Stephen Davis said Acadia planned to meet with the U.S. regulator in the first half of next year to discuss filing for Nuplazid’s approval to include dementia-linked psychosis on its label.

There are no FDA-approved treatments for the condition, characterized by hallucinations and delusions.

The company estimates there are about 2.4 million dementia-related psychosis patients in the United States, about 70% of whom have Alzheimer’s.

About 1.2 million patients have been diagnosed and are being treated with older-generation anti-psychotics and anti-depressants, Davis noted.

Acadia said 4.8% of patients taking Nuplazid had serious side effects, compared with 3.6% of patients in the placebo group.

Nuplazid was approved to treat psychosis linked to Parkinson’s disease in 2016 and Acadia recorded net product sales of $223.8 million last year.

The drug comes at a list price of $3,100 a month.

Acadia, also testing Nuplazid for use in patients with schizophrenia and major depressive disorder, declined to comment on future pricing.

https://www.reuters.com/article/us-acadia-pharm-study/acadia-pharmas-psychosis-drug-proven-better-than-placebo-in-dementia-patients-idUSKBN1Y905U

HHS announces plan to make free doses of Truvada available

The Trump administration is launching a program to provide free access to doses of Truvada, a drug that prevents against HIV, to people who are uninsured and at risk of being infected, officials announced Tuesday.

In a call with reporters Tuesday, Department of Health and Human Services (HHS) Secretary Alex Azar announced the program called Ready, Set, PrEP under which individuals who have tested negative for HIV and have a valid, on-label prescription can access the pre-exposure prophylaxis, or PrEP, medication.

Individuals can find a provider and sign up for the program at www.getyourprep.com or by calling the toll-free number 855-447-8410, he said.

The drug is being donated by the drug’s manufacturer Gilead Sciences in an 11-year deal with HHS. HHS will pay about $200 a bottle in distribution costs for the program up to a total of $6 million over six months to start, Azar said. He said HHS is working to set up a more economical distribution system in the future.

By March 30, CVS Health, Walgreens and Rite Aid will donate their pharmacy dispensing fees, which will help bring down the cost. Qualified patients will be able to obtain PrEP at those pharmacy retailers throughout the U.S. including no-cost delivery via mail, Azar said. He could not provide an estimated value of those donations.

Those companies will also provide patient counseling for the PrEP regimen and take steps to promote adherence.

In May, Gilead first announced it would make up to 2.4 million bottles of Truvada available for free to uninsured Americans at risk of contracting HIV. The announcement is not connected to patent disputes between HHS and Gilead over the drug.

This program is expected to benefit up to 200,000 patients a year and is part of the agency’s broader work aimed at ending the HIV epidemic in the U.S. within the next decade, Azar said. According to a Centers for Disease Control and Prevention report released Tuesday, about 18% of the 1.2 million people who could benefit from PrEP had a prescription.

“We have the tools to stop the spread of HIV in its tracks. Now it’s about the execution,” Azar said. “Ending the HIV epidemic requires significantly increasing the number of Americans receiving PrEP by expanding access, lowering costs and decreasing stigma.”

Ongoing HIV lab testing, which is required for individuals to qualify for Truvada, will not be covered. Azar said community health centers can usually make those services available at no charge to patients who do not have insurance coverage.

https://www.fiercehealthcare.com/hospitals-health-systems/hhs-deal-gilead-doses-cvs-walgreens-and-rite-aid-to-distribute-free-doses

Novartis’ digital transformation continues with Amazon supply chain tie

Not long after announcing a wide-ranging partnership with Microsoft to bring artificial intelligence tools to every desk across its R&D departments, Novartis is now teaming up with Amazon’s mammoth cloud computing division to overhaul its manufacturing, supply and business operations.

The new multiyear collaboration with Amazon Web Services dovetails with the drugmaker’s directives to embrace and incorporate digital technology at every point in its product pipeline and value chain.

AWS aims to supply the company with an enterprisewide data analytics platform, including AI and machine learning services, as well as cloud-based “Insight Centers” that will provide real-time metrics to Novartis’ global technical operations staff.

These centers will focus on tracking manufacturing lines and detecting bottlenecks as well as forecasting potential issues in quality and inventory. Novartis hopes this will allow for new, optimized production models, as the company looks to scale up its work in challenging-to-make personalized medicines such as Zolgensma and Kymriah.

Most recently, company opened a new cell and gene therapy manufacturing facility last week in Stein, Switzerland, providing a European base of operations for tailored therapies. Previously, Novartis had to rely on back-and-forth flights across the Atlantic to service patients on the continent, with its sole Kymriah-producing facility being located in New Jersey.

Novartis also plans to use AWS’ internet of things and computer vision offerings to help improve its manufacturing inspections, by digitally scanning images of sites and tracking individual items to spot for potential risks or delays.

“There is a lot we can learn from the AWS team, and while manufacturing is a great starting place, we’re keen to also explore where else we can apply this technology,” Novartis’ chief digital officer, Bertrand Bodson, said in a statement.

“Using data science and digital technologies to reimagine the way we manufacture medicines is not only at the heart of our transformation, but also core to our ambition to bring innovative medicines to patients faster,” Bodson added.

Novartis currently operates more than 60 manufacturing sites worldwide, producing treatments used by nearly 1 billion people. Through its partnership with AWS, the drugmaker hopes to develop standard metrics for site efficiency, deliverable on a single dashboard illustrating global performance.

The company has already been using Amazon’s computer vision products to double-check that batch manufacturing lines are clear and cleaned after use, and prepared to begin their next scheduled set of tasks. Novartis is also employing AI to extract and analyze data from printed manufacturing documents.

The forthcoming site-based Insight Centers look to make these data available in real time to help avoid unnecessary inventory and machine downtime when producing small-batch and personalized treatments.

https://www.fiercebiotech.com/medtech/novartis-digital-transformation-continues-apace-amazon-supply-chain-tie-up

Pelosi pricing plan will yield 100 fewer new drugs, White House predicts

As debate over drug pricing proposals rolls on in Washington, White House advisers have concluded House Speaker Nancy Pelosi’s aggressive pricing plan would result in 100 fewer new drugs over a decade, lowering Americans’ expected lifespan along the way.

Unveiled this fall, Pelosi’s plan calls for Medicare price negotiations, an international pricing index, potential fines for drugmakers who won’t negotiate and more. President Donald Trump originally tweeted that it was “great to see” the plan, but more recently, the White House has backed away from the proposal and instead supported a bipartisan effort in the Senate.

Now, the White House’s Council of Economic Advisers has rolled out unfavorable findings on Pelosi’s proposal. The bill could lead to 100 fewer drug launches over the next decade, it says, representing about one-third of the total rollouts expected over that span. By reducing access to new drugs, the bill would lower average life expectancy in the U.S. by four months, according to CEA.

The bill would lower drug prices, “but the threat it poses to continued medical innovation will harm American patients in ways that far outweigh any benefits,” the CEA said in a blog post.

In a statement to CNBC, a spokesman for Pelosi said the White House can’t be counted on to provide “accurate numbers or honest analysis.”

“President Trump’s CEA has written a love letter to Big Pharma and letting out-of-control drug prices continue just the way they are,” the spokesman told the publication.

The CEA’s analysis of fewer new drugs resulting from Pelosi’s plan far surpasses the Congressional Budget Office’s estimate. In October, the CBO said the plan would save Medicare $345 billion between 2023 and 2029 but result in eight to 15 fewer new meds out of a group of 300. The New York Times editorial board has said that’s a worthwhile tradeoff, but the pharma industry has pushed back hard against the proposal.

Meanwhile, the Senate bill calls for changes to Medicare Part D and Part B and more transparency for pharma middlemen. Bernstein analyst Ronny Gal recently wrote that the Senate proposal would have a “negligible” effect on pharma operations, while the Pelosi plan would represent a “nuclear winter” for the industry.

All of the debate comes ahead of next year’s elections, and drug pricing promises to be a hot topic on the campaign trail. Gal wrote that in recent months, his team “became convinced that the U.S. will gradually iterate toward more control of drug costs.” What kind of proposal lawmakers and the administration will land on, though, remains an unknown.

https://www.fiercepharma.com/pharma/white-house-predicts-100-fewer-new-drugs-from-pelosi-pricing-plan

Axsome On Track To End 2019 As The Best Performing Stock In Biotech

Axsome Therapeutics Inc AXSM 3.99% shares advanced strongly Tuesday after the company reported a positive mid-stage readout for its investigational compound to treat narcolepsy.

This small-cap biotech has been on a tear since late last year. For the year-to-date period, shares are up a staggering 1,300%.

Benzinga first alerted traders to this hugely successful biotech in late January, when the shares were already up about 200%. Even if the level that prevailed then were to be taken as an entry point, an investor would have made a neat gain of about 300% by now.

The major catalysts for the upside have been clinical readouts, which turned out to be mostly positive.

Source: Axsome

The stock gained about 161% on Jan. 7 when it reported positive Phase 3 results for its lead drug AXS-05 for major depressive disorder, or MDD. The FDA accorded Breakthrough Therapy Designation, or BTD, for AXS-05 in MDD in March. Subsequently in mid-April, the company announced positive results for the mid-stage study of AXS-05 in smoking cessation.

In September, the stock made further gains following the presentation of positive Phase 1 pharmocokinetic data for AXS-07 at the 19th Congress of the International Headache Society in Dublin. AXS-07 is being evaluated for migraine.

The stock, however, came under pressure in early October, although it made good the lost ground subsequently. An announcement in its third-quarter earnings release Nov. 7 concerning a delay in the top-line data readout for AXS-05 in treatment-resistant depression, or TRD, weighed on the stock briefly before it rebounded strongly.

The trigger for Tuesday’s rally was a Phase 2 readout for its AXS-12, which showed that Phase 2 study dubbed CONCERT, met the pre-specified primary endpoint and significantly reduced cataplexy attacks as compared to placebo in patients with narcolepsy. The asset also significantly reduced excessive daytime sleepiness and improved cognitive function, sleep quality and sleep-related symptoms.

Upcoming Catalysts

• Top-line results from the Phase 3 GEMINI placebo-controlled trial of AXS-05 in MDD – year-end 2019
• Top-line results from the Phase 3 MOMENTUM study of AXS-07 in migraine – year-end 2019
• Top-line results from the Phase 3 STRIDE-1 trial of AXS-05 in TRD – Q1 2020
• Top-line results from the Phase 2/3 ADVANCE study of AXS-05 in Alzheimer’s agitation – first half of 2020

Is Stretched Valuation A Concern?

With a slew of clinical readouts between now and the end of the first half of 2020, the stock could be primed for further upside. Regulatory milestones could also act as upside catalysts.

The average analyst rating for the stock is a Buy and the average price target is $39.86, with the Street-high estimate at $50.

https://www.benzinga.com/general/biotech/19/12/14922224/this-biotech-is-on-track-to-end-2019-as-the-best-performing-stock-in-the-sector

Analysts Like HealthEquity’s Post-Q3 Story

HealthEquity Inc HQY 3.4% outperformed third-quarter expectations with a 47-cent bottom-line more than double analyst forecasts. Revenue of $157.1 million also beat consensus estimates of $152.4 million, while EBITDA closed the quarter at $56 million against $43 million forecasts.

HealthyEquity’s stock traded higher by 14% to $69.92 per share at time of writing.

First Takes

The Street liked HealthEquity’s metrics but was more enthused about the big-picture HealthEquity story.

“More importantly, the company provided favorable commentary on two key parts of the growth story: 1) end market demand for health savings account (HSAs); and 2) the performance of WAGE,” Bank of America analysts led by Allen Lutz emphasized in a report. “In our view, strong account growth in the quarter and a positive qualitative outlook for HSA demand is meaningful given the company’s historically conservative approach.”

HSA grew membership 21% and assets 24% to yield about 21% revenue growth.

“Higher cash yields on custodial assets helped,” KeyBanc analysts Donald Hooker and John Kim wrote. “However, management took a much more cautious tone on potential custodial cash yields next year due to recent declines in short-term rates. The favorable new IRS regulations released in July 2019 are noteworthy; however, management commented that these positive regulations will likely not impact HSA adoption in the near term.”

Meanwhile, HealthEquity also reported $15 million of run-rate acquisition cost synergies from its WageWorks purchase. It expects to achieve $50 million by the end of 2022.

“Regarding WAGE, revenue was at the top end of the guidance range and the synergy timeline has been accelerated, indicating that attrition levels are under control and the company is executing against its accretion targets,” Lutz wrote.

KeyBanc offered a more cynical take on WageWorks.

“Revenues at the acquired WageWorks businesses were down by ~6% y/y due to ongoing attrition associated with the FSA and COBRA business that was acquired by WageWorks in 2016 from Automatic Data Processing (ADP),” Hooker and Kim wrote. “There will likely be more revenue run-off here in the near term.”

Earnings Breakdown

Wells Fargo said WageWorks contributed most of the quarter’s revenue and EBITDA upside as lower HSA yields offset account growth in the core HealthEquity segment. However, KeyBanc suggested that a 4.4% year-over-year increase in consolidated revenues reflects high growth in legacy HealthEquity segments and decline in WageWorks segments.

“We estimate that pro forma combined EBITDA margins were down 30 [basis points year-over-year], reflecting the negative economies of scale on the lower revenues at legacy WageWorks, offset by acquisition cost synergies,” Hooker and Kim wrote.

Expert Focus

Bank of America expects strong account growth and WAGE performance to drive $527.4 million in 2020 revenue. However, it’s watching industry growth rates for health savings plans as PPO plans surge and the Fed cuts interest rates. Wells Fargo suggested it’s less concerned about interest rates.

“We would note that the percent of revenue that is interest rate sensitive has fallen from 55% prior to the WageWorks acquisition to 25% after,” analyst Jamie Stockton wrote.

The Ratings

• Bank of America maintained a Buy rating and $75 price target;
• KeyBanc Capital Markets maintained an Overweight rating but raised its target from $70 to $77;
• Wells Fargo maintained an Outperform rating and $76 target.

“HQY seems to be executing fairly well on the things it can control (new account additions and acquisition integration),” Stockton wrote. “While management’s commentary about cash yields in FY21 may temper some of the positive reaction around Q3 results, we suspect a better fundamental picture (albeit still declining) at WageWorks will be well received.”

https://www.benzinga.com/analyst-ratings/analyst-color/19/12/14929564/these-analysts-like-healthequitys-post-q3-story

Analysts Offer Positive Prognosis for UnitedHealth After Investor Day

UnitedHealth Group Inc (NYSE: UNH) plummeted ahead of Tuesday’s investor day and failed to recover throughout the session. However, analysts walked away from the presentation more bullish on the stock.

“The investor day reinforced our thesis that we believe EPS visibility is high for UNH given the underlying market growth, the diversification of the company’s revenue, exposure to the high-growth Optum business and sound capital deployment,” Mizuho Managing Director Ann Hayes wrote in a report.

Biggest Takeaways

UnitedHealth’s guidance mostly aligned with analyst expectations, but big-picture details caused a stir. Mizuho was particularly enthused about Medicaid and Medicare Advantage growth. Medical membership growth is expected to be driven by government rather than commercial accounts in 2020.

Bank of America Merrill Lynch noted that the company is well positioned to seize synergies across its health plan, pharmacy benefit management, technology capabilities and physician network.

“Although it doesn’t happen everywhere, the opportunity is clear and should allow UNH to continue to grow EPS 13-16% over the next few years (at least) as they differentiate themselves in an increasingly competitive market,” analysts Kevin Fischbeck, Joanna Gajuk, Adam Ron and Courtney Fondufe wrote.

They expect developments in OptumRx and OptumInsight to drive further momentum.

“The most bullish part of the story is OptumHealth (the company expects rev growth up to 30% in 2020) due the ability to expand services and deepen penetration into existing markets,” Bank of America wrote.

Earnings Implications

Bank of America Merrill Lynch forecasts double-digit growth, and UBS agrees.

“We sensed a renewed focus on unit cost management moving forward likely as a result of normalizing utilization trends,” UBS analyst Whit Mayo wrote. “We expect that UNH should be able to sustain its 13-16% long-term EPS growth with heightened focus on driving at-unit costs vs. prior years.”

UnitedHealth attributed unit-cost management to its adoption of value-based contracting and out-of-network reference-based pricing, but UBS suggested that success depends on employer and physician engagement to direct enrollees toward the lowest-cost care setting. “Ultimately the cost trend impact from these efforts is highly dependent on networks and physician behavior,” Mayo wrote.

Notably, management raised its outlook for its medical loss ratio (MLR) attributable to a higher mix of new Medicaid patients, but Bank of America dismissed the concern as immaterial to earnings.

The Ratings

• Bank of America Merrill Lynch maintained a Buy rating and a $305 price target;
• Mizuho Securities maintained a Buy rating and $300 target; and
• UBS maintained a Neutral rating but raised its target from $257 to $279.

“UNH’s ability to leverage Optum to control costs and coordinate care drives unique differentiation vs. peers,” Mayo wrote.

“We think UNH’s technology and digital capabilities are key competitive differentiators,” Hayes wrote. “Other areas of intense focus were site of care and OptumCare. We expect OptumCare to be a key focus for M&A going forward, especially expanding in primary care, specialty pharmacy, infusion services, behavioral services and home services.”

https://www.benzinga.com/analyst-ratings/analyst-color/19/12/14929892/analysts-offer-positive-prognosis-for-unitedhealth-after-investor-day