Nationwide Children’s, a gene therapy leader, launches manufacturing spinout

Nationwide Children’s Hospital, a hot spot for gene therapy research, this week launched a biotech spinout dedicated to constructing the complex one-time treatments.

In creating Andelyn Biosciences, as the new company is called, Nationwide aims to build on its decade-long experience in developing, testing and manufacturing gene therapies for deadly inherited diseases like spinal muscular atrophy and Duchenne muscular dystrophy.

Andelyn will operate as a for-profit subsidiary of the Columbus, Ohio-based hospital, producing gene therapy components for biotech and pharmaceutical companies running clinical trials. By 2023, Andelyn also plans to contract with drugmakers to make commercial products from a larger facility that’s yet to be built.

As the gene therapy field has surged forward — yielding two pioneering drug approvals and at times remarkable clinical results — manufacturing has emerged as a persistent challenge.

Current treatments are delivered via hollowed-out, inactivated viruses that must be made in enormous quantities to deliver sufficient copies of the target gene. Scaling up from small studies to late-stage tests and commercial marketing, meanwhile, requires a company either own a dedicated manufacturing plant or turn to existing contract manufacturers, many of which currently have long wait times for production.

“We’re tracking the growth, maturation and evolution of the field,” said Dennis Durbin, chief scientific officer of the Abigail Wexner Research Institute at Nationwide, in an interview. “Commercial-scale manufacturing represents one of the next significant barriers to the continued development of the field.”

For years, Nationwide has produced gene therapies for its research at a small clinical facility. As Nationwide’s work expanded, the hospital added space, increasing the number of production suites dedicated to viral vector manufacturing from one to three.

More recently, Durbin said, Nationwide’s industry partners began asking the hospital if it could make preclinical or early-stage clinical product, requests that spurred Nationwide to consider launching Andelyn.

“Part of the reason we feel we can do this is because of our track record of success in doing it at the scale we’ve been doing it for several years,” said Durbin, who joined Nationwide two years ago from the University of Pennsylvania. “We don’t feel we’re starting out from scratch here.”

That track record includes a Phase 1 study led by researcher Jerry Mendell that proved the promise of a gene therapy for spinal muscular therapy, later taken forward by the biotech AveXis and approved as Zolgensma.

Other notable examples include two spinouts, Celenex and Myonexus, later acquired by Amicus Therapeutics and Sarepta Therapeutics, respectively. Sarepta has also licensed from Nationwide a Duchenne muscular dystrophy treatment that has since become the company’s leading experimental drug.

Select biotech spinouts from Nationwide Children’s

SPINOUT	DISEASE FOCUS	LEAD DRUG	BOUGHT BUY
AveXis	Spinal muscular atrophy	Zolgensma	Novartis, for $8.7 billion
Celenex	Lysosomal storage disorders	Two programs in Batten disease	Amicus Therapeutics, for $100 million
Myonexus	Limb-girdle muscular dystrophy	MYO-101	Sarepta Therapeutics, for $165 million

With Andelyn, Nationwide expects to offer manufacturing support from the start of clinical testing all the way through to a gene therapy’s potential approval — something it’s current clinical facility can’t do.

Durbin also hopes Andelyn will be able to keep pace with a field that’s unlikely to look the same in several years’ time.

“The manufacturing methods in this space are still what I would consider barely first-generation,” he said. “So we anticipate continued improvements and innovation and we want Andelyn to be on the forefront.”

Nationwide isn’t the only academic center investing in gene therapy manufacturing. The Children’s Hospital of Philadelphia, another focal point in gene therapy research, opened in late 2018 a clinical production site to make viral vectors.

But structuring Andelyn as a for-profit contract manufacturer appears unique, particularly from a not-for-profit hospital.

Durbin, though, doesn’t see a conflict between the two, noting that Nationwide will reinvest some of the revenues from Andelyn back into its own research programs.

Additionally, by helping gene therapies advance, Andelyn could usher in new treatments for children, Durbin said. That would be in keeping with the company’s name, which honors Andrew Kilbarger and Evelyn Villarreal, two children who participated in Phase 1 gene therapy studies at Nationwide.

https://www.healthcaredive.com/news/nationwide-childrens-gene-therapy-manufacturing-andelyn-launch/570472/

Hospital-run Civica Rx to develop drugs in house

• Civica Rx, the generic drug company created by hospital systems, on Thursday said it has signed a seven-year partnership with Thermo Fisher to develop its own in-house products to supply to its members.
• The partnership will focus on nine drugs used in critical or emergency care that are in short supply or face potential shortages because of the limited number of manufacturers.
• The agreement represents another step in Civica’s strategy, as previous deals have involved contracting with existing manufacturers to produce private-label drugs for its members.

The arrangement would see Thermo Fisher producing drugs that would be distributed under an Abbreviated New Drug Application, or ANDA, owned by Civica. Until now, Civica has contracted with five manufacturers, including Hikma, Xellia Pharmaceuticals and Exela Pharma Sciences, to produce drugs under the manufacturers’ ANDAs but using Civica’s drug code.

Using suppliers’ ANDA was the first phase of Civica’s strategy, done in order to get drugs in short supply to hospitals as quickly as possible as well as providing generic makers with justification to increase or re-start production. Under these arrangements, Civica has begun supplying its members with 18 drugs, among them sterile injectables from Hikma and antibiotics from Xellia.

The seven-year agreement with Thermo Fisher is the next phase, in which Civica, a non-profit founded in 2018 by healthcare systems, builds its own internal pipeline of essential drugs using a contract manufacturer.

The drugs will be selected based on input from hospital-led panels. The company would not disclose what drugs Thermo Fisher will produce, although its focus is on antibiotics, anesthetics, heart and pain management medications, as well as other essential sterile injectable medicines.

A third phase of its strategy will see Civica buy or build its own manufacturing facilities.

The first batch of private-label Civica drug, vancomycin hydrochloride, was delivered in October to Riverton Hospital, a Utah facility owned by Civica founder Intermountain Healthcare.

Civica’s members include 50 health systems accounting for 1,200 hospitals and 30% of licensed beds in the U.S.

Thermo Fisher entered the contract manufacturing market in 2017 when it bought Pantheon for $7.2 billion. The laboratory products and services division that absorbed Pantheon saw its revenue grow 41% to $10 billion in 2018.

https://www.healthcaredive.com/news/civica-thermo-fisher-partner-drug-shortage-manufacturing/570625/

MedPAC finds 340B effect on pricing ‘modest,’ going against pharma critique

• A Medicare Payment Advisory Commission study found spending on cancer drugs at hospitals participating in the 340B drug discount program was only 2% to 5% higher than non-340B hospitals and 1% to 7% higher than physician offices. The overall effect of the controversial program on cost-sharing for patients is “likely to be small, if any,” the Congressional advisory group said.
• Researchers were careful to point out they couldn’t directly attribute the spike in costs to incentives created by 340B discounts, noting another potential explanation is that 340B hospitals are more likely to be large teaching hospitals and care for outsized numbers of young and disabled patients who require aggressive treatment and receive subsidies in Medicare’s prescription drug benefit.
• The findings, described as “inconclusive” by one MedPAC member, throw cold water on big pharma’s perennial complaint that the program, established in 1992 to lower drug prices for safety net hospitals, is a major driver of healthcare spending.

Hospitals participating in the 340B program can buy outpatient drugs at substantial discounts, using the average sales price of the drug minus a rebate that changes based on inflation and whether the drug is branded or generic.

Empirical evidence on 340B, which gives participating hospitals on average a 25% to 50% discount on medicines, is limited. House Committee on Energy and Commerce Chairman Frank Pallone, D-N.J., asked MedPAC to dig into the drug discount program’s effect on healthcare spending in 2018. Its initial findings made public Friday provides some new ammunition in the ongoing battle between pharmaceutical companies and nonprofit disproportionate share hospitals over the future of 340B.

Eligible hospitals say they need the program in order to stay afloat, and that big pharma loathes it because it nibbles away at profits. Pharmaceutical companies riposte 340B pads hospitals’ bottoms lines, trickling down to higher costs for patients.

MedPAC’s analysis, one of the few from a non-pharma or non-provider funded angle, looked at monthly average cancer drug spending in 340B hospitals, non-340B hospitals and physician offices across five types of cancer: breast, colorectal, prostate, lung, leukemia and lymphoma.

Higher spending at 340B hospitals seems to be linked to the specific form of cancer. The 340B program was associated with higher spending for just two of the five cancer types studied: prostate and lung, MedPAC researchers found. However, the effects of general increases in oncology spending from 2009 to 2017 and patient age both had large statistically significant effects on cancer spend.

Lung cancer, which accounts for one-fourth of cancer deaths, usually has a higher price per unit for drugs in Medicare Part B, and a larger swath of the patient population is likely to receive new, pricey immuno-oncology drugs if treated in 340B hospitals. Prostate cancer also has a higher price per unit in both Medicare Part B and Part D, and patients are prescribed more drugs in 340B hospitals than non-340B facilities.

However, none of those findings were directly attributable to incentives created by discounts in the 340B program, researchers cautioned, and can’t be generalized to other cancers or conditions, deflating the drug lobby’s common attack that 340B incentivizes hospitals to choose higher priced drugs and use more drugs to inflate their margins.

“These results are a little surprising because they’re not that strong,” Lawrence Casalino, a MedPAC member and health policy chief at the Weill Cornell Department of Healthcare Policy and Research, said at the group’s Friday meeting, while Oschsner Health System CEO Warner Thomas shrugged them off as “modest” and “somewhat inconclusive.”

Powerful trade group PhRMA has been actively trying to shift public opinion on 340B through a barrage of reports and studies over the past few years.

A PhRMA-commissioned late last year argued safety net hospitals in the program were reimbursed for physician-administered drugs at three times higher than what they paid, and another found the program costs patients more in the long run by moving care away from physician offices to more expensive hospital outpatient settings. Some lawmakers have been similarly concerned about price and lack of government oversight or transparency, inciting MedPAC’s inquiry into 340B.

Friday’s report​ looked at the program prior to 2018, when CMS drastically overhauled payments in the program. Instead of hospitals receiving a drug’s average sales price plus 6%, they were paid 22.5% less than the average price. The facelift immediately sparked a legal challenge that was litigated for much of last year, with renewed fervor after CMS decided to continue the cuts going into 2020 despite a previous court ruling striking them down.

The case is now in the D.C. Circuit, with a decision expected this summer.

Commissioners asked Friday for more information on how consolidation and other environmental trends, like Medicaid expansion, contributed to the spread of 340B. “Is there any other consolidation that preceded this status? Are hospitals seeing it as a windfall” and buying 340B facilities to participate, asked MedPAC commissioner and University of Pennsylvania Health Transformation Director Amol Navathe.

Despite the hullabaloo, advocates for 340B maintain its benefits for low-income patients and their providers outweigh any drawbacks.

The program saved hospitals $11.8 million in 2018, according to trade group 340B Health, which said 90% of those savings was used for patient care services. A strong majority of hospitals said losing those savings would stop them from being able to provide programs like pharmacy services and transportations, with rural hospitals arguing it would contribute to hospital closures, worsening care access in needy areas.

https://www.healthcaredive.com/news/medpac-finds-340b-effect-on-pricing-modest-going-against-pharma-critique/570683/

Qiagen up 4% on renewed takeover chatter

QIAGEN N.V. (QGEN +4.3%) is up on almost double normal volume amid new rumors of a potential suitor.

Shares rallied last quarter on the same chatter but shares plunged in December after the company decided to remain independent.

https://seekingalpha.com/news/3532808-qiagen-up-4-on-renewed-takeover-chatter

$8B Risperdal award against Johnson & Johnson cut to $6.8M

Judge Kenneth Powell of the Philadelphia Court of Common Pleas reduced the payout that a jury awarded Oct. 8 to the plaintiff Nicholas Murray, a Maryland resident.

No reason was given for the reduction, which was disclosed in court records. Lawyers for Murray have said the punitive damages award was the first in thousands of lawsuits against Johnson & Johnson’s Janssen Pharmaceuticals unit over Risperdal.

Murray claimed he had been prescribed the drug in 2003, when he was 9, to treat symptoms related to autism. He had previously been awarded $680,000 in compensatory damages.

Both sides pledged to appeal.

“The ruling is wrong (and) provides essentially no punishment for the worst of the worst of corporate misconduct,” Murray’s lawyer Thomas Kline said in an email. “We believe that when the merits are reviewed that the $8 billion will be reinstated.”

Johnson & Johnson said that while Powell “appropriately reduced the excessive punitive damages award,” he wrongly excluded evidence that Risperdal’s label “clearly and appropriately” outlined the risks of use.

The U.S. Food and Drug Administration approved Risperdal in 1993 to treat schizophrenia and bipolar mania in adults, and in 2006 for irritability associated with autism in children.

Plaintiffs suing over the drug have said Johnson & Johnson concealed the link between Risperdal and excessive growth of female breast tissue in boys, known as gynecomastia.

While doctors may prescribe many drugs as they see fit, including for off-label uses, Murray said Johnson & Johnson should have warned his doctors about Risperdal’s side effects.

Johnson & Johnson said in October it faced lawsuits by 13,600 people over Risperdal.

The New Brunswick, New Jersey-based company agreed separately in 2013 to pay $2.2 billion to settle U.S. criminal and civil probes into its marketing of Risperdal and two other drugs.

https://www.reuters.com/article/us-johnson-johnson-risperdal/judge-slashes-8-billion-risperdal-award-against-johnson-johnson-to-6-8-million-idUSKBN1ZG293

While expected, Intercept’s approval delay adds to NASH uncertainty

In a Friday disclosure, Intercept Pharmaceuticals said it could take up to three months longer for regulators to make an approval decision on the company’s closely watched liver disease drug. The approval deadline is now set for June 26 rather than March 26.

Intercept expected such a delay due to the scheduling of an upcoming Food and Drug Administration meeting. Slotted for April 22, the meeting will have a panel of independent experts evaluate Intercept’s drug as a treatment for the disease, and then recommend to the FDA whether its safety and efficacy support approval. Given the timing, it was fairly certain an approval decision would be pushed back until after the panel makes its recommendation.

Despite the delay, Intercept CEO Mark Pruzanski maintains that his company’s drug, called obeticholic acid, can enter the U.S. market before the end of June.

“I feel very confident that we will be ready and we will be able to drive the successful launch of this drug,” Pruzanski told BioPharma Dive during an interview Wednesday, right before Intercept was notified of the new approval deadline. The company confirmed Friday that it’s still guiding for a U.S. approval and launch in the first half of 2020.

Intercept’s drug has already gotten the FDA’s blessing for a separate condition called primary biliary cholangitis, for which it is marketed as Ocaliva.

If approved again, it would be the first commercial treatment for non-alcoholic steatohepatitis, a fatty liver illness estimated to affect millions of U.S. patients. The large market opportunity has made NASH a crowded area of drug development, with big players such as Pfizer, Novartis and Gilead investing heavily.

Intercept, however, is the only one to have succeeded in a late-stage clinical trial. Results showed that NASH patients with moderate to advanced liver scarring who were put on Intercept’s drug ended up experiencing a one-stage-or-greater improvement in fibrosis without their disease worsening.

This effect, though, was seen in just a quarter of patients taking the higher dose of Intercept’s drug. Half of all the patients on that dose also reported itching, which analysts worry may limit the drug commercially because patients won’t be able to tolerate the side effects. Notably, NASH is considered a “silent” disease because its symptoms are mild or go unnoticed until the later stages, at which point patients have significant enough tissue damage that some require liver transplants.

Pruzanski doesn’t agree that NASH is silent. He said these patients often report lower quality of life due to chronic fatigue, abdominal discomfort and the itching that’s common with chronic liver disease. While these reports could be affected by other factors — many NASH patients are overweight or diabetic, for example — for Intercept they affirm a desire for more treatment options among patients and doctors.

Gauging patient interest is just one of the challenges Intercept inherits as a first-mover in NASH. The New York-based company also faces an insurance system expected to be very sensitive about price because of the lofty price tags put on medicines for the last big liver disease, hepatitis C.

“There’s been a lot of fearmongering out there, with this ‘enormous’ population, this ‘tsunami’ of disease,” Pruzanski said, “invoking the days of hep C with Sovaldi and other [direct-acting antiviral] launches.”

“What we’ve set out to do is really reassure payers that while this is a large unmet need,” he added, “we are appropriately focused on this subset of patients with advanced fibrosis.”

Upon launch, Intercept will target the roughly half a million patients who the company expects have advanced fibrosis and are under specialist care. The company has already done more than 100 payer interviews, and internal market research has found 84% of commercial payers see patients with advanced fibrosis patients as the most suitable group to receive its drug.

Yet while Intercept remains bullish on its own prospects, investor confidence in the field cooled last year as Gilead’s lead program disappointed.

“Gilead is sort of the bellwether for liver diseases. And so, to the extent they struggle, it doesn’t bode well for some of the smaller players,” Brian Lian, CEO of NASH drug developer Viking Therapeutics, said in an interview with BioPharma Dive this week.

The year ahead, however, promises several data readouts that could reinvigorate shareholders.

“There was a turnoff in the investment community from these negative studies,” Madrigal CEO Paul Friedman told BioPharma Dive in a recent interview. “I think there’s been a little bit of a swing back of late, but … there’s a lot of variability.”

https://www.biopharmadive.com/news/while-expected-intercepts-approval-delay-adds-to-nash-uncertainty/570693/

U.S. to screen passengers for new China coronavirus at three airports

The United States will begin screening at three major airports people coming from central Chinese city of Wuhan for the newly-identified coronavirus that has killed one person and infected at least 40 more in China, public health officials said on Friday.

The Centers for Disease Control and Prevention (CDC) said the screening at San Francisco, New York and Los Angeles airports will begin later on Friday and focus on travelers to the United States via direct or connecting flights from Wuhan.

The risk from the coronavirus to Americans is deemed to be low, the CDC said.

While the U.S. State Department has issued a health alert update about travel to the Wuhan region, the CDC has urged citizens traveling in the region to avoid contact with animals, animal markets or animal products, among other precautions.

https://www.reuters.com/article/us-usa-china-virus/u-s-to-screen-passengers-for-new-china-coronavirus-at-three-airports-idUSKBN1ZG29G