Thinly traded micro cap Menlo Therapeutics (NASDAQ:MNLO) is up 9% after hours in reaction to a disclosure by Steve Cohen’s Point72 Asset Management of a 5.8% stake.
Tuesday, January 21, 2020
Johnson & Johnson Q4 2019 Earnings Preview
Johnson & Johnson (NYSE:JNJ) is scheduled to announce Q4 earnings results on Wednesday, January 22nd, before market open.
The consensus EPS Estimate is $1.87 (-5.1% Y/Y) and the consensus Revenue Estimate is $20.83B (+2.2% Y/Y).
Over the last 2 years, JNJ has beaten EPS estimates 100% of the time and has beaten revenue estimates 100% of the time.
Over the last 3 months, EPS estimates have seen 2 upward revisions and 3 downward. Revenue estimates have seen 5 upward revisions and 0 downward.
We don’t need to ban vaping. We need to build better vaping devices
What’s the health care system to do when thousands of individuals, many of them between the ages of 18 and 34, arrive at hospitals across the country with serious, previously unknown breathing problems that may be related to their use of e-cigarettes and vapes? Maybe take a lesson from Hippocrates: First, do no harm.
Reports of this lung problem, now being called e-cigarette or vaping product use associated lung injury (EVALI), began emerging in June 2019. The Centers for Disease Control and Prevention says that more than 2,600 cases have been reported from every state except Alaska, the District of Columbia, and one U.S. territory; dozens of deaths have been confirmed. The supposed culprits in these illnesses range from vaping THC to using modified equipment, inhaling black-market liquids and, most recently, vitamin E acetate, a chemical used as an additive or thickening agent in some vaping products.
The knee-jerk reaction by some states has been to pull e-cigarettes and vapes off the market. Even the federal government has suggested it might push for a ban on some vaping and e-cigarette related products. But these products have been shown to be effective at helping smokers quit — more effective, in fact, than any other nicotine-replacement therapy on the market, including nicotine patches and nicotine gum.
We don’t need to ban vaping. What we need to do is the research needed to build a better vape.
Taking the wrong action — meaning action not backed by scientific evidence — could do more harm than good. For instance, bringing down the regulatory hammer before we understand EVALI could lead those who use e-cigarettes or vapes as replacements for cigarettes to return to smoking or purchase black-market vaping liquids, which may make the problem worse.
By building a better vape that can be used as an effective cigarette replacement without getting people sick, we can ensure that these nicotine therapies continue to help people quit smoking traditional cigarettes — which we know causes cancer and other diseases — without creating a new public health crisis. But doing this will require a combination of research, innovation, and regulatory oversight.
To a certain extent, the research has already begun. The Food and Drug Administration and the CDC are now collecting samples of e-liquids connected to EVALI cases in hopes of determining if there are any toxic ingredients these samples have in common. But often there’s barely enough liquid left in the cartridges in question to test, leaving researchers unable to determine what the toxic ingredient could be, let alone draw connections between ingredients from liquid to liquid.
I believe that the biggest hurdle lies in how the scientific community predicts what is actually toxic to humans. For instance, many ingredients in e-liquids, such as vitamin E acetate, flavorings, propylene glycol, and glycerin, are seen as safe for humans to ingest or put on their skin, but we don’t know the risks of inhaling large amounts of them over time. Much of the current research is done in animal models, which are slow, expensive, and don’t necessarily predict toxicity in humans.
To learn whether these ingredients are contributing to the EVALI problem, the FDA will need to test them specifically in human lung tissue. But studying just cells from human lungs — or in the case of the CDC’s most recent findings, in samples of lung fluid — doesn’t provide accurate data, as it doesn’t include mucus or the lung conditions that can affect the absorption of inhaled drugs.
As a biomedical engineer who works on formulating inhaled drug therapies for lung diseases, I spend a lot of time thinking about how to build accurate models of the human lung and what features to include: mucus, types of cells, fluid, blood circulation, and the like. To study if my treatments actually work, I need both an accurate model of the lung disease I am trying to treat and the accurate dose of inhaled therapy that would be administered to someone. Without measures of these two things, a study won’t hold up in the lab.
When it comes to EVALI, we don’t have either one.
If e-cigarette companies want to stay in business, they need to invest in the research needed to make safer products. It’s possible that a single ingredient or component could be replaced to make vaping safer. It could be that vape pens themselves give off toxic fumes when heated and reheated at high temperatures. Or it could be something else. But we won’t truly know until vape manufacturers are willing — or forced by the government — to invest in the research.
We have an opportunity here to avoid making the same mistakes with vaping as we did with cigarettes. By waiting too long to invest in research into cigarette toxicity, we caused a global lung cancer epidemic, the effects of which are still being felt today.
Regulatory and scientific processes are underway to ensure that the health risks of vaping are known earlier. Banning e-cigarettes and vaping devices may halt some illnesses related to their use, but it won’t further our understanding of the cause of these illnesses. In fact, there are other products, like inhaled insulin, that also cause mysterious lung injuries. What we need is to invest in research that gives us a clearer picture of exactly what’s going on in the lungs when we inhale any type of drug or additive.
By doing that we can increase the overall safety of inhaled medicine, which includes building a better vape: one that can help cigarette smokers quit without risking the dangers of EVALI.
Diane Nelson, Ph.D., is a postdoctoral fellow in Carnegie Mellon University’s chemical engineering department studying the effects of drugs and toxins on the pulmonary system with funding from the Burroughs Wellcome Fund. She was named a 2018 STAT Wunderkind in recognition of her research.
States need to wake up to public health risks from cannabis
Cannabis is on the march. Thirty-three states and the District of Columbia have legalized medical marijuana. Eleven states and the District of Columbia have legalized recreational use of cannabis for adults over 21, and others are considering it. More than 37 million Americans use cannabis each year in one form or another: flowers, concentrates, edibles, and the like.
Legalization brings some notable benefits. Among them, state tax revenues get a boost, new jobs get created, and law enforcement can move on to more serious crimes. But somewhere along the way, public health considerations have been pushed to the sidelines.
The Food and Drug Administration ensures the safety of only a handful of cannabis products, mostly those available by prescription. It does not oversee any of the plants, foods, oils, or tinctures sold in cannabis dispensaries throughout the U.S. This is a problem because the agency with the most expertise for monitoring food and medicals products in terms of their contents and consumer safety is not doing so, leaving the job to state agencies that lack experience and technical expertise.
Colorado, Oregon, California, and Nevada have had to use public health advisories and recall cannabis products after harmful pesticides were found in them, due to improper behavior of growers, producers, or testing labs. Emergency departments in states where cannabis use is legal are seeing a growing number of visits involving cannabis, including cases of “cannabinoid hyperemesis,” — nonstop vomiting related to cannabis use, even among experienced users.
State authorities urgently need to start pairing their desire for a new era of legal cannabis use with stronger regulations that inform and protect users.
I have seen the impact of unrestrained cannabis marketing firsthand in my work as president of the International Society for the Study of Drug Policy, a health economist at the University of Southern California, and former co-director of the RAND Corporation’s Drug Policy Research Center. The evidence for public health risks is clear, including increases in impaired driving, increases in adverse effects among pregnant and/or nursing women who use cannabis, increases in acute psychosis and emergency department visits, increases in cannabis use disorder and dependence, and increases in vaping-related lung injuries.
The notion that cannabis is not harmful — which is strongly promoted by the expanding cannabis industry — has taken particular root among the young, who are vaping nicotine and cannabis in record numbers. Even though use of cannabis among non-adults is illegal, a new study by the National Institute on Drug Abuse found that 21% of 12th graders had vaped cannabis in the past year, as had 19% of 10th graders and 7% of 8th graders.
States can step up their regulatory game in a number of ways. For starters, here are three trends that deserve high-priority attention.
Frequent users
In every year from 2000 to 2016, daily and near-daily users of cannabis represented at least 75% of all use, as measured in days of use. So as cannabis use in general is rising, cannabis use days among frequent users is also climbing, up from 1.4 billion days of use in 2000 to more than 3.5 billion days of use in 2016.
In the world of commerce, frequent customers sustain for-profit businesses. That is certainly true for cannabis, where sellers have clear incentives to develop more daily and near-daily users. To counter that trend, state legislatures that are contemplating legalization should consider alternative market models, including sole-source or government monopolies, nonprofits, social clubs, or public benefit corporations. These models reduce competition — which in turn reduces marketing and promotion — raise prices and, for some models, force companies to consider the community impacts of selling their product while making a safe product available to consumers.
While noncompetitive markets generally aren’t liked, the public health community has argued in the case of tobacco and alcohol that they may be more desirable due to potential public health risks. And it is always easier to move from a noncompetitive market to a competitive market should the public health risks not be realized.
Hospitalizations and emergency department visits
Cannabis-related emergency department visits have increased substantially, especially in states with more liberal policies. In Colorado, hospitalizations among cannabis users doubled after legalization of medical marijuana, and emergency visits doubled after legalization of recreational marijuana, notably for pediatric ingestion, acute intoxication, uncontrolled vomiting, acute psychosis, and burns from butane hash oil.
Most state regulatory agencies haven’t paid enough attention to the development of cannabis products that can be mistaken for non-cannabis merchandise or that target younger users. Edibles and extracts — cannabis oils, vape cartridges, and concentrates — are surging in recreational markets and deliver substantially more concentrated tetrahydrocannabinol (THC) (60% to 80% THC) than dried flowers (20% to 30% THC).
States should devote more regulatory resources to checking cannabis products being sold in stores, ensuring honest product labeling, developing regulatory processes for the development of new products before they go to market, ensuring proper and honest testing by independent labs, and restricting high potency waxes, oils, and the like from the market.
Pregnancy and nursing
Cannabis components easily cross the placenta and the blood-brain barrier. Newborns can also receive them through breast milk. Physicians agree that women who are pregnant or who are nursing infants should avoid using cannabis, but the trend line is going in the wrong direction. Increasing numbers of pregnant women report using cannabis to self-treat nausea, anxiety, depression and vomiting.
One study found that more than two-thirds of cannabis stores called at random in Colorado recommended cannabis products for easing morning sickness. Dispensaries should not be the place where people get their information on the potential benefits or harms of cannabis.
To help protect pregnant women, their babies, and everyone else who uses cannabis, all states should do these three things:
- Train board-certified pharmacists who are knowledgeable about cannabis products and require that they be on staff at dispensaries, as is the model now in Minnesota, Connecticut, and New York.
- Require health departments to proactively engage in community education of physicians, parents, and patients about the known health benefits and risks of cannabis, providing a strong counter to the false information being provided by some cannabis dispensaries.
- Impose significant financial penalties on producers and/or retailers — as well as their employees — who communicate inaccurate health information to consumers.
State obligations
States moving ahead with liberalization policies need to remember that they do so without help from the federal government, which still considers cannabis possession and use a crime. That leaves consumers without the critical oversight, quality control, and product testing the FDA provides for agricultural products, food, and medicine.
If a state wants to legalize cannabis, it must dedicate more resources to regulating this new industry. Sales will generate the necessary tax revenues to do the job. Funneling the income to other state functions is short-sighted and risks unleashing the next major public health crisis.
Rosalie Liccardo Pacula, Ph.D., is professor and chair in health policy, economics, and law at the Sol Price School of Public Policy and senior fellow at the Leonard D. Schaeffer Center for Health Policy & Economics, both at the University of Southern California. She receives funding from the National Institutes of Health for investigator-initiated research on cannabis policy and the impact of cannabis policy on opioid-related harm.
WHO raises possibility of ‘sustained’ human-to-human virus transmission
The World Health Organization on Tuesday raised the possibility that the new virus spreading in parts of China may be transmitting in an ongoing, sustained manner between people — which, if confirmed, would make it significantly more difficult to stop.
The agency’s Western Pacific Regional office, which covers China and neighboring countries, said on Twitter that new information “suggests there may now be sustained human-to-human transmission.”
“But more information and analysis,” it added, “are needed on this new virus to understand the full extent of human-to-human transmission and other important details.”
The WHO’s defines sustained human-to-human transmission as transmitting easily from one person to the next and then further onward — in the way that flu or other established human viruses work. That’s in contrast to limited person-to-person transmission, in which a virus dies out after infecting a person or a few people in clusters of people who are in close contact with each other, such as in a family or a work setting.
International outbreaks of other diseases such as bird flu viruses or MERS — Middle Eastern respiratory syndrome — have been relegated to limited human-to-human transmission, not sustained transmission.
The former form of transmission would be what one would expect to see in an animal virus that had not fully adapted to spread among people. The latter would signify a virus that is adept at infecting humans.
A spokesman for the WHO’s headquarters, in Geneva, told STAT in an email that it’s impossible at present to know whether sustained transmission is taking place.
“Current information does not allow for the full understanding of the extent of human-to-human transmission and the size of the epidemic,” Tarik Jasarevic wrote, saying that “scattered” human-to-human spread triggered by multiple animal-to-human transmissions may still be account for the majority of cases.
“We do not currently know which scenario is unfolding, but will continue to share our analysis,” he said.
The suggestion that sustained transmission may be happening will ratchet up already high concerns about the new virus, which is provisionally called 2019-nCoV. The virus is a coronavirus, from the same family as the viruses that caused SARS and MERS. While the source of the new virus is not yet known, Chinese authorities have said they believe it was transmitted to people from some type of wild game animal.
“Each day our new findings are not good,” said Michael Osterholm, director of the Center for Infectious Diseases Research and Policy at the University of Minnesota. “This is beginning to look more like SARS every hour.”
In late 2002, a new coronavirus started to spread in China, which for several months denied there was a problem. In February 2003, the virus began to spread broadly internationally, eventually infecting about 8,000 people and killing close to 800 before the outbreak was stopped.
As of Tuesday, the rapidly changing number of infections caused by the new virus was approaching 300, with at least six deaths reported. Most of the cases are in the central Chinese city of Wuhan, though cases have also been reported in Beijing and in Guangdong province, near Hong Kong. Thailand, Japan, and South Korea have also reported small numbers of cases in tourists from Wuhan or nationals who visited the city.
Tom Inglesby, director of the Johns Hopkins Center for Health Security, said if it is confirmed that there is sustained person-to-person spread of the virus, that will make stopping the outbreak a much more difficult task.
“That has very important implications for the response. It becomes much more challenging to control an outbreak with sustained human-to-human transmission, clearly,” he said, adding that stopping the virus from spreading in people should still be the goal.
The SARS outbreak was also a major challenge, he said, but the virus was driven out of the human population through strong public health interventions, and good international cooperation — which are needed now, Inglesby said.
CDC details first U.S. case of novel virus spreading in China
A man in Washington state has been diagnosed with a novel infection racing through China, the first time someone in the United States has been confirmed to have the virus, the Centers for Disease Control and Prevention said Tuesday.
The man, who in his 30s, had recently traveled to Wuhan, China, which is where the outbreak is believed to have begun, officials said. He is currently listed in good condition.
The U.S. is the fifth country outside of China to report cases of the virus, provisionally known as 2019-nCoV. Thailand, Japan, South Korea, and Taiwan have picked up a handful of cases, all in people who had recently been in Wuhan.
Also on Tuesday, the World Health Organization on Tuesday raised the possibility that the new virus may be transmitting in an ongoing, sustained manner between people — which, if confirmed, would make it significantly more difficult to stop.
The agency’s Western Pacific Regional office, which covers China and neighboring countries, said on Twitter that new information “suggests there may now be sustained human-to-human transmission” — but cautioned that more “information and analysis” are needed before making that conclusion.
A committee of experts will meet Wednesday to advise WHO Director-General Tedros Adhanom Ghebreyesus on whether to declare the outbreak a public health emergency of international concern — a PHEIC in global health parlance.
Chinese authorities, who first alerted the world to the existence of the outbreak on Dec. 31, have diagnosed nearly 300 cases to date. An update from the WHO said that of 278 cases reported as of Jan. 20, 51 were severely ill, 12 were in critical condition and six had died.
The CDC announced last week it would begin to screen passengers returning from Wuhan at three airports: San Francisco, Los Angeles, and John F. Kennedy in New York. On Tuesday, CDC officials said two more airports — Atlanta and Chicago’s O’Hare International Airport — would be added to that list.
Dr. Martin Cetron, director of the CDC’s center of quarantine and global migration, said that as cases in China started to increase rapidly over the weekend, CDC alerted the departments of Homeland Security and Transportation that all flights from Wuhan to the United States should be funneled through the five airports, where arriving passengers will have their temperatures taken for sign of illness.
“This idea of funneling means redirecting, reissuing tickets so all the arriving passengers from Wuhan would come into the airports that we can surge this capacity at,” Cetron said, adding other international airports are distributing information for passengers in English and Mandarin.
The Washington state man arrived back in the United States on Jan. 15, two days before the airport screening began. He became ill after his return and contacted his doctor on Jan. 19, informing the physician that he had recently traveled to Wuhan.
A sample from the man was flown to the CDC in Atlanta. The next day — Monday — testing at the agency confirmed that this was the first U.S. case. He is being held in isolation at Providence Regional Medical Center in Everett, Wash., with what was described as a mild case of pneumonia.
Tracing of people who have been in contact with the man began Tuesday, said Dr. John Wiesman, Washington’s secretary of health. The CDC has sent a team of experts to Washington to help with the investigation.
In announcing the screening plan last week, Dr. Nancy Messonnier, director of CDC’s National Center for Immunization and Respiratory Diseases, said she expected the United States would see cases. She reiterated that caution on Tuesday.
“This is an evolving situation and … we do expect additional cases in the United States and globally,” Messonnier said. “The confirmation that human-to-human spread with this virus is occurring in Asia certainly raises our level of concern. But we continue to believe the risk of this novel coronavirus to the American public at large remains low at this time.”
Tenet names ex-Oracle exec CEO of struggling Conifer unit
- Tenet has named Joe Eazor president and CEO of its health services arm, Conifer. Eazor previously worked as chief customer officer at tech giant Oracle.
- Eazor, who has a background in technology and operations spanning the public and private sectors, will replace interim CEO Kyle Burtnett, who will return to his previous role as COO of Conifer.
- Eazor will guide the revenue cycle management subsidiary as Tenet spins it off into an independent publicly traded company following years of shaky financial performance.
Tenet started mulling a sale of Conifer in December 2017 as part of a cost reduction program following a year of struggling financial performance. A couple of big fish were reportedly interested in snapping it up, including UnitedHealth Group, which owns robust health services arm, Optum — a steady driver of growth and profit for the healthcare behemoth.
Twelve-year-old Conifer never became that for Tenet. The revenue cycle business proved a perennial damper on the company’s earnings over the past year, with analysts forecasting an impending sale of the unit as a savvy move to recoup losses and bolster Tenet’s bottom line as it continued to pare down debt and divest hospitals.
Following low bids from three final parties, Tenet in July announced it would be spinning off Conifer into an independent publicly traded company in lieu of a direct sale or merger.
Eazor’s “years of experience at publicly traded companies and in high-tech operations will benefit us tremendously as Conifer continues to improve operations, product offerings, growth trajectory and standalone functions, all of which are key to completing a successful spinoff from Tenet by the second quarter of 2021,” Tenet CEO Ron Rittenmeyer said in a Tuesday statement.
According to Tenet, Conifer manages 17 million patient interactions and roughly $25 billion in net patient revenue annually. In 2018, the subsidiary reported revenue of $1.53 billion and a 26% year-over-year increase in adjusted EBITA.
The spinoff is expected to be completed in the first half of next year.
Eazor executed Oracle’s customer engagement programs as EVP and COO, a role he held for seven months. Prior to that, the University of Chicago Booth School of Business grad was CEO of San Antonio-based cloud computing company Rackspace and CEO of internet services provider EarthLink. He has also held executive roles at EMC, Hewlett-Packard and Electronic Data Systems.
For-profit Tenet operates 65 hospitals and 500 additional facilities running the gamut from ambulatory surgery centers to imaging centers. The company’s cost reduction efforts staunched the financial bleeding somewhat over the past year, with Tenet posting a third consecutive quarter of volume growth in the prior quarter ended Sept. 30.
The operator outlined plans to aggressively expand its outpatient surgery unit, United Surgical Partners International, at the J.P. Morgan Healthcare Conference in San Francisco last week. Tenet plans to shell out at least $175 million annually to purchase ambulatory surgery centers nationwide, taking advantage of a highly fragmented market.
Despite Tenet’s consolidation strategy in outpatient surgeries, the player will continue to divest hospital assets into the new year, according to its executives. Most recently, Tenet offloaded its Memphis-area hospitals to market giant Methodist Le Bonheur Healthcare for $350 million, sparking antitrust concerns among other area providers.
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