Search This Blog

Friday, January 24, 2020

Could Novel Coronavirus Become Low-Level Pandemic?

So far, this novel coronavirus from China (2019-nCoV) appears to be a milder virus than SARS, but that could mean it has the potential to spread further and wider than SARS, researchers argued.
While the virus seems “relatively mild” compared with fellow coronaviruses SARS and MERS, it could potentially spread more easily if infected people are not seriously ill, reported Vincent Munster, PhD, of the Laboratory of Virology of the National Institute of Allergy and Infectious Diseases in Hamilton, Montana, and colleagues.
“The severity of disease is an important indirect factor in a virus’ ability to spread,” the authors wrote in a Perspective piece in the New England Journal of Medicine.
“If infection does not cause serious disease, infected people will probably not go to health care centers. Instead, they will go to work and travel, potentially spreading the virus to their contacts, possibly even internationally,” Munster and colleagues added, noting that the virus also needs “efficient human-to-human transmission” for large-scale spread.
As of Jan. 24, 2020, at least 830 cases of novel coronavirus were confirmed in nine countries, including two travel-associated cases in the U.S. But the 26 reported deaths occurred mainly in patients with underlying illness, the researchers said.
On the other hand, they argued that the relative lack of severe disease with 2019-nCoV may make it harder to contain, because contacts and tracing become more difficult.
“Identification of chains of transmission and subsequent contact tracing are much more complicated if many infected people remain asymptomatic or mildly symptomatic,” the team wrote. “More pathogenic viruses that transmit well between humans can generally be contained effectively through syndromic (fever) surveillance and contact tracing,” such as the case of the Ebola virus, and SARS itself.
Risk of nosocomial spread may also be a key factor with emerging coronaviruses, as was the case for SARS and MERS.
“In addition to the vulnerability of health care settings to outbreaks of emerging coronaviruses, hospital populations are at significantly increased risk for complications from infection […] Thus, emerging viruses that may go undetected in healthy people can pose a significant risk to vulnerable populations with underlying medical conditions,” the authors wrote.
Ultimately, they concluded that a virus that causes less severe disease could have worse implications for population-level health, especially if it proves that it can be transmitted efficiently between people.
“A virus that poses a low health threat on the individual level can pose a high risk on the population level, with the potential to cause disruptions of global public health systems and economic losses,” Munster and co-authors wrote. “This possibility warrants the current aggressive response aimed at tracing and diagnosing every infected patient and thereby breaking the transmission chain of 2019-nCoV.”
The authors disclosed no conflicts of interest.

Fla.’s Scott calls for public health emergency over new coronavirus

A GOP senator wants the Trump administration to declare the coronavirus outbreak a public health emergency.
“We have to get serious about the threat of coronavirus coming from China. I don’t trust Communist China to coordinate in a transparent and efficient manner when it comes to combatting the threat of the virus, so we have to do everything we can to protect Americans,” Sen. Rick Scott (R-Fla.) said in a statement.
“While all of the cases are still travel-related, we must take every precaution,” he added.
Scott’s comments came after top health officials from the Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH) briefed senators Friday on efforts to try to stop the virus from spreading in the U.S.
There have been two confirmed cases of the coronavirus in the U.S. — in Washington state and Chicago — and officials say more cases are likely, with a third potential case being investigated in Texas.
However, all of the confirmed cases are people who recently traveled from China, meaning there is no known transmission of the virus inside the United States.
Most senators leaving the briefing on Friday said they felt satisfied that administration officials were taking appropriate steps.
The U.S. has already put in place screenings for fever and other symptoms at five major U.S. airports. The State Department and the CDC have also issued a travel advisory, telling U.S. citizens not to take unnecessary trips to the affected areas in China.
Scott did not specify what additional steps he wants the administration to take beyond calling for them to declare a public health emergency. A spokesperson said Scott wants to make sure the administration is using all available resources to combat the virus.
A public health emergency could allow federal officials to loosen certain regulations, issue grants and pave the way for spending additional money.
However, health officials told senators on Friday they don’t need more money. They also praised China’s cooperation on the outbreak.
“I was involved very deeply with the SARS response. And with SARS, the Chinese were not particularly transparent …  It was an embarrassment for them. I think they regretted that. Right now, from what I can see, they’re being quite transparent,” Anthony Fauci, head of the infectious disease unit at NIH, told reporters.
Fauci said he was “impressed” with China’s cooperation.
“There was some skepticism because in the past it wasn’t — in some cases they didn’t want the bad publicity and they didn’t move as quickly as they should. This is different.” Sen. Dick Durbin (D-Ill.) said of Chinese officials.
https://thehill.com/policy/healthcare/479804-gop-senator-calls-for-public-health-emergency-over-coronavirus

UnitedHealth to acquire embattled specialty pharmacy Diplomat for $300M

UPDATE: Jan. 24, 2020: UnitedHealth Group disclosed in an SEC filing Wednesday that four separate lawsuits are attempting to enjoin its $300 million purchase of specialty pharmacy Diplomat. The lawsuits allege information about the deal was held back from Diplomat shareholders, including financial data. “We believe that plaintiffs’ allegations lack merit and intend to contest them vigorously,” UnitedHealth said in the filing.

Dive Brief:

  • UnitedHealth Group is acquiring Diplomat, a struggling specialty pharmacy and infusion services provider, for roughly $300 million.
  • Diplomat will be folded into Optum, UnitedHealth’s health services arm and a reliable cash cow for the Minnetonka, Minnesota-based healthcare behemoth. The transaction is expected to close early next year, according to financial filings with the SEC.
  • The payer giant’s offer of $4 a share for the roughly 75 million shares outstanding is a relatively lowball offer considering its valuation, sending Diplomat’s stock down 31% in premarket trading Monday. Stock of the 44-year-old specialty pharmacy closed last week at $5.81 a share.
Flint, Michigan-based Diplomat manages specialty medications for patients with complex diseases, such as cancer, hepatitis, HIV and multiple sclerosis, and offers specialized infusion treatments nationwide. It’s the nation’s largest independent provider of these services.
In its 2015 heyday, Diplomat had a market value of $3 billion, then slowly ran out of cash as it struggled to compete with massive specialty drug players operated by CVS Health, Cigna and UnitedHealth itself.
Credit: Rebecca Pifer/Healthcare Dive
Diplomat, which went public in 2014 after raising $173 million, had a shoddy third quarter, with pharmacy benefit management revenue down almost 52% year over year and overall revenue down 5% to $1.3 billion.
John Prince, CEO of OptumRx, touted Diplomat’s “proven track record” of managing complex illnesses as what attracted UnitedHealth to the company. OptumRx has been on a steady expansion-by-acquisition campaign, snapping up Renton, Washington-based Genoa Healthcare, adding more than 430 pharmacies to its PBM, and Phoenix-based Avella, also a specialty operator, both in 2018.
Diplomat’s board of directors unanimously approved the deal, concluding joining OptumRx is in the “best interests of our shareholders, employees and clients,” Diplomat CEO Brian Griffin said in a statement Monday. Griffin previously ran IngenioRx, insurer Anthem’s in-house PBM.
Executive officers and Diplomat directors are set to make almost $72 million from the acquisition. Investor and philanthropist Philip Hagerman, who co-founded Diplomat in 1975 and owns 23% of the outstanding stock, will make $69 million alone, according to SEC documents.
UnitedHealth saw more than $60 billion in revenue in the third quarter, primarily driven by double-digit growth in Optum. OptumRx saw slightly deflated revenue growth of 5.8% in the quarter to $18.5 billion. It fulfilled 325 million scripts in the quarter, a decline of 2% year over year, due to changes to a single large account.
But Optum is still forecast to reach $110 billion in annual revenue this year, the segment’s CEO Andrew Witty, a former chief at GlaxoSmithKline, said on its third quarter earnings call.
The news comes as massive companies, usually payers, continue to bag smaller PBMs to round out their pharmacy offerings and consolidate the medical supply chain in-house. UnitedHealth runs UnitedHealthcare, the country’s largest private payer.
https://www.healthcaredive.com/news/unitedhealth-to-acquire-embattled-specialty-pharmacy-diplomat-for-300m/568707/

Community Health sees slight uptick in 2019 same-store revenue

  • Community Health Systems has been shrinking in recent years as it has been shedding properties in order to restore its bottom line, but a recent 8-K filing with the Securities and Exchange Commission suggests some moderately better times might be ahead.
  • The filing, required because the for-profit hospital chain will be selling a $1 billion round of senior secured notes while buying back an issue that matures next year, provided estimates that show a dip in net operating revenues for the fourth quarter and calendar year ending Dec. 31.
  • However, estimates for its same-store hospitals — the 101 facilities it continued to own between the end of 2018 and 2019 — saw modest upticks in revenue. By contrast, operating revenue dipped nearly 6% during the third quarter of 2019. Operating and net income were not disclosed in the 8-K.
Tennessee-based CHS hasn’t posted a profitable year since 2015, and that has helped shrink its stock price from around $52 a share in mid-2015 to little more than $4 per share today. It’s also been shrinking its footprint in recent years, shedding facilities that are costly to operate in an effort to boost its bottom line.
Fitch assigned a B rating to CHS’ secured notes. The ratings agency believes the refinancing transaction will “buy CHS more time to execute an operational turn-around plan focused on restoring organic growth and improving profitability of hospitals in certain targeted markets.”
However, Fitch noted the organization’s credit remains stressed due in part to a high overall debt burden and said its operating profile is “among the weakest” in the sector. The agency said it “believes that some of the company’s hospital markets may require additional capital investment to improve organic growth and profit margins, and this is concerning since cash generation is thin.”
While its 2019 earnings report is still nearly a month away from release, Thursday’s SEC filing may have some positive news for CHS. Net operating revenue on a same-store basis was up 3.7% for the fourth quarter and 4.2% for 2019. Adjusted patient admissions were also up 2.2% for the year (although down 10.6% when taking sold properties into account).
Surgeries — which tend to be a big revenue producer — were up 3% for the fourth quarter and 4.1% for the year in existing facilities.
The consensus among Wall Street analysts remains fairly grim for CHS. On average, they project a loss of $1.37 per share for 2020. That may not sound great, but its better than the projected loss of $1.75 per share for 2019.
https://www.healthcaredive.com/news/chs-estimates-slight-uptick-in-2019-same-store-revenue/571016/

Goldman Sachs Upgrades Davita, Poised To Profit From Medicare Expansion

Davita Inc DVA 3.37% surged to all-time highs Friday after winning the praise of a new market advocate. Medicare is largely to thank.

The Rating

Goldman Sachs analysts led by Stephen Tanal upgraded Davita to Buy and raised their price target from $72 to $97.

The Thesis

Next year, the U.S. will expand eligibility for Medicare Advantage plans to people with preexisting end stage renal disease (ESRD). As of yet, the program captures only the ESRD patients who developed the disease after enrollment or who were eligible for special needs dialysis plans.
“The 2021 ESRD rule change carries implications across the healthcare services ecosystem, as the 516,000 patients on Medicare with ESRD represent just 1% of all Medicare-eligibles but approximately 7% of total Medicare healthcare spending,” the analysts wrote. “Only 26% or 132,000 of these patients are on MA today, a figure that could rise considerably in 2021 and beyond — especially if large MA plans find ESRD patients to be an attractive demographic.”
Davita is a certain beneficiary, with the Medicare change expected to increase revenue per dialysis treatment. Goldman Sachs suspects Davita’s Medicare Advantage rate exceeds its Medicare fee-for-service rate by 15%.
By the analysts’ base-case estimates, Davita could increase ESRD patients by four basis points and pre-tax earnings by 2.4% over prior forecasts. In a bull-case scenario, EBITDA could rise 16.6% over previous forecasts. Either increase is expected to offset regulatory headwinds related to rule changes on care delivery.
https://www.benzinga.com/analyst-ratings/analyst-color/20/01/15180994/goldman-sachs-upgrades-davita-poised-to-profit-from-medicare-expansion

Vaccinex joins coronavirus-stoked rally, up 39%

Ultra-thinly traded micro cap Vaccinex (VCNX +39%) jumps on a 29x surge in volume, a modest 152K shares, apparently joining the coronavirus rally.
Investors appear to be ignoring the fact that the company is developing therapeutic vaccines for cancer, neurodegenerative diseases and autoimmune disorders.
Coronavirus-related movers: NanoViricides (NNVC +46.3%), Moderna (MRNA -1.7%), Novavax (NVAX +0.8%), ImmuCell (ICCC +4.4%), Aethlon Medical (AEMD -6.8%), Inovio Pharmaceuticals (INO +9.9%), BioCryst Pharmaceuticals (BCRX -5.8%), Nabriva Therapeutics (NBRV -5.9%)
https://seekingalpha.com/news/3534466-vaccinex-joins-coronavirus-stoked-rally-up-39

BeiGene downgrades late-stage study of PARP inhibitor in gastric cancer

In a disclosure at the ASCO GI Cancers Symposium, BeiGene (NASDAQ:BGNE) announced that it is “converting” its Phase 3 clinical trial, BGB-290-303, evaluating PARP inhibitor pamiparib (BGB-290) as maintenance therapy in patients with inoperable locally advanced or metastatic gastric cancer who have responded to first-line treatment with platinum-based chemo to Phase 2.
The company said the change is not due to safety or efficacy issues, but acknowledged that enrollment has been slower than expected (120 subjects to date). It plans to evaluate a development path after assessing the results from the study.
https://seekingalpha.com/news/3534486-beigene-downgrades-late-stage-study-of-parp-inhibitor-in-gastric-cancer