Thinly traded nano cap Immutep Limited (IMMP+19%) is up on a 14x surge in volume on the heels of its pipeline update including several important near-term data readouts.
Lead candidate eftilagimod alpha (“efti”): progression-free survival (PFS) data expected in March from the pivotal AIPAC
study evaluating efti + paclitaxel in 227 HR+ metastatic breast cancer
patients. Key secondary endpoints are overall survival (OS) and overall
response rate (ORR).
The company is planning to conduct a 24-subject bridging study assessing the combination in metastatic breast cancer patients.
Preliminary results from another Phase 2 study, TACTI-002,
evaluating efti + Merck’s Keytruda (pembrolizumab) in NSCLC and head
and neck squamous cell carcinoma (HNSCC) patients showed an ORR of 41%.
More mature data are expected next month.
Eftilagimod alpha is LAG-3
fusion protein designed to boost T cell responses to cancer. LAG-3
(lymphocyte activation gene-3) plays a key role in regulating the immune
system, specifically, signaling between T cells and antigen-presenting
cells which are responsible for the adaptive immune response.
Shares in Anthem Inc. tumbled on Wednesday after the health insurer
reported a key spending metric came in higher than analysts had expected
in the fourth quarter, and its financial forecast for this year also
disappointed.
The stock was down 4.5% in early-afternoon trading on the New York
Stock Exchange after the insurer reported its 2019 earnings, though the
company posted higher fourth-quarter revenue and profit.
The health insurer recorded a profit of $934 million, or $3.62 a
share, in the fourth quarter of 2019 compared with $424 million, or
$1.61 a share, in the year-ago quarter. Adjusted earnings were $3.88 a
share, matching analysts’ expectations.
Revenue was $27.41 billion, up from $23.37 billion.
Anthem Chief Executive Gail Boudreaux said in a conference call that
the company was delivering on its promised growth and was “poised for
another year of success in 2020.”
Investors focused on Anthem’s medical-loss ratio, or MLR, which
represents the share of premiums the insurer pays out in claims. They
closely watch the MLR as a gauge of health spending and insurers’
operational profitability, and get nervous when it ticks up
unexpectedly.
Anthem said its MLR was 89% in the fourth quarter, higher than the
88.1% figure that a consensus of analysts had estimated. The insurer
said the figure was pushed up compared with last year due to the
suspension of a tax on health insurers, an industrywide effect analysts
had expected. But Anthem flagged other factors as well, including
higher-than-expected health costs tied to the flu.
Another Wall Street concern was Anthem’s new 2020 guidance, which
projected earnings of more than $21.44 a share, including about 86 cents
a share of net unfavorable items.
The Indianapolis-based company estimated 2020 adjusted earnings of
more than $22.30 a share. That figure, which excludes the effects of
amortization and some other factors, was lower than many analysts had
anticipated based on early projections Anthem offered last quarter.
Executives attributed the shortfall to the coming repeal of the
health-insurance tax, passed late last year. Like other insurers, Anthem
had passed through this tax to customers in the form of higher
premiums.
The company expects the repeal of the tax will pull down earnings
this year, even though the repeal doesn’t take effect until 2021,
because some clients renew their coverage midyear. Anthem said it hadn’t
factored that effect into the broad early guidance that it previously
issued.
Chief Financial Officer John Gallina said the company’s core
assumptions for its 2020 performance hadn’t changed, except for the
impact of the 2021 health-tax repeal. He said that dynamic would affect
2020 earnings by around 30 cents per share.
Anthem is among the biggest health insurers in the U.S. One bright
sign for the company was its projection for medical costs for fully
insured employer plans, which Anthem estimates will increase around 4%
in 2020, down from the current rate of around 6%.
The insurer attributed the expected drop to the effects of its newly
launched pharmacy-benefit manager, IngenioRx, and other cost-reduction
efforts.
In the conference call, Mr. Gallina attributed the company’s higher MLR ratio partly to an early start to the flu season.
He also said Anthem now expects to receive a smaller payout than it
originally projected from an Affordable Care Act program, which hurt its
MLR result.
The biggest driver of the 2019 MLR performance, Mr. Gallina said, was
last year’s suspension of the health-insurance tax, an issue which
affects all insurers. The tax, a pass-through, had effectively increased
the revenue part of the MLR ratio in previous years because insurers
added it to premiums charged.
The tax is set to return next year, but has been repealed effective
in 2021. lt affects 2020 results because some clients renew their
coverage plans partway through the calendar year, and their monthly
premiums would reflect the coming change.
Given the tax’s return, Mr. Gallina said Anthem expects the MLR for 2020 will be lower than last year.
Yet he said the drop will be smaller than it otherwise would have
been, due to factors including the company’s changing mix of business,
which includes a higher proportion of enrollees in government plans such
as Medicaid. The ratio tends to be higher in government plans.
Heads up, clinicians: health plans and the federal government are
each rolling out their own new programs to simplify prior authorization
(PA), even as the industry coins a new contradiction in terms —
“retrospective prior authorization.”
“Believe it or not, plans don’t like prior authorization either,”
Kate Berry, senior vice president for clinical affairs and strategic
partnerships at America’s Health Insurance Plans (AHIP), said here at
the annual meeting of the Office of the National Coordinator for Health
Information Technology. “We know there are lots of opportunities for
improvement.”
AHIP is rolling out a project known as Fast Path that it hopes will
smooth the automated process for PA for drugs and for medical procedures
and devices. The project is expected to begin in 60-90 days and run for
about six months. Two vendors — SureScripts on the pharmacy side and
Availity on the procedure and device side — are partnering with AHIP on
the system; the seven plans participating provide health insurance to
about 60 million Americans, Berry said. Kate Berry, America’s Health Insurance Plans (Photo by joyce Frieden)
On the pharmacy side, doctors and other prescribers should be able to
use the Fast Path portal to access the patient’s pharmacy benefits and
know whether the specific medication requires prior authorization, AHIP says on its website.
If the medication does require PA, the doctor can see whether there are
alternative medications that don’t, or, if they prefer, they can
immediately submit a PA request for the original drug. The portal also
will let prescribers know the patient’s estimated out-of-pocket cost for
the drug.
On the procedure and device side, doctors will know immediately
whether the procedure requires prior authorization based on the
patient’s specific health insurance coverage, and will be able to submit
the necessary information and get a response from the plan through the
portal.
AHIP is hoping Fast Path will “enable information exchange —
bidirectional, supported, and streamlined — to reduce those phone calls
and faxes,” said Berry.
A Good First Step
Rob Tennant, director of health IT policy at the Medical Group
Management Association, a trade group here for physician practices, said
in a phone interview that Fast Path was a good first step, especially
the pharmacy element of the program. “I hope that we’ll see its use
skyrocket; it’s better patient care and patients will be happy and
potentially their out-of-pocket expenses will go down,” he said.
The part that addresses procedures and devices, on the other hand, is
not as comprehensive a solution, both because it only involves a small
group of health plans, and because it requires physicians to get out of
the electronic health record and sign on to a separate web portal,
Tennant continued.
“The benefit of the approach is that you eliminate a little hassle,
because right now each plan has its own proprietary web portal with
different sign-ons and different passwords,” he said. “This way, it
would be standardized at least for these health plans, but it’s not a
long-term solution to prior authorization.”
On the public side of the issue, the Centers for Medicare &
Medicaid Services (CMS) has surveyed thousands of stakeholders —
including patients, clinicians, and healthcare facilities — through
listening sessions, on-site visits, and interviews, to find out their
concerns with PA, said Alex Mugge, deputy chief health informatics
officer at CMS. “Whatever policies we move forward with, we’re really
trying to make sure we do it with a wide range of perspectives,” she
said. “We got thousands of comments on the challenges with PA.”
To help clinicians figure out whether a drug or procedure needs PA,
CMS is developing a Documentation Requirement Lookup Service (DRLS),
Mugge explained. The service “will tell the provider at the point of
care, ‘Does this patient have any PA requirements?’ And if the answer is
‘yes,’ it will say what they are. This is not PA itself, but what it
does is eliminate the step of digging through websites” to find the
answer. Alex Mugge, Centers for Medicare & Medicaid Services (Photo by Joyce Frieden)
“CMS is aware that electronic solutions are not only the ones needed
to address PA,” she added. “They will, however, improve efficiency and
streamline parts of it, but non-electronic solutions also need to be put
in place.”
Tennant, whose organization is part of a CMS workgroup that’s
developing the program, said the DRLS “shows tremendous promise, with
the caveat that this not be a Medicare-specific program. There can’t be
one-off solutions.” Currently, the DRLS is only aimed at a small group
of durable medical equipment, including CPAP machines and oxygen, with
the possibility of expanding to other devices if it is successful, he
noted.
“We are cautiously optimistic that this solution will be a universal
one,” he added, referring to the idea of including commercial insurers
and not just public plans like Medicare. “If it is, I think it could
truly automate a portion of the prior authorization conundrum.”
Benefits of Centralization
Much work remains to be done to get more providers submitting PA
requests electronically, noted Miranda Gill, MSN, RN, senior director
for provider services and operations at CoverMyMeds, a company that
develops websites for pharmacy prior authorizations. “When you look at
PA volume in total, only about 46% of PA requests are submitted
electronically. That leaves 53% done ‘old school’ — manually, by fax, or
phone. That shows that technology helps but doesn’t automatically solve
the problem.”
Technology has come a long way, however, she added. As an oncology
nurse, “the first PA I ever did took me about 50 minutes on the phone,”
she said. “Fast forward a few years, and submitting electronically took
me about 20 minutes. That’s a pretty significant difference.”
Turnaround time has increased by about 13 days as more providers have
gone from “retrospective” pharmacy PA — prior authorization initiated
at the pharmacy counter — to PA that’s done prospectively, before the
patient leaves the doctor’s office. “We would like to keep moving in the
prospective direction,” Gill said.
“I’d be remiss not to mention one other trend we’re seeing from the
prescription medicine PA process: the idea of centralized PA teams,” she
said. “That shouldn’t come as a surprise to any of us that practice in
healthcare; we’ve centralized a lot of things with pretty great
outcomes.” One study at the University of California Davis
found that centralized pharmacy PA teams have a 10% greater submission
rate, “indicating improvement in the quality of the PA and in
efficiencies,” said Gill. Centralized PA also cut the time between PA
initiation and PA submission by about 22% and decreased turnaround time
by about seven days. https://www.medpagetoday.com/practicemanagement/reimbursement/84587
Johnson & Johnson’s (JNJ) Janssen Pharmaceutical Cos. unit on
Wednesday said the European Commission approved the expanded use of
Erleada to treat adult men with metastatic hormone-sensitive prostate
cancer in combination with androgen deprivation therapy.
The drug maker said the approval could benefit a population of more than 100,000 people across Europe.
Erleada was previously approved in Europe for use in adults with
non-metastatic castration-resistant prostate cancer who are at high risk
of developing metastatic disease.
French drugmaker Sanofi
said on Wednesday it was postponing all its events in China and had
asked employees to stop all travel to and from Wuhan and Hubei provinces
in China.
The company said it had no plans to repatriate French employees from China over new coronavirus spread.
The U.S. Federal Reserve will end its latest policy meeting on
Wednesday with interest rates likely on hold, adjustments to its balance
sheet under discussion, and China’s widening coronavirus outbreak
posing an unexpected risk to the global economy.
A growing list of countries and companies are curbing travel to and
from China, evacuating personnel, and scaling back operations in
response to the health scare in the world’s second-largest economy.
As a result, some are predicting Chinese economic growth could dip
below 5% early this year, which would be a multi-decade low and send a
chill through financial markets.
Based on prior outbreaks like the Severe Acute Respiratory Syndrome
(SARS) epidemic in 2002 and 2003, the economic impact could be
short-lived if infections slow or a treatment is found.
Investors seemed to be pointing in that hopeful direction. After a
sell-off on Monday, U.S. equity markets rose on Tuesday and were largely
flat late Wednesday morning.
But a spreading global health scare could also have broader
implications for the world and U.S. economies, something Fed Chair
Jerome Powell is likely to be asked about in his news conference
following the end of the policy meeting.
Since the U.S. central bank cut rates in October, its third and final
reduction in borrowing costs in 2019, policymakers have agreed to keep
their target policy rate in the current range of 1.50% and 1.75% until
there is some significant change in the economic outlook.
U.S. data since the Fed’s last policy meeting in December have done
little to shift expectations for continued economic growth this year of
around 2% and steady, low unemployment.
U.S. President Donald Trump on Tuesday also repeated his call for
even lower rates. The Republican president lambasted the Fed and Powell
in 2018 and 2019 for maintaining a monetary policy that he regarded as
too tight.
While investors have increased bets the Fed would cut rates again at
some point this year, analysts still were near unanimous that any such
decision is months down the road.
Ninety-five of 108 economists polled by Reuters recently said they
expected the Fed to leave rates on hold at this week’s meeting, and JP
Morgan analyst Michael Feroli said it would likely be “one of the least
eventful meetings in recent years.”
The Fed is due to release its policy statement at 2 p.m. EST (1900
GMT). Powell’s news conference is scheduled to start half an hour later.
LONG-TERM FIX
The current solid consensus over rates, however, doesn’t mean the agenda is empty.
The Fed is expected to soon decide how much longer it will continue
its current practice of buying $60 billion a month in U.S. Treasury
bills, how to scale that program back, and what will replace it as a
long-term fix for its management of short-term bank funding markets.
Pumping that extra liquidity into the banking system each month has
allowed the Fed to keep short-term interest rates within the target
range, addressing an issue that arose last fall when a shortage of bank
reserves led that rate to spike.
But it is considered less than an ideal fix. It means the Fed each
month is adding to its roughly $4 trillion in assets. Some policymakers
would prefer the central bank have a smaller balance sheet if possible.
It has also created the impression that the Fed is engaging in a
scaled-down form of the “quantitative easing” it used to prop up the
economy in response to the 2007-2009 recession.
Fed officials argue against that comparison, but they face the issue
of how to scale the monthly purchases back without risking fallout in
asset markets where the extra central bank liquidity is considered a
“tailwind” that helps lift prices.
“The question is when, not if,” the balance sheet growth stops,
Cornerstone Macro analyst Roberto Perli wrote. “We expect Powell to
convey this message but to stay vague on timing, for now.”
As they discuss how to end this current round of asset purchases, Fed
officials are also debating what could take its place. Some
policymakers support a permanent offering of short-term “repo” loans
that banks could tap as needed, a system they say would allow reserve
levels to be set by banks.
In a related adjustment, the Fed may also raise by perhaps five basis
points the interest rate it pays banks on excess reserves as a way to
keep the federal funds rate closer to the middle of the current policy
target rate.
Novartis
boss Vas Narasimhan expects higher sales and profitability this year,
lifted by its broad range of drugs, and minimal disruption to its supply
chain from the coronavirus outbreak in China.
The Swiss drugmaker’s upbeat outlook and quarterly results on
Wednesday outshone the previous day’s results from Pfizer and set the
bar for rival Roche, which is expected to report higher 2019 sales and profit on Thursday.
Novartis shares were up 1.5% at 1337 GMT after the company said it
would raise its dividend 4% to 2.95 Swiss francs per share and as
Narasimhan downplayed the threat of coronavirus disruptions.
China is one of Novartis’s fastest-growing markets and has research
and development operations there but also obtains supplies of active
pharmaceutical ingredients from Chinese suppliers.
After the coronavirus outbreak, Novartis asked Chinese staff to work
from home until Feb. 10 while suspending some business travel, but
Narasimhan said he expects the company to emerge unscathed thanks to
sufficient supplies to ride out interruptions.
The head of generics unit Sandoz, Richard Saynor, said the company
has evaluated its stocks of ingredients and concluded that it has an
adequate buffer for now.
China accounts for more than $2 billion in annual business for
Novartis and last year produced double-digit growth including the
launches of Cosentyx and Entresto, a drug Narasimhan predicts could top
$1 billion in sales in China.
Novartis’s broad drugs portfolio, including treatments for cancer,
arthritis and rare diseases, helped the company post fourth-quarter core
net income of $2.99 billion, up 13% in constant currencies, on revenue
up 9% at $12.4 billion.
The group is benefiting from a mix of products developed in-house,
such as psoriasis medicine Cosentyx and heart failure remedy Entresto,
as well as $2.1 million-per-patient gene therapy Zolgensma, acquired
through a 2018 acquisition.
“A company of our size, with now approaching $50 billion of revenue …
has to have a diverse approach to therapeutic areas,” CEO Narasimhan
told a news conference in Basel.
“We want to cover the unmet needs of humanity, so that ranges from
cardiovascular disease and oncology, all the way to rare diseases.”
For 2020, Novartis expects net sales growth of up to
high-single-digit percentages, with core operating income potentially
rising even faster.
“The overall results, with the focus on the main drugs business and
the strong outlook for 2020, is likely to be taken positively by
investors,” said Zuercher Kantonalbank analyst Michael Nawrath, who has
an “overweight” rating on the stock.
Overall, Cosentyx’s sales for the 12-month period rose 28% to $3.6
billion, Entresto was up 71% at $1.7 billion and Zolgensma hit $361
million after seven months on the market.
