Sanofi eyes more EPS growth this year as it narrows focus

Sanofi said on Thursday its earnings per share were likely to rise by around 5% in 2020, weeks after it promised to focus on vaccines and key treatments including eczema medicine Dupixent until 2022.

The French drugmaker, long viewed as an industry laggard, has changed its chief executive, its chief financial officer and its head of research over the last two years, and is hoping to shine again thanks to a pipeline shake-up and new cost cuts.
It previously set a target of reaching a core operating margin of 30% by 2022, up from 27% last year.
Sanofi said net income rose 18.4% to 1.68 billion euros ($1.85 billion) in the fourth quarter of last year thanks to double-digit growth sales at its specialty care business Genzyme and its vaccines unit.
Revenue from Dupixent, also prescribed for other inflammatory diseases and developed with U.S firm Regeneron, was up 135% at 679 million euros.
Like rivals including Britain’s GlaxoSmithKline and Switzerland’s Novartis, Sanofi, which announced cost savings targets last month, is trying to zoom in on potential blockbuster treatments and has stopped several unsuccessful programs.

https://www.marketscreener.com/REGENERON-PHARMACEUTICALS-10649/news/Sanofi-eyes-more-EPS-growth-this-year-as-it-narrows-focus-29949527/

Rally goes on as China cuts U.S. tariffs

Fresh records on Wall Street are set to continue after China said it would halve tariffs on $75B of U.S. imports as part of its efforts to implement a recently signed ‘phase one’ trade deal.

The tariff relief adds to hopes the global economy may be able to avoid a major shock from China’s rapidly-spreading coronavirus, with DJIA futures pointing to opening gains of 200 points after soaring nearly 500 points on Wednesday.

The gains weren’t limited to the U.S. The overnight session in Asia saw the Nikkei rise 2.4%, Shanghai advance 1.7% and Hang Seng climb 2.4%, while Europe opened in the green with the Euro Stoxx 50 up 0.6%.

ETFs: FXI, KWEB, CQQQ, ASHR, YINN, MCHI, TDF, EWH, KBA, CAF, YANG, GXC, TAO, CYB, CHIQ, CHIX

https://seekingalpha.com/news/3538987-rally-goes-on-china-cuts-u-s-tariffs

Sanofi EPS beats by €0.06, misses on revenue

Sanofi (NASDAQ:SNY): Q4 Non-GAAP EPS of €1.34 beats by €0.06; GAAP EPS of -€0.01.

Revenue of €9.61B (+6.8% Y/Y) misses by €40M.

Press Release

https://seekingalpha.com/news/3538983-sanofi-eps-beats-0_06-misses-on-revenue

Vaping execs tell lawmakers e-cigarettes are not meant for young people

Executives from the five largest e-cigarette companies defended their products on Wednesday as House lawmakers pressed them about rising youth nicotine addiction.
The company leaders appeared for a hearing before a subpanel of the House Energy and Commerce Committee just one day before the Trump administration’s limited vaping ban will take effect.
Executives from Juul, Reynolds American, NJOY, Logic and Fontem told lawmakers that they did not deliberately market to young people.

“I fully recognize that the opportunity for the millions of adult smokers who still use combustible cigarettes to have an alternative is at risk if we don’t address this issue,” said K.C. Crosthwaite, Juul’s CEO. “We are focused on combating underage access because I know it puts it all at risk if we don’t make progress here.”
Rep. Frank Pallone Jr. (D-N.J.), chairman of the full House Energy and Commerce Committee, cast doubt on the companies’ assurances that they did not intentionally target young people.
“I heard all of you over and over again say you are responsible men, men of integrity. That is not true,” Pallone said. “If you wanted to be men of integrity and responsible men, you would not be selling this product, you’d be doing something else.”
Under questioning from Rep. Diana DeGette (D-Colo.), the oversight subcommittee chairwoman, the executives admitted that nicotine is addictive and that using their products can lead to nicotine addiction.
After the hearing, DeGette said she was glad the executives were able to acknowledge that nicotine is addictive. However, she said they needed to be more open.
“I was really disturbed when they refused to answer the questions about the very real health risks of nicotine,” DeGette told reporters. “And this is what has been happening … is the main manufacturers have been trying to convince people, and they’ve convinced many teenagers, that nicotine is not harmful if it’s delivered through e-cigarettes, and that’s just inaccurate.”

However, the executives repeatedly said that the U.S. Food and Drug Administration (FDA) should have ultimate regulatory authority, not Congress.
By May 2020, companies that want to sell e-cigarettes in the U.S. will have to receive approval from the FDA to determine whether they’re allowed to stay on the market. The companies will have to prove their products benefit public health.
“Looking forward, FDA’s Premarket Tobacco Application process provides a pathway for vapor products aligned with public health priorities. We believe vapor products can be manufactured and marketed responsibly within this framework,” said Ricardo Oberlander, president and CEO of Reynolds American.
Democrats also hammered the Trump administration’s vaping policy, arguing it is full of loopholes that make it ineffective. Disposable e-cigarettes, open tank systems and e-liquids of any flavor, including those mixed in vape shops, will all remain available under the policy.
NJOY, Fontem and Logic all make disposable products. NJOY Daily — the company’s disposable e-cigarette — comes in flavors such as “tropical twist,” “blue + black berry” and “apple melon.”
Fontem U.S. President Antoine Blonde came under fire from lawmakers for his company’s marketing of disposable products with flavors like “vivid vanilla” and “cherry blast.”
NJOY will stop distributing flavored versions of their products on Thursday, the effective date of the FDA vaping guidance.
However, both Blonde and NJOY CEO Ryan Nivakoff said they don’t think their disposable products are being used by large numbers of young people.
“We are not aware of any current issue caused by our disposable flavored and the fact that the FDA excluded the disposables from the guidance completely,” Nivakoff said.
https://thehill.com/policy/healthcare/481716-vaping-executives-tell-lawmakers-e-cigarettes-are-not-intended-for-young

Tirzepatide’s time to shine for Lilly

Tirzepatide’s clinical programme is set to double in size when a huge head-to-head outcome study gets under way. Costs will balloon too.

Lilly confirmed last week that it had huge hopes for its experimental diabetes project tirzepatide. A 12,500-patient cardiovascular outcome trial (CVOT) will start later this year, pitting the dual GIP/GLP-1 agonist against Trulicity, a similarly acting agent that is also the company’s best-selling drug.
Executives are not wrong when they describe the move as “bold”, though with Trulicity losing patent protection in 2027 they presumably feel the risk is worth taking. But the new trial represents a massive financial commitment. EvaluatePharma Vision’s R&D cost model* estimates that Trulicity’s CVOT was the most expensive ever run for a GLP-1 agonist. Tirzepatide’s, though, could set a new record.
The Trulicity Rewind trial cost Lilly almost $2bn to run, it is estimated; of the GLP-1 agonist CVOTs Rewind was the longest undertaken, although at almost 10,000 patients enrolment was similar to the outcome studies conducted with Novo Nordisk’s Rybelsus and Victoza, and Glaxosmithkline’s Tanzeum.
Shorter and smaller CVOTs bring down the average in the table below, but the details laid out by Lilly last week indicate that tirzepatide’s test of cardiovascular safety will not come cheap.

Crunching the numbers: the cost of GLP-1 trials
Mean enrollment in GLP-1 outcome studies	7,747
Estimated mean cost of GLP-1 outcome studies	$868m
Enrollment in Trulicity’s Rewind outcome study	9,901
Estimated cost of Rewind	$1.9bn
Enrollment in tirzepatide’s Surpass-CVOT outcome study	12,500
Estimated cost of Surpass-CVOT*	???
*Cost will be estimated once trial listed in clinicaltrials.gov. Source: EvaluatePharma Vision.

To be called Surpass-CVOT, the study will recruit patients with type 2 diabetes and confirmed atherosclerotic cardiovascular disease. The primary endpoint will be time to the first occurrence of the composite endpoint of CV death, myocardial infarction, or stroke, and will assess both non-inferiority and superiority of tirzepatide versus Trulicity. Lilly estimates that the study will take just over four years to complete.
This trial alone will double the number of patients in whom the company plans to test tirzepatide. However, a look at the clinical programme already running shows that the company’s ambitions for this project lie beyond diabetes. Impressive weight loss seen in phase II patients is fuelling hopes in obesity, while a mid-stage programme is also underway in Nash.
It is thought that hitting GIP adds effectiveness to GLP-1 agonism, though this comes at a cost. Tirzepatide’s weak spot is likely to be tolerability, with very high rates of nausea, vomiting and diarrhoea having been reported in earlier trials. Lilly believes these can be managed with dose titration but the very long run-in proposed – up to 20 weeks for the highest dose being tested – could limit the project’s appeal.
As such, until the Surpass programme starts to read out towards the end of this year, the real potential of tirzepatide is hard to estimate.
Not that this has held the sellside back: consensus forecasts indicate a launch in 2022 and a swift ramp to sales of $1.6bn by 2024. This surely represents a best-case scenario, though after committing billions to this project, Lilly must be expecting nothing less.

Tirzepatide’s late-stage clinical programme
Status	Acronym	N	Details	Primary completion
Phase III	Surpass-1	472	In T2D not controlled with diet and exercise	Oct 2020
	Surpass-2	1,872	vs Ozempic + metformin in T2D	Mar 2021
	Surpass-3	1,420	vs Tresiba in T2D	Dec 2020
	Surpass-4	1,878	vs Basaglar in T2D patients with increased cardiovascular risk	May 2021
	Surpass-5	472	vs placebo in T2D inadequately controlled with Basaglar +/- metformin	Jan 2021
	Surpass J-combo	441	In T2D patients on oral antihyperglycaemic medications	Mar 2021
	Surpass J-mono	636	vs dulaglutide in T2D	Apr 2021
	Surpass-AP-combo	956	T2D patients on metformin +/- sulfonylurea	Feb 2022
	Surmount-1	2,400	Obese or overweight patients	Feb 2022
Phase II	Synergy-Nash	196	Nonalcoholic steatohepatitis	Mar 2022
Total in all clinical trials		12,136
Source: EvaluatePharma.

*EvaluatePharma Vision’s R&D cost model estimates the cost of individual clinical programmes using real-world data. Company disclosed product-level spend and clinical trial patient numbers are combined to create cost per patient benchmarks by technology and therapy type. Utilising a matching algorithm, these benchmarks are applied to all commercially relevant clinical trials to estimate their cost, which can then be aggregated by product to estimate the cost of development of all products. 
https://www.evaluate.com/vantage/articles/analysis/spotlight/tirzepatides-time-shine-lilly

Putin: Strip Russian pharmacy licenses for raising anti-virus mask prices

Russian President Vladimir Putin on Wednesday proposed stripping pharmacies of their licences if they raise prices for anti-virus masks amid the coronavirus outbreak.
Russia, which last week reported its first two cases of the virus, has restricted crossings along its 4,300 km (2,670-mile) land border with China and flew home its first group of citizens from Wuhan, the epicentre of coronavirus, on Wednesday.
https://www.reuters.com/article/us-china-health-russia-masks/russias-putin-proposes-stripping-pharmacy-licences-for-raising-anti-virus-mask-prices-idUSKBN1ZZ1SG

U.S. government proposes higher payments to Medicare insurers in 2021

The U.S. government on Wednesday proposed an average 0.93% increase in its payments in 2021 to the health insurers that manage Medicare Advantage insurance plans for about 22 million people aged 65 or older or disabled.
The government will finalize the rate in April.
UnitedHealth Group Inc, Humana Inc, Anthem Inc, CVS Health Corp and Centene Corp are among the largest players in the Medicare Advantage market, in which private insurers are paid a set rate by the government to manage member healthcare.
The government payment rates affect how much insurers charge for monthly premiums, plan benefits and ultimately, how much they profit. Medicare Advantage covers about one-third of the people enrolled in the government’s Medicare program.
The Centers for Medicare and Medicaid Services, a division of the U.S. Department of Health and Human Resources, releases the proposed rate early each year and then opens a public comment period. The final rate adopted in April could be higher or lower than the proposed one.
Evercore ISI analyst Michael Newshel said in a research note ahead of the report that he was expecting about a 2.5 percent increase, in line with the 2.53 percent increase the government put in place for 2020 plans.
The government also proposed payment rates for advanced kidney disease.
https://www.reuters.com/article/us-usa-healthcare-insurance/u-s-government-proposes-higher-payments-to-medicare-insurers-in-2021-idUSKBN1ZZ336