Bristol Myers Squibb (NYSE:BMY): Q2 Non-GAAP EPS of $1.63 beats by $0.16; GAAP EPS of -$0.04 misses by $1.48.
Revenue of $10.13B (+61.6% Y/Y) beats by $90M.
Revlimid sales of $2.88B vs. consensus of $2.90B.
Shares +4.72% PM.
Thursday, August 6, 2020
Editas Medicine and Beam Therapeutics rally on rumored deal
Wednesday, August 5, 2020
Failing the Coronavirus-Testing Test
“At the moment, the United States has no semblance of public-health testing” for the coronavirus, says Michael Mina, an assistant professor of epidemiology at both Harvard Medical School and the Harvard T.H. Chan School of Public Health. What does Mina—an expert in viral testing protocols—mean by that?
Current tests for active infection with SARS-CoV-2 are highly sensitive—but most are given to suspected COVID-19 patients long after the infected person has stopped transmitting the virus to others. That means the results are virtually useless for public-health efforts to contain the raging pandemic. These PCR (polymerase chain reaction) tests, which amplify viral RNA to detectable levels, are used by physicians, often in hospital settings, to help guide clinical care for individual patients. In general, members of the public have not had access to such tests outside clinical settings, but even if they did, would find them too expensive for frequent use.
Furthermore, such tests detect tiny fragments of viral RNA even after the patient has recovered. Mina says that means “the vast majority of PCR positive tests we currently collect in this country are actually finding people long after they have ceased to be infectious.” In that sense, a positive result can be misleading, because the results can’t be relied on to guide the epidemiological efforts of public-health officials, which are focused on preventing transmission and controlling outbreaks: “The astounding realization is that all we’re doing with all of this testing is clogging up the testing infrastructure,” with results arriving a week or more after tests are administered, “and essentially finding people for whom we can’t even act because they are done transmitting.” In fact the testing backlog is so dire, and so “absolutely horrendously useless as a system for public-health surveillance,” that Mina believes the United States should at the very least throw away the millions and millions of samples that are waiting to be tested—and perhaps even halt the current testing regime and just start over.
“We need to change the whole script of what it means to test people,” he says. “In our country, we have always assumed that testing belongs in the clinical sphere, in the diagnostic sphere, and has to be run by laboratories or diagnosticians. The result is that we have a system for coronavirus testing…which is flailing, with raging outbreaks occurring.” What the country needs instead are rapid tests, widely deployed, so that infectious individuals can be readily self-identified and isolated, breaking the chain of transmission.
To do that, Mina says, everyone must be tested, every couple of days, with $1, paper-based, at-home tests that are as easy to distribute and use as a pregnancy test: wake up in the morning, add saliva or nasal mucous to a tube of chemicals, wait 15 minutes, then dip a paper strip in the tube, and read the results. Such tests are feasible—a tiny company called E25Bio, and another called Sherlock Biosciences (a start-up spun out of Harvard’s Wyss Institute for Biologically Inspired Engineering and the Broad Institute in 2019) can deliver such tests—but they have not made it to the marketplace because their sensitivity is being compared to that of PCR tests.
Mina says that is beside the point. “Imagine you are a fire department,” he says, “and you want to make sure that you catch all the fires that are burning so you can put them out. You don’t want a test that’s going to detect every time somebody lights a match in their house—that would be crazy: you’d be driving everywhere and having absolutely no effect. You want a test that can detect every time somebody is walking the streets with a flame-thrower.”
For public-health purposes, speed and frequency of testing are vastly more important than sensitivity: the best test would actually be less sensitive than a PCR test. As Mina explains, when a person first becomes infected, there will be an incubation period when no test will reveal the infection, because the viral loads are so low. About “three to five days later, the PCR test will turn positive, and once that happens the virus is reproducing exponentially in a very predictable fashion.” At that point, critically, “even if a rapid test is 1,000 times less sensitive than a PCR test,” Mina says, the virus is increasing so rapidly that the test “will probably turn positive within eight to 15 or 24 hours. So the real window of time that we’re discussing here—the difference in sensitivity that makes people uncomfortable”—is so small that public-health officers would be missing very few asymptomatic people taking the test in that narrow window of time. Given that the current testing frequency in most states, using highly sensitive but expensive and delayed PCR tests, is not even once a month, he points out—“Really, it’s never.”
So even though a saliva-based paper test wouldn’t register a positive result for as long as a half or even a full day after the PCR test, it would have great value in identifying pockets of infection that might otherwise be undetected altogether.
The strength of this system is that it would actually abrogate the need for contact tracing, says Mina. “If your goal is not to have a heavy hand over the population” (implementing onerous public-health restrictions on businesses and recreational activity), this is the way to do it, he explains, because it strips away “all of that complexity.” Most people who test positive will have done so before they become infectious, and can easily self-quarantine for the six days or so until they cease being infectious. Even if some people don’t quarantine, and the test cuts off just 90 percent of all the infections that might spread, “you’d immediately bring the population prevalence of the disease to very low numbers, to the point where all of a sudden society would start to look safe again.”
Mina has been predicting the advent of more widely available, cheaper tests for months. But those tests have not materialized, largely because of regulatory risk, he says: manufacturers cannot meet Food and Drug Administration (FDA) templates for test sensitivity that use PCR as the standard. The FDA—whose approval process is stringent because it is designed to test the efficacy of clinical diagnostics—has no jurisdiction over public-health testing. But at the moment, there is no alternative regulatory process for tests designed to ensure population-level wellness—such as a certification program that might be run through the Centers for Disease Control (CDC), the agency charged with safeguarding the public health.
“It is time to stop allowing diagnostic definitions to get in the way of absolutely essential public-health interventions,” says Mina, for whom explaining the distinction between the two types of test, and the different ways they can be used, has been an uphill battle. But it is one that he desperately hopes to win—and that the country needs him to win—for public-health measures to stand a chance of reining in the outbreak as schools and other institutions move toward reopening this fall.
The U.S. government has spent billions of dollars supporting attempts to develop vaccines and therapeutics. “Developing a good vaccine is very difficult to do,” he points out. “It’s a crapshoot that may or may not work. We’re putting billions more into developing therapeutics [treatments for COVID-19] which is really, really difficult.” With rapid testing, by contrast, “We have solutions, sitting in front of us right now, that are cheaper, would be much quicker to build, and much less risky to actually introduce and roll out. And the only thing standing in the way is that there just doesn’t seem to be the will to bring a public-health tool to market.”
The current cheap testing regimens were developed by just a handful of researchers, he says. “Imagine if the federal government just took over…to create an all-star team of diagnosticians centered around one of these technologies,” or even charged them with creating something brand new. “And then said, ‘We’re going to put billions of dollars into this, and it will allow us to stop the raging outbreaks that are burning in half the country right now. And we’ll do it in the next three weeks.’ That, to me, seems like a no-brainer: it takes the pressure off of needing a vaccine; it stops people from dying; it stops the virus from getting into schools and nursing homes—the moment population prevalence has been brought under control.”
NIH Trial of Remdesivir Plus Interferon Beta-1a for COVID-19 Treatment Begins
A randomized, controlled clinical trial evaluating the safety and efficacy of a treatment regimen consisting of the antiviral remdesivir plus the immunomodulator interferon beta-1a in patients with coronavirus disease 2019 (COVID-19) has begun. The study, called the Adaptive COVID-19 Treatment Trial 3 (ACTT 3), is anticipated to enroll more than 1,000 hospitalized adults with COVID-19 at as many as 100 sites in the United States and abroad. The National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health, is sponsoring the trial.
ACTT 3 is the third iteration of NIAID’s Adaptive COVID-19 Treatment Trial (ACTT). ACTT began on Feb. 21 to evaluate remdesivir, an investigational broad-spectrum antiviral discovered and developed by Gilead Sciences, Inc, of Foster City, California. A preliminary analysis of ACTT data found that patients who received remdesivir had a statistically significant shorter time to recovery compared to patients who received placebo. These results were published on May 22. More detailed information about the results, including more comprehensive data, will be available in a forthcoming report.
Subcutaneous interferon beta-1a, a medication manufactured by Merck KGaA, Darmstadt, Germany, is approved in the U.S. and more than 90 other countries for the treatment of multiple sclerosis. The drug is marketed under the brand name Rebif by EMD Serono, the North American biopharmaceutical business of Merck KGaA, Darmstadt, Germany. Interferon beta-1a has the same amino acid sequence as a naturally occurring protein called interferon beta, which is part of a class of proteins called type 1 interferons. Infected cells normally produce type 1 interferons to help the immune system fight pathogens, especially viruses. Interferon beta has both antiviral and anti-inflammatory properties.
Laboratory studies suggest that the normal interferon response is suppressed in some people after infection with SARS-CoV-2, the virus that causes COVID-19. In the laboratory, type 1 interferon can inhibit SARS-CoV-2 and two closely related viruses, SARS-CoV and MERS-CoV. In addition, two small randomized controlled trials suggest that treatment with interferon beta may benefit patients with COVID-19. The combination of interferon beta-1a and remdesivir for treating COVID-19 has not been evaluated in a large, randomized controlled trial.
In accordance with standard clinical research protocols, eligible patients who provide informed consent will participate in ACTT 3. Participants must have laboratory-confirmed SARS-CoV-2 infection with evidence of lung involvement, including a need for supplemental oxygen, abnormal chest X-rays, or illness requiring mechanical ventilation. People with confirmed infection who have mild symptoms or no apparent symptoms will not be included in the study.
ACTT 3 participants are being randomly assigned in a 1-to-1 ratio to receive either subcutaneous interferon beta-1a plus remdesivir (combination therapy) or remdesivir alone. Neither the participants nor the study team will know who is receiving which treatment regimen. All participants will receive standard doses of remdesivir and either interferon beta-1a or a placebo. Those in the combination therapy group will receive interferon beta-1a as a 44-microgram subcutaneous injection every other day for a total of four doses during hospitalization. Those in the remdesivir-only group will receive a matching placebo subcutaneous injection every other day for a total of four doses during hospitalization.
Investigators will evaluate whether time to recovery is shorter in the combination therapy group relative to the remdesivir-only group. Recovery is defined as the participant being well enough for hospital discharge, meaning the participant either no longer requires supplemental oxygen or ongoing medical care in the hospital, or is no longer hospitalized (with or without some limitation on activities). Recovery is evaluated up until day 29. A key secondary goal of the study is to compare patient outcomes at day 15 using an ordinal eight-point scale ranging from fully recovered to death. The trial also will compare other secondary outcome variables between treatment groups, including mortality alone.
An independent data and safety monitoring board (DSMB) will monitor ongoing results to ensure patient well-being and safety as well as study integrity. Preliminary results are expected in the fall of 2020.
The second iteration of the Adaptive COVID-19 Treatment Trial, ACTT 2, began on May 8 to evaluate the safety and efficacy of remdesivir plus the anti-inflammatory drug baricitinib for treating hospitalized adults with COVID-19. A product licensed to Eli Lilly and Company by Incyte and marketed under the brand name Olumiant, baricitinib(link is external) is approved in the U.S. and more than 65 other countries as a treatment for adults with moderately to severely active rheumatoid arthritis. ACTT 2 closed to enrollment on June 30 after recruiting 1,034 participants at 71 U.S. and international sites.
Additional information about ACTT 3 is available at ClinicalTrials.gov(link is external) under study identifier NCT04492475
Designer antibodies could battle COVID-19 before vaccines arrive
While the world is transfixed by the high-stakes race to develop a COVID-19 vaccine, an equally crucial competition is heating up to produce targeted antibodies that could provide an instant immunity boost against the virus. Clinical trials of these monoclonal antibodies, which could both prevent and treat the disease, are already underway and could produce signs of efficacy in the next few months, perhaps ahead of vaccine trials. “If you were going to put your money down, you would bet that you get the answer with the monoclonal before you get the answer with a vaccine,” says Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases (NIAID).
“Antibodies have the potential to be an important bridge until the vaccine is available,” says Ajay Nirula, a vice president at Eli Lilly, one of several large companies investing in them. Likely to be more effective than the repurposed drugs now available, such as remdesivir and dexamethasone, antibodies could protect the highest risk health care workers from becoming infected while also lessening the severity of COVID-19 disease in hospitalized patients. But making monoclonals involves growing lines of antibodymaking B cells in bioreactors, raising concerns they could be scarce and expensive. On 15 July, Lilly, AbCellera, AstraZeneca, GlaxoSmithKline, Genentech, and Amgen jointly asked the U.S. Department of Justice (DOJ) whether they could share information about manufacturing their monoclonals without violating antitrust laws, “to expand and expedite production.”
Soon after the pandemic began, researchers in industry and academia began to identify, design, tweak, and conduct lab tests of monoclonal antibodies against SARS-CoV-2, the virus that causes COVID-19. Most work by binding to and “neutralizing” the viral surface protein, or spike, that initiates an infection. On 29 May, Lilly, working with AbCellera, launched the first human study of a monoclonal antibody—a phase I trial testing its safety and tolerability in hospitalized COVID-19 patients. Other safety trials followed, from Lilly’s Chinese partner Junshi Biosciences and Regeneron, which developed a cocktail of three monoclonals that works against Ebola.
Regeneron is now testing the efficacy of its COVID-19 cocktail, which combines a spike antibody from a person who recovered and one from a mouse given the spike protein, in three large-scale, placebo-controlled trials. A prevention trial run in coordination with NIAID’s COVID-19 Prevention Trials Network (CoVPN), an arm of the Trump administration’s Operation Warp Speed, will recruit 2000 people who live in a house with a confirmed COVID-19 case. One treatment study run by the company aims to enroll nearly 2600 hospitalized people with severe COVID-19, whereas another, about half that size, will test the antibodies in infected people with mild or moderate symptoms. Lilly has launched its own trials, including a phase III, placebo-controlled study in 2400 residents or staff of long-term care facilities, run with the help of CoVPN.
“We should be able to see an efficacy signal very quickly” from these trials, says Amy Jenkins, who heads the Pandemic Prevention Platform (P3) program at the Defense Advanced Research Projects Agency, which for 2 years has invested in speeding the development of monoclonal antibodies for pandemics. Although Jenkins hesitates to make a firm prediction, she says the November-December time frame is “realistic and conservative.” That is likely earlier than any vaccine will prove safe and effective, researchers say.“I would be reluctant to say [that] would be any earlier than the end of the year,” Fauci said at a press conference about the launch of NIAID’s first COVID-19 vaccine trial on 27 July.
Regeneron’s Christos Kyratsous notes that vaccine trials must wait a few weeks for a person’s immune system to develop appropriate responses to shots and further weeks for “the event”—a chance exposure to SARS-CoV-2. This means those trials require time and many people. In contrast, for the antibody treatment trials, “your event has already happened,” Kyratsous says. And in the prevention studies, the household contacts of COVID-19 cases will be much more likely to be exposed than people who typically join a vaccine study.
Immunologist Dennis Burton, whose group at Scripps Research has isolated highly potent monoclonal antibodies against SARS-CoV-2 that they hope to move into human studies, says he is optimistic that monoclonals will protect people from infection for months with a single shot. “It’s much easier to take care of a few incoming virus particles than to try and resolve or cure an ongoing infection.” The same logic holds for treatment. “Hit the virus hard and early,” Burton says.
Kyratsous says even if monoclonal antibodies don’t beat vaccines to the finish line, they still might have a role to play against COVID-19. “We’re going to need both approaches in the long run,” Kyratsous says. Vaccines are rarely 100% effective, and many people may decline a vaccine or not skip immunization for other reasons. What’s more, he notes, the elderly or people who are immune compromised may not mount robust immune responses after being vaccinated.
Supplies of monoclonal antibodies may be limited, however, in part because of modest investment. Operation Warp Speed, for example, has committed $8 billion to six different COVID-19 vaccines; for monoclonals, the government has invested about $750 million, much of it in Regeneron, which will produce somewhere between 70,000 and 300,000 doses before it even has efficacy data. Lilly says it will have 100,000 doses by the end of the year.
If the antibodies work, a study from the Duke University Margolis Center for Health Policy estimates the United States alone could require nearly 40 million doses next year. But no one knows how far those doses would stretch, says Janet Woodcock, who is on leave from running the drug evaluation and research division of the Food and Drug Administration to lead Warp Speed’s therapeutic effort. “Unlike with vaccines, it is hard to project the number of treatment courses that will be available,” Woodcock says. Prevention, which would be a single intramuscular shot, requires less product than the intravenous infusions used in treatment, she notes, but the amount needed depends on a person’s weight.
Although how to prioritize vaccine distribution has already sparked extensive debate, no such discussion has yet taken place about monoclonal antibodies. But DOJ acknowledged the supply concerns on 23 July, giving the six companies that had petitioned it the green light to share production information.
Regeneron is not part of that group, but Kyratsous is optimistic about meeting the need. “The good thing with some of these biologics is you can ramp up production fairly fast,” he says. Nirula agrees. “If we have success in these clinical trials, we will have a lot of drug available,” he says.
The cost of monoclonals, especially for the higher doses needed for treatment, could split the world into the haves and have-nots. “It’s unlikely that that treatment will get down to a price point in the near future that it would be easily affordable globally,” says Seth Berkley, who leads Gavi, the Vaccine Alliance, and also heads an international COVID-19 vaccine effort.
Jenkins says a key aim of the P3 project, which has provided four groups with $96 million in seed money, has been to develop monoclonal antibodies that can be made by the body itself, instead of in large fermentation tanks. The idea, which has not yet been tested in humans for COVID-19, is to inject people with DNA or messenger RNA that encodes a desired antibody, allowing their own cells to make it. “We think we can bring down the cost of monoclonal antibodies,” Jenkins says.
Regardless of cost, evidence that monoclonals work as preventives could benefit everyone by giving vaccinemakers a clear sign that antibodies against the surface protein of SARS-CoV-2 are enough to protect a person. This, in turn, could provide a strong indicator for evaluating the worth of a candidate vaccine short of actual efficacy data. “It will be earthshaking to the vaccine field in a positive way,” says Myron Cohen of the University of North Carolina, Chapel Hill, who leads testing of monoclonal antibodies for CoVPN. “It provides a thousand opportunities to move forward faster.”
Vapotherm sells off after Q2 report
Vapotherm (VAPO -28.1%) appears to be pressured by “sell on the news” behavior out of the gate this morning. After the close yesterday, it announced better-than-expected Q2 results, including a 193% jump in revenues driven by robust demand for its Precision Flow systems.
Its revenue outlook for Q3 is $24.0M – 28.0M up 122 – 159% from a year ago and above consensus of $18.9M.
Despite the selloff, shares are up over four-fold this year.
Why Teladoc and Livongo Plunged
What happened
Shares of Teladoc Health (NYSE:TDOC) and Livongo Health (NASDAQ:LVGO) fell sharply on Wednesday, after the two tech-focused healthcare companies announced their plans for a merger. By the close of trading, Teladoc and Livongo’s stocks were down 19% and 11.4%, respectively.
So what
Under the terms of the deal, Livongo’s shareholders will receive 0.592 shares of Teladoc plus $11.33 in cash for each Livongo share they own. As of Aug. 4, the deal valued Livongo at $18.5 billion.
The combined company is projected to generate impressive financial metrics, with pro forma revenue of roughly $1.3 billion in 2020 — representing year over year growth of 85% — and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of more than $120 million.
“This highly strategic combination will create the leader in consumer-centered virtual care and provides a unique opportunity to further accelerate the growth of our data-driven member platform and experience,” Livongo founder and executive chairman Glen Tullman said in a press release. “By expanding the reach of Livongo’s pioneering Applied Health Signals platform and building on Teladoc Health’s end-to-end virtual care platform, we’ll empower more people to live better and healthier lives.”
Now what
Investors, however, were not impressed. Teladoc’s shareholders apparently believe the virtual care leader is overpaying for Livongo, whose business does lie somewhat outside Teladoc’s core telemedicine offerings. Livongo shareholders, meanwhile, probably would have preferred for the rapidly growing company to remain independent.
Nevertheless, Livongo and Teladoc’s management teams remain adamant that the merger will create value for investors and customers alike. “Together, we will further transform the healthcare experience from preventive care to the most complex cases, bringing “whole person” health to consumers and greater value to our clients and shareholders as a result,” Teladoc CEO Jason Gorevic said.
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