JPM: Entire Rates Complex Will Reprice If Fed Confirms Lift-Off Is Coming In 2023

 Paul Meggyesi, head of FX Research at JPMorgan Securities, shares his thoughts on today's main event.

Today’ FOMC is expected to symbolically validate what the market holds to be self-evidently true – that when economic facts change, especially radically, so too will policy. It shouldn’t matter that the market already has the best part of three hikes priced for 2023, any acknowledgement by the Fed that lift-off is being brought forward into 2023 would effectively sanction the continued re-pricing of the entire rates complex.

Certainly it is difficult to regard current market pricing as being stretched when the terminal funds rate is still priced below the Fed’s long-run estimate. In all, the FOMC should mark an important milestone in the rehabilitation of the dollar’s interest rate support, contingent upon the accelerated pace of vaccinations relieving the burden on public health and delivery of radical fiscal policy relieving the burden on monetary policy.

Europe obviously cannot rely on a similar pace of vaccinations to support its economic reopening nor, anywhere near the same magnitude of fiscal support; and, this contrast continues to warrant the pass-through of higher US yields into ever wider bond spreads, reinforcing the bullish read-through for the dollar.

It is noteworthy that the Bund/T-note spread is now back at its pre-pandemic level, and as a result FV for EUR/USD on out short-term model has edged lower yet again to 1.15. EUR/USD may not be exactly capitulating here but that doesn’t mean to say that fundamental pressure is not building for a bigger move.

https://www.zerohedge.com/markets/jpm-entire-rates-complex-will-reprice-if-fed-confirms-lift-coming-2023

Cardiovascular Systems: First Patients Use WIRION® Embolic Protection System

 Cardiovascular Systems, Inc. (CSI®) (NASDAQ: CSII), a medical device company developing and commercializing innovative interventional treatment systems for patients with peripheral and coronary artery disease, announced today that the first patients in the U.S. have been treated with the WIRION® Embolic Protection System.

WIRION is a distal embolic protection filter used to capture thrombus and debris that can be associated with all types of peripheral vascular intervention procedures, including atherectomy. Physicians typically use embolic protection devices in vessels located above the knee with long lesions, high plaque burden and poor run off.

WISE LE (WIRION EPS in Lower Extremities Arteries) was a multicenter study, performed in the United States and Germany and included all commercially-available atherectomy systems. The primary endpoint was freedom from major adverse events (MAEs) occurring within 30 days post-procedure and was compared with an objective performance goal derived from historical atherectomy trials. MAE was defined as a serious adverse event that resulted in death, acute myocardial infarction, thrombosis, pseudoaneurysm, dissection (grade C or greater), or clinical perforation at the filter location, clinically relevant distal embolism, unplanned amputation, or clinically driven target vessel revascularization.

https://www.businesswire.com/news/home/20210317005169/en/Cardiovascular-Systems-Inc.-Announces-First-Uses-of-WIRION%C2%AE-Embolic-Protection-System

Germany's Merck in fresh investment to make bio gear in France

 Germany’s Merck KGaA said it would invest 25 million euros ($29.9 million) in Molsheim, France, to make disposable plastic materials for bioreactors, an essential input for COVID-19 vaccine manufacturing.

The new site, which will see the creation 350 jobs, will be Merck’s first such facility in Europe and will likely come on stream at the end of this year, the diversified group said in a statement on Wednesday.

Merck’s Life Science unit, which supplies gear and chemicals for biotech labs, in December announced a combined $47 million investment at production facilities in Massachusetts and New Hampshire, also to produce supplies for makers of COVID-19 vaccines and biotech therapies.

It also has a site for single-use plastic bags for bioreactors in Wuxi, China. 

https://www.reuters.com/article/merck-bioreactors/germanys-merck-in-fresh-investment-to-make-bioreactor-gear-in-france-idUSF9N2G700C

In wake of biopharma mega buyouts, FTC kicks off review of industry's dealmaking

 Bristol Myers Squibb and Celgene. AbbVie and Allergan. Pfizer's Upjohn unit and generics giant Mylan. 

These are three of the biggest pharma mergers of the past couple years. They're also the kind of deals the Biden administration's Federal Trade Commission (FTC) might have scrutinized more closely, an agency official said Tuesday in announcing a sweeping review of its approach to biopharma M&A.

The process could bring tougher enforcement for biopharma's deal-makers going forward—and come into play for ongoing reviews, including the pending examination of AstraZeneca's $39 billion takeover of Alexion. 

Citing a high number of mergers in the industry in recent years—plus “skyrocketing” drug costs and allegations of anticompetitive conduct in the industry—FTC acting Chair Rebecca Kelly Slaughter told reporters Tuesday it’s “imperative that we rethink our approach.” The agency plans an "aggressive" approach toward anti-competitive deals, she added.

The FTC will work with the Department of Justice, state attorneys general and competition authorities in other countries to examine how mergers from recent years have played out after the deals closed. 

The FTC staff has an “eagerness and enthusiasm to be responsive” to the concerns, Slaughter said, and is ready to “put ideas into practice." The acting chair said she’s “happy to have work move as fast as it can.” 

In a new Securities and Exchange Commission filing, Alexion said it would withdraw a merger application and refile to give the agency more time to review. AstraZeneca planned to refile as well, Alexion said.

In an issue specific to the pharma industry, Slaughter said new technologies often emerge from small companies. The FTC wants to ensure that it’s “not just thinking about traditional questions,” such as market share, in merger reviews to ensure new drugs can reach the market at affordable prices, Slaughter said.

Pharma "impacts real people in a real way," she said, adding high drug prices are a "policy area of concern" for everybody.

 

There have been hundreds of biopharma takeovers in the last decade, Slaughter told reporters, and $1.6 trillion has changed hands under those deals. 

Still, at least one team of analysts doesn't see major risks for the industry from the review.

"We do not think the initiative is a cause for concern, but headlines from the FTC working group could dampen enthusiasm for M&A deals if the scrutiny increases ... or the working group looks retrospectively at prior deals that have been completed," Cantor Fitzgerald analyst Louise Chen wrote to clients Tuesday.

Aside from the recent mega buyouts Slaughter mentioned, other deals to attract FTC scrutiny in recent years include Roche’s buyout of Spark Therapeutics, which cleared the agency after delays, and Sandoz’s move to sell certain meds to Aurobindo. Sandoz and Aurobindo eventually abandoned their deal due to FTC concerns. 

https://www.fiercepharma.com/pharma/wake-biopharma-megabuyouts-ftc-kicks-off-review-industry-s-dealmaking

Emergent, amid COVID-19 production push, eyes upgrade to Canadian vaccine plant

 Emergent BioSolutions quickly positioned itself as one of the manufacturers to beat in the U.S. fight against COVID-19. Now, the company's laying out plans to upgrade a vaccine facility in Winnipeg—with the help of the Canadian government.

Emergent is in talks with Ottawa to fund an expansion of that plant, The Globe and Mail reports. The facility, which employs around 350, is equipped to handle the final manufacturing stages for mRNA, mammalian and microbial drugs—including mRNA-based COVID-19 vaccines like those sold by Pfizer and Moderna.

The CDMO's Winnipeg plant performs product formulation and fill-finish services, though it doesn't produce drug substance, the news outlet said. Emergent has already pledged current formulation and fill-finish capacity at the plant to local drugmaker Providence Therapeutics, plugging away on an mRNA-based vaccine.

The goal is to expand capacity to draw in major COVID-19 players, Canadian Industry Minister François-Philippe Champagne told the Globe. If Emergent can gin up capacity for 100 million doses annually in the region, drugmakers might consider moving production there, Champaign figures. The move wouldn't do much for the country's current vaccine rollout, but it could aid future campaigns, he said.

As it stands, Emergent can turn out more than one million multidose vials a month from its Canadian plant, Syed Husain, head of the company's CDMO business, told The Globe.

Emergent didn't immediately reply to Fierce Pharma's request for comment.

Canada has approved vaccines from Pfizer, Moderna, AstraZeneca and Johnson & Johnson, but none of those shots is produced locally, putting the country at the mercy of external supply chains. 

It has found some local manufacturing support by way of Novavax. Canada hasn't yet approved the drugmaker's phase 3 shot, though Novavax has agreed to start production in-country by late 2021 or early 2022.

Meanwhile, Canada and Europe were both hit by a surprise supply squeeze from Pfizer in January, when the company revealed a factory upgrade in Puurs, Belgium, would cause early deliveries to come in light. AstraZeneca has suffered well-publicized supply issues in Europe and Canada as well.

Stateside, Emergent is plowing ahead on a five-year work order to produce Johnson & Johnson's newly authorized vaccine from its Baltimore Bayview plant. It's also working on AstraZeneca's non-U.S. approved adenovirus vaccine at the same facility. 

The CDMO in June won a whopping $628 million government contract to help scale up production of COVID-19 vaccines. Officials earmarked around $542 million for bulk manufacturing capacity at Emergent’s Bayview facility, while the remaining $85.5 million was intended to boost fill/finish capacity at plants in Baltimore and Rockville, Maryland.

Alongside equipment and material ramp-ups, the company hired 800 new employees in 2020 to carry its manufacturing work forward, Sean Kirk, EVP of manufacturing and technical operations, said in a recent interview.

https://www.fiercepharma.com/manufacturing/emergent-and-canada-talks-to-onshore-covid-19-vaccine-manufacturing-report

FDA orders COVID antibody makers Regeneron, Eli Lilly to track virus variants

 Emerging coronavirus variants could pose threats to existing monoclonal antibodies and vaccines, and the FDA’s taken note, revising its emergency use authorizations to Eli Lilly’s and Regeneron’s drugs.

In edited letters of authorization re-issued in late February and early March, the FDA’s asking the two companies to monitor new variants of SARS-CoV-2, the coronavirus behind COVID-19 and potentially conduct additional tests of their authorized antibody drugs against variants.

The update came as evidence points to increased resistance of emerging coronavirus variants, especially the B.1.351 version first identified in South Africa, to antibody therapies.

The letters, first reported by Endpoints, were for existing EUAs for Lilly’s bamlanivimab (PDF) and its combo (PDF) with etesevimab, and Regeneron’s cocktail (PDF) of casirivimab and imdevimab, in mild-to-moderate COVID-19 patients with high risk of disease progression in the outpatient setting.

Specifically, the FDA attached two new conditions to the EUAs focused on monitoring and assessment of variants. The agency’s asking both Lilly and Regeneron to establish a process for monitoring genomic databases for variants and provide monthly summaries of their findings.

What’s more, the FDA specified that it may require further testing of the authorized antibody regimens against a particular variant.

A recent Nature study by Columbia University researchers raised red flags of reduced antibody potency against variants. In lab dishes, neither bamlanivimab monotherapy nor its etesevimab combo was able to neutralize B.1.351, and the Regeneron dual-drug regimen also showed a “noticeable” decrease in its activity against the variant, the team found.

Regeneron has been tracking the emergence of variants, as well as how its antibodies perform against them, since very early in the pandemic, a company spokeswoman said in a statement Tuesday. The company chose the dual-drug approach with potential viral mutations in mind because the two antibodies bind to different locations on the virus, she explained. 

The company is going one step beyond FDA’s request by “working on a publicly available dashboard that shares how we are seeing variants emerge and travel across the world into specific geographies,” she added. 

While she declined to comment on specific FDA submissions or requests, she said both Regeneron’s internal research and outside studies have confirmed that its cocktail remains potent against the variants first identified in the U.K., South Africa, Brazil and California.

“Lilly continually monitors the COVID-19 environment, assessing the neutralization of our antibody therapies against a wide array of emerging mutations and variants,” the Indianapolis pharma said in a statement. Antibody drugs “will need to be developed to address the evolution of the virus, including emerging variants that can differ by country or even by state,” it added.

Simultaneously for the letter revisions, the FDA also relaxed a previous stipulation around instructional or educational materials for the drugs. With the updates, the agency no longer requires prior review and approval of such documents before they’re distributed to the public.

https://www.fiercepharma.com/pharma/fda-revises-covid-19-euas-requiring-regeneron-lilly-to-monitor-efficacy-against-coronavirus

Pfizer expects higher COVID-19 vaccine prices and yearly boosters: CFO

 Pfizer made headlines last month when its chief financial officer said the company would look to raise COVID-19 vaccine prices after the pandemic wanes. The company is doubling down on that stance, and it now believes annual vaccinations are "increasingly likely."

Add those two things together, and you get a hefty long-term revenue stream.

During a recent virtual investor conference (PDF) hosted by Barclays, Pfizer Chief Financial Officer Frank D’Amelio said the company sees “significant opportunity” for its COVID-19 vaccine once the market shifts from a “pandemic situation to an endemic situation.”

Right now, the market is “clearly not being driven by what I'll call normal market conditions,” D'Amelio explained to Barclays analyst Carter Gould during the virtual event. Instead, it’s “been driven by kind of the pandemic state that we've been in and the needs of governments to really secure doses from the various vaccine suppliers.”

Eventually, Pfizer expects “normal market forces … will start to kick in,” D’Amelio said.

At that point “factors like efficacy, booster ability, clinical utility will basically become very important, and we view that as, quite frankly, a significant opportunity for our vaccine from a demand perspective, from a pricing perspective, given the clinical profile of our vaccine,” D’Amelio told the analyst.  

Plus, Pfizer believes there will be demand for shots even after the current crisis. Citing variant concerns, Pfizer believes it’s "increasingly likely that an annual revaccination is going to take place” and that those revaccinations will be needed “for the foreseeable future,” the CFO said.

Pfizer has said it expects $15 billion in revenue from the mRNA vaccine this year, and that number could grow as the company negotiates new supply deals. At the Barclays event, D’Amelio said his company expects “return after taxes” of around 25% on the $15 billion figure, or around $3.75 billion. The CFO previously said he expects margins for the vaccine to grow over time.  

On the manufacturing front, Pfizer and BioNTech have made several upgrades to their supply chains and now plan to produce 2 billion doses this year. The company is “working to improve upon that number as well,” D’Amelio said.

In the wake of AstraZeneca’s recent supply shortfalls in Europe, Pfizer and BioNTech expect to deliver 200 million doses there in the second quarter. Pfizer also expects to ship 300 million doses to the U.S. during the first half of the year.

Aside from its COVID-19 vaccine work, Pfizer sees an opportunity to improve on current flu vaccines with mRNA technology as well as to grow the market with a higher efficacy product, D’Amelio said at the event.

https://www.fiercepharma.com/pharma/pfizer-sees-need-for-annual-revaccinations-and-rationale-for-higher-prices-after-pandemic