Baxter hits the big time

 Rumours of back-and-forth between Baxter and Hillrom have surfaced periodically over the past month or so, and today Hillrom finally acquiesced to a $156-per-share cash offer. The deal, 2021’s largest medtech merger so far, values Hillrom at $10.5bn, giving it a total enterprise value of $12.4bn including debt. According to Evaluate Medtech, the combination of the two businesses will push Baxter into the top ten biggest medtechs by forecast 2026 sales. The transaction will also diversify the group’s offering. Baxter is currently mainly focused on dialysis technology, whereas Hillrom itself diversified from its hospital equipment origins into point-of-care diagnostics and patient monitoring with its $2bn purchase of Welch Allyn six years ago. (Of its more recent deal for Bardy Diagnostics, the less said the better). Of particular interest, though, is Hillrom’s presence in digital health. Speaking on a conference call, Baxter’s chief executive officer, José Almeida, said that with the usage of digital health technologies having been accelerated by Covid-19, these approaches had become “a really big focus” for the group. Shareholders are on board with the move, judging by the 4% rise in Baxter’s stock so far today. 

Top 10 medtechs by forecast 2026 sales
	WW sales ($bn)			Market share
Company	2020	2026e	CAGR	2020	2026e
Medtronic	30.1	41.9	+6%	6.6%	6.0%
Abbott Laboratories	22.5	34.3	+7%	4.9%	4.9%
Johnson & Johnson	23.0	32.9	+6%	5.0%	4.7%
Siemens Healthineers	16.5	28.1	+9%	3.6%	4.0%
Stryker	14.3	23.8	+9%	3.1%	3.4%
Becton Dickinson	16.0	22.1	+6%	3.5%	3.2%
Philips	16.1	21.2	+5%	3.5%	3.0%
Roche	14.7	18.4	+4%	3.2%	2.7%
Boston Scientific	9.7	16.5	+9%	2.1%	2.4%
Baxter + Hillrom	11.0	14.3	+4%	2.5%	2.1%
Source: Evaluate Medtech. https://www.evaluate.com/vantage/articles/news/snippets/baxter-hits-big-time

JAKs capped in arthritis – but the FDA might not be finished

 The FDA’s long-running review of the safety of Jak inhibitors was expected to result in some sort of curtailment of use, but the strength of yesterday’s action came as a surprise. The regulator effectively concluded that an increased risk of serious cardiac events is a class effect, and limited the use of these drugs in rheumatoid arthritis to patients who have already failed on a TNF blocker.

This likely reflects how these agents are typically sequenced already, but the clear safety warning from the regulator rules out Jaks moving into earlier treatment lines in the future. It will also shore up the anti-TNFs’ dominant position in RA; these agents are already projected to remain the biggest-selling RA mechanism until at least 2026, according to Evaluate Pharma. It was concerns about the FDA’s next steps that wiped $15bn off Abbvie’s market cap yesterday, however, while the market also sought out potential beneficiaries.

Abbvie has the most to lose from the FDA's hardening stance here. Rinvoq is the company’s biggest sales growth driver, according to the sellside, with the Jak1 inhibitor forecast to balloon into a $9bn-a-year product by 2026. RA was expected to account for around half of those sales, and although the FDA’s action only applies to the US this country was expected to be by far the most lucrative region, accounting for two thirds of total sales.

The fear is that the FDA will not stop at RA, in terms of imposing strict conditions of use or approving suboptimal dosages. Jaks are lining up to win approvals in other inflammatory conditions like psoriatic arthritis and atopic dermatitis, and other diseases that are considered less life-limiting, like alopecia. The risk that these applications will be turned down also cannot be ruled out.

Pfizer is another potential big loser here: the company has focused development of its new Jak inhibitor abrocitinib on atopic dermatitis, with an FDA decision delayed since April. The graph below shows that the sellside has pencilled in sales of almost $15bn across the Jak class by 2026, according to Evaluate Pharma, numbers that now look less likely to become reality.

It seems that the FDA has shrugged off the differences between these Jak inhibitors that developers have tried to play up over the years. Abbvie, for example, has long argued that Rinvoq’s selectivity for Jak1 makes it safer than molecules that also hit Jak2 and 3 kinases.

Developers of Tyk2 inhibitors will be shifting nervously – as Leerink analysts point out, Tyk2 is called “the fourth Jak” by sceptics and is different only in its name, rather than kinase functionality. Bristol Myers Squibb and Pfizer are the big Tyk2 players.

Thus the quandary for Abbvie is whether it should attempt to disprove any class effect by conducting a large cardiovascular outcomes study with Rinvoq. This seems unlikely to be worth the risk, given the chance of the move backfiring. The company might consider refocusing on its second major growth driver, Skyrizi, to be a better bet.

Skyrizi is an anti-IL-23 antibody, a class that has proven very effective in psoriasis with big potential also seen in inflammatory bowel conditions. Indeed, Leerink named this mechanism as one of the beneficiaries from the Jak safety fallout. Other IL-23 players include Johnson & Johnson with Tremfya and Lilly with mirikizumab.

Assuming that the FDA also pushes back on Jak use in atopic dermatitis, the competitive threat to Sanofi and Regeneron’s Dupixent will also dim. Meanwhile, the makers of anti-TNF agents can continue to count the money; the dominant product here is of course Abbvie’s Humira. These drugs have already held off biosimilars for an improbable amount of time, with Humira copycats not due in the US until 2023 and biosimilars of Amgen’s Enbrel possibly unable to enter until the end of the decade. 

Developers working on novel mechanisms might also benefit from the blunting of strong competitors, and several smaller groups saw share price jumps yesterday. These included Aclaris, which has had early success with its MK2 inhibitor in RA, and Arena, which is hoping that its S1P modulator etrasimod will yield positive results in various inflammatory bowel diseases over the coming months.

Biopharma watchers will also be pondering the broader repercussions of the FDA's move here. Leerink analysts described the action as "extraordinary", saying the agency's stance was hard to justify considering the data available and the not inconsiderable risks carried by anti-TNFs. They pondered whether "this amounts to continuing politicisation of the FDA’s decision making". 

Political or not, the situation does provide another example of a widening gulf between European and US regulators when it comes to risks versus benefits. This was also seen recently with roxadustat, the Fibrogen drug that was approved by the EMA but remains stalled at the FDA, also on cardiac safety concerns. The EMA, meanwhile, has shown no indication of restricting Jak usage.

The full picture of how the FDA will handle the upcoming Jak approval decisions has yet to emerge, but it seems that the regulator has once again adopted a very cautious stance. While there might well be some immediate beneficiaries from any Jak cap, those developing novel mechanisms in big disease settings should be asking whether the safety bars are rising in the US. 

https://www.evaluate.com/vantage/articles/news/policy-and-regulation/jaks-capped-arthritis-fda-might-not-be-finished

AMA urges 'immediate end' to use of ivermectin for COVID-19

 The American Medical Association (AMA) is calling for the "immediate end" to the use of ivermectin to treat COVID-19, and for doctors to stop prescribing it for that purpose, amid a spike in the use of the drug. 

Ivermectin, often used as a deworming agent in animals and sometimes for humans, is not approved to treat COVID-19 and has not been shown to work for that purpose. Poison control centers have recorded a five-fold increase in calls related to ivermectin, according to the Centers for Disease Control and Prevention.  

The AMA, the country's largest doctors group, is now joining in warning against use of the drug, joining the Food and Drug Administration and the CDC.

"We are alarmed by reports that outpatient prescribing for and dispensing of ivermectin have increased 24-fold since before the pandemic and increased exponentially over the past few months," the AMA said in a statement, joined by the American Pharmacists Association and American Society of Health-System Pharmacists. "As such, we are calling for an immediate end to the prescribing, dispensing, and use of ivermectin for the prevention and treatment of COVID-19 outside of a clinical trial." 

The groups also call on doctors and pharmacists to warn patients about using the drug to treat COVID-19.  

"Use of ivermectin for the prevention and treatment of COVID-19 has been demonstrated to be harmful to patients," the groups said. "Calls to poison control centers due to ivermectin ingestion have increased five-fold from their pre-pandemic baseline." 

Experts say that instead of risking the use of unproven drugs, people should get vaccinated.

https://thehill.com/policy/healthcare/570519-american-medical-association-calls-for-immediate-end-to-use-of-ivermectin

Europe's CDC Breaks With Biden Admin, Says No Urgent Need For COVID Boosters

 The Biden admin's rushed decision to enforce covid booster shots on the population, is getting pushback not only from the FDA, where two top vaccine regulators resigned from the Food and Drug Administration on Tuesday, revealing anger, frustration, and turmoil at the federal agency as it balks at the White House's steamrolling of accepted rules and regulations, but also from Europe.

Overnight, Europe's CDC - the Centre for Disease Prevention and Control (ECDC) - said there was no urgent need for booster doses of COVID-19 vaccines for the fully vaccinated, citing data on the effectiveness of shots.

The comments follow a similar statement from the European Medicines Agency last month that more data was needed on the duration of protection after full inoculation to recommend using booster shots.

The evidence on real-world effectiveness shows that all vaccines authorized in the region are highly protective against COVID-19-related hospitalisation, severe disease and death, the ECDC said. But the agency said extra doses can be considered for people who experience a limited response to the standard regimen, adding that these shots should be treated differently from booster doses.

Germany and France have announced they would begin giving boosters to vulnerable people and the immunocompromised from this month to protect citizens from the more infectious Delta variant.

The U.S. government has also started administering a third dose of Pfizer Inc-BioNTech and Moderna Inc’s vaccines to those with compromised immunity. And while we doubt that the US will actually bother with such trivia as data and facts, one look at the soaring number of cases in Israel, which not only has the highest vaccination rate but has also mandated booster shots, indicates that something is very wrong with current "scientific" approach to fighting covid.

Yet as long as it leads to billions in revenues for Pfizer and Moderna - and the pharma sector's lobby dollars keep flowing in the general direction of Congress - we doubt any officials will care too much, which is why the propaganda is out in full force, with Reuters overnight publishing a "survey" which "found" that 76% of surveyed Americans want a booster (while only 6% do not and 18% were not sure). One wonders if this is the same polling team that showed 90% odds of Hillary winning...

https://www.zerohedge.com/markets/europes-cdc-breaks-biden-admin-says-no-urgent-need-covid-boosters

COVID test maker Cue Health takes aim at public debut with $100M IPO

 After racking up hundreds of millions in venture capital throughout the pandemic to support its COVID-19 test-making business, Cue Health will look to make its break into the public market with an IPO that could bring in up to $100 million more.

The diagnostic test maker—and member of the Fierce 15 class of 2020—registered with the Securities and Exchange Commission Wednesday its intent to go public. Though its preliminary S-1 filing didn’t outline the number of stock shares that’ll be offered, nor the price of each share or the date of the debut, it did propose a maximum total offering price of $100 million.

Once Cue does go public—whenever that is, and at whatever stock price—it’ll be traded on the Nasdaq under the ticker symbol “HLTH.”

The IPO will support Cue’s previously expressed plans to expand its success in developing testing tools for COVID-19 into other diseases and conditions.

In March of this year, after raising $100 million in venture capital and another $481 million in U.S. government funding to support manufacturing of its test kits, Cue became the first diagnostics maker to receive an FDA emergency use authorization for a molecular COVID test designed for at-home, over-the-counter use.

By May, however, the San Diego-based company had already shifted its focus to translating its hand-held, cartridge-based diagnostic technology to other areas of medicine. That month, Cue raked in a whopping $235 million from backers including Johnson & Johnson Innovation, Perceptive Advisors, Koch Strategic Platforms and more.

That funding, Cue said at the time, will support its plan to build out its testing platform to offer a broad slate of tests for both infectious diseases and respiratory, cardiovascular and sexual health. All of those tests would be run through the same diagnostic system and will offer test takers direct access to physicians through an accompanying telehealth platform.

In its prospectus, Cue expounded upon those plans, indicating that making the switch from a private to a public company would give it a major boost in its pursuit of a new era that it has branded “Healthcare 2.0.”

"Through our connected diagnostic solution, we seek to enable the shift of care to virtual settings, while also connecting the physical care paradigm to the new digital ecosystem,” it wrote.

To that end, according to the filing, while still pursuing full 510(k) clearance for its COVID-19 test, Cue is also actively building out its slate of other diagnostics. So far, five are already in “late-stage" development for influenza A/B, respiratory syncytial virus, fertility, pregnancy and inflammation.

The company said it plans to submit those tests for FDA authorization or clearance sometime in the second half of next year.

https://www.fiercebiotech.com/medtech/covid-test-maker-cue-health-takes-aim-at-public-debut-ipo-up-to-100m

Oramed in $100M controlled equity offering agreement with Cantor

 On September 1, 2021, Oramed Pharmaceuticals Inc. (the "Company") entered into a controlled equity offering agreement (the "Cantor Equity Distribution Agreement") with Cantor Fitzgerald & Co., as agent ("Cantor Fitzgerald"), pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $100,000,000 from time to time through Cantor Fitzgerald.

Any sales of shares of common stock pursuant to the Cantor Equity Distribution Agreement will be made pursuant to an effective shelf registration statement on Form S-3, the prospectus contained therein and a prospectus supplement related thereto filed with the U.S. Securities and Exchange Commission. Cantor Fitzgerald may sell the Company's common stock (A) in privately negotiated transactions with the Company's consent; (B) as block transactions; or (C) by any other method permitted by law deemed to be an "at the market offering" as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, including sales made directly on The Nasdaq Capital Market or sales made into any other existing trading market for the Company's common stock. Subject to the terms and conditions of the Cantor Equity Distribution Agreement, Cantor Fitzgerald will use its commercially reasonable efforts to sell the shares of the Company's common stock from time to time, based upon the Company's instructions (including any price, time or size limits or other parameters or conditions that the Company may impose). The Company will pay to Cantor Fitzgerald a cash commission of 3.0% of the gross proceeds from the sale of any shares of common stock by Cantor Fitzgerald under the Cantor Equity Distribution Agreement. The Company will also reimburse Cantor Fitzgerald for certain specified expenses in connection with entering into the Cantor Equity Distribution Agreement. The Company and Cantor Fitzgerald have also provided each other with customary indemnification rights.

The Company is not obligated to make any sales of common stock under the Cantor Equity Distribution Agreement and no assurance can be given that the Company will sell any shares under the Cantor Equity Distribution Agreement, or, if it does, as to the price or amount of shares that the Company will sell, or the dates on which any such sales will take place. The Cantor Equity Distribution Agreement may be terminated by either party at any time upon five days' notice to the other party, or by Cantor Fitzgerald at any time in certain circumstances.

https://www.marketscreener.com/quote/stock/ORAMED-PHARMACEUTICALS-IN-12562638/news/ORAMED-PHARMACEUTICALS-INC-Entry-into-a-Material-Definitive-Agreement-Termination-of-a-Material-36299765/

Phreesia target upped to $81 from $70 by Needham

 Maintains Buy rating.

https://finviz.com/quote.ashx?t=PHR