The strange battle for Exelixis

Though biopharma shareholders often put up with failure, inefficiency and lavish C-suite remuneration, investor activism has recently been ticking up. The latest company to come under pressure is Exelixis, which yesterday received a series of demands from the hedge fund Farallon Capital.

This follows calls for change from activist funds at companies as varied as GSK, Illumina, Mereo and Jounce. The pattern is predictable: an entity builds up a significant minority stake, and then issues demands that usually include its target being sold or broken up. This is what makes yesterday’s development unusual, as Farallon has not called for an Exelixis sale or any divestments.

Rather, the demands are somewhat nebulous. Farallon, a 7.2% holder, calls on Exelixis to spend less on R&D than the $1bn in its 2023 budget, demanding more focus and the communication of a “coherent R&D strategy”. The reduction in R&D spend will clearly result in “excess capital” that Farallon wants returned to investors.

For its part Exelixis says it has a robust plan to maximise its Cabometyx franchise while developing the key pipeline assets zanzalintinib, a next-generation Cabometyx, and XB002, an ADC against tissue factor. Exelixis says it has met Farallon over 50 times since the fund first invested five years ago.

It claims to be willing to consider Farallon’s three proposed board nominees, but the sticking point concerns the sharing of confidential information. Exelixis says it is open to doing this under a standard non-disclosure agreement, but claims Farallon “demanded highly unusual ... unprecedented access” to Exelixis data, to which it cannot agree.

One-trick pony

Unsurprisingly, a key focus for Farallon is Cabometyx, Exelixis’s internally discovered blockbuster. Exelixis’s great success was to establish its own commercial infrastructure to turn Cabometyx into a formidable franchise, chiefly in kidney cancer.

Beyond Cabometyx, however, Exelixis has had little reason for cheer. Not only have no other significant projects reached the market, efforts to turn Cabometyx into a pipeline within a drug have seen a string of clinical disappointments, the most recent of which was last month's failure of the Contact-03 trial.

Now Farallon says Exelixis’s $6.4bn market cap, including $2.1bn of cash, fails to reflect the value of a brand the fund claims alone to be worth $33 per share, or over $10bn of NPV. Evaluate Pharma sellside consensus backs this up, calculating a Cabometyx NPV of $13.4bn.

But there is a large elephant in the room: Cabometyx patents might start to expire in 2026, and just last month Exelixis sued Cipla over that company’s filing of a generic version. However, Cipla has not challenged the 2026-expiring patent, and a separate action against MSN Laboratories yielded a win for Exelixis that could keep generics out until 2030.

Still, the generic threat goes to the heart of the problem for Farallon. A typical proxy battle would urge for a key product to be divested to release hidden value, or for the company to be sold. But Cabometyx is a dying brand, notwithstanding its success, and it is probably too late now for either option.

In the past

It is all very well for Farallon to rail against Exelixis’s R&D failures, but these cannot be undone. On the one hand the fund accuses Exelixis of spraying the R&D budget too liberally, and on the other it blames failures on hasty progression from phase 1 straight to phase 3. It says the R&D strategy “must change” but is vague as to how.

Interestingly, according to Evaluate Pharma key sellsiders do not even consider zanzalintinib and XB002 to be worthy of revenue forecasts. Perhaps one immediate task should be for Exelixis to generate sufficiently persuasive data for more analysts to include these increasingly important R&D assets in their financial models.

Big pharma needs to restock R&D pipelines, and Cabometyx must at one point have put Exelixis on the M&A track. But for whatever reason management did not sell Exelixis, and it is too late to bemoan what was not done. Farallon needs to come up with more concrete suggestions.

What the sellside thinks of Exelixis ($bn)
Asset	Status	Sales		NPV to Exelixis
		2022	2028e
Cabometyx	Launched in 2016*	1.4	2.2	13.4
Zanzalintinib (XL092)	Ph3	0	0	0
XB002	Ph1	0	0	0
XL102	Ph1	0	0	0
NB: *cabozantinib, the active ingredient, was launched in 2012 for a niche indication under the trade name Cometriq. Source: Evaluate Pharma sellside consensus. https://www.evaluate.com/vantage/articles/news/deals/strange-battle-exelixis

 

Mexican officials to hold talks in U.S. on fentanyl smuggling -president

 Members of Mexico's security cabinet will be in the United States this week to meet with U.S. officials about the trafficking of synthetic opioid fentanyl, Mexican President Andres Manuel Lopez Obrador said Monday.

The meeting's agenda will include other topics, including arms trafficking, the president said, without providing details on which U.S. officials would participate.

Some U.S. lawmakers have been calling on the Biden administration to take a harder line and ratchet up pressure on Mexico to crack down on the fentanyl trafficking. A handful of Republican legislators have even called for the U.S. military to bomb Mexican cartels and their labs inside Mexico.

Overdoses involving synthetic opioids, including fentanyl, killed more than 70,000 people in the U.S. in 2021, according to data from the U.S. Centers for Disease Control and Prevention (CDC).

U.S. officials say almost all fentanyl on U.S. streets is mass produced by powerful crime groups on Mexican soil, a claim Lopez Obrador denies.

China last week responded to a late-March letter from Lopez Obrador asking for help on shipments of fentanyl, saying there is no illegal trafficking of the opioid between China and Mexico.

The letter and China's response did not mention supplies of the precursor chemicals used to make fentanyl.

Lopez Obrador on Monday repeated that no fentanyl is synthesized inside Mexico, a claim the U.S. Drug Enforcement Administration (DEA) disputes.

"In Mexico fentanyl is not produced, the raw material for fentanyl is not produced. If China's government says they do not produce it either, then it is interesting. Who is producing it?," Lopez Obrador said during a regular news conference Monday.

https://www.marketscreener.com/news/latest/Mexican-officials-to-hold-talks-in-U-S-on-fentanyl-smuggling-president--43460333/

Baltimore Mayor Calls For Citywide Curfew After All Hell Breaks Out

 All hell broke out on Sunday night in Baltimore City's Inner Harbor district when gunshots were heard, causing hundreds of spring break youngsters to scatter through the streets. The mayhem, captured on video, resembled an apocalyptic scene. As a result, Mayor Brandon Scott has proposed a citywide curfew for minors during the upcoming summer months.

Baltimore City Police Commissioner Michael Harrison said more than 200 "young people" went running after gunfire rang out just 50 feet from police officers, according to Fox Baltimore. A 14yo and a 16yo suffered gunshot wounds.

Here's the video of the chaos:

"Either they [the kids] don't care about consequences or don't believe the consequences, and they have no respect for human life or the sanctity of life or authority to pull off that brazen cowardly act right there in the presence of police officers," said Harrison.

Mayor Scott said youth curfews would be implemented for the summer period. 

"I want everyone to hear me and hear me very clearly. We are going back to the old days. We will be enforcing the use of youth curfew in Baltimore as we move into the later Spring and Summer months," the mayor said. 

None of this should come as a surprise... 

Over fifty years of Democratic leadership has steered this struggling city into a hellhole of murders, broken families, collapsing education system, and an ever-worsening opioid crisis.

... and, of course, the Biden administration remains silent on Baltimore's rapid demise. 

https://www.zerohedge.com/political/baltimore-mayor-calls-citywide-curfew-after-all-hell-breaks-out

Emergency Med Leaders Call for Stop to New or Expanded Programs

 Despite widespread concern from national emergency medicine (EM) groups about a large shortfall during Match Day 2023, EM programs filled most of their available residency slots when final results were released.

Still, the initial deficit led some EM leaders to call for a swift halt to expanding or opening new EM residency programs and to further scrutinize the influence of private equity money on the specialty.

Before Match Day, the American College of Emergency Physicians (ACEP) and other EM organizations issued a joint statement about the high rate of unfilled emergency medicine (EM) positions expected this year. As they feared, 554 of 3010 positions offered by 287 institutions remained unfilled, an increase of 335 over last year.

The initial Match rate was about 82%. But by the end of the Supplemental Offer and Acceptance Program (SOAP) process, which finds alternative programs for unfilled positions or unmatched applicants during Match Week, only 44 of the unmatched EM positions, or about 8%, were left unfilled, said Donna Lamb, DHSc, MBA, BSN, president and CEO of the National Residency Match Program.

Those few remaining positions should be filled by July 1, the start date for programs, Bryan Carmody, MD, MPH, a pediatric nephrologist known for his medical school commentaries, told Medscape Medical News. There were at least 8000 unmatched applicants before the SOAP, so there shouldn't be a shortage of doctors interested in filling the remaining positions, he said.

Concerns about the initial match results remain, largely because of the increase in EM residency programs. For comparison, in 2018, the EM match rate was 99.4%; 220 EM residency positions offered 2278 slots.

Residence slots have increased by 20% in the past 5 years, Lamb told Medscape. "Is that too fast? I can't answer that."

"There's too many [residency programs], hands down," said Leah B. Colucci, MD, president of the American Academy of Emergency Medicine–Resident and Student Association.

ACEP President Christopher S. Kang, MD, disagreed. He doesn't believe there are too many programs. He blamed a "distribution problem" ― too many are concentrated in certain areas, leaving other regions underserved.

Declining Interest

Kang said residency slots increased in the past few years as medical organizations projected physician shortages across all specialties in the wake of the pandemic.

At the same time, EM was becoming more popular, he said. "You've seen now a mismatch." He noted that as programs have rapidly expanded to meet an initial demand, interest has declined, especially in less desirable geographic areas.

Lamb said that 36% fewer US medical school seniors included EM on their rank order list this year, compared with the specialty's peak in 2021, and 35% fewer of those seniors rated EM as number 1 on their rank order list.

"The specialty needs to focus in on and think about what's creating this barrier for applicants, in particular, US MD seniors, from going into the specialty, and how do we address it while ensuring that we are safeguarding the health of our population," she said.

Among the factors ACEP's Kang believes are causing a declining interest in the specialty:

• Burnout from serving on the front lines of the pandemic

• A 2021 ACEP report that predicted an oversupply of some 8000 physicians by 2030

• Concerns about verbal and physical assaults of healthcare workers

• Coping with the mental health crisis and the opioid epidemic

Medical students shy away from the specialty for fear of burnout, a stressful work environment, and the potential of an oversaturated job market, said Jessica Adkins Murphy, MD, president of the Emergency Medicine Residents Association.

"A lot of our medical student members actually said, 'I believe in myself and my ability to get a job, but I don't want to go through residency just to be miserable,' " said Murphy, a third-year resident at the University of Kentucky in Lexington.

Impact of Private Equity

Murphy and Colucci said they believe concern over profit-seeking in the ED influences medical students as they evaluate potential specialties.

Medicare reimburses hospitals for residents' salaries, although there's pressure to reduce salaries as a result of an increase in competition and private equity–backed hospitals. "Medical students are seeing that," said Colucci, a second-year resident.

EM doctors don't choose the specialty to make money, she said. She explained that many of the patients EM physicians see are uninsured, very sick, or lack primary care. "Those are the people we want to serve," Colucci said.

"Physicians go through years of medical school, years of residency, sometimes a fellowship, and then they come out and they don't have autonomy in their practice" because of corporate management oversight, she said. "And that's really disheartening."

Murphy said she's concerned that "there might some profit incentive to open new programs or to rapidly expand existing ones."

For example, HCA Healthcare sponsors 18 accredited EM residency programs ― 11 of which began in the past 5 years. All of HCA's EM residency positions were filled on Match Day, according to spokesman Harlow Sumerford. He also pointed to the 68 new EM residency programs that have been added over the past 5 years outside of HCA, according to the Acccreditation Council for Graduate Medical Education.

An ACEP spokesperson said the organization has been working with hospitals, healthcare systems, and residency program directors to determine how to grow programs in a responsible way.

Finding Solutions

The surplus of residency programs will not be solved by closing programs, Murphy said.

She and Colucci agree that leaders in graduate education should examine the quality of education that residents receive — especially in private equity-backed programs.

Demanding higher standards — such as requiring a certain number of intubations per month — could potentially remove programs that do not meet certain benchmarks and reduce residency slots, they said.

"If we were to increase residency training standards, it would inadvertently have the effect of closing down programs with less training opportunities, less learning opportunities, and training without specifically violating antitrust regulations," Murphy said.

Such changes can't come soon enough, said Colucci, who predicted worse outcomes for EM residents in Match 2024. "I wouldn't be surprised if we aren't losing applicants right now for this upcoming match," she said.

https://www.medscape.com/viewarticle/990566

New Colorectal Cancer Data Reveal Troubling Trends

 Colorectal cancer (CRC) remains the second most common cause of cancer-related death in the United States. Although the past several decades have seen significantly greater emphasis on screening and disease prevention for CRC, it has also become increasingly apparent that the age profile and associated risks for this cancer are rapidly changing.

Evidence of this can be found in recently released CRC statistics from the American Cancer Society, which are updated every 3 years using population-based cancer registries.

The incidence in CRC has shown a progressive decline over the past four decades. However, whereas in the 2000s there was an average decline of approximately 3%-4% annually, it slowed to 1% per year between 2011 and 2019. This effect is in part due to the trends among younger individuals (< 55 years), in whom the incidence of CRC has increased by 9% over the past 25 years.

The incidence of regional-stage disease also increased by 2%-3% per year for those younger than 65 years, with an additional increase in the incidence of more advanced/distant disease by 0.5%-3% per year. The latter finding represents a reversal of earlier trends observed for staged disease in the decade from 1995 to 2005.

These recent statistics reveal other notable changes that occurred in parallel with the increased incidence of younger-onset CRC. There was a significant shift to left-sided tumors, with a 4% increase in rectal cancers in the decades spanning 1995 to 2019.

Although the overall mortality declined 2% from 2011 to 2020, the reverse was seen in patients younger than 50 years, in whom there was an increase by 0.5%-3% annually.

Available incidence and mortality data for the current year are understandably lacking, as there is a 2- to 4-year lag for data collection and assimilation, and there have also been methodologic changes for tracking and projections. Nonetheless, 2023 projections estimate that there will be 153,020 new cases in the United States, with 19,550 (13%) to occur in those younger than 50 years and 33% in those 50-64 years. Overall, 43% of cases are projected to occur in those 45-49 years old, which is noteworthy given that these ages are now included in the most current CRC screening recommendations.

Further underscoring the risks posed by earlier-onset trends is the projection of 52,550 CRC-related deaths in 2023, with 7% estimated to occur in those younger than 50 years.

What's Behind the Trend Toward Younger Onset?

The specific factors contributing to increasing rates of CRC in younger individuals are not well known, but there are several plausible explanations. Notable possible contributing factors reported in the literature include obesity, smoking, alcohol, diet, and microbial changes, among other demographic variables. Exposure to high-fructose corn syrup, sugar-sweetened beverages, and processed meats has also recently received attention as contributing dietary risk factors.

The shifting trends toward the onset of CRC among younger patients are now clearly established, with approximately 20% of new cases occurring in those in their early 50s or younger and a higher rate of left-sided tumor development. Unfortunately, these shifts are also associated with a more advanced stage of disease.

There are unique clinical challenges when it comes to identifying younger-onset CRC. A low level of suspicion among primary care providers that their younger patients may have CRC can result in delays in their receiving clinically appropriate diagnostic testing (particularly for overt or occult bleeding/iron deficiency). Younger patients may also be less likely to know about or adhere to new recommendations that they undergo screening.

The landscape for age-related CRC is changing. Although there are many obstacles for implementing new practices, these recent findings from the American Cancer Society also highlight a clear path for improvement.

David A. Johnson, MD, a regular contributor to Medscape, is professor of medicine and chief of gastroenterology at Eastern Virginia Medical School in Norfolk, Virginia, and a past president of the American College of Gastroenterology. His primary focus is the clinical practice of gastroenterology. He has published extensively in the internal medicine/gastroenterology literature, with principal research interests in esophageal and colon disease, and more recently in sleep and microbiome effects on gastrointestinal health and disease.

https://www.medscape.com/viewarticle/990521

New Guidelines for Cannabis in Chronic Pain Management Released

 New clinical practice guidelines for cannabis in chronic pain management have been released.

Dr Alan Bell

Developed by a group of Canadian researchers, clinicians, and patients the guidelines note that cannabinoid-based medicines (CBM) may help clinicians offer an effective, less addictive, alternative to opioids in patients with chronic noncancer pain and comorbid conditions.

"We don't recommend using CBM first line for anything pretty much because there are other alternatives that may be more effective and also offer fewer side effects," lead guideline author Alan Bell, MD, assistant professor of family and community medicine at the University of Toronto, Toronto, Ontario, Canada, told Medscape Medical News.

"But I would strongly argue that I would use cannabis-based medicine over opioids every time. Why would you use a high potency-high toxicity agent when there's a low potency-low toxicity alternative?" he said.

The guidelines were published online March 27 in the journal Cannabis and Cannabinoid Research.

Examining the Evidence

A consistent criticism of CBM has been the lack of quality research supporting its therapeutic utility. To develop the current recommendations, the task force reviewed 47 pain management studies enrolling more than 11,000 patients. Almost half of the studies (n = 22) were randomized controlled trials (RCTs) and 12 of the 19 included systematic reviews focused solely on RCTs.

Overall, 38 of the 47 included studies demonstrated that CBM provided at least moderate benefits for chronic pain, resulting in a "strong" recommendation — mostly as an adjunct or replacement treatment in individuals living with chronic pain.

Overall, the guidelines place a high value on improving chronic pain, functionality, and addressing co-occurring conditions such as insomnia, anxiety and depression, mobility, and inflammation. They also provide practical dosing and formulation tips to support the use of CBM in the clinical setting.

When it comes to chronic pain, CBM is not a panacea. However, prior research suggests cannabinoids and opioids share several pharmacologic properties, including independent but possibly related mechanisms for antinociception, making them an intriguing combination.

In the current guidelines, all of the four studies specifically addressing combined opioids and vaporized cannabis flower demonstrated further pain reduction, reinforcing the conclusion that the benefits of CBM for improving pain control in patients taking opioids outweigh the risk of nonserious adverse events (AEs), such as dry mouth, dizziness, increased appetite, sedation, and concentration difficulties.

The recommendations also highlighted evidence demonstrating that a majority of participants were able to reduce use of routine pain medications with concomitant CBM/opioid administration, while simultaneously offering secondary benefits such as improved sleep, anxiety, and mood, as well as prevention of opioid tolerance and dose escalation.

Importantly, the guidelines offer an evidence-based algorithm with a clear framework for tapering patients off opioids, especially those who are on > 50 mg MED, which places them with a twofold greater risk for fatal overdose.

An Effective Alternative

Commenting on the new guidelines for Medscape Medical News, Mark Wallace, MD, who has extensive experience researching and treating pain patients with medical cannabis, said the genesis of his interest in medical cannabis mirrors the guidelines' focus.

"What got me interested in medical cannabis was trying to get patients off of opioids," said Wallace, professor of anesthesiology and chief of the division of pain medicine in the department of anesthesiology at the University of California, San Diego. Wallace, who was not involved in the guidelines' development study, said that he's "titrated hundreds of patients off of opioids using cannabis."

Wallace said he found the guidelines' dosing recommendations helpful.

"If you stay within the 1- to 5-mg dosing range, the risks are so incredibly low, you're not going to harm the patient."

Dr Christopher Gilligan

While there are patients who abuse cannabis and CBMs, Wallace noted that he has seen only one patient in the past 20 years who was overusing the medical cannabis. He added that his patient population does not use medical cannabis to get high and, in fact, wants to avoid doses that produce that effect at all costs.

Also commenting on the guidelines, Christopher Gilligan, MD, MBA, associate chief medical officer and a pain medicine physician at Brigham & Women's Hospital in Boston, Massachusetts, who was not involved in the guidelines' development, points to the risks.

"When we have an opportunity to use cannabinoids in place of opioids for our patients, I think that that's a positive thing…and a wise choice in terms of risk benefit," Gilligan said.

On the other hand, he cautioned that "freely prescribing" cannabinoids for chronic pain in patients who aren't on opioids is not good practice.

"We have to take seriously the potential adverse effects of [cannabis], including marijuana use disorder, interference with learning, memory impairment, and psychotic breakthroughs," said Gilligan.  

Given the current climate, it would appear that CBM is a long way from being endorsed by the US Food and Drug Administration, but for clinicians interested in trying CBM for chronic pain patients, the guidelines may offer a roadmap for initiation and an alternative to prescribing opioids.

Bell, Gilligan, and Wallace report no relevant financial relationships.

Cannabis Cannabinoid Res. Published online March 27, 2023. Full Text.

https://www.medscape.com/viewarticle/990506

Prenatal Supplements Fail to Meet Nutrient Needs

 Although drugstore shelves might suggest otherwise, affordable dietary supplements that provide critical nutrients in appropriate doses for pregnant women are virtually nonexistent, researchers have found.

In a new study published this month in the American Journal of Clinical Nutrition, investigators observed what many physicians have long suspected: most prenatal vitamins and other supplements do not adequately make up the difference of what food-based intake of nutrients leave lacking. Despite patients believing they are getting everything they need with their product purchase, they fall short of guideline-recommended requirements.

"There is no magic pill," said Katherine A. Sauder, PhD, an associate professor of pediatrics at the University of Colorado Anschutz Medical Campus in Aurora and lead author of the study. "There is no easy answer here."

The researchers analyzed 24-hour dietary intake data from 2450 study participants across five states from 2007 to 2019. Sauder and colleagues focused on six of the more than 20 key nutrients recommended for pregnant people, and determined the target dose for vitamin A, vitamin D, folate, calcium, iron, and omega-3 fatty acids.

The researchers tested more than 20,500 dietary supplements, of which 421 were prenatal products. Only 69 products — three prenatal — included all six nutrients. Just seven products — two prenatal — contained target doses for five nutrients. Only one product, which was not marketed as prenatal, contained target doses for all six nutrients but required seven tablets a serving and cost patients approximately $200 a month.  

For many years, Sauder and her colleagues have struggled to identify the gold standard of vitamins for pregnant patients.

More than half of pregnant people in the United States are at risk of inadequate intake of vitamin D, folate, and iron from their diet alone, and one third are at risk for insufficient intake of vitamin A and calcium.

Although more than 70% of pregnant women take dietary supplements, the products do not eliminate the risks for deficiencies.

The effects of inadequate nutrition during pregnancy may include neural tube defects, alterations in cardiovascular structure, and impaired neurocognitive development.

The researchers also looked at the challenges within the dietary supplement industry. The US Food and Drug Administration regulates dietary supplements as foods rather than drugs, and therefore does not require third-party verification that would ensure product ingredients match labels.

The researchers acknowledged the challenges in creating a one-size-fits-all nutritional supplement.

"The supplement industry is difficult because you're trying to create a product that works for a large, diverse group of people, but nutrition is very personal," Sauder said.

Kendra Segura, MD, an ob/gyn at the To Help Everyone Health and Wellness Center in Los Angeles, said she was unsurprised by the results.

"There's no good prenatal vitamin out there," Segura said. "There's no 'best.' "

Segura said she advises her patients to focus on increased nutritional intake with foods, but added that that the lack of nutrients in diets and the need for supplements reflects the lack of availability of healthy food in some communities (known as 'food deserts'), as well as poor dietary choices.

Diana Racusin, MD, an assistant professor of obstetrics, gynecology, and reproductive services at the University of Texas Health Science Center's McGovern Medical School in Houston, also "wasn't terribly surprised" by the findings. She stresses the importance of what patients eat more than the availability of supplements.

"What this is really showing us is we have work to do with our nutrition," Racusin said.

Sauder's biggest takeaway from her study is the need for more patient guidance for their nutrition beyond advising a supplement.

"We need better support for women to help them improve their diet during pregnancy so that they're getting the nutrients they need from food," she said, "and not having to rely on supplements as much."

The study was supported by the Environmental Influences on Child Health Outcomes Program of the National Institutes of Health and by the nonprofit organization Autism Speaks. Sauder reports no relevant financial relationships. Co-author Regan L. Bailey has served as a consultant in the past to the NIH Office of Dietary Supplements, Nestlé, the General Mills Bell Institute, RTI International, and Nutrition Impact; is a trustee of the International Food Information Council; is a former board member of International Life Sciences Institute–North America; is a member of Schiff Scientific Advisory Board; and in the past has received travel support to present her research on dietary supplements. Co-author Karen M. Switkowski is a paid consultant of prenatal nutrition to Modern Fertility.

Am J Clin Nutr. Published in the April 2023 edition. Full text

https://www.medscape.com/viewarticle/990598