CVS sees upbeat 2024 revenue, plans to simplify drug pricing process

 CVS Health on Tuesday forecast 2024 revenue above market estimates and said it would simplify the structure through which its pharmacies get reimbursed for drugs, in a push for more transparency amid scrutiny on surging healthcare costs.

Under the new model, called CostVantage, the company's over 9,000 pharmacies will have a fixed markup and fees to define drug cost and related reimbursement with contracted insurers and pharmacy benefit managers (PBMs).

Currently, out-of-pocket drug prices are decided by a complex, multi-tiered network including insurers, drugmakers, pharmacies and PBMs, resulting in ambiguity around fees and markups to the original cost of the drug.

"We have to make a change because our consumers are demanding it, the government's demanding it, and we have the opportunity here to drive a much more transparent model," CEO Karen Lynch said at the company's investor day.

CostVantage will be introduced for commercial insurance plans from 2025 and is expected to benefit the pharmacy and consumer wellness unit, executives said.

The company's shares rose 4% in afternoon trade.

Lynch said CVS expects its long-term earnings growth to be at least 6%, with a recovery in margins from its Medicare Advantage plans in 2025 helping the year's adjusted earnings per share rise by as much as 9% to 10%.

It expects 2024 revenue of at least $366 billion, ahead of LSEG estimates of $345.81 billion.

Separately, shares of GoodRx, which offers discount coupons for prescription drugs, slumped nearly 10% as the new CVS program raised competitive concerns.

CVS also said its PBM unit, Caremark, will in 2025 launch a program called TrueCost to offer clients more visibility into prescription drug pricing and administrative fees.

PBMs, which work as middlemen between insurers and drugmakers, have faced increasing political pushback over their role in surging drug costs.

"This is a great first step, in that it's bringing transparency to one part of the drug supply chain," said Julie Balter from Alliance of Community Health Plans.

"But I do think we need to continue to push for transparency throughout; transparency in how the drugs are priced, in purchasing them, (and) in the rebate aggregators.

https://finance.yahoo.com/news/cvs-forecasts-2024-revenue-above-115925949.html

Hackers access profiles of nearly 7 million 23andMe customers

 A hacker or hackers have accessed nearly seven million profiles of 23andMe customers, a spokesperson for the genetic testing firm told CNN on Tuesday, including in some cases users’ ancestry reports, zip codes and birth years.

A Friday filing from 23andMe to the Securities and Exchange Commission said that about 0.1% of the company’s user accounts, or roughly 14,000, had their accounts breached by the hackers.

23andMe is standing by that number but is also now telling reporters that the hackers were able to access some 5.5 million profiles that use a company feature called DNA Relatives that allows users to find genetic relatives. In addition, the hackers accessed a subset of family tree information on 1.4 million DNA Relatives profiles, the 23andMe spokesperson said in an emailed statement.

Engadget, a tech news outlet, first reported on the wider impact of the hack.

It’s the latest hack to affect a major US corporation that has impacted far more people than initial news reports suggested. Last month, identity management firm Okta admitted that hackers had stolen data on all users in Okta’s customer support system, after initially reporting in September that less than 1% of more than 18,000 were affected.

In the case of 23andMe, the hackers reused old usernames and passwords from other websites to break into 23andMe customer accounts — a rudimentary but effective technique called credential stuffing.

The 23andMe spokesperson, who declined to be named, did not respond to questions about who carried out the hack.

“23andMe has completed its investigation, assisted by third-party forensics experts. We are in the process of notifying affected customers, as required by law,” a statement posted Saturday evening to the company’s website says. “We have taken steps to further protect customer data, including requiring all existing customers to reset their password and requiring two-step verification for all new and existing customers.”

https://finance.yahoo.com/m/9d840bde-152c-3311-968e-a4f7a91855a0/hackers-access-profiles-of.html

Vanda: Application for Tradipitant for the Treatment of Gastroparesis OKd

 Vanda Pharmaceuticals Inc. (Vanda) (NASDAQ: VNDA) today announced that the U.S. Food and Drug Administration (FDA) has accepted the filing of Vanda's New Drug Application (NDA) for tradipitant for the treatment of symptoms of gastroparesis.

The FDA has set September 18, 2024 as the target date for its decision under the Prescription Drug User Fee Act (PDUFA). If approved, tradipitant will be the first novel drug to be approved by the FDA for the treatment of gastroparesis in over 40 years and to be accepted for review by the FDA for gastroparesis in over 30 years.

https://www.prnewswire.com/news-releases/vanda-pharmaceuticals-announces-that-us-food-and-drug-administration-accepts-new-drug-application-for-tradipitant-for-the-treatment-of-gastroparesis-302005177.html

Blackstone explores sale of Anthos Therapeutics

 Private equity firm Blackstone is exploring the sale of Anthos Therapeutics, a developer of a new generation of blood thinners it launched four years ago with backing from Novartis, according to people familiar with the matter.

Anthos, which does not yet have any approved products or generate revenue, could be worth several billion dollars in a potential sale, significantly more than the $250 million Blackstone invested when it founded Anthos in 2019, the sources said.

The company's anticoagulants have progressed to late-stage clinical trials - typically the final testing phase before seeking approval - which is why its value is seen as significantly more than four years ago, the sources added.

Cambridge, Massachusetts-based Anthos' most advanced product, a monoclonal antibody called abelacimab, is intended for patients with atrial fibrillation who do not respond well to other anticoagulants because of heavy bleeding.

Over 37 million people worldwide are diagnosed with atrial fibrillation, Anthos said last month, citing research studies. The heart rhythm disorder significantly increases the risk of stroke.

Blackstone is working with investment bankers to explore a sale of Anthos, the sources said, cautioning that no deal is certain and requesting anonymity because the matter is confidential.

A Blackstone spokesperson declined to comment.

Blackstone's global head of private equity, Joseph Baratta, confirmed in an interview on CNBC later on Monday that the New York-based buyout firm was looking at cashing out on Anthos when asked about Reuters' story.

"That may be something we look to bring in a partner to sell, yes," Baratta said.

Anthos licensed from Novartis an antibody used in the development of its blood thinners and granted the Swiss drugmaker a minority stake.

Leading bloodthinners used to treat atrial fibrillation patients include Eliquis from Bristol Myers Squibb and Pfizer and Bayer's Xarelto.

https://finance.yahoo.com/news/blackstone-explores-sale-anthos-therapeutics-192649595.html

Sanofi CEO under pressure to woo investors after spending shock

 Sanofi's CEO is under pressure to tell investors how much more he will spend on research and development (R&D) and what the likely pay-offs will be, as he seeks to boost a pipeline of future drugs and restore shareholder trust.

Shares in the 108 billion euro ($117 billion) French pharmaceutical giant tumbled 15% on Oct. 27 when CEO Paul Hudson unexpectedly abandoned 2025 margin targets in order to boost the budget for testing new immunology and inflammation drugs.

The market's shock reaction, compounded by a lack of details of the spending push, overshadowed Sanofi's plan to list its consumer unit, in line with an industry trend.

The British CEO, who was hired four years ago to revive the company's drug pipeline, said the strategy promises better earnings further down the line, but he would not disclose more details until a Dec. 7 investor day.

Investors have told Reuters that Hudson, whose current term started last year and expires in 2026, needs to lay out more precisely how much he plans to spend on each experimental drug and the commercial opportunity they offer.

"The first step is getting out there with the data and the reasons to believe in these programmes," said Dan Lyons, a portfolio manager at Janus Henderson Investors in Denver.

He said he was surprised by the plunge in the shares - steep even by the standards of current market jitters - but said the announcement was unexpected and lacked explanations.

The stock has underperformed rivals in recent years as shareholders worry the company is too reliant on its bestseller, anti-inflammatory drug Dupixent.

The shares trade at the equivalent of 11 times expected earnings over the next 12 months, according to LSEG data, compared with 15 and 16 for the European and global pharmaceutical indices respectively.

Before the surprise R&D news, Hudson was already under pressure from losing out in the COVID-19 vaccine race and after a once-promising breast cancer drug candidate flopped last year.

But new drug launches this year, haemophilia treatment Altuviiio, Beyfortus to prevent a common respiratory infection in infants and type 1 diabetes treatment Tzield, had since then rekindled some trust in Sanofi's development abilities.

Abandoning the 2025 goal was particularly contentious because it broke with a tradition of meeting financial targets, while asking for trust in a development track record which has flaws, said fund managers including Markus Manns at Germany's Union Investment.

David Song, a portfolio manager and investment partner at Tema ETF, said: "The narrative of Sanofi has been a margin expansion, earnings-driven story for a lot of investors."

Sanofi did not respond to a request for comment.

DRUGS UNDER SCRUTINY

Still, relative to sales, Sanofi's R&D budget of about 15.6% last year is well below a sector average of 20%-22%, said Fabian Wenner, wealth management analyst at Swiss bank Julius Baer.

"Sanofi had to catch up, but the announcement was too sudden a change for shareholders," he said, adding he too wanted a detailed breakdown of expenses.

Union's Manns suggested that sharing costs with development partners, a common practice in the industry, was a way to take the edge off the R&D budget ramp-up.

The drug candidates under particular scrutiny include frexalimab against multiple sclerosis, eczema drug amlitelimab to build on the success of mega-blockbuster Dupixent and a pneumococcal vaccine, all to be tested in costly phase III trials from next year.

Janus Henderson's Lyons said he was seeking clarity on how Sanofi plans to advance blood cancer drugs known as anti-CD38, including Sarclisa, GenMab and Johnson & Johnson's strong foothold with Darzalex.

Tema ETF's Song said a one-year delay in earnings growth may well be acceptable in exchange for the prospect of higher profits beyond 2025.

"Shouldn't investors give credit to managements who care about long-term shareholder value creation?," said Song.

https://news.yahoo.com/analysis-sanofi-ceo-under-pressure-060158029.html

Fall in euro zone business activity adds to recession expectations

 The downturn in euro zone business activity eased last month but still indicates the bloc's economy will contract again this quarter as the dominant services industry continues to struggle to generate demand, a survey showed.

Last quarter the economy contracted 0.1%, according to official data, and Tuesday's Composite Purchasing Managers' Index (PMI) for November indicated the 20-country currency union is on track to do so again this quarter, meeting the technical definition of recession.

HCOB's composite PMI, compiled by S&P Global and seen as a good guide of overall economic health, rose to 47.6 from October's near three-year low of 46.5 and coming in above a 47.1 preliminary estimate.

That was its best reading since July but remained firmly below the 50 mark separating growth from contraction.

A PMI for the services sector rose to 48.7 from October's 47.8.

"The service sector maintained its downward slide in November. The modest improvement of the activity index does not leave much room for optimism regarding a swift recovery in the immediate future," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

"The sombre outlook is reinforced by the fifth consecutive monthly shrinkage in new business. A fall in GDP is on the cards for the fourth quarter."

An index measuring new business - a gauge of demand - was below 50 for a fifth month although it did rise to 46.7 from 45.6.

However, overall sentiment about the year ahead improved. The composite future output index rose to 56.0 from 55.6.

https://finance.yahoo.com/news/fall-euro-zone-nov-business-090044711.html

Genentech: Positive Phase III Results for Inavolisib Combo in Breast Cancer

 

• Phase III (INAVO120) results shows that inavolisib in combination with palbociclib and fulvestrant significantly improved progression-free survival in the first-line setting
• PIK3CA mutations, found in approximately 40% of HR-positive breast cancers, are linked to tumor growth, disease progression, and treatment resistance
• Data will be shared with health authorities and presented at an upcoming medical meeting

https://www.biospace.com/article/releases/genentech-announces-positive-phase-iii-results-for-inavolisib-combination-in-people-with-advanced-hormone-receptor-positive-her2-negative-breast-cancer-with-a-pik3ca-mutation/