Target $90 from $125
Monday, August 5, 2024
Tenet to Sell Five Birmingham Hospitals to Orlando Health
Tenet Healthcare Corporation (NYSE: THC) has entered into a definitive agreement with Orlando Health for the sale of Tenet’s 70% majority ownership interest in Brookwood Baptist Health in Birmingham for approximately $910 million in cash (after-tax proceeds of approximately $790 million).
The transaction will include five hospitals – Brookwood Baptist Medical Center, Princeton Baptist Medical Center, Walker Baptist Medical Center, Shelby Baptist Medical Center, Citizens Baptist Medical Center – as well as affiliated physician practices and other related operations. Brookwood Baptist Health will remain a joint venture with Baptist Health System.
Additionally, under the agreement, Tenet’s Conifer Health Solutions subsidiary will enter into a new and expanded ten-year contract to provide revenue cycle management services for the Birmingham hospitals and related operations.
Sotera Health Q2 Results Top Estimates; Reaffirms FY24 Outlook
Sotera Health Co. (SHC) reported Monday that net income for the second quarter nearly doubled to $8.75 million or $0.03 per share from $23.51 million or $0.08 per share in the prior-year quarter.
Excluding items, adjusted earnings for the quarter were $0.19 per share, compared to $0.20 per share in the year-ago quarter.
On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.
Total net revenue for the quarter increased 8.3 percent to $276.59 million from $255.28 million in the same quarter last year. Net revenues were up 8.8 percent on a constant currency basis. Analysts expected revenues of $266.44 million for the quarter.
Looking ahead to fiscal 2024, the company continues to project adjusted earnings in a range of $0.67 to $0.75 per share on revenue growth of 4 to 6 percent. The Street is looking for earnings of $0.72 per share on revenues of $1.10 billion for the year.
https://www.rttnews.com/3466082/sotera-health-q2-results-top-estimates-reaffirms-fy24-outlook.aspx
Axsome Q2 update
Financial Guidance
- Axsome believes that its current cash is sufficient to fund anticipated operations into cash flow positivity, based on the current operating plan.
Commercial Highlights
Auvelity
- Approximately 123,000 prescriptions were written for Auvelity in the second quarter of 2024, representing a 29% sequential increase versus the first quarter of 2024.
- Payer coverage for Auvelity in the commercial channel increased from 48% of lives covered last quarter to 60% of lives covered as of August 1. The proportion of lives covered in the government channel (Medicare and Medicaid) remains at approximately 100%. Payer coverage for Auvelity across all channels is now at approximately 76% of all covered lives. Axsome expects coverage to continue to expand and evolve.
Sunosi
- Approximately 45,000 prescriptions were written for Sunosi in the U.S. in the second quarter of 2024, representing an 8% increase versus the first quarter of 2024.
- Sunosi maintains broad payer coverage in the commercial channel with 95% of lives covered. Currently 83% of total lives across all channels are covered.
Anticipated Milestones
- Regulatory:
- AXS-14 for fibromyalgia, NDA submission (3Q 2024)
- AXS-14 for fibromyalgia, NDA submission (3Q 2024)
- Clinical Trial Topline Results:
- Phase 3 ADVANCE-2 trial of AXS-05 in Alzheimer’s disease agitation (2H 2024)
- Phase 3 ACCORD-2 trial of AXS-05 in Alzheimer’s disease agitation (2H 2024)
- Phase 3 open-label safety extension trial of AXS-12 in narcolepsy (2H 2024)
- Phase 3 FOCUS trial of solriamfetol in ADHD in adults (2H 2024)
- Phase 3 EMERGE trial of AXS-07 in patients with migraine with inadequate response to oral CGRP inhibitors (2H 2024)
- Phase 3 PARADIGM trial of solriamfetol in major depressive disorder (2025)
- Phase 3 ENGAGE trial of solriamfetol in binge eating disorder (2025)
- Phase 3 SUSTAIN trial of solriamfetol in shift work disorder (2026)
- Phase 3 ADVANCE-2 trial of AXS-05 in Alzheimer’s disease agitation (2H 2024)
- Clinical Trial Initiations and Progress:
- Pivotal Phase 2/3 trial of AXS-05 in smoking cessation, initiation (2024)
- Pivotal Phase 2/3 trial of AXS-05 in smoking cessation, initiation (2024)
Conference Call Information
Axsome will host a conference call and webcast today at 8:00 AM Eastern to discuss second quarter 2024 financial results and provide a business update. To participate in the live conference call, please dial (877) 405-1239 (toll-free domestic). The live webcast can be accessed on the Investors page of the Company’s website at axsome.com. A replay of the webcast will be available for approximately 30 days following the live event.
Actinium Additional Leukemia Trials Required; Seeks Partner
- FDA determined that the Phase 3 SIERRA trial is not adequate to support a BLA filing for Iomab-B despite its statistically significant primary endpoint
- Additional head-to-head randomized clinical trial demonstrating overall survival benefit with Iomab-B is required by FDA to support a BLA filing
- Actinium to request a meeting with the FDA to further discuss specifics of additional trial
- Actinium will seek strategic partner for Iomab-B in the U.S. following completion of FDA interactions and focus development efforts on Actimab-A, Iomab-ACT and preclinical programs
Morgan Stanley touts CervoMed, Viking into Downturn
The S&P 500 plunged on Friday after a weak jobs report intensified concerns that the Federal Reserve’s decision to maintain rates at a two-decade high could lead to a deeper economic slowdown. Nevertheless, conventional wisdom anticipates that the Fed will begin cutting rates in September.
In fact, Fed-funds futures now suggest a 71.5% probability of a double rate cut (50 basis points) at the Federal Open Market Committee’s September meeting. This marks a significant increase from the 22% probability prior to the release of the jobs report.
A likely fall in interest rates promises cheaper money and easier borrowing, both of which would benefit the biotech sector. Biotech companies, which operate with high overhead costs, thrive in environments with more accessible credit.
Morgan Stanley’s equity strategist, Mike Wilson, elaborates on the quality of biotechs in a falling rate environment: “With rate cuts on the horizon, we recently discussed the case for Biotech to show relative outperformance as the Fed begins reducing the policy rate. Our analysis around prior cycles supports the notion that Biotech tends to outperform the market in periods of falling interest rates… We think this is driven by the sensitivity of biotech valuation to discount rates and the expectation for greater M&A activity on the back of falling yields, particularly around Fed cutting cycles.”
Wilson’s colleagues among the Morgan Stanley stock analysts are running with this outlook, and are advising investors to buy two biotech stocks in particular. Both have solid upside potential – as much as 230% in one case.
CervoMed (CRVO)
The first Morgan Stanley pick we’ll look at is CervoMed, a clinical-stage medical research firm specializing in neurodegenerative diseases and conditions. The company focuses on treating these conditions in their early stages, where intervention may be more manageable and effective. CervoMed has developed a leading drug candidate, neflamapimod, which targets inflammation in the synapses – the connections between nerve cells – that causes damage. Neflamapimod is currently undergoing clinical trials as a potential treatment for dementia with Lewy bodies, early-onset Alzheimer’s, and stroke recovery.
Neflamapimod inhibits the enzyme p38 alpha, which has been shown to be connected to the progression of neurological diseases. Excessive or chronic activation of this enzyme disrupts signal activity between neurons, causing synaptic dysfunction. This can lead to a wide range of symptoms, including memory loss, cognitive deficits, and impairment of motor function, with the eventual death of the damaged neurons. Neflamapimod is a small molecule compound, designed to penetrate the brain, and is administered orally.
In June of this year, CervoMed announced the completion of enrollment for the Phase 2b trial, RewinD-LB, evaluating neflamapimod. This trial aims to pave the way in a high-value potential market, with topline data expected to be released in December. Data from the earlier Phase 2a trial showed a positive impact of neflamapimod in patients with dementia with Lewy bodies.
The neflamapimod program is a pivotal aspect of this biotech stock and underpins Jeffrey Hung’s positive outlook on the shares. The 5-star Morgan Stanley analyst writes, “The data generated to date are supportive of the Phase 2b topline results expected in December 2024. Post-hoc analyses from the Phase 2a study showed significant improvements in pure dementia with Lewy bodies for key areas of focus including dementia severity, functional mobility, and cognitive tests of attention and working memory.”
Looking ahead, Hung outlines the risk-reward scenario for investors ahead of the upcoming catalyst in December: “We acknowledge that the upcoming readout will be a large binary event but have reason to believe neflamapimod will be able to target the underlying disease process to drive improvements across key measures. We think the risk/reward is skewed to the upside with potential for shares to trade up >100-150% with positive data or down 65-75% (to below cash) with disappointing results.”
Overall, the analyst expects positive clinical results and rates CRVO an Overweight (i.e., Buy). His $35 price target indicates a robust ~230% upside potential over the next 12 months.
Viking Therapeutics (VKTX)
Next under the Morgan Stanley microscope is Viking Therapeutics, a clinical-stage biopharmaceutical researcher dedicated to developing treatments for metabolic and endocrine disorders. The company is advancing a pipeline of novel, orally dosed small molecule compounds that have the potential to be first-in-class or best-in-class drug therapies.
The pipeline features three drug candidates targeting obesity, non-alcoholic steatohepatitis (NASH), and X-linked adrenoleukodystrophy (X-ALD). These candidates are currently undergoing four clinical trials, including two featuring the lead drug candidate VK2735 for the treatment of obesity.
VK2735 is being tested for both subcutaneous and oral dosing. The subcutaneous Phase 2 VENTURE trial has demonstrated significant weight reduction, comparing favorably to existing GLP-1 treatments. Based on these positive results, Viking is planning an end-of-Phase 2 meeting with the FDA and expects to reveal details about the upcoming Phase 3 trial afterward. Similarly, a Phase 1 study of the oral formulation of VK2735 showed promising weight reduction and an improved tolerability profile, supporting further dose escalation. Viking intends to start a Phase 2 trial of the oral VK2735 in the fourth quarter.
In addition to VK2735, Viking is optimistic about VK2809, its candidate for NASH. In June, the company reported positive results from the 52-week histologic data of the Phase 2b VOYAGE study, showing significant improvements in NASH resolution, fibrosis, and better tolerability compared to Madrigal’s newly approved Rezdiffra. Viking intends to meet with the FDA in the fourth quarter to discuss the future steps for VK2809.
Lastly, the company is working on VK0214, an orally available thyroid hormone receptor beta agonist, as a potential treatment for X-linked adrenoleukodystrophy (X-ALD). This rare neurodegenerative disease currently has no pharmacologic treatments. Viking has finished enrolling participants for the Phase 1b study of VK0214 and expects to announce the results by the end of the year.
These significant ‘shots on goal’ have caught the attention of analyst Michael Ulz. In his coverage of Viking for Morgan Stanley, Ulz lays out an optimistic stance: “The company’s lead asset, VK2735 (SC/oral), has shown promising early results, indicating a potential best-in-class profile in the large and growing obesity market. While obesity remains the focus, we believe recent data for VK2809 suggests potential in NASH, which represents another, potentially larger market opportunity. Overall, we believe early data de-risk both programs and we expect multiple catalysts in 2H24 to drive additional upside.”
https://finance.yahoo.com/news/morgan-stanley-predicts-230-surge-130315551.html
New Compound That Kills Flesh-Eating And Other Drug-Resistant Bacteria
by Marina Zhang via The Epoch Times (emphasis ours),
Twenty years ago, professor Fredrik Almqvist, an organic chemistry professor at Umeå University in Sweden, was asked by his collaborating researchers at Washington University in St. Louis (WashU) to design a compound that would prevent urinary tract infections, which are often caused by Gram-negative bacterial infections.
Almqvist’s team created various compounds that were then screened for their effects.
Rather than controlling Gram-negative bacteria adherence, they found some of the compounds were highly effective at killing various Gram-positive bacteria. These included multidrug-resistant strains classified as concerning threats by the U.S. Centers for Disease Control and Prevention (CDC).
The researchers singled out one compound, which they named PS757. Lab testing has shown PS757 to be effective against methicillin-resistant Staphylococcus aureus (MRSA), vancomycin-resistant Enterococcus faecalis (VRE), multidrug-resistant Streptococcus pneumoniae, and erythromycin-resistant Streptococcus pyogenes (S. pyogenes), among others.
They further studied the effect of PS757 on S. pyogenes, a potentially flesh-eating bacteria, in animals.
Kills Flesh-Eating Bacteria
S. pyogenes can cause a wide range of infections, from mild localized ones to potentially fatal soft-tissue infections, or necrotizing fasciitis.
In an animal study published Friday in Science Advances, researchers showed that the compound may help control the spread of the flesh-eating bacteria in rats and aid in recovery.
Rats with PS757 injected into their skin had more minor ulcers and open wounds. They also healed faster than those not treated with the compound.
S. pyogenes causes flesh-eating-like wounds by releasing toxins that kill soft tissue. These wounds are treated with antibiotics and surgical interventions to remove the infected tissues.
The animal study did not assess PS757’s effects on other bacterial infections. However, the research team’s previous laboratory studies showed that the compound was effective against other Gram-positive bacteria.
Current antibiotics for S. pyogenes control infections by blocking the bacteria’s toxins. However, antibiotic resistance has been on the rise. Lab experiments showed that PS757 worked as well as conventional antibiotics like vancomycin and clindamycin in killing S. pyogenes.
In necrotizing fasciitis caused by S. pyogenes, “clindamycin is the drug of choice due to its ability to suppress production of potent exotoxins,” Dr. Dennis Stevens, professor of medicine at the University of Washington’s Division of Allergy & Infectious Diseases, who was not involved in the study, told The Epoch Times via email.
Resistance to clindamycin has been reported in China, the United Kingdom, and the United States, and linezolid, another antibiotic, is a useful alternative, he said.
Dr. Stevens said the study used a strain of S. pyogenes rarely associated with toxic shock or necrotizing infection.
“Looks promising in their model. No toxicity studies yet,” he told The Epoch Times.
While the compound is far from ready to be made into a pharmaceutical, the authors hope that by conducting further research, they will be able to form a new antibiotic class for treating various drug-resistant bacterial infections.
A Broad Gram-Positive Bacteria-Killer
Almqvist designed the compound by making it mimic a bacterial peptide.
With this peptide as the base, he and his team added various components to change the compound’s properties. Compound PS757 is their latest variation.
“They work against a broad spectrum of Gram-positive bacteria, including the ones that already were running out of antibiotics to treat, like VRE and MRSA,” Michael Caparon, a professor of molecular microbiology at WashU and one of the study’s senior authors, told The Epoch Times.
Bacteria can be divided into two major classes: Gram-positive and Gram-negative. Gram-negative bacteria have an extra outer membrane, while Gram-positive do not.
“The bactericidal effect so far on wild-type bacteria is only seen with the Gram-positives, but we are pretty certain that we can also develop them further and affect Gram-negative bacteria,” Almqvist told The Epoch Times.
Caparon said that PS757 has several unique properties that may make it more effective than other antibiotics if research is successful.
“[These properties are] particularly effective against what are called persister cells,” living bacteria that have stopped growing, he said.
Most antibiotics on the market kill bacteria that are actively growing and replicating. They are ineffective against non-growing bacteria, which can contribute to bacterial resistance.
When a bacterial population is treated with antibiotics, “about 99 percent of them” die, Caparon said, but a small percentage of bacteria—persister cells—live on.
“When the antibiotic goes away, [the persister cells] grow out again and start the infection all over again,” Caparon explained.
PS757, however, has also been shown to kill persister cells, which may reduce antibiotic resistance.
Another unique aspect of the compound is that it can kill bacteria in biofilms. Biofilms are created when bacteria attach to a surface and form a community.
An example of a biofilm is the slick masses that grow in the moist areas of bathrooms.
Bacteria in biofilms are more resistant to antibiotics, often requiring a higher dose to kill them, but the researchers found that PS757 could kill these biofilm bacteria even without increasing the dose, Caparon said.
Only Early Developments
Almqvist and Caparon told The Epoch Times that much more work is needed before the compound is ready for pharmaceutical use.
“In this particular study, we don’t have what’s called the candidate drug; it’s not at that level. This is more like a really cool starting point towards a candidate drug,” Almqvist said.
He said that more work is needed to fine-tune the final compound, as is more research to understand how the drug behaves, its dosage, why and how it kills the bacteria, and how to optimize its effects.
With some drug designs, researchers know why the drug works because its functions were designed into the drug from the get-go. With PS757, however, the properties were discovered unintentionally.
Another way to find out how the drug works is to look for bacteria resistant to it. By understanding why the bacteria are resistant, researchers may determine why the drug works. However, PS757 has been successful to the point that no resistant bacteria have yet to be detected, making exploring its mechanism all the more complicated.
Almqvist, Caparon, and the other senior author, Scott Hultgren, have patented the compound used in the study and licensed it to a company with the expectation of facilitating pharmaceutical development and clinical trials.
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