FTC Says CVS, Cigna and UnitedHealth Abuse Middleman Role

 Units of CVS Health Corp., Cigna Group and UnitedHealth Group Inc. charged significantly more than the national average acquisition cost for dozens of specialty generic drugs, bringing in more than $7.3 billion in “excess” revenue over six years, the Federal Trade Commission said in a report on the drug middlemen.The practice inflated costs for consumers and insurers on key treatments for cancer, multiple sclerosis, HIV, organ transplants and other conditions and procedures, the FTC said. The report demonstrates how pharmacy benefit managers influence every aspect of the pharmaceutical supply chain, an FTC official said at a press briefing on the report Tuesday.

The report comes as the FTC is preparing to file a lawsuit alleging the three companies failed to fully comply with the agency’s subpoenas, according to people familiar with the plans. The suit, to be filed in federal court, seeks an order compelling the companies to turn over additional information about their business practices, according to the people, who spoke anonymously to discuss the complaint.

CVS said it has complied with the FTC’s demands by providing more than 2 million documents and 7 terabytes of data. A company spokesman said the lawsuit appeared to be linked to CVS’ attempt to have commissioners of the FTC removed from a related case about insulin costs. CVS said it was “misleading” for the agency to draw conclusions based on “outliers” without evaluating broader drug spending patterns.

Cigna’s Express Scripts called the report “another set of misleading conclusions based on a subset of medications that represent less than 2% of what our health plans spend on medications in a year” and said the FTC had failed to address the underlying causes of rising drug prices.

UnitedHealth’s Optum unit said the company is lowering the cost of specialty medications and helped patients save $1.3 billion in 2024, with a typical out-of-pocket payment of $5.

Two-Year Probe

The interim report, the product of a more than two-year inquiry by the antitrust and consumer protection agency, is its second looking at pharmacy benefit managers — the middlemen that negotiate drug prices between manufacturers, pharmacies and insurers. An interim report released last summer found that between 2020 and 2022, similar conduct related to two cancer drugs led to $1.6 billion in excess revenue for the pharmacies that share owners with the three largest PBMs. The agency hasn’t issued a final report because it says the companies haven’t turned over all the information it has requested.

https://finance.yahoo.com/news/ftc-says-cvs-cigna-unitedhealth-195626349.html

UnitedHealth investors await details behind 2025 outlook after exec's murder

 Analysts and investors are awaiting details behind UnitedHealth Group's 2025 outlook when it reports quarterly results on Thursday, after its investor day presentations were canceled last month by the murder of executive Brian Thompson outside the New York hotel where the meeting was set to take place.

The company in a press release on Dec. 3 said it was expecting a profit of $29.50 to $30 per share, which was in line with Wall Street expectations.

The murder unleashed a social media storm of patient dissatisfaction and ire over the health insurance industry's practices that raised questions about whether UnitedHealth would come under pressure to change how it operates.

"I think at one level people are just looking for them to express confidence in the outlook, and what are some of the puts and takes there of significance," said UBS analyst AJ Rice.

"Hearing more about the two challenging areas - Medicare and Medicaid - will be important underpinnings for feeling confident about that outlook," Rice added.

The health insurance industry has been grappling with high medical costs for over a year, particularly in government Medicare plans for older adults or those with disabilities as many people sought treatment delayed during the COVID-19 pandemic.

The issue extended in 2024 to Medicaid, which serves people with low income, with plans experiencing higher usage than budgeted, said Morningstar analyst Julie Utterback.

As states re-determined eligibility for their Medicaid plans, healthier members fell off the rolls, leaving behind those who require more medical services.

"We expect the Medicaid mismatch in rates and utilization to constrain profit growth through most of 2025," Utterback said.

Regulatory risks for the industry also may increase, with lawmakers focused on pharmacy benefit managers and their role in high drug costs. UnitedHealth's Optum is one of the nation's largest PBMs.

UnitedHealth will likely face questions about its business practices and the potential for regulatory or consumer backlash, said James Harlow, senior vice president at Novare Capital Management, which owns more than 46,000 UnitedHealth shares.

"It'll still be in the minds of folks that view these companies as villains, but all the companies can do is just continue to operate, beat numbers and continue to give cash back to shareholders," Harlow said.

More broadly for insurers, the focus will remain on enrollment and cost trends, which will impact the 2025 outlook and the ability for each company to hit its margin targets, J.P. Morgan analyst Lisa Gill said in a note.

https://finance.yahoo.com/news/unitedhealth-investors-await-details-behind-112225288.html

Inspector General Questions FDA’s Accelerated Approval for Biogen, Sarepta Drugs

 

An OIG report zeroed in on what it said were three particularly problematic accelerated approvals: Biogen’s Aduhelm, Sarepta’s Exondys and Covis’ Makena.

The Office of the Inspector General at the Department of Health and Human Services raised concerns on Wednesday regarding what it characterized as lapses in the FDA’s judgement in granting accelerated approval to certain medications.

In a 32-page report, the Office of the Inspector General (OIG) flagged three drugs in particular—Biogen’s Alzheimer’s disease antibody Aduhelm (aducanumab), Sarepta’s Duchenne muscular dystrophy therapy Exondys (eteplirsen) and Covis Pharma’s Makena (hydroxyprogesterone caproate)—for which it said the accelerated approval process “deviated” from the appropriate pathway “in ways that raised concerns.”

The OIG identified three main avenues by which the FDA improperly granted accelerated approvals. For all three drugs, for instance, the regulator pushed through with accelerated approval “despite concerns from its own reviewers and/or advisory committees,” the report read. In addition, the FDA’s review for two of the three problematic drugs—Aduhelm and Exondys—involved data and analyses not included in the companies’ original plans.

Finally, for Aduhelm exclusively, the OIG’s investigation found that some meetings with the sponsoring drug companies were “missing” or otherwise “mentioned but not fully documented” in the regulator’s administrative files. “Although these meetings were documented as having happened, the lack of details regarding the meetings makes it difficult to determine whether the meetings contributed significantly to FDA’s decision making,” according to the report.

Both Makena and Aduhelm have been removed from the market. Biogen withdrew its Alzheimer’s therapy in January 2024 after a disappointing launch followed by months of Congressional inquiries. The FDA pulled its approval of Covis’ preterm birth drug Makena in April 2023, citing evidence that the drug had not been performing its intended purpose of improving neonatal outcomes.

Exondys is still commercial, though its confirmatory trial is delayed. “Eteplirsen was approved in 2016, but after 8 years its confirmatory trial had yet to provide evidence of clinical effectiveness,” the OIG report pointed out.

Wednesday’s OIG report comes as the FDA’s accelerated pathway recently came under increased scrutiny, prompted by a string of high-profile withdrawals and controversial approvals. The withdrawals included a handful of notable market exits such as Pfizer’s Oxbryta in September 2024 and Takeda’s Exkivity in October 2023. Among the controversial approvals was another Sarepta asset: the Duchenne muscular dystrophy gene therapy Elevidys.

In June 2023, the regulator granted Elevidys accelerated approval despite its missing its primary endpoint in a Phase I study. A year later, in June 2024, the FDA converted Elevidys’ accelerated approval into a full one, a decision that many considered to be questionable given that the gene therapy failed its confirmatory Phase III trial.

https://www.biospace.com/fda/inspector-general-questions-fdas-accelerated-approval-for-biogen-sarepta-drugs

Lykos Loses Five Board Directors After FDA Rejection

 

Lykos Therapeutics is currently working out ways to fund an additional Phase III study for its MDMA-assisted PTSD therapy following an FDA setback last year.

Lykos Therapeutics can’t seem to catch a break. Months after the FDA declined to approve its MDMA-assisted post-traumatic stress disorder therapy, the psychedelics-focused drugmaker announced on Tuesday that five board directors have left the company.

Independent directors Jeff George, Scott Giacobello and Jason Pyle have all resigned from their respective roles, Lykos revealed in its press release, adding that Gisselle Acevedo, also independent, had likewise decided to step down from her post last month.

Joining the four departing directors is Kris Lotlikar, who was appointed onto Lykos’ board by the Multidisciplinary Association for Psychedelic Studies (MAPS), a nonprofit that works to improve awareness and understanding of psychedelic substances. MAPS is a Lykos shareholder.

To fill the newly empty spots on the biotech’s board, MAPS has named two new directors to occupy its designated seats: Ron Beller and Joe Green. Dan Grossman, who had previously occupied one of the two allotted MAPS seats, will stay with Lykos as an independent director. Dawn McCollough, independent, as well as Preferred Director Suprotik Basu, will likewise remain with the biotech.

Tuesday’s board transitions “come as the company continues to work towards resubmission of its new drug application and secures financing to support its strategy,” Lykos indicated in its news release, adding that the company is currently working with its shareholders—including MAPS—to “secure an aligned go-forward financing strategy.” Lykos promised to provide a more detailed update regarding its strategy moving forward “at the appropriate time.”

In August 2024, the FDA handed Lykos a particularly devastating rejection for its investigational MDMA-assisted therapy for post-traumatic stress disorder. According to the Complete Response Letter, the regulator asked Lykos to run another Phase III study to better illustrate the safety and efficacy of the therapy, noting that its application “could not be approved based on data submitted to date.”

The fallout from the rejection was severe. Just a week after the regulatory rebuff, Lykos announced that it was laying off 75% of its workforce in an effort to cut costs and muster enough resources to support continued development of the MDMA candidate. Rick Doblin, founder and president of MAPS, also left his post on Lykos’ board. In September, the biotech revealed that former CEO Amy Emerson would also be resigning.

In the weeks leading up to the FDA’s rejection, Lykos’ MDMA therapy became the subject of heavy controversy focused particularly on the conduct of its Phase III trials, in which there were “substantial concerns” surrounding the integrity of the data, according to a June 2024 report from the Institute for Clinical and Economic Review (ICER). In particular, the ICER flagged issues regarding the enrollment and methodology of the study.

Lykos’ trials were “essentially, unblinded, with nearly all patients who received MDMA correctly identifying that they were in the MDMA arm of the trials.,” the ICER report read. The watchdog also cited reports that patients who were recruited into the programs already had “very strong beliefs” about the benefits of MDMA.

Since the rejection, Lykos has already reached out to the FDA for guidance on taking the candidate forward, announcing in October 2024 that it had concluded a “productive” meeting with the regulator.

https://www.biospace.com/business/lykos-loses-five-board-directors-after-fda-rejection

New Safety Signals Force Keros to Fully Terminate Mid-Stage PAH Study

 

Taken together with Keros’ recent pivot away from obesity, the termination of its pulmonary arterial hypertension study could lead to a “difficult path ahead” for Keros, according to Guggenheim analysts.

Keros Therapeutics on Wednesday announced that it will completely discontinue the Phase II TROPOS study of its investigational fusion protein cibotercept in pulmonary arterial hypertension after an ongoing safety review found new signals of concern.

The news comes on the heels of another announcement from the company that Keros that it would “deprioritize” the development of its activin receptor ligand trap KER-065 in obesity. “Given the updates on the PAH front, as well as update and management’s recent announcement that they are deprioritizing the development of KER-065 in obesity . . . we believe the company and stock has a difficult path ahead, at least in the near-term,” Guggenheim Partners analysts wrote in an investor note on Wednesday morning.

Today’s announcement is not the first trouble shared about the TROPOS trial. Keros last month said it had suspended dosing in the 3-mg/kg and 4.5-mg/kg arms of the study due to “unanticipated” incidences of pericardial effusion, an adverse reaction characterized by the dangerous build-up of fluid around the heart. The company at the time did not clarify if the complications were related to cibotercept or not.

Now, Keros has revealed that new cases of pericardial effusion were detected in TROPOS, which pushed the biotech to “voluntarily” stop all dosing in the trial, including in the 1.5-mg/kg and placebo groups. “The TROPOS trial is being terminated early,” Keros noted in its announcement, adding that it will continue to monitor patients through end-of-trial visits. The company expects to present topline data from TROPOS in the second quarter of 2025.

“[While] the exact reason for the development of these pericardial effusions remains unknown,” it is likely that the complications are “specific to cibotercept” in pulmonary arterial hypertension (PAH), Guggenheim wrote.

Truist Securities also weighed in on Keros’ discontinuation of TROPOS, calling it “incrementally negative” in an investor note.

The development comes after Keros just last week revealed the deprioritization of KER-065 in obesity. As part of a sweeping portfolio management effort, Keros instead plans to focus its efforts and resources on testing KER-065 in neuromuscular disorders, particularly Duchenne muscular dystrophy, according to the compay’s corporate presentation.

At the beginning of the year, Keros had announced plans to advance KER-065 for obesity, and that it had already launched a two-part randomized, double-blinded, placebo-controlled Phase I study in this indication. Topline data from this study are expected in the first quarter of 2025, which Keros will use to inform the future development of the candidate in neuromuscular indications.

https://www.biospace.com/drug-development/new-safety-signals-force-keros-to-fully-terminate-mid-stage-pah-study

'Under Pressure to Deal, Biogen Executives Deflect Urgency at JPM25'

 

While investors and analysts push for a deal, Biogen CEO Chris Viehbacher and Head of Development Priya Singhal refuse to make one out of desperation.

Biogen’s Head of Development Priya Singhal, and CEO Chris Viehbacher for that matter, are well aware of the pressure from investors. The company’s shares have fallen to a five-year low of $143. Investors are repeatedly asking when they might strike another deal.

“The stock price is down, but we are trying to focus on, how do we continue to show the momentum and the growth? Because I think people didn’t believe us on a lot of the things, but we were able to kind of bring the proof forward,” Singhal told BioSpace in an interview on the sidelines of the J.P. Morgan Healthcare Conference. “Hopefully the stock price will follow. We’re trying to focus on what we can control, which is growth and scientific conviction in the pipeline.”

Investors have always underestimated Biogen’s ability to follow through on lofty goals, from getting an Alzheimer’s drug approved to now filing a request to clear a subcutaneous version in an attempt to ease the administration burden, Singhal said. But they did that on Monday, proving again that they can execute.

“I can understand it, because in the past, there were [proof of concept] failures, but now I think the proof’s in the pudding,” Singhal said. “And in 2024 I think we’ve been able to show the proof, and we have set it up for successive positive readouts potentially.”

A major milestone in 2024 was the positive readout for dapirolizumab pegol (dapi), which had previously failed a Phase II test in 2018. The Phase III PHOENYCS GO trial met its primary endpoint with a 49.5% response rate among patients with systemic lupus erythematosus, clearing a path for a regulatory filing. This compared to 34.6% in those who received just standard of care.

“I can tell you that before dapi read out positive, there wasn’t a lot of excitement about dapi. But now the equation’s changed,” Singhal said. Other milestones were data for high-dose Spinraza in spinal muscular atrophy, global approvals for Friedreich’s ataxia treatment Skyclaris and enrollment for the tau-targeting Alzheimer’s treatment BIIB080 in a Phase II trial.

Biogen also bought Human Immunology Biosciences last year for $1.15 billion upfront, at least momentarily silencing the constant drum beat of analysts and investors asking for a deal.

But of course heading into J.P. Morgan that call had picked up again. Biogen did announce a potential deal, an unsolicited bid for partner Sage Therapeutics. Singhal could not talk about the deal, only saying that they were required to disclose the offer under SEC rules.

In his J.P. Morgan presentation, Viehbacher stressed that Biogen is not desperate for deals.

“I see some proposals that we should be prepared to overpay. We’re never going to do that, not knowingly anyway. So I think that’s where the discipline of capital is,” he said during the Tuesday fireside chat.

Biogen is facing some tough changes with the multiple sclerosis franchise declining, which was pointed out in a note from BMO Capital Markets.

“While we agree with Mr. Viehbacher’s strategy, we expect limited acquisition opportunities will make it increasingly challenging to patch the hole that continues to widen with MS franchise erosion,” BMO’s Evan Seigerman wrote. “Business development continues to be needed, but limited revenue-generating opportunities at a reasonable price continue to box Biogen in to investing in early-stage assets.”

Singhal agreed that the MS business is declining, but said it’s taking “more of a glide.”

Viehbacher said another company like Reata Pharmaceuticals, which brought with it Skyclarys, would be a perfect match. Singhal underscored an all of the above approach that spans early science to early stage revenue-generating assets. She said Biogen has outlined most importantly what it won’t do, which includes oncology and “big immunology” diseases like rheumatoid arthritis or psoriasis. Instead, the company will stick to specialty immunology, rare diseasesand of course neuroscience.

“The Reatas and HiBios of the world are hard to find, so we’re being very purposeful about how we’re looking,” Singhal said.

Singhal too, deflected the urgency to conduct a deal.

“There’s the sentiment that we have to do a deal, and I think what I want to clarify is that that’s just our everyday business. We’re always looking at internal and external innovation. But do we believe that a deal at any cost is critical to drive Biogen growth? That’s not the case, because we believe that we are really positioned very well.”

https://www.biospace.com/business/under-pressure-to-deal-biogen-executives-deflect-urgency-at-jpm25

OS Therapies Phase 2b Trial Statistical Significance to Prevent Lung Metastatic Osteosarcoma

 

• The primary endpoint of 12-month Event Free Survival (EFS) for OST-HER2- treated patients (33.3%) was statistically significant (p= 0.0158) when compared with peer-reviewed comparable historical control (20%)

• Ongoing follow up demonstrates strong trend in favor of OST-HER2 in 1-year and 2-year interim analyses of the secondary endpoint, 3-year overall survival (OS) when compared with comparable peer-reviewed historical control

• 100% of patients who achieved 12-month EFS remain alive in OS follow-up

• OST-HER2 was safe and well tolerated in the Phase 2b study

• OS Therapies reiterates clinical and regulatory path in recurrent, fully resected osteosarcoma with lung metastases, an indication with no currently approved treatments

https://finance.yahoo.com/news/os-therapies-announces-phase-2b-124000671.html