Shares in Ironwood Pharma fell by a third after it revealed that the FDA is insisting on a new phase 3 trial of its short bowel syndrome therapy before it can consider approval.
The outcome of its discussions with the US regulator is far from what the company was hoping for, and it has now started a review of its "strategic options" – with the help of Goldman Sachs – to try to chart its path forward. That follows a halving of its headcount in January.
A year ago, Ironwood reported the results of its phase 3 STARS trial of GLP-2 analogue apraglutide as a treatment for short bowel syndrome with intestinal failure (SBS-IF), a rare and severe condition in which patients become dependent on parenteral support (PS), in some cases needing infusions of parenteral nutrition for up to 15 hours per day. It affects an estimated 18,000 adult patients in the US, Europe, and Japan.
Apraglutide hit its primary endpoint in the study, reducing the volume of PS needed by patients by 25.5% at 24 weeks, compared to a 12.5% decline for the placebo group, and also improved two of four secondary endpoints, increasing the chances that patients with SBS-IF could have at least one day free of PS in a week and reducing the need for PS in patients with a stoma fitted.
The FDA was concerned, however, that the exposure and dose delivered in the STARS Phase 3 trial were lower than planned due to dose preparation and administration issues. Ironwood attempted to address that with a new pharmacokinetics analysis of the data, but the FDA has remained unmoved.
The company said in a statement that it is "disappointed by this outcome," but that it is now working on the design of a confirmatory phase 3 trial and regulatory path forward with the FDA.
"We firmly believe apraglutide has the potential to provide tremendous value to patients with SBS-IF who suffer from increased mortality, and reduced quality of life," commented Ironwood's chief executive, Tom McCourt.
"We are focused on the best path forward to get apraglutide to market, which we believe still has the potential to be a blockbuster drug."
It's the second time in a matter of months that an SBS-IF candidate has been sent packing by the FDA. In December, the regulator issued a complete response letter (CRL) for Zealand Pharma's GLP-2 analogue glepaglutide, also asking for another phase 3 trial.
In February, Ironwood said it made $351 million in 2024 revenues from Linzess (linaclotide), its irritable bowel syndrome (IBS) and constipation therapy, and ended the year with cash reserves of almost $89 million. It expects to record Linzess sales of up to $850 million this year.
J&J opened Q1 2025 pharma earnings Tuesday, reporting sales of $21.9 billion and diluted earnings per share of $4.54. The medicines unit provided $13.9 billion while the medtech unit generated the remaining $8 billion.
Johnson & Johnson’s medicines, including Tremfya and Carvykti, helped drive a worldwide sales increase of 2.4% in the first quarter, the company reported Tuesday morning.
As always, J&J was the first out the gate for pharma earnings, reporting sales of $21.9 billion and diluted earnings per share of $4.54. The medicines unit provided $13.9 billion while the medtech unit kicked in the remaining $8 billion.
Guggenheim called the first quarter results “solid” in a Tuesday morning note, as the company beat the firm’s sales estimate of $21.63 billion.
J&J also maintained its guidance for 2025, despite facing major challenges from tariff threats that have sent the broader market on a rollercoaster ride. The company expects adjusted operation sales of 2-3%. Guggenheim noted that J&J is now factoring the tariffs into its guidance for 2025, although details were not provided.
Leerink Partners called the guidance maintenence “a welcome relief,” as J&J’s medtech unit is particularly vulnerable to potential tariffs.
CEO Joaquin Duato name-dropped Tremfya and Rybrevant as the key medicines behind J&J’s success this quarter in a Tuesday morning statement. Tremfya, which is approved for Crohn’s disease, had worldwide sales of $956 million, an 18% increase over $808 million for the same quarter in 2024.
J&J’s fading immunology star Stelara, meanwhile, suffered a setback in the quarter as biosimilars crept into the market. Another headwind was changes to the Medicare’s Part D policies. The drug pulled in sales of $1.63 billion for the first quarter, compared to $2.45 billion for the same period in 2023, representing a 34% decline.
Duato also highlighted clinical milestones for Rybrevant and its small cell lung cancer combo med Lazcluze. The combo outperformed AstraZeneca’s lung cancer stalwart Tagrisso in a Phase III head-to-head trial that read out in March. J&J’s combo led to a significant increase in overall survival as compared to Tagrisso. The combo brought in $141 million, compared to $47 million for the period a year ago.
J&J will address investors in a first quarter earnings call at 8:30 a.m. ET. Guggenheim expects investors will have more questions about macro headwinds like tariffs than J&J’s usual operations.
“We do not believe the 1Q 2025 results fundamentally change the overall JNJ story, with investors likely focusing more on current macro factors (e.g., tariffs, taxes, healthcare utilization, etc...), and their impact on JNJ and its peers, and potentially less focus than usual on JNJ’s current growth drivers and pipeline assets,” the firm wrote.
U.S. President Donald Trump directed his health department on Tuesday to work with Congress on revamping a law that allows Medicare to negotiate prescription drug prices, seeking to introduce a change the pharmaceutical industry has lobbied for.
Drugmakers have been pushing to delay the timeline under which medications become eligible for price negotiations by four years for small molecule drugs, which are primarily pills and account for most medicines.
That would align with the 13-year wait until more complex biotech drugs become eligible for Medicare price negotiations.
The wide-ranging executive order signed by Trump aims to reduce healthcare costs. It comes one day after the Trump administration instituted a national security report into the pharmaceutical industry, a precursor to sector-specific tariffs.
The ability of Medicare for the first time to directly negotiate prices on selected medicines was part of President Joe Biden's Inflation Reduction Act. Medicare covers 66 million Americans, mostly aged 65 and older.
Drugmakers have complained about the terms of Medicare's negotiating powers, saying it would stifle innovation. In particular, the industry has opposed the time frame for negotiation eligibility for most drugs.
When drugs have no competition, the law now allows the government to negotiate prices for complex biologic, or biotech, drugs after 13 years on the market, but after 9 years for drugs taken as pills and capsules.
Trump cannot implement the change through executive order because the negotiation process is outlined in legislation, but his order instructs Secretary of Health and Human Services Robert F. Kennedy Jr. to work with Congress on changing it.
Other proposed changes to the negotiation process would yield more savings than those achieved during the first round under the Biden administration, White House officials told reporters on a call before the signing without providing specifics.
Biden's administration had negotiated a price cut of as much as 79% for the first group of 10 drugs seen as among the most costly to the Medicare program.
The Trump administration will negotiate prices for the second group of 15 medications, which includes Novo Nordisk's blockbuster diabetes and weight-loss treatments Ozempic and Wegovy as well as Pfizer's cancer drugs Ibrance and Xtandi.
Trump's order also seeks to align Medicare payments for drugs with those of hospitals, which can be 35% lower, and calls for standardizing patient payment rates across locations so that people are not charged different rates depending on where they receive care, a policy known as site-neutral payments.
Trump directed the Food and Drug Administration to encourage more applications from states for drug importation programs, which were initiated during his first term.
So far only Florida has won FDA authorization to directly import drugs from Canada, even though several more states have applied. It also directs the FDA to streamline approval for less expensive generic and biosimilar versions of branded medicines.
Haleon PLC (LSE/NYSE: LON:HLN), a leading global consumer health company, announced today the agreement to purchase an additional 12% stake in Tianjin TSKF Pharmaceutical (TADAWUL:2070) Co., Ltd. (TSKF), its over-the-counter (OTC) joint venture in China. The acquisition, valued at approximately 1.623 billion yuan (around $0.2 billion), will transition TSKF into a fully owned subsidiary of Haleon.
The transaction, which follows Haleon’s December 2024 acquisition of a 33% equity interest in TSKF, is financed through Haleon’s existing cash reserves and new third-party debt denominated in Renminbi. The completion of the deal is subject to approval from the shareholders of Tianjin Pharmaceutical Da Ren Tang Group Corporation Limited (DRTG), the current 12% stakeholder, as well as customary regulatory clearances. The company anticipates the acquisition to be finalized within the next three months.
TSKF, established in 1984, is a prominent OTC company in China, distributing products under Haleon’s brand, including well-known names such as Fenbid, Contac, and Voltaren. These products cover major therapeutic areas like Pain Relief, Respiratory Health, and Skin Health.
DRTG, the seller of the 12% interest, is a core part of TPG’s pharmaceutical manufacturing operations. It focuses on the production and distribution of both Chinese and Western medicines and is listed on both the Shanghai Stock Exchange (SHSE: 600329) and the Singapore Stock Exchange (SGX: T14).
Haleon’s decision to acquire full ownership of TSKF signifies the company’s commitment to expanding its footprint in the Chinese market. The move is consistent with Haleon’s strategic focus on enhancing its global presence in consumer health and underscores the importance of the Chinese market in the company’s growth plans.
It was only a matter of time until the CIA became involved in the Trump administration's war on Mexican drug cartels. According, and is formulating a 'finely tuned machine' to help disrupt one of the deadliest criminal networks in the world.
Specifically, the CIA is establishing the Americas Counternarcotics Mission Center, combining its counternarcotics and Western Hemisphere teams to enable faster, more effective collaboration, CIA Deputy Director Michael Ellis (formerly Rumble general counsel) told Breitbart, adding that the mission is to become a "finely tuned machine" to dismantle cartels, labeled foreign terrorists by the Trump administration. According to Ellis, the agency will leverage its 25 years+ of expertise in targeting jihadist networks to disrupt the cartels' international operations.
“The drug trafficker is a savvy, sophisticated adversary,” the CIA official told the conservative publication. “[We’re] looking further upstream to identify those networks beyond our borders and dismantle them.”
“It’s a whole of government effort,” he added, before underscoring that the agency's operations may remain covert due to their sensitive nature.
In February, the Trump administration officially classified eight Latin American criminal groups as "foreign terrorist organizations," specifically targeting Mexico's Sinaloa Cartel, Venezuela's Tren de Aragua, and El Salvador's MS-13.
As part of its upcoming operations, the admin is considering drone strikes targeting Mexican cartels in a bold strategy to counter criminal organizations smuggling narcotics across the U.S. southern border, NBC News reports.
No decision has been made on whether the strikes have been approved.
“It’s their country, and obviously we believe in strong partnerships,” Acting DEA Administrator Derek Maltz said. “That said, at some point it’s about the safety of our kids.”
Maltz, speaking to NBC News, highlighted "historic, unprecedented action" in U.S.-Mexico drug enforcement collaboration during the early months of the Trump administration. Last month, Mexico deployed 10,000 troops to its northern border to inspect vehicles for fentanyl at crossing points.
Last weekwe explained how the escalating trade war between the US and China has gradually transformed into a theatrical war of who has the upper hand on any given day. And since it takes a long time for trade obstructions to hit the underlying economy, investors are keenly eyeing the stock, and especially FX, markets for any and every (early) indications of who has the upper hand (even if they are, as we show below, completely false).
Yet so far in the trade war, there has been one notable difference: while US stocks have tumbled (and rightfully so, as Trump institutes shock treatment to ween the US out of its debt-funded reserve currency, trade deficit addiction) and the US dollar has been in freefall, Chinese stocks have been surprisingly resilient and barely dropping, while the yuan reversed its losses last week, which pushed it to a record low only to rebound sharply higher.
There is just one problem: like everything else out of China, it's market reaction has also been 100% fake.
While the US reaction is understandable, since the political Fed is doing everything it can to tarnish Trump's approval rating and rugpull the market, and economy, from under him... and for those who say this is nonsense, may we remind you this is precisely what Bill Dudley told the Fed to do during the first Trump trade war...
... China, whose central bank is directly controlled by the CCP Politburo, has no such qualms, and as we reported last week, in order to stabilize the stock market China's Plunge protection team, aka the "National Team", unleashed a record buying spree of ETFs, which has prevented an all out rout.
At the same time, China has also clearly intervened in the FX market, ordering local banks to sell dollars and buy yuan after last week we saw the offshore yuan plunge to a record low against the dollar. To be sure, China wants devaluation, but not chaotic, uncontrolled devaluation which would spark the mother of all capital runs (Chinese banks have $63 trillion in assets (and by extension deposits), almost triple the US total).
As an aside, China's FX intervention would fully explain the bizarre concurrent weakness in both the dollar and TSYs, which some overeager commentators are ascribing to the death of US dollar reserve currency status...
... when in reality it was just a few days of China dumping US bonds and selling the proceeds (US Dollars) to buy yuan.
So going back to the core thesis, namely that in China it's all about the optics of not appearing to lose the trade war at least through day to day indicators meant for simplistic, first-order indicator observers (which these days is pretty much everyone in the market), Beijing's core prerogative remains to prevent a crash in either Chinese stocks or the yuan. And while we described above how China is defending the yuan (at the expense of Treasuries and the dollar, if only up to a point - the point being when China runs out of US reserves to sell), preserving stock market calm is just as important.
Which is why we weren't at all surprise to read that Chinese bourses have set daily restrictions on net share sales by hedge funds and large retail investors, Reuters reported noting that Beijing has stepped up support for its stock markets in an intensifying trade war with the United States.
Two investor sources said a soft limit on daily net sales by individual hedge funds and big retail investors - implemented through verbal warnings from brokerages - had been set at 50 million yuan ($6.83 million).
Failure to comply risked a suspension of trading accounts by the stock exchanges, which have issued the directive, the Reuters sources added.
Echoing everything we have said in the past week, Reuters also adds that "China has taken a slew of measures to stabilise its domestic stock markets, reeling from an escalating trade war with the U.S." and notes that "the moves have largely shielded stocks in China from the massive selling seen on global markets."
Brokerages have been asked to closely monitor transactions by private funds and big retail clients, according to a notice issued late on Thursday and seen by Reuters.
The current 50 million yuan daily limit on net sales by investors could be lowered further if the market slumps again, the notice said.
It stands to reason that if you can't sell, you will- drumroll - buy, and sure enough China and Hong Kong stocks reversed early declines on Friday and narrowed the week's losses.
"Such a restriction is understandable as you don't want to act against state will," said one of Reuters' brokerage sources. It's also understandable since China can not afford to give the impression that Trump has leverage in the escalating trade war. Instead, since Chinese stocks are stable, it afford Beijing the optics of being treated almost as an equal, or someone who can match Trump's tariff escalation blow by blow... when in reality China's economy is disintegrating below the calm surface.
Furthermore, as we also reported last week, China's state fund Central Huijin has vowed to increase stock holdings, a growing number of listed companies are buying back shares, and Chinese brokerages have pledged to steady the market amid higher tariffs and global recession risks.
And just to make sure there is no selling at all, on Tuesday Chinese press reported that certain China banks have cut deposits rates below 2%. Why? To push depositors into risk assets of course.
Needless to say, without the moves, Chinese stocks would be in freefall - just like its economy in a month or so - and the yuan would be plunging, while the narrative that Trump is flip-flopping or otherwise "losing" to China, would be DOA. Yet, since the Fed has so far refused to counter its Chinese peers, Trump indeed finds himself at a disadvantage.
But that may soon change, because while the Fed may pretend it has no choice but to wait until the hyperinflation from the tariffs manifests itself (some time in 2035, especially since tariffs are actually deflationary as we have explained for the past year) before easing, Bessent may take matters into his own hands, and without waiting for the Fed, ramp up the amount of treasury buybacks the US Treasury currently conducts every other day or so, in the open market (see full Buyback schedule here).
In fact, the Treasury secretary hinted at this himself in an interview with Bloomberg, when asked if he has contingency plans if the selloff becomes "more unnerving" (for example if foreign countries, i.e. China, may be selling US Treasuries in response to the trade war).
His answer: “we are a long way” from needing to take action, but “we have a big toolkit that we can roll out” if so, and included in that toolkit is the department’s buyback program for older securities, Bessent said. “We could up the buybacks if we wanted" (15'40" in the view below).
And that's precisely what will happen in a few weeks (or even days) if China's selling of Treasuries persists,sending yields plunging. The good news, is that this "soft QE" wouldn't have to be in place too long: only long enough for China to run out of reserves... mostly via Belgium's Euroclear...
... to sell. Which at the current pace of liquidations should be done by the end of the month.
Goldman analysts Noah Poponak and others reacted to Bloomberg's report earlier this morning regarding China's suspension of Boeing jet deliveries amid the deepening trade war between the U.S. and China.
"We think the impact to Boeing is very small because China had already stopped taking Boeing deliveries and stopped ordering Boeing aircraft during the last Trump administration, such that there is no real reduction to implement," Poponak wrote in a note to clients in the late afternoon hours of the cash session.
The analyst continued:
Per company data, customers from China have only ordered 28 aircraft since 1/1/2018 (ex. unidentified customers), and China is 2% of Boeing's large backlog that is sold out through 2030 with other customers. China was in the built but not delivered inventory balance, but the majority of that has now been delivered with around only 25 737-8 MAX aircraft (produced prior to 2023) left designated to the country. Boeing has previously stated that it can build a multi-year delivery skyline assuming China is not taking airplanes over at least a medium-term window, while it operates in a long-term secular growth market where all other regions have substantial growth and replacement needs.
"We are buy-rated on the stock," he added.
He explained that China was once a "meaningful portion of Boeing's total order and delivery activity," but not since President Trump's first term, which resulted in the first trade war round with Beijing.
The activity chart data shows Boeing's order activity with China plummeted after 2016.
Boeing deliveries to China, 2010 to present day.
Trump will likely need to sprinkle some Max jets and 777s in any trade deal when he renegotiates with Beijing.
* * *
Days after Juneyao Airlines postponed the delivery of a widebody jet from Boeing, Beijing has escalated its trade war response—quietly ordering all Chinese carriers to suspend further Boeing deliveries, according to Bloomberg, citing people familiar with the situation. The move marks a broadening of non-tariff retaliation amid a deepening tit-for-tar trade war between the U.S. and China.
Here's more color from the report:
China has ordered its airlines not to take any further deliveries of Boeing Co., according to people familiar with the matter.
. . .
Beijing has also asked that Chinese carriers halt any purchases of aircraft-related equipment and parts from U.S. companies, the people said, asking not to be identified discussing matters that are private.
The order came after China unveiled retaliatory tariffs of 125% on American goods this past weekend, the people said.
. . .
The Chinese government is also considering ways to provide assistance to airlines that lease Boeing jets and are facing higher costs, the people said.
. . .
Delivery paperwork and payment on some of these jets may have been completed before the reciprocal tariffs announced by China on April 11 took effect on April 12, and those planes may be allowed to enter China on a case-by-case basis, some of the people said.
Last week, Beijing hiked its effective tariff rate on US goods to 125%, countering President Trump's 145% tariff rate.
Beijing also shifted to non-tariff retaliation, limiting Hollywood film imports, slowing rare earth export shipments, and weakening the yuan.
The Bloomberg report sent Boeing shares down roughly 3.5% in New York trading. The stock is down 10% year-to-date (as of Monday's close) and hovering near Covid-era lows, still showing no signs of a meaningful recovery.
Let's not forget that China's non-tariff countermeasures may also include:
