Senate bill backed by patient groups eyes ‘annuity’ payments for pricey treatments

When healthcare wonks talk about alternative payment models for pricey treatments like gene and cell therapies, they’re usually referring to pay-for-performance deals such as the one Novartis struck with the Centers for Medicare & Medicaid Services for its $475,000 CAR-T cancer treatment, Kymriah. If patients don’t respond within a month of treatment, CMS doesn’t pay.

Now, two U.S. senators want to take that model a step further and allow insurers to spread those payments over time, with installments potentially tied to the effectiveness of the products they’re covering. Senators Bill Cassidy, M.D. (R-Louisiana), and Mark Warner (D-Virginia) have introduced a draft of a bill (PDF) they call the Patient Affordability, Value and Efficiency Act. It proposes amending the Social Security Act so that it will be legal for drug and medical device companies to strike payment deals with insurers that are linked to the performance of their products.

“With input from experts and key stakeholders, we’ll be able to ensure that pharmaceutical companies and medical device manufacturers are incentivized to develop more effective treatments at a better price,” Warner said in a statement.

The bill garnered the support of 14 patient groups, including the Michael J. Fox Foundation, CureDuchenne and the Friedreich’s Ataxia Research Alliance. In a letter to the senators, the groups said they were excited about the emergence of gene and cell therapies that have the potential to cure life-threatening diseases, but that because of their high prices they are “concerned that patient access to them could be greatly threatened.”

Many biopharma companies that are developing advanced therapies have made it clear that they’re hearing the chorus of legislators and patient groups who are criticizing high drug prices. And Wall Street analysts have been preparing investors for months for the potential impact of alternative payment models.

After Sens. Cassidy and Warner released their draft bill, analysts at Leerink Partners sent investors a note predicting that the early test cases for the viability of “annuity”-based payment models would be Novartis’ Zolgensma to treat spinal muscular atrophy and Bluebird Bio’s LentiGlobin for transfusion-dependent beta-thalassemia—both of which are gene therapies. The products are expected to be approved by the FDA this year.

“Both companies are leaders in cell and gene therapy, and we see these payment models as an opportunity to set the tone for constructive engagement with payers and deliver substantial social benefit,” Leerink analysts wrote in a note they sent to investors Thursday. That said, they added the warning that “the impact on shareholder returns may be mixed, according to our analysis of valuation implications across our coverage.”

Bluebird, in fact, had already disclosed that it’s cooking up a special payment model for LentiGlobin. The company’s executives said during a presentation (PDF) at the J.P. Morgan Healthcare Conference in early January that they might charge insurers an upfront fee for LentiGlobin but then spread the rest of the payments out over a period of up to five years. The company didn’t say how much it intends to charge for the treatment, but it vowed the price wouldn’t exceed $2.1 million, which the company believes is the product’s “intrinsic value” —what it returns to the healthcare system in extending the lives of patients and improving their quality of life.

As for Novartis, its history as an innovator in alternative payment models suggests it will come up with a plan for Zolgensma that payers will accept. The company has not yet disclosed the price it plans to charge for the product, but the cost watchdog Institute for Clinical and Economic Review said in December the gene therapy would be cost effective at a price of $2 million—an analysis Novartis was happy with, said Dave Lennon, president of the company’s AveXis unit, during a panel discussion hosted by FierceBiotech last week.

Lennon said Novartis is mindful of the need to develop alternative payment models for products like Zolgensma so the company can provide “a mechanism to stave off some of the pricing pressure that exists, because we find a mechanism to give value back.” He added that by working with payers to find affordable payment plans, the industry has “an opportunity to reset the paradigm under which we’re discussing what we should be charging for medicine, justifying that, and then really staying behind that based on outcomes.”

But tracking outcomes is likely to be a challenge for everyone involved, because there is no infrastructure in place for pharma companies or insurers to follow patients long after they’ve been cured of a disease. Tracking patient outcomes “in the real world … is often messier and more uncertain than the clinical trial setting,” the Leerink analysts said.

Earlier this month, Leerink released a report assessing the potential impact of five-year annuity payment models on the makers of gene and cell therapies in its coverage universe, including Bluebird. The analysts said they’re confident the company’s five-year payment plan for LentiGloblin is solid, but they warned that there are plenty of variables that could affect the profitability of products that are reimbursed via alternative payment models, not the least of which is uncertainty about the long-term benefits of gene and cell therapies.

“While it is premature to assume patients will derive a life-long benefit until the durability of gene therapy is shown in long-term studies, we believe payers will be willing to pay for durability demonstrated during clinical trials or linked” to value-based agreements, they wrote.

https://www.fiercepharma.com/pharma/senate-bill-backed-by-patient-groups-proposes-value-based-annuity-payments-for-pricey

What’s BMS saying about its Celgene buy behind the scenes?

Bristol-Myers Squibb CEO Giovanni Caforio has friends on TV now. R&D chief Tom Lynch has done some of his CAR-T due diligence on YouTube. And one reason Celgene was interested in Bristol’s $74 billion buyout bid is that its own rollout of multiple sclerosis drug Otezla was, well, pretty lame.

A fly on the wall at Bristol-Myers headquarters on Tuesday would have heard all those tidbits, plus some more substantive talk about the Celgene integration. For instance, CAR-T challenges, drug launches and hiring—or lack thereof. We heard it from a transcript (PDF) Bristol filed with the Securities and Exchange Commission.

The setting: A town hall with Bristol-Myers finance employees. The cast: Caforio, Lynch, CFO Charlie Bancroft, commercial chief Chris Boerner and General Counsel Sandy Leung. The purpose: Get staffers on board with the Celgene deal and the work they’ll have to do to bring Celgene into the fold.

Bristol executives have sketched their case for buying Celgene repeatedly, including at a kickoff presentation at the J.P. Morgan Healthcare Conference, where Caforio apparently made his new TV friends. But it’s a different sell for employees who not only face a major overhaul of their daily lives but the potential layoffs that come with any big merger and in the meanwhile—as Caforio acknowledged—may be working overtime because Bristol has to keep its own business humming despite the megamerger and its distractions.

“Many colleagues have said that pre-acquisition they were already stretched with work,” the CEO said. “Now we’ve been told that all open positions are on hold,” he went on, quoting a question he’s heard around the company. “[H]ow do we deal with that?”

Prioritize, in a word, he said, adding that the executive team is looking at some internal initiatives to see what work they can halt or postpone, and employees themselves can work with their managers to do the same with their own to-do lists.

But it’s part and parcel of a megamerger, as the executives noted, when investors will be looking for “synergies”—namely cost cuts, which usually include thousands of jobs. Every position left open could cut down on actual layoffs down the line. A “generic” finance job, for instance, could probably be filled by a counterpart at Celgene, Bancroft noted. But open jobs in biologics manufacturing—something Celgene doesn’t have—could be filled.

The “synergy” decisions—and a lot more—are the purview of Phil Holzer and his nascent Enterprise Integration Team, which has some six months to prepare before the deal’s target close date. The company’s scaling back its long-term financial planning process to free up bandwidth on the finance team to handle the integration, Bancroft said.

That leaves a lot of uncertainty on the table. One way to get staffers on board despite the questions? Recognition, and Boerner did some work in that vein by giving props to the company’s commercial team. Celgene has a half-dozen prospective launches over the next two to three years, and after stumbling with its Otezla rollout, saw Bristol-Myers’ own rollout expertise as a selling point for the merger.

“They specifically called out the fact that we have had many, many launches in I-O,” Boerner said, and he didn’t need to remind employees about the checkpoint inhibitor Opdivo and its rollouts in multiple indications. Even in areas where BMS doesn’t have expertise—such as MS—Celgene figured the Big Pharma could handle launches better than it could, Boerner suggested. “These are some of the new therapeutic areas that, as we launch these drugs, we’re going to have to get up to speed on pretty quickly,” he said, but Celgene recognized BMS had done the same in other fields before. “We’ve gotten up to speed very quickly, we know how to leverage the capabilities that others bring to the table, and that was hugely important for how they thought about this transaction,” Boerner said.

Market access was a specific call-out for Celgene because its lack of expertise there was one reason Otezla faltered, he noted. And though winning access is key to most launches, consider CAR-T, one of Celgene’s biggest recent bets with its Juno buyout. “That is an area where access has been a huge issue to the uptake of those medicines,” Boerner noted.

Which brings us to YouTube. One employee asked the executive team to outline their hopes in Celgene’s CAR-T business—and he was apparently pretty dedicated to discovering more about this new field because he’d been watching online videos about the technology.

“So, the one thing I want to just say is just to tell you I did a lot of due diligence on YouTube as well,” Lynch reassured him, “because if it’s a new technology, it’s surprising how you can learn a lot on YouTube.”

And Lynch went on to outline the challenges of CAR-T therapies, from the logistical difficulty of taking a patient’s own cells and shipping them to a central facility where the individualized therapy is made, to the challenge of actually manufacturing that therapy, to the opportunity of rolling Celgene’s entrant into the blood cancer market.

And Boerner chipped in to say the marketing challenges “are not trivial” either. “Sales have been relatively anemic” for the first two CAR-Ts, Novartis’ Kymriah and Gilead’s Yescarta, though the latter has started to get some traction, he noted.

One key problem, Boerner pointed out, is that CAR-T therapies are an expensive proposition. “They’re expensive from a list price, but when you tack on the logistics of managing them, they’re even more expensive,” he said. “That leads to the third problem, which is that access has become an issue, and then if you add all of that up, then a fourth problem is it’s not been a particularly good experience for physicians or patients.

“So, at some level, you’ve got to overcome all of those problems.”

Bristol thinks it can overcome those problems, partly because of that market access ability Boerner already touted, partly because—he argued—Celgene’s JCAR017 has some advantages over its predecessors. Its response rates are “higher, in some cases,” than Yescarta, and it might just be safer. One of CAR-T’s serious risks, cytokine release syndrome, has cropped up in 1% of patients “versus 15% to 20% for the other agents,” Boerner contended. “That’s huge because if that is maintained, you could potentially think about not monitoring these patients in the intensive care unit but potentially in an outpatient setting,” making the overall costs lower.

If those data bear out, “you can start to overcome some of the access challenges, he went on to say. “[T]his is where, frankly, we can add a lot of value.”

With Celgene’s hematology experience and Bristol’s oncology launch experience, more than any company in the industry, Boerner said, “I think we can actually help to improve the customer experience and ultimately the patient experience.”

In the meantime? Boerner echoed Caforio’s keep-your-head-down message. To his commercial team, he advised to “focus on delivering the business today.”

“I think there’s going to be an agility that we’re all going to have to get comfortable with in terms of being able to do multiple things,” he said. “We’re going to be learning a lot of new things, which is what really makes this transaction so exciting from my perspective. But ultimately, we’ve had a lot of success commercially. We’ve got to keep doing what we’ve been doing in the short term.”

https://www.fiercepharma.com/pharma/what-s-bms-saying-about-its-celgene-buy-behind-scenes-transcript-tells-all

Finding Your Transformation

The recent post on awakening your talent citedCourtney’s performance on the talent show as a beautiful example of how we “become a different person” when we are doing what we’re meant to be doing.  We can be one person in day-to-day life and quite another when we enter our performance zone.

This is an important characteristic of great relationships and great careers:  they bring out the best in us and transform us.

It’s important to note the opposing reality, however.  Just as we’re trans-formed when we’re activating our strengths and values, we are de-formed when those are chronically frustrated.  Consider a few examples:

*  Employees start their careers with enthusiasm, but quickly become caught up in office politics and playing the games that can move them up the ladder.  I have seen talented people become “yes-men”, completely lacking in integrity–all in the name of protecting and advancing their positions.  For a while, they gain status, but in a more enduring way they lose their souls and become bitter, cynical, and unproductive.

*  Couples start their relationships with real feeling, but soon are caught up in a social whirlwind of impressing others and/or an indulgence of personal/material needs.  Meanwhile, the activities and values that brought them together are submerged and their relationships increasingly become ones of convenience and emptiness, with little empathy for or genuine connection to others.

*  Members join a social organization out of an initial desire to learn, grow, and connect to others, but eventually are drawn into ego battles for status and position, creating social rifts and alienation in the process.  I’ve met a number of people active in social organizations who know many people and yet have shockingly few genuine friends.  In the immersion in me, me, me, they never get to we.

*  Traders start out with eagerness and anticipation, but before long are drawn into the consensus chats online and on trading floors.  They trade the same ideas in the same ways as others, never truly adding original, creative elements to their trading.  As they achieve the same, undistinguished returns as others, they become increasingly frustrated and discouraged, losing their energy and wasting day after day doing more of what doesn’t work.

Sometimes we find ourselves stuck in the hell of situations that are de-forming rather than trans-forming.  A beautiful outcome occurs when we use those deforming situations to transform us:  to become so revolted by emptiness and superficiality that we double down on what is most meaningful to us and that helps us find our voice.

Consider:  role models are everywhere.  We can find positive role models who inspire us, or we can find negative role models that so fill us with disgust that we’re able to do what Courtney does at the end of her song:  turn our backs, throw up our hands, give a little “mwah”, and move in a different direction.

There is a lot of positive that can be derived from negative role models.  Utilizing the deformation of negative role models as positive life motivation is the ultimate transformation.

http://traderfeed.blogspot.com/2019/01/finding-your-transformation.html

Botox Maker Argues Rival Drug Was Developed With Stolen Secrets

Allergan Plc and partner Medytox Inc. are seeking to block U.S. imports of a new rival to the wrinkle-treatment Botox, claiming it was developed using stolen manufacturing secrets and turncoat former employees.

Daewoong Pharmaceuticals Co. and Evolus Inc. expect to begin North American sales in February of their competing drug called DWP-450. Medytox contends a former employee handed over to Daewoong the results of its “meticulous, time-consuming, and expensive research” into a new process to make a treatment based on the deadly botulinum toxin, according to the complaint filed Wednesday at the U.S. International Trade Commission in Washington.

Allergan controls some 70 percent of the $3.5 billion U.S. market for treatments using the toxin, and the rival treatment by Daewoong and Evolus — to be priced 25 percent lower — could be its biggest threat. Madison, New Jersey-based Allergan and Medytox are testing a next-generation drugusing the new secret manufacturing process but it’s not expected to get U.S. regulatory approval until 2022.

“Daewoong and Evolus are able to introduce DWP-450 into the U.S. market at a price that they have touted will be substantially lower than the price of Botox, and to thereby undercut the market for Botox, because they were not required to make the massive research and development investments that Allergan and Medytox have incurred and continue to incur to develop their products,” Allergan and Medytox said in the complaint.

Daewoong markets its product in its native South Korea under the name Nabota and plans to sell it elsewhere as Jeuveau. Evolus, run by former Allergan employees, has an exclusive license to sell it in the U.S.

The trade complaint in Washington marks the latest entry in a nearly two-year saga between the two Korean companies.

Medytox in 2017 filed complaints in Korea claiming a former employee stole the company’s “most secret, most protected manufacturing processes” as well as a sample of Medytox’s strain and took it to Daewoong. There’s also a criminal investigation in Korea against Daewoong and the former employee, according to the ITC complaint.

Those cases are continuing, while similar suits in the U.S. were either dismissed or put on hold while the Korean actions proceed.

The process to turn a deadly toxin into Botox, which also is used to treat chronic migraines and urinary incontinence, has been a closely kept secret by Allergan, allowing it to maintain its dominance since it was first approved for sale in 1989.

Medytox’s first botulinum toxin treatment, Meditoxin, began selling in Korea in 2006 and the company has worked since then to develop its newer product, Innotox, in 2014. It plans to sell a derivative of Innotox in the U.S. with Allergan. Medytox uses a liquid-type version that’s seen as easier to use than Botox, which must be mixed with saline for injection.

Medytox uses a liquid-type version that’s seen as easier to use than Botox, which must be mixed with saline for injection.

The commission will consider the complaint and, if it decides to investigate the allegations, could make a final decision in about 15 to 18 months.

This isn’t Allergan’s only legal battle over rivals to its cosmetic treatments. Last week it filed a patent-infringement lawsuit against Prollenium Medical Technologies Inc. over the smaller company’s Revanesse Versa+ wrinkle-filler.

The case is In the Matter of Certain Botulinum Toxin Products, Complaint No. 337-3359, U.S. International Trade Commission (Washington).

https://www.bloomberg.com//news/articles/2019-01-31/botox-maker-allergan-argues-rival-developed-with-stolen-secrets?srnd=markets-vp

SF Biochemist Sells ‘Gene-Editing Kit’ For The Masses

After scientists unlocked the secrets of the human genome in 2003, there was immediate concern about how that knowledge might be abused in the wrong hands. Now, an East Bay entrepreneur wants to put that power in everyone’s hands.

Dr. Josiah Zayner has a PhD in biochemistry and worked for NASA, engineering organisms to help astronauts survive on Mars. But that wasn’t innovative enough for the young, self-described “Bio Hacker.”

“Normal scientists want to study, like, how fruit flies have sex or something, something that nobody really cares about,” said Dr. Zayner. “And what I want to study is, how do we make dragons or super-humans or something like that?”

Zayner wants others to do it as well. Out of a West Oakland apartment, he operates a company called The Odin that sells “gene-editing” kits; they come with all that’s necessary to create your own Genetically Modified Organism.

The kit teaches novice scientists how to inject tree frogs with a type of human growth enzyme that causes the frogs to double in size in about a month.

“It sounds ridiculous,” Dr. Zayner said, “but we’ve been doing gene therapy on human beings since the late 90’s, right? The stuff works, we know how to do it, I want to teach people that. I want people to see how it works.”

But at St. Mary’s College in Moraga, biology professor Vidya Chandrasekaran says there are ethical concerns about an untrained person using a live animal for experimentation.

“Using it in this manner, I’m not sure is the right way to approach biology,” she said.

Dr. Zayner frequently uses himself as a guinea pig. He once injected himself with a growth accelerator while live-streaming a talk at a bio conference. Dr. Chandrasekaran said that’s the kind of thing that occurs when people use science without accountability.

“It really matters whether the people who are doing these things understand the implications and the outcome of it,” she said.

But according to Dr. Zayner, new and powerful technologies are always feared at their beginnings. He pointed out that computers were once giant machines used only by business, government and universities.

“And if you ask yourself now, ‘Was it the correct thing to do to allow people to have access to computers?’, there’s nobody in the world who would say no,” he said.

“When you make a technology available to everybody, innovation happens.”

Whether gene-altering technology for the masses is the next innovation or a case of science gone mad is a question that only time will answer.

East Bay Biochemist Sells ‘Gene-Editing Kit’ For The Masses

Sylentis’ dry eye drug misses primary goals in phase 3

A phase 3 trial of Sylentis’ dry eye disease candidate tivanisiran has missed (PDF) its primary endpoints. The PharmaMar subsidiary failed to link the siRNA eye drops to improved scores on scales of ocular pain and corneal staining compared to artificial tears.

Sylentis advanced tivanisiran into phase 3 in the belief that inhibiting the production of ion channels involved in the transmission of ocular pain would improve the lives of people with dry eye disease. To test that idea, investigators enrolled 330 patients and randomized them to receive daily doses of tivanisiran or artificial tears for four weeks.

The Madrid-based biotech emerged from the study with data suggesting tivanisiran is no better than artificial tears at controlling ocular pain or addressing damage to corneal cells. That resulted in the trial missing its primary endpoints.

Sylentis used its release to disclose the news on other, more positive aspects of the data, starting with a statistically significant improvement in central corneal staining, a measure of cell damage. If the performance against the secondary endpoint is reproducible, it would suggest that tivanisiran is effective at improving one part, but not all, of the cornea.

Chief Operating Officer Ana Isabel Jiménez said in a statement that improvements in parts of the cornea have “been recognized by agencies for the approval of other products.” Sylentis plans to discuss the finding and other data points with the FDA and other regulators in the second quarter before deciding on a path forward.

Other results shared by Sylentis include biomarker data that suggest tivanisiran is better than the control in some regards, and findings that show the siRNA improved ocular pain symptoms and corneal staining over baseline. The drug’s inability to perform better than artificial tears in those areas overshadows its performance against baseline, though.

PharmaMar’s stock opened up a bit in Madrid before sliding back toward its starting point as the morning progressed.

https://www.fiercebiotech.com/biotech/sylentis-dry-eye-drug-misses-primary-goals-phase-3

Allergan abandons women’s health sale plan as profit slumps

Shares in Allergan fell after the company said it had swung to a loss in the last quarter of 2018, and forecast 2019 revenues below analyst expectations.

The Ireland-headquartered specialty drugmaker, best known for its Botox wrinkle treatment, reported a loss of $4.3 billion that reversed a profit of over $3 billion a year ago, even though sales were a little better than expected at $4.08 billion.

The loss resulted from big write-offs to the tune of a whopping $5.4 billion, in part resulting from lower-than-expected sales of double chin treatment Kybella/Belkyra – the main asset in the company’s $2.1 billion acquisition of Kythera – which brought in just $8 million in the quarter.

It also revealed that it had dropped plans to sell off its female health division, which was put on the block last year along with its anti-infectives business. CEO Brent Saunders said on a conference call that it made more sense at the moment to continue “managing and optimising” the women’s health business, but that he still expected anti-infectives to be sold as planned.

It’s possible that the volte-face on women’s health is related to the failure by Allergan to get FDA approval for uterine fibroids therapy Esmya (ulipristal acetate) last year, which had been tipped as a potential blockbuster. Approval would have made the division much more valuable.

Allergan’s cash-cow Botox (onabotulinumtoxinA) had a good quarter, rising 9% to $946m, but its second biggest product – Restasis (cyclosporine) for dry eye disease – fell 18% to $341m thanks to the start of generic competition in some international markets, lower demand and pricing pressure.

For the full year, the company is predicting net revenues of between $15 billion and $15.3 billion, which is a little lower than analysts’ projections.

The fall-off in Restasis sales is likely to gather pace as patent protection is lost in other countries, particularly the US which accounts for 95% of its sales. US exclusivity for the drug is due to be lost in March of this year.

Meanwhile, Botox is also facing the threat of biosimilar competition from US biotech Evolus, which resubmitted a marketing application in the US last August after its first attempt was rejected because of manufacturing issues. It’s hoping for a positive verdict from the FDA second time around in the spring.

In a bid to protect its franchise, Allergan acquired privately-held biotech Bonti last year for an upfront payment of $195 million, gaining control of a new botulinum toxin ingredient with a rapid onset of action (within 24 hours) and a two- to four-week duration of effect.

Shares in Allergan fell almost 9% after the results announcement to their lowest level for almost three years.

Some analysts attributed that in part to what they perceived as downbeat discussion by Allergan’s management on NMDA-targeting antidepressant rapastinel, which is due to report pivotal data later in 2019 and is in a race to market with Johnson & Johnson’s esketamine.

https://pharmaphorum.com/news/allergan-abandons-womens-health-sale-plan-as-profit-slumps/