Novartis spent $15bn on M&A last year, with more to come

The comprehensive restructuring of Novartis under new CEO Vas Narasimhan resulted in $15 billion in bolt-on acquisitions last year, and he wants to keep up that momentum.

Speaking on Novartis’ fourth-quarter results call, Narasimhan said that an informal target would be a spend of around 5% of Novartis’ market cap on M&A each year, which would equate to around $10 billion, as the process of “redesigning” the company around advanced therapy platforms and data science continues.

Last year’s additions included gene therapy company AveXis, bought for $8.7 billion, and radiotherapy specialists Endocyte which cost $2.1 billion, and Narasimhan said there was an appetite in picking up additional assets in “new technology areas [and] advanced therapy platforms.”

The comments came as Novartis reported a 6% rise in fourth-quarter revenues to $13.3 billion, a little ahead of expectations, with slow-burner heart failure drug Entresto (sacubitril/valsartan) finally breaking into blockbuster territory for the full-year, and psoriasis drug Cosentyx (secukinumab) continuing its buoyant roll-out.

Entresto grew 76% to $1.03 billion in 2018, outstripping even Cosentyx which rose 36% to $2.8 billion, buoyed by new comparative data from the PIONEER-HF trial. Also hitting the $1bn threshold in 2018 for the first time were chronic immune thrombocytopenia drug Promacta/Revolade (eltrombopag) and melanoma duo Tafinlar (dabrafenib) and Mekinist (trametinib), both growing by more than 30% in the year.

There are more blockbusters on the way as well, according to Narasimhan, who said on the call that 10 additional drugs due for launch in the next couple of years could have $1bn sales potential.

Three of those were approved in 2018 – Aimovig (erenumab) for migraine, CAR-T therapy Kymriah (tisagenlecleucel) for leukaemia/lymphoma and radio-oncology drug Lutathera (lutetium Lu 177 dotatate) – with four more due in 2019.

This year’s crop are predicted to be breast cancer therapy alpelisib, siponimod for secondary progressive multiple sclerosis, brolucizumab for sickle cell anaemia, and Zolgensma, Novartis’ much anticipated gene therapy for spinal muscular atrophy which was the primary asset in the AveXis deal.

On the downside, Kymriah is still looking a long way off a $1 billion product, with 2018 sales coming in at just $76 million thanks to manufacturing constraints and slow progress towards access agreements, although Novartis’ new oncology head – Susanne Schaffert – said momentum is building thanks to new capacity and reimbursement agreements.

Also sluggish out of the blocks has been Kisqali (ribociclib), Novartis’ competitor to Pfizer’s fast-growing breast cancer drug Ibrance (palbociclib), although this has started to come to life with sales up 210% to $235 million in 2018.

Narasimhan said he is “confident that with Kisqali over time we can build this into a blockbuster medicine with consistent effort and consistent focus on our new datasets”, such as the MONALEESA-3 and 7 trials.

Novartis also confirmed the spin-off of eyecare division Alcon, which could raise as much as $35 billion, which is expected to complete in the second quarter, and said the revamp of generics business Sandoz would continue to reshape its portfolio towards biosimilars.

https://pharmaphorum.com/news/novartis-spent-15bn-on-ma-last-year-with-more-to-come/

CAR-T firms push to improve manufacturing efficiency

Experience with the approved CAR-T drugs from Novartis and Gilead has shown that being able to manufacture enough products fast enough is a major issue when it comes to marketing these cutting edge therapies – perhaps even more challenging than getting them approved.

Kisaco Research’s CAR-T Congress EU heard how various biotechs are trying to refine or change the process for making cells that are capable of tackling blood cancer, and more challenging solid tumours.

Novartis has been struggling to meet demand for its approved CAR-T Kymriah (tisagenlecleucel), and has been looking to find ways to make manufacturing more efficient.

CAR-T (chimeric antigen receptor T-cell) therapies are manufactured by harvesting a patient’s own T-cells, genetically modifying them so that they target the disease, and then reintroducing them to the patient.

While the effects can be powerful, the challenges of producing the therapy in time is proving a challenge and the hunt is on to find new and faster ways to genetically engineer the CAR-T cells and get them to patients before their disease gets worse.

The genetic engineering step is proving to be a sticking point in the process, and there is a range of approaches being trialled that could be faster and more efficient than the virus-based gene editing used in approved CAR-Ts.

The conference heard from Michael Hudecek, director of the CAR-T Translational Research Programme at Universitatsklinikum Wurzburg, Germany who is working on cells that are genetically engineered using “sleeping beauty” DNA transfer.

This aims to be faster than the virus-based gene transfer but also prevents the risk of any virus left over from the process being left in the end product.

There have been no such issues in the approved drugs, but prior to approval in 2017 the FDA sought assurances from manufacturers that the process would not generate left-over retroviruses that could lead to new cancers.

“We need to make sure that no active viruses are presenting,” said Hudecek, whose technique is not based around viruses but a system based on “minicircles” of DNA that can be used to insert a piece of DNA code at 10% the cost of a viral vector.

There was also a presentation from David Sourdive, executive vice president of technical operations at Cellectis, which is developing allogeneic “off-the-shelf” T-cell therapies in partnership with Servier and Allogene.

The gene editing system behind this technology is Cellectis’ system known as Talen – a class of proteins capable of inserting genes with high specificity and activity.

Sourdive described it as a “powerful platform” that will continue to deliver results in future research.

He also noted that CRISPR-Cas9 gene editing techniques are not suitable for use in CAR-T cells – while this technique is suitable for snipping out bits of DNA, they leave an awkward dog-end in the molecule that makes it difficult to insert a new gene.

https://pharmaphorum.com/news/car-t-firms-push-to-improve-manufacturing-efficiency/

Green Growth Is Open to ‘Change’ on Its Bid for Aphria

Green Growth Brands Inc. is flexible and open to negotiations on its unsolicited takeover offer for Aphria Inc., though the two companies haven’t had a face-to-face conversation about the bid.

“It’s likely there needs to be some negotiation and there’s a chance that the offer might change,” Green Growth Chief Executive Officer Peter Horvath said in a phone interview.

Green Growth last week formally submitted an all-stock takeover offer it had first proposed in December, which it said valued Aphria at C$2.4 billion ($1.8 billion). Today that offer is worth about C$2.1 billion based on Green Growth’s share price, well below Aphria’s market value of C$2.6 billion. Aphria earlier said the bid was too low and advised shareholders to take no action until its board issues a recommendation.

Horvath said he’d be open to discussing a strategy that would include helping Aphria raise capital, for example.

“I think there’s always a chance that it could take on a form that’s different from what our bid was and it might not just be economics, it could be the ability to raise capital for their business,” he said.

Columbus, Ohio-based Green Growth has offered 1.5714 shares per Aphria share and plans to complete a third-party equity financing of C$300 million at C$7 a share to fund what would be the first large cross-border takeover in the cannabis industry. That’s nearly 40 percent above Green Growth’s Wednesday closing price of C$5.05.

Merger Gap

The 21 percent gap between Green Growth’s offer and Aphria’s current share price is the third widest of the 107 current deals tracked by Bloomberg.

Green Growth’s largest shareholder, All Js Greenspace LLC, backed by the retail fortune of Ohio’s Schottenstein family, has agreed to purchase up to C$150 million shares as a backstop to the financing.

Horvath said his investment bankers are confident other shareholders will pitch in the remaining C$150 million.

“I’m told people believe that they can raise it,” he said. “There’s a series of firms that’ll probably raise C$50 million or C$60 million each for us, and there’s a lot of interest in our business.”

Reject Bid

CIBC analyst John Zamparo said last week that it’s unlikely Aphria shareholders will accept the offer.

“We believe that ultimately this bid will not entice a majority of Aphria shareholders,” he said.

Aphria shares gained 4.9 percent to C$10.54 Thursday and Green Growth rose 5 percent to C$5.30. Green Growth said Thursday morning it has reached an agreement to acquire Desert Rose, a medical marijuana cultivator and retailer in Arizona, for $12.4 million. Green Growth also has operations in Nevada and Massachusetts.

Horvath said he believes Arizona will legalize recreational pot within 18 months and it’s acquisitions like Desert Rose that will help boost Green Growth’s share price to the C$7 level. The company is also opening its first mall kiosk selling topical products infused with cannabidiol, or CBD, and plans to have 300 open by the end of the year. Horvath said his aim is to compete with skin-care lines from the likes of Aveda, Kiehl’s and Bath & Body Works.

“The possibility of combining with Aphria is exciting and increases our footprint, but the kiosk business is what I’m most excited about,” Horvath said.

https://www.bloomberg.com/news/articles/2019-01-31/green-growth-open-to-change-aphria-bid-as-stock-lags-offer

Researchers Familiar With Chinese CRISPR Scandal Under Increased Scrutiny

In November, Chinese researcher He Jiankui of the Southern University of Science and Technology of China announced he had used CRISPR to alter the embryos of seven couples to make them resistant to HIV. To date, a set of twins were born and there is another pregnancy. This was met by near-universal condemnation in the global scientific community.

The Chinese government is investigating and He Jiankui has disappeared from the public eye, possibly under house arrest. At least one source, The Khmer Times, an English-language newspaper based in Phnom Penh, Cambodia, suggests that the Chinese government is also involved in a cover-up, accusing He Jiankui, who they’ve dubbed the “Chinese Frankenstein,” of “forging ethical test papers” and “deliberately circumventing surveillance.”

The Khmer Times points out that He Jinakui was a “rising star” in Chinese genome research who received the equivalent of $5.7 million in public grants for his research since 2015. His research project had been officially registered as “Evaluation of the safety and efficacy of gene editing with human embryo CCR5 gene” in the Chinese Clinical Trial Registry on November 8, 2018—only about three weeks before making his announcement in Hong Kong. There is also evidence that China’s Ethics Committee had examined the application and it had been approved, “In accordance with the ethical standards.” But now the Chinese government is claiming that’s all a lie.

Also under increasing scrutiny is the role of Houston’s Rice University researcher Michael Deem, who in earlier stories was portrayed as a former professor of He Jiankui’s who acted more as an observer and advisor to the work, with minor financial interests in He Jiankui’s biotech companies. It has now been noted that Deem was named as the senior author on the paper submitted to the journal Nature in late November, with He Jiankui as the lead author.

According to a Chinese scientist involved in the project, Deem was “more than a bystander: Deem collaborated with He on the experiment and participated as a member of the research team during meetings with several volunteers in 2017,” reported STAT. Deem was apparently involved in getting the volunteers’ consent.

Earlier stories indicated Deem’s role was being investigated by Rice University and the U.S. National Institutes of Health (NIH). 

Jia Ping, a human rights attorney and founder and chief executive officer of the Beijing-based Health Governance Initiative, a nongovernmental organization, told STAT, “As a prominent scientist from an elite university in the U.S., Deem’s presence is likely to have a significant role in persuading potential candidates to jump on board.”

For his part, in December, Deem’s attorney stated, “Michael does not do human research and he did not do human research on this project.”

In a statement issued by his attorneys last week, they said, “Michael Deem has done theoretical work on CRISPR in bacteria in the past, and he wrote a review article on the physics of CRISPR-Cas. But Dr. Deem has not designed, carried out, or executed studies or experiments related to CRISPR-Cas9 gene editing—something very different.”

The attorneys also say that Deem was not present at the consent process of the parents who gave birth to twins. In this case, Associated Press (AP), which originally reported that Deem was present, says it stands by its story.

Many researchers and ethicists are also questioning the role of other prominent scientists who knew of He Jiankui’s work. Paul Knoepfler, a biologist at the University of California, Davis, told STAT, “I don’t think He Jiankui would have done the project if Deem had been strongly disapproving of it.”

Another well-known and well-respected researcher, Craig Mello, with the University of Massachusetts Medical School and a Nobel Prize winner, is also facing criticism for his knowledge of He Jiankui’s work. Newsweek writes that Mello “knew about the gene-editing experiments taking place at He’s laboratory months before the girls were born.” The emails were acquired by AP.

In one of the emails, He Jiankui apparently wrote to Mello, “Good news! The woman is pregnant, the genome editing a success! The embryo with CCR5 gene edited was transplanted to the woman 12 days ago, and today the pregnancy is confirmed.”

Mello, on his part, appears to distance himself from the research, saying he was pleased for He, but that he would “rather not be kept in the loop.” He also told He Jiankui he didn’t believe the experiment was the appropriate use of CRISPR because there was no “true unmet medical need. You are risking the health of the child you are editing … I just don’t see why you are doing this.”

Mello and Deem are just a couple of U.S. scientists who were either involved in the research (Deem) or aware of it. Some, like Mello, appeared to be well-informed about the Chinese researcher’s work, while others, such as Sheila Jasanoff with Harvard University and Max Haeussler of UC Santa Cruz, who had interactions with him, only had had discussions or exchanges with He Jiankui that hinted at his work, but only in retrospect did they realize how far he had gone.

Joyce Harper of the Institute for Women’s Health at University College London told Newsweek that Mello should have reported the information to an official committee or the press. “The National Academy of Sciences had produced a detailed document on gene editing in 2017, and Mello could have approached this committee to discuss his concerns. Actions such as Dr. He’s totally undermines scientific and clinical research as well the harmful consequences it could have to the children born as the result of this highly experimental procedure. I appreciate whistleblowing is never easy but we need a system where this does not happen again.”

The National Science Foundation (NSF)’s Office of Inspector General is reportedly investigating Deem. Deem’s own research is funded by two active federal grants from the NSF and from the Department of Energy. The NSF’s is a five-year, $12-million grant, which ends in August. It is currently unknown if any of these federal monies were used for the Chinese CRISPR work. Rice University stated it was unaware of the CRISPR babies research and as far as it knew, none was performed in the U.S. It too has launched a full investigation.

STAT notes, “Even if he didn’t use federal funds for the work, government regulations require researchers to seek approval from an ethics committee at their institution should they want to carry out clinical trials abroad.”

https://www.biospace.com/article/role-of-american-researcher-who-assisted-china-s-frankenstein-under-more-scrutiny/

Retailers: Teva’s generic EpiPen not available in many U.S. stores

According to retailers and drug supply experts, Teva’s generic version of the EpiPen is not available in many U.S. pharmacies, Reuters reports.
https://thefly.com/landingPageNews.php?id=2857057

Abiomed Q3 results beat, guidance ‘compelling,’ says Piper Jaffray

Piper Jaffray analyst Matt O’Brien reiterated an Overweight rating on Abiomed shares, with a $480 price target, after the company’s Q3 earnings results beat targets on the top- and bottom-lines, and reiterated top-line FY19 guidance which the firm believes is conservative. Additionally, O’Brien sees Abiomed’s newly issued FY19 margin guidance as “compelling.” The analyst concluded that “there are so many things to like about the story” — including modest penetration rates, new indications, new geographies, new products, and operating leverage — and called it a name he would own.
https://thefly.com/landingPageNews.php?id=2857087

Botox for migraine aids for comorbidities including depression and anxiety

Abstract

Objective To assess the effects of onabotulinumtoxinA treatment for chronic migraine (CM) on comorbid symptoms of depression, anxiety, fatigue and poor sleep quality.

Methods The Chronic Migraine OnabotulinuMtoxinA Prolonged Efficacy open-Label (COMPEL) study is a multicentre, open-label, prospective study assessing the long-term safety and efficacy of onabotulinumtoxinA 155 U over nine treatments (108 weeks) in adults with CM. The Patient Health Questionnaire (PHQ-9) and Generalised Anxiety Disorder (GAD-7) scales were used to assess the effects of onabotulinumtoxinA on comorbid symptoms of depression and anxiety, respectively. A clinically meaningful improvement was assessed by the percentage of patients experiencing a ≥1 severity category reduction in PHQ-9 and GAD-7. The effects of onabotulinumtoxinA on associated sleep quality and fatigue were assessed using the Pittsburgh Sleep Quality Index and Fatigue Severity Scale, respectively.

Results OnabotulinumtoxinA treatment was associated with sustained reduction in headache days and PHQ-9 and GAD-7 scores in the analysis population (n=715) over 108 weeks. PHQ-9 and GAD-7 scores were significantly reduced at all time points in patients with clinically significant symptoms of depression and/or anxiety at baseline. By week 108, 78.0% and 81.5% had clinically meaningful improvement in depression and anxiety symptoms, respectively. Sleep quality and symptoms of fatigue also improved; however, less is understood about clinically meaningful changes in these measures. No new safety concerns were identified.

Conclusion In addition to reducing headache frequency, onabotulinumtoxinA treatment for CM was associated with clinically meaningful reduction in symptoms of depression and anxiety, and improved associated symptoms of poor sleep quality and fatigue.

Trial registration number NCT01516892.

https://jnnp.bmj.com/content/early/2019/01/10/jnnp-2018-319290