PRA Health Sciences (NASDAQ:PRAH): Q2 Non-GAAP EPS of $1.22 beats by $0.05; GAAP EPS of $0.62 misses by $0.22.
Revenue of $763.31M (+5.6% Y/Y) misses by $1.64M.
Shares +1.24%.
Wednesday, July 31, 2019
Cross Country Healthcare EPS beats by $0.01, beats on revenue
Cross Country Healthcare (NASDAQ:CCRN): Q2 Non-GAAP EPS of $0.01 beats by $0.01; GAAP EPS of -$1.44 misses by $1.43.
Revenue of $202.76M (-0.9% Y/Y) beats by $3.3M.
China drugmaker Chipscreen’s STAR Market IPO sees feverish demand
Shenzhen Chipscreen Biosciences, which plans to list on China’s red-hot new tech board, said its newly issued shares were almost 3,000-times oversubscribed among retail investors, despite an eye-popping offer pricing of 468-times earnings.
While the scramble reflects a strong appetite for listings on Shanghai’s Nasdaq-style STAR Market, which was launched in June, it also underlines the challenge for bankers to value IPOs for tech start-ups as regulators let market prices play their role in setting prices.
Chipscreen, which develops original drugs for tumours and diabetes, said in an exchange filing on Thursday that shares reserved for individual investors – accounting for about one fifth of the IPO – were 2,956.25 times oversubscribed.
The company has set the price for its initial public offering (IPO) at 20.43 yuan per share, or 467.51 times 2018 earnings, the highest so far for a STAR Market company.
In contrast, China-listed pharmaceutical firms, traded at an average earnings multiple of 30.79 over the past month.
The feverish demand values Chipscreen at 8.38 billion yuan ($1.21 billion), and would allow the company to raise 1 billion yuan – 27% more than originally planned.
In a roadshow on Tuesday, Chipscreen founder Lu Xianping said the company will use the IPO proceeds to “strengthen competitiveness, expand market share, and develop new products in a bid to make growth sustainable”.
Chipscreen’s share offering came a week after the frenzied debut of the first batch of 25 companies on the science and technology board on July 22. The companies surged roughly 140% on average on that day.
Chipscreen has not disclosed when it will debut on the STAR Market, which has attracted a slew of Chinese drugmakers to list. One drug developer, Suzhou Zelgen Biopharmaceuticals Co, plans to list before it sells any products to patients, potentially testing investors’ risk tolerance.
The new tech board potentially competes with Hong Kong, which last year revised listing rules to allow so-called pre-revenue, or pre-profit biotech firms to go public in the city.
Under the new listing regime, 10 biotech firms have floated in Hong Kong as of May, raising over HK$33 billion ($4 billion).
Shares of Ascletis Pharma, the first biotech firm to list in Hong Kong under the new rules, are trading about 66% below is IPO price, while performances of the rest are mixed.
Biotech Investors: Mark Your Calendar For These August FDA Dates
Though light in terms of PDUFA events, July yielded mostly positive results. Quiet a few approvals came through, including Eli Lilly And Co LLY 0.25%‘s nasally administered low blood sugar drug, Karyopharm Therapeutics Inc KPTI 0.84%‘s Selinexor and a handful of generic drugs.
With three new molecular entity approvals in July, the total number of NME approvals this year rose to 15, which pales before the 25 approvals that came through the same time last year.
PDUFA dates are deadlines for the FDA to review new drugs. The FDA is normally given 10 months to review new drugs. If a drug is selected for priority review, the FDA is allotted six months to review the drug. These time frames begin on the date that an NDA is accepted by the FDA as complete.
Here are the key PDUFA catalysts for the upcoming month.
Kala Eyes Drug Approval
- Company: Kala Pharmaceuticals Inc KALA 0.34%
- Type of Application: NDA
- Candidate: KPI-121, 0.25%
- Indication: dry eye disease
- Date: Aug. 15
KPI-121, 0.25%, is Kala’s candidate for the temporary relief of signs and symptoms of dry eye disease using a two-week course therapy. It will likely also work for dry eye flare.
The company said its product candidate, if approved, will be the first safe and effective short-term treatment option for dry eye disease.
Vanda Sleepless Over Jet Lag Disorder Approval
- Company: Vanda Pharmaceuticals Inc. VNDA 1.58%
- Type of Application: sNDA
- Candidate: Hetlioz
- Indication: jet lag disorder
- Date: Aug, 16
Vanda’s Hetlioz is a melatonin receptor agonist, which was initially approved in 2014 to treat non-24-hour sleep-wake disorder in totally blind individuals.
Non-24 is a chronic body clock disorder in the blind that causes problems with the timing of sleep.
The company’s sNDA for the drug was accepted in December of 2018, with the PDUFA date fixed for Aug. 16. However, the company said July 22 it received a notification from the FDA that the sNDA has deficiencies that preclude discussion of labeling and post-marketing requirements/commitments, although the agency did not disclose what the deficiencies were.
The FDA, however, said the notification does not reflect a final decision on the information under review.
Roche Seeks Approval For Personalized Cancer Medicine
- Company: Roche Holdings AG Basel ADR RHHBY 0.21%
- Type of Application: NDA
- Candidate: Entrectinib
- Indication: solid tumors and non-small cell lung cancer, or NSCLC
- Date: Aug. 18
Entrectinib is being evaluated for treating adult and pediatric patients with neurotrophic tropomyosin receptor kinase, or NTRK, fusion-positive locally advanced or metastatic solid tumors as well as for the treating people with metastatic, ROS1-positive NSCLC.
“By combining comprehensive genomic profiling with actionable targeted therapies, like entrectinib, we are advancing our personalised healthcare goal to find the right treatment for each patient,” the company said in its release announcing FDA acceptance of the NDA.
Will Nabriva’s Antibiotic Pass The FDA Muster?
- Company: Nabriva Therapeutics PLC – ADR NBRV 0.63%
- Type of Application: NDA
- Candidate: intravenous and oral formulations of Lefamulin
- Indication: community-acquired bacterial pneumonia, or CABP
- Date: Aug. 19
Lefamulin is a semi-synthetic pleuromutilin antibiotic evaluated for CABP. The NDAs – for the IV and oral formulations – have a priority review status, Fast Track designations as well as Qualified Infectious Disease Product designations.
While accepting the application, the FDA said it hasn’t planned an advisory committee meeting to discuss the applications.
AbbVie’s Rheumatoid Arthiritis Drug
- Company: AbbVie Inc ABBV 0.82%
- Type of Application: NDA
- Candidate: upadacitinib
- Indication: rheumatoid arthritis
- Date: Q3 (likely Aug. 19/20 assuming a six-month review period)
AbbVie’s upadacitinib is an investigational once-daily JAK1-selective inhibitor being studied for multiple immune-mediated diseases. The company is now seeking approval of the drug for treating adult patients with moderate to severe rheumatoid arthritis.
Sarepta Seeks Approval Of Drug For DMD Patients With Specific Mutations
- Company: Sarepta Therapeutics Inc SRPT 0.58%
- Type of Application: NDA
- Candidate: Golodirsen
- Indication: Duchenne muscular dystrophy, or DMD
- Date: Aug. 19
Golodirsen is being studied for the treatment of exon 53 amenable patients, who account for about 8% of DMD patients. It’s a phosphodiamidate morpholino oligomer engineered to treat DMD patients who have generic mutations, subject to skipping exon 53 of the dystrophin gene.
Can Second Time Be Charm For IntelliPharmaCeutics?
- Company: IntelliPharmaCeutics International Inc. IPCIF 3.01%
- Type of Application: NDA
- Candidate: Rexista
- Indication: abuse-deterrent pain medication
- Date: Aug. 28
Rexista is Oxycodone Hydrochloride extended-release tablets. The FDA issued a complete response letter to the original NDA in September of 2017, with the agency providing recommendations and requesting for information, including the relevant Category 2 and Category 3 studies to assess the abuse-deterrent properties of Oxycodone ER by the oral and nasal routes of administration.
The company resubmitted the application March 4, 2019, with the FDA accepting the resubmitted application on March 29, deeming it to be a complete response.
Nektar Waits With Bated Breath For Opioid Pain Medication Approval
- Company: Nektar Therapeutics NKTR 2.77%
- Type of Application: NDA
- Candidate: NKTR-181
- Indication: chronic low back pain in adult patients new to opioid therapy
- Date: Aug. 29
NKTR-181 is a novel mu-opioid analgesic drug candidate. On July 23, the company said it received a General Advice letter from the FDA regarding its NDA, communicating the postponement of an Adcom meeting scheduled for Aug. 21, as the regulatory agency continues to consider a number of scientific and policy issues relating to this class of drugs.
Although the postponement is not unique to NKTR-181, the FDA did say in the communication the PDUFA goal date may not be met.
HHS Outlines Goals for Possible Future Canadian Drug Imports
The Trump administration on Wednesday outlined ideas for potential future steps toward allowing importation of certain drugs from Canada into the United States.
The US Department of Health and Human Services (HHS) did not release a firm timeline for making formal proposals on drug importation. In fact, a future publication of draft regulatory proposals would mark only a first concrete step toward opening serious debate on ideas being considered by HHS.
It thus is unclear when — or if — consumers may get access to cheaper drugs through Canada due to any of the ideas HHS discussed Wednesday with reporters.
Still, HHS Secretary Alex Azar on Wednesday did emphasize the Trump administration’s support for the concept of allowing consumers to buy cheaper versions of pharmaceuticals in Canada.
Changes in the business landscape have prompted a new look at the question of importation, Azar said. With expanding international operations, drug distribution firms and pharmacy chains may be able to manage secure cross-border transactions, he said.
“We owe it to the American people to keep challenging our assumptions, challenging our orthodoxies, challenging our systems,” Azar told reporters during a telebriefing.
He said the announcement on drug importation represents an important “mindshift” in the Trump administration. HHS wants pharmacy chains, states, and wholesalers to build the case for importation, Azar said.
“We’re saying here’s the roadmap. We’re open,” he said. “Work with us and convince us that you have a game plan that can work.”
Two Pathways
The outline HHS released Wednesday, which the department calls its “action plan,” envisions two regulatory pathways for safe importation of drugs.
HHS and the US Food and Drug Administration (FDA) could use a notice of process called notice of proposed rulemaking (NPRM) to authorize demonstration projects. These could be developed by states, drug wholesalers, and pharmacists and submitted for HHS review.
The would-be test groups would make a case to HHS about how they could safely import certain drugs from Canada that are versions of FDA-approved drugs manufactured consistent with the FDA approval.
In a press release, HHS said its planned future NPRM for the demonstration projects would also seek “significant cost savings” from importation for consumers.
And the FDA could use what is called guidance to give recommendations to drug makers who might want to import into the United States versions of those drugs they sell in foreign countries. In theory, this second pathway would potentially broaden the chances for importation to include medications like insulin used to treat diabetes, as well as those used to treat rheumatoid arthritis, cardiovascular disorders, and cancer, HHS said.
“Too Dangerous”
Drug makers seem unlikely to embrace this option.
The pharmaceutical lobbying group issued an immediate criticism of HHS’ outline. In a statement, Stephen J. Ubl, chief executive officer of the Pharmaceutical Research and Manufacturers of America (PhRMA), called the aim of the HHS outline “far too dangerous for American patients.”
“Law enforcement has repeatedly warned that importation schemes could worsen the opioid crisis and jeopardize public safety,” Ubl said. “Moreover, Canadian officials have said that the policy is unworkable, and they will not risk shortages by diverting their medicine supply to the United States.”
John J. Leppard, an analyst with Washington Analysis, which advises investors about federal policy changes, wrote a Wednesday report on the HHS announcement. It was titled “Rx Pricing: The Red Herring of Reimportation & Supply Chain Implications.”
In the report, Leppard noted that the pharmaceutical industry is “unlikely to provide sufficient supply to foreign nations or pursue a demonstration project that would materially undercut its own domestic market and profitability.”
Leppard also observed that there is opposition in Canada to allowing more of the national drug supply to flow toward the United States. There have been reports of the nation’s medical system, Health Canada, preparing to take actions to ensure its citizens have uninterrupted access to the drugs they need, Leppard wrote.
“As reimportation has garnered greater attention in the U.S., Canadian officials have increasingly pushed back against the policy,” Leppard wrote.
Democratic Disapproval
The ranking Democrat on the health subcommittee of the Senate Finance Committee is also pushing back against the policy.
“This ‘action plan’ isn’t a real plan and lacks any real action. It sets up undefined ‘demonstrations’ that are limited in scope and it could take years to finalize rules, all while U.S citizens continue to pay the highest prescription drug prices in the world,” said Sen. Debbie Stabenow (D-MI), in a statement mailed to Medscape Medical News.
“If this Administration was serious about lowering drug prices, it should support passage of our legislation allowing Medicare to negotiate drug prices right now. The Administration should also support legislation I cosponsored, the Affordable and Safe Prescription Drug Importation Act, which will allow Americans to import safe and affordable prescription drugs,” she added.
Appeals court revives lab challenge of multibillion-dollar Medicare cut
A federal appeals court on Tuesday revived a group of clinical laboratories’ challenge to billions of dollars in lost Medicare revenue.
In a unanimous decision, the three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit overturned a lower court ruling that the laboratories couldn’t dispute the lost reimbursement funding. The Medicare changes stemmed from the Protecting Access to Medicare Act of 2014, or PAMA, which required certain clinical laboratories to give the CMS private payer data that could be used to set new reimbursement rates.
Although portions of the law aren’t reviewable by the courts, the D.C. Circuit determined it could review the data collection provisions and resurrected the American Clinical Laboratory Association’s lawsuit.
A District Court judge in September 2018 dismissed the case citing the judicial review clause of the law. The case will be sent back to the district court level for further review.
The ACLA, a trade group for clinical laboratories, sued the CMS in December 2017 over the planned cuts, alleging the agency ignored congressional intent and instituted a flawed data-reporting process.
The group’s president, Julie Khani, said in a statement that she was encouraged by the D.C. Circuit’s decision.
“HHS’ continued flawed data collection process poses a direct challenge to the rule of law and PAMA’s intent to support a sustainable, market-based laboratory market for millions of seniors,” she said. “On behalf of those who have already seen the consequences of this painful overreach, we urge the district court to act quickly to rule on the merits of ACLA’s case.”
The Congressional Budget Office in 2017 estimated PAMA would cut Medicare spending by $100 million in the first year of the new rates and $2.5 billion over a decade. However, that assumed that more labs would be surveyed under the clinical laboratory definition. Most hospital laboratories are exempt from the law.
Medicare’s fee schedule for lab tests has been largely unchanged since it was established in 1984. Each lab determines its own rates based on market prices. Medicare has historically paid 18% to 30% more than other insurers for some tests, HHS’ Office of Inspector General found. The program shells out about $7 billion a year for clinical diagnostic laboratory tests.
Congress panics on potential heparin shortage due to diseased China swine
A decade ago Congress was up in arms about Chinese crude heparin in the U.S. supply chain. Now member are highly concerned there may not be enough of it.
A group of six congressional leaders from both parties are asking FDA Acting Commissioner Norman Sharpless to give them some assurances the U.S. heparin supply is not in danger of drying up as a result of African swine fever which is wreaking havoc on pig herds in China, the primary source of crude heparin.
“U.S. dependence on Chinese heparin and on one animal source raises risks of shortages,” the representatives wrote in a letter to the Sharpless. “Pharmaceutical researchers are raising concerns that the African swine fever outbreak in China ‘has the potential to cause an unprecedented shortage of heparin’s raw material.'”
Crude heparin, which is used to manufacture the essential anticoagulant used in kidney dialysis and open heart surgeries, comes from pig intestines and China has reportedly already lost 150 million of its 440 million swine, the letter says.
FDA rules require heparin be manufactured only from pig intestines, because when “ruminant” animals like cattle are used, there is a chance the raw material could be contaminated with bovine spongiform encephalopathy or oversulfated chondroitin sulfate (OSCS), a cheap filler that saves money but that can be deadly to patients. In 2008, Chinese heparin contaminated with OSCS was tied to the deaths of 80 dialysis patients in the U.S. As recently as last November, European regulators banned a Chinese supplier after finding contamination risks
The committee members pointed out that, since the disease was discovered in Chinese herds last year, the country has lost a reported 150 million hogs to the outbreak. While there is no immediate indication that China’s hog herd problems are impacting the U.S. heparin levels, the letter points out that the current supply is already stressed. It has faced periodic shortages, like when a Baxter International plant was taken out of production by Hurricane Maria in 2017.
It was a decade ago that the FDA got whiplashed by Congressional leaders over tainted Chinese heparin in the U.S. supply. The investigation began after heparin batches were tied to hundreds of allergic reactions, some that proved fatal. The blood thinner had been tainted somewhere along the supply chain, which stretched into some mom-and-pop workshops in the Chinese countryside.
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