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Novartis to off-load parts of Sandoz unit; Lilly sets Elanco price range

Top news

* Novartis AG agreed to sell a portion of its generics unit's U.S. portfolio to India-based Aurobindo Pharma Ltd. for $900 million in cash, plus $100 million in potential earn-outs. The sale, expected to close in 2019, will cover Sandoz Inc.'s dermatology business and generic oral solids portfolio in the U.S., including about 300 products as well as development projects.

* Eli Lilly and Co. expects to raise about $1.45 billion in an IPO of its Elanco Animal Health Inc. unit on the New York Stock Exchange. The company, which will list 62.9 million common shares under the ticker ELAN, plans to price the offering at between $20 and $23 per share.

* U.K.-based drugmaker GlaxoSmithKline PLC will slash about 650 jobs in the U.S. as part of a previously announced restructuring, Reuters reported, citing a company spokeswoman. Savings generated will go toward research and development and commercial support of new products, spokeswoman Mary Anne Rhyne said.

On the policy front

* Lawmakers on both sides of Capitol Hill took steps this week to ban so-called gag clauses, which prevent pharmacists from telling customers when they can pay less in out-of-pocket costs for their prescription medicines by not using their insurance plans. By unanimous consent, the Senate on Sept. 4 adopted the Know the Lowest Price Act, or S. 2553, which would prohibit Medicare Part D prescription drug plans and their pharmacy benefit managers from using gag clauses.

Meanwhile, the House Energy and Commerce Health Subcommittee mulled over its own legislation to ban gag clauses during a Sept. 5 hearing, where it heard from a panel of witnesses on that and matters related to Medicaid. That bill, introduced by Rep. Buddy Carter, R-Ga., a pharmacist, would prohibit Medicare and private health insurance plans from using gag clauses in their contracts with pharmacies.

* American voters — Democrats, Republicans and Independents — want lawmakers to ensure protections remain in place to prevent insurers from discriminating against patients with pre-existing medical conditions, a new poll from the nonpartisan, nonprofit Kaiser Family Foundation showed. Those same voters also are not confident the Trump administration's actions to lower drug prices will pan out, Kaiser reported.

* The American Hospital Association and two other hospital organizations have refiled a lawsuit against the U.S. Department of Health and Human Services seeking to reverse a rule that would reduce discounts hospitals receive for the 340B drug pricing program. AHA's lawsuit is challenging a rule issued by HHS in November 2017 that would cut those discounts by nearly 30%, or $1.6 billion, according to the group.

* Intermountain Health Care Inc., a Salt Lake City-based not-for-profit hospital system, is collaborating with the Mayo Clinic, HCA Healthcare Inc. and four others to set up Civica Rx, a nonprofit company that will manufacture generic drugs, CNBC reported. Martin Van Trieste, former chief quality officer of Amgen Inc., will lead the new company, which will be established to combat medicine shortages and rising drug costs.

* The U.S. Food and Drug Administration published an internal policy for how manufacturing facilities are prioritized and scheduled for surveillance inspections, in a bid to increase transparency. "The risk-based site selection model is structured so that the inspection frequency for all facilities, regardless of where the facility is located, prioritizes our inspections of sites where the drug being produced and the manufacturing processes used pose the greatest potential risk for problems that could harm patients," FDA Commissioner Scott Gottlieb said.

* The Democratic Republic of the Congo reported its first death from the Ebola virus in the northeastern city of Beni, a city with close to 1 million people, Peter Salama, chief of the World Health Organization's emergency preparedness and response team, said in a tweet. Although the case was detected quickly and response is expanding, the increase of the virus spreading in an urban center "makes ending the outbreak much harder," Salama added.

M&A and capital markets

* Shire PLC acquired sanaplasma AG, a Switzerland-based source plasma collection company. The acquisition will increase Shire's access to plasma in the long term, the Ireland-based biotechnology company said, without disclosing financial terms of the deal.

* PhaseBio Pharmaceuticals Inc. raised $34 million in the latest round of financing that saw the participation of AstraZeneca PLC and Johnson & Johnson. The financing helps PhaseBio advance its lead product candidate PB2452, which is being studied as a treatment for heart patients receiving AstraZeneca's ticagrelor — sold as Brilinta — who are experiencing a major bleeding event or who require urgent surgery.

* Ontario-based Canopy Growth Corp. completed the acquisition of Canadian cannabis company Hiku Brands Co. Ltd.

* The U.S. Department of Justice is close to approving CVS Health Corp.'s planned purchase of Aetna Inc. and Cigna Corp.'s planned acquisition of Express Scripts Holding Co., The Wall Street Journal reported Sept. 5, citing people familiar with the matter. The DOJ will require CVS and Aetna to sell off assets related to Medicare drug coverage to alleviate competition concerns about the $69 billion merger, the Journal reported, citing sources familiar with the deal.

Drug and product pipeline

* Roche Holding AG said the U.S. FDA extended its review period for Tecentriq as an initial treatment for patients with nonsquamous, non-small cell lung cancer that has spread to other parts of the body. The agency is now expected to decide on the Tecentriq combination's approval by Dec. 5.

* Gilead Sciences Inc. and Galapagos NV said a mid-stage study of filgotinib in patients with a type of inflammatory spine disease met its main goal. The phase 2 study, dubbed Tortuga, evaluated the drug versus placebo in 116 patients with moderate to severe active ankylosing spondylitis, a type of arthritis affecting the spine that causes pain and stiffness in the neck and back.

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* ProQR Therapeutics NV said its medicine was effective in treating a rare inherited eye disease. An interim analysis of the company's early stage clinical trial of QR-110 showed that the therapy demonstrated rapid and sustained improvement in vision in patients with Leber's congenital amaurosis 10 due to a specific gene mutation.

* Eli Lilly and Co. and its unit Avid Radiopharmaceuticals Inc.'s imaging agent flortaucipir succeeded in helping detect Alzheimer's disease through a brain scan in a phase 3 study. Flortaucipir is being tested as an imaging agent that helps in tracing brain activity during a positron emission tomography scan.

Operational activity

* Teva Pharmaceutical Industries Ltd. appointed John Nason to lead its Teva Active Pharmaceutical Ingredients unit, a global provider of active pharmaceutical ingredients. Nason has worked for Teva since 2015 as senior vice president of European technical operations.

* Sweden-based Active Biotech AB (publ) regained global development and commercialization rights to laquinimod from Teva. Israel's Teva said it does not intend to continue developing the drug, which the company has been evaluating as a potential treatment of neurodegenerative diseases such as multiple sclerosis and Huntington's disease since 2004.

Our features

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Bayer CEO says 'nothing changed' with company strategy amid Monsanto legal woes: Bayer CEO Werner Baumann says the company's strategy remains unchanged as it integrates Monsanto into its business even as legal woes continue to plague the newly acquired company.

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Healthcare tech CEO sees advantages to pay TV partnerships: Independa founder and CEO Kian Saneii sees the television, a familiar device already in most U.S. homes, as an ideal option for providing in-home interactive healthcare experiences.

Other features

* 23andMe Inc., a privately held personal genomics and biotech company in California, is gauging consumer interest in a $749 "premium" service that would offer more health data, CNBC reported.

* Purdue Pharma LP will donate $3.4 million to Harm Reduction Therapeutics Inc., a nonprofit company developing a cheaper version of Narcan, a nasal spray sold by Adapt Pharma Inc. for the emergency treatment of a known or suspected opioid overdose, Bloomberg News reported. The donation is part of Purdue's efforts to rebuild its image as the drugmaker, along with other medicine manufacturers, face lawsuits over their alleged role in the U.S. opioid crisis.

The day ahead

Early morning futures indicators pointed to a mixed opening for the U.S. market.

In Asia, Hang Seng fell 0.99% to 26,974.82, while the Nikkei 225 was down 0.41% to 22,487.94.

In Europe, around midday, the FTSE 100 was down 0.22% to 7,367.23, and the Euronext 100 fell 0.15% to 1,031.10.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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