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AstraZeneca's Imfinzi fails trial; Merck & Co.'s Frazier top paid pharma exec

Top news

* AstraZeneca PLC cancer drug Imfinzi, in combination with tremelimumab, failed in a late-stage study to extend the lives of patients with a certain lung cancer. The drug combination was being evaluated against standard-of-care platinum-based chemotherapy in a phase 3 trial, dubbed Neptune, to treat advanced non-small cell lung cancer that had a large number of gene mutations.

* Stock and option awards boosted pay packages of the top 10 highest-paid pharmaceutical CEOs in 2018, with half of them receiving an increase in total adjusted compensation, according to data compiled by S&P Global Market Intelligence.

Kenneth Frazier, chairman, president and CEO of Merck & Co. Inc. — the Kenilworth, N.J.-based maker of blockbuster cancer drug Keytruda — claimed the top spot among the highest-paid executives. He received $20.9 million total adjusted compensation, up 22.1% from $17.1 million in 2017. His pay included $9.5 million in stock and $3.9 million in options.

* Nearly all the top 10 highest-paid CEOs at U.S. healthcare facility operators and medical suppliers received a bump in total adjusted compensation in 2018, according to data compiled by S&P Global Market Intelligence.

Kent Thiry, who recently stepped down as CEO of DaVita Inc., was the highest-paid executive with $32 million in total adjusted compensation. Thiry's salary more than doubled, with a 108.9% increase, with the sharpest year-over-year rise in stock and options to $26.6 million.

* Hologic Inc. CEO Stephen MacMillan received the largest pay in the U.S. healthcare equipment sector in 2018. He received $42 million in total adjusted compensation for the year — almost double the pay of the next executive in the rankings compiled by S&P Global Market Intelligence.

* The Trump administration confirmed that it is not providing influenza shots to undocumented migrants, including children, at U.S. Customs and Border Patrol detention centers. Doctors said this creates a situation ripe for an outbreak that could spread to the outside community. The lack of flu vaccinations threatens lives, a group of infectious-disease experts and doctors from Harvard and Johns Hopkins universities told members of Congress.

* Specialty drugs accounted for less than 1% of prescriptions in 2018, yet totaled 40% of its total drug costs, according to Rx Collaborative, a U.S. employer-based pharmacy benefit group purchasing coalition. The top 10 drugs by gross cost accounted for 20% of employers' pharmacy spending in 2018.

The top three drugs ranked by gross cost spend were specialty injectable immunotherapy drugs for conditions such as psoriatic arthritis, rheumatoid arthritis and Crohn's disease. Among the nonspecialty drugs in the top 10, four were for diabetes, including two insulin drugs.

* Chinese regulators called for price negotiations of 128 drugs in the preliminary amended National Reimbursement Drug List, according to the National Medical Insurance Administration. Most of the drugs are for treating rare diseases, chronic diseases and cancer.

* Irish drugmakers Allergan PLC and Endo International PLC settled with two Ohio counties for $15 million to avoid an October trial in the ongoing legal battle that alleges certain drugmakers and manufacturers fueled the opioid epidemic.

Endo and its subsidiaries will pay $10 million to resolve the two cases, while Allergan will pay $5 million to the counties to resolve its portion of the litigation.

* Koninklijke Philips NV — which is under investigation in Brazil and the U.S. in an alleged bribery racket — was made aware of suspicious sales of its medical devices to the Brazilian government in 2010 by an employee who was later fired, Reuters reported. Brazilian prosecutors have alleged that Philips and other companies conspired with intermediaries to pay bribes for public contracts and then charged Brazil's state healthcare system with high prices to recoup the cost of the bribes.

* A U.S. government-backed panel of experts in prevention and medicine recommended that more women should be tested for cancer-causing gene mutations such as those of the BRCA1 and BRCA2 genes, The Wall Street Journal reported. The U.S. Preventive Services Task Force noted that women who had been previously diagnosed and received treatment for breast, ovarian, fallopian-tube or abdominal cancer should be checked for mutations of the BRCA1 and BRCA2 genes.

M&A and capital markets

* Elanco Animal Health Inc. will become the No. 2 animal health company behind Zoetis Inc. with its $7.6 billion acquisition of Bayer AG's animal health business. Evercore analyst Umer Raffat said investors are rattled by the deal. Raffat cited Bayer Animal Health's heavy reliance on a few key products and potential antitrust issues stemming from the combined company's portfolio overlap.

* Lung disease-focused TFF Pharmaceuticals, Inc. priced its Nasdaq IPO at $5 per share, hoping to raise $19.3 million in proceeds from the sale of 4.4 million shares, not including the underwriters' option.

Drug and product pipeline

* Shares of Sarepta Therapeutics Inc. dropped 16% at market open Aug. 20 after the U.S. Food and Drug Administration rejected the company's flagship Duchenne muscular dystrophy treatment golodirsen. The rejection was a surprise setback for Sarepta, which develops RNA and gene therapy medicines for rare diseases.

Morgan Stanley analysts believe that investor jitters are instead related to concerns that the FDA may be raising the bar for approving DMD therapies. Therefore, Sarepta's other gene therapies that do drive valuation in this space may be at risk.

* GlaxoSmithKline PLC said it is seeking approval with Japan's regulator for its drug to treat chronic kidney disease-associated anemia.
Daprodustat treats renal anemia. The condition is common in chronic kidney disease, in which the organs fail to produce enough of a hormone, erythropoietin, needed to produce red blood cells.

* Synlogic Inc. said it was discontinuing the development of its medicine SYNB1020 following the failure of an early-stage trial in certain patients with a metabolic disorder. Synlogic was evaluating the safety and tolerability of the drug, as well as changes in blood ammonia levels, in a phase 1b/2a study in patients with cirrhosis and hyperammonemia.

* NuCana PLC stopped bringing in new patients for a late-stage pancreatic cancer study after an analysis deemed that the trial would not be successful. The company’s drug Acelarin was developed as a chemotherapy treatment for metastatic pancreatic cancer.

The day ahead

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

In Asia, Hang Seng rose 0.15% to 26,270.04, while the Nikkei 225 dropped 0.28% to 20,618.57.

In Europe, around midday, the FTSE 100 climbed 1.08% to 7,202.23, and the Euronext 100 rose 1.30% to 1,051.79.

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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