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Drug companies open 2019 with price hikes; US FDA breaks approval records

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Drug companies open 2019 with price hikes; US FDA breaks approval records

Top news

* Drugmakers — including Allergan PLC, Bristol-Myers Squibb Co., Biogen Inc. and Eli Lilly and Co. — boosted hundreds of medicines' prices by an average of 6.3% as of yesterday, The Wall Street Journal reported, citing an analysis from Rx Savings Solutions. The average price hike also included increases on different doses for the same drug.

Allergan's irritable bowel syndrome treatments Linzess and Viberzi, eye drops Restasis and Lumigan, hypertension drug Bystolic, birth control pill Lo Loestrin, and pneumonia treatment Avycaz cost 9.5% more as of Jan. 1, while Bristol-Myers boosted the prices of immuno-oncology drugs Opdivo and Yervoy by 1.5%. Eli Lilly also boosted the prices of its diabetes medicines Jardiance and Tradjenta by 6%, while Biogen posted a 6% price hike for Tecfidera.

* The U.S. Food and Drug Administration broke a number of records in 2018, including the agency's all-time high in approving first-of-their-kind therapies — clearing 59 last year. The previous record was held in 1996, when the FDA's Center for Drug Evaluation and Research permitted 53 new molecular entities, or NMEs, to enter the U.S. market.

The FDA approved 34 rare disease drugs in 2018 — the first time those products made up the majority of NMEs cleared by the agency in one calendar year. The agency also broke records in 2018 for approvals of generic drugs and lower-cost versions of biologic therapies, or biosimilars — approving 95 and seven, respectively, for the year.

M&A and capital markets

* Grifols SA sold Haema AG and Biotest US Corp. — two businesses it acquired earlier this year — to its existing shareholder Scranton Enterprises BV. Scranton will pay $537 million for the businesses, effectively the same price Grifols paid when it acquired Haema for €220 million in June 2018 and Biotest US for $286 million in August 2018.

* Nuvo Pharmaceuticals Inc. completed the acquisition of certain assets from specialty pharmaceutical company Aralez Pharmaceuticals Inc. for $110 million. Under the terms of the agreement, Nuvo acquired a portfolio of more than 20 products from Aralez, which seeks to wind down its operations.

The acquisition gives Nuvo access to its anti-inflammatory drug Cambia, allergy treatment Blexten, migraine treatment Suvexx and Canadian distribution rights to its head lice treatment Resultz. The deal also provides Nuvo with a platform to acquire and launch additional commercial products in Canada.

* Sunniva Inc. closed its acquisition of all equity interests of California cannabis distribution company LTYR Logistics LLC for C$156,359 in cash, 1,436,949 Sunniva common shares at C$3.71 apiece and 718,473 performance warrants. Sunniva, which operates large-scale cannabis production facilities, said one of the primary drivers of the acquisition was LTYR's distribution capabilities.

* Lansen Pharmaceutical Holdings Ltd. bought a 20% stake in China-based Tianjin Robustnique Biotechnology Co. Ltd., a producer of cosmetics and biological skincare products, for 14 million Chinese yuan.

Operational activity

* Endo International PLC said its lawsuit against the U.S. FDA will remain halted while the ongoing partial shutdown of the government remains in place. Endo is accusing the regulator of improperly authorizing the bulk compounding of hundreds of drugs, including "essentially a copy" of its blood-pressure drug Vasostrict, according to Reuters.

Other features

* Politico writes about how the EU's rush to restrict substandard medical devices is backfiring, with thousands of products going untested for longer than planned.

* Bloomberg News has a feature about the possibility of Chinese generic-drug makers seeing narrower profit margins as a result of a government program to drive down prices.

The day ahead

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

In Asia, the Hang Seng fell 2.77% to 25,130.35, while the Nikkei 225 was closed.

In Europe, around midday, the FTSE 100 decreased 0.82% to 6,672.97, and the Euronext 100 was down 1.36% to 904.15.

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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