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Novartis picks finalists for generics portfolio; AstraZeneca drug fails trial

Top news

* China's Shanghai Fosun Pharmaceutical (Group) Co. Ltd. and India-based Aurobindo Pharma Ltd. are among suitors short-listed to potentially acquire a portfolio of Novartis AG generics assets held by its U.S.-based Sandoz unit, Bloomberg News reported, citing people with knowledge of the matter. The portfolio, which could rake in as much as $2 billion, includes the Swiss drugmaker's U.S. dermatology business.

* AstraZeneca PLC's Fasenra failed to deliver statistically significant benefits to patients suffering from a certain type of lung disease, results from a phase 3 study of the drug showed. The study, called Galathea, evaluated the safety and effectiveness of using Fasenra as an add-on treatment to inhaled therapies in patients with moderate to severe chronic obstructive pulmonary disease.

* U.S. President Donald Trump will not call for Medicare to negotiate drug prices with manufacturers, senior administration officials told reporters in previewing the president's May 11 speech about his strategy to lower the costs of medicines. An official said Trump's blueprint would lay out steps to increase competition, support better negotiation, create incentives to lower list prices and reduce patients' out-of-pocket costs.

The officials hinted that Trump plans to target pharmacy benefit managers — often called middlemen — which negotiate rebates on behalf of insurance plans, including Medicare, with drug companies. Trump also plans to take actions to stop foreign nations from "freeloading" off of U.S. taxpayers and investors, who largely fund the research and development for the world's innovative medicines, the officials added.

* After Mylan NV CEO Heather Bresch told analysts on an earnings conference call that there had been "fluctuations" in the supply of EpiPens, The New York Times wrote that consumers from 46 states reported that they were unable to fill EpiPen prescriptions, citing Food Allergy Research & Education, a nonprofit focusing on food allergies. Pfizer Inc., which manufactures EpiPens through its unit Meridian Medical Technologies Inc., said it had increased its shipments in the past few months. Some examples of complaints included consumers who had been unable to find EpiPens in Seattle since March, patients who were repeatedly told the life-saving epinephrine delivery device was on back order, and one person who reportedly tried 10 pharmacies before finding an EpiPen.

* The World Health Organization is preparing for the worst-case scenario in a new outbreak of Ebola virus in the Democratic Republic of Congo, Reuters reported. Peter Salama, WHO deputy director-general of emergency preparedness and response, said he hoped the country would allow the deployment of an experimental vaccine, but also warned about its complexity.

On the policy front

* Novartis CEO Vasant Narasimhan said the $1.2 million deal the drugmaker struck with President Donald Trump's lawyer, Michael Cohen, and his shell company Essential Consultants was a mistake and urged employees to keep calm and carry on.

* In a bid to attract life science companies and boost its technology sector, the Israel Innovation Authority, or IIA, published a tender seeking pharmaceutical companies to open R&D centers in the country. Israel will likely select two companies in July, IIA CEO Aharon Aharon told Reuters.

M&A and capital markets

* Eli Lilly and Co. will acquire ARMO BioSciences Inc. in an all-cash transaction valued at $1.6 billion. Lilly will pay $50 for each ARMO share and expects to close the deal during the second quarter.

* Valeant Pharmaceuticals International Inc. said it was refinancing some of its existing debt by borrowing $3.82 billion in new term B loans. Valeant, which is renaming itself as Bausch Health Companies Inc., also plans to issue $750 million of secured debt securities and $750 million of unsecured debt securities.

Drug and product pipeline

* Celldex Therapeutics Inc. will discontinue the development of CDX-014, in early phase 1 development for renal and ovarian cancers, and CDX-1401, in phase 2 development for multiple solid tumors. The drug developer had earlier terminated its investigational drug glembatumumab vedotin after it failed a phase 2 study in breast cancer.

* Teva Pharmaceutical Industries Ltd. launched Teva-Cyclosporine ophthalmic emulsion in Canada, the first generic version of Allergan PLC's Restasis eye drops in the country.

Operational activity

* Otsuka Holdings Co. Ltd. reported profit attributable to owners of the company for the quarter ended March 31 of ¥22.73 billion, up from about ¥21.01 billion a year ago. For the full year ending Dec. 31, Otsuka expects attributable profit to fall 6.7% to ¥105 billion.

* Nektar Therapeutics said its net loss for the first quarter was 60 cents per share, compared with the S&P Capital IQ consensus normalized EPS estimate of a loss of 55 cents per share. The per-share loss grew 42.9% year over year from 42 cents.

* Grifols SA will collaborate with Chinese biotechnology company Boya Bio-pharmaceutical Group Co. Ltd. to build and manage plasma collection centers in the Asian country. The collaboration will commence with an initial investment of €50 million.

Our features

Do not expect single-payer healthcare system in US, say panelists: Despite the popularity of a single-payer healthcare system in some political circles, panelists at the FT US Healthcare & Life Sciences Summit in New York on May 10 doubt it will ever happen in the U.S.

Of Mice Not Men: Chemical from cactuslike plant kills pain in rats: In this week's column on early stage studies, researchers explore the painkilling effects of a chemical from a cactuslike plant and study a potential contraceptive shown to temporarily interfere with sperm mobility in monkeys.

HLTH: New venture, investors see supply chain change in health's future: In the midst of HLTH conference panels on big data and health unicorns, three industry veterans launched an investment fund while others put expiration dates on sections of an ever-consolidating supply chain.

The day ahead

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

In Asia, the Hang Seng rose 1.02% to 31,122.06, and the Nikkei 225 climbed 1.16% to 22,758.48.

In Europe, around midday, the FTSE 100 was down 0.09% to 7,693.397, and the Euronext 100 was down 0.19% to 1,068.34.

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