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Trump seeks NIH cuts in 2020 budget; S&P sets negative outlook on pharma sector

S&P Global Market Intelligence

Cannabis: Hashing Out a Budding Industry

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IFRS 9 Impairment How It Impacts Your Corporation And How We Can Help

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Trump seeks NIH cuts in 2020 budget; S&P sets negative outlook on pharma sector

Top news

* In his $4.7 trillion budget request for fiscal 2020, President Donald Trump told lawmakers that the U.S. National Institutes of Health's spending should be decreased by about $5 billion, from about $39 billion to about $34 billion. Trump also wants to slash U.S. spending on the global response to HIV/AIDS — calling for a 22% cut in funds for the President's Emergency Plan for AIDS Relief program, which targets 15 of the hardest-hit countries.

Under Trump's budget proposal, the U.S. Food and Drug Administration would get a slight increase of $643 million. The Trump administration also highlighted a number of ideas officials have previously discussed to lower drug prices.

Trump's fiscal 2020 budget also calls for $4.8 billion to support activities mandated under legislation enacted in 2018 to address the U.S. opioid crisis.

* S&P Global Ratings assigned a negative outlook to the pharmaceutical industry, with ratings downgrades expected to outnumber upgrades in 2019. In a March 11 report, the rating agency said increasing M&A activity, intensifying pricing pressures, regulatory scrutiny in the U.S. and the opioid crisis are key drivers of rating pressure in the pharma sector.

On the policy front

* Hospitals and insurers are preparing to counter a proposal by the Trump administration that would require hospitals to make public the prices they negotiate with insurers, The Wall Street Journal reported. Patient advocates have voiced their support for the plan, but industry groups are arguing that the proposed rule could upend hospitals' negotiations with insurers and would be too complex to implement.

* Patients are demanding U.K.-based GW Pharmaceuticals PLC's Epidiolex for hard-to-treat epileptic conditions, but for some, the first cannabis-based medication approved by the U.S. FDA has been hard to get. When the cannabidiol therapy received a drug scheduling decision and hit the shelves four months after the FDA's approval, physician surveys and social media chatter reported difficulty accessing the medicine.

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M&A and capital markets

* As yet another gene therapy company, this time Nightstar Therapeutics PLC, gets snapped up in the flurry of M&A activity thus far in 2019, analysts are speculating which experimental biotechs may be next. Their picks include uniQure NV, Audentes Therapeutics Inc., possibly Solid Biosciences Inc. and even the relatively larger BioMarin Pharmaceutical Inc. due to their experience and know-how.

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* Sinorda Biomedicine Ltd. aims to go public in 2020 or 2021, Chairman Hu Pingsheng told S&P Global Market Intelligence on the sidelines of the 2019 BIO Asia International conference in Tokyo. Hu said the company is in talks with investment banks and will prioritize listing in Hong Kong and on the new Shanghai trading board.

* Biogen Inc. agreed to sell its Hillerød, Denmark-based large-scale biologics manufacturing site to Fujifilm Corp. for up to $890 million in cash. Following the deal's closing, Tokyo-based Fujifilm will use the Hillerød site to produce third-party products for Biogen, including multiple sclerosis drug Tysabri.

Drug and product pipeline

* Eli Lilly and Co. said a late-stage study evaluating Cyramza, or ramucirumab, in certain patients with non-small cell lung cancer, or NSCLC, met its main goal. The Indianapolis-based drugmaker said patients with EGFR-mutated NSCLC whose cancer has spread to another site in the body showed statistically significant improvement in the time they lived without their cancer growing or spreading after starting treatment.

* The U.S. FDA approved Trazimera, Pfizer Inc.'s biosimilar to Roche Holding AG's breast cancer drug Herceptin. In 2018, the U.S. regulator chose not to approve Trazimera, requesting additional technical information from the New York drugmaker, although concerns at the time were not based on safety or clinical data in the application.

* Regeneron Pharmaceuticals Inc. and Sanofi received FDA approval for their Dupixent injection to treat adolescent patients aged 12 to 17 years with moderate to severe atopic dermatitis, a chronic inflammatory disorder that causes rashes.

* Eisai Co. Ltd. and Imbrium Therapeutics LP said the FDA accepted the companies' application seeking approval for lemborexant to treat insomnia. The FDA is expected to decide on lemborexant's approval by Dec. 27.

* Akebia Therapeutics Inc.'s vadadustat worked as well as Amgen Inc.'s Aranesp in treating anemia among patients with chronic kidney disease, results from two late-stage studies showed.

* Ascletis Pharma Inc. aims to start a phase 2 clinical study using an immuno-oncology drug to treat hepatitis B by the end of this year, CFO Lindi Tan told S&P Global Market Intelligence on the sidelines of the 2019 BIO Asia International Conference in Tokyo.

* Pharming Group NV, a Dutch biotech company that uses the milk of so-called "magic rabbits" to make its lead product Ruconest, intends to broaden the medicine's use beyond a rare genetic disease to address a market worth some $5.6 billion, piquing the interest of Big Pharma, according to analysts.

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Operational activity

* Dr. Reddy's Laboratories Ltd. wants U.K.-based Indivior PLC to pay more than $70 million for causing a delay in the launch of the India-based company's generic version of Indivior's Suboxone film for opioid addiction treatment, Bloomberg News reported. Dr. Reddy's is claiming that it lost sales in the U.S. due to Indivior's attempt to block its generic of the blockbuster painkiller.

The day ahead

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

In Asia, the Hang Seng was up 1.46% to 28,920.87. The Nikkei 225 rose 1.79% to 21,503.69.

In Europe as of midday, the FTSE 100 is up 0.17% to 7,142.66 and the Euronext 100 is up 0.03% to 1,020.81.

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.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.

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