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J&J psoriasis drug beats Novartis' in trial; US FDA rejects Mallinckrodt opioid


Essential IR Insights Newsletter Fall - 2023

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J&J psoriasis drug beats Novartis' in trial; US FDA rejects Mallinckrodt opioid

Top news

* Johnson & Johnson's plaque psoriasis drug Tremfya was more successful than Novartis AG's Cosentyx in treating the skin disease in a head-to-head late-stage trial. In the phase 3 trial, called Eclipse, 84.5% of patients on Tremfya had a 90% improvement in psoriasis in 48 weeks, compared to a 70% improvement with Cosentyx, Johnson & Johnson announced at the Inflammatory Skin Disease Summit in Vienna, Austria.

Novartis' head of global development, Eric Hughes, said the results do not take away from Cosentyx, as the medicine acted more quickly with patients achieving the baseline 90% psoriasis improvement at 12 weeks. "The clinical relevance of this one time point that they presented is important and it needs to be seen," Hughes told S&P Global Market Intelligence in an interview yesterday.

* Mallinckrodt PLC's SpecGx LLC unit, which operates the drugmaker's specialty generics business, said the U.S. Food and Drug Administration rejected its application for opioid painkiller Roxicodone. The regulator provided guidance on areas of further evaluation necessary to resubmit the application for further review and potential approval of the medicine.

On the policy front

* Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor and Pensions Committee, said he wants to pivot away from trying to get anything done on fixing the individual healthcare insurance market and focus instead on reining in costs. "You'll never get low-cost health insurance until you have lower-cost healthcare," Alexander said during a Dec. 12 forum in Washington hosted by Axios.

Last year, Alexander teamed with Sen. Patty Murray, D-Wash., in a failed effort to get a bill through Congress that sought to make some short-term fixes to the Affordable Care Act. Alexander made another go at it earlier this year, partnering with Sen. Susan Collins, R-Maine, on another bill, which built on the legislation he co-authored with Murray — an effort that also floundered.

* A bill aimed at stopping biopharmaceutical companies from gaming the Medicaid drug rebate program hitched a ride on a broader piece of legislation that made its way through the House on Dec. 11. Under the program, participating drugmakers that want their products covered by the federal government must offer states a price that includes a minimum rebate or, if lower, the best price the manufacturers provide to private-sector purchasers, such as hospitals.

Sens. Chuck Grassley, R-Iowa, the soon-to-be head of the Senate Finance Committee, and Ron Wyden, D-Ore., the panel's ranking member, introduced legislation earlier this month that would give the U.S. Department of Health and Human Services new powers to reclassify medicines in the Medicaid drug rebate program, impose civil monetary penalties and recover incorrect rebate payments.

* The Arkansas Department of Human Services will expand the reporting options for the state's controversial Medicaid work requirements program, which resulted in over 12,000 people losing their Medicaid eligibility until 2019. Beginning Dec. 19, Medicaid beneficiaries can report their work hours over the phone, seven days a week.

The expansion of reporting options changes one of the most criticized aspects of the state's work requirements program: The majority of reporting was required to be done over the internet. Opponents of the program have said that requiring people to record their hours on the Arkansas DHS website was hurting low-income people who may not have access to a computer or the internet.

M&A and capital markets

* Akebia Therapeutics Inc. and Keryx Biopharmaceuticals Inc. completed their all-stock merger, forming an entity with an implied pro forma equity value of about $1.3 billion. The combination of the companies will retain Akebia's name and will specialize in therapies for chronic kidney disease.

* AMAG Pharmaceuticals Inc. agreed to acquire Perosphere Pharmaceuticals Inc., a private biopharmaceutical company, including the rights to the latter's ciraparantag — an antidote for certain anti-blood clotting drugs. AMAG will pay Perosphere's equity holders $50 million upon closing under the deal.

* WuXi AppTec Co. Ltd.'s shares closed at their issuance price of HK$68 per share in Hong Kong on the first day of trading, with the company issuing about 116 million shares for the listing on the main board in Hong Kong to receive net proceeds of about HK$7.55 billion.

Kevin Xie, head of healthcare and life sciences at China Renaissance Group, which was one of the book runners on the Hong Kong listing, told S&P Global Market Intelligence that investors will need more time to learn about the company's business model. WuXi AppTec, founded in 2000 by CEO Li Ge and three other partners, offers services from the early discovery stage to manufacturing to over 3,000 clients worldwide to help shorten discovery time and cut drug costs.

* Synthorx Inc. closed its previously announced IPO of 13,699,636 common shares, priced $11 each. The La Jolla, Calif.-based company, which develops novel protein therapeutics for pain, infectious diseases, metabolic diseases and cancer, raised gross proceeds of $150.7 million.

Drug and product pipeline

* Novartis said the European Commission approved Xolair as a self-administered treatment for severe allergic asthma and chronic spontaneous urticaria.

* Neurocrine Biosciences Inc.'s phase 2b trial assessing valbenazine did not meet its goal of reducing the tic symptoms of Tourette syndrome in children, such as facial grimacing and repeating words and phrases. Tourette syndrome is a neurological disorder in which patients experience rapid motor and vocal tics.

Valbenazine — which is approved by the U.S. FDA for treating tardive dyskinesia, another nervous system condition — also failed an initial phase 2 trial for Tourette syndrome in 2017.

* OncoSec Medical Inc. said a mid-stage study of its drug Tavo combined with Merck & Co. Inc.'s Keytruda showed longer response duration and the absence of detectable cancer in skin cancer patients. Updated results from the phase 2b study, dubbed Keynote-695, showed one of the previously assessed partial responses has now become a complete response — the best treatment result for cancer — at six months.

* XBiotech Inc.'s experimental skin disease drug bermekimab was found to be safe and tolerable in patients with atopic dermatitis during a mid-stage study and showed promise compared to Sanofi and Regeneron Pharmaceuticals Inc.'s U.S.-approved treatment Dupixent. Atopic dermatitis is a chronic condition that makes skin thick, dry, red and itchy.

* China's National Medical Products Administration accepted Zai Lab Ltd.'s application for Zejula as a maintenance therapy for patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal ovarian cancer whose tumors shrunk due to platinum-based chemotherapy. Zai Lab recently launched Zejula in Hong Kong and aims to release the therapy in mainland China before 2020.

* The U.S. FDA confirmed that it will decide on the approval of Shield Therapeutics PLC's iron deficiency treatment Feraccru by July 27, 2019. Feraccru is already approved in the EU to treat iron deficiency in adults and in Switzerland for treating iron deficiency anemia in adults with inflammatory bowel disease.

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Operational activity

* Eli Lilly and Co. is collaborating with AC Immune SA to research and develop a new type of treatment for Alzheimer's disease and other degenerative disorders of the nervous system, with AC Immune's lead molecule ACI-3024 the primary focus of the collaboration. Switzerland's AC Immune will receive an up-front payment of CHF80 million from Eli Lilly under the deal.

* Natalie Babich, a former sales representative of Insys Therapeutics Inc., testified to having a physician assistant collect kickbacks in exchange for prescribing patients Subsys, the company's addictive opioid pain drug, Reuters reported, detailing Babich's testimony at a federal court in Concord, N.H. An investigation previously charged six Insys employees, including the company's billionaire founder John Kapoor, with engaging in a conspiracy to bribe doctors to prescribe Subsys and to defraud insurers.

* Johnson & Johnson is ready to shell out over $400 million to settle about 3,330 of 10,000 lawsuits accusing the company of selling faulty artificial hips and hiding the risks of the products, Bloomberg News reported, citing people familiar with the negotiations.

* The main offices of Samsung Biologics Co. Ltd. were raided by prosecutors as part of an ongoing investigation of the company for allegedly committing accounting fraud before its IPO in 2016, Yonhap News Agency reported.

Our features

Of Mice Not Men: Seeking a preventative malaria treatment; space mice: A team of scientists are searching for a preventative malaria treatment by lighting up cells from mosquitoes like fireflies, and researchers have developed a higher resolution brain-imaging system for mice. Also, space mice.

Other features

* Reuters has a feature about the concerns surrounding DNA testing and another about the challenges a global vaccine group is facing to get vaccines to people in rural and war-torn areas.

* A 29-year study published in The New England Journal of Medicine showed that men with clinically detected, localized prostate cancer with a long life expectancy who had surgery to remove their prostate had their lives extended by an average of 2.9 years.

* Bloomberg News writes about how Takeda Pharmaceutical Co. Ltd. CEO Christophe Weber sees the company's acquisition of Shire PLC as an opportunity for the drugmaker to grow.

* Tech giant Apple Inc. has employed dozens of medical doctors in various teams to bolster the company's health technology efforts, CNBC reported, citing two people familiar with the hiring.

The day ahead

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

In Asia, the Hang Seng rose 1.29% to 26,524.35, while the Nikkei 225 was up 0.99% to 21,816.19.

In Europe as of midday, the FTSE 100 fell 0.23% to 6,864.05, and the Euronext 100 was down 0.40% to 949.24.

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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