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Takeda completes £46B Shire buy; Gilead hepatitis drug gets Japan nod

Top news

* Japan's biggest drugmaker Takeda Pharmaceutical Co. Ltd. completed its £46 billion acquisition of Dublin-based Shire PLC. The deal has been approved by the Royal Court of Jersey, shareholders of both companies, the EU and the Japan Fair Trade Commission.

The merged entity — a biopharmaceutical giant focused on oncology, gastroenterology, neuroscience and rare diseases — has an annual revenue of over $30 billion, with a geographic footprint spanning about 80 countries, Takeda said in a news release.

* Gilead Sciences Inc. said Japan's Ministry of Health, Labor and Welfare approved Epclusa as a once-daily treatment for adults with chronic hepatitis C virus infection, with or without cirrhosis, or scarring. The approval was supported by late-stage trial data in Japanese patients with HCV infection with decompensated cirrhosis.

* Japan's Ministry of Health, Labor and Welfare also approved Daiichi Sankyo Co. Ltd.'s hypertension treatment Minnebro a compound identified under a collaboration between the Japanese drugmaker and Exelixis Inc.. The approval is based on the results of phase 3 trials, including ESAX-HTN, which evaluated Minnebro in patients with essential hypertension in Japan.

On the policy front

* New California Governor Gavin Newsom signed an executive order that directed the state's Medicaid system to negotiate prescription medicine prices for all of its 13 million recipients, Reuters reported. The order also aims to allow companies and government agencies to join the process of negotiating prices with drugmakers.

M&A and capital markets

* The fourth quarter of 2018 saw a continued M&A appetite for drugmakers as buyers snapped up more pharmaceutical companies than those operating in other healthcare sectors, an analysis of S&P Global Market Intelligence data shows.

The quarter's largest pharmaceutical deal was from Chinese drugmaker Yunnan Baiyao Group Co. Ltd., which agreed to acquire Yunnan Baiyao Shareholdings Co. Ltd., a provider of herbal raw materials, for about $5 billion. Shanghai RAAS Blood Products Co. Ltd. also valued Grifols Diagnostic Solutions Inc., the U.S.-based transfusional diagnostics and immunology services unit of Spain's Grifols SA, at about $5 billion.

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* Celgene Corp.'s cash-generating cancer medicine Revlimid and its experimental cell therapy platform made a compelling case for a takeover of the biotechnology company, Bristol-Myers Squibb Co. Chairman and CEO Giovanni Caforio told investors and analysts at the annual J.P. Morgan Healthcare Conference in San Francisco yesterday. Caforio and Celgene Chairman and CEO Mark Alles kicked off the conference with a fireside chat on their pending $74 billion deal.

* CSPC Pharmaceutical Group Ltd. agreed to acquire Hong Kong-based Yong Shun Technology Development Ltd. for about 252.9 million yuan. Yong Shun is developing monoclonal antibodies, which target specific tumor antigens, and immunotherapies for different types of cancer.

Drug and product pipeline

* Sage Therapeutics Inc.'s postpartum depression drug SAGE-217 was shown to be better than placebo in a late-stage study in reducing the symptoms of the mood disorder that affects women after childbirth. The U.S. Food and Drug Administration granted the treatment fast-track designation in May 2017.

* Axsome Therapeutics Inc. said its depression medicine AXS-05 met the main goal of a mid-stage study evaluating the drug against standard antidepressant therapy bupropion in 80 patients with major depressive disorder. After 6 weeks of treatment, the medicine showed a 17.2 point reduction in depression severity on the Montgomery–Åsberg Depression Rating Scale — more than the 12.1 point reduction for those taking bupropion.

The company said it plans to meet with the U.S. FDA to define the potential regulatory path for the broader major depressive disorder population.

Operational activity

* At the J.P. Morgan Health Conference, Bausch Health Cos. Inc. CEO Joseph Papa said the company is ready to switch to offense after overcoming a stock plummet that brought its shares from $260 per share in 2015 to under $9 less than two years later. Bausch is now preparing its eye care business for what Papa calls the "myopia epidemic," that is the dramatic increase in nearsightedness seen across the globe.

Meanwhile, Allergan PLC President, Chairman and CEO Brent Saunders previewed ambitious plans to continue its dominance in medical aesthetics. The company plans to launch one to two new aesthetics products per year for the next several years, according to Saunders.

Also during the conference, Biogen Inc. CEO Michel Vounatsos said that while the company has the capacity to consider M&A activity, its main focus is on advancing the existing pipeline. "The financial health of the organization is very strong because we had the right discipline, we had the right focus, we went early stage, we are not desperate," Vounatsos said.

* AstraZeneca PLC is restructuring its research and development and commercial operations into two distinct units for oncology and biopharmaceuticals and has appointed new executives for those departments amid a broader leadership shuffle. Jose Baselga — formerly of Memorial Sloan Kettering Cancer Center in New York — has been appointed to head up the fast-growing oncology business, while Mene Pangalos will run the biopharmaceuticals side.

* The U.S. Supreme Court has declined to take up two separate patent matters brought by Amgen Inc. and Merck & Co. Inc., shutting down a pathway in the companies' efforts to overturn rulings impacting their key products.

* Meanwhile, Supreme Court justices appeared to be sympathetic to Merck & Co. as the company looks to defend itself in hundreds of lawsuits accusing it of failing to properly warn patients of the risks associated with its bone drug Fosamax, Reuters reported.

* The latest trial over allegations that Johnson & Johnson's talc-based products caused cancer has officially started after a California jury heard opening statements yesterday, Reuters reported. In Dec. 2018, the New Brunswick, N.J.-based healthcare giant lost a motion to reverse a jury verdict from July 2018 ordering the company to pay $4.69 billion in damages to 22 women who claim its talc product contained asbestos that led to their ovarian cancer.

Our features

GSK turns to adult respiratory vaccines in bid to replicate Shingrix success: GlaxoSmithKline PLC is looking to develop more vaccines for older adults, including one for smoker's cough and for the respiratory syncytial virus, in a bid to replicate the success of its newly launched Shingrix vaccine.

Healthcare IPOs in 2018 outearn 2017's haul despite dip in volume: The year 2018 saw 186 healthcare IPOs globally — slightly fewer than 2017's 190 but earning over $9 billion more than the previous year, according to data compiled by S&P Global Market Intelligence.

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Medtronic's stock price drops over 6% after CFO projects FY'20 headwinds: Medtronic saw its stock price fall over 6% Jan. 7 after the company's CFO projected a fiscal year 2020 headwind. The projection came shortly after the company's presentation at the 2019 J.P. Morgan Healthcare Conference.

Other features

* The Wall Street Journal has a feature about how mental-health professionals are turning to remote video consults to deal with the increasing number of teenagers and adolescents facing depression and anxiety.

* Bloomberg News writes about how large pharmaceutical companies are on the hunt for more deals, underscored by Bristol-Myers' acquisition of Celgene and Eli Lilly and Co.'s acquisition of Loxo Oncology Inc. to start the year.

* The New York Times has a feature about a federally funded project called the Undiagnosed Diseases Network, which aims to help patients with conditions that doctors have dismissed as psychosomatic, or patients who have been given multiple misdiagnoses. The New York Times also writes about the advancements in pain control for children.

* The Financial Times has an explainer about Theresa May's plan to show the sustainability of the U.K.'s National Health Service through the agency's eighth decade.

The day ahead

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

In Asia, the Hang Seng was up 0.15% to 25,875.449. The Nikkei 225 rose 0.82% to 20,204.04.

In Europe as of midday, the FTSE 100 increased 1.11% to 6,886.30, and the Euronext 100 rose 1.25% to 931.11.

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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