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Scandal-ridden Theranos to dissolve; Bayer cuts 2018 outlook on Monsanto deal

Top news

* Theranos Inc. will formally dissolve, The Wall Street Journal reported, citing a shareholder email. The Palo Alto, Calif.-based blood-testing company, which had been accused of faking tests and defrauding customers, plans to pay unsecured creditors its remaining cash in the coming months.

* Bayer AG reported second-quarter core net income from continuing operations of €1.41 billion, or €1.54 per share, up from €1.35 billion, or €1.52 per share, a year earlier. The German agrochemical and pharmaceutical company lowered its outlook for 2018 to reflect the acquisition of the world's top seed maker, Monsanto Co. The company now anticipates core EPS to decline by a high-single-digit percentage, or between €5.70 and €5.90.

* The U.K. National Health Service reached a commercial deal with Novartis AG to make available within weeks the Swiss drugmaker's personalized chimeric antigen receptor T cell drug, Kymriah, to children and young people with leukemia, a cancer of the blood and bone marrow. The U.K. National Institute for Health and Care Excellence also approved Kymriah, which costs about £282,000 per patient, for entry into the reformed NHS Cancer Drugs Fund.

* Pfizer Inc., which has been publicly complaining about impediments to biosimilar product sales for more than a year, has filed a citizen petition with the FDA requesting that the agency take action against communications from rival pharmaceutical companies about Pfizer's biosimilars. Among the companies mentioned in the document are Johnson & Johnson's Janssen Biotech Inc. unit and Amgen Inc., both drugmakers that market products with corresponding Pfizer biosimilars.

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* Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. have hired Jack Stoddard as the COO of their joint healthcare venture, a spokesperson for the venture confirmed to S&P Global Market Intelligence on Sept. 4 following a CNBC report. Stoddard started working with the company Sept. 4, according to the spokesperson.

On the policy front

* Scott Gottlieb, the commissioner of the U.S. Food and Drug Administration, is not satisfied with the pace at which the American market for biosimilars — lower-cost versions of biologic medicines — is growing, noting that only a dozen of those products have been approved by his agency. Only four of the 12 biosimilars are being marketed in the U.S. because of ongoing patent litigation or settlements that have delayed the cheaper competitor's market entrance, resulting in the loss of potential cost savings for Americans, the FDA chief said.

M&A and capital markets

* Teva Pharmaceutical Industries Ltd. launched tender offers to buy certain of its senior notes for a combined aggregate purchase price of up to $400 million. The Israeli drugmaker said the offers, which will be funded with available cash on hand, will help reduce its total debt and overall interest expense.

* Principia Biopharma Inc. priced its Nasdaq IPO of 4,687,500 common shares at between $15 and $17 apiece.

Drug and product pipeline

* Therapeutic Solutions International, Inc. is planning to allow patients to access its immunotherapy drug StemVacs under the Right to Try Act after an early trial of the medicine showed safety in patients with advanced cancer. The legislation allows Americans with a life-threatening disease or condition to seek experimental treatments without having to go through the FDA's long-standing compassionate-use process.

* Eisai Co. Ltd. and Merck & Co. Inc. said the National Medical Products Administration of China approved Lenvima as a single therapy for patients with hepatocellular carcinoma, a type of liver cancer, whose cancers could not be removed through surgery and those who have not received prior systemic therapy.

* Puma Biotechnology Inc. said the European Commission approved its medicine Nerlynx months after the European Medicines Agency recommended that it be used as a treatment for breast cancer.

* Elsewhere, the U.K. National Institute for Health and Care Excellence backed the use of Kyowa Hakko Kirin Co. Ltd. and Ultragenyx Pharmaceutical Inc.'s Crysvita within the country's National Health Service. The reversal comes months after the price watchdog rejected the medicine stating that the results from clinical trials did not show noticeable benefit in children and teenagers. The price watchdog had also raised concerns about the treatment's cost-effectiveness at the time.

* Hutchison China MediTech Ltd. said the National Medical Products Administration of China approved the company's drug fruquintinib for treating certain patients with colorectal cancer. Hong Kong-based Chi-Med said fruquintinib capsules will be sold under the brand name Elunate in China through a collaboration with Eli Lilly and Co.

* Johnson & Johnson filed an application seeking U.S. approval for its antidepressant nasal spray esketamine. The FDA had granted breakthrough therapy status to the medicine.

* EyeGate Pharmaceuticals Inc.'s EGP-437 drug was not as effective as a steroid medicine in treating inflammation of the middle layer of the eye, a late-stage study showed. The company found that the drug showed some clinical efficacy in patients with noninfectious anterior segment uveitis, but after 14 days of treatment, EGP-437 failed to work as well as prednisolone acetate ophthalmic solution.

Operational activity

* Agios Pharmaceuticals Inc. said David Schenkein will step down as CEO Feb. 1, 2019, and become executive chairman of the board. Jacqualyn Fouse, who was previously president and COO of Celgene Corp. before joining Agios' board in December 2017, will succeed Schenkein as CEO.

* BioMérieux SA said net income of consolidated companies for the six months ended June 30 increased year over year to €134 million, or €1.14 per share, from €101 million, or 86 euro cents per share. The French in vitro diagnostics company attributed the growth to strong sales growth and an improvement in the product mix.

* Gilead Sciences Inc. entered a license agreement with San Francisco-based Trianni Inc. to use its transgenic human monoclonal antibody discovery platform, which uses genetically engineered mice to generate antibodies that can be effective in humans.

* Sanofi agreed to pay more than $25 million to settle the U.S. Securities and Exchange Commission's charges that certain of its units engaged in a kickback scheme in order to get business.

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Other features

* According to research firm Sector and Sovereign Research, real U.S. drug prices declined 5.8% during the second quarter, thanks to a new tactic insurers are using to limit the financial aid that drugmakers provide directly to American consumers, Reuters wrote.

The day ahead

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

In Asia, the Hang Seng fell 2.61% to 27,243.85, while the Nikkei 225 fell 0.51% to 22,580.83.

In Europe, around midday, the FTSE 100 decreased by 0.45% to 7,424.68, and the Euronext 100 decreased by 0.84% to 1,039.01.

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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