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Johnson and Johnson Q3 earnings rise; Trump wants short-term healthcare fix

Top news

* Johnson & Johnson booked third-quarter adjusted net earnings of $5.21 billion, or $1.90 per share, up 11.2% from $4.68 billion, or $1.68 per share, a year earlier. The company also increased its adjusted earnings guidance for 2017 to a range of $7.25 to $7.30 per share.

* Impax Laboratories Inc. and Amneal Pharmaceuticals LLC are in advanced talks for a potential deal that would create the fifth-largest generic-drug company in the U.S. by revenue, insiders told The Wall Street Journal. Under the all-stock deal, Impax shareholders will hold 25% of the merged company — expected to be worth $6.4 billion, or about $9 billion with debt — and Amneal owners will hold the remainder.

* U.S. President Donald Trump is backing a bipartisan healthcare bill that would include cost-sharing reduction payments, which Trump had said the previous week would be halted, Bloomberg News reported, citing Sen. Lamar Alexander, R-Tenn. The subsidies would be paid with assurances that they would help Americans lessen out-of-pocket costs, and not go to insurance companies, Alexander added.

* Trump said the Affordable Care Act is "dead," and called on congressional Republicans and Democrats to work on a short-term fix of healthcare, before proceeding to a long-term program by Republicans anticipated to become law early next year, Reuters wrote.

On the policy front

* Trump took aim at the biopharmaceutical industry for its high prices, repeating remarks he made earlier in the year that the companies are "getting away with murder." He said the U.S. wants to bring its drug prices down to what other countries are paying, "or at least, close and let the other countries pay more."

Biotechnology companies' shares fell following Trump's comments, while pharmaceutical companies' stocks recorded a slight drop, CNBC noted.

* Furthermore, Trump said he would officially declare the U.S. opioid crisis a national emergency next week. Trump added that he would take another look at his nominee to lead the National Drug Control Policy, Rep. Tom Marino, R-Pa., who came under fire after a probe revealed that a law the congressman sponsored weakened the authority of the Drug Enforcement Administration to rein in distributors selling large numbers of opioid pills to rogue pharmacies and doctors.

* Some ACA plan rates in Arkansas will jump nearly 25% in 2018, a spokesperson for the state's insurance regulator confirmed to S&P Global Market Intelligence.

* The pharma and medical device sectors are bracing for a so-called hard Brexit, Reuters reported. Some companies are already planning to set up operations in other EU countries, to prepare for a scenario where the U.K. leaves the bloc without reaching trade agreements with the remaining EU nations.

M&A and capital markets

* Myovant Sciences Ltd. secured up to $140 million financing through two deals to fund ongoing development of its lead compound relugolix in uterine fibroids, endometriosis and prostate cancer. Takeda Pharmaceutical Co. Ltd. had granted Myovant an exclusive, worldwide license to develop and market relugolix, except in Japan and some Asian countries where it retains exclusive rights.

* Intrexon Corp. entered into a preferred stock equity facility with Third Security LLC allowing the company to sell up to $100 million of its newly issued series A redeemable preferred stock.

* OrthoPediatrics Corp. closed its IPO, selling 4.6 million common shares at a price of $13 apiece. The company received $59.8 million in gross proceeds from the offering.

* Agriculture-food sector focused Neovia SAS will acquire Epicore BioNetworks Inc. for C$1.30 per share, or total proceeds of about C$35.6 million. Epicore's shares will be delisted from the TSX Venture Exchange upon deal completion.

Drug and product pipeline

* The U.S. Food and Drug Administration granted AstraZeneca PLC and MedImmune's Imfinzi priority review status as the regulator accepted a supplemental biologics license application for the lung cancer treatment.

* Hutchison China MediTech Ltd.'s lung cancer drug savolitinib in combination with AstraZeneca's Tagrisso or Iressa showed preliminary anti-tumor activity in two phase 1b/2 trials on patients whose disease had progressed after a first-line treatment.

* Exelixis Inc. said the phase 3 trial of Cabometyx met its main goal of overall survival in patients with advanced hepatocellular carcinoma, a form of liver cancer.

Exelixis also received priority review from the U.S. FDA for the company's supplemental new drug application for Cabometyx to treat patients with previously untreated advanced renal cell carcinoma.

* Takeda Pharmaceutical's phase 2 trial of Alunbrig demonstrated that the drug reduced the tumor size in patients with a common form of lung cancer who have progressed on Pfizer Inc.'s Xalkori.

* Pfizer said the phase 2 trial of lorlatinib showed that 90% of non-small cell lung cancer patients who were ALK or ROS1-positive, who had not received prior therapy, achieved an objective response rate — a measure of patients whose tumors shrank.

* Bayer AG submitted an application in Japan seeking market authorization for BAY94-9027, or damoctocog alfa pegol, intended to treat hemophilia.

* Novo Nordisk A/S' GLP-1 diabetes drug semaglutide is effective and caused no heart risks, according to a preliminary review published on the U.S. FDA's website ahead of an FDA panel's meeting on whether to recommend approval of the drug, Reuters reported.

Operational activity

* Johnson & Johnson's DePuy International Ltd. is being sued for selling faulty hip implants in the U.K., Bloomberg News reported.

* A Texas district court judge invalidated four patents held by Allergan plc on its dry eye drug Restasis in a dispute between Allergan and generic drugmakers led by Mylan NV and Teva Pharmaceutical Industries Ltd., Reuters reported. Moody's said the ruling is credit negative for the company.

The day ahead

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

In Asia, the Hang Seng climbed 0.02% to 28,697.49, while the Nikkei 225 rose 0.38% to 21,336.12.

In Europe, around midday, the FTSE 100 rose 0.18% to 7,540.74 and the Euronext 100 gained 0.06% to 1,050.03.

The Daily Dose is updated as of 6:30 a.m. ET. Some external links may require a subscription.