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Mallinckrodt to spin off generics unit; US measles outbreak reaches Florida

Top news

* Mallinckrodt PLC is spinning off its specialty generics and active pharmaceutical ingredients business to its shareholders. Mallinckrodt Inc., a newly formed company that will hold the specialty generics business, will be the entity listed on the New York Stock Exchange under the ticker MNK. The remaining specialty brands company will be renamed Sonorant Therapeutics PLC and will continue to be listed on the NYSE under the ticker SRTX.

* The worst measles outbreak in the U.S. since 1994 has spread to Florida, making it the 26th state to report new cases, the Centers for Disease Control and Prevention confirmed. The CDC reported 60 new measles cases in the week ended May 24, raising the total number of confirmed cases in 2019 to 940.

* A trial starting today in Oklahoma may become the first major test of whether states will be able to hold pharmaceutical companies liable for the opioid crisis, The Wall Street Journal reported. Lawyers for Oklahoma Attorney General Mike Hunter are arguing that Johnson & Johnson's marketing practices are responsible for many people's addiction to painkillers. The case is the first of about 2,000 lawsuits by states, municipalities and Native American tribes against pharmaceutical companies.

Purdue Pharma LP, the maker of OxyContin, and Teva Pharmaceutical Industries Ltd. will not be present at the trial, after they agreed to pay $270 million and $85 million, respectively, to settle the lawsuit.

* After the release of Novartis AG's multimillion-dollar pricing plans for Zolgensma, the U.S. government is grappling with how it will cover pricey gene therapies like it and other potentially curative treatments for Americans enrolled in Medicare and Medicaid, the top official who runs those programs said. "We really need to have some serious discussions about how we're going to pay for some of the new innovations and treatments," Centers for Medicare and Medicaid Services Administrator Seema Verma told reporters last week.

On the policy front

* British Columbia is expanding the use of biosimilars in its public drug program, called PharmaCare, to include therapies such as Eli Lilly and Co.'s diabetes drug Jardiance and psoriatic arthritis drug Taltz. The coverage expansion will save the Canadian province about $96.6 million over the first three years, with the funds being redirected to support additional drug listings and improved patient coverage.

* Mexican President Andrés Manuel López Obrador said the country could import medicines directly from overseas drugmakers instead of sourcing them from Mexican intermediaries, to help alleviate medicine shortages at local public hospitals, Reuters reported. López Obrador blamed companies that were upset about his clampdown on drug overpricing for the shortages.

* The U.S. Food and Drug Administration is set to hold its first public hearing May 31 into its oversight of cannabidiol products, Bloomberg News reported. The agency could decide to limit the amount of the cannabis compound that is allowed in food and beverages.

Drug and product pipeline

* José Baselga, AstraZeneca PLC's executive vice president for research and development, oncology, wants the U.K. drugmaker to focus more on early-stage cancers than advanced disease when developing new cancer therapies, the Journal wrote. Baselga said there are better ways of determining which patients have a higher likelihood for their tumors to return, and medicines can now target tumor cells more accurately.

* Allergan PLC and Gedeon Richter PLC said the U.S. Food and Drug Administration approved a supplemental new drug application to expand the use of Vraylar, or cariprazine, to treat adult patients with depressive episodes associated with bipolar 1 disorder.

Operational activity

* Management consulting company McKinsey & Co. Inc. severed ties with Purdue Pharma, saying it is "no longer advising clients on any opioid-specific business" and is helping fight the U.S. addiction crisis, Bloomberg News reported. JPMorgan Chase & Co. recently asked Purdue to find a new banking partner as the drugmaker faces thousands of lawsuits over its alleged role in the U.S. opioid crisis.

* Alpine Immune Sciences Inc. said Gilead Sciences Inc.'s Kite Pharma Inc. unit terminated a collaboration to develop cancer immunotherapies, effective June 20. Kite had been granted an exclusive license to two programs from Alpine's transmembrane immunomodulatory protein technology for applications to antigen receptor and T cell receptor products through the October 2015 deal.

The day ahead

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

In Asia, the Hang Seng gained 0.38% at 27,390.81, while the Nikkei 225 rose 0.37% to 21,260.14.

In Europe, around midday, the FTSE 100 lifted 0.02% to 7,279.21, and the Euronext 100 fell 0.34% to 1,038.08.

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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