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Gilead's hepatitis C patent challenge; Perrigo divests MS drug rights for $2.85B

* A lawsuit filed by House Republicans during the Obama administration that challenged the legality of government subsidies to insurers under the Affordable Care Act's exchanges is in the spotlight following the failed repeal and replace plan of the American Health Care Act, The Wall Street Journal wrote. The Trump administration could settle the lawsuit and drop the government payments, forcing insurers to lose billions of dollars in expected subsidies and leave the ACA marketplace, although they would also endanger insurance coverage to ACA enrollees. A spokesman for the White House reportedly said the Trump administration was still exploring its options regarding the lawsuit.

* Médecins Sans Frontières has joined a legal challenge on Gilead Sciences Inc.'s patent for Sovaldi, a hepatitis C drug. The nonprofit organization filed the challenge with the European Patient Office alongside Paris-based Médecins du Monde and other civil society organizations from 17 countries in an effort to increase access to the drug.

* Perrigo Co. PLC divested its rights to the royalty stream of its multiple sclerosis drug Tysabri to RPI Finance Trust, an affiliate of Royalty Pharma, for up to $2.85 billion. The transaction consists of $2.2 billion in cash at closing and up to $650 million in potential milestone payments based on future global net sales of the drug in 2018 and 2020.

M&A and capital markets

* YiChang HEC ChangJiang Pharmaceutical Co. Ltd. entered an equity transfer agreement to buy a 9% stake in its joint venture with Taigen Biopharmaceuticals Holdings Ltd. The deal consideration will be $40 million or $20 million, depending on phase 2 trial results for the treatment of hepatitis C, to be conducted by the joint venture Dongguan HEC TaiGen Biopharmaceuticals Co. Ltd.

* Adaptimmune Therapeutics PLC closed an underwritten public offering of its American depositary shares for net proceeds of about $61.8 million. The biopharmaceutical company plans to use the net proceeds to advance its pipeline of SPEAR T-cell candidates through clinical trials and for other general corporate purposes.

Drug and product pipeline

* The U.S. FDA approved Tesaro Inc.'s Zejula for the maintenance treatment of women with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to platinum-based chemotherapy. Tesaro expects to launch the drug in the U.S. in late April.

* The European Medicines Agency's Committee for Medicinal Products for Human Use recommended Eisai Co. Ltd.'s Zebinix for approval in Europe to treat adults with newly diagnosed focal onset epilepsy. The drug showed non-inferiority to controlled-release carbamazepine in patients with focal onset seizures in a phase 3 study.

* India-based Aurobindo Pharma Ltd. secured the U.S. FDA's approval to manufacture and market its Meropenem injection for the treatment of complicated skin and skin structure infections, intra-abdominal infections, and bacterial meningitis. The injection is a generic equivalent of AstraZeneca PLC's Merrem injection, and is expected to launch in April.

* Cellect Biotechnology Ltd. said it was able to complete its first stem cell transplant using the ApoGraft technology in the company's phase 1/2 clinical trial in a blood cancer patient.

* Paratek Pharmaceuticals Inc.'s sarecycline met its primary endpoints in two phase 3 trials for the treatment of moderate to severe acne. Allergan PLC owns the U.S. rights to the treatment and plans to file a new drug application with the U.S. FDA during the second half of 2017 based on the results.

* Foamix Pharmaceuticals Ltd. reported the results of two phase 3 trials evaluating its acne treatment FMX101 with the same co-primary endpoints. One of the trials showed significance in both primary endpoints, whereas the other met the first co-primary endpoint but failed to demonstrate statistical significance in investigator's global assessment success.

Operational activity

* Valeant Pharmaceuticals International Inc.'s former CEO Michael Pearson filed a lawsuit against the company, alleging that it refused to pay him shares owed under his separation agreement, The Wall Street Journal reported. Pearson reportedly claims that Valeant did not pay him 580,676 shares and 2.5 million performance shares due under the separation agreement in November 2016.

* Edgardo Ramos, a federal district judge in New York, dismissed a pair of counterclaims Express Scripts Holding Co. Inc. made in Anthem Inc.'s $15 billion suit claiming that the pharmacy benefit management organization charged too much for drugs. Ramos threw out Express Scripts' claim that Anthem breached an implied covenant of good faith and fair dealing, noting that it duplicated a breach of contract claim.

* Sanofi is reverting the commercial rights of an erectile dysfunction drug back to VIVUS Inc. VIVUS CEO Seth Fischer said the company will now find a partner for the commercialization of Stendra in Africa, the Middle East, Turkey and the Commonwealth of Independent States, including Russia.

The day ahead

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

In Asia, the Hang Seng rose 0.63% to 24,345.87, while the Nikkei 225 gained 1.14% to 19,202.87.

In Europe, around midday, the FTSE 100 climbed 0.07% to 7,298.59, and the Euronext 100 lifted 0.14% to 969.77.

Now featured on S&P Global Market Intelligence:

* AstraZeneca's Tagrisso eyes blockbuster status after China approval: Following marketing approval in China, AstraZeneca PLC's Tagrisso could treat an unmet need in East Asian lung cancer patients with mutations in the epidermal growth factor receptor gene.

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