Assembly Biosciences reports chronic hepatitis data, shares jump

Assembly Biosciences announces presentation of ABI-H0731, ABI-H2158 data

Assembly Biosciences (ASMB) announced that data on its lead HBV core inhibitor candidates, ABI-H0731 and ABI-H2158 for the treatment of chronic HBV will be featured in a late-breaking poster session during the American Association for the Study of Liver Diseases Annual Meeting.

Shares jump on hepatitis data, Stockwinners

A hepatitis B infection can result in either an acute infection or a chronic infection. When a person is first infected with the hepatitis B virus, it is called an “acute infection” (or a new infection). Most healthy adults that are infected do not have any symptoms and are able to get rid of the virus without any problems. Some adults are unable to get rid of the virus after six months and they are diagnosed as having a “chronic infection.”

Title: Continued Therapy with ABI-H0731+Nrtl Results in Sequential Reduction/Loss of HBV DNA, HBV RNA, HBeAg, HBcrAg and HBsAg in HBeAg-Positive Patients.

Abstract Summary: Final results from Phase 2a are reported for HBeAg+ patients with chronic HBV infection treated with 731+Nrtl for 24 weeks.

In Study 202, greater mean log10 declines in HBV DNA and RNA were achieved with 731+Nrtl versus entecavir alone.

In Study 201, the proportion of patients on 731+Nrtl versus Nrtl alone achieving DNA target not detected was 69% vs 0%, and the proportion of patients achieving RNA less than35 U/mL whose RNA was greater than or equal to35 U/mL at baseline was 52% vs 0% respectively.

In Study 211, there are 64 HBeAg+ patients currently on extended treatment beyond 24 weeks. Among the 27 HBeAg+ patients receiving 731+Nrtl in Study 201, 41% have now achieved DNA TND along with RNA less than35 U/mL and HBeAg less than1 IU/mL.

At their last time point, Study 202 patients now in Study 211 have demonstrated mean DNA and RNA declines of 6.1 and 3.0 logs, respectively, with observed mean log changes of greater than or equal to 0.6 for HBeAg, greater than 0.8 log for HBcrAg and greater than or equal to 0.4 log for HBsAg.

731 continues to exhibit a favorable safety and tolerability profile in patients treated for up to 1 year, with only mild/moderate adverse events and lab abnormalities, and only a single discontinuation due to a Grade 1 rash.

The combination of 731+NrtI results in faster and deeper declines in HBV DNA and RNA than NrtI alone, as well as subsequent declines in the surrogate markers of cccDNA predictive of cccDNA pool depletion, and HBsAg.

A Visual Guide to Hepatitis, Stockwinners

The emergent data supports the continued development of 731.

Abstract data are as of the time of submission; the poster is expected to include updated safety and efficacy results. Title: The Second-Generation Hepatitis B Virus Core Inhibitor ABI-H2158 is Associated with Potent Antiviral Activity in a 14-Day Monotherapy Study in HBeAg-positive Patients with Chronic Hepatitis B.

Abstract Summary: The Phase 1b study is enrolling sequential cohorts of 9 patients and each cohort will be randomized to receive 2158 or placebo QD for 14 days in a blinded manner.

Dosing in the 1st cohort has been completed. In patients receiving 2158, mean declines from Baseline to Day 15 in HBV DNA and RNA levels were 2.3 log10 and 2.1 log10 IU/mL respectively.

No serious AEs, dose limiting toxicities or premature discontinuations were reported.

Three patients reported a total of 5 mild, drug-related AEs that recovered without intervention; dizziness, fatigue, rash, headache and upper abdominal pain.

Treatment emergent laboratory abnormalities were infrequent, mild and transient, with no ALT elevations Grade greater than or equal to 1 in severity.

Day 14 plasma 2158 Cmax and AUC0-24hr were 3,390 ng/mL and 46,100 hr*ng/mL, respectively.

Results from the initial 100 mg low dose of ABI-H2158 cohort demonstrated potent antiviral activity, a favourable safety profile when administered for 14 days, and support once daily dosing in CHB patients.

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Madrigal Pharmaceuticals sharply higher on NASH trial

Madrigal achieves liver biopsy endpoints in NASH trial of MGL-3196

Madrigal Pharmaceuticals higher on NASH trial, Stockwinners.com
Madrigal Pharmaceuticals higher on NASH trial,

Madrigal Pharmaceuticals (MDGL) announced top-line, 36-week results from a Phase 2 clinical trial in patients with biopsy-proven non-alcoholic steatohepatitis, or NASH.

In this trial, MGL-3196, a first-in-class, oral, once-daily, liver-directed, thyroid hormone receptor beta-selective agonist, demonstrated statistical significance in the primary endpoint, relative reduction of liver fat on magnetic resonance imaging-estimated proton density fat fraction at 12 Weeks in December 2017, and, reported here, statistically significant results in multiple Week 36 endpoints including key secondary endpoints, reduction and resolution of NASH.

“The degree of NASH resolution, an approvable FDA endpoint, in patients who received MGL-3196 for 9 months we believe suggests a high likelihood of success in a larger trial with a somewhat longer treatment period in a Phase 3 study designed similarly to this Phase 2 study, pending regulatory agreement with such a design. Further, considering what we have learned regarding drug exposure and dosing, we believe there is potential to resolve NASH in as little as 9 months in 30-40% of patients receiving only MGL-3196, a well-tolerated once a day oral therapy,” stated Paul Friedman, CEO of Madrigal.

In the trial, MGL-3196 demonstrated statistical significance in the primary endpoint, relative reduction of liver fat on magnetic resonance imaging-estimated proton density fat fraction at 12 weeks and statistically significant results in multiple week 36 endpoints.
Shares of Madrigal are up 67%, or $66.57, to $175.00 in premarket trading. Viking Therapeutics (VKTX), which has a thyroid beta agonist in Phase 2 development for the treatment of non-alcoholic fatty liver disease and hypercholesterolemia, is trading up 38% to $6.86. Intercept Pharmaceuticals (ICPT), which has a competing, and further along than Madrigal’s, drug to treat non-alcoholic steatohepatitis is trading down 6% to $69.01.

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Biotech stocks to watch in January

Ten biotech names to watch in January 

Biogen says BAN2401 did not meet primary endpoint. Stockwinners.com

In a research note to investors, Jefferies analyst Michael #Yee identified what he sees as ten potential disclosures or announcements that could come in the next two weeks to start 2018.

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Among the names that may see stock-moving events as the new year begins are Celgene (CELG), Biogen (BIIB) and Vertex (VRTX).

TURNING THE PAGE TO 2018

Jefferies’ Yee told investors that “turning the page to 2018 and into a January conference,” he is modestly optimistic that large-cap biotech picks up a bit given the recent pullback, tax reform and low investor expectations.

He reiterated that the big biotech names are working toward a much bigger 2018 product cycle and late-stage data read out period.

Celgene tumbles

Thinking outside of the box, the analyst pointed out that the key upside “wild-card” is whether “big consolidation” actually occurs in the large caps based on pharmaceutical companies buying pharma or “big biotech” companies.

STOCK-MOVING ANNOUNCEMENTS

Other than surprise M&A deals that could swing sentiment in biotech, Jefferies’ Yee sees the potential for at least ten stock-moving announcements within his coverage going into a major industry conference in two weeks.

The analyst told investors that #Celgene is likely to pre-announce results for its fourth quarter and provide new 2018 guidance, though investors should assume that outlook could be conservative.

#Biogen could also disclose color around Spinraza patient numbers and update on aducanumab Alzheimer’s enrollment, he contended.

Yee argued that #Vertex could pre-announce on its fourth quarter but may not provide 2018 Cystic Fibrosis guidance until its ‘661 combo is approved in February. The company could also disclose Phase 3 triple plans and update on Phase 2 data.

Regarding #Alnylam Pharmaceuticals (ALNY), the analyst highlighted the company may discuss the path forward for ALN-TTRsc02, update on the ALN-GO1 phase 1 program, or announce a new program in the near-term.

#AveXis (AVXS) may provide FDA meeting updates and next steps post recent regulatory discussions; Intercept Pharmaceuticals (ICPT) may pre-announce fourth quarter Ocaliva sales or announced the initiation of a Phase 3 cirrhosis study, or give color on upcoming FDA label change; and Assembly Biosciences (ASMB) could announce Phase 1b HBV data on viral knockdown, he contended.

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Lastly, Yee pointed out that Axovant Sciences (AXON) may report Phase 2B data for intepiridine in dementia with Lewy bodies and nelotansersin in visual hallucinations, while Acorda Therapeutics (ACOR) is likely to pre-announce 2017 Ampyra net sales and provide 2018 financial guidance, and FibroGen (FGEN) could disclose HRCT imaging IPF data or Phase 2 pancreatic cancer data for pamrevlumab.


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Laboratory stocks tumble on CMS proposal!

Medical diagnostics stocks slide after CMS proposes cuts

Medical diagnostics stocks slide after CMS proposes cuts. See Stockwinners.com for details

Following the news of the proposed Protecting Access to Medicare Act changes, including a bigger than expected reduction in clinical lab fee schedule spending, Raymond James analyst Nicholas #Jansen downgraded Quest Diagnostics (DGX) to Market Perform.

Meanwhile, his peer at Craig-Hallum told investors that the preliminary PAMA impact is near “the worst-case outcome” for the clinical lab industry.

MOVING TO THE SIDELINES ON QUEST

Raymond James’ Jansen downgraded Quest Diagnostics to Market Perform from Outperform following the preliminary 2018 Clinical Laboratory Fee Schedule, or #CLFS , rates released Friday evening, which he believes were close to the worst-case reduction and create an overhang for the sector.

Based on the proposal, there is a 21.9% reduction expected over the coming years, with 58% of the total codes seeing the maximum 10% reduction in 2018, he explained.

The analyst argued that the CLFS came in steeper than anticipated and will likely make it more difficult for Quest to achieve previously communicated 2020 forecasts.

In a statement over the weekend, Quest Diagnostics said it was “deeply disappointed that CMS has issued draft 2018 Medicare payment rates that are not market-based and derived from flawed market data collection that excluded key components of the lab market,” adding that it plans to “explore all available options, including the courts if necessary.”

BUYING ON WEAKNESS

Commenting on the PAMA news, Craig-Hallum analyst Kevin #Ellich said that the preliminary impact is near the worst-case outcome for the clinical lab industry with a 9%-10% reduction in CLFS spending.

The analyst told investors that he thinks the labs stocks could come under pressure and that he would use the weakness as a buying opportunity for LabCorp of America (LH), NeoGenomics (NEO) and Exact Sciences (EXAS).

Additionally, Ellich pointed out that he expects Quest Diagnostics and LabCorp to manage cuts and gain market share. Meanwhile, SunTrust analyst David MacDonald argued in a research note of his own that the exposure of LabCorp and Quest Diagnostics is “manageable,” and that he recommends buying the shares on any “meaningful” weakness.

FEW WINNERS

Canaccord analyst Mark #Massaro also commented on the #PAMA announcement, saying the cuts were greater than he expected and that he believes the brunt of the cuts will impact “mom and pop” small labs that lack scale.

This environment will allow lab leaders LabCorp, Quest, and even Genomic Health to consolidate weaker players, he contended.

Nonetheless, the analyst noted that he views LabCorp, Quest Diagnostics and GenMark (GNMK) as the “losers” after the news, and Genomic Health (GHDX), VeraCyte (VCYT) and Vermillion (VRML) as among the “few winners.”

PRICE ACTION

In Monday’s trading, shares of Quest Diagnostics have dropped over 7% to below $95, while LabCorp’s stock has slipped nearly 4% to $149 per share.


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Kite Pharma Sold for $11.9 Billion

Gilead to acquire Kite Pharma for $11.9B, or $180 per share in cash

Gilead to acquire Kite Pharma for $11.9B. See Stockwinners.com Market Radar for details

Gilead Sciences (GILD) and Kite Pharma (KITE) announced that the companies have entered into a definitive agreement pursuant to which Gilead will acquire Kite for $180.00 per share in cash.

The transaction, which values Kite at approximately $11.9B, was unanimously approved by both the Gilead and Kite Boards of Directors and is anticipated to close in the fourth quarter of 2017.

The transaction will provide opportunities for diversification of revenues, and is expected to be neutral to earnings by year three and accretive thereafter.

Research and development as well as the commercialization operations for Kite will remain based in Santa Monica, California, with product manufacturing remaining in El Segundo, California.

Under the terms of the merger agreement, a wholly-owned subsidiary of Gilead will promptly commence a tender offer to acquire all of the outstanding shares of Kite’s common stock at a price of $180.00 per share in cash.

Following successful completion of the tender offer, Gilead will acquire all remaining shares not tendered in the offer through a second step merger at the same price as in the tender offer.

The consummation of the tender offer is subject to various conditions, including a minimum tender of at least a majority of outstanding Kite shares on a fully diluted basis, the expiration or termination of the waiting period under the Hart Scott Rodino Antitrust Improvements Act, and other customary conditions. Gilead plans to finance the transaction with a combination of cash on hand, bank debt and senior unsecured notes.

The tender offer is not subject to a financing condition. The $180.00 per share acquisition price represents a 29 percent premium to Kite’s closing on Friday, August 25, and a 50 percent premium to the company’s 30-day volume weighted average stock price.

BofA Merrill Lynch and Lazard are acting as financial advisors to Gilead. Centerview Partners is acting as exclusive financial advisor to Kite. Jefferies LLC and Cowen and Company, LLC also provided advice to Kite.

Skadden, Arps, Slate, Meagher & Flom is serving as legal counsel to Gilead and Sullivan & Cromwell LLP and Cooley LLP are serving as legal counsel to Kite.

Watch blueBird (BLUE)  and Juno Therapeutics (JUNO) as they may move higher on the news.


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When It Rains, It Pours

Insurers are dropping Valeant’s top products

Insurers are dropping Valeant's top products. See Stockwinners.com Market Radar

The beleaguered pharmaceutical firm sees its products being denied coverage by major health insurers.

United Healthcare’s (UNH) formulary is no longer covering Valeant Pharmaceuticals’ (VRX) number three branded drug Solodyn and will also now exclude Retin-A brand, its number four branded drug, Wells Fargo analyst David #Maris tells investors in a research note.

The analyst estimates the two drugs represented approximately $214M of Valeant’s sales in 2016. Maris also points out that #Glumetza, Valeant’s number eight branded drug, and Relistor were removed in July from CVS/Caremark’s (CVS) formulary.

These two drugs had approximately $119M in 2016 revenues. Maris notes his counterpart Peter Costa estimates that United Healthcare covers approximately 17% of the U.S. and CVS covers approximately 33%.

Express Scripts (ESRX) is releasing its 2018 national formulary next week, Costa adds.

Maris keeps an Underperform rating on shares of Valeant with a $9 price target. The stock closed on Thursday at $17.13.

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Chipotle Tumbles as Health Woes Continue

Chipotle Mexican Grill shuts Virginia restaurant down after reports of illnesses

Chipotle Mexican Grill spokesman Chris Arnold says the company is aware of a "small number" of illnesses linked to a store in Sterling, Virginia

Chipotle has shut down a location in Sterling, Virginia, after eight reports were made to the website iwaspoisoned.com stating that at least 13 customers fell sick after eating there from July 14-15, according to Business Insider.

The company’s executive director of food safety, Jim Marsden, told Business Insider: “We are working with health authorities to understand what the cause may be and to resolve the situation as quickly as possible.

The reported symptoms are consistent with #norovirus. #Norovirus does not come from our food supply, and it is safe to eat at Chipotle.”

Norovirus is different from E. coli, the bacteria that led to a widespread outbreak at Chipotle restaurants in 14 states two years ago.

Cases of norovirus stemming from restaurants can often involve a worker who failed to wash his or her hands after going to the bathroom.

The virus is highly contagious and causes symptoms like stomachaches, nausea, diarrhea, and vomiting. It’s the most common cause of food-borne illnesses in the US with more than 21 million cases annually.

Chipotle (CMG) has dealt with norovirus cases in the past. In December 2015, nearly 120 Boston College students fell sick after a norovirus outbreak at a restaurant close to campus.

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Arena Pharmaceuticals Reports Positive Ralinepag Results, Shares Rise!

Arena reports successful primary efficacy analysis in Phase 2 trial of ralinepag

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Arena Pharmaceuticals (ARNA) announced Phase 2 results for ralinepag, an investigational, long-acting, orally administered prostacyclin receptor agonist under development for the treatment of pulmonary arterial hypertension, or #PAH.

In this 61-patient study, the primary efficacy analysis demonstrated a statistically significant absolute change from baseline in pulmonary vascular resistance compared to placebo.

#Ralinepag also demonstrated numerical improvement in 6-minute walk distance.

Ralinepag improved median PVR by 163.9 dyn.s.cm-5 from baseline compared to a 0.7 dyn.s.cm-5 worsening from baseline in the placebo arm. Patients treated with ralinepag had a 29.8% improvement in PVR compared to the placebo arm and a 20.1% improvement in PVR compared to baseline.

Additionally, adverse events observed in the study were consistent with other prostacyclin treatments for the management of PAH, with headache, nausea, diarrhea, jaw pain and flushing being the most commonly reported adverse events.

“The positive outcome of this Phase 2 trial in a contemporary PAH patient population is an important milestone in the development of ralinepag for the treatment of patients suffering from this grievous illness. It is exciting to see the positive nonclinical pharmacological profile translating into potentially the first oral prostacyclin therapy that may approach consistent therapeutic levels without the complexity of parenteral therapy. These data give us confidence to move expeditiously toward a Phase 3 clinical program,” said Preston Klassen, Chief Medical Officer of Arena.

ARNA closed at $18.39 on Monday, shares last traded at $25.50.

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U.K. Approves Alexion’s Strensiq

Alexion reaches funding agreement with NICE and NHS England for Strensiq

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Alexion Pharmaceuticals (ALXN) announced that it has reached a national funding agreement with the National Institute for Health and Care Excellence, or NICE, and the National Health Service, or NHS, England based on a Managed Access Agreement, or MAA, which provides access to Strensiq for patients in England with pediatric-onset hypophosphatasia, or HPP, regardless of their current age.

The funding agreement was announced today in a positive final evaluation determination, or FED, issued by the NICE Highly Specialised Technologies, or HST, Evaluation Committee to recommend Strensiq according to the MAA.

#Strensiq (asfotase alfa) is an enzyme replacement therapy approved for the treatment of patients with perinatal/infantile- and juvenile-onset hypophosphatasia (HPP). 

#HPP is a genetic, chronic, progressive and life-threatening metabolic disease in which patients experience devastating effects on multiple systems of the body, leading to debilitating or life-threatening complications. HPP is characterized by low alkaline phosphatase (ALP) activity and defective bone mineralization that can lead to destruction and deformity of bones and other skeletal abnormalities, as well as systemic complications such as muscle weakness and respiratory failure leading to premature death in infants.

The MAA has been developed in collaboration between physician thought-leaders, patient groups, NHS England, and Alexion. The MAA ensures access to Strensiq for infants, children and adult patients with pediatric-onset HPP who experience the most disabling symptoms and are expected to benefit most from therapy.

ALXN has a 52-weeks trading range of $96.18 – $145.42. Shares last traded at $124.48.

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FDA Grants Conatus’ IDN-7314 Orphan Drug Designation

Conatus (CNAT) granted orphan drug designation for IDN-7314 for treatment of PSC

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Conatus Pharmaceuticals (CNAT) announced that the U.S. FDA has granted Orphan Drug Designation to Conatus’ drug candidate IDN-7314 for the treatment of primary sclerosing cholangitis, a disease affecting bile ducts in the liver which can lead to cirrhosis and liver failure.

The FDA’s Orphan Drug Designation program is intended to encourage the development of drugs and biologics that may provide benefit to patients suffering from rare diseases or conditions.

IDN-7314 is an orally active pan-caspase protease inhibitor designed to reduce the activity of enzymes that mediate inflammation and cell death, which has demonstrated reduction of relevant biomarkers in two preclinical models of PSC. One nonclinical model, the Mdr2-/- mouse model, is considered the current benchmark nonclinical model of PSC.

A new preclinical model, second mitochondria-derived activator of caspases-mimetic induced PSC in mice, has recently been reported that reproduces much of the phenotype of human PSC. IDN-7314 significantly improved biochemical indices of hepatic and biliary damage in these murine models of PSC, and these results suggest the involvement of caspases in the progression of PSC.

Other stocks to watch include: ICPT, INCY and AZN.

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Chipotle Warns of High Costs, Shares Slide

Chipotle falls after signaling continued high costs to win back consumers

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Shares of Chipotle Mexican Grill (CMG) fell Tuesday after the restaurant chain “clarified” its second quarter outlook, appearing to confirm that costs related to food, marketing, and promotion will remain elevated as it seeks to regain consumer trust following its 2015 food scares.

CHIPOTLE WARNS ON COSTS

In a regulatory filing after Monday’s close, Chipotle “clarified” its financial outlook in connection with an investor meeting, saying that “for Q2, we continue to expect food costs to be approximately 34.2% of sales, and marketing and promotion costs to be up approximately 20-30 basis points versus Q1 to 3.6%-3.7% of sales. As a result, we expect other operating costs as a percentage of sales for Q2 to be at or slightly higher than reported for Q1. For the full year, we continue to expect comparable restaurant sales increases in the high single digits.”

PIPER MAKES ONLY MINOR TWEAKS:

Piper Jaffray’s Nicole Regan highlighted that the news follows a “solid” Q1 report and says the Q2 guidance update necessitates only “relatively minor” tweaks to her quarterly models. The analyst maintains her earnings predictions for both 2017 and 2018, adding that the firm’s latest checks generally reflect the consensus opinion that trends are now “headed in the right direction,” likely helped by Chipotle’s TV campaign. Regan reiterated an Overweight rating and $530 target on the stock while noting that its next catalyst is “stringing together a series of steady quarterly improvements.”

MAXIM PREFERS DEEPER PULLBACK

While keeping a Hold rating and $440 target on Chipotle, Maxim’s Stephen Anderson cut his Q2 profit estimate to $2.62 from $2.87 per share on the company’s likely higher costs, adding that he had previously expected food expenses to improve as promotional activity and commodity prices eased. The analyst models double-digit comparable sales growth for the quarter while warning of impacts from the Easter holiday shift and Chipotle’s recently-disclosed data breach, saying he still prefers to wait for a “deeper pullback” before recommending the stock.

DEUTSCHE HIGHLIGHTS MARGIN CONCERNS

Writing that margin recovery “remains under pressure,” Deutsche Bank analyst Brett Levy says food, marketing, and other operating costs continue to form an “apparent drag on restaurant-level profits.” Levy lowered his second quarter EPS view by 20c to $2.04 and highlighted that management indicated sequential expense pressures are expected to persist and could near 100 basis points of additional costs versus the prior consensus forecast for restaurant-level margins. The analyst keeps a Sell rating on the shares, arguing that Chipotle “faces an uphill battle” to regain lost sales while lifting margins

PRICE ACTION: Shares of Chipotle remain down 6.7% to $428.31 in late day trading.

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SciClone sold for $605 Million

SciClone Pharmaceuticals provides therapies for oncology, infectious diseases, and cardiovascular disorders

It’s lead product is ZADAXIN, which is used for the treatment of hepatitis B and hepatitis C viruses

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#SciClone Pharmaceuticals $SCLN and a consortium consisting of entities affiliated with GL Capital Management GP Limited, Bank of China Group Investment Limited, or BOCGI, CDH Investments, Ascendent Capital Partners and Boying announced that they have entered into a definitive merger agreement under which the Buyer Consortium will acquire all the outstanding shares of SciClone for $11.18 per share in cash.

SciClone Pharmaceuticals, Inc. provides therapies for oncology, infectious diseases, and cardiovascular disorders in the People’s Republic of China, the United States, and Hong Kong. Its lead product is #ZADAXIN, which is used for the treatment of hepatitis B and hepatitis C viruses, and certain cancers, as well as for use as an immune system enhancer.

The transaction will be funded by the Buyer Consortium through a combination of equity financing to be provided by the Buyer Consortium and debt financing, and is not subject to a financing condition.

The transaction, which was unanimously approved by SciClone’s board, values the company at approximately $605M, on a fully diluted basis, and represents a premium of 11% over SciClone’s closing stock price on June 7, 2017 and a premium of 16% over its ten-day volume-weighted average closing stock price.

The transaction, which is expected to close this calendar year, is subject to approval by SciClone stockholders and other customary closing conditions.

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Amazon, the next Threat to Drug Prices

Wells Fargo said Amazon may be the next threat to drug pricing as the company’s move into the prescription pharmacy space could result in increased competition and increased pricing transparency

Although brand-name drugs comprise only 10% of all dispensed prescriptions in the United States, they account for 72% of drug spendingHttps://stockwinners.com/

Last month, #CNBC reported that #Amazon ( $AMZN ) is considering going into the prescription pharmacy business in the U.S. Now Wall Street analysts are questioning if the e-commerce giant has larger plans for the healthcare market.

One of the reasons drug prices are much higher in the United States compared to other industrialized countries is that the U.S. lacks a national healthcare system that directly negotiate with the pharmaceutical industry. Rather, most of the negotiations occur between the pharmaceutical companies and private insurers or vendors. The primary reason for increasing drug spending is the high price of branded products protected by market exclusivity provisions granted by the US Patent and Trademark Office and the Food and Drug Administration (FDA) (rather than a national healthcare system.)

Although brand-name drugs comprise only 10% of all dispensed prescriptions in the United States, they account for 72% of drug spending. Between 2008 and 2015, prices for the most commonly used brand-name drugs increased 164%, far in excess of the consumer price index.

Although brand-name drugs account for the greatest increase in prescription drug expenditures, another area that has captured the attention of the public and of policy makers has been the sharp increase in the costs of some older generic drugs. In 2015, Turing Pharmaceuticals raised the price of pyrimethamine (Daraprim), a 63-year-old treatment for toxoplasmosis, by 5500%, from $13.50 to $750 a pill.22 The company was able to set the high price despite the absence of any patent protection because no other competing manufacturer was licensed to market the drug in the United States.  Significant increases in the prices of other older drugs include isoproterenol (2500%), nitroprusside (1700%), and digoxin (637%). Even though the prices of most generic drug products have remained stable between 2008 and 2015, those of almost 400
increased by more than 1000%.

Having made the above statements, it should be noted that there are a number of middle men before a patient’s prescription is received by the consumer. It is estimated that a 28% – 48% cost increase for a typical prescription, and that is where Amazon could come in.

PRICING THREAT:

Wells Fargo analyst David #Maris said Amazon may be the next threat to drug pricing as the company’s move into the prescription pharmacy space could result in increased competition and increased pricing transparency.

He added that a Wells Fargo survey of nearly 2,900 U.S. adults found that 54% of those polled said they would use or would probably use “Amazon Pharmacy,” indicating patients’ willingness to shift from local pharmacies. While the e-commerce giant has not confirmed its U.S. pharmacy interest, if it did enter the market Maris believes it could see fast adoption and “usher in a new age of price transparency.” He also wonders if pharmacy “may be just the beginning” and if Amazon eyes the “even larger prize” of fully integrated digital healthcare as telemedicine becomes more widely accepted. Maris said while little is known about Amazon’s plans, investors and companies should question the impacts of such a move now.

SIMPLY AMAZON‘: In addition, #Maxim analyst Tom Forte said that as consumers increasingly interact with Amazon in physical locations, “Amazon.com will become simply Amazon.” He analyzed 18 market opportunities, including 14 that Amazon is already pursuing and four – credit, gas stations, pharmacy, and travel – that are new. Among them, he identified ten categories where the global total addressable market exceeds $1T, which included the pharmacy space. Forte said he believes Amazon’s potential expansion into the pharmacy market could serve as a driver of sustained revenue growth and its delivery initiatives, such as Prime Now, make it well-positioned for entry. Given Amazon’s opportunity to drive incremental sales growth and “further disrupt the retail sector,” Forte raised his price target on AMZN to $1,300 from $1,075 and keeps a Buy rating on the name.

WHAT TO WATCH:

Publicly traded large-cap pharmaceuticals companies include AstraZeneca (AZN), Bristol-Myers (BMY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY). Publicly traded retail pharmacy operators include CVS Health (CVS), Walgreens (WBA), Fred’s (FRED) and Rite Aid (RAD).

PRICE ACTION: Amazon rose 0.1% to $1,012.35 in Tuesday trading. The stock is just dollars away from its recently-reached all-time high of $1,016.50.

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Alnylam’s Givosiran receives FDA’s Breakthrough Therapy

Porphyria is a group of diseases in which substances called porphyrins build up, affecting the skin or nervous system

Givosiran was found to be generally well tolerated with no drug-related serious adverse events

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Alnylam Pharmaceuticals $ALNY announced that it has received Breakthrough Therapy designation from the U.S. Food and Drug Administration for #givosiran, an investigational RNAi therapeutic targeting aminolevulinic acid synthase 1 for the prophylaxis of attacks in patients with acute hepatic porphyria.

“Promising results from the ongoing Phase 1 study of #givosiran demonstrating meaningful reductions in the occurrence of porphyria attacks formed the basis of the Breakthrough application,” the company says Updated results from this trial will be provided in an oral presentation on June 26 at the International Congress on Porphyrins and Porphyrias being held in Bordeaux, France.

The ongoing portion of the Phase 1 study of givosira is being conducted as a randomized, double-blind, placebo-controlled study.

Data presented at the 2016 American Society of Hematology meeting held in Atlanta demonstrated initial evidence for clinical activity with givosiran including meaningful reductions in both the number and frequency of porphyria attacks, as well as meaningful reductions in annualized hemin doses required in patients with acute intermittent porphyria, the most common and severe form of AHP.

In the first two dose cohorts, givosiran was found to be generally well tolerated with no drug-related serious adverse events. In the third dose cohort, which remains blinded, one death due to acute pancreatitis, considered unlikely related to givosiran or placebo, was reported after the data transfer date.

Porphyria is a group of diseases in which substances called porphyrins build up, affecting the skin or nervous system. The types that affect the nervous system are also known as acute #porphyria. Symptoms of acute porphyria include abdominal pain, chest pain, vomiting, confusion, constipation, fever, and seizures. These symptoms typically come and go with attacks that last for days to weeks. Attacks may be triggered by alcohol, smoking, stress, or certain medications. If the skin is affected, blisters or itching may occur with sunlight exposure.

The disease is usually inherited from a person’s parents and is due to a mutation in one of the genes that make heme. Some types are autosomal dominant and others are autosomal recessive. One type, porphyria cutanea tarda, may also be due to increased iron in the liver, hepatitis C, alcohol, or HIV/AIDS. The underlying mechanism results in a decrease in the amount of heme produced and a build-up of substances involved in making heme. Porphyrias may also be classified by whether the liver or the bone marrow is affected.  About 1 in 75,000 people have acute porphyria attacks. They may either have one of the acute porphyrias or they may have a mixed porphyria.

Separately,  the company announced that management will present a company overview at the #Jefferies 2017 Healthcare Conference on Tuesday, June 6, 2017 at 9:00 am ET in New York City.

PRICE ACTION:  ALNY closed at $64.09. The stock has a 52-week trading range of $31.38 – $80.11. Other stocks to watch: ICPT, AZN, INCY, BIIB.

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Gilead HIV Success Shields it Against Patent Loss, Competition

The bictegravir combination was “well tolerated and no patients discontinued study medication due to renal events”

Analyst expects Gilead to use one of its priority review vouchers to obtain an accelerated six month regulatory timeline

 

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#Gilead (GILD) announced Tuesday that its latest #HIV treatment candidate met its primary goal in four late-stage studies, showing “non-inferiority” against existing regimens, including a competitor from GlaxoSmithKline (GSK).

By definition, a #non-inferiority trial aims to demonstrate that the test product is not worse than the comparator by more than a small pre-specified amount. This amount is known as the non-inferiority margin, or delta.

Wall Street analysts largely cheered the news and said it could be key in preserving Gilead’s spot in the HIV treatment arena.

BACKGROUND: Gilead announced Tuesday morning that four Phase 3 studies evaluating its #bictegravir in combination with the already-approved emtricitabine/tenofovir in HIV patients met their primary goals of “non-inferiority” against existing regimens, including GlaxoSmithKline’s #Tivicay.

On the safety front, the bictegravir combination was “well tolerated and no patients discontinued study medication due to renal events.” The company noted that it plans an New Drug Application (NDA) submission in Q2, with a Marketing Authorization Approval (MAA) filing in Europe following in Q3.

CITI SEES POTENTIAL FIRST CHOICE FOR PHYSICIANS: #Citi analyst Robyn #Karnauskas says today’s data are “key” to the long-term health of Gilead’s HIV franchise and could make the bictegravir regimen the first choice among physicians, adding that a 1Q18 launch of the bictegravir regimen looks “likely” now. While cautioning that Gilead’s announcement did not include comment on drug superiority or detailed efficacy metrics, Karnauskas’ base case estimates about 25% of patients switching to the bictegravir combo, contributing roughly $6 per share to her discounted cash flow modeling.

JPMORGAN SAYS KEY TO HIV FRANCHISE: #JPMorgan analyst Cory #Kasimov is “generally encouraged” by Gilead’s announcement but “not entirely surprised” given the previous Phase 2 data. Kasimov thinks a 2018 launch, potentially with accelerated FDA review using one of the company’s priority vouchers, could be “key” to help the company maintain market share in the face of pending patent expirations as well as continued growth in GlaxoSmithKline’s Tivicay. Kasimov adds that he expects sales of the bictegravir product to peak around $5B by 2022.

LEERINK SEES POTENTIAL YEAR-END LAUNCH: #Leerink’s Geoffrey #Porges says the bictegravir news looks “in line” with both his and the company’s expectations: While the trials “do not appear to have shown statistical superiority,” they also didn’t bring new safety concerns. The analyst expects Gilead to use one of its priority review vouchers to obtain an accelerated six month regulatory timeline, potentially allowing for year-end approval and launch, adding that his forecast for the regimen eventually ramps to over $10B in global sales.

PRICE ACTION: Shares of Gilead showed volatility Tuesday, reaching highs near $64.75 before paring those gains into session close at $64.50. Meanwhile, GlaxoSmithKline $GSK gained 1.8% to $43.43.

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