As pow­er shifts hands in Wash­ing­ton, a top an­a­lyst pre­dicts an un­avoid­able war over ris­ing drug prices

The drug in­dus­try has two pow­er­ful rea­sons for buck­ing Pres­i­dent Don­ald Trump’s cam­paign to cap and low­er drug prices. As Bern­stein’s Ron­ny Gal sees it, they have to keep drug prices mov­ing up­ward to meet Wall Street’s ex­pec­ta­tions on their num­bers.

Threat­en­ing to re­al­ly shove prices north is al­so a good bar­gain­ing chip for the price ne­go­ti­a­tions to come in Wash­ing­ton DC, he adds. And the in­dus­try may soon have a long­time al­ly among the De­moc­rats in a key po­si­tion to in­flu­ence any drug pric­ing leg­is­la­tion to come.

Ron­ny Gal

“The drug in­dus­try kind of has to come back to in­creas­ing prices,” Gal wrote in a note. “They will do so cau­tious­ly at first (eg CELG ‘med­ical cost in­fla­tion’ rate). If they don’t they will start miss­ing num­bers — in part be­cause net av­er­age prices will ac­tu­al­ly drop if they don’t as pa­tients grad­u­al­ly shift to low price chan­nels (Med­ic­aid, 340B).”

With the midterms now re­ced­ing in the back­ground, leav­ing the Dems in charge of the House, the bio­phar­ma in­dus­try has good rea­son to keep its pow­der dry as they try to stave off pol­i­cy changes that re­al­ly threat­ens their num­bers.

“Po­lit­i­cal­ly,” Gal writes, “phar­ma does not have to be as nice to PO­TUS now that CMS has pol­i­cy ideas that are an­ti­thet­i­cal to in­dus­try in­ter­est (the IPI, MA for­mu­la­ries). At the very least, threat­en­ing to raise prices gives in­dus­try a bar­gain­ing chip to ne­go­ti­ate some of these poli­cies away.”

An­na Es­hoo

The tidal shift in pow­er in Wash­ing­ton DC could come with a big bonus for in­dus­try lob­by­ists. An­na Es­hoo, a Cal­i­for­nia De­mo­c­rat who has helped craft big com­pro­mis­es on the lengthy ex­clu­siv­i­ty pe­ri­od grant­ed for bi­o­log­ics and more — to BIO’s im­mense sat­is­fac­tion — is mak­ing a bid to be­come chair of the Health Sub­com­mit­tee of the House En­er­gy and Com­merce Com­mit­tee. And she has the se­nior­i­ty to get it.

Frank Pal­lone

Gal, though, notes that Frank Pal­lone is slat­ed for the top seat on E&C, and he has in­di­cat­ed a will­ing­ness to work with Trump on pric­ing — not a pleas­ant prospect from the in­dus­try lob­by­ists’ per­spec­tive. In spe­cif­ic, Pal­lone has ad­vo­cat­ed a change al­low­ing Medicare to ne­go­ti­ate drug prices — rather than put a “Medicare for all” pro­vi­sion up for a vote.

Just be­fore the elec­tion Trump man­aged to rile up PhRMA with a pro­pos­al to es­sen­tial­ly im­port over­seas drug prices, forc­ing Medicare Part B to low­er drug prices to con­form with rates ne­go­ti­at­ed by sin­gle-pay­er na­tions like the UK. In part, that’s be­cause Trump wants to force the in­dus­try to force oth­er coun­tries to pay more for drugs, tak­ing some of the weight off the dom­i­nant US mar­ket. And in part it’s to low­er drug prices af­ter com­plain­ing for the last 2 years about the in­dus­try’s pric­ing strat­e­gy — which is to move high­er on their port­fo­lios year and year.

Pfiz­er moved the is­sue back on­to the pub­lic stage just days ago with its de­ci­sion to raise prices on 41 drugs, which rep­re­sents 10% of its com­mer­cial of­fer­ings, by an av­er­age of 5%. While that would have been a mod­el of re­straint 2 years ago, it trig­gered an im­me­di­ate back­lash from HHS, which has been com­ing up with new price re­forms for the pres­i­dent.

BREAK­ING: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan

Brent Saun­ders has found his way out of the cur­rent fix he’s in at Al­ler­gan $AGN. He’s sell­ing the com­pa­ny to Ab­b­Vie for $63 bil­lion in the lat­est ex­am­ple of the hot M&A mar­ket in bio­phar­ma.

Ab­b­Vie $AB­BV has agreed to pay $188.24 a share — cash and stock — for the trou­bled Al­ler­gan, re­flect­ing a 45% pre­mi­um as in­vestors bid up shares in an­tic­i­pa­tion of a much buzzed about com­pa­ny split. That price — with each share of Al­ler­gan worth 0.8660 Ab­b­Vie shares and $120.30 in cash — re­flects a sharp fall from the $330 peak for Al­ler­gan and Saun­ders 4 years ago — but much bet­ter than any­thing share­hold­ers had in mind for the near fu­ture.

UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene will require the sale of blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay.

The announcement — which has potentially delayed the completion of the takeover to early 2020 — irked investors, triggering the New York-based drugmaker’s shares to tumble Monday morning in premarket trading.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. Apart from the partial overlap of Bristol-Myers injectable Orencia, the company’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. With Monday’s decision, it appears Bristol-Myers is favoring its experimental drug, and discounting Otezla’s future.

The move blindsided some analysts. Credit Suisse’s Vamil Divan noted just days ago:

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Eye­ing a $500M peak sales pot, Almi­rall dou­bles down on le­brik­izum­ab as Der­mi­ra lines up PhI­II

With eyes on what it be­lieves is a $500 mil­lion peak rev­enue op­por­tu­ni­ty in Eu­rope, Barcelona-based Almi­rall has stepped up with $50 mil­lion in cash to take up the op­tion on Der­mi­ra’s IL-13 an­ti-in­flam­ma­to­ry drug le­brik­izum­ab just ahead of the start of Phase III. And there’s an­oth­er $30 mil­lion due as the late-stage pro­gram gets geared up.

That shouldn’t be long from now, as Der­mi­ra ex­pects to be­gin the late-stage tri­al work for atopic der­mati­tis be­fore the end of this year as it fol­lows a trail that ex­ecs in­sist leads to block­buster re­turns. Along the way, they’ll need to take on the 600-pound go­ril­la in atopic der­mati­tis: the IL-13/IL-4 drug Dupix­ent, from Re­gen­eron and Sanofi. Ri­vals al­so in­clude Leo Phar­ma, in its piv­otal with tralok­izum­ab, and Anap­tys­Bio in the hunt with a mid-stage pro­gram for etokimab, pre­vi­ous­ly re­ferred to as ANB020.

Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

Bris­tol-My­ers star Op­di­vo fails sur­vival test in a matchup with Nex­avar aimed at shak­ing up the big HCC mar­ket

Bris­tol-My­ers Squibb has suf­fered an­oth­er painful set­back in its years-long quest to ex­pand the reach of Op­di­vo. The phar­ma gi­ant this morn­ing not­ed that their Check­mate-459 study com­par­ing Op­di­vo with Bay­er’s Nex­avar in front­line cas­es of he­pa­to­cel­lu­lar car­ci­no­ma — the most com­mon form of liv­er can­cer — failed to hit the pri­ma­ry end­point on over­all sur­vival.

This was a sig­nif­i­cant mile­stone in Bris­tol-My­ers’ tal­ly of PD-1 cat­a­lysts this year. Nex­avar (so­rafenib) has been the stan­dard of care in front­line HCC for the past decade, though Op­di­vo has been mak­ing head­way in sec­ond-line HCC cas­es, where it’s go­ing toe-to-toe with Bay­er’s Sti­var­ga (re­go­rafenib) af­ter re­cent ap­provals shook up the mar­ket.

Suf­fer­ing No­var­tis part­ner Cona­tus is pack­ing it in on NASH af­ter a se­ries of un­for­tu­nate tri­al events

The NASH par­ty is over at No­var­tis-backed Cona­tus. And this time they’re turn­ing off the lights.

More than 2 years af­ter No­var­tis sur­prised the biotech in­vest­ment com­mu­ni­ty with its $50 mil­lion up­front and promise of R&D sup­port to part­ner with the lit­tle biotech on NASH — ig­nit­ing a light­ning strike for the share price — Cona­tus $CNAT is back with the lat­est bit­ter tale to tell about em­ri­c­as­an, which once in­spired con­fi­dence at the phar­ma gi­ant.

Dean Hum. Nasdaq via YouTube

Gen­fit goes to Chi­na with a deal worth up to $228M for NASH drug

Fresh off the high of its Nas­daq IPO de­but, and the low of com­par­isons to Cymabay — whose NASH drug re­cent­ly stum­bled — Gen­fit on Mon­day un­veiled an up to $228 mil­lion deal with transpa­cif­ic biotech Terns Phar­ma­ceu­ti­cals to de­vel­op its flag­ship ex­per­i­men­tal liv­er drug — elafi­bra­nor — in Greater Chi­na.

The deal comes weeks af­ter Gen­fit $GN­FT is­sued a fiery de­fense of its dual PPAR ag­o­nist elafi­bra­nor, when com­peti­tor Cymabay’s PPARδ ag­o­nist, se­ladel­par, fiz­zled in a snap­shot of da­ta from an on­go­ing mid-stage tri­al. The main goal at the end of 12 weeks was for se­ladel­par to in­duce a sta­tis­ti­cal­ly sig­nif­i­cant im­prove­ment in liv­er fat con­tent, but da­ta showed that pa­tients on the place­bo ac­tu­al­ly per­formed bet­ter.

Alex­ion wins pri­or­i­ty re­view for Ul­tomiris' aHUS in­di­ca­tion; FDA ex­pands ap­proval of Ver­tex's Symdeko

→ Alex­ion $ALXN has scored a speedy re­view for Ul­tomiris for pa­tients with atyp­i­cal he­molyt­ic ure­mic syn­drome (aHUS) af­ter post­ing pos­i­tive da­ta from a piv­otal study in Jan­u­ary. The drug is the rare dis­ease com­pa­ny’s shot at pro­tect­ing its block­buster blood dis­or­der fran­chise that is cur­rent­ly cen­tered around its flag­ship drug, Soliris, which is a com­ple­ment in­hibitor typ­i­cal­ly ad­min­is­tered every two weeks. Ul­tomiris has a sim­i­lar mech­a­nism of ac­tion but re­quires less-fre­quent dos­ing — every eight weeks. The de­ci­sion date has been set to Oc­to­ber 19. Late last year, Ul­tomiris se­cured ap­proval for noc­tur­nal he­mo­glo­bin­uria (PNH) pa­tients.

Bet­ter than Am­bi­en? Min­er­va soars on PhI­Ib up­date on sel­torex­ant for in­som­nia

A month af­ter roil­ing in­vestors with what skep­tics dis­missed as cher­ry pick­ing of its de­pres­sion da­ta, Min­er­va is back with a clean slate of da­ta from its Phase IIb in­som­nia tri­al.

In a de­tailed up­date, the Waltham, MA-based biotech said sel­torex­ant (MIN-202) hit both the pri­ma­ry and sev­er­al sec­ondary end­points, ef­fec­tive­ly im­prov­ing sleep in­duc­tion and pro­long­ing sleep du­ra­tion. In­ves­ti­ga­tors made a point to note that the ef­fects were con­sis­tent across the adult and el­der­ly pop­u­la­tions, with the lat­ter more prone to the sleep dis­or­der.