Un­der ‘threat’ of fines, No­var­tis sues HHS over drug pric­ing pro­gram

The bio­phar­ma in­dus­try is not tak­ing the threat of even mod­est civ­il mon­e­tary penal­ties light­ly, as No­var­tis last week sued the Biden ad­min­is­tra­tion’s HHS over plans to as­sess such penal­ties for changes that the com­pa­nies made in re­gard to a small but high-pro­file drug dis­count pro­gram for hos­pi­tals.

Un­der the pro­gram, known as 340B and run by HHS’ Health Re­sources and Ser­vices Ad­min­is­tra­tion, drug­mak­ers are re­quired by law to sell their prod­ucts at heav­i­ly dis­count­ed prices so hos­pi­tals can pro­vide them to low-in­come pa­tients. Al­though the na­tion­al pro­gram is some­where be­tween 8% and 5% of the en­tire US drug mar­ket, bio­phar­ma com­pa­nies have crit­i­cized the bal­loon­ing growth of cer­tain con­tract phar­ma­cies that are now op­er­at­ing on be­half of many of the hos­pi­tals and took ac­tion to halt that growth over the past year.

But HRSA told drug­mak­ers — As­traZeneca, No­vo Nordisk, Lil­ly, No­var­tis, Unit­ed Ther­a­peu­tics and Sanofi — last month that they have to pro­vide the dis­counts to the con­tract phar­ma­cies, or else pay $6,000 for each in­stance in which the gov­ern­ment be­lieves that each sold a prod­uct to an en­ti­ty at an in­cor­rect price.

Like Lil­ly in In­di­ana dis­trict court (which now has un­til June 10 to re­ply to HRSA’s let­ter), No­var­tis is call­ing on the DC dis­trict court to stop “HRSA’s threat” be­cause it lacks mer­it and be­cause No­var­tis has not over­charged any en­ti­ties as it on­ly stopped the dis­counts for con­tract phar­ma­cies out­side of a 40-mile ra­dius from par­tic­i­pat­ing hos­pi­tals.

“Noth­ing in the statute con­tem­plates—let alone re­quires—that man­u­fac­tur­ers agree to ship drugs nom­i­nal­ly pur­chased by cov­ered en­ti­ties di­rect­ly to ‘con­tract phar­ma­cies’ for dis­pens­ing to both pa­tients and non-pa­tients of the cov­ered en­ti­ty alike. And yet that is pre­cise­ly what HRSA has pur­port­ed to man­date here,” No­var­tis said.

The com­pa­ny al­so not­ed an ex­plo­sion of con­tract phar­ma­cy arrange­ments over the last decade, as con­tract phar­ma­cy par­tic­i­pa­tion grew 4,228%, ac­cord­ing to a re­port from the Berke­ley Re­search Group, and as the num­ber of con­tract phar­ma­cy arrange­ments by hos­pi­tals in­creased from 193 to more than 43,000 dur­ing the same pe­ri­od.

That growth has come with abuse, No­var­tis al­leges, and the gov­ern­ment’s pub­lic claim that the com­pa­ny has know­ing­ly and will­ful­ly vi­o­lat­ed its 340B oblig­a­tions “plain­ly in­jures No­var­tis’ rep­u­ta­tion.”

In­side Track: Be­hind the Scenes of a Ma­jor Biotech SPAC

Dr. David Hung and Michelle Doig are no strangers to the SPAC phenomenon. As Founder and CEO of Nuvation Bio, a biotech company tackling some of the greatest unmet needs in oncology, Dr. Hung recently took the company public in one of this year’s biggest SPAC related deals. And as Partner at Omega Funds, Doig not only led and syndicated Nuvation Bio’s Series A, but is now also President of the newly formed, Omega-sponsored, Omega Alpha SPAC (Nasdaq: OMEG; oversubscribed $138m IPO priced January 6, 2021).

Barry Greene, Sage CEO

UP­DAT­ED: Sage's sec­ond chance at de­pres­sion hits the PhI­II pri­ma­ry, but ques­tions re­main over dura­bil­i­ty, side ef­fects

Looking to make a comeback after a big Phase III flop, Sage Therapeutics revealed data they believe could change the entire depression treatment landscape, given the vast array of failures in the field. But some results are spooking investors, sending Sage $SAGE shares down early Tuesday.

First, the primary: Sage and Biogen reported Phase III data for once-daily zuranolone Tuesday morning, saying the experimental drug hit its primary endpoint by spurring a statistically significant change from baseline in the 17-item Hamilton Rating Scale for Depression total score. After 15 days, patients in the drug arm saw an average change of -14.1 points, compared to -12.3 on placebo.

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Harith Rajagopalan (Fractyl)

Af­ter a decade in the Type 2 di­a­betes game, Fractyl Lab­o­ra­to­ries recharges with a fresh $100M and a new name

Harith Rajagopalan compared the way Type 2 diabetes is managed to sticking your fingers in a dam that’s leaking from a number of places.

You can take drugs to lower your blood sugar, cholesterol, or blood pressure, but you’re not addressing what he says is the core issue — the metabolic abnormality that causes the disease.

“We’re so busy plugging the holes in the dam, we don’t have time to see that the whole infrastructure is at risk,” he said. “That infrastructure is a full-body systemic metabolic abnormality called metabolic syndrome, that we’re ignoring while we’re so busy trying to treat all of the individual symptoms of the condition.”

Bio­gen sig­nals a big PhI­II fail­ure as the lead gene ther­a­py in their $800M Night­star buy­out goes down in flames

That $800 million buyout of Nightstar has turned into a bust for Biogen as the lead therapy in the deal failed a pivotal study, signaling a severe setback for the biotech’s ambitions in gene therapies.

The big biotech put out the word after the market closed on Monday that the gene therapy they picked up in the deal for a degenerative blindness called choroideremia failed the Phase III study, just a month after their #2 drug in the deal also flopped in a mid-stage study.

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Hal Barron, GSK R&D chief (Endpoints News)

Hal Bar­ron gam­bles $625M cash on high-wire TIG­IT act, throw­ing Glax­o­SmithK­line in­to heat­ed race and com­plet­ing next-gen I/O trin­i­ty

Count Hal Barron and GlaxoSmithKline in for the TIGIT fight.

The stakes are as high as the risks: While a growing pack of Big Pharma rivals is lending credence to the hypothesis that TIGIT will be the next big immune checkpoint and cancer drug target, the first clinical trials have shown response rates that can be described as modest at best. But Barron’s bet is on the whole “axis” that the receptor sits on, with an eye on testing its new anti-TIGIT antibody not just in combo with PD-1 but also in triplets.

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Lynn Fitch, Mississippi Attorney General (Rogelio V. Solis/AP Images)

Mis­sis­sip­pi sues Eli Lil­ly, Sanofi and No­vo over in­sulin prices as in­ter­change­able biosim­i­lars may ar­rive soon

Mississippi Attorney General Lynn Fitch last week sued the top three insulin manufacturers, which collectively cover almost the entire US insulin market, alleging that they’ve colluded to raise their prices in lockstep, and in some cases by more than 1,000% for drugs that are decades old.

“Because of Manufacturer Defendants’ collusive price increases, nearly a century after the discovery of insulin, diabetes medications have become unaffordable for many diabetics,” the lawsuit says.

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Michel Sade­lain puts his name and new cell en­gi­neer­ing tech be­hind 'ag­nos­tic' CAR-T start­up chas­ing epi­ge­net­ic anti­gens

It felt natural for Alain Maiore and Sebastian Amigorena to bring in Michel Sadelain as a co-founder of Mnemo Therapeutics. A CAR-T pioneer, Sadelain had been involved as an advisor since the early days — enthusiastic about Amigorena’s work in a genetic knockout that could enhance T cell memory and a new class of potential targets he’s discovered — and could introduce some well-known technologies to the toolbox. So they got the initial cash from Sofinnova Partners to plant roots in Paris and New York in early 2019; within a few months, they began to see more clearly just what the antigen discovery platform might unlock.

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Andrew Hopkins, Exscientia CEO

Ex­sci­en­tia spends Soft­Bank's cash in bid to edge out AI ri­vals

Exscientia is sprinting to win the great AI biotech race.

The UK company, having long labored on small discovery deals with large pharmas, raised up to $525 million in a Series D led by the infamous Japanese conglomerate SoftBank in April and followed it up less than a month later with a Bristol Myers Squibb deal that paid $50 million cash and $1.2 billion in milestones.

Now, the Oxford spinout is splurging on a shiny new tool. On Monday they announced they purchased the three-year-old molecule-screening biotech Allcyte, a longtime collaborator, for $60.6 million in cash and stock.

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As Covid-19 shifts the world's at­ten­tion to biotech, Noubar Afeyan's Flag­ship builds $3.4B fund to fu­el new in­ven­tions. Here's the plan

A little more than a year ago, Flagship Pioneering rolled out a monster fund with $1.1 billion in it to bankroll the platform companies they were creating inside their own labs. But it turns out, that was just the prelude to a much, much larger raise, as both current investors — who’ve been reaping the rewards of some booming biotech stocks — join in with new investors betting on more in the years to come.

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