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Washington State has become the latest to sue Johnson & Johnson over the way it marketed opioid painkillers, according to press reports.

J&J supplies raw materials used to make opiates, and the state argues that the company used deceptive marketing to say the drugs were effective for treating pain and were unlikely to cause addiction.

This is the latest in a string of lawsuits to hit J&J, some related to its role in the opioid crisis, with others related to whether its signature talc baby powder contains carcinogenic asbestos.

There is also a high-profile lawsuit over its marketing of the mental health drug Risperdal – in October a US court ruled that J&J should pay $8 billion in damages to a man because it failed to inform him about the side-effects of the drug before he went on to grow breasts.

J&J has challenged the ruling and insisted that its legal team will overcome the ongoing legal issues in its third quarter financial results conference as the lawsuits mounted up in October.

The latest lawsuit seeks civil penalties and damages and was filed in King County Superior Court, and alleges the company violated the state’s Consumer Protection Act, was negligent and a public nuisance.

Washington is also asking the company to forfeit profits made in the state as a result of its behaviour.

This figure could amount to millions of dollars, the state’s attorney general Bob Ferguson said at a news conference, where he said that the “human toll” of J&J’s actions was “staggering”.

J&J’s pharmaceutical unit Janssen, which is named in the lawsuit, said its opioid marketing was “appropriate and responsible”.

“Janssen provided our prescription pain medicines for doctors treating patients suffering from severe pain and worked with regulators to ensure safe use – everything you’d expect a responsible company to do,″ Janssen said in a statement.

But Ferguson argued that prescriptions and sales of opioids in Washington increased more than 500% between 1997 and 2011.

At peak sales in 2011, more than 112 million daily doses of all prescription doses of opioids were dispensed, he said.

A judge in Oklahoma in November finalised an order directing J&J to pay $465 million to address the opioid crisis in that state.

In December a jury in Missouri ruled J&J was not responsible for a woman’s cancer that she blamed on asbestos-tainted talc.

That ruling that came after the company rejected findings of FDA tests showing trace amounts of the contaminant, which prompted the company to pull certain packs from shelves in October.

An artificial intelligence (AI) system from Google Health can identify breast cancer more accurately than radiologists, according to research.

The research conducted by experts from Google Health, Alphabet’s DeepMind unit, and UK and US universities and published in the scientific journal Nature, shows that the AI reduced both false positives, as well as false negatives.

Around one in five breast cancers are not detected by conventional mammogram screening, and the chance of a false positive is thought to be around 50-60%.

This can lead to unnecessary treatment, costing health systems billions of dollars every year.

Google Health’s algorithm was trained and tested on de-identified images from almost 120,000 mammograms in the US and the UK.

Results showed an absolute reduction of 5.7% and 1.2% in false positives in the US and UK, respectively. For false positives the reductions seen were 9.4% in the US and 2.7% in the UK.

In the double-reading process used in the UK, the AI performed as well as a human and reduced the workload of the second reader by 88%.

Authors concluded that the initial assessment paves the way for clinical trials of the AI system.

The company’s UK lead is Dominic King, a former breast cancer surgeon who said the company embarked on the study because senior radiologists are concerned about whether the country’s cancer screening services are sustainable.

In 2018, the Royal College of Radiologists estimated that the country would need more than 1,000 additional senior radiologists.

King told the FT that the results were “really exciting” and could also help to screen for cancer in earlier stages when the disease is harder to accurately detect.

The results come two years after the government’s health tsar Sir John Bell said that using AI to scan for heart disease and lung cancer along could save the NHS billions of pounds.

Using AI could cut the NHS £2.2 billion pathology spend by around half according to Bell, who hoped that an AI system developed by Optellum could allow more than 4,000 lung cancer patients to be diagnosed earlier.

Pharmaceutical companies kept their annual New Year’s Day traditions going with increases on the list price of drugs. According to an analysis conducted on Jan. 1, more than 250 drugs manufactured by different companies saw price increases.

The analysis, conducted by healthcare research firm 3 Axis Advisors, showed that the price increases were between 1% and about 10%, with the average drug price increased by about 5%, CNBC reported. Over the past four years, the median increase has been 9% and 10%.

Companies that increased prices on Jan. 1, according to the report, included GlaxoSmithKline, Biogen, Bristol-Myers Squibb, Gilead Sciences, Sanofi and Pfizer. More price increases are expected to be announced later this week, which could affect the median and range of those hikes, 3 Axis co-founder Eric Pachman told Reuters.

The list price is the price set by drug manufacturers and is then negotiated by payers. The list price is rarely the retail price a consumer pays.

The annual price increase continues to happen even as lawmakers in the United States are drafting and attempting to pass legislation that would grant the U.S. government the power to negotiate with drug companies over the cost of medications covered by Medicare and other federally-supported plans. Prescription price costs will certainly play a role in the coming 2020 presidential election.

As drug prices continue to play a central role in U.S. electoral politics, many drug companies have pledged to keep price increases below 10%.

Bristol-Myers Squibb increased the price on 10 of its drugs, including cancer immunotherapies Opdivo and Yervoy. Both of those drugs saw a 1.5% price increase, according to the report. Eliquis, its blockbuster blood thinner, saw a 6% price increase. Revlimid, which came under BMS’ umbrella following the company’s $74 billion acquisition of Celgene last year, also saw a 6% price increase. Revlimid, which earned nearly $10 billion in revenue for Celgene last year, is expected to lose about 60% of its earning power over the next seven years as patent protection drops. Still, the multiple myeloma drug is a strong driver of revenue for the combined companies. For BMS, a 6% price increase is the most the company will raise drug prices this year, the company told CNBC.

Gilead Sciences increase prices on more than 15 different drugs including HIV treatments Biktarvy and Truvada. Both of those drugs saw price increases under 5%, CNBC reported.

Biogen notably increased the price of its multiple sclerosis treatment Tecfidera by 6%.

Pfizer told Reuters that it will increase the list prices on around 27% of its portfolio in the United States by an average of 5.6%. Nearly half of those increases, about 43%, will be for sterile injectibles. A Pfizer spokesperson said the increases will be less than $1 per product. Two notable Pfizer drugs that will see increases are cancer drug Ibrance and its rheumatoid arthritis drug Xeljanz.

GSK is increasing the cost on 30 different drugs, including its Ellipta inhaler for asthma and PARP inhibitor Zejula, which it gained in its $5.1 billion acquisition of Tesaro Oncology in 2018. Some of the HIV medications developed by its subsidiary ViiV will also see increases, Reuters said. However, it did not indicate which of those drugs would go up in cost.

Sanofi plans to increase the list price of 10 drugs, with hikes of between 1% and 5%, according to the report. Israel-based Teva Pharmaceutical will also increase the price of about 15 drugs by 6%, according to the report.

A new international biotech – Sumitovant Biopharma – has been created after Sumitomo Dainippon’s strategic alliance with Roivant Sciences came to fruition as 2019 drew to a close.

The $3 billion transaction announced earlier this year involves the transfer of five of the Roivant group companies formed by biotech entrepreneur Vivek Ramaswamy – Myovant, Urovant, Enzyvant, Altavant, and Spirovant – to the newly-formed company.

Sumitomo has taken an 11% stake in Roivant as part of the deal and also has an option on six more companies in the Roivant umbrella group, which could also be rolled into the new company between now and 2024.

Sumitovant will operate as a wholly-owned subsidiary of Sumitomo, and will be led by ex-Genentech executive Myrtle Potter, who has been operating chair of Roivant since July 2018.

Other members of the new biotech’s leadership team include chief medical officer Sam Azoulay, commercial chief Adele Gulfo and chief digital officer Dan Rothman, who are all making the switch from Roivant. The new company will have offices in London and New York.

The deal is viewed as a bolt-on pipeline deal for Sumitomo, which has fallen behind its peers of late in bringing new candidates through its R&D pipeline, adding new clinical-stage candidates for women’s health, urology, prostate cancer, and multiple rare diseases including cystic fibrosis.

The Japanese company needs new products to bring to market as it prepares for the loss of patent protection to Latuda (lurasidone), a $1.6 billion drug for schizophrenia and bipolar depression that is facing a generics hit in 2023, and after some late-stage pipeline failures including napabucasin in pancreatic cancer.

“We are thrilled to have Sumitovant as one of the core growth engines for Sumitomo Dainippon,” said Sumitomo’s chief executive Hiroshi Nomura, who added that it is a key part of the company’s plan to become a ‘global specialised player’ by 2033.

Sumitovant comes into being with several drugs in its late-stage pipeline that could be launched in the next five years, including relugolix for uterine fibroids, endometriosis and advanced prostate cancer, vibegron for overactive bladder, RVT-802 for ultra-rare disease congenital athymia and rodatristat ethyl for pulmonary arterial hypertension (PAH).

Acceleron Pharma and Fulcrum Therapeutics are entering 2020 as partners to tackle pulmonary diseases. On Monday, the two companies forged a collaboration and license agreement that has the potential to be worth more than $450 million.

The Cambridge, Mass.-based companies inked a deal to identify small molecules designed to modulate specific pathways associated with a targeted indication within the pulmonary disease space. Fulcrum has a product engine and target identification platform that uses computational biology, as well as a proprietary relational database that will help in the identification of small molecules that control the expression of certain genes. Acceleron will use Fulcrum’s platform to focus on genes that are known to impact specific pathways associated with pulmonary disease, the companies said. Fulcrum has also used the platform for drug discovery in a range of genetically defined muscle, central nervous system and blood disorders. Acceleron will be responsible for all development and commercialization activities for any potential therapeutics identified via this platform.

 Habib Dable, chief executive officer of Acceleron, said the collaboration brings in Fulcrum’s skill in identifying drug targets that are based on the modulation of genetic pathways associated with disease. That knowledge, Dable said, will be paired with Acceleron’s “deep expertise in TGF-beta superfamily signaling.” The different skill sets the companies bring together will be aimed at generating what they hope will become disease-modifying therapies.

For Acceleron, the deal comes several months after its mid-stage asset sotatercept received Orphan Drug Designation from the U.S. Food and Drug Administration as a potential treatment in pulmonary arterial hypertension (PAH). Sotatercept is being evaluated in two Phase II trials in patients with PAH, with top-line results from one of those trials expected in the first quarter of 2020. Sotatercept is an investigational agent designed to be a selective ligand trap for members of the TGF-beta superfamily to rebalance BMPR2 signaling, which is a key molecular driver of PAH, a rare progressive disorder that is characterized by the constriction of pulmonary arteries and elevated blood pressure in the pulmonary circulation.

“With this agreement, along with the advancement of the Acceleron-discovered assets sotatercept—in Phase II trials in pulmonary arterial hypertension—and ACE-1334, we underscore our growing commitment to the development of novel therapies for patients with pulmonary diseases of high unmet medical need,” Dable said in a statement.

Under terms of the agreement, Acceleron will provide Fulcrum with an upfront payment of $10 million and will reimburse the company for relevant R&D costs. Fulcrum will also R&D and commercial milestone payments of up to $295 million for the first product to be approved as a result of this collaboration. Also, Fulcrum will receive up to $143.5 million in additional milestone payments for all subsequent products commercialized, the companies said.

Fulcrum CEO Robert J. Gould said the collaboration with Acceleron builds on the “proven potential” of the company’s platform to identify therapies that can address the root cause of diseases. He noted that the platform led to the discovery of Fulcrum’s mid-stage asset losmapimod, an investigational treatment for facioscapulohumeral muscular dystrophy (FSHD) in patients with a genetically confirmed diagnosis of FSHD.

“This new opportunity to screen and identify pulmonary disease-specific therapies is another reflection of the broad potential applications of the Fulcrum platform in gene modulation,” Gould said in a statement.

Dive Brief:

• Most medtech companies are struggling with expensive and fragmented manufacturing and distribution footprints, often due to growth through acquisitions, according to a new analysis by McKinsey.
• Manufacturers facing pressure from rising operational costs and demand for increased services need to overhaul their supply chain networks to remain competitive, the consulting firm said.
• Medtech lags other highly regulated industries, including the pharmaceutical sector, in developing manufacturing capabilities in emerging markets, McKinsey said.

Dive Insight:

Medtech companies that take the plunge and redesign their operational networks stand to save as much as 15% in costs within three years while improving delivery lead times, McKinsey found. The consultants said a few leading medtech manufacturers have already done so.

The firm recommends medtechs previously dissuaded by concerns about potential quality risks and logistics disruptions reconsider moving manufacturing to emerging countries. The consultants projected that emerging markets will play an increasingly important role in the medtech supply chain over the next five years.

Two countries in particular, Costa Rica and Malaysia, are becoming manufacturing hubs that meet the bar for quality and talent, and their governments are offering incentives to attract the investment, McKinsey said. The firm also notes that some emerging economies are becoming sizable markets for medtech products, increasing the attractiveness of establishing local production facilities.

McKinsey also recommends medtech manufacturers consider adding contract manufacturing organizations (CMOs) and third-party logistics providers to the supply chain. Contract operators have improved both quality and costs and their use is growing quickly, the consultants said.

Key production processes that CMOs are increasingly handling include casting services for orthopaedics and electronic component manufacturing and subassembly for in vitro diagnostics. McKinsey suggests outsourcing opportunities also exist in surgical tools, intravenous pumps and neurostimulation.

Still, risks in outsourcing should not be underestimated and include the loss of intellectual property and potential regulatory, quality and delivery issues, the report cautioned.

“Success rests on having the right talent, processes, and performance-management mechanisms to manage an ecosystem of third-party partners,” McKinsey wrote.

TOKYO and SOUTH SAN FRANCISCO, Calif., Dec. 26, 2019 /PRNewswire/ — Astellas Pharma Inc. (TSE: 4503, President and CEO: Kenji Yasukawa, Ph.D., “Astellas”) and Xyphos Biosciences, Inc. (CEO: James Knighton, “Xyphos”) today announced that Astellas has acquired Xyphos. With the acquisition Astellas will gain Xyphos’ novel and proprietary ACCEL (Advanced Cellular Control through Engineered Ligands) technology platform, as well as industry-leading immuno-oncology talent, to develop new and potentially better ways to mobilize, target and control immune cells to find, modulate and destroy targeted cells throughout the body.

“At Astellas, immuno-oncology is a Primary Focus of our research and development strategy, and we are working on the development of next-generation cancer immuno-therapy using new modalities/technologies,” said Kenji Yasukawa, President and CEO, Astellas. “The innovative technology in development at Xyphos fits perfectly in advancing our immuno-oncology strategy to create and deliver value for patients. Combining this technology with our capabilities in cell therapy that we have been working on so far, we can create next-generation high-function cells and maximize the value of our technology. We look forward to working with Xyphos’ superb team to advance and expand their clinical development programs to bring their novel therapeutics to patients.”

“At Xyphos, we are driven to advance our innovative cell therapy technology platform as an exciting new approach to potentially manage and cure cancer,” said James Knighton, Chief Executive Officer, Xyphos. “Astellas’ commitment to immuno-oncology makes them an ideal partner to advance our proprietary NKG2D-based NK-cell and T-cell platform to the next stage of clinical exploration. Further, we look forward to becoming part of Astellas to accelerate this immuno-oncology research and development in the vibrant South San Francisco community.”

Xyphos has developed a flexible and versatile synthetic biology platform to direct cells of the immune system to target single or multiple tumor antigens while controlling the immune cell proliferation and endurance. Xyphos’s proprietary molecules can be delivered to natural immune cells or to engineered Chimeric Antigen Receptor (CAR) cells to generate immunotherapies for oncology. Xyphos’ patented CAR technology is based on an engineered modification to a natural human receptor named NKG2D. NKG2D exists on natural killer (NK) cells and some T-cells. The designed modification of NKG2D renders it inert, that is, unable to bind to any of its natural ligands, which occur on stressed cells. Through further protein engineering, several natural ligands of NKG2D have been modified to bind exclusively to the otherwise inert NKG2D receptor. Various functional molecules (for example, antibodies that recognize specific tumor antigens) are attached to the modified ligand. The ligand-directed functional molecules then bind exclusively to immune cells expressing the inert CAR on their surface – the proprietary convertibleCAR^®-cells. The CAR-cells can be directed by the ligand-bound antibody to seek, become activated and attacks a targeted cancer cell. Xyphos’ first convertibleCAR-T cell product candidate is in preclinical development and scheduled to be tested in a first-in-human clinical study in 2021.

Considering the acquisition, $ 120 million was paid upon closing of the acquisition, and Xyphos became a wholly owned subsidiary of Astellas. In addition to this payment and potential future development milestone payments, it will provide a total transaction value of $ 665 million.

The impact of this transaction on Astellas’ financial results in the fiscal year ending March 31, 2020 will be limited.

About Astellas
Astellas Pharma Inc., based in Tokyo, Japan, is a company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products.

Sarepta Therapeutics and Roche inked a licensing deal that gives Roche exclusive commercial rights to SRP-9001, Sarepta’s investigation gene therapy for Duchenne muscular dystrophy (DMD), outside the U.S.

DMD is a muscle wasting disease caused by mutations in the dystrophin gene. It is a progressive disease that usually causes death in early adulthood, with serious complications that include heart or respiratory-related problems. It mostly affects boys, about 1 in every 3,500 or 5,000 male children.

Sarepta is the only company to have an approved treatment for DMD on the market, Exondys 51, which was approved in 2016 after a contentious and year-long public process. Exondys 51, as the name suggests, is for DMD patients with a confirmed mutation amenable to exon 51 skipping.

On December 13, the U.S. Food and Drug Administration (FDA) approved Sarepta Therapeutics’ Vyondys 53 (golodirsen) for DMD patients amenable to skipping exon 53.

The agency had originally issued a Complete Response Letter (CRL) in August for Vyondys 53 related to the risk of infections at intravenous infusion ports and renal toxicity observed in preclinical models. After the CRL, Sarepta made a formal dispute resolution request to the agency, which was quickly evaluated and resolved by Peter Stein, director of the Office of New Drugs (OND), which granted the appeal.

The agency is requiring Sarepta to conduct a confirmatory trial, which Sarepta expects to complete by 2024.

SRP-9001 is a micro-dystrophin gene therapy candidate that delivers the microdystrophin-encoding gene directly to muscle tissue. It uses a modified virus, AAVrh74 that has a strong affinity for muscle tissue. It also has a muscle-specific promoter called MHCK7, which is designed to enhance the activity of the gene in heart and skeletal muscles.

Under the terms of the agreement, Roche is paying Sarepta $1.15 billion up front and an equity investment. It is eligible for up to $1.7 billion in regulatory and sales milestones and royalties on net sales, likely to be in the mid-teens. The two companies will equally share global development costs. Sarepta will continue to hold rights to SRP-9001 in the U.S.

“As a mission-driven organization, we are inspired to partner with Roche with the goal of bringing SRP-9001 to patients outside the United States,” said Doug Ingram, president and chief executive officer of Sarepta. “This collaboration will not only increase the speed with which SRP-9001 could benefit DMD patients outside the United States, but will also greatly expand the scope of territories within which we could potentially launch SRP-9001 and improve and safe lives.”

Sarepta will still be responsible for the global development plan and manufacturing plans for SRP-9001. The company has also given Roche an option to buy rights outside the U.S. to certain future DMD-specific programs for separate milestone, royalty and cost-sharing considerations.

“We are excited to enter this licensing agreement with Sarepta,” said James Sabry, head of Roche Pharma Partnering. “By working together to provide SRP-9001 to patients, we hope to fundamentally transform the lives of patients and families living with this devastating disorder for which there are currently only limited treatment options.”