Wednesday, July 19, 2017

The Readout by Damian Garde & Meghana Keshavan

Welcome to The Readout, where we keep you on top of the latest in biotech. For more in-depth coverage of biopharma, subscribe to STAT Plus. On Twitter: @damiangarde@megkesh, and @statnews.

A good day for Vertex — and cystic fibrosis patients

Even the most hard-to-treat cystic fibrosis patients could see benefit from a trio of new Vertex combination therapies: The company just released impressive data showing significant improvements in lung function in patients who are genetically resistant to all treatments now on the market.

Right now, Vertex’s existing drugs can treat about half the 75,000 CF patients worldwide. That’s expected to jump to 90 percent with these new therapies — which could triple the company’s CF revenues to as much as $6 billion.

“This is life-changing for these patients,” Vertex CEO Jeff Leiden told STAT.

Read more.

BIO: It's time to expose the shorts

A thing biotech executives sometimes do is blame their sinking share prices on an anonymous, presumably massive cabal of short sellers for spreading malicious rumors. It’s a convenient explanation, because no one can be sure it’s not true, but it’s rarely an effective one, because no one can be sure it is.

BIO would like to change that.

In testimony before a House finance committee Tuesday, aTyr Pharma’s John Blake argued that the SEC should force shorts to show their faces (or at least disclose their positions) in public. Speaking on BIO's behalf, he argued that “the current lack of transparency related to short positions is enabling trading behaviors that unfairly harm growing companies, long-term investors, and, most importantly, patients.”

The thing is, no one — including BIO — is quite sure how to write policy that would actually work. Requiring every single short seller to publicize her bets would be overkill, but simply mimicking the law for long-term investors makes no sense. Under current regulations, anyone who owns more than 5 percent of a company’s shares has to disclose purchases and sales, but shorts almost never take positions that large. BIO suggests either picking a much lower threshold or finding an entirely different metric.

Here's what's even less clear: Is this really that big a problem for biotech, and would doxxing ill-intentioned short sellers actually discourage them?

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Gottlieb takes branded drug makers to task

In a speech encouraging generic drug competition, FDA chief Dr. Scott Gottlieb gave branded drug makers a bit of a tongue lashing. FDA rules exist to protect consumers, or to make the regulatory process run more smoothly, he said. But some branded biopharmas are “taking advantage of these rules in order to deliberately forestall the entry of expected generic drug competition,” he said. 

He’s referring, of course, to branded pharma’s ultra-litigiousness, as well as their regular attempts to block generic drug makers from buying their branded wares. 

“In other words, they are ‘gaming our system,’” Gottlieb explained. “They’re exploiting a regulatory arbitrage, born of the growing complexity of our regulatory system, and its occasional slowness.” (STAT's Signal podcast took on such shenanigans last fall in a fun episode that you really ought to listen to, if you haven't already.) 

Anyway, back to Gottlieb: He says FDA has already taken steps to address some of the issues in its Drug Competition Action Plan. Seems as though Trump's FDA may be less about deregulation, and more about regulatory reform.

Biopharma buyouts: The glass is as full as you want it to be

Where are all the megadeals that once characterized the drug business?

They’ve basically fallen off a cliff since 2015, points out EP Vantage. Uncertainty over future U.S. tax policy is a likely culprit, and with no near-term resolution on the horizon, things may remain stilted.

Ah, but there’s hope for the future, says EY. In a survey of life sciences executives, one-third said they had five or more deals in their pipelines. Last year, that number was just 6 percent, suggesting a surge of buyouts is in the offing.

But then, perhaps not, if you consider the words of one particularly powerful life sciences executive. During Novartis’ earnings call yesterday, CEO Joseph Jimenez said biotech companies have grown so massively expensive that his company isn't seeing a lot of value on the deal market despite being willing to pay as much as $15 billion for an acquisition.

You may now pick and choose from the facts above to support your personal opinion.

More reads

  • The 10 most prescribed drugs in the U.S. (STAT Plus)
  • The myth of drug expiration dates. (ProPublica)
  • PhRMA published an exhaustive look at the industry's pipeline of new drugs. (PhRMA)
  • 'We are all mutants now': The trouble with genetic testing. (The Guardian)

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Thanks for reading! Until tomorrow,

Damian & Meghana

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