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The Readout Damian Garde & Meghana Keshavan

Biotech didn’t get the buyout it was looking for

In times of market uncertainty, there’s nothing better for sentiment than a high-dollar acquisition, assuring investors that the deep-pocketed powers that be are still willing to spend. Yesterday brought such a deal, but, thanks to the details, the reaction was less than celebratory.

As STAT’s Adam Feuerstein reports, the German firm MorphoSys agreed to pay $1.7 billion for the cancer-focused biotech Constellation Pharmaceuticals. The price represents a 68% premium to Constellation’s prior close. But at $34 per share, MorphoSys’s offer is below Constellation’s valuation as recently as February. 

The deal wasn’t terribly well-received. MorphoSys’s share price fell about 13% on the news. At least some of that reaction relates to how the company financed the deal. To help pay for the acquisition, MorphoSys sold its royalty rights to certain approved and experimental drugs, meaning the company has traded predictable cash flows for Constellation’s unapproved treatments for blood cancer, which may or may not turn out to actually work.

Read more.

With a pricey drug out of reach, rare disease parents are running their own clinical trial

For the parents of children with a rare epileptic disease, the FDA-approved drug Ravicti offers hope for a better life. But the treatment’s list price, around $740,000 per year, makes it difficult to convince insurers to cover an off-label prescription. So the parents came with a plan: Fund their own clinical trial to prove Ravicti can help their kids, making it worth the expense.

As Erika Check Hayden reports for STAT, one patient has already completed the trial, and investigators expect to enroll 19 more children with rare diseases caused by mutations in two genes, STXBP1 and SLC6A1. The study has been in the works for about three years, and parents have pitched in $320,000 to make it happen.

The Ravicti story highlights the growing trend of repurposing older drugs in hopes of treating rare diseases with no approved therapies. But the fact that parents have had to go to such lengths underlines the escalating cost of drugs for rare diseases. If Ravicti weren’t so pricey to begin with, it’s possible none of this would be necessary.

Read more.

Money appears to talk when it comes to prescribing insulin

When the makers of long-acting insulins spend money on meals and speaking fees for doctors, those physicians are more likely to prescribe those products, according to a new analysis.

As STAT’s Ed Silverman reports, the study, published in PLOS Medicine, looked at Medicare claims and the federal database of payments to doctors. In 2017, physicians who took money from drug makers wrote, on average, nearly twice as many prescriptions for long-acting insulin than those who did not receive payments, according to the study.

The difference had a measurable effect on Medicare spending, the study found. Long-acting insulin is the most costly product in its class, and its list price has steadily increased over a decade, which draws a straight line from industry payments to federal expenditures, the authors found.

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CureVac’s curious Twitter strategy gets results

On Friday, just after the markets closed for a three-day weekend, CureVac put out a press release noting that its ongoing Covid-19 vaccine trial had completed an interim analysis and would continue as planned. On the upside, that means independent monitors didn’t see any safety problems. On the downside, it means CureVac’s vaccine didn’t clear the roughly 85% efficacy threshold that would have stopped the trial early.

Quite a few people focused on the downside, which, combined with the timing of the press release, suggested that CureVac’s vaccine might be wending toward disappointment. As anonymous Twitter user @Biohazard3737 put it, CureVac “failed the first interim.” Taking an interesting social media strategy, the company used its corporate account to publicly dispute that characterization in a direct reply to @Biohazard3737, whose Twitter avatar is a sheep, and explain that, actually, this is good news.

And in the day since, CureVac’s share price has risen nearly 6%. The company’s valuation is now higher than it was before the whole interim analysis conversation began. It’s probably not advisable for publicly traded biotech companies to mix it up with anonymous alphanumeric accounts on Twitter, but in this one instance, it seems to have worked out just fine.

More reads

  • Tmunity encounters a lethal roadblock as 2 patient deaths derail lead trial. (Endpoints)
  • Israel sees probable link between Pfizer vaccine and myocarditis cases. (Reuters)
  • How Genentech narrowed the gender gap in its top ranks. (Harvard Business Review)
  • Changing the equation: Researchers remove race from a calculator for childbirth. (STAT)

Thanks for reading! Until tomorrow,

Thursday, June 3, 2021

STAT

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