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The Readout Damian Garde

Drug importation is here. Kind of

Yesterday, the Trump administration put out a pair of long-expected policies that would allow for the importation of cheap Canadian drugs. But each faces enough roadblocks to tamp down industry concerns about a sweeping change to the status quo.

As STAT’s Nicholas Florko reports, the Health and Human Services plan would create two means of importing drugs. In one, states, wholesalers, and pharmacies could apply for HHS approval to import certain medicines from Canada. In a second, drug companies could voluntarily import their own products from countries where they’re cheaper, using a loophole that would cut out middlemen in the supply chain.

That second pathway might not be terribly popular with manufacturers. And the first one has managed to irk drug makers, pharmacists, and public health officials alike — to say nothing of actual Canadians. But it has proved popular with some governors, and HHS Secretary Alex Azar said the administration “will move as quickly as humanly possible” to enact the policy. He also said “fervently committed” twice.

Read more.

When it comes to biotech buyouts, no one really knows anything

Every winter, Wall Street analysts survey investors about the year ahead. And pretty much every year, those investors forecast an uptick in acquisitions. They were right about 2019, which saw a roughly 30% jump in dealmaking compared with the last five years on average. But when it came to predicting which companies would get acquired, stock pickers didn’t fare so well.

Of the 10 most-likely-to-be-acquired companies on last year’s J.P. Morgan survey, only one, Tesaro, actually got bought. The list included Clovis Oncology, which is down about 40% on the year, and Sage Therapeutics, which has been cut in half since January.

With that in mind, the latest J.P. Morgan survey came out yesterday, and again the majority of respondents predicted an increase in buyout activity. The list of likely takeouts included UniQure, Amarin, and Sarepta Therapeutics, but you should perhaps take those with a grain of salt.

Meanwhile, drug pricing is fracturing Republicans

At the outset of 2019, reducing the cost of medicine was virtually the only idea in Washington with bipartisan support. Now that the year’s winding down, it’s dividing individual parties.

As STAT’s Nicholas Florko reports, powerful Republicans are frustrated with Senate Majority Leader Mitch McConnell, who has stalled in scheduling a sweeping drug pricing bill for a vote. The legislation, which would cap the amount seniors can pay each year on drugs and would block drug makers from raising their prices more than inflation, passed the Senate Finance Committee in July but has since gone nowhere.

“The president wants it,” said Sen. Chuck Grassley, the Iowa Republican who chairs the finance committee. “Senate majority leaders, historically, if you’ve got the president of the same party, they tend to be spokesmen for the administration, not against the administration.”

Read more.

There are perhaps second acts in English lives

Neil Woodford, the U.K. investor whose disastrous bets in biotech saw him driven out of his namesake funds, is reportedly mounting a comeback in China. According to Bloomberg, Woodford and his top deputy have decamped to China and are taking meetings with investors “interested in early-stage assets.”

Woodford’s gradual undoing began with collapses at public biotech companies Circassia and Prothena, got compounded by underwater and immobile stakes in privately held firms, and then concluded with the liquidation of his banner fund in October.

But over that same period, biotech has been ascendant in China. In 2019, local drug startups raised more than $5 billion from IPOs in Hong Kong and Shenzhen, and their valuations, while volatile, have been on the rise. If Chinese biotech investors believe Woodford, despite his recent past, can replicate those kind of returns, the storied fund manager may yet stage a comeback.

More reads

  • Research pact between Syros Pharma, Global Blood seeks new drugs to treat sickle cell disease. (STAT Plus)
  • Inside Merck's $2.7B ArQule buyout. (Endpoints)
  • Experimental vaccine patch embeds invisible dots under the skin, leaving record of immunization. (STAT)
  • Moffitt Cancer Center shakeup: CEO and others resign over China ties. (Tampa Bay Times)

Thanks for reading! Until tomorrow,

Thursday, December 19, 2019


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