July 26, 2023

The need-to-know this morning

Joe Lewis, a British billionaire and owner of the Tottenham Hotspur soccer club, was charged with insider trading by federal prosecutors in Manhattan. The charges include allegedly concealing a 20% stake in Mirati Therapeutics and funneling nonpublic information to "friends and lovers" about Mirati, Solid Bio, and other companies so they could trade on it.
GSK and Alkermes reported second-quarter earnings that matched or exceeded Wall Street expectations.
Infinity Pharmaceuticals is laying off 21 employees, or 78% of its workforce, as it seeks a buyer for an experimental cancer drug. The company warned that its stock could be delisted from the Nasdaq.

Biotech

Biogen didn't quite hit the right notes

Yesterday, Biogen told the world it had beat quarterly expectations and was planning to cut $700 million from its spending, two things that generally go over well with Wall Street. And yet the company's shares fell about 4% after its conference call with analysts, suggesting new CEO Chris Viehbacher was less than reassuring.

That reaction, according to Mizuho analyst Salim Syed, probably reflects Viehbacher's conservative expectations for the early days of the Alzheimer's disease drug Leqembi — the word "measured" made an appearance — and lingering concerns about the company's governance.

Last month's boardroom scandal is an "elephant in the room," Evercore ISI analyst Umer Raffat said during the conference call before asking Viehbacher to explain just how it all went down. Viehbacher's response wended its way from a dismissal of "the gossip" to an assurance that he and the board are on the same page before concluding with "I don't think there's anything else to be said about that," which neither answered Raffat's question nor, based on the stock response, assuaged investors' concerns.

Regulatory

And what about Sage's depression drug?

By Aug. 5, partners Sage Therapeutics and Biogen will learn whether the FDA is going to approve their novel treatment for severe depression, one of the biggest binaries left on biotech's calendar and a decision that will direct each company's near-term fortunes.

You probably wouldn't guess any of that based on yesterday's Biogen earnings presentation. There were no slides dedicated to Sage's drug, called zuranalone, and when CEO Chris Viehbacher had two opportunities to extoll the virtues of the medicine, he chose to temper his speech and defer further comment until after the FDA had rendered its decision.

On the one hand, that could reflect the pragmatism that helps executives like Viehbacher survive for decades in a tough business ("I have to confess to a little bit of superstitiousness on my side," he said of talking about a drug under FDA review). But Sage's immediate 8% decline suggests investors see more than just corporate conservatism.

Diagnostics

What it's like to do desktop blood testing in the shadow of Theranos

Truvian Health, a San Diego diagnostics company, shared the first clinical data on its desktop blood-testing device, finding that the instrument's results were largely consistent with those of large central laboratories. The next step is convincing a skeptical field in the wake of Theranos' many broken promises.

As STAT's Jonathan Wosen reports, Truvian's data, presented at a major diagnostics conference this week, suggest its device can run 25 common tests on 300 microliters of blood, which is roughly eight drops. The company is running additional validation studies and expects to file for FDA approval by the third quarter of 2024.

Truvian has a long road ahead, between convincing regulators and winning over wary scientists. But by presenting its results in public and promising to publish in a peer-reviewed journal, the company has already distinguished itself from Theranos. "What are we doing different?" said Dena Marrinucci, the company's chief operating officer and co-founder. "It's transparency."

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Washington

Congress isn't about to upend the PBM world

The pharmaceutical industry, no stranger to congressional crosshairs, got a brief respite this summer as the middlemen it loves to malign came under sustained scrutiny. But the resulting legislation, while likely to pass, is hardly poised to significantly change the way America pays for prescription drugs.

As STAT's Rachel Cohrs reports, the major legislative packages on so-called PBM reform moving through Congress would, at most, work around the fringes. Experts said they would add some transparency into the system, prohibit middlemen from overcharging insurers, and ensure certain fees in the Medicare program aren't tied to drug prices.

But they wouldn't address the fact that PBMs and the insurance companies that employ them take a bigger payment from the sale of expensive medicines, an arrangement that incentivizes drug companies to charge more and contributes to the upward creep of pharmaceutical list prices in the U.S.

Read more.

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