In biosimilar reimbursement documents issued Tuesday, CMS removed an incentive for physicians to prescribe more expensive Medicare Part B innovator drugs and opened the door to formulary exclusions of innovator drugs under Medicare Part D.
For physician-administered Part B drugs, CMS said a biosimilar would be reimbursed at its average sales price (ASP), plus 6% of the ASP for the innovator product. Physicians typically are reimbursed ASP plus 6% for the specific branded Part B drug being prescribed, giving them an incentive to prescribe higher priced drugs. The reimbursement method for biosimilars, which CMS expects to be priced 15-30% lower than corresponding innovator products, would remove the incentive to prescribe the higher priced innovator drug.
For pharmacy-dispensed Part D drugs, CMS said biosimilars may provide plan sponsors "with new products that create formulary design options that help to control costs while still ensuring beneficiaries have access to the medications they need." In cases where a plan sponsor chooses to include only a biosimilar or an innovator drug, CMS said plans would need to offer patients taking the excluded drug a transition supply before switching.
Part D plans are required to offer at least two distinct drugs in each class. CMS said it would not consider a biosimilar and an innovator product as different drugs to satisfy that requirement, making it easier for plans to exclude innovator drugs.
FDA approved its first biosimilar -- Zarxio filgrastim-sndz from the Sandoz unit of Novartis AG (NYSE:NVS; SIX:NOVN) -- earlier this month. Zarxio is a physician-administered drug, which CMS said on Tuesday would qualify as a Medicare Part B drug in most instances. In cases where the biosimilar of human G-CSF is administered in a nursing home or in an intermediate care facility, it would be reimbursed under Part D.
Zarxio is a biosimilar of Neupogen filgrastim from Amgen Inc. (NASDAQ:AMGN). Sandoz has not disclosed a price for Zarxio and has agreed not to launch the biosimilar in the U.S. until the earlier of May 11 or a ruling by the U.S. Court of Appeals for the Federal Circuit (CAFC) on Amgen's application for an injunction pending appeal (see BioCentury Extra, March 25).
The first pharmacy-dispensed Part D biosimilar is expected to be a biosimilar of Humira adalimumab from AbbVie Inc. (NYSE:ABBV). Amgen and Sandoz are each developing biosimilars of Humira.
AstraZeneca plc (LSE:AZN; NYSE:AZN) launched Movantik naloxegol in the U.S. on Tuesday to treat opioid-induced constipation (OIC) in adults with chronic non-cancer pain. The wholesale acquisition cost (WAC) for once-daily Movantik is $8.32 per pill.
The launch triggers a $100 million milestone payment to Nektar Therapeutics (NASDAQ:NKTR) from AZ under a 2009 deal. Movantik was developed using Nektar's oral small molecule polymer conjugate technology.
FDA approved the pegylated form of the peripheral mu opioid receptor (OPRM1; MOR) antagonist naloxol in September 2014. In January, the U.S. Drug Enforcement Agency (DEA) de-scheduled the drug, which it had considered a schedule II controlled substance based on its structural similarity to noroxymorphone (see BioCentury Extra, Sept. 16, 2014).
AstraZeneca and Daiichi Sankyo Co. Ltd. (Tokyo:4568) partnered earlier this month to co-commercialize Movantik in the U.S. Daiichi will begin promoting the drug by May (see BioCentury Extra, March 20).
Nektar is eligible for another $40 million milestone from AZ upon the drug's European launch, sales milestones totaling $375 million and royalties. The European Commission approved the drug in January as Moventig to treat OIC in adult patients who have had an inadequate response to laxatives.
ImmunoGen Inc. (NASDAQ:IMGN) rose $0.43 to $8.95 on Tuesday, improving on Monday's gains after it sold its royalty rights for breast cancer drug Kadcyla ado-trastuzumab emtansine to TPG Special Situations Partners (TSSP) for $200 million. The deal is expected to close next month.
TSSP will receive 100% of the royalty payments from Roche (SIX:ROG; OTCQX:RHHBY) for Kadcyla until the firm has received a total of $235 million or $260 million; the threshold will depend on an undisclosed payment timeline. After the threshold is met, ImmunoGen will receive 85% of the royalty payments and TSSP will receive 15% for the remainder of the royalty term.
The royalty term is 10 years in each country where Kadcyla is launched, or 12 years in countries where ImmunoGen holds relevant Kadcyla patents at the 10-year mark. ImmunoGen and TSSP are eligible for royalties ranging from 3-5% in countries where ImmunoGen holds Kadcyla patents, and 2% in countries where ImmunoGen does not.
In 4Q14, ImmunoGen received $4.6 million in royalties from Roche on sales of the antibody-drug conjugate of a humanized mAb against HER2 linked to ImmunoGen's DM1 cytotoxic agent. The biotech had $106.6 million in cash as of Dec. 31, 2014.
ImmunoGen had gained $0.27 on Monday.
Separately, Infinity Pharmaceuticals Inc. (NASDAQ:INFI) exercised an option on Tuesday to purchase from Takeda Pharmaceutical Co. Ltd. (Tokyo:4502) worldwide royalty obligations ranging from 7-11% on sales of duvelisib (IPI-145) in oncology indications. Infinity paid Takeda $52.5 million to exercise the option; it had paid $5 million last July to obtain the option.
The oral inhibitor of phosphoinositide 3-kinase (PI3K) delta and gamma is in Phase III testing for relapsed or refractory chronic lymphocytic leukemia (CLL) and previously treated follicular lymphoma, and Phase II testing for refractory indolent non-Hodgkin's lymphoma (NHL).
Infinity has exclusive, worldwide rights to the product from Intellikine Inc., which Takeda acquired (see BioCentury, Sept. 8, 2014).
Infinity had until Tuesday to exercise the option. Its shares lost $0.34 to $13.98 on Tuesday.
AbbVie Inc. (NYSE:ABBV) has rights to co-develop and co-commercialize duvelisib in the U.S. and rights to market and commercialize the product outside of the U.S. to treat cancer.
Merck & Co. Inc. (NYSE:MRK) and Syndax Pharmaceuticals Inc. (Waltham, Mass.) will jointly run a Phase Ib/II combination trial of Merck's Keytruda pembrolizumab plus Syndax's entinostat (SNDX-275) to treat patients with advanced non-small cell lung cancer (NSCLC) or melanoma. The companies plan to start the trial next half.
Merck spokesperson Pamela Eisele said the trial will be the first to combine Keytruda, a humanized IgG4 mAb against programmed cell death 1 (PDCD1; PD-1; CD279), with a histone deacetylase (HDAC) inhibitor. The companies said entinostat, an oral HDAC inhibitor, enhanced immune checkpoint inhibition in preclinical models.
Eisele said Merck expects data in 2H16 from the Phase Ib part of the trial, which will test safety and tolerability. Merck will begin the Phase II efficacy portion after choosing a dose based on Phase Ib results.
Keytruda is approved to treat advanced melanoma in patients previously treated with Yervoy ipilimumab from Bristol-Myers Squibb Co. (NYSE:BMY). Merck is testing the anti-PD-1 in a variety of combination trials (see BioCentury, Nov. 24, 2014).
Entinostat is in Phase III testing in combination with hormone therapy to treat advanced estrogen-receptor positive breast cancer in postmenopausal women, an indication for which it has breakthrough therapy designation (see BioCentury Extra, Sept. 11, 2013).
Merck and Syndax did not disclose financial terms.
BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX) gained $0.45 to $9.02 after the Biomedical Advanced Research and Development Authority (BARDA) of HHS's Office of the Assistant Secretary for Preparedness and Response (ASPR) awarded the company a $12.1 million contract to develop and manufacture Ebola treatment BCX4430.
ASPR has the option to provide an additional $22.9 million under the contract.
The contract will support efforts to improve the manufacturing process and scale up production of BCX4430 in U.S. facilities. The RNA-dependent RNA polymerase inhibitor is in Phase I testing with funding from NIH's National Institute of Allergy and Infectious Disease (NIAID). Results from a Phase I trial of intramuscular BCX4430 are expected in 3Q15.
BCX4430 is the first small molecule therapy for Ebola to receive ASPR support. ASPR also is funding the development of Zmapp, a combination of three mAbs targeting Ebola glycoproteins GP1 and GP2, from Mapp Biopharmaceutical Inc. (San Diego, Calif.), and Ebola vaccines from GlaxoSmithKline plc (LSE:GSK; NYSE:GSK), NewLink Genetics Corp. (NASDAQ:NLNK) and Profectus BioSciences Inc. (Baltimore, Md.).
Pfizer Inc. (NYSE:PFE) named Charles Mackay CSO of the company's inflammation and immunology research unit. Mackay is a research fellow at Monash University and chair of diabetes at the Charles Perkins Center within the Faculty of Medicine at Sydney University.
Oncology company Tesaro Inc. (NASDAQ:TSRO) hired Joseph Farmer as SVP, general counsel and secretary. Farmer was VP, chief corporate counsel and assistant secretary at Cubist Pharmaceuticals Inc., which Merck & Co. Inc. (NYSE:MRK) acquired.
Insulet Corp. (NASDAQ:PODD) hired Michael Levitz as CFO, effective May 4. Levitz is SVP, SFO and treasurer of Analogic Corp. (NASDAQ:ALOG). He replaces Allison Dorval, who is resigning.
Michael Webb will replace Sheridan Snyder as president and CEO of cancer play Xcovery Holding Co. LLC (West Palm Beach, Fla.) and oncology and opthalmology company Tyrogenex Inc. (West Palm Beach, Fla.). Snyder, who co-founded both companies, will remain chairman at Xcovery and a director at Tyrogenex. Webb was president and CEO of Allegro Diagnostics Corp., which Veracyte Inc. (NASDAQ:VCYT) acquired.
Dyax Corp. (NASDAQ:DYAX) jumped $8.40 (50%) to $25.15 in early after-hours trading on Tuesday on postmarket news that its DX-2930 significantly reduced hereditary angioedema (HAE) attacks in a Phase Ib trial. The company, which also said the molecule received Fast Track designation from FDA, plans to meet with the agency to discuss the "minimum pathway forward" for DX-2930 to prevent HAE attacks.
"I don't see a lot of value for doing a Phase II study in preparation for doing a final study for approval," EVP of R&D and CMO Burt Adelman said on a conference call to discuss the data.
During days 8-50 of the 37-patient trial, the 300 mg dose group experienced no HAE attacks per week, the 400 mg group had 0.045 attacks per week and the placebo arm had 0.37 attacks per week. Compared with placebo, the company said those results corresponded to attack reductions of 100% for the 300 mg group (p<0.0001) and 88% for the 400 mg group (p=0.005).
The company's announcement did not include efficacy results for the 30 and 100 mg DX-2930 groups. Dyax reported no deaths, serious adverse events, dose-limiting toxicities or discontinuations due to AEs in the trial.
DX-2930, a human mAb against plasma kallikrein, already has Orphan Drug designation. Dyax markets Kalbitor ecallantide, a subcutaneously delivered yeast-derived recombinant plasma kallikrein inhibitor, to treat HAE. Dyax slipped $0.30 to $16.75 on Tuesday.
The New York City Economic Development Corp. said Flagship Ventures and Arch Venture Partners will direct investment activities for the Early Stage Life Sciences Funding Initiative, its $150 million life sciences fund. The fund intends to invest in 15-20 New York City-based startups by 2020.
NYCEDC said Flagship will lead investments in therapeutics, while Arch will pursue non-therapeutic investments. Arch co-founder and managing director Robert Nelsen said his firm will pursue deals for research tools, diagnostics and instrumentation, and intends to co-invest alongside NYCEDC and its industry partners, each of which will make investment decisions on its own. Nelsen said Arch will independently pursue therapeutics investments in New York City. Flagship did not respond to inquiries.
NYCEDC launched the initiative in 2013 with Celgene Corp. (NASDAQ:CELG), Eli Lilly and Co. (NYSE:LLY) and GE Ventures as partners. At the time, the initiative planned to invest $100 million, with NYCEDC contributing $10 million, the three strategic partners investing a total of $40 million, and VCs investing $50 million. NYCEDC would not describe the sources of the $150 million it has now raised for the fund, or say when it expects to make its first investment (see BioCentury Dec. 9, 2013).
aTyr Pharma Inc. (San Diego, Calif.) raised $76 million in a series E round led by new investors Sofinnova Ventures and an undisclosed institutional investor. Other new investors included funds and accounts advised by T. Rowe Price; Federated Investors; Deerfield; Rock Springs Capital; EcoR1 Capital; Sphera Global Healthcare; and two more undisclosed institutional investors.
aTyr said existing investors, including VCs and a public investment fund, also participated, but did not specify which ones. Its prior investors include Alta Partners, Cardinal Partners, Domain Associates and Polaris Partners (see BioCentury, Aug. 5, 2013).
aTyr began a Phase Ib/II study in January of Resolaris to treat facioscapulohumeral muscular dystrophy (FSHD). The protein therapy based on non-canonical functions of secreted forms of aminoacyl tRNA synthetases received Orphan Drug designation from the European Commission last month.
Sofinnova's Srinivas Akkaraju joined aTyr's board.
Thrasos Therapeutics Inc. (Montreal, Quebec) raised $21 million in a series D round led by new investor BDC Capital and existing investor SR One. Current investors Advanced Technology Ventures; Fonds de solidarite FTQ; Lumira Capital; MP Healthcare Venture Management; Pappas Ventures; and SW Co also participated.
In 3Q15 Thrasos plans to complete an ongoing Phase II study of THR-184 to prevent acute kidney injury (AKI) in patients undergoing cardiac surgery. The company expects data in 1H16. The small peptide that selectively activates activin receptor-like kinase 2 (ALK2; ACVR1) and ALK3 has Fast Track designation in the U.S. to prevent cardiac surgery-associated AKI.
BDC's Ela Borenstein joined Thrasos' board.
Intercept Pharmaceuticals Inc. (NASDAQ:ICPT), Insmed Inc. (NASDAQ:INSM) and Synta Pharmaceuticals Corp. (NASDAQ:SNTA) raised more than $580 million in follow-on offerings on Tuesday.
Intercept raised $338.4 million through the sale of 1.2 million shares at $282 in a deal underwritten by UBS and Citigroup. Intercept proposed the offering pre-market Tuesday. The stock fell $13.89 to $282.02 on the day. Last month, the company raised $176 million in a follow-on through the sale of 1 million shares after FDA granted breakthrough therapy designation for the biotech's OCA obeticholic acid (DSP-1747) to treat non-alcoholic steatohepatitis (NASH) with liver fibrosis (see BioCentury Extra, Feb. 5).
Insmed raised $206.5 million through the sale of 10 million shares at $20.65 in a follow-on underwritten by Citigroup; Leerink; JMP; and H.C. Wainwright. The company proposed the offering after market close Monday when its shares were valued at $21.09. The lung disease company slipped $0.29 to $20.80 on Tuesday.
Cancer company Synta raised $38.5 million through the sale of 22 million shares at $1.75 in a follow-on underwritten by Jefferies; Cowen; JMP; and Roth Capital Partners. Synta proposed its offering after market Monday when its shares closed at $2.33. The company fell $0.39 (17%) to $1.94 on Tuesday.
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