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You really have to do Botox 4 times a year - that's two vials per treatment or 8 per year. Insurers seem to pay on the order of $1.5k per treatment or a bit more, so this new drug seems to be pretty much on par with Botox given it is self-administered.
So bottom line is I don't see insurers resisting the switch from Botox to this drug.
Peter
AMGN is providing 2 months free.
Peter
I think Vascepa modestly lowers ApoB - something of the order of 10%. But it's likely ApoB particle number that is the most important metric and most studies don't discuss that.
Peter
Yes, I've never understood why someone like REGN or the biosimilar folks haven't filed an antitrust case. When I looked at it briefly, did seem like there was one unhelpful precedent involving Lovenox:
https://www.law360.com/articles/792577/3rd-circ-rejects-lovenox-antitrust-suit-against-sanofi
>>As evidence of the arbitrariness of substitutions, Cohen of Tufts highlights 14 drugs that were excluded by one of the two big pharmacy benefit companies but included by another — which suggests the size of the rebates are driving the decisions.<<
Need to do some more work here to dig into all this - thanks for your insightful comments.
We should remember that there are two quite different things we need to think about - the actual impact which may well take years to play out and will be very complex, and the market reaction which will be quick. All we need to think about for now is the market reaction. So for now just need to predict what a superficial analysis will conclude.
Cynically,
Peter
>>drug rebate complaint dealt with the rebates passed on to the Insurers and Benefit Companies
Yes, that's the issue. The REGN CEO reportedly claimed that he could price his RA drug at zero and still not get onto some formularies.
The way this works (as I understand it at least - things are pretty opaque to outsiders) is that say Humira has a broad label and a lot of existing patients. So every insurer has to cover it. So they basically have say 30% of the existing market locked-up. Now ABBT does a deal with the PBMs that give them a big volume discount (in form of a rebate) for any sales over 30% of the market. The marginal cost of those drugs to the insurer might even be negative. Now comes a new entrant with a narrower label that only potentially addresses say 50% of the overall market. They can't ever compete with those marginal sales prices and can't ever displace Humira.
Peter
So in parallel with twitter, I'm seeking ideas for a paired trade based on drug rebates potentially going away.
My view is that rebates help entrenched companies like ABBV with drugs like Humira escape competition from other drugs in the same general class. So if rebates go away, some big companies will be hurt and some smaller competitors will be helped.
So what suggestions do folks here have? Might be short AGN/long RVNC is one possibility - not sure how much of AGN Botox revenue is protected by rebates.
Peter
>>AMGN’s COO thinks ICER’s proposed $8,500/yr price for Aimovig is reasonable, according to yesterday’s 1Q18 CC.
Very interesting. I have a friend who works at ICER and their researchers actually did an interview with me on my migraine experiences and thoughts.
This does indeed seem reasonable pricing - not a huge step-up from Botox. I think ICER previously pegged annual cost of Botox at close to $8k, although I think in practice it's more like $6k.
>> clearly display the issue of incomplete receptor occupancy
Well I'm not sure that "clearly" is the right adjective here. High CGRP might be an initiating factor early in a migraine, but once the migraine is fully established it might be that you need more than lowering CGRP to abort it.
If it was just incomplete receptor occupancy, wouldn't you expect more of a dose response?
>>Can Botox Ease Teeth Grinding?
For some reason that is quite unclear to me, the Allergan migraine protocol that everyone uses skips the masseter muscle.
>>Biohaven Ph3 Migraine data
Not great results compared with a good triptan, particularly at 2 hours.
Might still be useful with triptan-refractory patients or maybe in morning headache. Greatest promise ultimately lies with multiple doses - be interesting to see if it could be used in medication overuse headache for example. But that's not these trials.
It's covered by insurance (unlike cosmetic uses) so I don't recall what insurance actually pays them.
I do know that once they muddled my insurance and sent me a bill for a ridiculous amount (like $5k) for one treatment but that the amount the insurers paid them was way less (something more of the order of $1k).
>>Due to its lower cost relative to CGRP
We don't really know what the CGRP pricing is going to be yet. Also unclear if the third company to market (likely Lilly) with an equivalent drug might be forced to cut prices to gain traction.
I can't really believe the insurance companies will require step-therapy (fail Botox before using a CGRP) given the clear efficacy advantage here. For many patients Botox only really starts to work after the second or third administration anyhow - so that's six or nine months before decent efficacy. The CGRPs are more like a few days before efficacy. And the Botox procedure is not particularly pleasant for patients - indeed the majority of the patients at the place where I tried Botox have conscious sedation. (Remember some of these patients have allodynia).
Now the dynamics of the market may be that some of the docs giving Botox might not want to give up their lucrative gig and instead keep patients on the inferior drug - but those same docs are presumably going to prefer a three-month product to a six-month product.
So I'm personally skeptical there is going to be any significant first-line market for Botox-type drugs a few years out from here. And these trials are long and likely hard to enroll as well.
>>RVNC - Can attaching their peptide to other drugs for lasting effect also be in the future?
I really doubt it. It becomes a NCE and so has to go through the full approval process. Easier these days to make some sort of a depot version and go through a 505b2 process.
>>makes RT002 competitive with even the longest-acting CGRP compounds in terms of cost and convenience.
But not in efficacy. Botox is borderline efficacious (which makes trials very tough) and the CGRP's work really well. There is some argument that Botox in fact works via decreasing CGRP, and if that is correct I'm not sure there will be patients that fail a CGRP and work with a Botox-type drug.
Looks to me like it's likely real. But private company so no easy play.
>>In addition, 46 patients were treated for more than 6 months,
Enough for approvability in that one phrase. Existing last-stage drugs have durations measured in weeks, not months.
>>This is the same concern I had with RTRX and sparsentan in FGGS
Me too! Shkreli's too-pat and somewhat flippant response to this concern when I had someone raise it (very early on in the history of RTRX) sparked my first doubts about his shtick.
I'd note that you (unlike virtually all the other posters here) have actually been "outside the yard" by being actively involved in drug development.
I'm currently taking a few baby steps outside the gate for the first time.
Peter
Far from my area of expertise, but drugs that stop viral replication as far as I know don't clear already infected cells. So given you want to clear the infection, the alternative is for infected cells to somehow die. And apoptosis is the least damaging way for a cell to die.
Most (but not all) viruses end up killing the cells they infect, so for those a fusion inhibitor should work fine.
Not sure where RSV fits on the spectrum, but it does look like it makes infected cells very sensitive to apoptosis by TRAIL:
Respiratory Syncytial Virus Infection Sensitizes Cells to Apoptosis Mediated by Tumor Necrosis Factor-Related Apoptosis-Inducing Ligand
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC187410/
Yes, I obviously agree that the discount rate feeds into the NPV calculation and my "close to zero" beta is likely too extreme - the issue is how much.
If you back-of-the envelope model a drug NPV as 10 years of constant income stream, then increasing the risk-free rate from 2% to 3% (a massive move) reduces the NPV by about 5%. Reality will of course be some higher than that, particularly if the stream only starts in a few years.
Compare that move with the change in the price of 10-year treasuries this week when the rate moved from 2.77% to 2.85%.
My tweetstorm on beta vs volatility for biotechs:
1/ Why do biotechs have high betas? Should they?
— Peter Suzman (@Biomaven) February 11, 2018
First, let me set out the difference between "beta" and "volatility" - a distinction many investors don't understand well.
The upside from this one drug is obviously significantly more limited now than previously because of the price appreciation, but I view it as low risk (in the biotech context). So that's why I think it's smart to be patient.
The other drugs in their pipeline you can think of as free upside call options. And it remains to be seen how this one will compete with the Deciphera compound that has potentially broader coverage in GIST.
BTW, I also posted some FGEN thoughts and predictions on twitter today:
With $FGEN within sight of its all-time high, I've been asked again about my long-term views. Back when the stock was in the mid-to-high teens I publicly stated that I thought this was the best biotech risk/reward profile I'd seen in a decade of biotech investing.
— Peter Suzman (@Biomaven) January 25, 2018
>BPMC
Avapritinib (Blu-285) is what I call a "magic drug" for PDGF-driven malignancies. My general advice is never to sell stock based solely on a high stock price for a company with a magic drug. Eventually someone will buy them out.
Unclear what their second act will be though. For RET they are in a dogfight with Loxo. But success outside '285 is icing on the cake.
Peter
There is a real need for this, and if they can produce a less nephrotoxic contrast agent that works just as well, then adoption would be very quick indeed. Trial lawyers are good for something!
Here's a paper that describes the modification and preclinical results:
http://verrow.com/vpwp/wp-content/uploads/2016/11/Rowe-et-al-2016-J-Neuroimaging-26-511-518-Preclinical-Studies-of-Kidney-Safe-Iodinated-Contrast-Agent.pdf
This is a low-risk, high reward program that leverages their captisol franchise.
Also of interest if they can indeed reformulate some chemo drugs like doxorubicin to reduce nephrotoxicity without compromising efficacy. That's a harder slog - the safety aspect is pretty straightforward, but showing comparable efficacy isn't all that easy.
>>My criticism is of the company enrolling this trial and Elias seems to have done a terrible job
Can't disagree with that.
Just to clarify some potential confusion here.
This is an old video relating to the original extension something like a year ago when they only had a handful of subjects.
There is now a new extension recently posted showing the trial has been extended from 2 to 3 years.
I'm actually fairly confident in this trial showing some effectiveness - the preclinical data is strong. And the good news is that it is a potential add-on to mostly any other therapy.
I still hold all my LGND. It's less of an acquisition target than one might think because they are so lean. So not clear it's more valuable to some other company than it is as a standalone.
I keep it because it is so different than all my other biotech holdings and so it makes for a form of diversification. I see no reason why they won't keep steadily growing for quite a few years to come, so it's the kind of stock where it's better to simply forget you hold it.
Peter
Thanks Jim.
On the SARM, if the "outcomes" is something easily measurable like muscle strength compared with placebo, then that would I think be feasible. If it's some vaguer or longer term outcome (like mortality or becoming bedridden) then I think prospective partners would flinch. I think the FDA has become a little less doctrinaire, and I could see them approving based on a significant increase in lean muscle mass.
We do know that lack of lean body mass in the elderly is a significant predictor of increased mortality. Indeed having a minimum thigh circumference is perhaps the single best biometric prediction of longevity in adults. (Fat thighs turn out to be fine!).
http://www.bmj.com/content/339/bmj.b3292
Here's a discussion of the regulatory issue surrounding cachexia:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4670733/
>>In the meantime, the convergence between MDGL and VKTX is broken today
Do you have any comments on the relative merits of their two thyroid beta agonists? On the surface profiles look pretty similar, both concentrate in liver.
Also any thoughts on the VKTX SARM drug? Certainly had robust dose-dependant efficacy in their Phase 1, but that was quite a different population from their intended frail target.
Here is link to recent presentation:
https://event.webcasts.com/viewer/event.jsp?ei=1175701&tp_key=e83681dcc0
(I own some VKTX from much lower levels).
Peter
Of the order of $70 for the reader and $40 for a 10-day sensor.
https://www.closeconcerns.com/knowledgebase/r/5f51f49e
You could obviously pass the reader on to someone else after using it, so per user cost could be lower.
>>FreeStyle Libre continuous glucose monitor
I'm kind of tempted to try one for a week to see if I have any idiosyncratic glucose reactions to various foods (like those seen in that Israeli study). Because they rely on a razors/razorblade model the actual device isn't that expensive.
Peter
>>It's possible these are ISOs
Very unlikely - because ISO exercises are an AMT item, they are rarely given to high-level employees. For high-level employees, exercising and holding an ISO produces no cash to pay the likely AMT liability.
(No idea what the new tax bill does to the AMT though).
>>The above sounds like a non-ITT comparison, but this is a press release from the FDA itself!
But it's from the device side rather than the drug side. My impression is they tend to be much more casual.
This is of interest though:
>>ADXS
Interesting - can't say I understand why they chose that subset. I suppose it's possible that the hypermutated tumors have too wide a variety of neoantigens and so there will always be some tumor cells that are not covered by their vaccine.
It does appear to be the case that previously expressed neoantigens can disappear under selective pressure from treatment. So maybe they are going for tumors that are not too heterogeneous.
Peter
A subset (around 15%) of colorectal cancer is hypermutated:
https://www.nature.com/articles/nature11252
>>AGN thinks its CGRP drugs being oral will give them an edge in the market.
There will indeed be a role for the orals if they prove safe. But I suspect they will largely be marketed to PCPs rather than neurologists. And insurance will fight back on these given the triptans work pretty well. Big difference is that unlike the triptans the gepants should in theory not produce medication overuse headaches with frequent use.
BHVN and AGN are fairly close in timing - both should be completing their first Phase III imminently.
>>Botox is generally administered with a narrow-gauge (30-32) needle that most people don't find objectionable in the head and neck area.
1. Migraineurs sometimes have allodynia, so they are potentially considerably more sensitive to pain in some regions.
2. Botox treatment involves maybe 20 or 30 injections
3. I suspect the clinic encourages sedation because they are profit-driven.
I personally found the injections quite tolerable without any sedation.
At the headache place where I tried Botox, my impression is that at least half of the patients apparently opt for conscious sedation, which must up the price considerably when you consider this is every 3 months.
The data is so much stronger than for Botox that I'd be surprised if the insurers required step-therapy beyond what they already require to cover Botox.