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Notable Developments At The 2019 JP Morgan Conference
New CVS Hub Stores, NASH Drugs, Liquid Biopsy, Illumina Chip, Smokeless Tobacco Reduction, Among Developments at JPM and Biotech Showcase
The 2019 J.P. Morgan Healthcare Conference (JPM) has ended. Nearly 500 companies from biotech, pharma, insurance, hospital systems and more gave investor presentations to more than 9,000 attendees at the Westin St. Francis hotel this year. The size of the conference suggests that the decision as to what the investor conference and related product showcases were “about this year” could be seen in many forms, and numerous media outlets will describe the show’s focus in different ways. Kalorama attended the related Biotech Showcase event and the Digital Medicine and Medtech Showcase, with an eye to in vitro diagnostics, analytical testing and biotechnology. While there were hundreds of companies involved, a several developments were worthy of note:
CVS to Create Retail-Clinic Focused Hub Stores: CVS’s packed presentation at JPM was the first since it finalized its 2018 merger with Aetna. CVS is focused on creating particular stores of high retail interest known as “home hubs,” which will reduce products in a category but offer home hubs with existing CVS stores. These stores will focus on pharmacy, wellness, retail clinics and scale back on underperforming categories. They will offer services such as post-discharge follow up, additional screening, nutritional counseling and chronic condition management. Expanded retail clinic scopes at these stores – a such as chronic disease management – are expected. (Kalorama Information’s report on Retail Clinics
NASH Drugs a Focus: NASH, or non-alcoholic steatohepatitis, has no approved treatments. Estimates hold that about 30 million people in the U.S. have the fatty liver disease. The condition can cause liver fat buildup that can lead to cirrhosis. The FDA recently clarified endpoints somewhat in a guidance document that allowed NASH resolution, fibrosis improvement or a combination as endpoints. Gilead, Allergan and Merck are among those participating in the market: https://www.biopharmadive.com/news/nash-2019- jpm-readouts-deals-market-competition/545772/
“Drugs for an underserved liver disease class, continued liquid biopsy development, generic biologics, smokeless tobacco abuse, a new chip to improve reads and run lengths for NGS and many company updates were on Kalorama’s radar at the 37th J.P. Morgan Healthcare Conference. ”
FDA Looks to Biosimilars for Pharma Price Reduction: Food and Drug Administration head Scott Gottlieb, MD, delivered a keynote address at the conference. The Trump Administration’s views on drug pricing has been known, but the FDA Director made it clear that competition would be the method.
Among Dr. Gottlieb’s stated goals for 2019 is a reduction of drug prices through competition. “If we bring more products to the market, that will then promote price competition,” he said. In another effort to bring down drug prices, Gottlieb said that Hatch-Waxman took many years to build a generics market and the same would be true of biosimilars. He said that rebates are an impediment to the market and causing a
slower uptake than expected. (Kalorama Information’s report on Biosimilars
Guardant RUO test: The test, a targeted sequencing-based test of cell-free DNA, builds on its Guardant360 liquid biopsy for tumor mutational profiling, by adding an epigenomic component. That improves the sensitivity, enabling genomic alterations to be detected at frequencies as low as .01 percent. The company said 2018 revenues grew by 94 percent over 2017 revenues, driven by its clinical tests as well as partnerships with pharmaceutical companies. (Kalorama Information’s report on Liquid
Biopsy tests is here: https://www.kaloramainformation.com/Worldwide-Liquid-Biopsy-Analyte- ctDNA-cfDNA-Application-Screening-Drug-Monitoring-Diagnostic-Region-Europe-Asia-ROW-Type- Cancer-10975987/)
New Chip for Illumina: llumina generated $3.330 billion in revenue, according to their JPM presentation, up 21% from $2.752 billion in 2017. The company also said it remains on track to complete its $1.2 billion acquisition of Pacific Biosciences (PacBio) by mid-2019. In addition, the company plans a new SP chip for the NovaSeq that will have faster run times and longer reads. (Kalorama Information’s report on Next- Generation Sequencing is here: https://www.kaloramainformation.com/Generation-Sequencing- Instrumentation-Consumables-Services-Competitive-Trends-11594541/)
Bruker Sees Clinical Proteomics Revenue Growth: Bruker updated on its MALDI Biotyper, a system used for microbial identification, that is viewed as a success story for clinical proteomics. The firm has an installed base of around 3,200 Biotyper systems around the world. And while sales growth for the system has slowed to the high single digits, Bruker said half the revenues are from consumables, growing at a much higher rate. The SepsiTyper product for bloodstream infections has been launched in Europe, and
the firm is planning trials this year in advance of a filing for marketing clearance from the US Food and Drug Administration. With Bruker’s acquisition of Hain Lifescience in August 2018 they added assays marketed for tuberculosis, sexually transmitted diseases and HIV, and have a pipeline of assays they are developing using Hain’s Liquid Array format. (Kalorama Information’s Clinical Mass Spectrometry report is here: https://www.kaloramainformation.com/Mass-Spectrometry-Clinical-10554966/
Konica Minolta Provides Ambry Update: Konica Minolta said that Ambry has now run more than 1.5 million genetic tests and receives orders from 11,000 clinicians and more than 4,000 institutions per year. The tests that Ambry runs are in-network with around 95 percent of the insured population, and its CLIA- certified, CAP-accredited lab has the capacity to process 3,000 samples per day. In addition, he said, the firm runs a translational genomics lab that can conduct variant classification. CEO Dr. Aaron Elliott noted that for one class of variant – splice site variants – RNA testing was able to reduce the number of variants
classified as being of unknown significance to 8 percent from 92 percent. (Kalorama Information’s report on Clinical Lab Services is here: https://www.kaloramainformation.com/Clinical-Laboratory- Services-10702756/)
$115 Billion in China Biotech Investment Last Year – At the China Biotech Showcase that kicked off the week of healthcare investment and product launches, the impressive growth in life science investment in China in 2018 was noted, an increase from 2017. ChinaBio, a leading Shanghai consulting, financial and conference organizer, indicated in a report that the China life science segment continues to grow:
- $43 billion raised for new VC/PE funds targeting China life science investments, with average fund size increasing to $765 million;
- $17 billion invested in China life science companies, up 36% from 2017, with another $8 billion in corporate investments;
- $34 billion in value created in M&A deals, 53% higher than 2017, with average deal value exceeding $200 million;
- $7 billion in IPO funding, an increase of 40%, with an average raise of over $250 million;
- $14 billion in partnering activity, up 75% from $8 billion in 2017.
China/US Relationship Troubles a Worry for Biotech? The previously mentioned report from ChinaBio also said that “the trade relationship between the US and China is dealing with considerable unknowns as President Trump seeks concessions from China and, especially, greater IP protection for high-tech US companies operating in, or operating with, China.” The news dominates the headlines, and as a result, it comes up in year-end reviews. This emphasis in year-end reviews may be misleading. So far, no US- China cross-border biopharma deals have been rejected – by either side. The report also notes that one Chinese investor has participated in 41 US biotech deals this year with a total value of $2.6 billion. (Kalorama Information’s report on the IVD Market in China is
“Despite news stories with dire predictions, so far, no US-China cross-border biopharma deals have been rejected – by either side.”
Thermo Fisher Scientific Grows on Consumables, China: Thermo Fisher’s CEO Marc Casper presented at the conference, noting that 2018 revenues were more than $23 billion, with 52 percent coming from consumables, 26 percent from instrument sales, and 22 percent from services. China, Casper said, “continues to be the fastest growing end market,” with sales to that region representing around 10 percent of total revenues. He said that demand from China has not slowed down amidst the trade war between China and the US, adding that because most of Thermo’s products are not made in the US, they are not subject to the tariffs.
Kalorama Information attended numerous presentations and meetings with companies. The following was found:
Preventing Opioid-Related Endocarditis: Patients with opioid abuse problems have a high rate of endocarditis due to the sharing of needles and the resulting staff infections. A North Carolina study showed that 47% of patients with endocarditis have opiod abuse issues.
CytoSorbents, a New Jersey-based, critical care immunotherapy company, presented at the meeting. The company makes the only approved extracorporeal cytokine adsorber in the European Union, designed to reduce the “fuel to the fire” of deadly inflammation often seen in critically-ill patients in the intensive care unit (ICU) and those undergoing complex open heart surgery. Examples of this “fuel” include: excessive cytokines, bacterial toxins, activated complement, plasma free hemoglobin, bilirubin, and a host of other inflammatory mediators. Their product is a highly porous polymer bead system that acts like a sponge. The company said their product has helped stabilize patients with endocarditis with fewer complications by reducing excessive cytokines and toxins.
“Their product is a highly porous polymer bead system that acts like a sponge. [helping to]…stabilize patients with endocarditis with fewer complications by reducing excessive cytokines and toxins.”
Using CBD for Smokeless Tobacco Addiction: Smokeless tobacco is one of the most potent ways of
consuming nicotine. Thirty minutes of smokeless tobacco is like smoking 3 cigarettes, and though smoking is down, smokeless tobacco is up. Among youth, and among military personnel, there is an increase in the use of smokeless tobacco. CV Sciences, a consumer products and pharmaceutical cannabidiol company, presented at the Biotech Showcase meeting. The company’s CVSI-007 combines nicotine and cannabidiol to support smoking cessation. Why combining nicotine and CBD? The company said their product can be 10x as powerful as tobacco but lasts longer, which reduces the need for re-dosing. Ten million Americans, it is estimated, use smokeless tobacco. “The FDA has taken a serious interest in cannabidiol from companies including our own with rigorous science.”
“Ketamine-Like” Oral Formulation: Ketamine is more effective than many anti-depressants on the market, but is a drug that so far must be clinically administered. Vista Gen presented at Biotech Showcase with an oral formulation that they say has effects like ketamine. Their AV-101 oral treatment has FDA fast track designation. The company says the drug inhibits the receptor more like a “fine tuned thermostat,”
where ketamine works in a more indiscriminate fashion, blocking the receptor function but with side effects. Key clinical data readouts will follow in 2019. In an NIH-sponsored study ongoing at NIMH CSF, AV101 will be measured.
Using mAbs against Hospital Infections: While oncology has made use of monoclonal antibodies for at least two decades, in the treatment of infectious disease, these functions are not common and reimbursement is challenging. This is something Aridis, and its VAP Targeted Adjunctive Immunotherapy, would like to change. The company, which presented at Biotech Showcase as part of
the J.P. Morgan Healthcare Conference, believes they can use high hospital costs to get their product into major usage. Ventilator-associated pneumonia (VAP) costs 35,000-45,000 in ICU ventilation and hospital days. The company also noted that improved knowledge, too, may play a role in the use of an immunological approach to infectious disease. While antibiotics enter the bacteria to attack it, mAbs do not. It’s now known that they preserve microbiome and do not target metabolic functions. Yet they still lead to bacterial degradation. Per the company, with the increase in availability of rapid diagnostic tests, broad antibiotics will fall out of favor. The company has an ongoing Phase 3 Global Clinical Study of its candidate AR-301 (first patient in January; 105 sites in 18 countries; testing its product vs. an antibiotic). The company has raised 130 million dollars through venture capital and non loan grant funding. The company also has a gram negative AR-105 mAb and an AR-501 for cystic fibrosis. (Kalorama Information’s report on What’s Trending in Monoclonal
Antibodies: www.kaloramainformation.com/Trending-Monoclonal-Antibodies-Structure-Target- Indication-11440829)
“Clean” Kinase Inhibitor: FLT-3 kinase is a key driver of AML (acute myeloid leukemia) but many existing drugs are not effective. They are “dirty” in that they attack more than the intended target in the human
kinasome. Aptose Biosciences discussed their C6-806 orphan drug designated candidate C6-806, a pan FLT-3 kinaser inhibitor for AML. The drug was found to be non-toxic in 600 mgs/kg in murine trials.
Alzheimer’s Therapy Moves: The conference is important because it has become a central time and place for announcements biotechnology companies may have had in the works. This year proved no exception as Biogen announced a major deal in regards to Alzheimer’s therapy, as noted in
“Biogen announced a major deal in regards to Alzheimer’s therapy, Vista
Gen has FDA fast track for a ketamine-like oral formulation, while CV Sciences aims at treating smokeless tobacco addiction with CBD.”
Smartphone Headache App? BioTrak Therapeutics has developed the first preventative therapeutic smartphone app for migraine and headache, EaseTM. The app provides the same clinically proven, behavioral interventions traditionally only available in an office setting. The company says the Ease app addresses both the physical and psychological factors of migraine disease and tension-type headaches.
Its content is based on clinically validated approaches with the aim of allowing users to self-manage their headaches. The app provides physiological therapy, including diaphragmatic breathing exercises to help patients build a healthier autonomic nervous system. Psychological support to manage stress, anxiety and depression is provided with audio-based relaxation and meditation exercises. A machine learning algorithm adjusts the user’s personalized support based on lifestyle and disease profile. The company said that a 28-day clinical study has shown Ease to successfully reduce the symptoms of migraine and frequently recurring tension-type headaches, matching the literature results shown in over 100 clinical studies on 3,500 subjects in office settings.
Other links and notes –
Myriad Grows on New Products, with an Emphasis on Depression: Myriad Genetics said that their growth has come from new products. In fiscal year 2013, less than 1 percent of testing volumes were from new products; that is now 76 percent.
Novartis Building Out Cell and Gene Therapy Platform That’ll Lead the Pack, CEO Promises:
www.fiercepharma.com/pharma/novartis-cell-and-gene-therapy-work-about-expanding-game- board-treatments-ceo. (Kalorama report: Potential pipeline disruptors: Products that will drive the future pharma market: www.kaloramainformation.com/Potential-Pipeline-Disruptors-10848169)
uBiome Hosts Second Annual Microbiome Conference at JPM: https://www.pharmiweb.com/pressreleases/pressrel.asp?ROW_ID=300285. (Kalorama report on
Human Microbiome Applications in In Vitro Diagnostics and Other
Eli Lilly Broadens the Scope of Their Oncology Portfolio into Precision Medicines with Agreement to Acquire Loxo Oncology: https://seekingalpha.com/pr/17371285-lilly-announces-agreement-acquire-
loxo-oncology. (Kalorama Information’s report on precision cancer in vitro
Luminex/Verigene II MDx System: Luminex said it is about to finish a clinical trial initiated to validate its Verigene II MDx system along with an enteric assay. The firm anticipates submitting the results of the trial to the US Food and Drug Administration with a view to obtaining marketing clearance. The company said the Verigene is a fully automated, sample-to-result system with a much smaller footprint, an easier-to-use interface and the ability to run assays at room temperature, which saves on refrigeration and shipping
costs. (https://seekingalpha.com/article/4232643-luminex-lmnx-presents-annual-2019-jp-morgan- healthcare-conference-slideshow)
GenMark Diagnostics: The company anticipates that it will soon receive FDA clearance for a gram- negative blood culture identification panel running on the ePlex molecular diagnostics system. (https://seekingalpha.com/article/4232098-genmark-diagnostics-gnmk-37th-annual-j-p-morgan- healthcare-conference-slideshow)
Bio-Techne: Over 600M in revenue, mostly from biotech: (https://seekingalpha.com/article/4232444- bio-techne-tech-presents-37th-annual-j-p-morgan-healthcare-conference-slideshow)
Twist Bioscience: CEO Emily Leproust said that the company’s revenues more than doubled in fiscal year 2018 to $25.4 million. (https://seekingalpha.com/article/4232600-twist-bioscience-corporation- twst-presents-37th-annual-j-p-morgan-healthcare-conference)
PerkinElmer: The company acquired Swedish startup Vanadis in 2016, which had been developing
noninvasive prenatal testing technology that did not rely on either next-generation sequencing or microarrays, and last year began collaborating with the Women & Infants Hospital of Rhode Island to test the Vanadis platform on samples from around 2,650 women. Prahlad Singh, PerkinElmer’s president and chief operating officer, said that data from that study is expected in the second half of the year. (https://seekingalpha.com/article/4232586-perkinelmer-pki-presents-37th-annual-j-p-morgan- healthcare-conference-slideshow)