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  • FDA to beef up cell and gene therapy staff

    • Citing the 800 active INDs for cell therapy and gene therapy candidates and the expectation that it will be receiving more that 200 INDs each year by 2020, FDA Commission Scott Gottlieb, M.D., outlines the agency's initiatives to support timely review and to enable the approval of 10 - 20 such therapies per year by 2025.
    • 50 new clinical reviewers will be added (certainly contingent on the resolution of the federal government impasse between President Trump and Congress).
    • New policy guidance will be issued this year. The agenda includes working with sponsors to make maximum use of accelerated programs, including regenerative medicine advanced therapy (RMAT) designation, a series of clinical guidance documents to inform product development, including gene therapies for blood disorders, and how to use the accelerated approval pathway in cases where the gene therapy addresses the underlying genetic defect.
    • The guidance will also include information designed to help in the development of CAR-T therapies (and other cellular products) and to promote a better understanding of the critical factors in manufacturing with the goal of allowing minor manufacturing changes without requiring new bridging studies.
    • Selected tickers: XLV, IBB, XBI, XPH, IHE, PPH, VHT, OTCQX:RHHBY, ABBV, AGN, AZN, BMY, GSK, JNJ, MRK, NVS, BHC, TEVA, AMGN, BIIB, GILD, VRTX, TAK, ESRX, WBA, CVS, UNH, PFE, CELG, LLY, XON, ALNY, CLLS, SRNE, ZIOP, CYAD, BLUE, NTLA, CRSP, EDIT, SRPT, SLDB, RCKT, RGNX, BGNE, SGMO, ONCE, VYGR
  • FDA Commish touts advances/successes

    • In a stream of tweets, FDA Commissioner Scott Gottlieb, M.D. details a number of accomplishments and advances by the agency. Highlights:
    • Federal government shutdown: About 400 (or 410) staffers are returning to work to conduct key inspections: ~150 in food, ~100 in high-risk medical device manufacturing, ~70 in high-risk drug manufacturing and ~90 in high-risk biologic manufacturing. They plan to work without pay this week.
    • Generics and biosimilar programs will be negatively impacted if the shutdown persists. Carryover fees are funding the work at present. Higher-risk products are being prioritized.
    • Seven biosimilars were approved in 2018, raising the cumulative total to 16. 70 programs are in process.
    • Five generic drugs were approved last year under the new competitive generic therapy designation (accelerated revenue and 180 days of market exclusivity). "First generics" comprised almost 10% of the 971 generic drug applications approved in fiscal 2018 (no prior generic was on the market). The total number of approvals was a record for the agency. 1,021 were approved in calendar 2018.
    • Selected tickers: BIB, GRX, THW, BME, BIS, IXJ, ARKG, GNRX, CHNAXLV, IBB, XBI, XPH, IHE, PPH, VHT, OTCQX:RHHBY, ABBV, AGN, AZN, BMY, GSK, JNJ, MRK, NVS, BHC, TEVA, AMGN, BIIB, GILD, VRTX, TAK, ESRX, WBA, CVS, UNH, PFE, CELG, LLY, PRGO, MYL, MNK, RDY, AKRX
  • Rep. Cummings opens investigation into drug prices

    • Following through on his previously announced commitment, U.S. Representative Elijah Cummings (D-MD 7th District), Chairman of the House Oversight Committee, has opened an investigation into the pricing practices of 12 drugmakers, demanding information and documents on pricing approaches, R&D investments and corporate strategies designed to preserve market share and price power. He says that he will remain "laser focused" on the matter. A hearing is set for January 29, the first of several planned.
    • The targeted companies are: AbbVie (ABBV -2.6%), Amgen (AMGN -1.7%), AstraZeneca (AZN -3.7%), Celgene (CELG -0.1%), Eli Lilly (LLY -1.5%), Johnson & Johnson (JNJ -1.1%), Mallinckrodt (MNK +0.1%), Novartis (NVS -1.1%), Novo Nordisk (NVO -3.7%), Pfizer (PFE -1.3%), Sanofi (SNY -1.7%) and Teva Pharmaceutical Industries (TEVA -0.1%).
    • Last week, Rep. Cummings and Senator Bernie Sanders (D-VT) introduced a bill aimed at curbing the rise in drug prices.
    • This year, the U.S. government will spend ~$99B for medicines under Medicare Part D. Prices of brand-name meds increased 62% from 2011 to 2015, even allowing for rebates and a 17% drop in prescriptions. 94% of widely used branded medicines more than doubled between 2005 and 2017.
    • Related tickers: BIB, GRX, THW, BME, BIS, IXJ, ARKG, GNRX, CHNA, XLV, GILD, BHC, OTCQX:RHHBY, MRK, GSK, TAK, ABC, CAH, MCK, UNH, CVS, ESRX, BIIB, BMY
  • Dem lawmakers introduce bill to lower U.S. drug prices

    • On the heels of a new round of price increases by drug firms and worn-out patience waiting for President Trump to follow through his campaign promise, Senator Bernie Sanders (D-VT) and Representative Elijah Cummings (D-MD 7th District) have introduced a bill aimed at reining in drug prices.
    • Their bill, similar to the Trump administration's idea to benchmark U.S. drug prices to Europe's, would create an "international pricing index" as a means to more closely align the U.S. with other countries.
    • It would also allow the Secretary of Health and Human Services (HHS) to negotiate prices under Medicare Part D and allow Americans to purchase medicines from Canada and other countries.
    • Predictably, the Pharmaceutical Research and Manufacturers of America, the industry's top lobbying organization, is opposed, saying the bill would "interfere with patient access to medicine while also undermining the U.S. intellectual property system, replicating the flawed policies of foreign governments and circumventing the FDA's robust safety standards."
    • Drugmakers blame pharmacy benefit managers (PBMs) for the problem saying they continue to demand ever-increasing rents for inclusion on formularies.
    • Several drugmakers maintained prices for a short while last year, but reinstituted increases this month on more than 250 medications, including top seller Humira at AbbVie. On the plus side, the increases were more modest, with almost all being less than 10%.
    • Selected tickers: XLV, IBB, XBI, XPH, IHE, PPH, VHT, OTCQX:RHHBY, ABBV, AGN, AZN, BMY, GSK, JNJ, MRK, NVS, BHC, TEVA, AMGN, BIIB, GILD, VRTX, TAK, ESRX, WBA, CVS, UNH, PFE, CELG, LLY, ABC, CAH, MCK, UNH, CVS, ESRX
  • Drug applications take back seat to safety surveillance at FDA during shutdown

  • Citi sees equities returning 14% in 2019

    • Fears of a recession are overdone and corporate earnings growth should only see a slowdown this year, according to Citigroup, which is advising investors to buy the dip in equities.
    • The team, including Robert Buckland and Jonathan Stubbs, points to only 3.5 red flags waving in its "bear-market checklist" of 18 potential warnings, Bloomberg reports.
    • Global companies' EPS is expected to increase an average 4% this year. By contrast, the market is pricing in a 4% contraction, Buckland says.
    • With the dollar expected to weaken in 2019, the strategists upgraded emerging-market equities to overweight, their preferred value trade.
    • By sectors, the strategists recommend a balanced mix of cyclical and defensive equities. They put an overweight rating on communication services and healthcare in the defensive category and industrials in the cyclical sector.
    • They rate energy, financials, materials, and information technology as neutral, and consumer staples, utilities, and consumer discretionary as underweight.
    • Communication services ETFs: XLC, VOX, IXP
    • Healthcare ETFs: XLV, VHT, BIB, IYH, HQH, CURE, THQ, FHLC, GRX, THW, BME,
    • Industrial ETFs: XLI, VIS, FIDU, IFLY, IYJ, FXR, AIRR, RGI, UXI, EXI, SIJ
  • Biotechs lead broad market advance, XBI up 5%

  • Drug makers OK with price inclusion in TV ads if done fairly

    • Four members of Big Pharma, Pfizer (PFE -1.6%), Sanofi (SNY -1.6%), Eli Lilly (LLY -1.5%) and Johnson & Johnson (JNJ -0.9%), responding to the federal government's proposed inclusion of prices in TV drug ads generally support the value of increased transparency for patients, but caution that it needs to be done fairly.
    • They say that including just the list price will confuse patients since most are only responsible for co-payments. Some may not fill prescriptions if they perceive that they will have to pay the full monty (shockingly high in many cases).
    • J&J says that if list price disclosures are required for drugs, then hospitals, health insurers and pharmacy benefit managers should play by similar rules.
    • Sanofi was the least supportive, regarding CMS's proposal as "oversimplified" since would fail to grasp the "nuance and complexity" of prescription drugs and biologics.
    • The trade association, Pharmaceutical Research and Manufacturers of America (PhRMA), has proposed its own voluntary guidelines that will take effect in April. It prefers to link drug price information to ads and wants to partner with advocacy groups on an online patient affordability platform that will allow them to access information on insurance coverage, co-payments and other factors in addition to drug prices.
    • The 60-day comment period ended last month. CMS will now decide on the specific regulation. Legal challenges are a near certainty if prices are required in advertisements.
    • Selected tickers: BIB, GRX, THW, BME, BIS, IXJ, ARKG, GNRX, CHNA, XLV, XBI, VHT, IYH, RYH, IBB, XHE, PJP, OTCQX:RHHBY, ABBV, AGN, AZN, BMY, MRK, NVS, BHC, TEVA, AMGN, BIIB, GILD, VRTX, ESRX, WBA, CVS, UNH, CELG, LLY, CI
  • Stocks attempt to bounce from big early decline

    • The averages opened down more than 1.5%, but have about halved those early declines.
    • The financial (XLF +0.1%) sector has moved into the green, and basic materials (XLB -0.4%) is nearly there. Health care (XLV -2.5%) is the worst-performing sector.
  • U.S. government shutdown hampers FDA

    • FDA Commissioner Scott Gottlieb, M.D. says the U.S. government shutdown prevents the agency from accepting new product applications under user fee programs (PDUFA, GDUFA, BsUFA, MDUFA, ADUFA, AGDUFA) since it is unable to collect payments.
    • In addition, its Center for Biologics Evaluation and Research (CBER) will pause non-emergency work on whole blood, blood components for transfusion, allergenic extracts and certain other products.
    • Its Center for Drug Evaluation and Research (CDER) will pause all over-the-counter monograph drug activities. Emergency work will continue.
    • The 30-day review clock for pending IND amendments (non-user fee programs) will be suspended, but will resume when the shutdown is over.
    • Emergency INDs and IND amendments will continue to be reviewed, including those under user fee programs.
    • About 30% of the drug review process is paid for by appropriations so it will continue in part during the shutdown.
    • As everyone should know, the government impasse relates to President Trump's demand for ~$5B for a wall at the U.S./Mexico border.
    • ETFs: BIB, GRX, THW, BME, BIS, IXJ, ARKG, GNRX, CHNA, XLV, XBI, VHT, IYH, RYH, IBB, XHE, PJP
  • House Democrats weigh Medicare-for-all push next year: WSJ

    • With Democrats on the verge of taking control of the House of Representatives, party leaders are weighing whether the party should push votes on Medicare for All or focus on more modest health-care initiatives, the Wall Street Journal reports.
    • The Medicare for All concept is popular with liberal voters, but it's riskier in swing districts.
    • There are currently eight proposals for such plans, but none are likely to become law with the Republicans gaining a larger majority in the Senate.
    • Some Democrats, though, say the priority should be to stabilize the Affordable Care Act, especially in protections for people with pre-existing conditions, rather than to push for a major overhaul in healthcare.
    • Some related tickers: UNH, CI, AET, HUM, ANTM, CVS, WCG, HCA, WBA
    • ETFs: XLV, VHT, IYH, HQH, CURE, THQ, FHLC, FXH, RXL, RYH, SICK, LNGR, RXD, BTEC, JHMH, HCRF
  • Nasdaq down more than 2% late in session

    • A bit less than an hour before the closing bell, the Nasdaq is down 2.1% and the S&P 500 1.1%.
    • The FAANG names and continued evisceration of social media (NASDAQ:SOCL) are the stories: Facebook -5.3%, Amazon -4.5%, Google -2.7%, Apple -2.8%, Microsoft -2.3%, Netflix -4.6%, Twitter -6.2%, Snap -3%, Nvidia -3.2%.
    • Outperforming are defensive plays like healthcare (XLV -0.9%) and utilities (XLU -0.6%).
  • SPDR Active ETF Trust declares quarterly distribution on funds

    • Health Care Select Sector SPDR ETF (NYSEARCA:XLV) - $0.3795. 30-Day SEC Yield of 1.60%.
    • Consumer Discretionary Select Sector SPDR ETF (NYSEARCA:XLY) - $0.3758. 30-Day SEC Yield of 1.47%.
    • Real Estate Select Sector SPDR Fund (NYSEARCA:XLRE) - $0.3686. 30-Day SEC Yield of 3.39%.
    • SPDR MFS Systematic Core Equity ETF (NYSEARCA:SYE) - $0.3523. 30-Day SEC Yield of 1.58%.
    • SPDR S&P Bank ETF (NYSEARCA:KBE) - $0.2617. 30-Day SEC Yield of 2.23%.
    • SPDR S&P Regional Banking ETF (NYSEARCA:KRE) - $0.3187. 30-Day SEC Yield of 2.30%.
    • SPDR Russell 1000 Low Vol ETF (NYSEARCA:LGLV) - $0.5814. 30-Day SEC Yield of 1.97%.
    • SPDR S&P Dividend ETF (NYSEARCA:SDY) - $0.6677. 30-Day SEC Yield of 2.61%.
    • Payable Dec 27; for shareholders of record Dec 24; ex-div Dec 21. 30-Day SEC yield as of Dec 19.
  • Healthcare leads markets lower as J&J plunges 10%

  • Senate Dems introduce bill to block "excessive" increases in drug prices

    • Four democratic senators, Richard Blumenthal (D-CT), Kamala Harris (D-CA), Amy Klobuchar (D-MN) and Jeff Merkley (D-OR), have introduced a bill aimed at blocking drug price hikes. Specifically, it will allow the Department of Health and Human Services to prohibit price increases that it considers excessive, although there are no details provided regarding the criteria for such decisions.
    • House Speaker Nancy Pelosi has pledged an agenda for next year to combat high drug prices.
    • Selected tickers: BIB, GRX, THW, BME, BIS, IXJ, ARKG, GNRX, CHNA, XLV, XBI, BHC, OTCQX:RHHBY, ABBV, AGN, AZN, BMY, GSK, JNJ, LLY, MRK, NVO, PFE, NVS, SHPG, TEVA, MYL, AMGN, BIIB, GILD, CELG