Welcome to your weekly roundup of EP Vantage’s snippets – short takes on smaller news items.
This week, September 18 to 22, 2017, we had thoughts on the following: Impella RP gets approved, again; Teva clears the underbrush, but Copaxone still a worry; Thrombogenics cries all the way to the bank after Alcon split.
Impella RP gets approved, again
Two years after gaining US approval as a right-side heart pump, Abiomed’s Impella RP has gained US approval as a right-side heart pump. This is possible because the first approval, back in January 2015, was under a humanitarian device exemption, a category for devices intended to be used in no more than 4,000 patients per year. But the number of patients in the US who could benefit from Impella is at least twice that, and with its new premarket approval its US sales ought to expand. Impella RP is the only temporary heart pump designed for use in the right side of the heart, and can pump more than 4 litres of blood per minute. It is inserted via the femoral vein and the vena cava into the patient’s right ventricle. Impella RP may be used for up to two weeks to treat acute heart failure or decompensation following left ventricular assist device implantation, heart attack, heart transplant or open-heart surgery, after which period it is withdrawn. EvaluateMedTech consensus forecasts put the device’s 2022 sales at just shy of $200m, making it Abiomed’s second best seller.
Teva clears the underbrush, but Copaxone is still a worry
More than $2bn in asset sales and debt restructuring might have bought the incoming Teva chief executive, Kåre Schultz, some breathing room, but the group’s outlook is somewhat dependent on no negative surprises emerging from Copaxone. Today the Israel-based company said it had negotiated a change in the covenants for $10.9bn worth of debt, allowing it to maintain a less onerous debt-to-Ebitda ratio. This news followed yesterday’s announcement that Teva had sold off two sets of assets from its women’s health portfolio for $1.38bn, bringing its total recent divestitures to $2.48bn. Evercore ISI's analyst Umer Raffat, meanwhile, said asset sales plus cash flow should allow it to come within the new debt covenants, with some room to spare – provided that its top seller, Copaxone, can maintain a $3bn-plus sales pace. EvaluatePharma’s consensus of sellside analysts estimates $3.6bn in sales in 2017, although this is set to decline quickly afterwards. Thus an immediate threat has been resolved, but Teva’s key vulnerability remains, meaning that Mr Schultz has hard work yet to do.
Thrombogenics cries all the way to the bank after Alcon split
It can be argued that there is no such thing as a good breakup, but when getting ditched nets you €63.7m ($76.1m), doubling your cash position, the sting is a hell of a lot easier to deal with. Today, Alcon kissed goodbye to its partnership with Thrombogenics for the eye drug Jetrea, handing non-US global rights back to the Belgian company along with the generous lump sum. Thrombogenics’ shares rose 16% on the news. It is unlikely that there would have been too many tears at Novartis’s Alcon unit. Since it was approved in 2013 Jetrea has only sold $52m, meaning that the undisclosed royalties for the 2012 deal would have been miniscule. Alcon has also already paid out €210m as part of the now terminated deal, including a $45m milestone when Jetrea was approved in Europe. As such, an exit fee of €63.7m seems a small price to end the distraction and costs of supporting and marketing a low-selling/low-priority product across the globe. It also plays into the strategy of cutting costs and sharpening the focus of Novartis’s ophthalmic division, especially if this is to be spun off. For the troubled Thrombogenics having €120m in the bank could see the company indulge in some much-needed deal activity to shore up a pipeline that is essentially Jetrea. On this occasion there is a lot to be said for living the single life and for Alcon’s poor deal-making skills.