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After abortion ruling, biotechs behind novel contraceptives say tide is turning on insurance coverage

For Whitney, the desire to eventually have kids sparked a search for a new type of birth control. Another IUD would prevent pregnancy for too long and…

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For Whitney, the desire to eventually have kids sparked a search for a new type of birth control. Another IUD would prevent pregnancy for too long and she needed an alternative until she was ready for children. In 2020, she finally found an option she liked: a new vaginal ring called Annovera developed by TherapeuticsMD. But there was an issue. After changing jobs, her insurance plan denied coverage.

Her options? Switch contraceptives and risk grueling side effects, or embark on a lengthy appeal process. “I kind of just gave in and just took what they were offering me,” said Whitney, who is 34 years old and lives in Wisconsin.

Whitney, who asked that her last name be withheld for privacy reasons, ended up on a birth control pill. It can be difficult to remember to ingest the pill every day, which once forced her to take Plan B, also known as the “morning-after pill.”

“If I had had the birth control that I wanted, I wouldn’t have been in this situation,” she said. “It’s just frustrating.” Whitney isn’t alone in her frustration.

Getting insurers to cover new contraceptives can be difficult, an issue thrust into the spotlight after the Supreme Court overturned Roe v. Wade. As state laws restricting abortion take effect, women’s health advocates and the federal government are pushing payers to provide as many birth control options as possible, including newer products that often aren’t covered by insurance.

Contraceptives are not one-size-fits all, and what works for one woman may cause side effects in another — ranging from weight gain and mood swings to blood clots.

Biotechs — aided by updated regulations, a federal crackdown and public pressure — say the insurance industry is beginning to show more of a willingness to pay for novel forms of birth control. In a sign of greater investor interest in the space, Agile Therapeutics, a women’s contraception company, recently raised more than $24 million in a public offering.

The Affordable Care Act requires that most insurance plans fully cover contraceptives approved by the FDA and prescribed by a clinician. However, lawmakers and women’s health advocates say that insurers have routinely shirked their responsibilities over the last decade.

Saundra Pelletier

Evofem, a biotech that won FDA approval for a non-hormonal birth control gel called Phexxi in 2020, initially struggled to secure insurance coverage. But after the Supreme Court’s draft decision leaked in May and prodding from the federal government, insurers now cover 75% percent of product claims, up from 55% a year ago. That’s according to Evofem CEO Saundra Pelletier, who said there’s more work to do.

“They just weren’t doing the right thing for women,” Pelletier said of some insurers. “But now, when they recognize these attacks on women are real and pervasive and could be increasing, they’re really starting to step up and say, ‘Look, we don’t want to be the holdout.’”

Al Altomari

Agile Therapeutics CEO Al Altomari said that clinicians seem more willing to fight for women’s choice in birth control in recent months, while smaller insurance companies are showing more openness to covering the company’s product. Some of the large pharmacy benefit managers haven’t moved just yet, he added — but he believes eventually they will.

His company’s hormonal birth control patch called Twirla was approved in 2020. Agile touts the product as a lower-dose and more convenient option than other patches and birth control pills. Women apply the patch once a week for three weeks, followed by an off-week when their cycle occurs.

Twirla’s first few quarters on the market were challenging, Altomari said, between struggling with insurers and launching in the middle of a pandemic.

“There has been really a lot of noncompliance by the insurance companies and this has been really a big issue that’s actually ended up in the White House,” he said. “It’s hurting all of our companies, including ours.”

But the Supreme Court decision in ​​Dobbs v. Jackson Women’s Health Organization triggered new interest in the company, fueling Agile’s public offering that raised $24 million earlier this month and another at-the-market raise of $12.8 million.

“We’re growing, we think in the second quarter somewhere between 25 and 30% quarter-on-quarter growth, despite these challenges,” Altomari said. “We think things are going to get a lot better, faster for all of us.”

Some drugmakers argue holes in insurance coverage have stifled innovation. Just look at Big Pharma, which hasn’t made much progress on the contraception front in the last decade or so, Altomari said.

“All the innovation in contraception, in particularly the last 10 to 15 years, has come out of little companies,” he said. “Each one of these companies has passion for the space.”

When its gel launched, Evofem also found itself in insurance purgatory. Some payers didn’t want to cover Phexxi because it didn’t fit into existing birth control categories that are part of a federal list guiding coverage decisions. Pelletier said Evofem asked HHS to update the list, but the agency stated it shouldn’t be a proxy for coverage decisions.

Endpoints reached out to HHS’ Office on Women’s Health, which oversees the guidance, but did not receive a response as of press time.

In January, the Women’s Preventive Services Initiative, which works with HHS, recommended that “any FDA-approved, -granted or -cleared contraceptives” should be made accessible as part of contraceptive care. The language has been widely interpreted to mean insurers should cover birth control.

Mara Gandal-Powers

“It is pretty clear that if something has approval from the FDA, it should be getting coverage,” said Mara Gandal-Powers, director of birth control access at the National Women’s Law Center.

But there still might be exceptions. A plan can charge a cost-sharing fee for birth control filled at an out-of-network pharmacy if they have it covered without cost-sharing at an in-network pharmacy, Gandal-Powers noted. In addition, some employer plans were grandfathered in when the ACA went into effect, and don’t need to cover preventive services.

A 2020 report sponsored by the Kaiser Family Foundation and nonprofit Susan Thompson Buffett Foundation found that the share of oral contraceptive users paying out-of-pocket dropped from 96% in 2010 to 10% in 2018 after the Affordable Care Act passed. But many women are still paying out of pocket for contraception.

Gandal-Powers said that some insurance plans violate HHS’ most recent guidance by requiring patients to try a number of products first before they can get coverage for a newer form of birth control that isn’t on the list. She has seen plans that require women to try eight products before they can get full coverage for their choice, regardless of what a clinician has recommended. And many women don’t realize they can appeal decisions that flat-out deny coverage, she said.

If a woman’s first choice is denied, plans are supposed to have “an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual or a provider,” according to updated 2015 guidance issued by HHS, which allows women to get access with the help of a provider.

“We’re sort of seeing twofold with newer products, that plans are saying they don’t have to cover them because they don’t appear on this outdated list, and plans don’t have the cautionary exceptions process in place,” Gandal-Powers said.

Insurance companies continue to face pressure in the weeks since the Dobbs decision, as the Biden administration has stepped up efforts to compel insurers to cover birth control. Last month, HHS Secretary Xavier Becerra, Treasury Secretary Janet Yellen and Labor Secretary Martin Walsh said in a letter to payers that they’ve received “troubling and persistent reports” of noncompliance.

“For this reason, we are calling on your organizations to remove impermissible barriers and ensure individuals in your plans have access to the contraceptive coverage they need, as required under the law. It is more important than ever to ensure access to contraceptive coverage without cost sharing, as afforded by the ACA,” they wrote.

If a plan fails to comply with the act, there’s a range of enforcement actions the government can take, including monetary penalties, Gandal-Powers said. For more than 10 years, the National Women’s Law Center has been running a hotline to help women understand what’s covered under their plan, and how to appeal decisions that don’t comply with the ACA.

When asked for comment on their policies around contraceptives, the Blue Cross Blue Shield Association, a federation of locally operated Blue Cross companies, issued a statement:

BCBS companies take compliance with state and federal laws very seriously and are committed to ensuring access to preventative services, including contraception. BCBS companies are reviewing existing policies to make sure there are no unintended barriers to contraceptive access for members.

Aetna International declined to comment, while Humana and UnitedHealth Group did not respond as of press time.

For Evofem and other biotechs, it isn’t just payers that are paying more attention. Women, clinicians and even investors have been more engaged, Pelletier said. Evofem’s stock more than doubled after the Dobbs ruling and has maintained the momentum. Prescriptions are also up, Pelletier noted.

Sabrina Johnson

“It also reinforces for healthcare investors — this is healthcare,” said Daré Bioscience CEO Sabrina Johnson. “All of a sudden we’ve shone a spotlight on the category and it’s becoming noticed.”

Even though Daré’s lead candidate hasn’t yet entered a Phase III trial, Johnson knew the company would need to start conversations with payers and regulators early on. And being differentiated enough from other products should make it easier to get coverage, she said.

The company is working on a vaginal ring called Ovaprene. It’s similar to the NuvaRing in shape and size, but unlike other products, it’s non-hormonal. Ovaprene has a knitted polymer barrier, which is porous but doesn’t allow sperm to reach the cervix. From the center, the ring releases a form of iron that interferes with sperm mobility.

Daré partnered with both Bayer and the National Institutes of Health, which is co-funding the Phase III trial that’s slated to begin this year. Since the Supreme Court decision, the company has also seen heightened interest from additional investors, according to Johnson.

“There are certain investors who have been outspoken about the SCOTUS decision,” she said.

Will that translate to long-term interest? It’s difficult to say, as the field is risky. However, getting on the right birth control early is of increasing concern to the millions of women whose abortion rights have now been revoked or called into question.

TherapeuticsMD, which developed Whitney’s preferred birth control option, did not respond to a request for comment.

Wisconsin, where Whitney lives, adopted an abortion ban in 1849. And though the state’s governor Tony Evers has said the ban won’t be enforced, some clinics have already halted abortions.

“It’s more about having a choice over your body and what’s best for you,” Whitney said. “No one can make that decision better than yourself.”

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Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

In response to the virus pandemic and nationwide…

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Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

In response to the virus pandemic and nationwide Black Lives Matter riots in the summer of 2020, some elite colleges and universities shredded testing requirements for admission. Several years later, the test-optional admission has yet to produce the promising results for racial and class-based equity that many woke academic institutions wished.

The failure of test-optional admission policies has forced Dartmouth College to reinstate standardized test scores for admission starting next year. This should never have been eliminated, as merit will always prevail. 

"Nearly four years later, having studied the role of testing in our admissions process as well as its value as a predictor of student success at Dartmouth, we are removing the extended pause and reactivating the standardized testing requirement for undergraduate admission, effective with the Class of 2029," Dartmouth wrote in a press release Monday morning. 

"For Dartmouth, the evidence supporting our reactivation of a required testing policy is clear. Our bottom line is simple: we believe a standardized testing requirement will improve—not detract from—our ability to bring the most promising and diverse students to our campus," the elite college said. 

Who would've thought eliminating standardized tests for admission because a fringe minority said they were instruments of racism and a biased system was ever a good idea? 

Also, it doesn't take a rocket scientist to figure this out. More from Dartmouth, who commissioned the research: 

They also found that test scores represent an especially valuable tool to identify high-achieving applicants from low and middle-income backgrounds; who are first-generation college-bound; as well as students from urban and rural backgrounds.

All the colleges and universities that quickly adopted test-optional admissions in 2020 experienced a surge in applications. Perhaps the push for test-optional was under the guise of woke equality but was nothing more than protecting the bottom line for these institutions. 

A glimpse of sanity returns to woke schools: Admit qualified kids. Next up is corporate America and all tiers of the US government. 

Tyler Durden Mon, 02/05/2024 - 17:20

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Four burning questions about the future of the $16.5B Novo-Catalent deal

To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.
Beyond spending billions of dollars to expand…

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To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.

Beyond spending billions of dollars to expand its own production capacity for its weight loss drugs, the Danish drugmaker said Monday it will pay $11 billion to acquire three manufacturing plants from Catalent. It’s part of a broader $16.5 billion deal with Novo Holdings, the investment arm of the pharma’s parent group, which agreed to acquire the contract manufacturer and take it private.

It’s a big deal for all parties, with potential ripple effects across the biotech ecosystem. Here’s a look at some of the most pressing questions to watch after Monday’s announcement.

Why did Novo do this?

Novo Holdings isn’t the most obvious buyer for Catalent, particularly after last year’s on-and-off M&A interest from the serial acquirer Danaher. But the deal could benefit both Novo Holdings and Novo Nordisk.

Novo Nordisk’s biggest challenge has been simply making enough of the weight loss drug Wegovy and diabetes therapy Ozempic. On last week’s earnings call, Novo Nordisk CEO Lars Fruergaard Jørgensen said the company isn’t constrained by capital in its efforts to boost manufacturing. Rather, the main challenge is the limited amount of capabilities out there, he said.

“Most pharmaceutical companies in the world would be shopping among the same manufacturers,” he said. “There’s not an unlimited amount of machinery and people to build it.”

While Novo was already one of Catalent’s major customers, the manufacturer has been hamstrung by its own balance sheet. With roughly $5 billion in debt on its books, it’s had to juggle paying down debt with sufficiently investing in its facilities. That’s been particularly challenging in keeping pace with soaring demand for GLP-1 drugs.

Novo, on the other hand, has the balance sheet to funnel as much money as needed into the plants in Italy, Belgium, and Indiana. It’s also struggled to make enough of its popular GLP-1 drugs to meet their soaring demand, with documented shortages of both Ozempic and Wegovy.

The impact won’t be immediate. The parties expect the deal to close near the end of 2024. Novo Nordisk said it expects the three new sites to “gradually increase Novo Nordisk’s filling capacity from 2026 and onwards.”

As for the rest of Catalent — nearly 50 other sites employing thousands of workers — Novo Holdings will take control. The group previously acquired Altasciences in 2021 and Ritedose in 2022, so the Catalent deal builds on a core investing interest in biopharma services, Novo Holdings CEO Kasim Kutay told Endpoints News.

Kasim Kutay

When asked about possible site closures or layoffs, Kutay said the team hasn’t thought about that.

“That’s not our track record. Our track record is to invest in quality businesses and help them grow,” he said. “There’s always stuff to do with any asset you own, but we haven’t bought this company to do some of the stuff you’re talking about.”

What does it mean for Catalent’s customers? 

Until the deal closes, Catalent will operate as a standalone business. After it closes, Novo Nordisk said it will honor its customer obligations at the three sites, a spokesperson said. But they didn’t answer a question about what happens when those contracts expire.

The wrinkle is the long-term future of the three plants that Novo Nordisk is paying for. Those sites don’t exclusively pump out Wegovy, but that could be the logical long-term aim for the Danish drugmaker.

The ideal scenario is that pricing and timelines remain the same for customers, said Nicole Paulk, CEO of the gene therapy startup Siren Biotechnology.

Nicole Paulk

“The name of the group that you’re going to send your check to is now going to be Novo Holdings instead of Catalent, but otherwise everything remains the same,” Paulk told Endpoints. “That’s the best-case scenario.”

In a worst case, Paulk said she feared the new owners could wind up closing sites or laying off Catalent groups. That could create some uncertainty for customers looking for a long-term manufacturing partner.

Are shareholders and regulators happy? 

The pandemic was a wild ride for Catalent’s stock, with shares surging from about $40 to $140 and then crashing back to earth. The $63.50 share price for the takeover is a happy ending depending on the investor.

On that point, the investing giant Elliott Investment Management is satisfied. Marc Steinberg, a partner at Elliott, called the agreement “an outstanding outcome” that “clearly maximizes value for Catalent stockholders” in a statement.

Elliott helped kick off a strategic review last August that culminated in the sale agreement. Compared to Catalent’s stock price before that review started, the deal pays a nearly 40% premium.

Alessandro Maselli

But this is hardly a victory lap for CEO Alessandro Maselli, who took over in July 2022 when Catalent’s stock price was north of $100. Novo’s takeover is a tacit acknowledgment that Maselli could never fully right the ship, as operational problems plagued the company throughout 2023 while it was limited by its debt.

Additional regulatory filings in the next few weeks could give insight into just how competitive the sale process was. William Blair analysts said they don’t expect a competing bidder “given the organic investments already being pursued at other leading CDMOs and the breadth and scale of Catalent’s operations.”

The Blair analysts also noted the companies likely “expect to spend some time educating relevant government agencies” about the deal, given the lengthy closing timeline. Given Novo Nordisk’s ascent — it’s now one of Europe’s most valuable companies — paired with the limited number of large contract manufacturers, antitrust regulators could be interested in taking a close look.

Are Catalent’s problems finally a thing of the past?

Catalent ran into a mix of financial and operational problems over the past year that played no small part in attracting the interest of an activist like Elliott.

Now with a deal in place, how quickly can Novo rectify those problems? Some of the challenges were driven by the demands of being a publicly traded company, like failing to meet investors’ revenue expectations or even filing earnings reports on time.

But Catalent also struggled with its business at times, with a range of manufacturing delays, inspection reports and occasionally writing down acquisitions that didn’t pan out. Novo’s deep pockets will go a long way to a turnaround, but only the future will tell if all these issues are fixed.

Kutay said his team is excited by the opportunity and was satisfied with the due diligence it did on the company.

“We believe we’re buying a strong company with a good management team and good prospects,” Kutay said. “If that wasn’t the case, I don’t think we’d be here.”

Amber Tong and Reynald Castañeda contributed reporting.

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Petrina Kamya, Ph.D., Head of AI Platforms at Insilico Medicine, presents at BIO CEO & Investor Conference

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb….

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Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

Credit: Insilico Medicine

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

The session will look at how the latest artificial intelligence (AI) tools – including generative AI and large language models – are currently being used to advance the discovery and design of new drugs, and which technologies are still in development. 

The BIO CEO & Investor Conference brings together over 1,000 attendees and more than 700 companies across industry and institutional investment to discuss the future investment landscape of biotechnology. Sessions focus on topics such as therapeutic advancements, market outlook, and policy priorities.

Insilico Medicine is a leading, clinical stage AI-driven drug discovery company that has raised over $400m in investments since it was founded in 2014. Dr. Kamya leads the development of the Company’s end-to-end generative AI platform, Pharma.AI from Insilico’s AI R&D Center in Montreal. Using modern machine learning techniques in the context of chemistry and biology, the platform has driven the discovery and design of 30+ new therapies, with five in clinical stages – for cancer, fibrosis, inflammatory bowel disease (IBD), and COVID-19. The Company’s lead drug, for the chronic, rare lung condition idiopathic pulmonary fibrosis, is the first AI-designed drug for an AI-discovered target to reach Phase II clinical trials with patients. Nine of the top 20 pharmaceutical companies have used Insilico’s AI platform to advance their programs, and the Company has a number of major strategic licensing deals around its AI-designed therapeutic assets, including with Sanofi, Exelixis and Menarini. 

 

About Insilico Medicine

Insilico Medicine, a global clinical stage biotechnology company powered by generative AI, is connecting biology, chemistry, and clinical trials analysis using next-generation AI systems. The company has developed AI platforms that utilize deep generative models, reinforcement learning, transformers, and other modern machine learning techniques for novel target discovery and the generation of novel molecular structures with desired properties. Insilico Medicine is developing breakthrough solutions to discover and develop innovative drugs for cancer, fibrosis, immunity, central nervous system diseases, infectious diseases, autoimmune diseases, and aging-related diseases. www.insilico.com 


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