JP Morgan Healthcare Conference

Traditional Media

1. Sanofi Sees No Opening to Actelion Talks After J&J Re-Entry

   Jan 9, 2017 | Bloomberg

   By James Paton
   
   
   Sanofi doesn’t see an opening to make a deal with Actelion Ltd. while the Swiss target is in acquisition talks with U.S. drug giant Johnson & Johnson, said Elias Zerhouni, the French drugmaker’s global research and development president.
2. Actelion pulls out of health conference amid M&A activity

   Jan 4, 2017 | Reuters

   Swiss biotech group Actelion has cancelled a scheduled appearance at next week's JP Morgan healthcare conference in San Francisco, it said on Wednesday.
3. More Than 100 Biopharma Execs Are Pushing for More Gender Diversity in the Industry

   Jan 11, 2017 | Fortune

   By Sy Mukherjee
   
   
   At least 100 biopharma executives from major drug makers like Eli Lilly (LLY, +0.45%), Johnson & Johnson (JNJ, +0.17%), Bayer, Novartis (NVS, -0.40%), and a slew of biotech CEOs have signed an open letter advocating strategies to get more women involved in the life sciences.
4. Twirling ballerinas, an acrobat, and love potion: inside a party on the first night of JPM

   Jan 10, 2017 | STAT News

   By Rebecca Robbins
   
   
   On a night when pricey booze flowed at drug industry-sponsored parties all over this city, the bar was high for the most lavish bash of the evening. But the party thrown Monday night by Johnson & Johnson’s innovation unit cleared it. Easily.
5. Johnson & Johnson CEO's Fireside Chat: 5 Things You Need to Know

   Jan 10, 2017 | The Motley Fool

   By Keith Speights
   
   
   Most CEOs presenting at the J.P. Morgan Healthcare Conference talk primarily about what their companies have done recently and what's new with their pipelines. But most CEOs don't run the world's largest healthcare company, as Johnson & Johnson (NYSE:JNJ) CEO Alex Gorsky does.
6. Day 2 at JP Morgan: Change is coming, but which drugmakers will stay on top?

   Jan 11, 2017 | Medical Marketing & Media

   By Jaimy Lee
   
   
   The pharmaceutical leaders presenting at the JP Morgan Healthcare Conference vary in their industry outlooks: some are hopeful, and others are uncertain, but most admit that change is coming, whether or not they want it.
7. Day 1 at JP Morgan: Pricing is top of mind for pharma CEOs

   Jan 10, 2017 | Medical Marketing & Media

   By Jaimy Lee
   
   
   Fortune described the annual JP Morgan Healthcare Conference as the biopharmaceutical industry's Burning Man. From what I can tell so far, that's the perfect way to characterize this sprawling, crowded event.
8. Your JPM need-to-know: Regeneron's PCSK9 patent rant, Valeant's sell-offs and more

   Jan 10, 2017 | FiercePharma

   By Tracy Staton
   
   
   To the biopharma industry, J.P. Morgan's annual healthcare investor conference is like a bazaar of news, commentary and behind-the-scenes meetings that—who knows?—might yield M&A fruit later this year. It happened for Actavis, when former CEO Paul Bisaro chatted with then-Forest Laboratories chief Brent Saunders at the 2014 meeting. And that executive duo ended up acquiring Allergan in a $66 billion deal last year.
9. Don’t get too excited about U.S. corporate tax reform, pharma. It may not all be pretty

   Jan 10, 2017 | FiercePharma

   By Carly Helfand
   
   
   Here at the JPMorgan Healthcare Conference, some drugmakers are speaking up about the corporate tax reform that could take place under U.S. President-elect Donald Trump. Amgen CEO Robert Bradway, for one, proclaimed Monday that Amgen "will be a clear beneficiary of that change.”
10. What'd you miss at J.P. Morgan? Everything you need to know, all in one place

    Jan 16, 2017 | FiercePharma

    By Tracy Staton
    
    
    The sun has set on the J.P. Morgan Healthcare Conference, but we're still digesting the multicourse meal of news and commentary we've come to expect from the meeting each year. Here's our menu of JPM coverage, in case you missed any of your favorite dishes.
11. Johnson & Johnson's (JNJ) Management Presents at JPMorgan Health Care Conference (Transcript)

    Jan 9, 2017 | Seeking Alpha

    Good afternoon, everybody. I’m Mike Weinstein from the JPMorgan Health Care team, and it’s my pleasure to introduce Alex Gorsky, who I think needs no introduction, is Chairman of the Board and Chief Executive Officer of Johnson & Johnson. And Alex and I last year, we did a fireside chat and we thought maybe we’d do the same thing again this year.
12. Johnson & Johnson: Should It Be In Your 2017 Dividend Portfolio?

    Jan 11, 2017 | Seeking Alpha

    s the United States makes ready for the inauguration of President-Elect Trump, companies like Johnson & Johnson (NYSE:JNJ) are likewise considering their strategic alternatives as the reality of business-friendly tax reform looms.
13. Johnson & Johnson CEO Gorsky Discusses What Drove the Stock in 2016

    Jan 9, 2017 | The Street

    By Amanda Schiavo
    
    
14. JPM: Saunders, Pops, others talk drug pricing

    Jan 10, 2017 | BioPharma Dive

    By Lisa LaMotta
    
    
    Allergan CEO Brent Saunders shared a stage with Alkermes CEO Richard Pops, PhRMA Chairman Joaquin Duato, President of ICER Steve Pearson and CEO of PhRMA Steven Ubl at the J.P. Morgan Healthcare Conference in San Francisco to talk about drug pricing.
15. Fearing a Trump Attack, Drug CEOs Walk a Pricing Tightrope

    Jan 11, 2017 | Chief Executive

    By Ross Kelly
    
    
    Huddled this week at a major conference in San Francisco, many are treading carefully ahead of Donald Trump’s inauguration to avoid one of the president-elect’s signature Twitter tirades.
16. Trump Tax Policies Could Make J&J a Bigger Threat in 2017 (Video)

    Jan 10, 2017 | The Street

    By Sarah Pringle
    
    
    Johnson & Johnson (JNJ) CEO Alex Gorsky has hinted to investors how potential tax reform might impact the company's strategic planning in 2017 and beyond, and offered his thoughts about the drug pricing controversy that weighs on the industry.
17. Johnson & Johnson Could Benefit From Tax Reform (Video)

    Jan 10, 2017 | The Street

    By Tony Owusu
    
    
    Johnson & Johnson (JNJ) is optimistic that potential tax reform initiatives from President-elect Donald Trump could enact will be beneficial for the company, CEO Alex Gorsky told attendees of the J.P. Morgan Healthcare Conference in San Francisco.
18. This is Why Actelion (ALIOF.PK) Canceled Its Appearance at the J.P. Morgan Conference Next Week

    Jan 6, 2017 | BioSpace

    By Mark Terry
    
    
    The saga of Swiss-based Actelion Pharmaceuticals (ALIOF.PK) takes another turn, although it’s hard to know exactly what it means. With the JP Morgan Healthcare Conference being held in San Francisco next week, all eyes are on biopharma companies, hoping for a peak at industry trends for 2017. Except Actelion canceled its scheduled appearance.
19. At Annual JP Morgan Conference, An Industry Wonders What Comes Next in a Trump Presidency

    Jan 18, 2017 | D CEO Healthcare

    By Hubert Zajicek
    
    
    The group doesn’t get smaller and the hallways don’t get any larger here in the Westin Hotel, which was sardine-packed with 10,000 attendees of JP Morgan’s annual healthcare conference in the city’s Union Square neighborhood.
20. Biotech Roundup: JPM Deals, Gender Diversity, PCSK9 Battle & More

    Jan 13, 2017 | Xconomy

    By Ben Fidler
    
    
    This past week, the biopharma industry made its annual January pilgrimage to San Francisco for the J.P. Morgan Healthcare Conference. 2016 was a whirlwind year in biotech, and the biopharma gods rewarded attendees with a multi-day monsoon to slog through to get from one meeting to the next.
21. Notes From The JPM ’17 Vortex: Trump, Rainstorms & The Price You Pay

    Jan 16, 2017 | Xconomy

    By Alex Lash
    
    
    The week of frenetic data sharing, deal talking, and party hopping of the J.P. Morgan Healthcare Conference—and the events that have mushroomed around it—took a punch to the gut just as most attendees were wrapping up and checking their outbound flight status.

Broadcast Media

22. Power Lunch Video Clip

    Jan 9, 2017 | CNBC

    View Clip Here: http://app.criticalmention.com/app/#clip/view/25654107?token=5567a44b-adfb-4141-99f3-adec35deb954

Traditional Media

1. Sanofi Sees No Opening to Actelion Talks After J&J Re-Entry

   Jan 9, 2017 | Bloomberg

   By James Paton

   Sanofi doesn’t see an opening to make a deal with Actelion Ltd. while the Swiss target is in acquisition talks with U.S. drug giant Johnson & Johnson, said Elias Zerhouni, the French drugmaker’s global research and development president.

   “There is an exclusive relationship right now with J&J,” Zerhouni said Monday during an interview with Bloomberg Television’s Erik Schatzker at the J.P. Morgan Healthcare Conference in San Francisco. “At this moment, you have to abide” by those terms, he said.

   Actelion and J&J returned to the negotiating table last month, entering exclusive discussions about a possible transaction. Sanofi had been in advanced talks to buy Actelion after J&J initially dropped out, according to people familiar with the matter. 

   Zerhouni, a former Actelion board member, still sees the company as a fit with Sanofi’s portfolio of drugs because of its strength in pulmonary hypertension and focus on rare diseases.

   “It is really an innovative company,” he said. “You have to open up to the best, and Actelion is one of the best.”Praluent Fight

   Sanofi is also fighting a legal battle after a U.S. court last week blocked the French company and its partner Regeneron Pharmaceuticals Inc. from selling their cholesterol-lowering drug Praluent in the U.S. Rival Amgen Inc. has contended that the sales infringe its patents for a related drug. 

   A federal judge on Monday extended a stay of the ruling by 15 days, giving Sanofi and Regeneron 45 days to conduct an appeal before they have to stop selling Praluent.

   “It’s a fundamental issue of whether or not intellectual property trumps public health and the public interest,” Zerhouni said. “This discussion is not over. In my view, we believe very strongly this is an invalid patent and we will fight it.”

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2. Actelion pulls out of health conference amid M&A activity

   Jan 4, 2017 | Reuters

   Swiss biotech group Actelion has cancelled a scheduled appearance at next week's JP Morgan healthcare conference in San Francisco, it said on Wednesday.

   A spokesman gave no reason for the move, which comes after Actelion entered exclusive talks with Johnson & Johnson (J&J) last month about a possible transaction.

   Chief Executive Jean-Paul Clozel has represented Actelion at the high-profile conference in the past, but it was not immediately clear who was set to speak this year.

   People familiar with the matter told Reuters last week that J&J was negotiating a deal that would separate Actelion's commercialised portfolio from its research and development assets. Any deal could emerge by late this month.

   The deal structure would allow J&J to acquire Actelion with a cash offer in the region of $260 per share. It also would let Actelion shareholders benefit financially from Actelion's R&D pipeline, the people said.

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3. More Than 100 Biopharma Execs Are Pushing for More Gender Diversity in the Industry

   Jan 11, 2017 | Fortune

   By Sy Mukherjee

   At least 100 biopharma executives from major drug makers like Eli Lilly (LLY, +0.45%), Johnson & Johnson (JNJ, +0.17%), Bayer, Novartis (NVS, -0.40%), and a slew of biotech CEOs have signed an open letter advocating strategies to get more women involved in the life sciences.

   The letter was published amid the ongoing J.P. Morgan Healthcare conference in San Francisco, an industry spectacle that my colleague Cliff Leaf has referred to as "biopharma's Burning Man." And there's some recent history that explains the very public effort.

   Last year, the communications firms LifeSci Advisors got into some serious hot water during the JPM health conference for hiring scantily-clad women to "entertain" the largely male crowd at a cocktail party that it threw. The incident drew outrage from male and female biopharma professionals alike, who pointed out that it underscored the inherent gender gap in the life sciences.

   LifeSci Advisors apologized profusely (it's no surprise that founding partner Mark Rice is one of the signatories on this year's letter). But the point had already been made - women are extremely underrepresented in the biopharma industry, both in the executive and non-executive ranks.

   This year's open letter advocates five guiding principles and 10 best practices to promote gender diversity, including: getting executives and boards to make gender diversity a priority; establishing mentorship programs that connect women with life sciences executives; and doing a better job tracking where female talent goes within biopharma firms, among other suggestions.

   Sarepta Therapeutics (SRPT, +2.59%) chief Edward Kaye, Biogen (BIIB, +0.18%)R&D EVP Michael Ehlers, AbbVie vice president Lisa Olson, and Teva (TEVA, +0.68%) SVP of corporate development Ivana Magovčević-Liebisch are just some of the bigwigs who signed the letter.

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4. Twirling ballerinas, an acrobat, and love potion: inside a party on the first night of JPM

   Jan 10, 2017 | STAT News

   By Rebecca Robbins

   On a night when pricey booze flowed at drug industry-sponsored parties all over this city, the bar was high for the most lavish bash of the evening. But the party thrown Monday night by Johnson & Johnson’s innovation unit cleared it. Easily.

   Held under dramatic colored lighting in the stately and cathedral-esque Asian Art Museum, the Johnson & Johnson JLABS bash drew hundreds of executives and investors in town for the industry’s annual J.P. Morgan Healthcare Conference.

   Rest of article behind paywall. Accessible here: https://www.statnews.com/2017/01/10/party-jpm/

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5. Johnson & Johnson CEO's Fireside Chat: 5 Things You Need to Know

   Jan 10, 2017 | The Motley Fool

   By Keith Speights

   Most CEOs presenting at the J.P. Morgan Healthcare Conference talk primarily about what their companies have done recently and what's new with their pipelines. But most CEOs don't run the world's largest healthcare company, as Johnson & Johnson (NYSE:JNJ) CEO Alex Gorsky does.

   Gorsky sat down at the J.P. Morgan conference on Monday for what was billed as a "fireside chat," discussing a range of topics. Here are five things you need to know from what he said.1. The future of healthcare

   Gorsky said that he's "excited" about the future of healthcare. In particular, he cited the unprecedented innovation that's going on in the industry right now, stating that "never has my plate been so full with new opportunities." He credited this wave of innovation to the billions of dollars invested in research, including, especially, gaining a deeper understanding of the human genome.

   Consumers will play an increasingly important role in the future, according to Gorsky. In particular, consumers' access to information about their healthcare options could change how healthcare services are obtained.2. Opportunities for the pharmaceuticals segment

   Gorsky said that looking for new opportunities is "one of the most important jobs we have." He noted that J&J has a "bottom-up process" for evaluating new product opportunities that "can be chaotic."

   Johnson & Johnson's team looks at several factors when considering a new opportunity. Gorsky said that the company always starts with patient need. It then takes a look at the financial impact, especially focusing on whether or not J&J can create value. Finally, the company looks at whether it can win -- defined as being No. 1 or No. 2 in a particular area.

   While J&J intends to focus on the five therapeutic areas where it currently operates (immunology, cardiovascular and metabolic disease, infectious diseases, vaccines, and neuroscience and oncology), Gorsky said that he doesn't want "to be dogmatic" about it. If a great opportunity arises in a different area, J&J won't necessarily turn away.3. Drug pricing

   When asked about the role of pricing in the pharmaceutical industry, Gorsky insisted that he "doesn't think it's a pharmaceutical pricing issue" but instead "a healthcare pricing challenge." Although he didn't specifically address current controversies over drug pricing, he said that the industry "has a responsibility to be responsible actors."

   Gorsky noted that healthcare pricing in general is responding to major changes in demand. Demographic trends, particularly the aging population, are driving demand higher over the next few decades. This significantly increased demand for healthcare services is putting a lot of pressure on the healthcare system, so pharmaceutical companies must innovate more effectively to show their value. Gorsky said that the days of drugmakers being rewarded for incremental innovation are over.

   J&J makes sure to invest more into research and development than it receives in price increases. That's important when discussing price increases, in Gorsky's view. He said that around 70% of the company's sales growth stems from new product launches or increased volume, with the rest coming from increased prices.4. Potential political changes

   Two major changes could be on the way with a new president and new Congress in Washington, both holding the potential to greatly impact the pharmaceutical industry: Obamacare could be repealed, and U.S. corporate tax policies could be reformed.

   Gorsky didn't seem too concerned about the prospects of Obamacare being repealed. He noted that while initial expectations were that the healthcare-reform legislation would drive higher hospital volumes, Johnson & Johnson hasn't seen any significant increase in hospital volume.

   He was cautiously optimistic about the prospects for corporate tax reform, but warned that J&J's effective tax rate could actually increase marginally. However, he said that any lowering of rates would help make the company more competitive. Gorsky is especially interested in seeing what changes are made to encourage companies to repatriate cash -- and perhaps earnings as well.5. Lower-growth J&J segments

   It's no secret that Johnson & Johnson's pharmaceutical business is driving the company's growth. Gorsky was asked about his view of the two segments with lower growth: medical devices and consumer.

   Gorsky acknowledged that the medical-device business had experienced significant changes that curtailed its growth. However, he said that J&J views this as "an opportunity to rethink the way we want to operate." He added that the medical devices segment has refocused its portfolio, and he thinks the segment is now positioned for a rate of growth at, or higher than, the overall market growth rate for the industry.

   As for J&J's consumer segment, Gorsky said that the group "has done an outstanding job." He thinks that the business segment is positioned well for future growth.Looking ahead

   Johnson & Johnson will continue to be a microcosm of the entire healthcare system. The company's scope extends across much of the healthcare industry, from consumer products to medical devices to prescription drugs.

   If there is a single takeaway from Alex Gorsky's comments for investors, I'd say it's that Johnson & Johnson has the capability to adapt to change -- whatever that change might be. Regardless of what's going on economically, politically, or scientifically, J&J has the resources and the background to adapt. That should give J&J shareholders reason to sleep peacefully.

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6. Day 2 at JP Morgan: Change is coming, but which drugmakers will stay on top?

   Jan 11, 2017 | Medical Marketing & Media

   By Jaimy Lee

   The pharmaceutical leaders presenting at the JP Morgan Healthcare Conference vary in their industry outlooks: some are hopeful, and others are uncertain, but most admit that change is coming, whether or not they want it.

   “We're seeing reform taking place with the customers,” J&J CEO Alex Gorsky said Monday.

   On the way to the Westin Tuesday morning, my Uber driver, asking me about the conference, wondered who is at fault for high drug prices. It depends who you ask, I said. Insurance companies say it's profit-driven drugmakers, while pharmaceutical companies say too much cost-sharing has shifted to the consumer.

   But Gorsky may be right. Customers of all kinds are demanding change.

   This may be one reason why he and Novartis CEO Joe Jimenez separately said they expect to see more risk-sharing and outcomes-based contracts between drugmakers and insurers. And it's clear that change is afoot in the healthcare industry — and that the manner in which companies respond to uncertainty and new patient demands is likely to decide their longevity in the market.

   Here are a few more examples of change we can expect to see this year, as well as one we won't be seeing.

   1. Sanofi wants to be the next OTC leader.

   The French drugmaker recently closed its $25 billion asset swap with Boehringer Ingelheim, and it is now the proud owner of six “iconic” over-the-counter brands, a move that puts the company among the top three players in the fragmented OTC market, Sanofi CEO Olivier Brandicourt said Tuesday. What's so great about OTC brands? Well, for one, there is no patent cliff. The brands are “ever-lasting,” in Sanofi speak, and they also create more sustainable revenue streams. The size of the portfolio also likely means more synergies in advertising and promotional activities.

   2. Valeant's serial acquisition days are over.

   “We've done a lot of M&A in the past,” Valeant CEO Joseph Papa said Tuesday, before stressing that the company is no longer going to rely on growth through acquisition. The “New Valeant” — that was the name of the presentation — will be focused on new products, finding hidden assets, and paying down debt. It is also working to stabilize its sales force, bringing down the turnover rate of 11% from May 2016 to roughly 6% now. A day earlier, Valeant disclosed that it would divest Dendreon Sanpower for $820 million and three skincare brands — CeraVe, AcneFree, and Amb — to L'Oreal for $1.3 billion, as if to reinforce the point Papa would make on Tuesday. Papa went so far as to create a fact-and-fiction summary defending the New Valeant. Example: “Valeant doesn't do R&D.” Papa: R&D spending is going up, by 38% this year. Another example: “Valeant just buys companies and raises prices.” Papa: The company has committed to single-digit price increases for its U.S. branded drugs.

   3. Pfizer isn't budging when it comes to drug pricing.

   The drugmaker has been insistent in its position on drug pricing, which argues against changing — unlike companies like Allergan and Novo Nordisk, which have pledged to limit price increases, and Johnson & Johnson, which said this week it plans to publicly detail average drug price increases for its prescription drugs. Pfizer CFO Frank D'Amelio reiterated comments made by CEO Ian Read in December at the Forbes Healthcare Summit. (Read did not attend the Pfizer session on Tuesday.) In short, they believe that because drug spending as a percentage of total healthcare spending hasn't changed much in recent decades, it's not up to the pharmaceutical industry to address concerns about how drugs are priced. Their beef is that out-of-pocket costs for patients are significantly higher when filling a prescription (15%) than when visiting a hospital (3%), and thus they view it as a system-wide issue. “We don't anticipate any major changes in how we do drug pricing,” D'Amelio stated.

   4. No one should have to choose between hospice care or going bankrupt.

   But at least once a week in the U.S. someone must make that choice. People with health insurance are less like to die of cancer than those who do not have coverage. Where you live decides whether you live. This is according to Greg Simon, executive director of the White House Cancer Moonshot Task Force, who argued that there are too many unconscionable choices when it comes to cancer care. Speaking at the nearby StartUp Health Festival, Simon said he also wants to see more attention paid to the role of nutrition in preventing cancer and during the treatment of cancer.

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7. Day 1 at JP Morgan: Pricing is top of mind for pharma CEOs

   Jan 10, 2017 | Medical Marketing & Media

   By Jaimy Lee

   Fortune described the annual JP Morgan Healthcare Conference as the biopharmaceutical industry's Burning Man. From what I can tell so far, that's the perfect way to characterize this sprawling, crowded event.

   An estimated 9,000 people arrived in San Francisco this week, with plans to attend the conference as well as the myriad supporting events filling the city. About 450 companies are expected to present over the next four days, and the Westin St. Francis hotel on Monday was crowded with a mix of Secret Service personnel preparing for Vice President Joe Biden's talk and a sea of blue and gray suits.

   There are lines everywhere — to enter a room, to leave a room, to get on the elevator, to buy a coffee, to throw away your coffee cup, to check your coat. People push a little when it's time to board the elevators.

   See also: Drugmakers, facing pricing criticism, sell cures in new ads

   There is also a general feeling of camaraderie. “Do you want a coffee?” asked the CFO of the small Finnish biotech I happened to be sharing a table with in the packed hotel lobby. “Are you going to the tweet-up?” asked a reporter at The Wall Street Journal.

   No one is here to make friends, though. They came because the CEO of every major (and minor) pharma, biotech, PBM, pharmacy retailer, and public and not-for-profit health system is here, as are their investors, their venture capitalists, and the journalists who cover them.

   And if one theme emerged for drugmakers on day one of the 35th annual JP Morgan Healthcare Conference, it was this: The questions being asked about how drugs are priced are weighing heavily on pharma CEOs, and they know that the issue is not going away anytime soon.

   Novartis CEO Joe Jimenez went so far as to remind investors that the drugmaker generates one-third of its business in the U.S., unlike many of its competitors that get half of their revenue from the U.S. “The changes we have made internally and externally will position us well,” he said Monday. “We have a lower risk profile.”

   Later in the day, Johnson & Johnson CEO Alex Gorsky made similar remarks, noting that at the same time that the demand for healthcare services and goods is growing there is “increasing vigilance” and “increasing scrutiny” around drug prices, particularly for cancer therapies. “It's our responsibility to be responsible actors,” he said.

   1. It should come as no surprise, then, that Novartis's Jimenez is not one to mince words. “Entresto was a bit of a disappointment,” he said. 

   Sales of the closely watched heart-failure drug, approved in mid-2015, have been slower than expected, despite the range of initiatives — including numerous risk-sharing deals with insurers and a handful of campaigns, including a direct-to-consumer ad — put into play by Novartis. But favorable treatment guidelines in the U.S. and Europe are promising, Jimenez said, and Novartis has invested in a primary-care field force in the U.S. market that is up and running. “Entresto is back on the right track,” Jimenez said. “It's not going to be a rocket ship like Cosentyx, [but] it will become a blockbuster.

   2. If drugmakers have any lingering doubts about the purchasing power and influence of integrated delivery networks, it's time to think again. 

   Kaiser Permanente, a not-for-profit health plan and hospital network mainly serving California, is one such example. Kaiser Permanente CEO Bernard Tyson said last year the hospital system employed 18,000 physicians, who wrote 78.3 million prescriptions and delivered 101,000 babies. Its members and patients refilled 19.3 million prescriptions in 2016. But the stat that got the most attention in the elevator after Tyson's talk was this one: Of the 100 million primary-care visits conducted each year, 52% were done virtually.

   3. Gilead Sciences' Truvada for pre-exposure prophylaxis is next in line for a commercial-support boost in 2017. 

   Gilead Sciences CEO John Milligan told a standing room-only crowd that a U.S. sales force team would be deployed in support of the preventative HIV drug later this year. Between 80,000 and 90,000 patients in the U.S. are currently taking the drug as a preventative tool against HIV. But that's not all Gilead has in store on the marketing front. Milligan noted the mix of advertising support Gilead plans to put behind its HCV franchise — which includes the blockbusters Harvoni and Sovaldi — with plans for unbranded and branded campaigns in the U.S. and Japan.

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8. Your JPM need-to-know: Regeneron's PCSK9 patent rant, Valeant's sell-offs and more

   Jan 10, 2017 | FiercePharma

   By Tracy Staton

   To the biopharma industry, J.P. Morgan's annual healthcare investor conference is like a bazaar of news, commentary and behind-the-scenes meetings that—who knows?—might yield M&A fruit later this year. It happened for Actavis, when former CEO Paul Bisaro chatted with then-Forest Laboratories chief Brent Saunders at the 2014 meeting. And that executive duo ended up acquiring Allergan in a $66 billion deal last year.

   In that enormous marketplace of information at #JPM2017, here's a sampling of the news our reporters considered worth your attention.

   Regeneron CEO Len Schleifer wasn’t shy about criticizing the recent PCSK9 patent ruling that threatens to push his company's drug, Praluent, off the market—or about holding rival drugmaker Amgen responsible. Schleifer said he was “surprised” Amgen feels “they have to take these products from patients and disrupt it right now.” And Schleifer's not the only one taking issue with the court's decision, or with Amgen's decision to play hardball. News

   Price-hike poster child Valeant is using the J.P. Morgan Healthcare Conference to make a big statement about its arduous turnaround, which is largely focused on paying down its $30 billion debt burden. On Tuesday, the company announced a couple of long-awaited asset sales that will yield $2.1 billion in cash for paying down debt. Report

   Last week, Teva had to slash more than $1 billion off the 2017 sales guidance it announced last July. On Monday at the JPMorgan Healthcare Conference, CEO Erez Vigodman explained exactly how the company arrived at the off-base forecast in the first place. Thing is, observers aren't so sure Teva can do better going forward. Story

   And about potential U.S. tax reform: Drugmakers are speaking up about changes that could take place under U.S. President-elect Donald Trump. Amgen CEO Robert Bradway, for one, proclaimed on Monday that Amgen "will be a clear beneficiary of that change,” while Pfizer execs said they expect to benefit, too. But as J&J chief Alex Gorsky pointed out, for other companies, it may not be so black and white. Some pharmas might actually see their tax rates go up. Article

   Everyone wanted to listen to Gilead Sciences at the J.P. Morgan Healthcare Conference in San Francisco on Monday, but though the company talked up its HIV and NASH programs, it did not come up with what many investors most wanted to hear: a major deal. Story

   Celgene faced big expectations heading into JPM, and though it disclosed street-beating 2016 earnings on Monday—and a growth forecast of 18% for 2017—shares were down on the news. CEO Mark Alles talked up its collaborations, and for those keeping track, execs said Celgene is on its way to hitting a 2020 revenue goal of $21 billion-plus. Article

   After flying in semi-stealth mode for some time now, causing accusations of secrecy, mRNA biotech Moderna finally shone some light onto its pipeline and delivery technology. The company highlighted the five assets it currently has in the clinic; shared updates on its work with Merck and AstraZeneca; and outlined its focus on immuno-oncology, infectious diseases and cardiovascular disease.

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9. Don’t get too excited about U.S. corporate tax reform, pharma. It may not all be pretty

   Jan 10, 2017 | FiercePharma

   By Carly Helfand

   Here at the JPMorgan Healthcare Conference, some drugmakers are speaking up about the corporate tax reform that could take place under U.S. President-elect Donald Trump. Amgen CEO Robert Bradway, for one, proclaimed Monday that Amgen "will be a clear beneficiary of that change.”

   But as Johnson & Johnson CEO Alex Gorsky warned, for others, it won’t be so black and white.

   “There are going to be some things that all of us really like that are likely going to go away,” he cautioned, and “there’s going to be other things that we don’t necessarily like that may be introduced" in a new set of tax rules.

   Right now, there’s a lot of mystery in particular surrounding what might be done to allow companies to bring home money they’re storing overseas without paying tax penalties, he noted.

   “Is it just the cash that’s abroad, or is it in fact all of the earnings?" Gorsky asked. "What exactly is that rate? Is it 8%? Is it 3%? Is it 5%? What’s the timeline that might be associated with that? Is there a phasing period so you can manage it appropriately?

   “At the end of the day it could mean for a company like Johnson & Johnson—and I would dare say others—that your tax rate could go up marginally,” he said.

   That’s not to take away from the potential benefits tax reform could bring to pharma companies. Tax considerations might be less important under a new scheme, he said. “If changing up the rules brings drugmakers more flexibility in the long run to be able to deploy capital in ways that are not necessarily so heavily influenced by the tax regulations versus the strategic and actual financial outcomes, I think that’s a real positive,” Gorsky said.

   Much attention has been focused on the cash-repatriation issue in the wake of a super-slow 2016 on the M&A front. Analysts are predicting that Trump’s reforms could kick-start dealmaking in the sector. However, Trump has also said he intends to bring down drug prices—a scenario the industry wouldn't be too fond of.

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10. What'd you miss at J.P. Morgan? Everything you need to know, all in one place

    Jan 16, 2017 | FiercePharma

    By Tracy Staton

    The sun has set on the J.P. Morgan Healthcare Conference, but we're still digesting the multicourse meal of news and commentary we've come to expect from the meeting each year. Here's our menu of JPM coverage, in case you missed any of your favorite dishes. Fierce interviews

    Novartis CEO Joe Jimenez warned last year that tech was an area where pharma would have to “pay real attention.” Now, with Qualcomm and Google collaborations already set, CMO Vas Narasimhan tells FiercePharma that the Swiss drugmaker is scouting more high-powered digital partnerships to take on pressing pharma issues like the high cost of drug development. Interview

    Deal talk is hard to ignore at JPM—especially for a pair of the world’s biggest hemophilia drugmakers. Execs at Bioverativ, Biogen’s soon-to-be-spun-off hemophilia biz, are all too familiar with rival Shire's $32B deal for Baxalta, a newly spun-off pharma centered on hemophilia. Bioverativ's not interested in a sale, the execs say. And Shire CEO Flemming Ornskov says his company "doesn't need to" buy anything. Article

    Even as Big Pharma interest in cancer vaccine combos surges, Bavarian Nordic is intent on remaining an independent vaccine company, CEO Paul Chaplin told FiercePharma. That's because, he says, it's the “best and most fruitful way” to get the most out of the company's platform in a variety of disease targets. Interview

    Ionis CEO Stanley Crooke, fresh off his approval of Spinraza with Biogen, tells FierceBiotech that the company is seeking to get its heart drug volanesorsen in front of the FDA as soon as possible. It's also looking to work on a new alternative med with Biogen after dropping development of IONIS-DMPK-2.5-R. Story

    When the time comes to launch his company's new atopic dermatitis treatment dupilumab, Sanofi's Genzyme CEO David Meeker told FiercePharma that he has one key objective—and it isn't about sales numbers; he thinks those will take care of themselves. It's about building a rare-disease-style patient community to get the drug to the right patients, and only the right patients. Interview Big Pharma and Big Biotech news

    AbbVie CEO Richard Gonzalez joined the 10% price-hike pledge Wednesday, following Allergan and Novo Nordisk, as the drug pricing debate sent biopharma shares reeling once again. But other CEOs speaking at the J.P. Morgan Healthcare Conference criticized that trendy 10% limit as a poor answer to the industry's pricing woes. Story

    Sanofi CEO Olivier Brandicourt believes the French drugmaker has fixed the issues at a fill/finish plant in France that delayed its experimental rheumatoid arthritis drug sarilumab. Dupilumab is going through that same facility. Brandicourt says Sanofi and partner Regeneron should be back on track with their applications; Regeneron CEO Len Schleifer separately said he's looking for good news with a dupilumab decision later this quarter, thanks to progress already made at the Sanofi plant. Story

    After Regeneron CEO Len Schleifer took Amgen to task for trying to push his company's PCSK9 drug Praluent off the market in a patent dispute, Amgen hit back, saying Regeneron and its partner Sanofi had launched a drug "they had no right to manufacture or sell" and that they'd failed to prove their case in court. Schleifer said Amgen could have waited for the appeal to be heard at the Federal Circuit Court, "the place where these cases are really decided," but didn't. "Is that putting patients first?" Schleifer asked during his JPM presentation. "It’s no small wonder that our industry isn’t beloved, because we talk a lot about putting patients first, but I don’t think people always do." Updated story

    Celgene faced big expectations heading into JPM, and though it disclosed street-beating 2016 earnings on Monday—and a growth forecast of 18% for 2017—shares were down on the news. CEO Mark Alles talked up its collaborations, and for those keeping track, execs said Celgene is on its way to hitting a 2020 revenue goal of $21 billion-plus. ArticleM&A talk

    Pfizer’s dealmaking over the past few years follows a pattern: It likes buys that bring in new sales, and quickly. And executives say that's a trend they intend to continue. Looking for revenue growth “now or soon,” as CFO Frank D’Amelio said during a Tuesday fireside chat, is still the M.O. And if the company gets to repatriate overseas cash without a tax penalty under President-elect Trump, it'll have some serious firepower, he said. Report

    Everyone wanted to listen to Gilead Sciences at the J.P. Morgan Healthcare Conference in San Francisco on Monday, but though the company talked up its HIV and NASH programs, it did not come up with what many investors most wanted to hear: a major deal. StoryPipeline updates

    After flying in semi-stealth mode for some time now, causing accusations of secrecy, mRNA biotech Moderna finally shone some light onto its pipeline and delivery technology. The company highlighted the five assets it currently has in the clinic; shared updates on its work with Merck and AstraZeneca; and outlined its focus on immuno-oncology, infectious diseases and cardiovascular disease. Story

    Sarepta Therapeutics saw a 21% bump Tuesday after it announced a new, early-stage research deal in Duchenne Muscular Dystrophy and announced early results from its controversial med for the disease, Exondys 51 (eteplirsen). The drug brought in $5.4 million in Q4, after its fall approval, and 250 patients have started going through the process of winning reimbursement for the drug. Some analysts were unimpressed, however, saying that those numbers fell short of their expectations. Story

    Just three months ago, gene silencing specialist Alnylam was pummeled after deaths in a phase 3 clinical trial forced it to abandon its revusiran candidate for hereditary ATTR amyloidosis. Now, it is hoping to file its replacement candidate by the end of the year. Story.

    CureVac had some disappointing news to report to investors at the J.P. Morgan conference this week after its lead drug failed a phase 2b trial in prostate cancer. The German specialist in mRNA-based drugs said CV9014 was unable to meet its primary objective of improving survival in the trial, which involved patients with asymptomatic or minimally symptomatic metastatic castration-resistant prostate cancer (mCRPC). Story

    After raising $45 million in a Series D round in October, True North Therapeutics said it is boosting its development plan for TNT009 by starting extra tests in the U.S. and Europe for a rare form of autoimmune hemolytic anemia. It's also looking at TNT009 in additional Complement-driven rare diseases. Release.Specialty pharma news

    Price-hike poster child Valeant used the J.P. Morgan Healthcare Conference to make a big statement about its arduous turnaround, which is largely focused on paying down its $30 billion debt burden. On Tuesday, the company announced a couple of long-awaited asset sales that will yield $2.1 billion in cash for paying down debt. Report
    
    Allergan CEO Brent Saunders is tired of hearing from investors that chin-fat buster Kybella’s launch isn’t going as well as, say, that of IBS-D med Viberzi or schizophrenia treatment Vraylar. “Kybella is not a pharmaceutical launch,” he stressed during a JPM presentation. “It’s a medical aesthetic launch. It’s a new market, and we know from looking at historical data of launching Botox and launching fillers that Year 2 is pivotal.” Story

    Last week, Teva had to slash more than $1 billion off the 2017 sales guidance it announced last July. On Monday at the JPMorgan Healthcare Conference, CEO Erez Vigodman explained exactly how the company arrived at the off-base forecast in the first place. Thing is, observers aren't so sure Teva can do better going forward. StoryBig industry issues

    More than 100 biopharma leaders have signed an open letter advocating for the adoption of 10 best practices to increase gender diversity in the industry. Publication of the list, which was signed by people from Big Pharma, biotech and venture capital, comes one year after the hiring of models to attend a party at the J.P. Morgan conference sparked protests and soul-searching in the industry. Story
    
    And about potential U.S. tax reform: Drugmakers are speaking up about changes that could take place under U.S. President-elect Donald Trump. Amgen CEO Robert Bradway, for one, proclaimed on Monday that Amgen "will be a clear beneficiary of that change,” while Pfizer execs said they expect to benefit, too. But as J&J chief Alex Gorsky pointed out, for other companies, it may not be so black and white. Some pharmas might actually see their tax rates go up. Article

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11. Johnson & Johnson's (JNJ) Management Presents at JPMorgan Health Care Conference (Transcript)

    Jan 9, 2017 | Seeking Alpha

    Michael Weinstein

    Good afternoon, everybody. I’m Mike Weinstein from the JPMorgan Health Care team, and it’s my pleasure to introduce Alex Gorsky, who I think needs no introduction, is Chairman of the Board and Chief Executive Officer of Johnson & Johnson. And Alex and I last year, we did a fireside chat and we thought maybe we’d do the same thing again this year.

    And first off, Alex has the benefit of being the Chairman and CEO of the world’s largest healthcare company, and so probably has as good a perspective on the overall state of healthcare with so much that’s going on right now and would love to get your thoughts on big picture, 10,000-foot view, how are you feeling broadly about healthcare and before we bring it down to J&J?

    Alex Gorsky

    Sure. First of all, my team asked me to make this little reading before I get going, so if you’ll bear with me here for a minute since we are technically in our blackout period, I have to say that before I begin, please be aware that some statements made today will be considered forward-looking statements, and please refer to our SEC filings and particularly our 10-K, which discusses risks and uncertainties that could cause results to differ materially from those projected today.

    In addition, I may refer to non-GAAP measures. See our Web site at investor.jnj.com for reconciliations to comparable GAAP measures. Finally, all remarks regarding financial performance represent results through and including third quarter 2016. I will not be discussing our results for fourth quarter 2016.

    Michael Weinstein

    Well said.

    Alex Gorsky

    Okay. First of all, let me say Mike, thank you very much, and JPMorgan, it’s really impressive to see how this event has just mushroomed and exploded over the last 5 or 10 years. And I think very few people probably thought when you first decided to get healthcare together, but now when you think about the healthcare, the technology, when you think about the impact that the people in this room have on the American economy, let alone globally, the healthcare around the world, most importantly the impact that you, that we have the privilege of serving patients and consumers every day, it’s pretty remarkable. And so it’s great to be here and I love the fireside chat setup, not quite as formal but nonetheless I’ll try to make it as comprehensive.

    And secondly, before I get into comments, I just want to do a quick thank you to all the Johnson & Johnson leaders and retirees out in the audience as I look out there. There’s no way I could do my job, there’s no way we could do what we do at Johnson & Johnson without those leaders and the people that have gone before us to make the company what it is. But I guess in a nutshell what I would say, Mike, is I’m excited about the future in healthcare. I think that there’s a lot of uncertainty and there’s certainly going to be challenges ahead. But having been in this industry now for several decades and thinking about the different phases we’ve been through, being here today I think there’s a number of reasons to be excited, but obviously appropriately balancing that what I think some of the challenges that we have ahead.

    It starts really first of all which is science innovation, and I think by far the best part of my job is I get to sit in rooms all day long with a diverse array of some of the world’s best scientists seeing groundbreaking innovation across a number of different disciplines and domains from pharma to biotechnology to medical devices to consumer. And I can tell you never has my plate been so full with new opportunities, and it’s very different than from the '90s when we were on the 17th PPI and I’m sure people in this room were wondering is pharma ever going to show a breakthrough.

    Today, it’s just the opposite. It’s how are we ever going to make the right portfolio decisions. And look, I don’t think that’s an accident. I think it happened because the people in this room and the people in our industry have invested billions of dollars in understanding the genome and really understanding some of the underlying biology and pathophysiology of these conditions whether it’s in oncology, neuroscience, immunology. So I think it’s a very exciting time and I think it’s picking up. And what you see more and more is that while there’s one good opportunity, there may be five more opportunities the next day.

    And I think the balance of course to that is as we look around the world as more and more people are consuming more healthcare as we’re experiencing in our country, an aging population that I think is representative by the way of populations around the world, particularly those over 65, the increasing consumption of healthcare by that segment, it’s just putting a lot of pressure on payers, on providers, on governments. And how we reconcile those things of course I think will be very important not only to our industry but frankly to the next several generations.

    Michael Weinstein

    So when you think about J&J and the breadth of the company in the opportunity set, talk a little bit about the process of J&J of portfolio investments? You have so many opportunities to invest across so many different parts of your business. Can you talk a little bit about how you think about the opportunity set across pharmaceuticals, across medical devices and across consumer, and your ability to fund all the different opportunities that you see presenting in front of you?

    Alex Gorsky

    Sure. I think it’s one of the most important jobs that we have. And sometimes when we talk about portfolio, immediately you go to the hbr article - and you see the X and Y-axis, you see another four different quadrants and how you’re going to qualify everything. And yes, that’s part of it, but it’s much more than that. It’s much more than a graph. It’s science, it’s chemistry, it’s passion, it’s emotion, it’s all those things. And then more often than not, the way that we look at it is we have a process by which we regularly and on an ongoing basis will consistently look at opportunities within our own portfolio. It’s externally sourced, it’s constantly being shuffled, it’s constantly being reprioritized based upon new data, new information that you may have. Frankly, it can be reprioritized just based upon the actionability, what’s going on in the market.

    But at the same time, it’s a bottoms-up process within our own organization. We have scientists around the world that are working every day on new opportunities, and so it can be chaotic. There’s a lot of discussion, there’s a lot of debate that takes place but it’s something that I would say we spend more time on than about any other major endeavor in our organization to ultimately make sure we have a line of sight to the new innovations that are going to make the biggest difference for patients and consumers that we think provide us with the new platform for the future. It always starts with patient need.

    And while I think it’s important for us and some great work has been done particularly over the last few years around focusing, for example, in our pharmaceutical group on the five therapeutic areas where we’ve chosen to play, as we talked about earlier in our session, while we think that that gives you a lot of capabilities, it increases your probability success, you shouldn’t be dogmatic about that. Because if a great opportunity presents itself, we’ve got a lot of clinical development capabilities, a lot of regulatory capabilities, a lot of reimbursement capabilities that we can put to bear on something that maybe an adjacency. So that’s the way we tend to think about it. Next, obviously we take a look financially at what something does in the portfolio. Is this something where we can really create value? And we’ve got to be able in some way be able to make a difference such that the opportunity in our hands does better than where it’s located at the given time. In here too, I think you’ve got to have the right balance of being disciplined, being very thoughtful. At the same time, as all of us know, it’s very easy to say no, and making sure that you get that balance in the financial models. I think third for us, the thing that we’ll take a look at is what’s our chance of really winning in a particular area? What gives us the right to be successful? Why do we believe that we can be number one or number two in a particular category? So those are some of the things that we think about when we’re looking at our portfolio.

    Michael Weinstein

    Let me ask you, there’s a lot of discussion mostly pharmaceutical companies today and this week will be around drug price, and it’s been obviously a very hot topic for the last year, year and a half in the industry. Can you give us your thoughts on the role of pricing in the pharmaceutical industry and how that might be changing, and obviously focus on the branded pharmaceutical industry?

    Alex Gorsky

    Sure. And look, I realize many, many people in this room are experts and have given a lot of thought and a lot of study to this topic of pricing, but I really don’t think it’s a pharmaceutical pricing issue necessarily that is the challenge, I think it’s a healthcare pricing challenge, and I think the reason for that as I was alluding to earlier, we’ve got a lot of new great innovation, a lot of great new technology, but one thing we also know is demand is going up over the next 20, 30, 40 years because of some of those underlying demographic factors, ageing factors that we’ve talked about. And that regardless of what decision we might make today is going to put a lot of pressure on the system. So I think that’s an important place to start.

    I think the second thing that we think a lot about is how do you make sure that you’re really innovating, that you’re bringing things out that make a big difference in the marketplace. So I think that the days of being rewarded for incremental innovation likely are passed, and it doesn’t mean that you’re always going to swing for the fences but it does mean that the clinical information, the value information that you have to provide to better characterize, to better describe the product is more important than ever. So that’s something that we spend a lot of time on. And then look, I think all of us in this industry, and we’re very fortunate, I think we’re blessed to work in an industry like this. It makes such a big difference for patients. It’s also our responsibility to be responsible actors.

    And so I think that regardless really of what happens with healthcare reform, what exact shape that it takes, we’re seeing changing customer needs, we’re seeing reform taking place with the customers who are demanding; yes, they want to understand the efficacy and side effect profile, but they also want to understand the value associated with it, and how do we transform some of our models in the right way is going to be very important going forward.

    Michael Weinstein

    So with that as the preamble, how is your strategy on market brands relative to pricing or how you think about investing on those [indiscernible] market brands? Does that change at all given the dynamics that are out there?

    Alex Gorsky

    No, I think we – if you look at our practice, it probably gives you a best indication of what our thinking is about pricing environment going forward. One, it starts with investing in R&D so that you can truly innovate, and we’ve made that a major strategic priority. We invested 13% of our net trade sales or over $9 billion last year. What we have realized during that timeframe is about 70% of our growth has come from either new product launches or volume increases and the remaining from pricing. And in fact if you look at the increases that we’ve gained in pricing, the amount that we’ve increased our R&D exceeds that. And so that’s been our approach and we would expect that to continue going forward. There’s a lot of confusion --

    Michael Weinstein

    That’s to the message there being that for all you may have captured incrementally from price, you’ve put that back into --

    Alex Gorsky

    Put it back into R&D, because we think that’s necessary for the long run. We all have to admit it’s a confusing system in this country and particularly when you look at the difference between gross and net pricing, and obviously that’s another component that we have to pay attention to. But overall, we would expect there to be increasing vigilance, increasing scrutiny I think of pricing especially when you get into areas – certain areas of oncology where we know for example that the potential for combination therapies – and look sometimes when you first launch the product, you don’t know what that second or third indication may be. And I think in areas like that, again depending on the absolute benefit, I think those are the areas that will challenge the industry, so thinking about new pricing models, thinking about new ways of expressing that value I think is going to be particularly important.

    Michael Weinstein

    In Washington right now they’re talking about ACA and what to do with the Affordable Care Act and we may have a repeal, we may have repeal and replacement, we may have nothing, and we’ll see what happens here in the next few weeks. But what impact do you think ACA has had across your three businesses; pharmaceuticals, devices, and consumer over the last couple of years? And given the uncertainty of what’s going to play out, does that influence your thinking at all in your planning for '17 and '18?

    Alex Gorsky

    Well, it’s been interesting to watch the ACA impact evolve over the past several years. And again like many people in this room, I think about three, four years ago when it was first being implemented, there was a lot of work done in their projections. And of course the theory was is that we would get more people insured in this country, we would therefore see more healthcare utilization, that the healthcare industry be it pharmaceutical companies or device companies should then expect to see an increase in volume and that would play itself through the system. Hence there were offsetting fees, rebates associated with that. And I think, we’ve seen a bit of a different outcome, and specifically we haven’t seen a significant increase in hospital volumes.

    And while I think for the first few years it was difficult to get a clear line of sight into what was happening in the hospital, because of course we were going through one of the most significant recessions that our country has ever gone through, we had a lot of people who were unemployed, we had a lot of people who were either un or underinsured, we had people that didn’t want to be out of their chair even if they needed a procedure because they were afraid that their physician may not be there. But it was one of the first times really that we saw elasticity in demand in healthcare along with the more general economy, things really slowed down. We saw especially in medical devices, you saw most categories go from 6%, 7%, 8% growth rates down to 2%, 3% in a very short period of time.

    What we’ve seen since then is hospital volumes have not rebounded significantly. It’s been in the low-single digits as you know from the different data sources and that’s by the way in terms of hospital admissions, in-patient admissions, surgical procedures. And given our position for example with suture which is used in the majority of procedures, tracking that volume gives us a pretty good indicator of what’s going on deeper in the system. We didn’t see a very significant increase in volumes. And again, I think one of the things we saw happening during that time was employers, like ourselves, like many of you were looking at ways to be more effective and more efficient with the care that you’re delivering even to our employees. And so you saw co-pays going up. You saw other changes taking place in the system.

    So I think overall the good news from the Affordable Care Act is that there’s about 25 million people who through some means, either through Medicaid expansion or through the exchanges, now have got some type of insurance. The good news is, is that in young adults up to 26-year-old can be covered under their parents’ plan. I think another component is that a lot of preexisting conditions now must be covered. The challenge of course was a lot of the other assumptions built into it I think were yet to come to fruition around truly bending the cost curve in some of these areas.

    If you look at what’s happened on the insurance exchanges, it’s been a bit of a mixed message. On one hand I think 75%, 80% of the policies are either bronze or silver plans. Those can have co-pays ranging from $2,500 to $5,000. And one of the issues we faced in the pharma area right now why it’s such a sticker shock is that the co-pays associated with pharmaceutical products can be four times what you see, for example, in a hospital procedure. And so I think for a couple of years there was a sense that while the ACA slowed healthcare spend, then we’ve seen an increase a bit more since then, but I think one way or another change will have to occur. And I think we’re seeing that now and I think that’s what the next couple of years are going to be about, how do we take this platform, preserve some of these benefits and I’d say the positive aspects, but then make some of the other necessary changes to be successful.

    Michael Weinstein

    And you were talking about the slowdown that we saw post the financial crisis in '08 into '09 and the economic crisis. I think a lot about the shift in financial burden onto the consumer over the last several years in the U.S. in healthcare system, that may be the biggest change we’ve seen. Do you think that healthcare consumption going forward is going to look more cyclical than it has historically? And that’s because if you think about what we saw in that last downturn, well, today versus that last downturn, deductibles are 50% higher than they were then, right. So they had a pocket cost of going to see a physician, of going into the hospital going to get that procedure done has all gone up. And today we’re at nine-year lows in unemployment, we’re 15-year highs in consumer confidence, we don’t know what that next downturn is going to look like but my suspicion is that it’s going to – we’re going to find out that healthcare consumption in the U.S. is maybe more fragile, more economically sensitive than it’s ever been before.

    Alex Gorsky

    Yes, I think one way or another the consumer is going to play a more important role in overall healthcare and it starts just with knowledge and information. With a few clicks now anyone can quickly get access to information that we couldn’t have imagined even 10 or 15 years ago. The second component of that is of course the economic burden associated with it, the co-payments. But Mike I think there’s a few ways to look at it. I think one is our economy is very different today than it was 10 years ago. And in this shift that has occurred from manufacturing to a service-based economy, service jobs having very different benefit constructs than what we traditionally saw with a lot of employees is a significant driver. I think that’s one aspect.

    I think the other thing that will be interesting to watch is remember the majority of all the healthcare that we consume takes place when we’re old. And once people are covered under Medicare, of course they enter into a different construct and so the majority of healthcare that’s going to be consumed will be in that segment. And so I think as Medicare changes, that will be another dynamic that we’ll have to think about. And then I think third, I think reimbursement schemes, the way that we pay for healthcare moving more from a fee-for-service to a times bundled episodes of care outcomes-based approach will be another dynamic that we’ll see more and more of.

    Michael Weinstein

    Let me ask you about another issue that’s a hot topic in Washington right now, which is corporate tax reform. It feels as if we’ve been talking about tax reform for years, certainly more than a decade but it feels like there’s a potential for some real action in 2017. Can you give us your thoughts on tax reform and what it might mean to Johnson & Johnson both from let’s go from a, daily access [ph] to your cash immediately and going forward and b, in terms of your tax rate and your strategic planning maybe c going forward?

    Alex Gorsky

    Sure. Yes, it’s certainly something that’s been in the news a lot lately and I think something that will continue to be in the news in the coming months. And as I was preparing for today, in fact I saw the article yesterday that – what was the term? I don’t think it was called destination-based cash flow tax adjusted for borders was one of the latest terms that was used. And I don’t have a crystal ball but we’ve been engaged with a lot of people in Washington D.C. and I think that look we have a very unique time now where as Dominic Caruso, our CFO, would say the sun, the moon and the stars may actually align to bring about significant change.

    Now when we talk about change at first there’s a lot of enthusiasm for it and I think we should be and I think the overall outcome really has the potential to be positive. But we should also understand that there are going to be some things that all of us really like that are likely going to go away. There’s going to be other things that we don’t necessarily like that may be introduced as part of that. Based upon the conversations that we’ve had, the opportunity to go to more of a territorial-based system will result in us being much more competitive hopefully taking out some of the anomalies that cause us to do inversions, other factors that may result in us being less competitive. So I think that could be a very good thing.

    Secondly, just lowering the rates so that we can be more competitive. Third, a very important issue is how do we repatriate some of the cash that’s abroad and there’s a lot of discussion taking place about that as it is just the cash that’s abroad or is it in fact all of the earnings. And for a company like us there’s a significant difference between those two numbers. What exactly is that rate? Is it 8%, is it 3%, is it 5%? What’s the timeline that might be associated with that? Is there a phase-in period so you can manage it appropriately?

    At the end of the day it could mean for a company like Johnson & Johnson and I would dare say others that your tax rate could go up marginally. However, I think if it provides us more flexibility in the long run to be able to deploy capital in ways that are not necessarily so heavily influenced by the tax regulations versus the strategic and actual financial outcomes, I think that’s a real positive. But there’s a lot of work that will need to be done in the coming months to make that happen.

    Michael Weinstein

    Okay. One final question, then we’re going to have to wrap, so specifically on J&J if you think about the progress over the last several years, so much of the growth of the company has been driven by the pharmaceutical business which we expect in the pharmaceutical business continue to be the number one driver of the company’s overall growth. How are you feeling about the device business and the consumer business ability to contribute incrementally to growth going forward and really reflect more of a balanced portfolio of growth?

    Alex Gorsky

    Sure. Well, Mike I wouldn’t submit that we still do have a pretty balanced portfolio and we are incredibly proud of a pharmaceutical performance especially over the last three to five years has been pretty remarkable to have double-digit growth throughout that period; launched more than 15 new compounds, at the same time have a very promising pipeline going forward. At the same time, we saw the secular shift in the medical device space that I talked about in the market and we frankly have used this as an opportunity to really rethink the way that we want to operate in the device area.

    And I think our team has done a great job on refocusing the portfolio in areas like general surgery, in areas like orthopedics, in areas like vision care making decisions that were going to be in other areas so that we could redeploy that capital into bigger, more significant growth opportunities and things that we think could make a bigger difference for patients. We made significant changes about our commercial model. And as healthcare systems, as hospital systems and even with the announcement this morning continue to evolve, making sure that we’re evolving our model as well so that we’re more service-oriented and that ultimately we can better meet their needs.

    We made a lot of those changes, we’ve done reorganization. I think that that group is positioned for a rate of growth that’s at or slightly above the market growth. And to do that being among the largest device companies is no small task. So I think that’s poised for very solid performance going forward. And look our consumer group has done I think an outstanding job of going from a consent decrease several years ago to fully working with the FDA, meeting all those standards and in fact helping to set a new standard with the same time, doing a number of acquisitions, a number of divestitures, being very focused on several areas.

    And again for all the reasons we talked about earlier, the consumer being very important, we think now our consumer business is positioned well for growth going forward. So look, we’re excited about 2017. We’re excited about between now and 2020. We think the diverse model that we have is the right model strategically, financially but look it’s not based on dogma or just strategy, it’s based on execution and we expect each of our businesses, let alone our collected businesses, to do better than their competitors, to invest for the future and ultimately to deliver shareholder value.

    Question-and-Answer Session

    Q -

    Michael Weinstein

    Perfect. We need to wrap. Thank you, Alex.

    Alex Gorsky

    Thank you.

    Michael Weinstein

    And we will continue discussion across the hall. Thank you.

    Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

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12. Johnson & Johnson: Should It Be In Your 2017 Dividend Portfolio?

    Jan 11, 2017 | Seeking Alpha

    Summary

    The looming change in the tax environment – initiated by the incoming Trump administration – should provide a Johnson & Johnson with many strategic opportunities.

    A lower corporate tax rate could mean marginally higher effective taxes on J&J (lowering earnings), they should nonetheless look forward to more share repurchases and possibly a special dividend.

    That being said, we expect that J&J will become more aggressive on the acquisitions once its overseas cash is repatriated.

    Ultimately, the expectation of higher shareholder returns and the potential for M&A should drive J&J’s stock this year, making it a valuable staple in any dividend investor’s portfolio.

    Analysis

    Johnson & Johnson's Cash Pile Could Come Home

    As the United States makes ready for the inauguration of President-Elect Trump, companies like Johnson & Johnson (NYSE:JNJ) are likewise considering their strategic alternatives as the reality of business-friendly tax reform looms.

    Specifically, President-Elect Trump's desire to reduce taxes on corporations overall - as well as give large American multinationals a one-time incentive to bring their overseas profits (in the form of significant cash reserves) back home - should provide corporate chiefs with ammunition to pursue acquisitions, in addition to boosting returns to shareholders in the form of dividends and share buybacks.

    J&J is no exception - by some estimates, it keeps all of its cash overseas to defer paying taxes. In a recent 'fireside chat' at the JP Morgan Healthcare Conference, J&J's CEO, Alex Gorsky, suggested that the odds of it repatriating its $40.4 billion cash trove has increased in light of Trump's victory.

    Dividend

    Before we look at how J&J will look like as Trump takes over, it's worth noting that it remains one of the strongest dividend plays among blue chips. To wit, while its 2.75% dividend yield is not particularly high, it remains above the averages of both the S&P500 and Dow Jones Industrial Average, both off which count J&J among their components. This yield is also around 70-basis points better than the average of its industry peer group.

    What's more, during an era when many of J&J's fellow Dow components like McDonald's (NYSE:MCD) and Coca-Cola (NYSE:KO) are intent on leveraging their balance sheets in order to return capital their shareholders, J&J has maintained its excellent financial metrics - its working capital and debt ratios are far better than that of its competitors and fellow S&P500 components. Consequently, it remains - together with Microsoft (NASDAQ:MSFT) - one of the two remaining U.S. companies that have 'AAA' credit ratings.

    Taxes, Taxes, Taxes

    The interesting thing about Trump's tax reform plan, at least as far as J&J is concerned, is that while it will provide a sort of amnesty on past earnings, it could actually result in marginally higher effective taxes for the company, according to Gorsky.

    J&J's current effective tax rate is 19.1%, which is a mix of the various tax rates in the jurisdictions where it recognizes its profits. Given Gorsky's statement, it's probably safe to say that the mix of his company's tax rates imputes a rather low one for the United States (because of deductions, exemptions and the like), such that the lower corporate tax rate of 15% proposed by Trump would actually mean a 'hike' in its effective tax rate.

    In our view, 'marginally' for J&J could mean that its tax rate could rise to around 20%. Taking its results from the 3rd quarter as a benchmark, when J&J reported $5.28 billion in pre-tax income, this would imply an additional tax burden of around $47 million - or around $0.02 per share in reduced earnings. This would've translated into an annual earnings diminution of nearly $386 million - or $0.14 per share - based on its trailing 4 quarters' pre-tax income.

    This is not insignificant - on average, analysts expect J&J to report earnings of $6.71 per share for 2016 - or around $0.51 better than in 2015. Consequently, a 'marginal' increase to a 20% effective tax rate would have effectively wiped-out 28% of J&J expected earnings if Trump's tax plan had been in place in 2016. Even if J&J's effective rate increases to just 19.5%, it could still be looking at an earnings diminution of $0.07 based on the last 4 quarters.

    Given the above, investors should carefully asses the purported friendliness of Trump's tax plan to businesses. That being said, we fully expect J&J to manage the transition to the new tax regime in a way that will spread out or disperse the increase in its effective tax rate.

    Special Dividends and Special Transactions?

    Of course, the headline-grabber tax-wise is the 10% tax on unrepatriated earnings. In and of itself, it would imply a tax-savings windfall of close to $8.9 billion. Astute investors will note that this amount is greater than either the total amount of its stock repurchases in the four quarters ending in September or the dividends it paid to shareholders during the same span.

    In short, with just the tax savings from its offshore cash, J&J could elect to increase its stock repurchases by 50% and pay a special dividend of around $1.60 per share sometime in the next year. Alternatively, J&J could choose to double its share repurchases or issue a one-time dividend of $3.20 per share.

    In our view, there is a third alternative: acquisitions. In the last four quarters (ending in September), J&J spent just around $4 billion in acquisitions. Rather than accelerating its buybacks or paying a special dividend, J&J could instead acquire smaller biotechnology firms that will enable it to buttress is pharmaceutical pipeline, allowing it to head-off the threat to its incumbent blockbusters like Remicade from biosimilars developed by competitors such as Pfizer (NYSE:PFE) by introducing new revenue channels.

    Indeed, beyond just the tax savings, J&J's repatriation of its $40 billion cash reserve could allow it to be more aggressive in the size of its pursuits, perhaps even targeting smaller listed biotech firms. Revenue growth and higher earnings driven by acquisitions would also have the effect of muting the impact of a higher effective tax rate. Naturally, the danger is that J&J becomes overly aggressive, eroding its superb financial standing.

    Conclusion

    In the medium-term, we anticipate that J&J will see a small hit to its earnings from higher effective taxes, but for now, we see J&J seeing its 2017 earnings coming in at $7.15 per share, implying a forward earnings ratio of 16.25-times, which is at a discount to the Dow and S&P500's respective multiples of 18.7-times and 17.7-times.

    Consequently, we believe that J&J's forward multiple should rise to around 18-times as investors pile into J&J shares in anticipation of a special payment and M&A speculation. Such a multiple would give us a target price of $129 per share, which is in range of the consensus target of $125 per share, representing a 1-year return of around 11%. Together with its dividend yield of 2.75%, investors could be looking at a total return of around 13.5% - a solid return for what should be a stable in dividend investors' portfolios.

    Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in JNJ over the next 72 hours.

    I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: Black Coral Research, Inc. is a team of writers who provide unique perspective to help inform dividend investors. This article was written by Jonathan Lara, one of our Senior Analysts. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article. Company financial data is taken from the company’s latest SEC filings unless attributed elsewhere. Black Coral Research, Inc. is not a registered investment advisor or broker/dealer. Readers are advised that the material contained herein should be used solely for informational purposes. Investing involves risk, including the loss of principal. Readers are solely responsible for their own investment decisions.

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13. Johnson & Johnson CEO Gorsky Discusses What Drove the Stock in 2016

    Jan 9, 2017 | The Street

    By Amanda Schiavo

    Johnson & Johnson (JNJ) stock is up 16% in the last year, and CNBC's Meg Tirrell sat down with CEO Alex Gorsky at the J.P. Morgan Healthcare Conference in San Francisco to discuss continuing the rise in 2017. The interview aired on Monday afternoon's "Power Lunch." 

    "We're really pleased with the performance overall, but we're far from satisfied," Gorsky said. "But I think the underlying driver in all that, frankly, it's about innovation, it's about execution and it's about delivering on our commitments."

    Looking back over the last four years, the CEO noted that the company has been able to launch more than 15 new pharmaceutical products that have been helping patients, but have "also been a real driver in our business."

    The time and energy Johnson & Johnson has put into its medical device business has begun to pay off, and its consumer business has "gone through a complete turnaround," Gorsky said. While happy with what the company has done so far, the CEO is looking ahead to plans that will roll out over the next five years.

    Tirrell pointed out that tech CEOs have met with President-elect Donald Trump, something that has yet to happen in health care. Tirrell asked Gorsky what he'd like to say to Trump if that meeting were to occur.

    "The fact is we have been talking a lot with the administration around [Trump] and frankly I think it's great that so many people are spending time talking about health care," Gorsky said. "You know, when you think about, first of all the impact that it has on patients, it's very personal."

    Health care, Gorsky said, is about 18% of our economy. People want to make it better by making changes that are needed, he said, but they also need to recognize the challenges and economic pressures.

    Alluding to Trump's proposed overseas-cash tax holiday, Gorsky said Johnson & Johnson wants to make sure it has access to the capital that it has around the world. The company wants to "put that to use by developing new innovations, by investing here, let alone in other areas. That's what we think is the real benefit going forward," Gorsky said.
    

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14. JPM: Saunders, Pops, others talk drug pricing

    Jan 10, 2017 | BioPharma Dive

    By Lisa LaMotta

    Allergan CEO Brent Saunders shared a stage with Alkermes CEO Richard Pops, PhRMA Chairman Joaquin Duato, President of ICER Steve Pearson and CEO of PhRMA Steven Ubl at the J.P. Morgan Healthcare Conference in San Francisco to talk about drug pricing.

    Saunders, who pledged the company would put a stop to predatory pricing, emphasized that there is a difference between net price increases and gross price increases.

    Meanwhile, Pops and Pearson noted that a lot of the focus of the drug price debate is on price hikes for generics or high-priced ultra rare disease drugs. 

    Dive Insight:

    It was inevitable that the topic of drug pricing would take center stage at the largest gathering of the biopharma industry. While Saunders tried to emphasize the important role of pharmaceuticals and downplay some of the bad behavior from the industry, others acknowledged that changes are coming.

    "We can't build pricing solutions for the bad actors," said Saunders at the breakfast hosted by Endpoints. Saunders' rhetoric towed the industry line – which has pushed the message that innovation costs money and saves lives, while downplaying the profit side of the equation.

    But Duato, who is also the worldwide chairman of pharmaceuticals at Johnson & Johnson, cautioned that there has to be more risk-sharing between pharmaceutical companies and payers.

    He noted alternative models like outcomes-based pricing are going to become more important as scrutiny of the industry's pricing practices continues.

    ICER President Steve Pearson echoed this sentiment, noting that public payers like state Medicaids will become the proverbial canary in the coal mine with their design flexibility, but inevitably some Food and Drug Administration-approved drugs will just not be covered. 

    The move toward drug pricing transparency is a good one, said Pearson, complimenting the moves made by companies such as Allergan, Johnson & Johnson and Novo Nordisk to be more forthcoming about their pricing strategies. Ultimately, he cautioned "affordability is a complicated soup."

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15. Fearing a Trump Attack, Drug CEOs Walk a Pricing Tightrope

    Jan 11, 2017 | Chief Executive

    By Ross Kelly

    Huddled this week at a major conference in San Francisco, many are treading carefully ahead of Donald Trump’s inauguration to avoid one of the president-elect’s signature Twitter tirades.

    Johnson & Johnson yesterday said it’s planning to release a report next month detailing how much it has raised the prices of its prescription products. The industry must “act responsibly” on pricing, CEO Alex Gorsky told the JPMorgan Healthcare Conference.

    Drug costs are still a key concern for voters outraged by revelations last year that several companies, such as Mylan and Valeant, dramatically hiked the price of often life-saving treatments. But companies say they risk squeezing profits and starving innovation if they can’t push through price increases as planned.

    Trump spooked the industry last month by indicating to Time magazine that his view on the issue may not be that different from Hillary Clinton, who had proposed capping price increases on the campaign trail. “I’m going to bring down drug prices,” Trump said. “I don’t like what’s happened with drug prices.”

    Allergan Pharmaceuticals, meanwhile, has just made good on CEO Brent Saunders’ “social contract” pledge issued in June to limit price increases to single-digit percentages just once a year—though it’s acted right at the upper limit of the pledge.

    A widely circulated research report from Evercore ISI analyst Umer Raffat indicates that Allergan raised the prices of many of its drugs by 9% or 9.5% in the first days of 2017. “These price increases are consistent with our social contract,” Allergan said on Twitter in response to some public criticism.

    In San Francisco on Tuesday, Saunders warned a panel discussion that companies that ignore public concerns about price rises do so at their peril. “If you think for a second our president-elect, soon to be president, isn’t going to use 140 characters and tweet viciously about it, I don’t think you know who is going to be president,” Saunders said.

    At least one CEO is taking a more sanguine view. “Look, I’m extremely optimistic,” Mylan CEO Heather Bresch told CNBC. “I believe that obviously he is a very business-minded individual that’s very solution-oriented.”

    Pharmaceutical CEOs have long argued they need to raise prices to help fund the innovation that’s required to invent new and better treatments—a view acknowledged last week by President Barack Obama that won’t be lost on a businessman like Trump.

    But in the lead-up to his inauguration next Friday, and indeed during the first months of his presidency, any CEO thinking of pushing through a substantial price hike is asking for trouble.

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16. Trump Tax Policies Could Make J&J a Bigger Threat in 2017 (Video)

    Jan 10, 2017 | The Street

    By Sarah Pringle

    Johnson & Johnson (JNJ) CEO Alex Gorsky has hinted to investors how potential tax reform might impact the company's strategic planning in 2017 and beyond, and offered his thoughts about the drug pricing controversy that weighs on the industry. 

    The likelihood that offshore profits will be repatriated to the U.S. has increased in light of the Republican sweep, and J&J is viewed as being among the biggest potential beneficiaries. Such legislation would essentially free up cash for drugmakers like J&J to spend on acquisitions of other U.S.-based players, if they don't use it for R&D, capital investment or stock repurchases or dividend payments.  

    "Look, we have a very unique time now, where as Dominic Caruso, our CFO would say, 'the sun, the moon and the stars may actually align to bring about significant change," Gorsky told attendees Monday, Jan. 9, at the J.P. Morgan Healthcare Conference at San Francisco's Westin St. Francis Hotel.

    Though the odds of repatriation have increased, Gorsky emphasized on Monday's fireside chat with the J.P. Morgan analyst Michael Weinstein that there remains a number of uncertainties.

    Much of the discussion currently centers on whether repatriation would result in the freeing up of just the cash that's stashed abroad or all of the foreign earnings, while other factors include what the tax rate would be and whether a timeline or possible phase-in period would be put in place, Gorsky said.

    "At the end of the day it could mean for a company like Johnson & Johnson, and I would dare say others, that your tax rate could go up marginally," Gorsky said.

    "However, I think if it provides us more flexibility in the long run to be able to deploy capital in ways that are not so heavily influenced by the tax regulations versus the strategic and actual financial outcomes, I think that's a real positive," he went on. 

    The increased odds for repatriation would also likely favor industry peers such as Pfizer  (PFE) and Merck  (MRK) . 

    Jefferies analysts estimated in a November report that within its U.S. large-cap pharma coverage, there's about $112 billion of gross cash at its disposal -- $98 billion of which is estimated to be held overseas and the majority of which could be repatriated in 2017. 

    "The opportunity to go to more of a territorial-based system will result in us being much more competitive hopefully taking out some of the anomalies that cause us to do inversions," Gorsky noted Monday. 

    In other topics of discussion Monday, the CEO alleged that the controversy around drug pricing is based on the erroneous view that pharmaceutical companies are taking advantage of consumers.

    To Gorsky, the underlying demographic factors of an aging population, which is ultimately fueling growing demand for healthcare, combined with new technology, is fueling pricing increases across the entire industry. But he noted that the resulting profits feed innovation. 

    Gorsky attributed about 70% of J&J's growth to either new product launches or volume increases, with the remainder stemming from pricing. In other words, the CEO indicated that incremental top line growth stemming from pricing changes is largely injected back into R&D. 

    "That's been our approach and we would expect that to continue going forward," Gorsky said. "There's been a lot of confusion."
    

    J&J plans to issue a report in February describing how it has raised the prices of its prescription drugs in the U.S., according to a Monday night Wall Street Journal report. 
    

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17. Johnson & Johnson Could Benefit From Tax Reform (Video)

    Jan 10, 2017 | The Street

    By Tony Owusu

    Johnson & Johnson  (JNJ) is optimistic that potential tax reform initiatives from President-elect Donald Trump could enact will be beneficial for the company, CEO Alex Gorsky told attendees of the J.P. Morgan Healthcare Conference in San Francisco.

    There is some anticipation that Trump and the Republican-controlled Congress could make repatriating offshore profits more cost effective by changing tax laws or granting a tax holiday, freeing up cash for companies like Johnson & Johnson to acquire other U.S.-based players.

    Shares of J&J are down more than 5% over the past year compared to the S&P 500, which is up more than 6%.

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18. This is Why Actelion (ALIOF.PK) Canceled Its Appearance at the J.P. Morgan Conference Next Week

    Jan 6, 2017 | BioSpace

    By Mark Terry

    The saga of Swiss-based Actelion Pharmaceuticals (ALIOF.PK) takes another turn, although it’s hard to know exactly what it means. With the JP Morgan Healthcare Conference being held in San Francisco next week, all eyes are on biopharma companies, hoping for a peak at industry trends for 2017. Except Actelion canceled its scheduled appearance. 
    
    Around the end of November, U.S.-based Johnson & Johnson (JNJ) was reportedly in talks to acquire Actelion. Then it was reported that the company walked away from the deal, supposedly over price. 
    
    Then it was reported that Paris-based Sanofi (SNY) was in talks to acquire the company. 
    
    On December 22, 2016, Actelion and J&J officially announced that they were in talks about a possible “strategic transaction.” It’s not clear if Sanofi is any longer in the picture. 
    
    Actelion focuses on rare drugs. It recently brought two new drugs on the market, both of which have the potential to become blockbusters over the next two or three years. About 50 percent of its revenue derives from sales of Tracleer, used to treat a form of high blood pressure that affects arteries in the lungs, pulmonary arterial hypertension (PAH). Tracleer is facing generic competition this year. 
    
    The two new drugs are Opsumit and Uptravi. Opsumit is used to treat PAH, and is likely to replace Tracleer. Uptravi is also used to treat PAH.

    It was reported originally that J&J balked at Actelion’s asking price. J&J reportedly offered $260 per share, or more than $28 billion. However, Actelion was asking for as much as $285 per share. The original deal was also believed to have a complicated structure, with J&J creating a biotech company that tied Actelion to relevant parts of its own pharmaceutical business. Because it would have required J&J to give up control of some of its assets, many analysts were skeptical about the likelihood of the deal. 
    
    When Sanofi threw its hat in the ring, inside sources said the deal might involve a contingent value right, or CVR. A CVR allows a buyer to agree to a base price with an additional amount tacked on only if specific pipeline drugs meet various milestones. Sources indicated there was a discussion of a CVR of about $20 as part of the $275 per share price being negotiated. 
    
    Now sources, in response to news that Actelion wasn’t appearing at the JP Morgan conference, are indicating that the deal with J&J would separate Actelion’s commercialized portfolio from its pipeline assets. If there’s news at all, it’s expected later this month. Reuters also writes, “The deal structure would allow J&J to acquire Actelion with a cash offer in the region of $260 per share. It would also let Actelion shareholders benefit financially from Actelion’s R&D pipeline, the people said.” 
    
    It was also reported today that J&J and Actelion have started discussions with Switzerland’s takeover board about the viability of the deal. The panel’s preliminary review is ongoing. The Swiss takeover board evaluates and determines whether deals meet legal requirements. Reuters does indicate that J&J would invest $1 to $2 billion over several years into Actelion’s R&D efforts in return for a minority stake in the rest of the business. 
    

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19. At Annual JP Morgan Conference, An Industry Wonders What Comes Next in a Trump Presidency

    Jan 18, 2017 | D CEO Healthcare

    By Hubert Zajicek

    The group doesn’t get smaller and the hallways don’t get any larger here in the Westin Hotel, which was sardine-packed with 10,000 attendees of JP Morgan’s annual healthcare conference in the city’s Union Square neighborhood.

    And although president-elect Donald Trump was not in attendance, his presence was felt throughout the conference. His recent remarks promising the government would do a better job of having biotechnology and pharmaceutical bid on its business led people to wonder what the future holds for healthcare companies—almost immediately after giving his speech, the markets moved and the NASDAQ Biotech Index experienced a single drop of 3 percent.

    This was not the only time Trump was mentioned. At the conference, people mainly discussed what an Affordable Care Act replacement plan might look like if his mandate to repeal and replace succeeds, but so far, nobody knows. The only thing that is certain is hospitals are in the process of anticipating going back to the “fee-for-service model” for the time being until they can respond to the new administration’s latest initiatives. The ACA incentivized a shift to value-based payment models, which reimbursed for outcome instead of volume.

    Below are some observations from some of the sessions I got to attend. With up to eight tracks in parallel, this is nothing but a snapshot, with some anecdotal information around some of this year’s hottest topics in healthcare:

    Healthcare innovation: Despite uncertainty, most companies’ presentations showed healthcare continues to innovate. Whatever pressures may be applied to the industry, the fact is, staying healthy and living longer never goes out of style. The healthcare industry is still behind in adoption of digital health tools but the opportunities are seemingly endless.

    Disease management, artificial intelligence and population health tools: There was plenty of buzz around disease management, artificial intelligence, and population health tools, as evidenced by the standing room-only and completely overflowing room at the IBM Watson Health. Expectations are high, but real commercial success is still in its infancy. Another well attended session was by Michael O’Neil, GetWellNetwork’s dynamic and passionate founder and CEO.

    Diagnostic testing: On the Diagnostic side, both Labcorp and Quest Diagnostics reported good results, with precision medicine and genetic testing providing significant storylines. Both firms are recognizing that the healthcare consumer is becoming an increasingly important part of their clientele, as opposed to having relationships with referrers only.

    Repeal and Replacement of the ACA: The CEOs of Johnson & Johnson and Biogen verbalized some of the uncertainty around the repeal of the ACA two days before Trump’s remarks. J&J, the world’s largest pharma/device company, continues to dabble in digital health as evidenced by their Jlabs Innovation Centers around the world. Biogen is the leader in Multiple Sclerosis treatments and continues to innovate and develop new therapies.

    Diabetes: Diabetes remains a main health concern in this country and Dexcom’s presentation was particularly impressive. Given Dexcom received FDA permission to use its device to guide insulin administration, it has lots of room to grow in the continuous glucose monitoring (CGM) market. The evidence showing continuous glucose monitoring is superior to periodic glucose monitoring is particularly compelling: Dexom reported $570M in revenue, a 42 percent increase, over 2015. Fresenius, a top dialysis provider, continues to grow in the U.S. and worldwide, in parallel to diabetes, which, in many cases, leads to kidney failure and a need for dialysis.

    Hospital supplies and tools: Cardinal Health, a major supplier to hospitals, will likely see a significant impact, depending how changes under the new administration are implemented. However, Cardinal derives 85 percent of its revenues from classic fee-for-service relationships, so that should buffer any impact on contractual changes that may come along in the near future. Similarly, Qiagen, a research tool provider with a diverse set of tools, is well insulated from changes in healthcare because research tools are not likely affected by changes in the ACA.

    Hospital providers: The consolidation among large hospital providers should continue if history is a guide. This should allow for economies of scale for some of the larger ones. Community Health Systems, now a $20 billion hospital group, had a rocky year after the acquisition of Health Management Associates and its debt made it the largest hospital company for a brief time. It spent the year divesting some of its assets and is looking to turn its business around. Many of the other larger hospital systems have had a great year, but it remains a tough business, with plenty to be figured out after Inauguration day.

    Human healthcare: And if all this “human healthcare” seems to be too uncertain, then the IDEXX presentation was for you. IDEXX is a leader in pet healthcare. Pet healthcare is a (largely) cash business. Diagnostics in pet-healthcare are booming. The vast majority of baby-boomer AND millennials (hey, that’s a first here – they have something in common) regard their pets as part of their family, and are willing to forgo other expenditures to afford healthcare for their pets. 

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20. Biotech Roundup: JPM Deals, Gender Diversity, PCSK9 Battle & More

    Jan 13, 2017 | Xconomy

    By Ben Fidler

    [Corrected, 1/14/16, see below] This past week, the biopharma industry made its annual January pilgrimage to San Francisco for the J.P. Morgan Healthcare Conference. 2016 was a whirlwind year in biotech, and the biopharma gods rewarded attendees with a multi-day monsoon to slog through to get from one meeting to the next.

    Earlier today, Alex Lash and I offered a few tidbits from our notebooks—more to come later. But here are many of the other headlines to emerge from J.P. Morgan, where companies across the industry try to put their best foot forward with new deals and more.

    Pricing, Trump, PCSK9 Battle, and Diversity

    —Drug pricing was on many people’s minds at J.P. Morgan, including Allergan (NYSE: AGN) CEO Brent Saunders, who talked about yearly price hikes, price transparency, and more with Alex Lash.

    —Just days after Regeneron Pharmaceuticals (NASDAQ: REGN) lost a patent infringement suit to rival Amgen (NASDAQ: AMGN) over its cholesterol-lowering PCSK9 blocker alirocumab (Praluent)—a ruling that threatens to pull Regeneron’s drug from the market—CEO Len Schleifer railed against the Thousand Oaks, CA, company’s tactics. “If they really cared about patients they wouldn’t rip this drug from patients,” he said, according to a Reuters report. Regeneron plans to appeal the decision.

    —Sarepta Therapeutics (NASDAQ: SRPT) CEO Ed Kaye detailed the early launch trajectory for eteplirsen (Exondys 51), which last year became the first-ever approved drug for Duchenne muscular dystrophy but has faced pushback from insurers.

    —The frenzy of J.P. Morgan meetings came to a screeching halt on Wednesday when President-elect Donald Trump slammed drug companies, saying they were “getting away with murder” because of the prices they charge.

    —More than 100 life sciences leaders signed a letter calling on the biopharma industry to boost its efforts to increase gender diversity.

    Deals, Deals, Deals

    —Takeda Pharmaceutical bought Ariad Pharmaceuticals (NASDAQ: ARIA) in an all-cash deal that values the Cambridge, MA-based cancer drug developer at about $5.2 billion.

    —Just days later, Takeda entered a five-year, $125 million partnership with Brisbane, CA-based immuno-oncology startup Maverick Therapeutics and got an exclusive right to buy the company at the end of the deal.

    —Cambridge-based Merrimack Pharmaceuticals (NASDAQ: MACK) sold off its only marketed products, two cancer drugs, to French pharma company Ipsen for $575 million up front.

    —Milwaukee-based medtech company Mortara Instrument was acquired by Hill-Rom Holdings for $330 million.

    —Boston-based Vertex Pharmaceuticals (NASDAQ: VRTX) sold four experimental cancer drugs to Merck KGaA for $230 million in cash.

    —[An earlier version of this item mistakenly said Allergan paid $50 million for an option to acquire Lysosomal Therapeutics; terms weren’t disclosed. We regret the error.] Allergan announced two deals. It nabbed an option to acquire Cambridge startup Lysosomal Therapeutics, which is developing drugs for Parkinson’s disease, for an undisclosed sum; and paid $50 million to Indianapolis-based Assembly Biosciences for rights to two experimental microbiome drugs for gastrointestinal disorders

    —Celgene (NASDAQ: CELG) paid Swiss firm Anokion $45 million up front in a deal to develop treatments for autoimmune diseases. Celgene also has an exclusive option to buy the biotech in the future.

    —AbbVie detailed a group of collaborations focused on large-scale genomic sequencing efforts and immuno-oncology. Here’s more from FierceBiotech.

    —Sarepta inked two different deals with Nationwide Children’s Hospital for rights to two experimental Duchenne gene therapies. Terms weren’t disclosed.

    mRNA Ups and Downs

    —High-flying, yet secretive messenger RNA drug developer Moderna Therapeutics gave J.P. Morgan attendees the most detailed look yet at its evolving drug pipeline, which largely consists of experimental vaccines for infectious diseases and cancer. STAT reports that safety issues caused the company to dump what was once its lead program, however, for the rare disease Crigler-Najjar syndrome.

    —Rival mRNA drug developer CureVac, with offices in Germany and Cambridge, said that its mRNA prostate cancer vaccine, CV9104, failed a Phase 2 trial. Here’s more from Labiotech.eu.

    Fundings

    —Former Biogen (NASDAQ: BIIB) CEO George Scangos is back in the Bay Area, where he’s leading newly launched Vir Biotechnology, a startup researching new treatments for infectious disease. Arch Venture Partners has committed at least $150 million to the effort.

    —San Francisco pain drug developer Adynxx raised a $16 million Series B round to start another Phase 2 clinical trial for its lead drug, AYXI.

    And in other news…

    —Johnson & Johnson (NYSE: JNJ) announced plans to open its latest “JLabs” biotech incubator at the New York Genome Center in Manhattan. JLabs head Melinda Richter spoke with Xconomy at J.P. Morgan about the planned incubator, which will be funded by some of the cash from New York Governor Andrew Cuomo’s $650 million state biotech initiative.

    —The FDA declined to approve the intravenous version of Waltham, MA-based Tesaro’s (NASDAQ: TSRO) anti-nausea drug rolapitant, citing manufacturing concerns.

    —Boulder, CO-based Nivalis Therapeutics (NASDAQ: NVLS) said CEO John Congleton will step down and it will ax 80 percent of its staff in a restructuring.

    —Oliver Smithies, a Nobel laureate and University of North Carolina at Chapel Hill professor of pathology, died Tuesday at 91 following a short illness, according to the university.

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21. Notes From The JPM ’17 Vortex: Trump, Rainstorms & The Price You Pay

    Jan 16, 2017 | Xconomy

    By Alex Lash

    The week of frenetic data sharing, deal talking, and party hopping of the J.P. Morgan Healthcare Conference—and the events that have mushroomed around it—took a punch to the gut just as most attendees were wrapping up and checking their outbound flight status.

    The incoming party-pooper-in-chief, Donald Trump, said during his first press conference Wednesday that drug companies are “getting away with murder” and he’d work to rein in prices and other practices. You could hear the needle screeeeeeeeching across the vinyl. (Good thing it came Wednesday; Tuesday is the biggest J.P. Morgan party night.)

    His soundbite offended many people who rightly noted that they are working to heal people, not kill them. But his rhetorical brinkmanship fed upon deep and legitimate concerns that many here in San Francisco were already debating in the days leading up to the Trump presser: Prices are unsustainable, and the industry’s reputation is in tatters. In interviews with Xconomy and others, Allergan (NYSE: AGN) CEO Brent Saunders added context to the high-profile pledge he made last year to limit price increases across his company’s extensive product line.

    He wasn’t the only one talking up responsibility. Across many conversations, however, it was clear to us that good-pricing practices—especially the oft-bandied word “transparency”—mean different things to different companies. No company, as far as we know, is willing to tell the world what their products actually cost after middlemen like Express Scripts (NYSE: ESRX), who negotiate on behalf of health plans, extract discounts for their clients.

    Most of the pricing talk has centered around big companies with multiple products, such as Allergan, Novo Nordisk, and Johnson & Johnson. But it’s also important to check with smaller biotechs that are gearing up for potential commercial launches whose fortunes hinge upon those sales. Read on to find out how the attitude of one biotech has evolved since last year’s J.P. Morgan, plus much more about pricing, politics, and… umbrellas? Step into the vortex.

    —…Or Your Money Back? Alnylam Pharmaceuticals (NASDAQ: ALNY) is one of the few companies that says it’s willing to give money back or leave it on the table if its products don’t work. At least in theory—it doesn’t have a marketed product. But if the experimental patisiran succeeds in Phase 3 trials this year, Alnylam could soon become a marketer, not just a developer.

    Last year at J.P. Morgan, CEO John Maraganore told Xconomy that the company would be creative about drug pricing, but he wouldn’t talk specifics. This year, company president Barry Greene went a step further, saying Alnylam is “highly willing” to sign performance-based deals “so that payers will appreciate that they’ll only pay where the drug works.” Greene said Alnylam has been crunching numbers to justify the price it presents at the start of negotiations with payers. Patisiran is meant to treat the rare disease TTR amyloidosis. If patisiran fails, it would likely take Alnylam years to get back to this spot. “The opening of [that] envelope is probably the biggest pivotal moment for us,” said Greene.

    —Simon Says: Vice President Joe Biden’s handpicked “cancer moonshot” chief Greg Simon gave perhaps the best riposte to Donald Trump’s pharma attack this week—and it came the day before The Donald held his press conference. Speaking on a lunchtime panel of Washington bigwigs Tuesday, Simon described Trump’s previous criticism of drug pricing and gouging this way: Pretend Martin Shkreli is walking down the street with his wife, who happens to be the biopharma industry. Trump hates Shkreli, so as he approaches the couple, he loads up and punches Shkreli’s wife.

    Simon is a Democrat through-and-through—he was Vice President Al Gore’s domestic policy adviser. He is also pro-drug development; he helped launch FasterCures and ran it for six years, then did a stint at Pfizer, and for a short time he led the healthcare crowdfunding firm Poliwogg. On the panel, in fact, he stumped for financial creativity as the solution to the drug price debate: “The problem is there are no future markets [in the pharma business], it’s all on a cash flow basis.” In other words, it’s hard for drug companies and their investors to spread the risk, he asserted: “It’s a financial issue, not a moral issue.”

    Simon made other pointed political comments, fretting about the anti-science bent of Trump—a concern that many in San Francisco shared in light of Trump’s anti-vaccine stances and potential promotion of Robert Kennedy, Jr. So it was an awkward moment when one of the conference hosts, at panel’s end, chided Simon for getting political after apparently promising he wouldn’t. “You lied,” she said, perhaps tongue in cheek.

    It was a puzzling moment, too. Wasn’t this a panel about politics and policy? She had no harsh words for Julie Gerberding, former director of the Centers for Disease Control and Prevention and now a top Merck executive, who said at CDC she had to deal with the “anti-science policies of the [George W.] Bush administration” and a right-leaning Congress. “Their effect was blunted because of the absence of big majorities,” she said, but most difficult for her was legislation that prohibited federal dollars going toward research on reproduction and gun violence. “We can imagine a lot of bad policy opportunities,” she said, “but change occurs slowly. Agencies are very stable.”

    —Troubled Waters: One CEO of a high-profile publicly traded biotech company told Xconomy he was hanging out with med-tech executives and got an earful. It was about time pharma gave up its “pound of flesh,” they said. Medical device makers don’t get nearly the spotlight or funding that drug companies do; there’s long been resentment that pharma for years has gotten everything it wants from Washington.

    Perhaps the universe was exacting some small measure of revenge this week with all the rain—some of San Francisco’s heaviest in decades—that pounded the conference. (Although device makers get rained on, too. Perhaps it was the weather equivalent of punching Shkreli’s wife.)

    The wet, windy weather left dozens of umbrellas strewn on sidewalks and in gutters like roadkill. Desperate attendees searching for replacements ducked into chain drugstores like CVS and Walgreens, which were more than happy to oblige with $15 and $25 umbrellas. The hasty mark-up was obvious from the garish orange price stickers. Wait a second… CVS and Walgreens also own drug-purchasing middlemen that work on behalf of insurers and employers—and are a source of some of the markups that get blamed on the drug companies, say the drug companies. Sounds like something the president-elect should tweet about. Wet! Sad!

    —What Price Gene Therapy: No discussion about what drugs are actually worth is complete without a mention of gene therapy. Spark Therapeutics (NASDAQ: ONCE) could be the first to test the American market, as it expects to complete an FDA application for its treatment for certain kinds of inherited blindness, voretigene neparvovec, in the next few months, CEO Jeff Marrazzo told Xconomy this week. If accepted, it would be the first FDA review of a gene therapy. If approved, the pricing question would follow.

    Unlike other drug types, gene therapy is a single procedure meant to produce a long lasting, if not permanent treatment. Drug companies would love to be paid based in large part on the long-term savings that a cure would save. But what if a treatment stops working after a few years? After its Strimvelis was approved in Europe last year for a rare immune system disease, GlaxoSmithKline said it would charge $665,000 upfront but would give money back if it didn’t work. (Before Strimvelis, the $1 million gene therapy Glybera from UniQure was approved in Europe but barely got off the ground.)

    Spark CEO Marrazzo wouldn’t talk about specific pricing models, but he did note that 93 percent of the patients in the voretigene neparvovec Phase 3 trial have gained back some visual function, and that the treatment has been proving more and more durable, which Spark will take into account when building a case about the drug’s value. “You multiply that out, and then you have a value point,” Marrazzo said, but added it’s unclear whether that value will be paid up front or over time. “We’re going to at least put a stake in the sand on alternative ideas as we go through this year.”

    There’s plenty of talk about gene therapy pricing, including a meeting Marrazzo says the nonprofit group ICER convened last month with payers and gene therapy manufacturers to talk about how to price and pay for gene therapies in the U.S. “The good news is the conversations are happening and people are talking about the different ways of trying to do this,” he says. “The question is how much will get accomplished before [Spark] has something that can help people.”

    —Coulda, Woulda, Sarepta: One of the biggest biotech stories of 2016 was Sarepta Therapeutics (NASDAQ: SRPT), which saw its eteplirsen (Exondys 51) become the first-ever approved therapy for Duchenne muscular dystrophy. It was highly controversial, with the FDA drug chief Janet Woodcock overruling negative recommendations from her staff. The FDA gave eteplirsen an “accelerated” approval; to stay on the market, Sarepta must prove by 2021 that the drug is actually working.

    Sarepta CEO Ed Kaye told investors at J.P. Morgan that the launch is off to a rocky start, but it was good enough to send shares up more than $9, or 31 percent, before Trump’s Wednesday comments shaved a bit of cream off the top.

    Mention of the approval was enough to make BioMarin Pharmaceutical (NASDAQ: BMRN) CEO Jean-Jacques “JJ” Bienaimé bristle. The San Rafael, CA, company had bet on a rival Duchenne drug, drisapersen, by buying Prosensa for $680 million in November 2014. But the FDA rejected the drug last January, and BioMarin shelved it five months later. Bienaimé wasn’t surprised to see insurers pushing back against Sarepta’s scanty clinical evidence. “Payers are not fools,” he told Xconomy.

    Some FDA staffers questioned whether the eteplirsen approval, pushed by a powerful patient community, opened the door for other patient groups to pressure FDA. The agency has moved recently to include patient perspectives into their decisions—and the new 21st Century Cures Act directs it to do so even more.

    But Bienaimé and his chief medical officer Hank Fuchs said the eteplirsen approval was an outlier, and we’re not likely to see the same amount of pressure work again for such a poorly characterized drug. Like any good clinical expert, Fuchs expressed the moment in statistical terms: “The ratio of patient-activism voices divided by number of patients successfully treated in clinical trials might be an all-time exceptional ratio.”

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Broadcast Media

22. Power Lunch Video Clip

    Jan 9, 2017 | CNBC

    View Clip Here: http://app.criticalmention.com/app/#clip/view/25654107?token=5567a44b-adfb-4141-99f3-adec35deb954

    Rough Transcript:

    >>Well the biggest Pharma conference in the world is taking place in San Francisco, our Meg Tirrell is there live there with the CEO of Johnson & Johnson for an exclusive interview, meg.

    >> Alex, thanks for joining us.

    >> Hey, Meg it’s great to be here with you at the JP Morgan conference in San Francisco.

    >> We were just observing your stock, up 16% in the past year, after a tough year for the drug industry overall, what do you think was driving that and what will continue that growth in 2017?

    >> meg, look, we're really pleased with the performance overall but far from satisfied. the underlying driver is about innovation, it’s about execution and delivering on our commitments. look over the past four years we’ve been able to launch 15 brand new pharmaceutical products that have been great for patients, but also a real driver in our business. We put a lot of time and energy in our medical device business, and now it’s performing at a very high level. The consumer business has gone through a complete turnaround. we're very proud of that. I'm even more excited about the plans that we have in place over the next five years.

    >> we were talking with Celgene CEO earlier about this idea that the tech industry CEOs have met with president-elect Donald Trump. He hasn’t had that same sit down with pharma CEOs. if he did, what would you tell him?

    >> that's a great question. The fact is, we have been talking a lot with the administration around him. frankly, I think it's great that so many people are spending time talking about health care. First of all, the impact it has on patients, it's very personal. second it's about 18% of our economy. and the kind of things that we're talking about is how can we take what i believe is one of the very best health care systems in the world and how can we make it even better? how can we make changes, recognizing the challenges, economic pressures, regulatory pressures but keep essential elements like innovation, but how can we do that through better integration? how can we do it through more value-based pricing and put some of those things together so we don't lose focus on the patient and the outcomes, but at the same time recognize the realities that health care has continued to evolve as a part of our overall economy?

    >> Some of the news coming out of here is m&a, of course, one cancer company getting acquired this morning. you have a lot of cash. people have talked about a potential tax holiday. what would you do with that money?

    >> what we're most encouraged about, regardless of which particular approach is decided upon is to give us more flexibility and let us be more competitive on a global basis. The pharma industry and the biotechnology industry is very global, and so making sure we can best access the capital we have around the world and put that to use by developing new innovations and investing here, let alone in other areas, that's the real benefit going forward.

    >> how should we think about you in terms of being a dealmaker this year?

    >> we're always a dealmaker. take a look at us historically over 20, 10, 5 years, I’d say about 50% of the time we source our innovation externally we can’t discover and develop everything ourselves internally, but it’s by conferences like this where we reach out and partner, ultimately finding the best approaches and then, obviously, apply our clinical development, regulatory skills, our great sales and marketing capabilities and we think that that's what makes a big difference for us.

    >> you hear the president-elect say, the only thing he said so far, about the drug industry is that he doesn't like what's happened with your pricing, how do you respond to that? do you feel you need to change your approach on pricing or does something else need to change? what is the effect of that?

    >> pricing is a big issue. value is a big issue. not only across the pharmaceutical industry but across all of health care. part of it is this demand. with an aging population, increasing middle class, more people getting access, it's putting a lot of pressure on the system. we try to, first of all, make sure we're responsible players in all of this. that starts with making sure we differentiate our drugs, that we fully demonstrate the profile they bring to patients but also the value that they bring. make sure we have the right support programs, price them responsibly. but it will take all the members of health care working together to get this right.

    >> Mel, you have a question?

    >> yes. you talk about always being a dealmaker. has that effort moved up the value chain, in terms of priorities, especially as you're facing looming potential competition for Remicade? there's this speculation in the analyst community that a deal should be made in order to plug the immediate drop in sales that you could face with Remicade. does that push you further in the m&a pool?

    >> as i said earlier, m&a we look at as a very important sourcing strategy for us every year. while we certainly understand and recognize the issue, of Remicade this year, this is something we've been planning for from a strategy point of view for some time. We try to make sure constantly that, one, is the strategy right? does it financially make sense? do we feel we can add value? is it a good cultural fit for us to bring the organization together? long term, is this something that will create value for our shareholders, help patients, help consumers? and sometimes there's a lagging effect on that. you can't assume because we haven't done a deal a particular period of time we haven't been working hard. one of the most important things you can do is walk away from the wrong deal. this is something that we're constantly, continuously updating and we expect that same behavior to continue.

    >> when you say we're working on a deal, are you talking about Actelion?

    >> of course I'm not going to comment specifically on that. we're always working on a range of different deals that we do. look, they're never done until they're done. and in a company like ours with so many different diverse sectors it's important we're constantly identifying new innovations, opportunities that ultimately will help us continue to grow and help patients.

    >> Alright Alex, we are going to have to leave it there, thank you very much for joining us.

    >> thank you, meg.
    

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