Trump proposes deep cuts to Medicaid, NIH funding

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Capitol HillPresident Donald Trump’s proposed budget would slash Medicaid funding and cut support for major biomedical research programs at the National Institutes of Health and the Centers for Disease Control & Prevention.

The budget blueprint drew condemnation from healthcare advocates and lawmakers from both sides of the aisle. Senate majority whip Sen. John Cornyn (R-Texas) reportedly said earlier this week that Medicaid cuts wouldn’t get through Congress.

“I think the tradition is presidents write budget proposals and that the Senate and the House substitute their own, and so I wouldn’t expect that would carry the day,” he told The Hill.

The potential $610 billion cut to Medicaid would add to the $839 billion cut proposed by the American Health Care Act that passed in the House earlier this month.

The proposal to slash Medicaid funding goes against Trump’s campaign promise to leave Medicaid, Medicare and Social Security funds untouched.

Among the more significant reductions proposed in Trump’s budget are an -19% cut to the National Cancer Institute and a -28% cut to spending on environmental health. The budget would also trim funding for the National Science Foundation by $776 million, or -11%.

According to the president’s proposal, the FDA would receive $1.89 billion in direct government funding. The 31% decrease would be offset by an increase of $1.3 billion in user fees.

Rep. Tom Cole (R-Okla.) said the proposed $5.8 billion cut to NIH funding “penny-wise and pound-foolish”, according to Stat. Cole is the chair of the House health appropriations subcommittee.

The proposal did not include any direct cuts to Medicare.

CDC director Dr. Tom Frieden took to Twitter to respond to the administration’s proposal, calling it an “assault on science.”

Also today, Rep. Tom Macarthur (R-NJ) resigned as co-chairman of the so-called Tuesday Group, a caucus of moderate House Republicans, citing divisions over efforts to repeal and replace former President Barack Obama’s healthcare law, according to a report from Politico. 

Novartis’ Ultibro Breezhaler tops corticosteroid for COPD in head-to-head study

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NovartisNovartis (NYSE:NVS) said today that a new analysis of its head-to-head Flame trial showed that inhaled corticosteroids may not be necessary in some chronic obstructive pulmonary disease patients with high blood eosiophil counts.

The data demonstrated that the company’s Ultibro Breezhaler provided better or similar benefits compared to Seretide, an inhaled corticosteroid, in COPD patients regardless of eosiophil count. These results contrast with previous work suggesting better outcomes with inhaled corticosteroids for patients with high eosinophil counts.

Get the full story at our sister site, Drug Delivery Business News.

Cerus lowers Intercept sales guidance after Fresenius Kabi supply snafu

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  • Bain Capital raises $720m life sciences fund

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    Bain CapitalBain Capital said today that it raised $720 million for its 1st investment fund focused exclusively on the life sciences sector.

    “We are excited by some of the long-term secular trends in the life sciences space,” Bain Capital Life Sciences managing director Adam Koppel said. “Big pharma is increasingly outsourcing R&D at the same time as many new technologies and treatments are being developed.”

    The Boston-based fund has already backed a pair of companies, RNAi inhibitor maker Dicerna Pharmaceuticals (NSDQ:DRNA) and Solid Biosciences, which is developing treatments for Duchenne muscular dystrophy.

    The Bain life sciences fund, led by 8 investment professionals, will target investments in the $30 million to $70 million range in both publicly traded and privately owned companies in the medical device, specialty pharmaceutical and biotech sectors.

    “We are not going to be activist investors, we are going to be more like what they call ‘constructivist’ investors, who play an important role in companies’ strategic decisions,” added BCLS managing director Jeff Schwartz.

    Material from Reuters was used in this report.

    Private equity shop EQT leads the pack in chase for Ottobock

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    Private equity shop EQT is reportedly the leading bidder for a stake in Germany’s Ottobock, the world’s largest maker of artificial limbs, as talks with rival PE player CVC continue.

    EQT and CVC are vying for a 20% share in Ottobock’s bread-and-butter healthcare business ahead of an eventual public listing, “people familiar with the matter” told Reuters. Other bidders, including KKR, BC Partners and Advent, have dropped out. The talks with EQT are not exclusive and could still crumble, the sources told the news service.

    Founded in 1919 as a maker of prosthetics for World War I veterans, Ottobock has said it’s worth some $3.38 billion (€3 billion), representing a 12x multiple of this year’s expected earnings before interest, taxes, depreciation & amortization of $281.3 million (€250 million). That puts the value of a 20% slice of its healthcare segment at about $676 million.

    That’s an attractive valuation compared with Ottobock’s peers, because the healthcare division includes its low-margin wheelchair business. Rival Össur(PINK:OSSUY) trades at 17x expected core earnings, for example.

    JP Morgan has pledged to offer a loan package of 3x EBITDA – or $843.8 million (€750 million) – to the successful buyer, banking sources told the news service.

    EQT and Ottobock declined to comment; CVC was not immediately available for comment, Reuters reported.

    ($1 = €0.888797)

    EnteroMedics jumps pre-market on BarioSurg buyout

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    EnteroMedics, BarioSurgEnteroMedics (NSDQ:ETRM) said today that it acquired BarioSurg and the gastric vest it developed to treat obesity, sending share prices surging in pre-market trading.

    The BarioSurg device is designed to be implanted via laparoscopy to wrap the stomach and emulate the effects of conventional bariatric surgery by temporarily reducing the stomach’s volume.

    St. Paul, Minn.-based EnteroMedics said it paid 1.38 million shares (worth $6.3 million at yesterday’s $4.59 closing price), plus 1 million convertible shares that can be changed into 5 million shares if shareholders approve and $2 million in cash. The shares issued in the deal amount to about 20% of EnteroMedics shares, the company said.

    “We are excited to both incorporate BarioSurg’s gastric vest into our now further differentiated portfolio of medical devices for fighting obesity and related comorbidities, and to explore potential clinical opportunities to combine the vest and vBloc therapy,” EnteroMedics chairman, president & CEO Dan Gladney said in prepared remarks. “As we move toward building a comprehensive bariatric and metabolic continuum of care platform to effectively address unmet needs within these areas, we believe that the strong foundation we’ve built at EnteroMedics will maximize the potential for a successful approval and the subsequent commercialization of this device.”

    “EnteroMedics is a leader in minimally-invasive, sustainable weight loss treatment with vBloc Therapy. I look forward to joining the company and navigating a path toward potential FDA approval and eventual commercialization, while at the same time exploring ways in which the vest may be able to be combined with vBloc therapy to enhance patient outcomes,” added BarioSurg founder & CEO Dr. Raj Nihalani, who was named chief technology officer at EnteroMedics as part of the deal.

    News of the deal sent ETRM shares up 29.9% to $5.96 apiece today ahead of the market’s open.

    Anika touts Phase III data for Cingal knee therapy

  • ‘Radiating Shoe Sales’

    By: Vanessa Burrows Since the discovery of X-rays in the late 19th century, the technology has enhanced health care in a variety of ways. Like many cutting-edge scientific developments, however, it also has inspired uses of uncertain therapeutic value. That was the case with the shoe-fitting fluoroscope, the subject of the latest episode of FDA’s […]

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  • Intersect ENT updates on Sinuva steroid-releasing sinus implant

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    Intersect ENTIntersect ENT (NSDQ:XENT) said today that the FDA is slated to make a decision on its new drug application for the Sinuva steroid-releasing sinus implant by January 7, 2018.

    The Sinuva implant, which was previously called the Resolve implant, is placed during an in-office doctors appointment and is designed to be a treatment option for patients with recurrent ethmoid sinus obstruction. Traditionally, treatment for the condition includes high-dose oral steroids and repeat surgery.

    Get the full story at our sister site, Drug Delivery Business News.

    Triple-combo inhaler for COPD wins recommendation for approval in EU

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    Chiesi GroupChiesi Group said today that the European Medicines Agency’s Committee for Medicinal Products for Human Use recommended that the EMA approve its extra-fine triple combination inhaler for the treatment of chronic obstructive pulmonary disease.

    The Trimbow device combines an inhaled corticosteroid, a long-acting beta2-agonist and a long-acting muscarinic antagonist. The healthcare group said it is the 1st time the extra-fine triple therapy has been available in a single inhaler.

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