Healthcare Beat: GlaxoSmithKline plc (ADR) (GSK), Gilead Sciences, Inc. (GILD), and Valeant Pharmaceuticals Intl Inc (VRX)

GlaxoSmithKline plc (ADR) (NYSE:GSK), Pfizer Inc. (NYSE:PFE), and other pharmaceuticals have come together to  explore new treatments for Alzheimer disease. The pharmaceutical companies have agreed to invest $100 million with the UK government, to spearhead efforts on the research front.

GlaxoSmithKline plc (ADR) (NYSE:GSK)

Venture capital firm SV Life Sciences Advisers LLP is to handle funds dedicated to Dementia exploration. Johnson & Johnson (NYSE:JNJ), Eli Lilly and Co (NYSE:LLY), Takeda Pharmaceutical Co Ltd (ADR) (OTCMKTS:TKPYY) and Alzheimer’s Research UK have all agreed to contribute towards the Dementia Discovery Fund. The investors are to appoint representatives who will sit on the scientific advisory board.

The representatives are to supervise and advise a team of neuroscientists who will aim to bring to market new treatments for the various forms of dementia by 2025.

GlaxoSmithKline plc (ADR) (NYSE:GSK), which already sells a compound for Alzheimer disease to Axovant Sciences Limited, is to chair the first scientific advisory board meeting next month.

Spending on Hepatitis C drugs is up with Gilead Sciences, Inc. (NASDAQ:GILD) turning out to be the biggest beneficiary. For the first half of the year, Medicare reportedly spent $4.6 billion on Hepatitis C treatment, way higher than it spent last year. The increase in spending on this front is due to development of new generation, easier to tolerate treatments compared to past treatments

ProPublica reports that 183,000 scripts for hepatitis C were filled through June 30 of this year. At the current rate, Medicare could file up to 386,000 scripts this year, compared to 288,000 scripts posted last year. Gilead Sciences, Inc. (NASDAQ:GILD) has already received payments for 120,000 scripts for its combo pill Harvoni. In contrast, AbbVie received 3, 352 scripts for its cocktail Viekira Pak

Drug makers and Medicare, however, stand to make less as rebates negotiated by some payers could eat into the total amount of sales. Some of the rebates are believed to be as much as 40%.

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) has been the subject of criticism in the recent past over the pricing of most of its drugs. The company says that it is ready to limit price hikes to about 10%. The hikes could, however, be more than 10% in special occasions according to CEO Michael Pearson.

As part of the new strategy the company is also looking to invest more on R&D, an area sidelined in the past. Valeant had resorted to carrying out acquisitions all in an attempt of trying to gain access to already developed drugs.

Valeant Pharmaceuticals Intl Inc (NYSE:VRX)’s Pearson says that they intend to pursue fewer mergers or acquisitions as part of the new strategy. A lack of significant activity on the M&A front could have a significant effect on the stock going forward. The company is what it is in the market thanks to a string of acquisitions carried along the way.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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