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Health Care Roundup: Market Talk

19 Aug 2017 8:20 am

1723 GMT - Startup Arcus Biosciences has struck an $816M licensing deal to compete with bigger drugmakers in the immuno-oncology industry. Large companies such as Bristol-Myers Squibb (BMY) and Merck (MRK) are leaders in immuno-oncology, an effort to harness the immune system to fight cancer. BMY and MRK make the immunotherapies Opdivo and Keytruda, respectively, which target a molecule known as PD-1. Anti-PD-1 drugs also could make other cancer therapies more effective when used in combination. Arcus has licensed rights to an anti-PD-1 drug and plans to test this product with other immunotherapies to discover effective combinations of immuno-oncology agents. Arcus's founders sold their previous immunotherapy startup, Flexus Biosciences, to BMY for $1.25B in 2015. (brian.gormley@wsj.com)

1715 GMT - Medical-device companies once concerned themselves chiefly with developing disease treatments that won over doctors and regulatory bodies. But increasingly device makers also find that they must generate data to illustrate the economic benefits of their therapies in order for hospitals and insurance companies to pay for their products. Hospitals seek technologies that help them avoid Medicare reimbursement penalties for hospital re-admissions, while insurers aim to lower costs and limit premium hikes. Device companies are running studies to gather evidence of economic benefits. This can be difficult for small, cash-strapped startups, but companies that target large markets can attract venture capital to fund studies needed for reimbursement. (brian.gormley@wsj.com)

1406 GMT - Shares in Smiths Group PLC fall more than 1% to 1543 pence after a report claiming the U.K. medical-device maker is considering a takeover bid for Accelerate Diagnostics of the U.S. Smiths is among a number of potential suitors for Accelerate, which is developing technology that fast-tracks diagnosis of infectious diseases, London's Evening Standard reports. Other potential bidders include Thermo Fisher Scientific Inc. and Boston Scientific Corp, the report says, adding that Smiths and Accelerate declined to comment on the speculation. Shares in Accelerate climb nearly 2% in early U.S. trading before falling back. (philip.waller@wsj.com)

1118 GMT - European shares fall in lunchtime trading on negative sentiment following the terror attacks in Barcelona. The Stoxx Europe 600 drops 0.8%, or 3.2 points, to 373.69 as airlines lose ground, with shares in Ryanair Holdings PLC, IAG PLC, Air France KLM and EasyJet PLC all falling. "As we've seen over the last couple of years in Europe, these kinds of atrocities affect tourism and will hit airline earnings," says Neil Wilson at ETX Capital. "Investors are concerned that demand will fall over the rest of the year, which was already looking like it would be tough." Shares in German drug-maker Stada Arzneimittel AG rise 12% after Bain Capital LLC and Cinven Group Ltd. prevailed in their second takeover bid. Shares in Dutch tank-storage terminal operator Royal Vopak NV drop 8% after it posts lower 1H earnings. (philip.waller@wsj.com)

1028 GMT - The U.S. Food and Drug Administration's approval for a tablet form of AstraZeneca's ovarian cancer drug Lynparza was broader than expected. Analysts had anticipated an approval only in patients whose tumors carry the BRCA mutation, as this was the group that Astra had tested the tablet in. Still, the news hasn't significantly raised investor expectations for Lynparza, which competes in a crowded market: Tesaro and Clovis also market so-called PARP-inhibitor drugs. Astra shares trade down 1.14% Friday. (denise.roland@wsj.com; @deniseroland)

(END) Dow Jones Newswires

August 19, 2017 04:20 ET (08:20 GMT)

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