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Brainstorm Health Daily: June 12, 2017

Happy Monday, Dailies. There was some mighty big news at GE this morning, as GE CEO Jeff Immelt announced he was stepping down from the role on August 1, and being replaced by the current head of GE’s healthcare division, John Flannery. Flannery will assume the Chairman’s title as well on Jan. 1, 2018—which will put a formal end to Immelt’s long stewardship of the company.

I had breakfast with Flannery two weeks ago and he’s a smart, affable guy. Since 2014, he has led the healthcare unit, which had nearly $18.3 billion in revenue last year—or just under 15% of the company’s total business. And he’s credited with boosting the segment’s operating income by a healthy margin (up nearly 10% in 2016, year over year).

GE Healthcare has embarked on some thoughtful partnerships with academic centers of late: working with Boston Children’s Hospital to develop a pediatric brain scan database and algorithms to help non-specialists quickly identify kids with development delays, for instance; partnering with UCSF to create predictive analytics to improve diagnoses from CT scans and X-rays (in part, using data from electronic health records); and working with Johns Hopkins to make its hospital bed allocation more efficient, among other things.

And at the Brainstorm Health gathering in May, we got to see a cool demonstration of another technology partnership…in real-time. A doctor in rural India treated a chest pain patient with the help of a portable GE Health electrocardiogram (ECG) device. This physician wasn't a specialist. But thanks to cloud computing, he was able to transmit the heart data over to a cardiologist in San Diego, who then interpreted these results and shot his analysis and advice back to the Indian doctor via a tool called Tricog that can be downloaded via smartphone.

The good news for GE going forward is that its new boss seems to “get” healthcare and the power that disruptive technology can wield here. The bad news? Jack Brennan, GE’s lead director told me this afternoon: “John got fired as the head of GE Healthcare” when he was named CEO of the whole company.

I’ll have more of my fascinating conversation with Brennan, who led Vanguard for more than a decade, and Susan Peters, who leads human resources at the company, tomorrow.

In the meantime, here’s Sy with the day’s other news.

Clifton Leaf, Editor in Chief, FORTUNE
@CliftonLeaf
clifton.leaf@fortune.com

DIGITAL HEALTH

athenahealth to buy Praxify Technologies for $63 million. Cloud-based digital health firm athenahealth has scooped up Silicon Valley's Praxify Technologies in a $63 million deal, landing the company a suite of medical applications including a digital personal assistant that works with patients' electronic health records and AI capabilities. The system will be integrated into athenahealth's main cloud technology. "In combination with our cloud platform and services, Praxify's team and technology will help us further reduce the many inefficiencies of healthcare's clinical and operational workflows," said athenahealth chief technology officer Prakash Khot in a statement. (Healthcare IT News)

INDICATIONS

FDA rejects Coherus' copycat of Amgen's Neulasta. The Food and Drug Administration (FDA) has rejected Coherus BioSciences' "biosimilar" copycat of Amgen's white blood cell-booster Neulasta, a treatment that brings in about $4.6 billion in annual sales. The FDA is now requesting that the biotech provide more information about its manufacturing process for the treatment and a new analysis of certain data. While Coherus shares plunged more than 27% on the news, the denial doesn't mean the experimental therapy, CHS-1701, is doomed. The company can still win FDA approval if the agency is satisfied that it has resolved outstanding issues. (Reuters)

Flexion Therapeutics osteoarthritis drug could hold an advantage for diabetes patients. Flexion Therapeutics presented data over this weekend at the American Diabetes Association (ADA) annual meeting in San Diego suggesting that its experimental osteoarthritis drug Zilretta could come with a key safety leg-up. In a small clinical trial, the extended-release treatment didn't produce the kind of blood sugar spikes commonly associated with steroids to treat pain. As CEO Michael Clayman tells Fortune, this is significant because an outsize share of diabetes patients have or develop osteoarthritis, and the oscillation in blood glucose levels can be dangerous for them (especially for a chronic pain condition). Flexion describes itself as a biopharma company focusing on non-opioid approaches to pain management.

Nationwide birth control recall launched over packaging error. In the life sciences, order matters. Especially the order in which you take certain kinds of drugs. Case in point: Lupin Pharmaceuticals has had to launch a nationwide recall for a certain lot of its birth control medication because a packaging error placed placebo pills into the first four days of a cycle rather than the last four, raising legitimate concerns of unintended pregnancies. (Fortune)

THE BIG PICTURE

The Senate is writing a health care bill. You're not allowed to see it. The Senate GOP may come to a preliminary deal on health care legislation to roll back Obamacare as soon as this evening. But don't expect to see a public draft, according to Axios. Two Republican aides tell the publication that bill text won't be released until much further in the process (ostensibly once a final deal has been hammered out). This could prove problematic among more conservative Senate members like Kentucky's Rand Paul, who very publicly condemned the House's "secret" Obamacare legislation before its release earlier this year (when the bill was literally being kept under lock and key in a basement.) (Washington Post)

SCOTUS rules on critical biosimilars case. In one of the most consequential biopharma legal cases of the year, the Supreme Court has sided with Novartis over U.S. biotech giant Amgen when it comes to biosimilars, the generic versions of pricey medicines made with biological matter. In a unanimous ruling, SCOTUS ruled that companies making such copycats don't have to wait a full six additional months after winning FDA approval before bringing the products to market (Amgen was arguing that Novartis generics arm Sandoz would run afoul of federal law if it didn't hew to the 180-day post-approval waiting period). Clarence Thomas and the other Justices disagreed. "An applicant may provide notice of commercial marketing before obtaining a license," wrote Thomas, delivering the opinion of the court. "Amgen’s contrary arguments are unpersuasive, and its various policy arguments cannot overcome the statute’s plain language." (RAPS)

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