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Brainstorm Health Daily: March 27, 2017

Greetings, readers. Once more, this is Sy. Cliff will be back tomorrow morning.

Not every health sector is reacting positively to the GOP’s Obamacare repeal bill’s failure. But a quick glance at the stock market shows that there’s one unambiguous winner from the American Health Care Act’s (AHCA), aka Trumpcare’s, stunning demise in the House of Representatives last Friday: hospitals.

Some of the nation’s largest hospital networks saw their shares soar in Monday trading after House Speaker Paul Ryan and Republican leadership pulled the AHCA at the behest of President Donald Trump. Tenet Healthcare was up as much as 7%, HCA Holdings spiked 5.5%, Community Health Systems rose more than 4%, and rural care provider LifePoint Health is up more than 3%.

This shouldn’t come as much of a surprise. Multiple independent analyses had shown that the AHCA’s enactment would lead to widespread insurance coverage losses—to the tune of 24 million fewer insured Americans over the next decade relative to current law. That helped galvanize major opposition to the legislation from health industry groups like the American Medical Association (AMA) and the American Hospital Association (AHA), as well as advocacy organizations such as the AARP.

Ratings agencies like Moody’s had also warned that the expected coverage losses under Trumpcare would hit hospital finances especially hard by swelling the ranks of patients who wouldn’t be able to pay for their medical treatment.

Broader health care indices and ETFs also rose modestly Monday, with the iShares Dow Jone Healthcare ETF up about 0.3% and the Health Care Select Sector SPDR ETF up about 0.2%.

Insurance company stocks were a bit of a different story, however. Health insurer giants like Anthem, Aetna, UnitedHealth, and Cigna all fell anywhere from 0.5% to 1.1% Friday.

Although the main trade association representing firms like these, America’s Health Insurance Plans (AHIP), did not endorse the AHCA, the bill did contain some measures that would benefit the companies by repealing certain taxes and allowing insurers to provide less generous (and less costly) benefits to customers. And now that Obamacare remains the law of the land under a hostile White House and Congress, insurers may be feeling the pinch of uncertainty over what the future holds for Obamacare’s marketplaces.

Finally, biotech and pharmaceutical stocks rose modestly Monday, with broad index funds and biotech ETFs up about 0.7% and big cap companies like Pfizer, Amgen, Celgene, and others up anywhere from 0.3% to 1.7%. This could, in part, be attributable to the fact that Republicans were considering repealing an Obamacare policy that requires individual and small group health plans to cover “essential benefits” including prescription drug coverage, which could have hit the industry’s bottom line.

But there is now also uncertainty over whether or not the Trump administration will be able to pursue comprehensive corporate tax reform, as the president had promised to big pharma CEOs during a January meeting. Repealing Obamacare and its various taxes was a major component of the GOP’s tax cut strategy.

The Dow Jones and NASDAQ composites were both down modestly early Monday.

Read on for the day’s news.

Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

DIGITAL HEALTH

The Zika mosquito’s genome has been mapped. Researchers have made a breakthrough in the battle against Zika virus – one of the genomic variety, reports Nature. Scientists have finally put together the genome of the Aedes aegypti, the pesky skeeter species that serves as a vector for Zika and is largely responsible for its outbreak in warm, humid, tropical regions. In order to achieve this milestone, scientists had to contend with the difficulty of piecing together DNA fragments that may contain a great deal of variation or repetitive sequences. And so, Baylor College of Medicine geneticist Erez Lieberman Aiden and his team came up with a new method of dealing with the issue. “By looking at how chromosomes fold, Aiden and his colleagues created maps that show how frequently different stretches of the genome come into contact with one another, a method called ‘Hi-C’,” writes Nature. “Using these Hi-C maps as guides, researchers can infer the proximity of different genome fragments.” (Nature)

Novartis, Cota Healthcare strike breast cancer precision medicine deal. Swiss pharma giant Novartis and Cota Healthcare are expanding an existing partnership in an effort to boost health outcomes for breast cancer patients. Under the collaboration, Novartis will be able to use Cota’s cloud platform, which is able to lump diverse patient pools into stratified tranches based on their medical information and personal histories. With the tech’s help, Novartis can better identify which patients would benefit most from various breast cancer treatments. “Data and insight that comes directly from patient records – real-world evidence – is transforming how pharmaceutical and life science companies develop more precise, targeted therapies,” said Cota CEO John Hervey in a statement. (Healthcare IT News)

INDICATIONS

Former Baxalta CEO heads over to Alexion. Ludwig Hantson, once the head honcho over at Baxter spinoff Baxalta, has a new gig: CEO of Alexion Pharmaceuticals, which is still grappling with the aftermath of some high-profile C-suite shakeup drama. The company had been conducting internal investigations into the sales strategy behind its flagship rare disease drug Soliris. And while that probe didn’t lead to any findings of improper sales reporting, CEO David Hallal and Chief Financial Officer Vikas Sinha stepped down over concerns that there were problems with how such reporting was handled. Hantson’s appointment makes a lot of sense given Alexion’s focus on rare diseases (a field in which both Baxalta and its eventual acquirer, Shire, also specialize). (Reuters)

Allergan acne drug snags a late-stage clinical win. Allergan and Paratek Pharmaceuticals are celebrating the success of sarecycline, an experimental acne treatment that met the primary endpoints in a pair of crucial phase 3 clinical trials. While specific details remain sparse, the firms announced that the daily, oral treatment bested placebo when it came to efficacy, and that they plan to file a marketing application with the FDA by the end of the year. “The positive efficacy results observed in the pivotal phase 3 clinical trials indicate that sarecycline can be an effective treatment option for patients with moderate to severe acne,” said Allergan R&D chief David Nicholson in a statement. “We look forward to submitting a new drug application for sarecycline and bringing to market a potential new option for physicians treating patients with acne.”

THE BIG PICTURE

Trumpcare may be dead. That doesn’t mean Obamacare is safe. You might have heard that the American Health Care Act, aka Trumpcare, went out with not so much a bang but a whimper on the floor of the House of Representatives last week (it didn’t even get a vote). But does that mean the Affordable Care Act, the legislation with seemingly nine lives, is out of the woods? Don’t bet on it. As I explain, there are still plenty of measures that the Trump administration and Congress can take to undermine the health law and exacerbate its existing problems. From death by a thousand administrative cuts to insurance industry uncertainty to lawsuits challenging key Obamacare provisions which help people afford their out-of-pocket costs, the ACA still has plenty of challenges to withstand going forward. (Fortune)

Another study analyzes the effects of breastfeeding. There’s been plenty written on the possible benefits, and the possible exaggeration of benefits, of breastfeeding children. Well, here’s another one to add to the pile: a study published in the journal Pediatrics suggests that breastfed children aren’t necessarily bound to be smarter than their bottle-fed peers – although the authors says there is some evidence that breastfed babies are less likely to develop hyperactivity. (TIME)

REQUIRED READING

5 ‘Health’ Foods You Should Take With a Pinch of Saltby Laura Entis

SCOTUS Turns Away Vimeo Caseby Reuters

Q&A With Brian Chesky: Disruption, Leadership, and Airbnb’s Futureby Leigh Gallagher

Why the Youtube Ad Boycott Could Cost Google $750 Millionby Mathew Ingram

Produced by Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

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