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「What’s News In China」Alibaba + Vanguard, First Index Option In Mainland China, China’s Most Valuable Brand

Alibaba (NYSE: BABA) affiliate Ant Financial and Vanguard, the $5.9T U.S.-based asset manager, formed a joint venture to bring a streamlined and broadly available investment advisory service to retail consumers in China. // prnewswire

China’s first mainland stock index options will debut on China Financial Futures Exchange (CFFE) on Dec. 23. The options are tied to the Shanghai and Shenzhen stock exchange-based CSI 300 Index and the minimum account threshold is RMB500K. It is the fourth risk management hedging tool for the mainland stock market. Previous options included CSI 300 Stock Index futures, CSI Smallcap 500 Index futures and SSE 50 Index futures. // YiCai

Moutai/Maotai is the most valuable brand in China. Hurun released its Most Valuable Chinese Brands list on Dec 12 – Kweichow Moutai ranked top with RMB 640 billion brand value. It maintained the title for the second year running. Maotai /Moutai is a brand of baijiu; the company booked over RMB 22 billion revenue and RMB 10 billion net income in 2019Q3. // AsiaTimes

 

Opioids (4)

New Treatments

Nektar Therapeutics (NKTR-181)

  • NKTR-181 is a new chemical entity (NCE) designed to relive pain without inducing high levels of euphoria, minimising the likelihood of addiction and abuse. Due to the potential of NKTR-181 to address the urgent problem of prescription painkiller abuse, the US Food and Drug Administration (FDA) granted NKTR-181 a Fast Track designation for the treatment of moderate-to-severe chronic pain in May 2012.
  • March 20 2017, Nektar Therapeutics announced positive results from the SUMMIT-07 Phase III study testing the efficacy of NKTR-181 in the management of moderate-to-severe chronic lower back pain.
  • Human Abuse Potential of Oral NKTR-181 in Recreational Opioid Users: A Randomized, Double-Blind, Crossover Study
  • May 2019, spinning off into a new subsidiary, Inheris Biopharma
  • July 26 2019
    • FDA Delays Advisory Committee Hearing For NKTR-181
    • Jefferies’ David Steinberg says he now expects a 1-year delay for the entry of the drug and lop off 30% of its peak revenue — trimming that to $350 million.
  • Q3 earnings Call, Nov 6 & Jefferies London Healthcare Conference, Nov 20
    • FDA informed us that they can now reschedule product-specific advisory committee meetings. We now anticipate adcomm for NKTR-181 within the next several months
  • https://seekingalpha.com/article/4303473-nektar-therapeutics-nktr-ceo-howard-robin-q3-2019-results-earnings-call-transcript?part=single

 

Opioids (3)

Oxycontin & Purdue Pharma

Companies at the center of the opioid crisis include Purdue Pharma, which filed bankruptcy in September 2019.

Oxycontin is a modified-release formulation of oxycodone that was initially approved December 12, 1995 as 10 mg, 20 mg, and 40 mg tablets. An 80 mg tablet was approved January 6, 1997, followed by a 160 mg tablet on March 15, 2000, and 15 mg, 30 mg and 60 mg tablets on September 18, 2006. The Applicant (Purdue Pharma) ceased distribution of the 160 mg tablet in April of 2001.

Here is a history of FDA actions, from 1995 OxyContin approval. In 2001, OxyContin label was changed to add and strengthen warnings about the drug’s potential for misuse and abuse.

Abbott marketed OxyContin from 1996 through 2002 — a critical period directly following the approval of the drug by the US Food and Drug Administration.

With Abbott’s help, sales of OxyContin went from a mere $49 million in its first full year on the market to $1.6 billion in 2002. Over the life of the partnership, Purdue paid Abbott nearly a half-billion dollars, according to court records. From late 1996 through 2002, Abbott was paid about $374 million in commissions, according to those documents. Total sales of the drug during that time were nearly $5 billion. From 2003 through 2006, after Abbott had stopped selling OxyContin, it still received a residual payment of 6 percent of net sales, according to the West Virginia court records. It is unclear whether that pertained only to prescriptions written by the Abbott doctors. OxyContin sales during that time were nearly $6 billion.

In May 2007, the company and three of its current and former executives, pleaded guilty to charges of misleading the public about the drug’s risks; Purdue Pharma LP and the executives will pay a total of $634 million in fines. The company’s sales representatives misleading physicians about OxyContin, for instance, said that the drug produced no euphoric feelings for users and that users suffered no withdrawal symptoms when they stopped taking it.

In April 2010, FDA Approves New Formulation for OxyContin.

In 2010, OxyContin was reformulated and an abuse-deterrent version was introduced, leading to an increase in heroin use and subsequent rise in hepatitis C infection rates.

Between the reformulation in 2010 and 2015, there was a more than 40% drop in OxyContin misuse. During the same period, there were sharp jumps in both heroin-related mortality and hepatitis C infections, suggesting that that factors driving the rise in heroin deaths may also be driving the rise in hepatitis C infections, according to the researchers. Prior to the reformulation of OxyContin, hepatitis C infection rates were comparable between above- and below-median misuse states. However, following the reformulation in August 2010, the gap began to widen.

More recently, strategies to reduce the supply of prescription opioids have received scrutiny for the same reason: Opioid users with untreated addictions often turn to riskier illicit drugs.

March 29, 2017 – Trump signs an executive order calling for the establishment of the President’s Commission on Combating Drug Addiction and the Opioid Crisis. New Jersey Governor Chris Christie is selected as the chairman of the group, with Trump’s son-in-law, Jared Kushner, as an adviser.

February 9, 2018 – A budget agreement signed by Trump authorizes $6 billion for opioid programs, with $3 billion allocated for 2018 and $3 billion allocated for 2019.

September 15, 2019 – Purdue files for bankruptcy as part of a $10 billion agreement to settle opioid lawsuits. According to a statement from the chair of Purdue’s board of directors, the money will be allocated to communities nationwide struggling to address the crisis.

Opioids (2)

Prescription Opioid

As a treatment: Prescription opioids can be used to treat moderate-to-severe pain and are often prescribed following surgery or injury, or for health conditions such as cancer.

In recent years, there has been a dramatic increase in the acceptance and use of prescription opioids for the treatment of chronic, non-cancer pain, such as back pain or osteoarthritis, despite serious risks and the lack of evidence about their long-term effectiveness.

Image result for Prescription opioid volume peaked in 2011 at 240 billion milligrams of morphine equivalents and have declined by 29% to 171 billion
Source: IQVIA

Prescription opioid usage in the United States increased considerably from the mid 1990’s to its peak in 2011, at 240 billion MMEs (morphine milligram equivalents). It is now declining rapidly with the largest single year change in 2017 with a decline of 23.3 billion MMEs or 12.0%.

The most common drugs involved in prescription opioid overdose deaths include:

    • Methadone
    • Oxycodone (such as OxyContin®)
    • Hydrocodone (such as Vicodin®)

Abuse Deterrent

What is an Abuse Deterrent Opioid: with abuse-deterrent formulation properties that are expected to meaningfully deter certain types of abuse and/or make abuse more difficult or less rewarding.

As a general framework, abuse-deterrent formulations can currently be categorized as follows:

  1. Physical/chemical barriers – Physical barriers can prevent chewing, crushing, cutting, grating, or grinding of the dosage form. Chemical barriers, such as gelling agents, can resist extraction of the opioid using common solvents like water, simulated biological media, alcohol, or other organic solvents. Physical and chemical barriers can limit drug release following mechanical manipulation, or change the physical form of a drug, rendering it less amenable to abuse.
  2. Agonist/antagonist combinations – An opioid antagonist can be added to interfere with, reduce, or defeat the euphoria associated with abuse. The antagonist can be sequestered and released only upon manipulation of the product. For example, a drug product can be formulated such that the substance that acts as an antagonist is not clinically active when the product is swallowed, but becomes active if the product is crushed and injected or snorted.
  3. Aversion – Substances can be added to the product to produce an unpleasant effect if the dosage form is manipulated or is used at a higher dosage than directed. For example, the formulation can include a substance irritating to the nasal mucosa if ground and snorted.
  4. Delivery System (including use of depot injectable formulations and implants) – Certain drug release designs or the method of drug delivery can offer resistance to abuse. For example, sustained-release depot injectable formulation or a subcutaneous implant may be difficult to manipulate.
  5. New molecular entities and prodrugs– The properties of a new molecular entity (NME) or prodrug could include the need for enzymatic activation, different receptor binding profiles, slower penetration into the central nervous system, or other novel effects. Prodrugs with abuse-deterrent properties could provide a chemical barrier to the in vitro conversion to the parent opioid, which may deter the abuse of the parent opioid. New molecular entities and prodrugs are subject to evaluation of abuse potential for purposes of the Controlled Substances Act (CSA).
  6. Combination – Two or more of the above methods could be combined to deter abuse.
  7. Novel approaches – This category encompasses novel approaches or technologies that are not captured in the previous categories.

Opioids with FDA-Approved Labeling Describing Abuse-Deterrent Properties

FDA has approved these opioids with labeling describing abuse-deterrent properties consistent with the FDA’s Guidance for Industry: Abuse-Deterrent Opioids – Evaluation and Labeling:

There are currently NO generic opioids with FDA-approved abuse-deterrent labeling.

Opioids (1)

Opioids

Opioids are drugs formulated to replicate the pain-educing properties of opium. Prescription painkillers like morphine (吗啡), oxycodone (羟考酮) and hydrocodone (氢可酮) are opioids.

There are four categories:

  1. Natural opioids (including morphine and codeine 可待因) and semi-synthetic opioids (drugs like oxycodone, hydrocodone, hydromorphone 氢吗啡酮, and oxymorphone 羟吗啡酮)
  2. Methadone (美沙酮), a synthetic opioid
  3. Synthetic opioids other than methadone (drugs like tramadol and fentanyl)
  4. Heroin, an illicit (illegally made) opioid synthesized from morphine that can be a white or brown powder, or a black sticky substance.
Source: CDC

Opioids—mainly synthetic opioids (other than methadone)—are currently the main driver of drug overdose deaths. Opioids were involved in 47,600 overdose deaths in 2017 (67.8% of all drug overdose deaths).

Opioids such as morphine and codeine are naturally derived from opium poppy plants more commonly grown in Asia, Central America and South America. Heroin is an illegal drug synthesized from morphine.

Hydrocodone (such as Vicodin) and oxycodone (such as OxyContin) are semi-synthetic opioids, manufactured in labs with natural and synthetic ingredients.

Fentanyl is a fully synthetic opioid, originally developed as a powerful anesthetic for surgery. It is also administered to alleviate severe pain associated with terminal illnesses like cancer. The drug is up to 100 times more powerful than morphine.

Methadone is another fully synthetic opioid. It is commonly dispensed to recovering heroin addicts to relieve the symptoms of withdrawal.

Three Waves of Opioid Overdose Deaths

From 1999-2017, almost 400,000 people died from an overdose involving any opioid, including prescription and illicit opioids.

This rise in opioid overdose deaths can be outlined in three distinct waves.

3 waves of the rise in opioid overdose deaths

 

  1. The first wave began with increased prescribing of opioids in the 1990s 3, with overdose deaths involving prescription opioids (natural and semi-synthetic opioids and methadone) increasing since at least 1999.
  2. The second wave began in 2010, with rapid increases in overdose deaths involving heroin.
  3. The third wave began in 2013, with significant increases in overdose deaths involving synthetic opioids – particularly those involving illicitly-manufactured fentanyl (IMF). The IMF market continues to change, and IMF can be found in combination with heroin, counterfeit pills, and cocaine.

「What’s News In China」

Dinsey Shanghai began construction for the new Zootopia-themed (疯狂动物园主题) expansion. Zootopia will be Shanghai Disneyland’s eighth themed land. It will also be the first Zootopia-themed expansion at a Disney park worldwide. On Dec 9, the construction has officially started; the plan was first announced in January this year. In China, Zootopia is the 2nd best-selling movie in 2016 and the 2nd best-selling anime movie in history as of 2019. // YiCai

Bilibili (哔哩哔哩) just paid RMB 800 million (US$ 113 million) for e-sport broadcast right. Trying to capture the market potentials in e-sports and live-streaming in China, Bilibili (NASDAQ: BILI) has reportedly spent RMB 800 million (USD 113 million) on a three-year exclusive agreement to broadcast the Riot Games’ League of Legends (LoL) World Championship in China. The 2018 LoL World Championship has 99.6 million unique viewers. // KrAsia | 36Kr

BCG opened its Asia-Pacific center for digital services in Shenzhen. Opened on Dec 6, the new DigitalBCG Immersion Centers in Shenzhen is the firm’s fifth global center for digital transformation after Silicon Valley, Paris, New York and Bangalore. // prnasia

「News of the Week」A letter from Larry and Sergey

Google’s co-founders retired from management positions in Alphabet and wrote a blog to the public;

They will continue their involvement as co-founders, shareholders and members of Alphabet’s Board of Directors.

Sundar Pichai, CEO of Google, becomes CEO of both Google and Alphabet.

Alphabet’s press release on Dec 3.

WSJ – Google Management Shuffle Points to Retreat From Alphabet Experiment

Dots to connect: Waymo’s rollout, potential spin-off of independent assets, Alphabet’s bottom-line, more detailed reporting, internal control issues, etc.

Our very first founders’ letter in our 2004 S-1 began:

 

“Google is not a conventional company. We do not intend to become one. Throughout Google’s evolution as a privately held company, we have managed Google differently. We have also emphasized an atmosphere of creativity and challenge, which has helped us provide unbiased, accurate and free access to information for those who rely on us around the world.”

 

We believe those central tenets are still true today. The company is not conventional and continues to make ambitious bets on new technology, especially with our Alphabet structure. Creativity and challenge remain as ever-present as before, if not more so, and are increasingly applied to a variety of fields such as machine learning, energy efficiency and transportation. Nonetheless, Google’s core service—providing unbiased, accurate, and free access to information—remains at the heart of the company.

 

However, since we wrote our first founders’ letter, the company has evolved and matured. Within Google, there are all the popular consumer services that followed Search, such as Maps, Photos, and YouTube; a global ecosystem of devices powered by our Android and Chrome platforms, including our own Made by Google devices; Google Cloud, including GCP and G Suite; and of course a base of fundamental technologies around machine learning, cloud computing, and software engineering. It’s an honor that billions of people have chosen to make these products central to their lives—this is a trust and responsibility that Google will always work to live up to.

 

And structurally, the company evolved into Alphabet in 2015. As we said in the Alphabet founding letter in 2015:

 

“Alphabet is about businesses prospering through strong leaders and independence.”

 

Since we wrote that, hundreds of Phoenix residents are now being driven around in Waymo cars—many without drivers! Wing became the first drone company to make commercial deliveries to consumers in the U.S. And Verily and Calico are doing important work, through a number of great partnerships with other healthcare companies. Some of our “Other Bets” have their own boards with independent members, and outside investors.

 

Those are just a few examples of technology companies that we have formed within Alphabet, in addition to investment subsidiaries GV and Capital G, which have supported hundreds more.  Together with all of Google’s services, this forms a colorful tapestry of bets in technology across a range of industries—all with the goal of helping people and tackling major challenges.

 

Our second founders’ letter began:

 

“Google was born in 1998. If it were a person, it would have started elementary school late last summer (around August 19), and today it would have just about finished the first grade.”

 

Today, in 2019, if the company was a person, it would be a young adult of 21 and it would be time to leave the roost. While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents—offering advice and love, but not daily nagging!

 

With Alphabet now well-established, and Google and the Other Bets operating effectively as independent companies, it’s the natural time to simplify our management structure. We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two CEOs and a President. Going forward, Sundar will be the CEO of both Google and Alphabet. He will be the executive responsible and accountable for leading Google, and managing Alphabet’s investment in our portfolio of Other Bets. We are deeply committed to Google and Alphabet for the long term, and will remain actively involved as Board members, shareholders and co-founders. In addition, we plan to continue talking with Sundar regularly, especially on topics we’re passionate about!

 

Sundar brings humility and a deep passion for technology to our users, partners and our employees every day. He’s worked closely with us for 15 years, through the formation of Alphabet, as CEO of Google, and a member of the Alphabet Board of Directors. He shares our confidence in the value of the Alphabet structure, and the ability it provides us to tackle big challenges through technology. There is no one that we have relied on more since Alphabet was founded, and no better person to lead Google and Alphabet into the future.

 

We are deeply humbled to have seen a small research project develop into a source of knowledge and empowerment for billions—a bet we made as two Stanford students that led to a multitude of other technology bets. We could not have imagined, back in 1998 when we moved our servers from a dorm room to a garage, the journey that would follow.

Sundar sent the following email to Googlers on Tuesday, December 3:

Hi everyone,

 

When I was visiting Googlers in Tokyo a few weeks ago I talked about how Google has changed over the years. In fact, in my 15+ years with Google, the only constant I’ve seen is change. This process of continuous evolution — which the founders often refer to as “uncomfortably exciting” — is part of who we are. That statement will feel particularly true today as you read the news Larry and Sergey have just posted to our blog.

The key message Larry and Sergey shared is this:

 

While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents—offering advice and love, but not daily nagging!

 

With Alphabet now well-established, and Google and the Other Bets operating effectively as independent companies, it’s the natural time to simplify our management structure. We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two CEOs and a President. Going forward, Sundar will be the CEO of both Google and Alphabet. He will be the executive responsible and accountable for leading Google, and managing Alphabet’s investment in our portfolio of Other Bets. We are deeply committed to Google and Alphabet for the long term, and will remain actively involved as Board members, shareholders and co-founders. In addition, we plan to continue talking with Sundar regularly, especially on topics we’re passionate about! 

 

I first met Larry and Sergey back in 2004 and have been benefiting from their guidance and insights ever since. The good news is I’ll continue to work with them — although in different roles for them and me. They’ll still be around to advise as board members and co-founders.

I want to be clear that this transition won’t affect the Alphabet structure or the work we do day to day. I will continue to be very focused on Google and the deep work we’re doing to push the boundaries of computing and build a more helpful Google for everyone. At the same time, I’m excited about Alphabet and its long term focus on tackling big challenges through technology.

The founders have given all of us an incredible chance to have an impact on the world. Thanks to them, we have a timeless mission, enduring values, and a culture of collaboration and exploration that makes it exciting to come to work every day. It’s a strong foundation on which we will continue to build. Can’t wait to see where we go next and look forward to continuing the journey with all of you.

– Sundar