The Senate released a report that was over 125 pages long and covered a year-long investigation into drug pricing last Wednesday. The report goes into detail of four companies that hit major headlines in 2015 for obscenely high drug prices, including the infamous Martin Shkreli and his 5,000% price hike for Daraprim. With Donald Trump as the new president-elect, biotech stocks and health care stocks in general saw a bump following the election.
Many market players were unhinged by the possibility of a Clinton presidency and fears surrounding her stance on the industry overall. However, following what is being called "The Trump Bump," new developments that have coincidentally been found on President-elect Trump's Twitter feed have some investors a bit skittish. He too has expressed interest in lowering the cost of pharmaceutical drugs.
The committee was clear and made the distinction between the companies investigated in the report and other new businesses and drug companies developing new drugs. With Republican control of the Congress, many are seeing this as a bit more protection for pharma and biotech companies. Republican Senator Susan Collins told The New York Times that she did not think the solution would be for the government to set drug prices.
"Our report does not recommend that the government get into the business of setting prices for prescription drugs," Collins said. "We think that would have a harmful impact on the pipeline of innovative drugs."
Despite the negative light shone on companies like Turing Pharmaceuticals, Retrophin Inc. (RTRX), Rodelis Therapeutics and Valeant Pharmaceuticals (VRX), new and novel drugmakers as well as researchers continue to press forward. New government regulation brought about by President Obama's 21st Century Cures Act Bill aims to direct government funds to aid in the rapid commercialization of unique therapies and underserved areas of research.
Vitality Biosciences (VBIO), for instance, recently announced it has received the Drug Enforcement Administration's approval to scale up its activities at its facilities used for the development of novel pharmaceutical drugs. The company has targeted what has (up until 2014) been an illegal substance across the U.S., but recent developments and state legalization have aided in the expansion of the active ingredient for use with medical applications.
Recent moves made by the DEA brought up additional regulation on the topic. However, Vitality has been working with the DEA as well as the California Research Advisory Panel (a part of the California Attorney General's Office) to ensure substantial on-site guidelines are put in place to prevent any deviation of Schedule I substances. Vitality is currently overseeing preclinical studies of its proprietary prodrugs that were reviewed and approved by the FDA. "We are excited to scale up our research and to aggressively pursue clinical testing of our compounds, and this approval greenlights that work," explained Dr. Brandon Zipp, director of research and development and scientific co-founder of Vitality Biopharma, in a recent press release.
This news comes during the stock's latest bull rally that began earlier in December. In fact, shares of Vitality have not traded this high since October and a recent uptick in trading volume has become noticeable compared to previous months. Last month, Vitality announced it filed an international PCT (Patent Cooperation Treaty) application that includes 79 patent claims and almost 200 individual compounds. No new developments have surfaced regarding the progress of this application.

In combination with Opdivo, the companies are looking to achieve improved and longer lasting efficacy in patients with clear cell renal cell carcinoma who have cancer that is stable or possibly increasing on a PD-1 inhibitor therapy. PD-1 normally acts as a type of "off switch" that helps keep T-cells from attacking other cells in the body. When PD-1 binds to PD-L1 (a protein on some normal and cancer cells), it basically tells the T-cell to leave the other cells alone.
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