Saturday, July 4, 2009

Salmon's Take on Schering-Plough's Asenapine, and the NYT Opinions. . . .


Earlier this week, I ran some ruminations on The New York Times article of Tuesday, and its companion opinion piece -- about recent disappointments in the pace of genomics-based therapy discoveries. Salmon, as ever, had a far more comprehensive, and thoughtful, view on these matters, in the comments. It appears below:

. . . .The results are not surprising.

First schizophrenia (skee-zo-fren-i-a not skit -zo-fren-i-ais) is most likely not a single disease we've thought of it in this manner for decades based on the symptoms. A large fraction become paranoid and withdrawn, others are happy and just laugh at everything, most have auditory hallucinations and others visual, other symptoms such as thought problems, verbal communication, and breakdown in knowing personal space can vary significantly.

As a clinician it's extremely difficult to try to figure out from external observations and discussion what even the symptoms are and what type of mental illness we are dealing with. This is particularly true for children and the changes in symptoms that occur over time.

The brain is the most complex organ in the entire body it controls thought, emotion, memory, and movement. The types of cells and the complexity of the interconnections, the intercellular biochemical actions. and what the can do is simply staggering and we essentially understand very little about how normal brains work much less diseased ones.

As for genetic causes this is not suprising. Cystic Fibrosis was the first genetic disease tackled and it was due to a defect in a single gene product a chloride transporter. Yet soon (1-2 years) after discovering the target it was apparent that there well over 1000 mutations with different degrees of effect on function from extremely severe disease resulting in death in childhood to mild illness that might otherwise not be detected but might explain a greater propensity for say respiratory infections. Plus poorly functioning chloride channels resulted in compensatory activity by other channels and that likely led to some of the problems.

The complexity of the brain makes the likelihood that schizophrenia is due to defects in multiple possible brain activities from interconnections to receptor number and binding, to intracellular downstream effects on mitochondria highly probable.

Examining the drugs that we use it's clear that they are extremely dirty and hit multiple multiple receptor targets and act in many different ways. Plus the extensive metabolism with alterations in receptor binding and effects with differences in metabolite and enantiomer exposures make it likely that you are going to have effects and side effects that you don't anticipate or understand.

On top of all this we need to remember that nature uses these same basic building blocks over and over and varies them via mutations. So it is not surprising that we have effects on the heart or the liver, or kidney's, or muscles. Or if the drugs effect mitochondria or some other target that there is cumulative toxicities that occur after years at related sites (such as the pancreas where they may cause cell death and diabetes) or on the brain itself.

Considering all this it's amazing that we have drugs that work at all. However you have to realize that a drug may work extremely well in a amall percentag of people and drive the average improvements in scores that we use to measure efficacy but in the majority work no better than placebo and in another fraction may actually make mental illness worse, (e.g. suicide, psychosis, violence). Even that idea that short term efficacy or even moderate term (6 months - 1 year) will predict long term efficacy and safety is suspect and in fact evidence from other countries tend to support this.

When you consider all this and look at how psychiatry is practiced with little to no thought or self questioning of assumptions and what happens to patients it's no wonder that patients feel victimized and many claim there are no such diseases or biological basis.

As my boss used to say when I worked in this area 'this isn't rocket science. Rocket science is easy!."

We need to listen to our patients. I was at the last psychopharmacologic drug advisory committee meeting and the patient representative was a mother whose son committed suicide and when I and other heard the story thought it was suspicious for drug induced suicide. Instead she stated that patients would rather be on the drugs and have clear thoughts and deal with the side effects. That is simply false. Many patients will accept a lower less effective dose but not a higher more effective one due to side effects. Others prefer to not take drugs at all and know that they're acting strange to others but they've made a decision and when you speak to them you realize in spite of the mental illness that it's an informed one. Instead you have families and drug companies funding campaigns to forcibly medicate people even when they're not dangerous. Plus even forcibly administering these drugs to any kid who goes into foster care or an instituion and other kids when they aren't indicated on the hypothesis that they will prevent illness when in fact with all the effects it's most likely that they will be causing problems and even death well before they might truly need an antipsychotic.

As for asenapine if it worked well I assume that it would have been approved long ago (of course there are ways to rig the system even when the studies fail and you can't tell if a drug works or not).

Thus the most likely reason for the long development, Pfizer dropping it, and the delays in approval are most likely major toxicities. Considering the major toxicities we're seeing with the structurally similar antipsychotics (Clozapine - agranulocytosis and cardiac effects, Zyprexa - cardiac effects and diabetes, Seroquel - the same) We can only surmise that the magnitude and severity of the toxicities with asenapine must be truly horrific. Of course perhaps this is why it's only submitted for short term use even though no one would ever prescribe an antipsychotic for only short term use.

Rather than hubris where Pfizer and other failed, perhaps Fred is simply doing what he has done before. Moved on before the s--- hits the fan and sold the company to someone else to deal with the mess. So I wouldn't be surprised if Merck is simply taking on another Vioxx. But this time rather than treating people at the end of life who may be able to accept the risk for themselves for a true possibility of benefit. We are instead forcibly or tricking people into medicating children without schizophrenia or clear bipolar disorder with symptoms that part of every study where response has been shown, so there is no evidence of any benefit in the majority of the children treated and clear evidence of serious harm and death. . . .

-- Salmon,
07.02.09

Indeed, Happy Fourth, one and all.

Thursday, July 2, 2009

Friday Litigation Update: Vytorin MDL 1938 -- A Case Management Conference Rather Abruptly Canceled


This may well turn out to be nothing, but last night, Magistrate Judge Falk signed an order postponing a case management conference in MDL 1938, formerly known as Polk, et al. v. Schering-Plough Corporation, et al. (Case 08-285) -- the putative classs action alleging consumer fraud as a result of the delayed disclosure of the ENHANCE study.

Some general background on this would-be class action is here; the background on the civil RICO allegations in the case appears here. Last night's order looked like this:

. . . .The case management conference scheduled for Thursday, July 2, 2009 at 10:00 a.m. is hereby canceled and will be rescheduled shortly.

Ordered by:

/s/ Mark T. Falk

Magistrate Judge
Mark T. Falk
July 1, 2009. . . .

So -- is this as a result of a personal issue, or scheduling conflict, on the part of one of the parties, their lawyers, or the courts? We'll soon know whether this portends something substantive -- like, for example, some (improbable, but late-breaking) settlement discussions -- or something simple, and obvious -- like an unexpected trip, of some kind.

Okay -- Add Levitra® to the Near-Term "In-Substance" Patent-Cliffs List


A Total of $3.38 Billion, in Annual Revenues at Risk, by April 2012.

Yesterday afternoon, Schering Corporation -- along with a German company that holds the patents on Levitra® -- sued Teva Pharmaceuticals alleging patent infringement. That drug is sold for -- ahem -- erectile dysfunction, but don't laugh too quickly, as it is represents about $430 million in annual revenues, as a franchise, for Schering-Plough. On May 19, 2009, Teva wrote the German company to inform it of Teva's intention to file an Abbreviated New Drug Application (ANDA) with FDA -- for a generic equivalent tablet, containing the same active ingredient in Levitra -- Vardenafil Hydrochloride. The action is captioned Schering Corporation, et al. v. Teva Pharmaceuticals, et al. (Case No. 09-480, U.S. Dist. Ct., Del., Complaint Filed July 1, 2009). From the complaint:

. . . .[Levitra] Patent No. 6,362,178 expires March 28, 2018. . . .

But that is likely not going to be the most critical expiry date, for Levitra. No, Levitra's most critical expiry date may now well come as early as April of 2012 (see table below). How so?

Well, let's review the larger narrative here, then: even though many on Wall Street tout Schering-Plough's relative dearth of formal patent expiries (most after 2014; many in the 2017 to 2019 time-frame) -- there is another side to this story.

That "other side" involves the right, under the various Hatch-Waxman amendments, of competing manufacturers to launch generic versions of most of these drugs, "at risk" -- on the earlier to occur of (1) a favorable outcome in patent litigation (the Temodar trial is complete; now awaiting a decision from the bench), (2) 30 elapsed months from the filing of a patent lawsuit, coupled to FDA approval of an abbreviated new drug application (Note that the Clarinex "at risk" date could come at any moment -- should FDA approve Orchid's ANDA), or (3) the formal expiration of the relevant as-granted patents.

In one convenient table, then, as I'd earlier detailed, below are some of the larger Schering-Plough franchises with looming near-term "in substance" patent cliffs [now with Levitra's potential Teva woes, included]:





Branded NameSales ($M/Yr)Compound NameFirst Suit Filed30 Month Expiry/
"At Risk" Date
Likely Competitor
Clarinex®$800 MillionDescloratadineSeptember 2006May 2009*Orchid Pharma*
Zetia®$900 MillionEzetimibeMarch 2007October 2009Glenmark Pharma
Temodar®$950 MillionTemozolomideJuly 2007January 2010Barr Labs (Teva Pharma)
Integrilin®$300 MillionEptifibatideFebruary 2009November 2011Teva Pharma
Levitra®$430 MillionVardenafil HClJuly 2009April 2012Teva Pharma
Total:$3.38 Billion........

~~~~~~~~~~~~~

* All but one potential generic Descloratadine manufacturer has agreed to a standstill until January 2012, for generic launches. I believe the one remaining is Orchid Pharmaceuticals, out of India.

~~~~~~~~~~~~~

Wednesday, July 1, 2009

The NYT Put me in Mind of Schering-Plough's Asenapine, Tonight. . . .


The New York Times today ran a piece on the disappointments encountered by geneticists, recently -- in identifying causes of common diseases, through study of the afflicted patients' genetic code. It truly is a fabulous piece of reporting -- do go read it all. I'll wait.

And so, I was doubly delighted to find that the Times also ran a companion editorial (by Nicholas Wade -- do go read it, from top to bottom, as well!), which literally took my breath away, with the grace and precision of its delivery:

. . . .It seems to me the reports represent more of a historic defeat, a Pearl Harbor of schizophrenia research.

The defeat points solely to the daunting nature of the adversary, not to any failing on the part of the researchers, who were using the most advanced tools available. Still, who is helped by dressing up a severely disappointing setback as a "major step forward"?

. . .nature is often a lot more complex than assumed. It now seems that the arm of natural selection is far longer than thought. It has reached way beyond our reproductive years and zapped most harmful genetic variants before they could get to be common in the population. That leaves relatively uncommon variants, lots and lots of them in each case, as the genetic cause of each common disease.

In the last few years gene hunters in one common disease after another have turned up a few causative variant genes, after vast effort, but the variants generally account for a small percentage of the overall burden of illness. With most common diseases, it turns out, the disease is caused not by ten very common variant genes but by 10,000 relatively rare ones.

Today it’s the turn of schizophrenia researchers to make the same discovery. . . .

Schizophrenia too seems to be not a single disease, but the end point of 10,000 different disruptions to the delicate architecture of the human brain. . . .

So the press release writers could have cast it as a noble defeat, were words like defeat a part of their vocabulary, or frankness their masters’ priority. . . .

So -- why asenapine (the chemical name of the drug Hassan proposes to brand as "Saphris", in the United States), that decidedly old-schoolish Schering-Plough candidate awaiting an FDA decision, later this year (rescheduled from the middle of last year) for treatment of schizophrenia? Because we now know several other large pharma players passed on bringing it to market, before Fred Hassan threw perhaps a half-billion dollars into trying to get it approved -- at Schering -- for schizophrenia.

Yes, the "defeat points in some measure to the daunting nature of the adversary" -- and, in the case of asenapine, perhaps even more to the hubris that leads one CEO to think he could succeed where scores of others have assessed (including Pfizer, quite rightly, it seems) that it wouldn't be "a major advance".

Merck Expects to Name the "New Merck" Senior Executives By Late August 2009


Yet another Merck Merger Update was filed this morning with the SEC -- and this is the only really "new" information, in the page and a half of text:

. . . .I realize that most employees want to know the outcome of all this work. In other words, what is the new Merck structure and who will be on the new Merck leadership team. We expect to share our new structure and senior leaders (EC+1) by late August. . . .

So, the EMT equivalents will be identified shortly, then their direct reports (EC+1), or one layer below the EC (the equivalent of an EMT at most other pharma companies), will be named by late August.

All of this assumes a vote in favor of the reverse-merger, as presently structured, by both companies' shareholders, on August 7, 2009.

When to Put a Patient on a Simple Statin? The Role of C-Reactive Protein Questioned -- Anew


After Crestor's Jupiter trial results last year (one of the pivotal events in the decline of Schering-Plough's Vytorin/Zetia), it was thought, by some, that perhaps c-reactive protein (or CRP) might not only appear as evidence of inflamation associated with heart disease -- but elevated levels of CRP might actually be a contributing cause -- of heart disease. Not so, apparently, according to a study involving more than 100,000 patients, published in JAMA, just yesterday. [Both Marilyn Mann, and Matt Herper, of Forbes, had speculated that this might be the outcome, last year. They were both right.]

In any event, The New York Times Health Page has done a nice job of summarizing, in plain-English, these latest JAMA-published findings -- and the background, on treatments for elevated cholesterol -- do go read it all, but here is a snippet:

. . . .C-reactive protein, or CRP, a marker of inflammation in the body, is unquestionably associated with heart disease: the more CRP in a person’s blood, the greater the likelihood of heart disease.

But in a paper to be published Wednesday in The Journal of the American Medical Association, researchers analyzing genetic data from more than 100,000 people conclude that their study "argues against" the notion that the protein causes heart disease. . . .

Different people produce different amounts of CRP, and the amount a person produces is determined by tiny inherited changes in the CRP gene. So in a population, there are people who just happen to produce more CRP throughout their lives and others who just happen to produce less. If CRP causes heart disease, those who make more would have more heart disease. That, however, is not what the study found. . . .

Dr. Rader, at Penn, said he still did CRP tests on selected patients and expected to continue. An elevated CRP level indicates increased risk, even if the protein does not cause the risk. Dr. Rader tests CRP to help decide whether to give a statin to patients with normal cholesterol but with a family history of heart disease. A high CRP, he said, could tip the balance, leading him to prescribe a statin.

Dr. Altshuler noted that part of the power of a Mendelian randomization study was that it could stop a hypothesis from prematurely becoming viewed as fact. . . .

That would be a very good thing -- as perhaps hundreds of thousands of patients would not have been rushed onto wildly-expensive regimens of Vytorin/Zetia, in the last four years, when simple, cheap generic statins were apparently doing an adequate job, in the vast bulk of typical cases.

Schering-Plough Posts Positive Phase III Results in Fertility Trial


. . . .However, this was a non-inferiority trial, afterall.

Tuesday, June 30, 2009

Schering-Plough Pays $55 Million to U.S., California and Florida -- to Settle Drug Price Mark-Up Suits. . . .


At The Eleventh Hour, literally on the eve of a pending trial in the federal District Court in Massachusetts, Schering-Plough, and its subsidiary, Warrick Pharmaceuticals, have agreed to settle the potential financial exposures of each, in a series of actions brought by several states attorneys general, and the United States, claiming that Schering-Plough, and others, artificially inflated the wholesale price of many drugs each sold to Medicare or Medicaid, from as early as 1991 -- to the present day.

Schering-Plough already (at the end of October 2008) paid $31 million to settle similar charges in Missouri -- the largest such settlement ever, there. Earlier, Schering-Plough paid $27 million on similar actions in Texas.

Schering-Plough's payments will be due within 15 days, by wire-transfer. It is $55 million:

. . . .The Relator on behalf of the United States contends that Schering and Warrick submitted, or caused to be submitted, false claims to the Medicaid Program. . . .

The Relator on behalf of the United States contends that Schering and Warrick submitted, or caused to be submitted, false claims to the Medicaid Program. As a result, the Relator contends that the United States has certain claims against Schering/Warrick. . . .

In separate actions brought by California and Florida, California and Florida also contend that Schering/Warrick submitted, or caused to be submitted, for payment by the Medicaid Program false, fraudulent, and excessive claims for reimbursement. . . .

In full and final settlement of all claims that were brought or that could have been brought by the Relator on behalf of the United States, and all claims that were brought or that could have been brought by the States of California and Florida, Schering/Warrick shall pay the sum of Fifty-Five Million Dollars ($55,000,000). . . .

Within fifteen (15) business days from the Effective Date of this Agreement, Schering/Warrick shall pay the Settlement Amount by wire transfer into an escrow account at Frontier Bank (“Escrow Agent”) in accordance with the terms of the separate Escrow Agreement. . . .

I believe there are similar actions still pending in at least 19 other states against Schering-Plough. If each of these settles at around $30 million per state, the "all-in" tab for this alleged overcharging will be north of $685 million.

Meanwhile, at least 16,000 people will lose their jobs -- to improve Schering-Plough's productivity and efficiency. Would it not have been a better business strategy to charge steady, fair prices to the government payors, right along -- since 1991? I think so.

Monday, June 29, 2009

A federal Jury Verdict Form You'll Not See Every Day. . . .


Curtain: Act Two [of a three-act-play -- click to enlarge]. . . .



Recall that Johnson & Johnson's Centocor unit is in a pair of suits alleging, and defending, various claims of patent infringement -- one in Texas, from 2007 -- in which Centocor claims Abbott's Humira infringes several of Remicade's patents. In the other, pending in Boston, which was filed shortly after FDA approval of Simponi (a month or so ago), it is Abbott that claims Centocor has infringed some of Humira's patents, in the sales and marketing of Simponi (golimumab), the Centocor follow-on to Remicade.

Centocor has clearly won the case in Texas -- to the tune of $1.672 billion in jury-awarded patent-infringement (and royalties due) damages:

. . . .$1,168,466,000. . .

[plus]

$504,128,000. . . .

Wow. I do think this will embolden Centocor, and J&J, to very-aggressively pursue Schering-Plough, in the coming arbitration, over the reversion of Remicade and Simponi non-US rights. I think that is so, because Centocor is now flush with a sense of just how valuable this franchise will be, if Abbott's Humira has to pay steep royalties to it, just to stay on the market at all. Centocor will certainly want to likewise aggressively control the future of Simponi, given that the Abbott suit (alleging Simponi infringes on Abbott's Humira patents), in Boston, is still at least a couple of years away from a trial-date.

Were I Merck CEO Dick Clark, I'd seriously think about setlling early with Centocor/J&J -- just to take the risk of a boxcar number (like this one, above) off the arbitrators' table.

Team Merck to SEC, Tonight: "What We Know" and "What We Don't."


Another merger update was provided to Merck employees today, and filed, by Merck, with the SEC, tonight. It is interesting how careful Merck is to point out that the shareholders might not vote in favor of this particular reverse-merger structure -- THRICE. (I've reprinted, and bolded it -- below, along with some of the more salient bits):

TopicWhat We Know. . .What We Don't Know Yet. . .

FacilitiesThe Facilities Integration Team is currently analyzing all the Merck and Schering-Plough sites to see how they would best fit in the combined company. The evaluation of these facilities and their future roles is a complicated process — involving a careful assessment of organizational requirements, employee demographics and community commitments — and will occur over time. Information about site decisions will be shared as soon as appropriate.

Which sites will remain, which ones might decrease or increase in size and which ones will close.
Number of global employees post-closeImmediately at closing, the new Merck will have more than 100,000 employees total. Longer term, the substantial majority of employees will remain, but there will be a 15-percent reduction in the total workforce.Exactly which jobs will be affected and where, or how many and which employees the new Merck will need to operate efficiently. We also don't know when job reductions will occur within individual divisions and functions, although the job reductions are expected to take place through the year 2011. . . .

Employee benefits programsCurrent benefits programs will continue. We anticipate that any changes will be limited to those which are typical for routine business, and are not dependent upon the merger.What the new Merck’s benefits programs will be in the future. Merck's and Schering-Plough's benefits plans will be harmonized over time, with the majority of changes being planned for the year 2011 and later.

Merger Completion Date -- Day 1Our goal is to complete the merger during Q4 2009.

The exact date. . . .
Leadership team of the new MerckDick Clark will lead the new Merck as chairman, president and CEO. Other executive leaders — from Executive Committee through senior leadership, including most country-level senior leadership — will be named close to Day 1.

The specific organizational structure and who will be named to executive leadership roles. . . .
Special shareholders' meetingsOn June 24, the U.S. Securities and Exchange Commission (SEC) completed its review of the companies' joint merger proxy statement and declared it effective. In addition, regulators worldwide will review and approve the proposal for a combined company from an anti-trust perspective. Aug. 7 is the date of the special shareholders' meetings of both companies.

How the shareholders will vote; when and whether the proxy materials will be approved and the anti-trust approvals will be granted.
Shareholders' [Exchange Terms]Under the agreement, Schering-Plough shareholders will receive 0.5767 shares of Merck and $10.50 in cash for each share of Schering-Plough stock they own, upon closing of the merger.If the shareholders of each company will agree to the price and the merger. In the joint proxy materials, the boards of directors of both companies encourage shareholders to vote for the merger.

This ought to be very interesting.

More on the "Trouble for Temodar", Today -- Post-Trial Patent-Challenge Briefs Filed


"An Egregious Misuse of the Patent System. . . ."

After clearing a madatory one-week delay, to allow the redaction of trade secret material, Barr/Teva, Schering-Plough's opponents in the Temodar patent litigation (Cancer Research Technologies, et al. v. Barr Laboratories, et al., Case 07-457 (SLR), US Dist. Ct., Del. -- trial complete April 2, 2009 -- awaiting decision) have laid waste to one of Schering-Plough's central patent protection strategies in this challenge to the exclusivity for Temodar. Do click it to enlarge [a massive 2.6 Mb PDF File of the 60-page brief, full text]:



Background, from earlier SEC Form 10-Q, and federal District Court filings:

. . . .in July 2007, Schering-Plough and its licensor, Cancer Research Technologies, Limited, filed a patent infringement action against companies seeking approval of a generic version of certain strengths of TEMODAR capsules. The trial concluded April 2, 2009. A decision has not yet been rendered. . . .

[Much more on Schering-Plough's "In Substance" Patent Cliffs, more generally, here.]

[From the Delaware filings -- Barr/Teva's Disputed Questions of Law:]

. . . .'291 Patent is Unenforceable Due to Prosecution Laches Resulting from [Schering's] Delay in Prosecuting the Applications Leading to the Issuance of the ‘291 Patent

Prosecution laches is an equitable doctrine that "may render a patent unenforceable when it has issued only after an unreasonable and unexplained delay in prosecution," and may be applied even though a patent applicant complies with pertinent statutes and rules. Symbol Tech., Inc. v. Lemelson Med. Educ. & Research Found., 422 F.3d 1378, 1385 (Fed. Cir. 2005); In re Bogese, 303 F.3d 1362, 1367 (Fed. Cir. 2002). When addressing the issue of the burden of proof applied to prosecution laches, this Court has agreed with other district courts that “the preponderance of the evidence standard should apply. . . ."

. . . .As an equitable doctrine, there are no firm guidelines for determining when prosecution laches should render a patent unenforceable, and the determination is "subject to the discretion of a district court before which the issue is raised." Symbol Tech., 422 F.3d at 1385. Prosecution laches requires “an examination of the totality of the circumstances.” Id. at 1386. Factors district courts have considered to determine whether a delay in prosecution was unreasonable are (1) whether the prosecution history of the patentee’s patents is atypical of patents in that field or patents generally; (2) whether there are unexplained gaps in the prosecution history; (3) whether the patentee took any unusual steps to delay the application process; (4) whether a change in the patentee’s prosecution of the application coincided with or directly followed commercial developments or evolutions in the field of the claimed invention; and (5) whether legitimate grounds can be identified for the abandonment of prior applications. . . .

With so much focus on health care reform in the United States, this case may well become the "poster child" for Big Pharma's more-than-occasional alleged abuse of the United States patent system -- to (in this case) delay the start date of patent protection, until the manufacturer (Schering-Plough) is in the best position to keep any potential generic competitors (Barr/Teva) off the US market-shelves for the longest period of time imaginable. Once again, pressing too hard -- torturing the facts, and the law -- Schering-Plough may yet reap the exact opposite of the result it originally sought. We shall see.

Merck's Zostavax is "Back" -- Raw Material Potency Returns -- Has Cleared Order Backlogs


Vaccine manufacturing is a very complicated proposition -- and almost-unimaginably more complicated, when one needs to acheive the immense-scale bulk operations a blockbuster franchise biological requires -- to reach many markets in vast quantities, and in a timely fashion, to boot. Merck's biological engineeers know this only too well:

Per this morning's The Wall Street Journal -- this looks to be $320 million added back into revenue -- assuming the Whitehouse Station biological engineers have solved the bulk raw material potency problems, for good:

. . . .Merck & Co. (MRK) is back to normal shipping times for its Zostavax shingles vaccine after a year of prolonged delays caused by supply constraints for a key ingredient.

The resolution of back orders is just one milestone in Merck's attempt to bounce back from various problems plaguing its vaunted vaccines unit.

The Whitehouse Station, N.J., company cleared back orders for 10-dose packs of the vaccine in April and for single-dose shipments earlier this month, said spokeswoman Amy Rose. Merck has resumed shipping the product to doctor's offices and other health-care providers within three to five days of order placements. . . .

Thus, Merck is up about 2.5 percent on the NYSE this morning; Schering-Plough is up about half of that.

Sunday, June 28, 2009

Financial Times' UPDATED Story Claims a $4 $10 $4 Billion Animal Health Price


UPDATED on Monday: It appears that both FT stories are now back to reciting the single $4 billion figure. Interesting. This item is entirely credited to the keen eyes of an anonymous commenter of mine, below.

In a new story -- identical to the old, in every respect, save one -- the Financial Times is now asserting that the Animal Health businesses may fetch upwards of $10 billion (up from $4 billion in the original rumor piece, of Friday night).

One increasingly obvious possibility -- to reach that number -- is a sale of everything (Both Merck's Merial share, and Schering-Plough's Intervet businesses):

. . . .Merck. . . is close to restructuring its lucrative animal medicines assets in a wide-ranging deal likely to be finalised in the next few weeks with its partner Sanofi-Aventis that could earn it more than $4 $10 billion. . . .

To be fair, Merck CEO Dick Clark has made very specific statements to the contrary, and in very-recent SEC-filed documents, no less. So, until those are revised, updated or withdrawn, I'm not sure this is anything beyond a simple rumor.

But a rumor with a very high price tag.

Saturday, June 27, 2009

Another Fascinating (Completely Unverified) CafePharma Post -- "Re-Importation" of Schering-Plough Birth Control Drugs/Devices. . . .


With reimportation near the top of the screen, in many of the recent health-care reform discussions -- I thought the readership might find this purely-rumored squib, purporting to be from a Schering-Plough Womens Health Care sales representative -- rather interesting. [I am, candidly, uncertain whether the Implanton birth control system is considered a "device" by FDA, or a "drug" -- but it is a distinction of scant difference, as in either case, re-importation is presently proscribed by applicable U.S. Customs regulations.]

In any event, while Canada may not technically be "overseas" -- this appeared on CafePharma, overnight:

. . . .Yesterday, 5:50 PM | Anonymous

W[omens] H[ealth] C[are] here -- have mercy on me......learned today that one of my top offices has been ordering Implanon FROM CANADA!! Also have some ordering from South America...what a nightmare ....Office Mgr. told me "if your company wouldn't charge $600-700 for one rod, I wouldn't have to do this".....OB said he didn't know -- he just puts them in.......anyone else have this issue? They should DUMP this crappy product and just let offices order on their own OR somehow give the rep credit for ALL orders including out-of-country ones -- but that will NEVER happen. . . .

Click the image to enlarge it [I edited it slightly for typos, blue-language, etc., above -- but this is the original]:



It goes without saying, of course, that it would be unlawful to provide incentive compensation of any kind to Schering-Plough salespeople, for sales made in plain, and knowing, violation of the United States Customs provisions.

And so, I offer this more as an example of just how broken the health-care delivery system really is in the United States -- and less as a specific indictment of Schering-Plough salespeople. I am fairly certain that this sort of stuff occurs (in a presumably very-small fraction of all implanted birth-control procedures), industry-wide. A small percentage of doctors' offices occasionally source, buy, and reimport drugs and devices, from non-U.S. vendors -- both thus apparently willing to take the risks of prosecution and/or injury, to a patient, should an adulterated good be implanted.

Truly unfortunate, even if it only hapens "once in a Blue Moon. . . ."

Fair pricing -- worldwide -- might be a better solution, no? It would remove the powerful financial incentive to reimport, right? I think so.

Financial Times Claims Animal Health Business Deal With Sanofi-Adventis is "Near"


The online version of London's Financial Times had, back in late March of 2009, also run a "rumors" piece that very accurately presaged Johnson & Johnson's filing for arbitration (re Remicade and Simponi non-US rights reversion) -- so I'd tend to give this piece just a little more credence than it might otherwise be entitled, simply on its face.

What was most intriguing to me was the relative prominence that FT's stringer Andrew Jack, in London, allocated to the divestiture of all the Animal Health businesses (as I have, before) -- even in the face of still-operative comments to the contrary from Merck CEO Dick Clark. From Financial Times, then [UPDATED version of this story here]:

. . . .Merck. . . is close to restructuring its lucrative animal medicines assets in a wide-ranging deal likely to be finalised in the next few weeks with its partner Sanofi-Aventis that could earn it more than $4 $10 billion. . . .

Merck is considering whether to fold Schering-Plough’s animal health division into Merial in exchange for a fresh balancing cash injection from Sanofi-Aventis, to sell them to a third party, or to sell its own stake in Merial. . . .

Merial, established as a joint venture in 1997, generated sales last year of $2.8 billion.

Schering-Plough’s own animal health products and those of Intervet, which it acquired from Akzo Nobel in 2007, generated [revenues of] nearly $3 billion last year.

Chris Viehbacher, the head of Sanofi-Aventis appointed at the end of last year, has expressed his interest in diversifying the business away from core pharmaceutical products and stressed a large capacity to fund deals, suggesting an appetite to strengthen the French group’s position in animal health. . . .

That last bit might imply that Sanofi, alone, or with other backing, would buy the whole of all the Animal Health franchises, outright -- then carve them up, in some fashion. If sold, the aggregated Animal Health franchises would greatly reduce New Merck's (and to be clear -- "New Merck" is a far more accurate descriptor for the Sch-Merck entity, than any name which would include the old "Schering-Plough" handle -- so I'll likely use "New Merck" to refer to the post-merged entity, from now on) debt load, post reverse-merger. They could be nearly completely-delevered, when compared to pre-merger levels.

In this market, that would allow New Merck to weather significant internal (i.e., FDA non-approvals and patent-cliffs), or external (i.e., reform-driven pricing pressures and/or any future overall-market calamaties and) challenges.

We'll see.

Friday, June 26, 2009

In 2008, Schering-Plough Employees' Plan-Participants Saw Depreciation of $150 Million, in Company Stock Values Alone


Schering-Plough just filed (with the SEC) its 2008 Annual Reports on Form 11-K covering its employees' saving and investment plans (one for employees in Puerto Rico, and one covering the United States employees), tonight. Together, these plans reported just under $150 million in value-declines, for the calendar year 2008 -- on Schering-Plough common stock investments held by employees, alone (forgetting about the all the rest of the general market-declines).

Meanwhile, CEO Fred Hassan's payday/GAIN -- on the reverse merger's effectiveness -- could easily top $158 million, for his personal account, alone.

That's MORE than ALL the employees' plans unrealized declines of last year, combined.


From the SEC Forms 11-K, then:

. . . .Puerto Rico | Page 12. . . ($1,779,000). . .

United States | Page 13. . . ($149,576,000). . . .

The vast bulk of these declines are now in the accounts of the lowest-paid (and in many cases, soon-to-be laid-off) Schering-Plough employees (and recent ex-employees). . . . But Mr. Hassan will parachute away, safely -- on billowing clouds of golden fleece. . . .

A Grin-Break -- From the Sunscreen Battle Royale -- On a Hot Friday


As most of you know, Schering-Plough (the maker of Coppertone) has sued J&J's Neutrogena unit (seeking, after depositions, a preliminary injuction -- a gambit upon which I personally think Schering-Plough is highly unlikely to prevail), claiming that some of Neutrogena's advertising for its sunscreens is "false and misleading". Of course, Neutrogena not only disputes those allegations, but has, just this week, re-asserted that some of Schering's Coppertone advertising is -- itself -- both "false and misleading", under the federal Lanham Act, as well as local Delaware law (the suit is pending in the federal District Courthouse in Delaware).

What's good for the goose, is better for the gander, it would seem, eh? In any event, at about page 13, of the 19 page Neutrogena filing (full 19 page PDF file), this appears:

. . . .123. Finally, the commercial as a whole conveys the false and misleading message that Coppertone Sport sprays provide better sun protection compared to Neutrogena Ultimate Sport sprays. That claim is false even according to Schering. Schering’s papers filed in this action contend only that Coppertone Sport’s highest SPF products provide at most parity protection compared to Neutrogena’s Ultimate Sport products. And on average, Neutrogena’s Ultimate Sport products, including the spray products, provide better sun protection than do Coppertone’s Sport products.

124. The Coppertone Sport commercial is being aired during the very first selling season for the Neutrogena Ultimate Sport line. Neutrogena has invested in Ultimate Sport years of research and development, significant advertising expenditures, and the time and effort of many Neutrogena employees and executives. A significant portion of that investment could be lost if Schering is not barred from making its false and misleading claims about the Neutrogena Ultimate Sport line.

125. Unless and until Schering is ordered to cease making its false and infringing advertising claims, Neutrogena stands to suffer a loss of sales, hard-earned reputation, and consumer confidence that it may never be able to recoup. . . .

"Ouch -- that's kinda' lobster red, there, Missy!" An aside, here -- do ya' think it matters, at all, that J&J didn't agree to "play ball" with CEO Hassan, on Remicade and Simponi rights outside the US -- and thus, this Coppertone arguable "strike suit" was brought -- almost two full years after most of the ads Schering now complains about were first introduced into the stream of interstate commerce? I do.

Simponi's EMEA "Approvable" Recommendation Likely to Sharpen JNJ's Abritration Focus


Simponi, a Centocor drug, has received the equivalent of an FDA "Approvable Letter" from the European Medicines Agency. This is good news for Johnson & Johnson unit Centocor. If Schering-Plough is able to convince a panel of arbitrators that it should retain the European rights to Simponi (or settle with J&J on favorable terms), this will also be good news for it. But that outcome (even, apparently, in the views of Schering-Plough and Merck, themselves -- given the beefed-up "Risk Factor" disclosure about the matter, of just yesterday, in an official SEC filing) is, at the moment, far from clear -- per Reuters updated story, this morning:

. . . .Johnson & Johnson and Schering-Plough Corp's once-monthly drug Simponi has been recommended for approval in Europe to treat moderate to severe rheumatoid arthritis, the companies said on Friday.

Decisions by the European Medicines Agency are normally endorsed by the European Commission within a couple of months. . . . .

The drugs are proving a high-stakes bone of contention in Merck & Co's planned $41 billion purchase of Schering-Plough, because Merck has said it will inherit overseas rights to the drugs.

Under an earlier marketing deal with J&J, Schering-Plough is obliged to return overseas rights to J&J if control of Schering-Plough changes.

Merck is slated to buy Schering-Plough later this year. But the deal was structured as a "reverse merger," meaning Schering-Plough technically would acquire larger Merck even though Merck is paying it $41 billion.

The strategy would allow Schering-Plough to claim it is a continuing enterprise and therefore has not undergone a change in control that would force it to give up overseas rights to the two arthritis drugs.

J&J has exclusive rights to sales in the United States. Schering-Plough has rights in most other markets.

Schering-Plough said in a filing last month J&J would seek to arbitrate an end to their drug partnership in the wake of the planned merger with Merck. . . .

This certainly means there will soon be much more to fight over -- previously, the EU approval was seen as likely, but no one could reliably predict when the pan-European revenue stream would begin. Thus, assigning a value to the rights was a fuzzy proposition. Everyone agreed it was north of $1 billion, but how far north? Now, in the next few months, we are likely to get a sharpened sense of just how much is really at stake, here -- in the single largest market for which Schering-Plough still arguably may retain its right to sell this very, very high margin drug (along with, and as a follow-on, to Remicade).

As ever, stay tuned -- but I actually think this increases the chance that Schering-Plough and Merck agree to a very generous (to William Weldon's team) royalty-sharing arrangement with JNJ/Centocor, in order to secure at least some portion of this Euro-revenue, with certainty. Even though -- as I've said before -- an "all or nothing" outcome isn't terribly likely in most arbitrations, I think these numbers are just too high for Dick Clark to be willing to simply roll the dice -- potentially seeing "snake eyes" come up -- and lose it all.

Thursday, June 25, 2009

Salmon's Excellent Insights on Yesterday's FDA Transparency Webcast


I knew Salmon would wander by, to grace us with some cogent commentary and analysis -- on the above topic -- and in the comment box, here, he just did:

. . . .Most of the comments as they came from outside the agency were fairly consistent and limited. I didn't pay attention to the non-drug portions so I'll stay focused on comments related to drugs especially as this blog focuses on SP.

Many comments related to difficulties with FOIA, the methods used to redact documents (white out and then scan into pdf image files so they can't be searched). Not including reviews consistently in Drugs@fda. Also not releasing reviews of supplemental indications that have not been approved due to lack of efficacy or safety because companies still promote these uses off-label. One ex-FDA reviewer pointed out the FDAAA 2007 requires release of the action package but not IND reviews which may be pertinent but even so with the very first one under this law there was inappropriate redaction of drug metabolism information and >90% or market withdrawals are due to drug metabolite toxicities. One mother of a boy who died didn't understand why numbers of patients taking a drug should be redacted as it's needed to assess adverse event rates.

Industry comments were pretty much as expected. Don't release stuff because they're trade secret or commercial secret. There were several comments debating the extent of redaction.

However several people indicated that this could be overcome by simply not releasing information until either approval, nonapproval, or prior to an advisory committee and not during the review process.

There were also a number of people who said FDA needs to release all the raw data because analysis by FDA reviewers or analysis of avandia data that came out under discovery showed very different safety risks than admitted to by companies or the FDA.

One ex-FDA reviewer recommended that all new molecular entities have advisory committee meetings in spite of their problems. Dr. Sharfstein probed this and it was suggested that when FDA reviewers can't speak and all the questions are answered by industry or FDA senior people, a different picture may emerge. However when reviewers who know the data are allowed to speak, the committee members can get more nuanced and detailed answers which they can probe and in that reviewer's experience this in one case he was involved in changed the likely Advisory Committee "yes" vote to a "no" vote by the Committee.

Another unique comment by this ex-reviewer was the need to change the FDAAA of 2007 and the Good Review Management Practices/Good Review Practices (GRMPs or GRPs), because they were allowing insider trading.

Off line this ex-reviewer was passing out statements because he had originally been scheduled to speak and when FDA saw his comments he was removed (based on the claim that they were off topic). I have the package which includes the scope of the topics to be discussed and the rules for the meeting and they certainly seem within topic to me, embarassing to FDA yes, but still within the scope.

One of the draft statements is particulary interesting for this blog as it refers to possible insider trading and knowledge of internal FDA information regarding asenapine and possibly the sale of Schering-Plough to Merck. . . .

-- Salmon

Excellent, Salmon! To your last point, I can arrange to collect anything that was made public at an open, federal governmental agency meeting. Whether I'll run it, here, may be another matter. I do try to confine my material to public documents, officially released. Let me get back to you on this, in the comments.

Thank you so very much!

Namaste

Off-Topic -- Like This -- Not Much of What Came Much Later. . . .