Saturday, July 23, 2016

O/T: 54 Years Ago This Afternoon, President Kennedy Used Telstar 1 -- To Broadcast A Live TV Address, From The US To The UK

In so doing, he (and Walter Cronkite, later broadcasting the nightly news -- and rather improbably, the Chicago Cubs, immediately prior thereto -- whose game at Wrigley, with the Philadelphia Phillies was broadcast to England for a few moments, while President Kennedy waited to begin his prepared remarks) paved the way for the global lightning-fast internet we now take for granted. If you are looking at this these YouTube video-feeds in Wolverhampton, Tokyo or Dakar -- you may well be seeing the below, bounced off a satellite -- one of hundreds of far-advanced great great grandchildren of Telstars 1 and 2.

Here more than a half century on, those early, ginger steps led to this day: letting us stay in touch with one another live, and instantly, from Japan to Antarctica, from to Kenya to Canada, and from the US to Turkey. Simply amazing, for those of us who still remember a time when it was not so:

. . . .Telstar 1 was an experimental active communication satellite built by Bell Systems. It was launched with assistance from NASA in July 1962. Approximately 400 transmission sessions were conducted by the satellite with multi-channel telephone, telegraph, facsimile, and television signals in the six month period after Telstar was launched. Hundreds of technical tests and measurements were also made which would help later satellites revolutionize the communications industry. [In the Cubs middle innings, batter Tony Taylor, was seen hitting a ball pitched by Cal Koonce to the right fielder George Altman. Then the video feed cut away to President Kennedy, speaking live in Washington, DC.]

A few months later, during November 1962 the command subsystem on the satellite failed. A brief restoration of services was made in early 1963, however within six weeks the command subsystem again failed. The cause of the failures was due to degradation of transistors, caused by Van Allen belt radiation increases later attributed to very high level troposphere American & Soviet nuclear weapons tests then being conducted. . . .

It is hard to overstate what a "wow factor" that moment in television history held. Kids across the nation watched, glued to their (overwhelmingly) black and white TV sets, as their parents explained satellite orbits. It even inspired/generated an eponymous No. 1 pop-hit, by the Tornados -- in both the UK and the USA. Here's a bit of that live presidential address, at about 24 minutes and 53 seconds in.

Now you know -- off (fittingly, now) to see Star Trek Beyond. . . smile. . . .

Pfizer's Lobby Spend Nearly Doubled Merck's -- In First Half Of 2016: $7.77 Million...

Just as we intoned a few days ago, there is still "embedded" in the huge 2016 first half spend by Pfizer, all that money it had to write off, lobbying to skirt the two-year old Treasury regulations -- on inversions, during Q1 2016 -- when it had to abandon its $159 billion Allergan re-domicile deal. [That the deal was always going to end up DOA was obvious to most savvy financial people -- at least to those not trapped in the Pfizer echo-chamber.] What an ignomious waste of shareholders' money, that was. It was clear over a 18 months ago, that the regulatory landscape had changed -- after Mr. Read's first failed inversion (at $120 billion, for AZ) went down in flames. Between the two failed deals, Mr. Read likely spent over $600 million -- when one includes all the broken deal fees to bankers and counter-parties, and legal, lobbying, tax and accounting expenses.

Okay -- to the specifics, then: Pfizer spent $3.57 million in Q2 2016 (compared to $2.45 million in Q2 2015). And that in turn, compares to its $4.2 million in Q1 2016. Down only 12 per cent, compared to Merck's cutting lobby-spend in half, in the same time frames.

In any event, I would hope that Mr. Read's lobby spend decreases more significantly in Q3 2016 -- to become more closely proportional to Pfizer's size relative to Merck's -- as it is clearly a tumor, at this point in the year. With very little happening in the way of actual legislation, until the new President is elected, the whole operation ought to be essentially moth-balled, until January 2017. But that's just my $0.02 -- for Pfizer's institutional investors, to communicate/advocate with Mr. Read. Here's some of what he spent on, in Q2 2016 -- I've bolded the bits that Merck likely also spent on (albeit much smaller sums):

. . . .Trans Pacific Partnership Negotiations, Miscellaneous Tariff Bill (MTB), Trans-Atlantic Trade & Investment Partnership (TTIP,) Canada IP/Trade Issues, South Africa IP Issues, China IP, Saudia Arabia Pricing Issues, United Nations Health Panel [likely along with Merck], Thermacare EU, Privacy Shield, G7/G20, APEC, OECD. . . .

21st Century Cures Initiative, Senate Innovation Project, Drug Pricing, Biosimilars Reimbursement Policy. . . .

Patent Troll Legislation, Defend Trade Secrets Act, Medicare Rebates/Medicare Part D, Non-Interference, Medicare Part B Reimbursement, Medicare Part B CMMI Demo. . . .

Deferral, Comprehensive Tax Reform, Territorial Systems, Patent Innovation Box, Cadillac Tax, Inversions, Section 385 Proposed Regulations. . . .

Omnibus Appropriations Bill, LHHA Appropriations, 2017 FDA & Labor/HHS Appropriation Bills. . . .

Now you know -- off to mountain-bike, a workout, and then a longish swim in the cool clear lake waters, then lie on the white sandy beaches, here. . . smile. I love summer Saturdays. . .

Friday, July 22, 2016

Merck Encounters FDA Delay On Its C. Diff. BLA -- But Stool Capsules Are Already Likely Eating Into Would-Be Market Share...

While this offering will, in part, serve as a complement to the Cubist acquisition offerings, it will certainly sell on its own -- if and when it garners approval. However, the reality may be that the biologic will be overpriced compared to the purified stool capsules (or alternatively, implants) which have gained increasing favor, as payers look for more economical methods for tackling this otherwise rather common and widely-dispersed infection problem. We shall have to wait and see how it all unfolds, but I expect that Merck has trimmed its peak annual sales expectations for the candidate, given intervening developments on other C. diff. fronts.

Chief among these is the notion that, as I had originally noted -- as early as December 2012 -- Clostridium difficile biologics franchises may face the reality that purified stool implants (or more recently, carefully insulated oral capsules!) solve the same problem, at a fraction of the biologics' costs. And some of that filtered through at the earlier FDA Advisory Committee meeting -- but here is FierceBiotech on it all, as of this morning:

. . . .Trials for the drug, which is not a traditional antibiotic but designed as a mAb to prevent the recurrence of C. difficile infection by binding to and neutralizing the C. difficile toxin B, have already been chided by an FDA expert panel.

Last month the regulator’s advisory group questioned the Big Pharma giant for its small trial size despite the patient population being huge, with others seeing shortcomings in the data. The panel did vote 10-5 (with one abstention) for a recommendation, but most seemed to harbor differing levels of reservation. . . .

So now the earlierst this BLA will be cleared will be late October, 2016. Now you know -- and onward, to a perfect -- if smokin' hot, summer weekend -- all grins here! I refuse to allow the re-emergence of the name of David Duke -- into national political race dialogues, bend the arc of my joy -- at all. Next Star Trek movie installment in the offing, as well!

Thursday, July 21, 2016

Merck Drastically Cuts Its Lobbyist Spend In Q2 2016

While final figures for Pfizer are not yet available (as it is almost always tardy in reporting), it looks like Pfizer cut its Q2 2016 lobby spend by only about 12 per cent, compared to Q1 2016.

Merck on the other hand, has cut its Q2 spending in half, compared to Q2 2015 -- and spent only about a third of what it spent just last quarter, in Q1 2016. My suspicion would be that this US presidential election year summer brings us to both a congressional recess, and not much in the way of action on major legislative proposals, for or against pharma's interests -- as presidential campaigning now dominates the scene. Even so, here is what Kenilworth says it spent its lobby-dollars on, in Q2 2016:

. . .340B (no specific bill), Hepatitis C (general education; no specific bill), Human papilloma virus and vaccine policies (general education), shingles vaccine policies (general education), antimicrobial resistance (general education and DISARM (H.R. 4187), biosimilars (no specific bill), 21st Century Cures (H.R.6), Senate Innovation Project (no bill number), cost and value of medicines (no specific bill), Strengthening Public Health Emergncy Response Act (H.R. 3299), priority review voucher and medical countermeasures (general education), women's health (general education), insurance benefit design and value-based contracting (general education), general pharmaceutical issues. . . .

Comprehensive tax reform (no specific bill), international tax proposals (no specific bill), orphan drug legislation (S.1128), base erosion (no specific bill), territorial tax system (no specific bill). . . .

Medicare Part D (general education, no specific bill), changes to low-income subsidy structure in Medicare Part D (general education, no specific bill), H.R. 5122 (Centers for Medicare and Medicaid Innovation demo), Independent Payment Advisory Board (general education, no specific bill), Medicare Part B (general education, no specific bill); Medicaid (no specific bill). . . .

Trans-Pacific Partnership, data exclusivity for biologics, United Nations high level panel. . . .

FY17 Labor HHS Appropriations bills, FY17 Agriculture Appropriations bills, vial size. . . .

The United Nations high level panel above was likely on Ebola and vaccine policies. Now you know. And I think Pfizer's figures stayed relatively high in Q2 2016, in large part because it was still working to get clearance for the Allergan inversion deal into early Q2 -- which it has now abandoned. I'd expect sharper declines from Pfizer, in Q3 2016 -- proportionately more in line with Merck's. But time will tell. I am planning on wholly-avoiding Mr. Trump's speech tonight -- as I don't want to upset my stomach. But we will see. . . . smile.

It Is Looking More Likely That Judge Labson-Freeman Will Decide Whether Merck Pays $15 Million Of Gilead's Legal Fees, Even Before The Appeals Are Decided...

Overnight, the very able federal Disrtict Court Judge Beth Labson-Freeman ordered Gilead, by July 27, 2016 -- one week before the hearing on August 4, and one week from now -- to provide her with a complete set of so-called "task-based" deeply detailed by time-keeper spreadsheets. These sorts of breakdowns show the number of hours expended by each billing attorney, and on which tasks those hours were expended. She has not required a breakdown of the billing rates for these attorneys (yet). What the Judge is after is a sense of whether the lodestar amount Gilead is seeking from Merck is reasonable.

In addition she has ordered that Merck be allowed to see the aggregated, and individualized breakdowns of hours by task, by lawyer -- with client confidences redacted, of course -- so that Merck may assess whether the fees sought are reasonable, under the circumstances.

Here is that two page order, for the record -- as a PDF file.

For its part, Merck had just asked that the fees motion not be heard until the appeals are completed. It would seem that Judge Labson Freeman is not inclined to wait -- as she'd likely rather collect this data while it is right at hand, and everyone's memories of the to and fro' of the trial -- and trial prep efforts -- are fresh.

The August 4, 2016 9 AM PDT in-court appearances, and argument, portend to be rather dramatic, in my experienced estimation. Over $15 million in fees reimbursement hangs in the balance for Merck. We will keep you informed. Were I a betting man, I'd guess that over $13 million will be ordered paid by the judge, in the end. [Again, as she quite sagely did, with the overall original $200 million verdict -- she is clearly hinting here that the two ought to get together and settle on a number -- from Merck to Gilead -- and that she'd likely be disposed to bless it. But if they couldn't get there on the verdict (now vacated in its entirety), it is not clear they'll be able to negotiate their way to get to agreement, on the fees, either. She does seem to be hinting that she will award some part of these fees, in seeking this level of detail, right now. Just my $0.02 -- to Mr. Frazier.]

Okay -- out now, on foot -- to find a tart, freshly cool summer fruits salad, on a muggy, heat-domed Thursday early afternoon. . . but outdoor-dining, and with live music, to boot -- will be in order, for certain. . . .

O/T: The GOP's "Party-Unity" Night Went Well -- WWF Theatrics Edition(?)...

Well -- these goofy Trumpers have turned the Republican National Convention into a WWF show, overnight. Hilarious. Trump walks in to cut off Mr. Cruz's speech? The TV monitors cut out from time to time, and the would-be Emperor Trump scowls in anger? [But first, let me plug and support the sublime artist from whom the image at right was derived: do go get your very own Cruz WWF 2020 poster here!]

It was hard to keep up with all the mayhem last night, as it was unfolding essentially simultaneously (i) on the floor, and (ii) on the podium, and (iii) in Mr. Trump's family box. Pegged hard right on the irony meter, but likely missed by many last night were Mr. Christie's remarks -- to TV reporters, from his seat on the convention floor, calling Mr. Cruz "shameful," and "not a man of integrity." Gee -- is this the part of Night Three, when the party finally unifies? Cool.

Ted Cruz (whose wife needed a security escort to leave the arena, after his speech) echoed the #NeverTrump movement's "vote your conscience" mantra -- and pointedly REFUSED to endorse the currently proposed ticket.

Some hard-right pundit said he thought the night was boring, but good for party unity -- and Mr. Trump. I am not sure what sort of perception-altering meds that guy is on, but do steer clear. Is/was he on Ketamine?

Me? I don't really think GOP conventioneers threatening a sitting US Senator's wife qualifies as "good for the party, and Trump". But what might I know? Overall, it couldn't happen to a nicer bunch of folks, truly.

Onward -- into the abyss, which is a Trump-Pence landslide loss -- with Mr. Cruz starting his obviously self-aggrandizing 2020 GOP Presidential nomination run. . . as of last night.

If there is still a GOP by 2020 -- in name or otherwise, that is.

The Trump team is handing this 2016 election over to Mrs. Clinton, on a silver platter. 80 per cent probability via Nate Silver; 76 per cent probability via the New York Times models. And all of that was BEFORE last night's chair throwing WWF cage match. They threatened a spouse of a US Senator, from their own party? That's beyond the pale -- truly. Not that Mr. Cruz was an innocent -- but they sure look like brownshirts to me.

I am just all grins -- on this second sweltering morning. . . all grins.

Wednesday, July 20, 2016

Not "Our" Merck -- And Not So Sure About This Idea, More Generally...

Let me say at the outset (per the very impressive line-up of logos, at right) that a lot of extremely smart people have decided to back this with real cash -- nearly $50 million, if we include the seed-, and Series A- rounds.

Having said that, I for one am glad that the US Merck (no relation) has kept its venture arm out of this investment. [It would have been a short reach, from Amgen to Dr. Perlmutter (and thoughts of eventual expansion to Alzheimer's), but that didn't happen -- thankfully, in my opinion.] I'm not at all sure I see a fit, even between the German Merck venture arm, and this idea. Now, Pfizer and Amgen -- each is already in the AD/HD space, with drug offerings, so I at least see the theory there.

It would be wonderful -- a miraculous development, actually -- if it turns out that a mobile video game platform can improve the cognitive abilities of kids with AD/HD. I suspect (having done almost no reading on the topic) it is more likely to be used first as a diagnostic device -- to assess kids.

Even so, if the longer term goal is an efficacy trial, for improvement in AD/HD symptoms -- I think that will be very tough to demonstrate. But we shall see -- here's a bit, from XconomyBoston, this early morning:

. . . .Akili announced it tacked on $11.9 million to its recent Series B funding round, bringing the round’s total to $42.4 million. The additional money comes from the venture capital arms of pharma giants [GERMAN] Merck and Amgen—both new investors in Akili—along with previous backers, Akili says in a press release. Before the Series B, Akili had raised at least $7 million through venture capital, grants, and industry collaborations.

The deal strengthens Akili’s ties to the pharma industry and likely gives its experimental technology more credibility as it tries to become the first company to receive FDA approval to sell interactive electronic games as a medical device capable of diagnosing and treating a variety of cognitive disorders. Akili now has four relationships with large pharma companies or their investment arms; it previously struck a partnership with Pfizer and snagged an investment from Shire Pharmaceuticals.

Akili marks the first investment by [GERMAN] Merck’s VC arm into a company that sits at the intersection of software and medicine. . . .

Onward now, on a sweltering, humid mid-summer morning -- with a wide grin, just the same. . . as more symphony music is in store, in the cool of this coming evening. Be excellent to one another!

Tuesday, July 19, 2016

Sovaldi®/Harvoni® Merck v. Gilead Patent Battles Update: Next Post Trial Motion Hearing Date: August 4, 2016

Gilead's motion to recover around $15 million in its attorneys' fees, from Merck -- as well as other renewed post-trial motions -- will now be heard in Northern California (San Jose) federal District Court -- on August 4, 2016 at 9:00 AM PDT.

We will let you know when we hear/see anything, via the electronic PACER filings. Here is a link to the backgrounder on Gilead's earlier motion for the attorneys' fees. Fees it says it should not have had to incur, had Merck not engaged in "inequitable conduct" pre-trial -- and during it.


As to [432] MOTION for Judgment as a Matter of Law (Renewed) under Fed. R. Civ. P. 50(b), [434] MOTION for Attorney Fees pursuant to 35 U.S.C. Section 285.

Motion Hearing set for 8/4/2016 09:00 AM before Hon. Beth Labson Freeman. . . .

And, as we head out, shortly -- on a flawless summer evening, to hear the symphony, we are keenly aware of just how fortunate we are -- stem to stern. Smile.

O/T: Who "Said It Better" -- Wore It Better -- And LIVED It, Better?

It may well be that Mrs. Trump didn't initially tell the truth when she said she wrote most of it herself, but it is wickedly ironic, just the same.

The words she, or her ghost-writer, clearly stole center on her family values -- and the value of keeping one's word. I prefer the ORIGINAL -- genuine article, not the pale imitation, per the NYT:

. . . .Mrs. Obama, in her 2008 speech:

"Barack and I were raised with so many of the same values: that you work hard for what you want in life; that your word is your bond and you do what you say you’re going to do; that you treat people with dignity and respect, even if you don’t know them, and even if you don’t agree with them. And Barack and I set out to build lives guided by these values, and pass them on to the next generation. Because we want our children — and all children in this nation — to know that the only limit to the height of your achievements is the reach of your dreams and your willingness to work for them. . . ."

Just. Go. Compare. Stolen, I tell you.

I am tempted to say that I didn't prefer it* in the plagiarized German/Slovenian version -- but that would be small-minded. So instead, I'll just note that the Trump candidacy is a train-wreck unfolding in slow motion. He will lose in a landslide, now. Bank on it. Out on a flawless Tuesday morning -- enjoying the fresh air!


* That is a perhaps too-oblique reference to an immortal Art Buchwald bon mot, about a Pat Buchanan speech in the early 1980s, when he said "Actually, I preferred it in the original German. . . ." Now you know.

Monday, July 18, 2016

BMO Capital Feels Merck Is "Fairly Fully Valued" At This $58 Level

Over the past nearly seven years, we have watched -- and noted -- the ups and downs, from the old Bank of Montreal analyst operations.

Last August 15, BMO had increased its target on Merck to $70, from $64 (which was its old target, as of September 2014). It last had a "market perform" rating on Kenilworth in May of 2014. Since Septmeber of 2014, BMO had Merck as an "Out-perform".

This morning, BMO returned Merck to September 2014 rating. What this means it that -- in the near term -- BMO thinks $58 to $60 is a reasonably fair price for Merck, and it will rise or fall pretty much in step with the DJIA. Here's a bit -- but do go read it all:

. . . .MRK shares are up about 13 percent year-to-date with a total return of about 15 percent including the dividend, outperforming the S&P 500 and the S&P 500 Pharmaceuticals index. The analyst sees the risk/reward as more balanced.

"While we remain bullish on Keytruda (forecast $9 billion by 2026 in multiple tumors), and expect a strong launch in first line (1L) NSCLC, we've lowered our expectations in 2L+ as Bristol-Myers Squibb Co.'s Opdivo should continue to dominate in this setting," [BMO analyst] Arfaei highlighted. . . .

So now you know. Keep a good thought, for racial harmony, this week -- as we head into what may well be a very divisive Republican convention, on that score. Our hearts are with the slain police officers' families, and those still recovering, in Baton Rouge, since just yesterday. Awful.

Even so, being pro-BLM is not being anti-police -- the two are not mutually-exclusive. Only small minds are comforted by -- and/or require -- such literally black and white thinking. But the GOP is about to say they are, in Cleveland, this weeek. Me? I'll meditate on peace this week. I will hold to a more nuanced, and yes, even occasionally uncomfortable view of the world, as we know it, now.

So, peace it is. The peace that comes from justice. For what we need, is more justice. Less colored -- more equitable -- justice, for all. Mr. Obama is, and has been, spot on, throughout here (despite what the hard right might tell you). Namaste, to all of good will.

Friday, July 15, 2016

Swiss Re (Among Others), On Ebola Pandemic Insurance? Not Sure This Is A Workable Idea...

At the G7 Summit back in May, this was one of many discussions that caught my eye. [Here is the United Kingdom's fine private law firm, Dentons, on the idea -- from back in early June of 2016.] I've been waiting for a journal article on it, and now (as of July 11, 2016) that has arrived.

And as I read it over, I do applaud both the basic charitable instinct I see in this form of "insurance", as well as the innovation it embeds -- that, of looking to lay the funding risk off, into the private capital markets, around the globe. However, based on my limited readings to date, I am deeply skeptical that such a market could emerge in a way that would be stable, for the longer term.

I am willing to watch these feasibility studies continue, and the various independent experts test each others' models, but (in my view) the fundamental truth of almost every epidemic is that it BECOMES a larger epidemic because it is not possible to alleviate many routine sub-tropical (and certainly not possible to eliminate non-routine ones, like Zika or Ebola viruses), and still make a profit, in the Western-style model of public health care delivery. By definition, it will cost more than can ever be collected, in return.

If I'm right about that, I cannot see how a charitable "insurance" market will be self-sustaining, unless it is more "voluntary contribution" than "enforced premiums" driven. Based on what we saw in Ebola this last time around (2014-2016), no series of $10 million- or even $100 million-set of premiums could be expected to fund an over $5 billion ultimate liability, and certainly not more than one occurrence. I just don't think early money would make enough of a difference, except in very unusual cases (for example, where the cure is already well-known and ready to go -- i.e., not Ebola or Zika). So it will, for me, always come back to charity -- voluntary additions primarily from the US, Japan, Australia and EU and the UK. I cannot see any insurance company being able to make a market that relies on an "assumed" level of additional charity -- where, as here -- most of the "buyers" of such insurance, are also very likely going to be asked to make additional contributions. [The PEFF funding available is capped at $500 million over three years, with an additional replenishable cash window of $50 to $100 million -- seems far short of any reasonable goal amount.] But I will watch -- with a keen eye -- and hope that they are much smarter than I am.

Here is the bit -- from the Insurance Journal, do go read it all -- if you are interested in this sort of thing:

. . . .Take the Ebola virus outbreak for example.

Six months after the initial cases were reported, roughly one-third of financial pledges had been dispersed. As the crisis worsened, resource requirements grew, according to the report.

"Appeals for funds by the WHO grew from USD $4.8 million in early April 2014 at the onset of the outbreak to USD $1.5 billion by November of the same year, to roughly USD $4 billion by January 2015," the report states. "Combined with a poorly coordinated global response and lack of capacity, this left Guinea, Liberia and Sierra Leone devastated both physically (lives lost) and economically."

Nikhil da Victoria Lobo, head of global partnerships Americas for Swiss Re, said roughly $5.4 billion in appropriations came from the U.S. government following the Ebola outbreak.

"It would be far smaller for the U.S. government to put up some tens of millions of dollars. . . than to appropriate $5.4 billion after the horse has left the barn," Lobo said. . . .

True, but tens of millions won't cover $5 billion. Ever. Not even as a simple timing of funding mechanism.

We must remember that Swiss Re, and Munich Re have vested interests here -- in having yet another product to sell, and collect one-time commissions upon -- largely without regard to whether the coverage actually remains solvent, and is worth anything -- after even one event. But here's to hoping.

Hope is of course, a good thing -- perhaps the best of all things. And that hope is like the dawn, luminous and yet clear. . . smile.

Wednesday, July 13, 2016

UPDATING: North Wales Screening Facility Will Apparently Close, Afterall...

The total remains fixed (for now, in this local round, at least) at 300 to 360, but Merck's spokesperson did confirm today that a part of the North Wales facility (one building at least) -- a screening facility, will close, and those jobs will move to other facilities. [These facilities are separate from Upper Gwynedd and West Point.]

So it is that Derek had the correct "word on the street", yesterday morning. Here's a bit from the local Times Herald today:

. . . .Keller declined to give specific numbers, but said “less than 10 percent” of the company’s discovery, pre-clinical and early development employees would be affected. Multiple outside reports put that number at around 3,600 total employees, meaning 300 to 360 jobs could be cut.

According to Keller, Merck will close the North Wales screening facility, which is a separate and distinct facility from Upper Gwynedd and West Point Merck facilities, which are both located in Upper Gwynedd.

Along with the changes, Merck plans to increase investments in exploratory biology “in areas where biomedical research is converging,” specifically naming Cambridge, Mass., and the San Francisco area. . . .

Now you know -- and onward, simply awash this evening,in the joys of a new generation -- of perfect life. . . smile. G'night!

Tuesday, July 12, 2016

MRL To Shift About 350 Jobs Out Of NJ and PA -- To San Francisco And Boston:

Very early this morning, Derek Lowe had reported on the broad outlines, here (but he had heard that one or more of the facilities might be closed). We chose to wait for a confirmation from Kenilworth. I am now gratified that we did so.

About mid-afternoon, Eastern Daylight Time, Merck partially confirmed the rumblings Derek had heard, in an official fashion. [It also dispelled some of what he had heard, as well -- in fairness.]

At one point, there were nearly 36,000 employees in New Jersey and Pennsylvania alone, prior to the absorption of legacy Schering-Plough, into Merck, in November 2009. After this latest set of cuts, there will be fewer than 12,300. Here's's updated report:

. . . .Merck Research Laboratories is shifting jobs from its old manufacturing centers in Pennsylvania and New Jersey towards hotter biomedical research areas around Boston and San Francisco.

UPDATED 2:55 pm: Merck's 3,600-staff Discovery, Pre-Clinical and Early Development group is cutting "less than 10 percent," or between 300 and 360 jobs, from sites in North Wales, Montgomery County; Rahway, N.J.; and Kenilworth, N.J., near the company's headquarters, says spokeswoman Lainie Keller. The sites will remain open.

Merck "is increasing our investment in exploratory biology in areas where biomedical research is converging, specifically in Cambridge, Massachusetts (home to Harvard University, where Merck has facilities). and the San Francisco Bay area," said Keller. "Unfortunately, these changes will result in workforce reductions" at the company's North Wales drug-screening facility and the New Jersey sites "as we shift resources and personnel."

. . .Merck employs around 12,500 in central Montgomery County, mostly in Lower Gwynedd Township and West Point borough, where the company makes pills as well as developing drugs. . . .

Well it seems that "disease area biology, in Kenilworth" is not shutting down, entirely. And that is good news for all the families of these science and technical people. Now you know. Still beaming brightly, at the new life -- and "the opinion of the Infinite that the Universe should go on. . . ."

One Impertinent Question: Is 35 Years Too Long, For A Broad -- And Ferociously-Disputed -- Basic Biotech Patent, To Live?

If not addressed, these long-simmering disputes might artificially inflate the prices of both Keytruda®, and Opdivo®, to patients and end-of-line payers -- for these revolutionary immuno-oncology treatments. And they might artificially reduce the price of the Genentech/Roche offering branded as Tecentriq®.

But first -- a small bit of the 35 year history, here: Genentech has claimed, over all these years, via various PTO interference proceedings, confidential settlements and complicated federal court maneuvers -- including (allegedly) "buying off" other patentees -- that its so-called Cabilly I, II and III patents cover "any method for producing any immunoglobulin molecule in any type of host cell." And that is a breath-takingly broad claim.

And so, Kenilworth has decided to preempt yet another set of one-sided "negotiations", with Genentech/Roche, over the amount of license royalties Merck must pay, under the newly issued continuation patent called Cabilly III, to Genenetech -- in order to manufacture and sell pembrolizumab (branded as Keytruda).

Last week, on Thursday, Merck asked a federal District Court judge sitting in Central California to declare the Cabilly III patent invalid -- for double patenting, and laches -- i.e., the 35 years Genenetech has already enjoyed. Alternatively, Merck asks the court to declare that Merck's methods do not infringe these old patents -- even if they are still valid.

Here is just a bit of the full 20 page complaint at law (a PDF file) -- do take a look; it recites a very nicely-detailed history of these Cabilly I, II and III patents -- and how they've been used as a bludgeon -- against most of the important players in biotech, over these three decades:

. . . .Defendants [Genentech/Roche/City of Hope] have asserted that the Cabilly patents broadly cover the use of certain well-known, conventional recombinant methods to produce any antibody product in any type of host cell. Defendants have filed infringement claims under the Cabilly III patent against numerous companies who have made and sold antibody products that were produced using recombinant methods similar to the recombinant methods used by Plaintiff [Merck] to make Keytruda® (pembrolizumab), and bezlotoxumab. . . .

Defendants have also previously initiated patent license negotiations with Plaintiff concerning the Cabilly patents with respect to Keytruda (pembrolizumab), bezlotoxumab and other Merck antibody products indevelopment. Given Defendants’ acts and statements, Plaintiff’s manufacture and sale of Keytruda (pembrolizumab) and Plaintiff’s manufacture and expected future sale of bezlotoxumab in the United States, a real, immediate, and substantial dispute exists between the parties concerning the Cabilly III patent for which Plaintiff now seeks declaratory relief. . . .

As ever, we will keep an eye on this potentially multi-billion dollar piece of patent litigation -- as it could well have industry-wide implications. Earler versions, against other players, have been pending since 2015, brought offensively by Genenetech, in the same District Court, in California. Now you know. Smiling broadly, on a sweltering but joyful Tuesday early morning, here. . . Onward.

Monday, July 11, 2016

A Merck Services LLC Has Acquired Control Of Vestar's StayWell

In what was likely less than a $10 million transaction, all in, the Healthcare Services & Solutions, LLC arm of Kenilworth has taken a controlling stake in a Vestar Capital Partners backed entity called StayWell (not to be confused with the other "Staywell", a Florida-based WellCare health plan servicing company of the same name -- this particular StayWell capitalizes its "W"!). . . .

More seriously, this is a nice coup for the Vestar private equity folks. A validation -- and a suggestion that Merck intends to continue to build its relationships with payors and providers, via the LLC subsidiary. Here's a bit, from the press release from StayWell:

. . . .StayWell will continue to operate as an independent entity after the transaction. Vestar will retain a significant minority stake in the Company. Terms of the transaction were not disclosed.

[Merck's LLC subsidiary] HSS offers services and solutions that help patients, providers, and payors around the world achieve improved health care outcomes more efficiently and at a lower cost, through cutting-edge illness prevention and wellness programs and care management offerings. HSS operates as a separate business unit, independent from Merck’s pharmaceutical products business. Merck is known as MSD outside the United States and Canada. . . .

[Vestar representatives said] "StayWell also brings a large customer base, particularly in its domestic U.S. commercial footprint which includes hospitals, health care providers, health plans, major employers, and leading health advocacy organizations. Our shared emphasis on improving health outcomes, combined with our strong foundations in data, science, and evidence-based offerings, will provide new opportunities for both organizations as a result of this transaction. . . .

We will keep an eye on this one. And, it is -- despite the masthead's message -- a day of encouraging signs here. And so, we are smiling, widely, Onward!

Sunday, July 10, 2016

In My Opinion, What The FDA's Priority Review Voucher Progam Was Supposed To Be About...

Strictly speaking, this is a tangent to the Merck review narrative -- but even so, I did edit it a bit, and posted it to the KaloBios site as well -- given its rather broad applicability to the PRV effort narrative, now underway at post-bankruptcy KaloBios.

In sum my intention is to highlight the stark differences between the effort to secure a KaloBios PRV (for Chagas), as compared to the Gilead effort -- to secure a PRV for Ebola, related to the use of GS 5734 for acute cases (as imaged at right).

Quickly then (with more in-depth background available, here and here), at least two very acute (near death) cases of human Ebola viral infection were cured, at least in part, with the use of GS 5734 in an experimental, compassionate use role, last year.

Were we to look back in time an additional year, we would see that Gilead's science team -- as the Ebola epidemic was flaring-up in western Africa -- began trying their library of experimental proteins against the virus (in primate models), with the help of US governmental labs. They came to learn that an older portion of an anti-HCV agent, spliced onto the top of an HIV fighting agent, led to pretty solid animal model results. [That clipped HCV portion, in the 2D model at upper right, is shown in a green hue.]

And, though Gilead will never be able to sell this very expensive "nuc" (pronounced "nuke") for a profit, it is without a doubt, a vitally-needed tool, as the two known cures in humans would suggest. And so, right now Gilead is studying it in the remaining non-acute cases in Liberia, Sierra Leone and Guinea, with the idea of ultimately filing to seek FDA approval -- for an ebola indication -- for GS 5734.

The central motivator here is to alleviate death and suffering -- from future ebola outbreaks, and to protect against a wide-ranging pandemic in the US or Western Europe. [Merck's vaccine candidate would likely be the first line deployed there -- should an outbreak of size appear in the US or Europe.]

So, Gilead is now eligible for a priority review voucher from FDA related to the tropical disease called... ebola.

And that makes eminent good public health sense.

Okay, contrast the deaths of nearly 11,300 people (and over 28,000 gravely ill) in sub-Saharan Africa in 2014-16 (ebola) with perhaps seven to ten acute cases of Chagas in the US, since the 1960s -- none of which were fatal.

While I agree it would be optimal -- and wise -- to have a stable supply of an FDA approved agent (benznidazole) to use against Chagas here in the US, it is a very pale effort, and threat -- compared to those presently underway at Gilead and Merck -- in many ways working hand in glove, to combat the scourge that is ebola.

In short, some efforts are more deserving than others. That's my opinion.

Now you know. Grinning ear to ear, at the miracle that is new life. . . . truly amazing.

And, Speaking Of Bonuses... Merck's USW Local 10-86 Members Should Already Have Theirs...

As part of the signing of the new collective bargaining agreement at West Point, Pennsylvania a couple of months back (early May, actually), Merck agreed to pay signing bonuses, upon ratification.

The ratification had long-since occurred, and so -- as of last Friday, July 1, 2016 -- all members should have seen a deposit advice for their signing bonus, thus:

. . . .Finally (not that anyone has been asking), we’ve been told the signing bonus SHOULD be in this Friday’s (July 1st) paycheck. It will arrive as a second deposit/check in your account. . . .

Now you know -- and G'mornin' -- on a Sunday completely bubbling with perfect new baby life, and so much more. . . we are truly blessed -- lucky to be alive here and now. . . smiling widely.

Saturday, July 9, 2016

When Will Pauline Cafferkey Receive Her £4,000 "Ebola Service" Bonus?

Many, many other brave UK health care workers have long since been paid the £4,000 bonus the British health ministries authorized for those who deployed to Africa -- to remediate the 2014-2016 Ebola epidemic.

Pauline Cafferkey is among others who have yet to receive theirs. At one point, an under-minister for public health had indicated that -- because she was once transported (entirely inside the UK) in a manner considered "unsafe" -- apparently while she had a fever, in a relapse of her viral conditions -- his agency might take disciplinary action against her. We are hopeful that this is not the form of discipline that minister had in mind.

To my understanding, others who are not on staff of Public Health England have received their bonuses, but it may be that the under-minister ruled her ineligible on the basis that she isn't PHE staff. But the UK's Mirror news-outlet, and The Guardian, have been asking after it -- since at least July 1. Here's a bit:

. . . .Ebola nurse Pauline Cafferkey, who nearly died after contracting the virus while treating patients in Sierra Leone, has not been given a £4,000 bonus many of her colleagues have received, Parliament has heard.

[UK Prime Minister] David Cameron described the Scottish nurse as "one of the bravest people" he had ever met and pledged to look into the issue after it was raised in Prime Minster’s Questions.

The nurse, form South Lanarkshire, has twice had to be treated at a specialist infectious diseases unit at the Royal Free Hospital in London after coming down with the virus. . . .

"We took the decision to help partner with that country, to deal with Ebola, and it is now Ebola free. . . ."

His remarks came after the SNP ’s Ms. Ferrier (Rutherglen and Hamilton West) said NHS volunteers had missed out on the payments given to Public Health England staff.

She said: "The Prime Minister will no doubt be aware of my constituent Pauline Cafferkey, a nurse who contracted Ebola in Sierra Leone in 2014 when she was there as part of the DFID organised response to the outbreak. She and around 200 NHS volunteers through UK Med have not received an equivalent bonus of £4,000 that was awarded to 250 Public Health England staff. . . ."

Onward, on a quiet, contemplative Saturday morning. Smiling once again, just the same. And wishing only joy for all the workers who risked their lives for the good people of Sierra Leone, Guinea and Liberia. Onward.

Friday, July 8, 2016

O/T, But Not Really: It Is Hard To Know What To Say, This Friday...

I do feel compelled to say. . . something. Whew. There are five dead police officers in Dallas, this morning -- and seven more (two of them civilians), still struggling for their lives.

Yet -- and in no way to condone the snipers' actions in Dallas -- there has been an undeniably thunderous drum-beat of very recent live videoed encounters in which (mostly) black men, mostly un-armed, and mostly for what-were-originally-fairly-trivial alleged offenses, end up dead -- by police gunfire.

Each is an abomination. Each is a tragedy. Each life is valuable -- police officer, and citizen. But we need to accept that race is an unhealed wound, in America.

It will serve no useful purpose (and is illogical) to reflexively blame these murders in Dallas on our leaders who note these facts, about very disparate policing outcomes (but some nut-job right wing bloggers are doing just that). The Governor of Minnesota spoke the truth. Our 44th President simply spoke the truth -- that all Americans should be troubled by these needlessly deadly police encounters.

And all Americans should condemn the killers of the Dallas police officers -- at least one video of a suspect the Dallas police forces sought (and is now dead) is shown "open carrying" a AR-15 semi-automatic rifle (apparently lawful in Dallas). Moreover, it cannot be a sane answer to read OUT of the Second Amendment, the words "well-regulated" which appear ahead of "militia". Yes, the NRA too must answer for Dallas.

Prior to actual gunfire (in the odiously wrong view of the NRA), the Dallas police on scene for the protest could not lawfully stop the would-be suspect/protester, even though he was strapped with an semi-automatic AR-15 sniper style rifle. Thanks to the NRA -- that is what it claims passes as a constitutional right (against law enforcement), now in Texas. Assault rifles being used to kill police, in the protester(s) hands, in the open -- unchallenged in Dallas, until actual shooting starts.

To be clear, the above is not to blame the Dallas police. They have to live with the laws the Texas legislature has passed. That is however, to blame the legislators "captured" by the NRA. The five officers' blood is on the legislators' hands.

And the bloodshed caused by police over-reaction in Louisiana and Minnesota, this week -- the equally senseless killing of black men -- is on the hands of those who chant to the crowds (and the police) that all brown people are to be suspects, first and foremost -- and I mean Donald Trump, here.

This is a profoundly sad and shameful moment in America -- but one that has been fairly easy to see coming. One largely fed by the wildly self-absorbed and thus irresponsible would-be "Muslim deporting", and "wall-building" politician the GOP plans to nominate for President. Shameful. [And all of this is not entirely off-topic, since the CDC has suggested treating gun violence like an infectious epidemic. That seems apt (if entirely too pale) -- flare ups in Louisiana and Minnesota inevitably lead to. . . even larger infections -- in Dallas.]

And now -- to provide at least one Merck related trivial update -- the appeal of the $200 million wipe out will have to wait, since post trial motions -- including the fee motion -- are not completed yet, per the federal Circuit, yesterday:

. . . .On consideration of the notice of appeal filed on July 5, 2016, a motion of the type enumerated in Fed. R. App. P. 4(a)(4) has been filed in the United States District Court for the Northern District of California rendering the notice of appeal ineffective, it is ORDERED that the appeal be, and it hereby is, DEACTIVATED.

The appeal will be reactivated upon entry of the order disposing of the last such outstanding motion. . . .


July 7, 2016

Peter R. Marksteiner

Clerk of Court. . . .

In addition, AstraZeneca, and all other pre-bankruptcy R&D partners of BIND Therapeutics, were granted protection of their IP rights, in a Delaware bankruptcy court ruling entered yesterday. That's it, for the trivial.

Now, in an effort to bend the arc of the narrative toward the positive -- our family is expecting the next generation of sweet new baby-girl life, this very weekend. So, as they say -- "a baby is the Infinite's opinion that the Universe should. . . continue."

I agree. I agree. Amen, and Namaste. . . take good care of all you love, they are precious human lives -- young, and old, new and not so -- one and all. Whoosh.

Thursday, July 7, 2016

BIND Therapeutics Chapter 11: Shouldn't Merck File A "Limited Objection", Too?

As we mentioned over the long holiday weekend, Pfizer earlier made a $20 million "stalking horse" bid for the assets of BIND, in Chapter 11. Yesterday, AstraZeneca entered a limited objection to that proposed deal, in the Delaware federal Bankruptcy Courts. [That hearing will be underway shortly in Delaware, BTW.]

Simply stated, AZ wants to be sure that Pfizer doesn't acquire (free and clear of its rights) the patents, patent applications and other intellectual property rights that AZ earlier obtained rights to -- via its own previously-spent research collaboration money. Those IP rights, the argument runs, should not be lien-free when/if BIND departs bankruptcy, at least not in the hands of Pfizer, should it win the bidding. AZ simply asserts its rights to receive what it is due under the agreements it struck with old pre-bankruptcy BIND Therapeutics.

It occurs to me that a very similar situation likely applies to Merck -- and its earlier (November 2014) R&D agreements with BIND -- so I would expect that Merck's lawyers will soon file a similar objection. After-all, neither of these multinationals wants to have to "ask" Ian C. Read to return their IP -- IP they already bought and paid for. Here's the AZ version of that bankruptcy objection, though -- and a relevant bit:

. . . .Upon review of the Sale Motion, AstraZeneca believes that the proposed sale of the Purchased Assets pursuant to the Bidding Procedures may include patents, patent applications or other intellectual property that is or may be subject to the rights of AstraZeneca under the License Agreement. . . .

AstraZeneca does not object to the Bidding Procedures or oppose a sale by the Debtor of any of its patents, patent applications or other intellectual property that is subject to the rights of AstraZeneca under the License Agreement. However, to the extent that the Debtor seeks to sell the Purchased Assets free and clear of liens and interests, AstraZeneca files this Limited Objection to ensure that any and all sales of the Purchased Assets remain subject to the rights of AstraZeneca under the License Agreement, including, in the event of rejection, any applicable rights of AstraZeneca under section 365(n) of the Bankruptcy Code. . . .

We will see if/when Kenilworth's lawyers make a similar filing. Onward, on a gorgeous mid-summer morning -- springing out the door, expectantly!