Monday, November 24, 2008

Ed Silverman, on Schering's Webcast Today: "Expectations…Low."


Thanks go to Ed, over at Pharmalot for reminding me about this non-event; webcast here. In just a few minutes, Schering-Plough will begin a four-and-a-half hour, no some-questions-asked session on what's right with Schering's R&D pipeline and its prospects. But remember, Schering will allow no press (or analysts' call-in) Q & A -- and remember (they just took a few questions), Schering doesn't give guidance or make projections (they just made some "aspirational goals" disclosures).

In other words, as Ed channels Deutsche Bank analyst, Barbara Ryan: "expectations. . . . appear to be fairly low."

Thus, as a public service, I will listen and watch -- so you won't have to. If anything truly ground-breaking [up, or down] occurs, I'll live-blog it, below:



Question-and-Answer Session:



▲ 1:28 PM -- Schering is going through a "re-tooling" in Japan (but as below, Schering will likely not get it all done until the end of the above window -- or, even beyond the end of the wondow it announced in the above slide). CEO Fred Hassan has still has not addressed the Seamus Fernandez (Leerik-Swann) questions about approaching China more aggressively -- they are simply "looking" (aggressively!) -- but don't have very many shoes in the street there.

▲ Asked "Will the TRA studies be read-out before IMPROVE-IT results are read-out?", Dr. Rick Veltri said, and Koestler confirmed that, as event-driven trials, he hopes that both come close in time to one another. That means IMPROVE-IT is running quite a bit slower than promised, as well.

▲ Dr. Koestler just said that Pegintron will be studied in combination with boceprivir -- this suggests they are more worried about Vertex's teleprevir, than they are letting on, here. Schering is looking for lots of "alternative" or back-up data, should the FDA decide to approve Vertex's candidate first. Vertex is well-ahead.

▲ The "Non-interference" (drug formulary) policy looks like it could be open to repeal -- given the new to-be-named HHS Secretary, Daschle -- and a deeply-Democratic Congress. CEO Hassan is (perhaps vainly) hopeful that "drastic" action will not be taken against pharma. Fred takes comfort that the "financial crisis" and "oil imports" will be bigger "targets" than Schering's businesses. That is not a very-reassuring answer. He is admitting to being No. 3 on the Administration's hit list.

▲ Bob Bertonlini on foreign currencies' "headwinds" -- in answer to Jamie Rubin, at Goldman Sachs -- Schering WILL face significant currency headwinds, in Q4 2008, and well-beyond. Schering's Euro-denominated debt is an "economic" hedge. However, "economic" hedges do not dampen P&L swings -- that is, profitability will be negatively impacted this year -- and beyond. This argument tells us to ignore GAAP results, and focus primarily on "growth" not GAAP-sanctioned "profitable growth". That is thus a rather-patronizing answer, to a clearly-very-able-questioner.

UPDATE: I think Fred just tried to clean up his currency answer.

▲ Carrie Cax is blaming the slower enrollments of patients in Schering's boceprevir studies on doctors "holding their patients back" -- only some 18 percent of patients are entering experimental programs. Could it be that the doctors have lost confidence in Schering's ability ot know when to "step in" and help protect patients -- if any given trial starts to exhibit troubling safety signals?

▲ CEO Hassan is now telling a Boston analyst that Schering is concerned about FDA not being "politically-independent". Ouch. He hope the Obama Administration will be able to remedy this. [Could it be that Schering has hurt its FDA credibility-levels, with Vytorin's ENHANCE?]



As the above slide demonstrates, even a good IMPROVE-IT outcome will be short-lived.

▲ 12:55 PM -- Three major projects are now at least five years away from where CEO Hassan said they would be -- just two years ago, at an earlier version of this conference. Boceprevir in particular will not receive any "quick shortcuts" on FDA approval -- that conflicts with the claimed "fast-track" status, on the below slides.

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


Presentation Session:

▲ Carrie Cox also just admitted that Bridion/Sugammadex will be "slowly adopted" in the Operating Suites across Europe (it is not approved in the US) -- it will need to discplace, in her own owrds, "very-well-entrenched generics" -- meaning it will have to compete on price, as well as efficacy. That is a wholly-new disclosure.

▲Carrie Cox admitted that Schering's boceprevir FDA filing will likely be 2011 or 2012. Ouch -- that would mean it may be four or five years away from market.

▲ 12:35 PM -- Carrie Cox is offering her perspectives on the "commercial potential" for these investigational candidates. Yawn.

▲ Now Veltri is on to Thrombin candidates (pre-clincial, and early-clinical) -- far future candidates.

▲ This -- the below -- Veltri's LDL-C "lower is better analysis" -- is simply "junk" science. It is religion -- not deduction or induction -- his entire Vytorin/Zetia slide-deck is infected with superstition.

▲ Every one of Dr. Veltri's slides assumes [without any evidence] that "mechanism of action" for cholesterol reduction is irrelevant.

▲ Rick Veltri is hard-selling the mantra that "lower is better" -- and just flatly stated that it "does not matter" what the mechanism of action for lowering is. This is in direct conflict with the vast majority of the data available to date.

▲ Now, Dr. Enrico Veltri is trying to debunk the cancer data in SEAS -- he said that IMPROVE-IT researchers will now only follow-up on cancer, every six-months, in the patient-population. Q: Is that wise?

▲ From "The Sublime to The Ridiculous" Department: there will be a "next-generation" study -- called, hilariously, "Red Cabbage" -- started by Schering, in 2009 [Veltri hisssself named it!]:



▲ 11:45 AM -- Rick Veltri (Yes, THAT Enrico Veltri!) is up, now -- on cardiovascular products. Rick is hard-selling fear -- blaming "pillars of science" for "waiving the white flag" -- and giving up, on treating heart-disease. Ri-i-i-i-i-i-ight.

▲ Now on to a "proof-of-concept" (read: decades away from market) study, for a far-in-the-future Schering Hep C drug candidate, to be cocktailed with existing protease inhibitors. Will these numbers hold up in larger patient populations, and will these patients remain free of dangerous side effects? We'll see -- check my second "as edited" slide -- directly below, in a moment:



[NOTE: Here is the Schering presser's spin, on the above.]

▲ 10:40 AM -- Schering has moved on -- to a regurgitation of the boceprevir Hep C naive treatment data, to date. . . . [see slide above, and this, for some balance -- note that Vertex's Teleprevir is WORKING in patients that have already failed treatment on Schering's existing cocktails, among others. The significance of this fact -- from a scientific point of view -- almost cannot be overstated.]



▲ Specific scientific presentations now underway, for the very-long pipeline tail -- including a potential for using cancer anti-bodies as a form of vaccine -- most are still in animal models. This means they are at least a decade away from market, in almost all cases.

▲ Schering has just issued two press releases, the first about Asenapine, the other about treating Parkinson's here, and here.

▲ Now, a 15 minute break -- slide coming [from me, below].

▲ Asenapine is off-its-time-track at FDA (as admitted on the Q3 earnings conference call), and like Sugammadex, Schering today provides no details about when we might expect a meeting with FDA, or an end-date letter. "We are working on it with FDA," is all Schering will say. Not helpful. At all.

▲Interestingly, Schering admits, at about Slide 35, that Vytorin/Zetia will lose US patent exclusivity in 2015, and in EU/Japan in 2017 or 2018 -- yet, we won't even know if it works (to reduce cardiac event risks) before late 2012 -- that is when IMPROVE-IT will, best case, be finished. Wow. That slide lasted about five seconds -- then was deep-sixed.

▲ Koestler calls Schering's boceprevir "best in class" -- I guess that "class" reference must assume Vertex's teleprevir has already-graduated, a full year and a half ahead of Schering's own boceprevir. . . .

▲ Fred asks "Why be excited?" Indeed, Why?

▲ 8:32 am EST -- and not started yet -- not surprising. . . .

5 comments:

Anonymous said...

On November 13th, the following message was posted on CafePharma

Asenapine decision delay ' unknown'

see the table referred to in the news http://seekingalpha.com/article/1057...r?source=yahoo

more good news?


The table lists anticipated PDUFA goal dates (i.e. NDA approval/nonapproval dates) through the end of 2008.

Asenapine beign listed as unknown delay means it's already past the PDUFA due date.

Under the Food Drug and Administration Amendments Act of 2007 the entire action package has to be published if a drug is approved. The action package includes all reviews and all associated documents in the official files.

Typically if a drug is not to be approved a company will withdraw the application. If the goal date is to be missed there has to be agreement with the company. There may be situations where a company does not want to withdraw a drug due to stock prices etc. yet a drug will not be approved so there is agreement to delay the review. Alternatively activity in the FDA may occur so late, such as on the PDUFA goal date, that it is not possible for the company to withdraw the application and the FDA is stuck with having to issue a letter. So if the drug is approved the documentation that has to be released under FDAAA 2007 (i.e. the reviews) may be so damaging that it would have huge repurcussions both for the company and the FDA. A company may also want to agree to an indefinite delay in the review in that case also.

Anonymous said...

The repurcussions could also be very damaging for similar drugs in the class.

Something like this could make a CEO just lose it and rant in public.

But the damage to other companies might be so great that other CEOs might have a reason to get behind the first one and support him. Of course if some of the drugs were so dangerous that they needed to be removed from the market and the companies were promoting them off-label and Medicaid was paying for them this might be major fraud against the US government.

Condor said...

Quite so, Anonymous poster -- thanks!

Schering, for its part, is saying that it remains comitted to bring Asenapine to market in the US -- and working with FDA to resolve the missed deadline issue.

That would mean that unless Schering is committing fraud (a possibility -- but then FDA will send a nasty-gram to world on it, I suspect!) -- Schering will have to keep submitting data to FDA, to try and resolve the questions that caused FDA to miss the deadline.

At least that is the way I see it -- am I missing something (else) here?

Anonymous said...

As for fraud and nastygrams I doubt it.

FDA has a long history of working with drug companies to coverup dangerous drugs and silence those who would raise the issue. Thus it's possible that the documentaton that would need to be released might include evidence of fraud and FDA's involvement.

Here's just a few well documented examples:

Troglitazone (Rezulin) Warner Lambert?

Alosetron - Glaxo (5HT3 antagonist for irritable bowel syndrome - (intermittent diarrhea, cramping and constipation - caused Ischemic Bowel Disease. Symptoms include periumbilical stomach pain. If you don't detect IBS and have emergency surgury you can die. Normally it's so rare that the GPs who would prescribe alosetron would never think of it.

Vioxx - Merck - David Graham

Proheart 6 - Wyeth - Victoria Hampshire

Ketek - David Ross

FDA has all sorts of ways to help drug companies. They can trick reviewers or get rid of them so that companies can submit a response that gives FDA an excuse just to say the drug is acceptable even when FDA knows there are major problems, FDA can then delay looking into safety reports and can find excuses to say the cases aren't clean (they almost never are because the people most likely to be effected first have something else that predisposes them.)

There's almost always some way to use to get a drug approved even for a much more limited indication and then of course the company can promote things off label.

Just look at Pharmalot's recent quote of Tom Laughren head of FDA Psychiatry Drugs, saying in essence it's not our job to inform the prescribers on appropriate use. But there sure has been a lot of interest in the press (pharmalot) about this in the lst few days.

Part of the problem with certain drugs is that there are class effects. If a drug is turned down for one or even multiple safety reason(s), that raises issues for other drugs already approved and marketed. Are they even more dangerous? If they are then if drug X isn't approved for a safety reason then shouldn't drug Y be pulled from the market? This creates problems for other companies that they don't want to have, and believe me companies test each other's drugs in the lab and so they tend to know. This of course would make the companies want to protect each other to a certain extent and even rally behind the CEO of the company whose drug was going to cause them all problems. This would be especially important for a class of drugs that is responsible for most of the growth in sales for the industry as a whole, e.g. $30 billion of a $300 billion US market, related drug with similar toxic mechanisms could even increase the risk to a much larger fraction of the US and worldwide market.

Normally a company might withdraw the application for a drug like this but if it hadn't been done by the decision date it's too late and an approval or nonapproval letter has to be sent.

Notice that right after Fred's WSJ rant FDA changed policy so that no more approvable letters. Making interpreting nonapprovable letters much more difficult, (is it major that kills the drug or a minor issue that can eventually be overcome.

Now there might be a way for FDA to get around releasing the documents. Who's going to know if they don't? Someone in FDA might point it out to a congressional committee, but what if the chairman of the committee isn't inclined to followup?

By the way isn't all the shuffling of oversight committees recently interesting, especially in light of Fred's comments the day before. Now many of the 'progressives' come from states that are heavy with Pharma and startup biotechs but that doesn't prove anything. After all we don't know who put the requirement in the FDAAA that the complete action package had to be released. This was a slick move. Most people don't know that action package means all the documents in the official file related to the NDA review.

Anonymous said...

The requirement for release of the action package might also have something to do with all those recently missed FDA deadlines.