Friday, January 30, 2009

Leerink Swann Issues a Downgrade -- on Schering-Plough

In a counter-industry trend (most pharma companies are enjoying higher ratings, due to their perceived defensive postures, in down-beat economic times) -- Leerink Swann, in the person of Seamus Fernandez -- just downgraded Schering-Plough:

January 30, 3009
Leerink Swann
FROM: Outperform
TO: Market Perform

Quoth Forbes:

. . . .[S]aying there are no major catalysts for financial growth in the coming year. Fernandez based the downgrade on surveys with health care providers. . . .

Fernandez noted that 65 percent of cardiologists surveyed do not expect the [IMPROVE-IT -- due out in 2012] study to show a significant advantage for Vytorin. Fernandez also said that the slumping economy will only encourage doctors and patients to seek out cheaper, generic substitute drugs.

"We find it difficult to recommend that investors put new money to work in" Schering at this time, Fernandez concluded. . . .

Schering-Plough is trading below $17.70, this morning -- after an intra-day high of $19.99 as recently as January 26, 2009. That wasn't even four full days ago. The downgrade comes only two days before 2008 year-end results are to be announced, to boot. Ouch.

Thursday, January 29, 2009

Chairman Henry Waxman's Views on the Next FDA Chief. . . .

MedPage Today reports thus:

. . . .Waxman and several other lawmakers, including Sen. Charles Grassley (R-Iowa), the ranking minority member of the Senate Finance Committee, spoke at today's conference.

Grassley targeted the FDA, accusing the agency of being more concerned with "looking good" than anything else.

Pointing to the need for significant change at the FDA, Grassley said an outsider should take the helm to "shake things up" and focus on postmarketing surveillance.

One such outsider is Steven Nissen, M.D., director of cardiovascular research at the Cleveland Clinic. Dr. Nissen, who is known to be on the short-list for the FDA post, has been a frequent visitor at Grassley's Senate office.

Grassley has been turning up the heat on the FDA. He has spearheaded several investigations of the pharmaceutical industry, most notably a probe into Merck and Schering-Plough for direct-to-consumer advertising of ezetimibe/simvastatin (Vytorin) and the companies' handling of results of the ENHANCE trial.

Asked about Grassley's outsider comment, Waxman said he didn't know who the Senator had in mind, but said that Josh Sharfstein, M.D. "would be excellent" as FDA commissioner.

Dr. Sharfstein, who is Baltimore's health commissioner, is considered the front-runner to head the FDA. Before taking the job in Baltimore, he served on Waxman's congressional staff.

Waxman said that Dr. Nissen would also be a good choice, but said, "it's not my choice. It's up to the president. . . .

Tuesday, January 27, 2009

Compare and Contrast: Vertex Extends Next-Gen Hep C Lead Over Schering

First, consider this, from Schering's announcement of today:". . . .Treatment discontinuations due to adverse events were between 9 and 19 percent for patients in the boceprevir arms, compared to 8 percent for the control arm. . . ."

See this -- dated January 12, 2009 -- from Vertex's Investor Relations crew. I've excerpted a snippet below, to outline just how far ahead Vertex's Teleprevir is -- relative to this morning's Schering-Boceprevir announcement:

January 12, 2009

. . . .Broad Clinical Development Program for Telaprevir

ADVANCE and ILLUMINATE trials in treatment-naive patients fully enrolled

Vertex today announced that the ILLUMINATE clinical trial is fully enrolled. Together with the ADVANCE clinical trial, which was fully enrolled in October 2008, Vertex has enrolled more than 1,500 genotype 1 treatment-naive HCV patients as part of the Company's broad registration program for telaprevir:

ADVANCE: Vertex and Tibotec completed enrollment in October 2008 in the global 3-arm pivotal Phase 3 ADVANCE trial that is focused on 24-week telaprevir-based response-guided regimens in genotype 1 treatment-naive HCV patients. In the ADVANCE trial, telaprevir is being dosed for 8 or 12 weeks. All patients are expected to have completed 8 or 12 weeks of dosing with telaprevir or placebo by the end of January 2009. Vertex expects to have sustained viral response (SVR) data from the ADVANCE trial in the first half of 2010. The ADVANCE trial enrolled approximately 1,050 patients.

ILLUMINATE: Vertex today announced that the Company has completed enrollment in the global 2-arm ILLUMINATE trial that will include evaluation of 24-week and 48-week telaprevir-based regimens in genotype 1 treatment-naive HCV patients. In the ILLUMINATE trial, telaprevir is being dosed for 12 weeks. The Company expects to have SVR data from the ILLUMINATE trial in the first half of 2010, which will supplement SVR data obtained from the pivotal Phase 3 ADVANCE trial. The ILLUMINATE trial enrolled approximately 500 patients.

Differentiated profile in treatment-failure patients

Full enrollment of approximately 650 patients in the global 3-arm pivotal Phase 3 REALIZE clinical trial is expected in the first quarter of 2009. This trial is focused on 48-week telaprevir-based regimens in genotype 1 HCV patients who failed to achieve SVR with prior treatment of pegylated interferon (peg-IFN) and ribavirin (RBV). The REALIZE trial is expected to enroll relapser, partial responder and the most difficult to treat null responder patients who are well-documented with respect to their prior response to HCV therapy. In the REALIZE trial, telaprevir is being dosed for 12 weeks.

Vertex presented interim clinical data, including safety information, from the Phase 2 PROVE 3 trial in November 2008 at AASLD. The data showed a 52% SVR12 rate in treatment-failure HCV patients, with a 24-week telaprevir-based treatment regimen. All patients in PROVE 3 completed dosing in the second quarter of 2008. Vertex expects to present final SVR data from the telaprevir and control arms of PROVE 3 at a medical meeting in the first half of 2009.

Vertex exploring utility of telaprevir in other patient populations and dosing regimens

Interim results presented in November 2008 from the ongoing, Phase 2, open-label, randomized C208 study examining a twice-daily (q12h) telaprevir dosing regimen versus a three-times-daily (q8h) regimen in combination with RBV and peg-IFN-alfa-2a (PEGASYS(R)) or peg-IFN-alfa-2b (PEGINTRON(TM)) in treatment-naive genotype 1 HCV patients, including safety information from the study, support the potential for twice-daily dosing of telaprevir. Tibotec expects to present additional data from this trial, including SVR data for patients who completed dosing and have been followed 24 weeks post-treatment, at a medical meeting in 2009.

Vertex and Tibotec plan to discuss a proposed HIV/HCV co-infection program with the U.S. FDA and European health authorities in the coming months. . . .

It is clear, from Schering's own press release of this morning, that Boceprevir has fallen well-behind. But most-importantly, do note that Schering's adverse event rate is much higher that the comparable Teleprevir rates. Irritations caused by Schering's molecule may well end the race early -- with a forefeit win for Vertex. Do stay tuned. Back now.

I should point out that, in earlier press-released study results, Vertex's Teleprevir showed much higher effectiveness rates (vis-a-vis Schering's Boceprevir) in patients whose previously-attempted treatments for Hep C had failed. Schering's release (of today) confirms this data -- Vertex's Teleprevir is doing much better at treating the so-called "non-responders" -- those who did not acheive significant reductions in their viral loads, during prior courses of therapy, with a variety of other compounds (including Schering's).

My bet? Teleprevir is going to be declared "best in class" -- for the next generation of Hep C drug candidates.

And that alone puts Teleprevir a full quarter-mile ahead of Schering's Boceprevir -- in a two-mile race.

Sunday, January 25, 2009

New Yorker on Health Reform, and Difficult Choices. . . .

This one comes to us from The New Yorker, by Atul Gawande, M.D. [Hat Tip: Marilyn Mann] -- the article opens with a review of history -- and the cogent observation that unspeakble cruelties have long-been the impetus and engine for meaningful health care reform, throughout the Western world. That is accurate, in so far as it goes.

I mention it here, though, simply to note that some form of cruelty will permeate every health care delivery system (and certainly, each non-system, like ours). So, it seems, the setting up of a "no-cruely" goal may be the proverbial "bridge too far".

Someone will always, always, get a little less than the very best care (especially if "best" is taken to mean most-expensive), in any setting where -- as here -- resources are constrained. I think the best we can hope for, and thus aim toward, is to be fully-aware of the trade-offs we are accepting, when we embrace any series of approaches to health-care reform, over any given other. In any event, here is the snippet -- but do go read the whole five-page article:

Getting There from Here: How should Obama reform health care?

In every industrialized nation, the movement to reform health care has begun with stories about cruelty. . . .

. . . .The current discussion between the Obama Administration and congressional leaders seems to center on opening up the federal workers’ insurance options and Medicare (or the equivalent) this way, with subsidized premiums for those with low incomes. The costs have to be dealt with. The leading proposals would try to hold down health-care spending in various ways (by, for example, requiring better management of patients with expensive chronic diseases); employers would have to pay some additional amount in taxes if they didn’t provide health insurance for their employees. There’s nothing easy about any of this. But, if we accept it, we’ll all have a lifeboat when we need one. . . .

It won’t necessarily be clear what the final system will look like. Maybe employers will continue to slough off benefits, and that lifeboat will grow to become the entire system. Or maybe employers will decide to strengthen their benefits programs to attract employees, and American health care will emerge as a mixture of the new and the old. We could have Medicare for retirees, the V.A. for veterans, employer-organized insurance for some workers, federally organized insurance for others. The system will undoubtedly be messier than anything an idealist would devise. But the results would almost certainly be better. . . .

So -- let us face it -- and face it, now: some form of rationing is inevitable. Either we can continue to allow this non-system to ration solely based on ability to pay (or to procure adequate insurance coverage), or we can begin to make more thoughtful, meaningful, but no less difficult decisions -- about "how much" each person is allowed to consume.

No one really wants to talk about it -- but that is exactly why me must: sometimes the hardest thing -- and the right one -- are the same.

That is the nut of it. And the sooner we get down to really cracking the shell, and making tough, resource-constrained choices as the foundations of our conscious policies -- the better it will be for all of us.

Schering to Bet $8 to $10 Million, in 2009: Buying Video Spots in Nascent Media Outlets

First -- understand the concept -- "Digital Out of Home outlets" are those mostly-little (but some big) flat screens -- popping up near the check-outs, in urban and suburban groceries, convenience stores, train-stations and health-clubs around the nation. Schering-Plough is making what is thought to be the single largest media buy in these outlets, to date. The full MediaWeek story is here, but it does seem in part spurred by the cost-ineffectiveness of Schering's Super Bowl ad, of 2008. [Gee -- I think maybe Schering ought to run the spot, at left.]

Said more plainly, it seems a way to try to reach more people, rather cheaply -- and nearer their own points of purchase. That may make some sense for suntan lotion, but "not so much" for traditional medicines. Here's a snippet -- from the story -- I found interesting:

. . . .Digital out-of-home is still one of those tempting, emerging media that is so new and so fragmented, it generally falls into the experimental column of the budget, (if the advertiser is lucky enough to have one of those these days). . . .

Over a period of eight to 12 weeks, Schering-Plough advertising for several sun care, footcare and upper respiratory brands will run on 17 digital networks in nine venue categories. To target consumers closer to the point of purchase, Schering-Plough chose networks that reach consumers in varied lifestyle locations from health clubs and physicians’ offices to malls, coffee houses, golf courses and airports. . . .

Moving at least some of its advertising and marketing closer to the point of purchase makes sense for Schering-Plough. While the overall sales for its consumer healthcare products rose 2 percent in third quarter 2008 on the launch of new constipation product MiraLAX, sales of its other over-the-counter products, such as Claritin, were low. After spending about 84 percent of its media budget on TV (per data from Nielsen Monitor-Plus through November ’08), and at least $2 million for one ad in a first-time Super Bowl spot in ’08, the company may have figured it was time to try a medium that was less costly and more targeted. . . .

Does it really make sense to spend $8 to $10 million advertising the lower-margin OTC health stuff, when Schering's drugs generate the lions' share of the profits?

I dunno. But I do know we'll not likely see many ads for Vytorin on TV.

Saturday, January 24, 2009

First ENHANCE Suit -- Alleging Vytorin Was "Offending Agent" in Patient's Cancer -- Filed

This is a rather-ominous first -- of what will likely be many, many more -- a plaintiff (in one of the most-recently filed RICO ENHANCE putative class actions) has asserted that after he was admitted to a hospital ER, a health professional told him that his taking Vytorin was "the offending agent" -- that presumably led to his rare form of cancer.

The case is captioned Jaweed v. Schering-Plough, et al. (08-CV-6202, U.S. Dist. Ct. N.J., Complaint filed December 17, 2008). Click on the above image of the first page; then take a look below (from page 7, of the massive 75-page complaint):

[17.] . . . .Mr. Jaweed [the Plaintiff] began taking Vytorin October 30, 2006 because, although his cholesterol was not highly elevated, his physician prescribed it as a preventative. Mr. Jaweed paid for 30-day supplies of Vytorin over the time he took the drug, with the cost being approximately $127.90 per 30-day supply. . . .

18. Mr. Jaweed stopped taking Vytorin on November 14, 2007 when, during a hospital emergency room treatment, he was told to do so because Vytorin was "the offending agent" which prompted his admission. Mr. Jaweed was found immediately thereafter to have a rare form of cancer. He grew increasingly concerned January 14, 2008 and thereafter when the results of the ENHANCE study were released to the public. . . .

I will definitely follow this one -- and post updates -- as developments occur. Oddly, thus far, no mention has been made of the SEAS trial results. But I'd not be surprised to see an amendment to add that, as additional factual background, in support of the plaintiff's cancer allegations -- in the complaint. As ever, we'll stay tuned.

Gary Lawson Retiring Later This Year, It Seems. . . .

Per this story, we learn that Gary Lawson, head of global compensation and HRIT at Schering-Plough, will be retiring "later this year". Interesting, especially since he was a recent high-ranking alum of Wyatt Wheeler.

And yes -- regular readers will recall that Wyatt Wheeler is the firm where Ira T. Kay (pictured, at right), Hans Becherer's designated compensation consultant, resides. Cozy.

Of course, Hans Becherer is the Chairman of Schering's Compensation Committee of the Board -- he oversees CEO Hassan's pay, and bonus opportunities. Very. Cozy. [BTW, per the link, in his name, he is personally a named defendant in Cain v. Hassan -- the putative ENHANCE "ERISA Breach of Fiduciary Duties" and shareholders' derivative actions.]

In any event, here is the most-relevant snippet from the story mentioned above [emphasis supplied]:

. . . .Lawson, the head of global compensation and HRIT for Schering-Plough Pharmaceuticals, is responsible for the design, development and implementation of compensation programs on a global basis. In addition, he is responsible for the development, communication and implementation of a global HRIT strategy to support the company’s globalization initiative. Lawson plans on retiring later this year and dedicate his efforts in supporting HighRoads in their business strategy.

Most recently vice president and a member of the North American Compensation Practice Leadership Group for Watson Wyatt Worldwide, Lawson previously served a term on The Wyatt Company Board of Directors and was the Chairman for the Compensation Practice of The Wyatt Company. . . .

Fascinating. Was it disclosed in the proxy -- as a potential conflict, in the Compensation Committee's much-earlier original retention of Ira T. Kay (circa late-2005)? When did Lawson ACTUALLY leave Wyatt Wheeler? I'll go check.

Hans Becherer is depicted at left, BTW.

Well, no firm answers yet, but here we go -- from the relevant 2006 proxy (quoting from page 22):
. . . .The Compensation Committee’s Consultant.

In determining the amount and form of executive compensation, the Compensation Committee often asks for advice from its outside compensation consultant. In June 2006, Ira Kay of Watson Wyatt, a compensation consultant, was retained to report to the Compensation Committee, following the retirement of its prior consultant in late 2005. [Ed. Note: Who was that?] Kay does not now provide, and has never provided, any services to Schering-Plough, any member of management, or any employee of Schering-Plough. Watson Wyatt does not provide services to Schering-Plough, any member of management or any employee of Schering-Plough although it does provide non-U.S. actuarial and benefit plan services to certain Schering-Plough subsidiaries. None of these services relate to compensation of the named executives or other executives, and the fees for all such services are not material to Watson Wyatt or Schering-Plough. . . .

Interesting. In the prior year's proxy, the report had something very different to say. It seems Schering reformed its consultant retention practice in 2006 -- as per the below, management at Schering-Plough selected the consultant, and Mr. Becherer's Compensation Committee simply "ratified" that choice, after the fact. A clear opportunity for untoward influence is created thereby. No disclosure of potential conflicts -- take a look (from page 26 of the prior year's proxy):
. . . .The Committee selects, and when it deems appropriate is advised by, an independent executive compensation consultant to assist in evaluating the components of the executive compensation program. The Committee also annually ratifies Schering-Plough’s selection of a compensation consultant, which works with Schering-Plough’s Global Human Resources professionals and also provides information to the Committee. . . .

Cozy, indeed.

So -- Which Product-Lines Could Be "Busted-Out" of Schering?

Let's get specific, shall we?

Here are some guesses as to the future revenue lines (derived from published sources, and SEC filings) -- [along with some editorial comment, from yours truly, in brackets!]:

Schering's Likely Revenue-Streams
From Non-Cholesterol Franchise
: 2008 -- 2010 ($US Millions)

2008: $600
2009: $610
2010: $605 [This is stable only until
Vertex's Teleprevir launches.]

Claritin/Clarinex Products
2008: $425/$790
2009: $436/$580
2010: $420/$555 [Will there be an Orchid (or other)
"at risk" generic launch?
If so, these will drop-
off, even more dramatically.]

2008: $1,150
2009: $1,160 [This could easily be peeled off.]
2010: $1,175

2008: $455
2009: $542
2010: $597 [Rising nicely; but
lawsuit-trend-line rising, in time. . . .]

Bayer Relationship (All-In)
2008: $461
2009: $432 [Alliance in litigation]
2010: $406
2008: $255
2009: $218
2010: $184 [Sharp drop here.]

2008: $236
2009: $125 [Huge drop-offs!]
2010: $95

2008: $190
2009: $195 [Flat.]
2010: $190

2008: $156
2009: $170 [Soft rise.]
2010: $175

2008: $175
2009: $182 [Another soft rise.]
2010: $188

2008: $200
2009: $180 [Some declines.]
2010: $164

2008: $150
2009: $140
2010: $108 [Clank.]

This is by no means exhaustive, as the "All Other" Organon line is about a billion per year, but many of these lines could be sold to pay-down debt.

Another interesting alternative might be to exit the Hep C franchise, en todo. Schering ought to concede that Teleprevir will win the day -- and sell-out now, for a better price, than be bled to death, little by little, by lost-share (all the while, having to spend on Boceprivir, clearly a "me-too" second-line candidate). So, if Schering could avoid the expense of development on Boceprivir, and get cash for the overall current-strength of the Hep C state of play, now -- why wouldn't it?

Here are the 2008 to 2010 guess-timated sales of its current Hep C franchise products, all in:
2008: $1,420
2009: $1,355 [Flat for so long as Vertex doesn't reach the US market.]
2010: $1,330

Again, this could throw off some cash to pay down debt, and then, perhaps, buy-back some common stock, near term, at lower prices -- given that come August 2010, Schering will be forced to issue highly-dilutive common stock, to "settle out" on those Organon-related 6% Mandatory Converts, if the common-share price isn't then well above $27.50 (and that is not very-likely).

I'll have more, soon.

Silly Ideas Department: Morningstar Guy Thinks Merck "Might Buy" Schering. . . .

You'll have to fast forward to the very end of this video, but that is his supposition. Silly. Truly. Merck looks to be actually "beating a retreat" from "all [or most] things Schering".

Do also consider that Morningstar has long-recommended that its clients buy and hold Schering, and that much of that was bought at well-above $19 (mid-$20s, actually) -- so, this closing toss-away opinion may be read, at least in some measure, as an attempted price support -- as Schering closed above $19 last night, for the first time in a very long time (September 8, 2008, actually -- but who's keeping track?). As I pointed out on the Yahoo boards, today -- I think Schering is a bust-up play, at present:

. . . .The Question Actually Was: "Next on the Chopping Block. . . ."

. . . .Only then did the questioner "correct" himself -- remembering that Morningstar has staked a lot of reputation on Schering stock. Morningstar likes Schering above $19 -- where many of its clients bought in, last year -- and in 2007.

That said, I think the guy makes a case (at the very end of the video -- at about 4:15, into it), at least "as to patent cliffs" -- the problem with his supposition, though, is that he says the likely "acquiror" would be. . . wait for it: Merck.


Two words: No Way. Two more: No How. What of this would Merck want?

I think it more likely, as I have written -- repeatedly -- that Merck or others will pick-off the promising pockets they want, and refuse to "take out the rest of Fred's now-festering garbage" (i.e., Vytorin/Zetia; Claritin, etc.). Each of these generates good cash-flow, but the margins are dwindling -- especially in the OTC health segment.

So, the question might be rephrased as "Who needs good cash flow product lines (with lower relative profitability, but with longish patent tails)?"

In that scenario -- a bust-up is far more likely.

Even the Morningstar guy said Schering is likely "already in play."

That "play" is just not likely an intact merger of equals, in my opinion. . . .

My more specific analysis, is now available above.

Friday, January 23, 2009

Dr. Nissen's Suggestions to President Obama -- A Very Good Start. . . .

As the Inaugural euphoria winds down, and the business of governing gets into high gear, it is high-time for our 44th President, Barack H. Obama, to pick an FDA Commissioner.

For months now, Dr. Steven Nissen, head of Cardiac Medicine at the prestigious Cleveland Clinic has been rumored to be near the top of the very short list. He served as an advisor to the President during his campaign. This week, it seems that Dr. Nissen's cogent thoughts are popping up, all over -- in print, nationwide. Over at Nature [Note: subscription $$ req'd], and in an interview with the Cleveland Plain-Dealer, to mention just a few. The below summary of his Nature essay is derived from this blog. Here is a snippet, but do go read it all [Photo at right taken on 1100 Pennsylvania Avenue, on Tuesday afternoon. And, a Double Bonus! -- Extra, Extra Credit goes to Marilyn Mann, loyal reader, for collecting all these salient Nissen links! -- Gracias!]:

. . . .Dr. Nissen’s suggestions include:

▲ The FDA Chief should serve a fixed six-year term to insulate the agency from political influence;

▲ The FDA needs better harmonization between its Office of Surveillance and Epidemiology, which monitors post-marketing safety, and its Office of New Drugs, which is responsible for post-marketing regulatory decisions;

▲ Partner with large healthcare providers to collect better adverse event reporting data;

▲ Rely less on "non-inferiority" and "bio-markers" trials [Think Schering's Vyotrin here!], as an indicia of FDA approvability;

▲ Similarly, FDA ought ot reduce reliance on "substantially equivalent" trials;

▲ Curtail direct-to-consumer advertising until after two years from first FDA approval;

▲ Increase inspection of foreign drug manufacturing and compounding facilities; and

▲ Quadruple the FDA’s current $2.3 billion budget. . . .

[And now, little bit from the Plain Dealer blog:]

. . . .The Plain Dealer: A report released earlier this month by the U.S. Department of Health and Human Services noted that in 42 percent of trials, the FDA failed to receive disclosure forms from the physicians conducting the trials. Are those disclosure forms important?

Nissen: Absolutely. First of all, it's all about transparency. If one has a personal financial interest in a product, it's very hard to be objective about that product, its safety and its efficacy. . . .

The Plain Dealer: Have you ever felt pressured by a drug company to publish results more positive than what you came across?

Nissen: All the time. When you do research with a company, they have their interest and we have our interest. The pharmaceutical industry is a for-profit enterprise. When they do research, they want that research to support their product. We have to be tough and independent.

My group will only engage in pharmaceutical trials if we name an academic steering committee that governs the trial. And the entire trial database has to be transferred to the Cleveland Clinic -- not tables and figures and derived data, but the whole raw data.

We also have the independent rights to publish the results if they're favorable or unfavorable.

The Plain Dealer: The position of FDA commissioner is one of the few top agency or Cabinet positions President-elect Barack Obama has not filled. Are your sources at the FDA and on Capitol Hill telling you why there is a delay and when can we expect an announcement?

Nissen: I think it's a very challenging appointment. We have a failed agency that desperately needs a new direction and a very powerful industry sitting on the sidelines with lots at stake.

I am confident that the Obama administration, with a very thoughtful transition team, will do what's right for the country. And by having a campaign which was free of lobbyists' contributions, I'm confident that they will make an independent decision based upon what they believe is right for the country. . . .


Tuesday, January 20, 2009

December 2008 Vytorin/Zetia Market Share Slides to 10.13 Percent -- IMS

While the overall US market for cholesterol management drugs expanded in December (according to IMS), the share of that market held by the Schering-Merck Joint Venture declined to 10.127 percent, compared to 10.27 percent in November 2008.

Schering also said that it would no longer provide monthly IMS data on the two drugs -- claiming that the erosion has "stabilized". I'll have more about that goofy Schering proclamation when I'm back from DC, on Thursday.

LATER -- personally, I'd be ashamed to sign my name to a statement that called this IMS data "stabilizing": a pair of drugs, but essentially one brand -- whose US market-share has fallen from the low-20s percent range over a year ago, to 17, then to 15, then to 12, then to 11, and now to essentially a dead-flat-10 percent by December 2008.

But I am not Fred Hassan -- and thankfully, I am not his lawyer.

Where is the full-measure of truth in Schering's FAQs? I don't see it. Telling Wall Street rose-colored half-truths, all while requiring that the analysts "do the math" -- to learn the far-less sanguine full-truth -- is a "sharp practice". Puts me in mind of an old bon mot:

"Verily, the sharp employ the sharp -- a man may be by his lawyer, known."

-- Voltaire

From DC, on Tuesday, then (as ever, click it to enlarge):

Saturday, January 17, 2009

Forecast -- Light to No Schering-Blogging. . . .

I'll likely be almost completely off-the-grid, unless a truly monumental Schering-specific story breaks between now, and this coming Wednesday night -- as I'll be in DC for the all the Inaugural festivities (and the many, many Rev. Dr. Martin Luther King Day ones, on Monday, as well!). If something really unusual happens, I'll likely blog it from my cell-phone. Likely. Not. Pretty.

Otherwise, keep it spinnin' in good karma -- at least until Wednesday night.

BusinessWeek -- on Pharma's New Drill. . . .

Just as I have long, and repeatedly opined -- it seems BusinessWeek now agrees -- that the Bush 43 era (late-2003) ban on direct government pricing negotiations will end in 2009, under President Obama. Go read it all, but here is the most salient bit, for Schering-Plough:



Republican authors of the 2003 Medicare drug plan barred the government from negotiating discounts. Obama and congressional Democrats will overturn the ban, reducing prices paid for drugs. All major pharma players may be affected. . . .

Buckle-up for large price concessions on Vytorin/Zetia -- and a host of your other branded compounds -- Mr. Hassan. Private insurers will certainly seek so-called "most favored nations" pricing clauses, after the government gets tough on pricing. And they ought to. That will mean that insurers will be guaranteed no less-favorable pricing than the federal government is able to negotiate.

As an editorial aside, it seems odd -- ironic, even -- that pharma generally, and Schering CEO Hassan particularly, will endlessly repeat the old chestnut about the "death of US pharma innovation-leadership" -- being caused by government intervention in the "free market" for drug sales, and advertising.

'Tis ironic then, that out of the other side of their mouths, they liken letting the government freely-negotiate open-market pricing on drugs to "price extortion" -- and complain it is somehow inherently unfair.

Really -- which is it, boys? Are you for free markets, or ag'in 'em? Is the government (FDA) "killing pharma" with excessive intervention, or is the government's "drug prices-support program" something you must have?

You've benefitted-mightily from government-price-protections, and now, you'll cry foul when they are certain to be repealed?


Friday, January 16, 2009

Lowenstein Sandler Compounds Dechert's Errors -- Repeating a Brief, in Manson, the ENHANCE Securities-Fraud Matter. . . .

For the second time in a week, lawyers for Schering-Plough [this time Lowenstein Sandler; last time Dechert LLP] have confused the evidentiary import of an FDA Safety Announcement. Lowenstein Sandler has now made the same argument (over the same objections), in the Schering ENHANCE Securities Fraud putative class action, as Dechert made in the ENHANCE Sales Practices putative class action, captioned Polk (document 144, in Case 08-cv-285), on Monday.

Here is a PDF of the Securities Fraud version of the letter/brief (Document 90, in Manson, 08-cv-397).


50 More Schering R&D Positions Eliminated Yesterday. . . .

CNN Money is carrying news of additional job cuts in five Schering R&D locations around New Jersey and Pennsylvania -- as its previously announced "Productivity Transformation Program" -- a process of down-sizing -- continues:

. . . .the layoffs included management, administrative and scientific positions, and were spread primarily across five locations in New Jersey and Pennsylvania.

Schering-Plough has been making periodic job cuts since announcing the productivity initiative, but hasn't announced every action, Galpin said.

Schering's broader cost-reduction effort was announced last year in response to increased pressure on the industry as well as a downturn in sales of cholesterol drugs Vytorin and Zetia, which Schering-Plough co-markets with Merck & Co. (MRK).

Also, Schering has run into some regulatory setbacks trying to bring new drugs to market in the U.S. . . .

How is it that this "Productivity Transformation" only began -- in the fifth year of CEO Hassan's service? Wasn't he a turnaround specialist? Gee, I wonder.

Thursday, January 15, 2009

PhRMA's "Charm Offensive" is Once Again in High Dungeon. . . .

Do go read the rest of this AP story -- but here are a few snort-inducing tidbits:

Pharma to Democrats: We're here to help

. . . .even as the former Republican Congressman pledged to work with labor unions and other left-leaning groups, he continued to warn against federal controls on drug prices, particularly in the Medicare drug benefit. . . .

Like many Democrats, President-elect Obama has criticized the Medicare drug benefit as unduly favorable to drugmakers. He supports allowing the federal government to directly negotiate drug prices, which advocates say would cut drug spending for both the government and seniors. Under the current system, insurers and pharmacy care companies negotiate as middlemen between the government and drugmakers.

Tauzin cautioned that a fight over that program could derail larger reform efforts.

"If we get into old wars like that we're not going to be able to move forward," he said. . . .

Pharma's cheerleading for health reform comes less than a week before Democrats take control of both the White House and Congress for the first time in 15 years. . . .

Does PhRMA's new president (former Rep. Billy Tauzin) fancy himself -- as still being in control of any legislative agenda?

"We" won't be able to move forward? Who, exactly is the "we" here, Mr. Tauzin?

There is no chance that Big-Pharma can prevent federally-reimbursed open-market price negotiations/bidding on drugs, by fiat, any longer, Mr. Tauzin.

Consider that just a month ago, PhRMA's Rep. (and Schering-Plough's CEO) Fred Hassan offered a lament -- about being "left out" by the reformers' efforts -- "we need first a seat at the table" -- now, you Mr. Tauzin, say "we" won't be able to "move forward"? My reaction? Ummm. . . .

"Not. A. Chance."

Wake up, and smell the coffee, PhRMA. You'll need to be asking, politely, as any supplicant would -- not faux-dictating, as a demi-god might.

Schering's Asenapine -- Even If Approved -- Faces A "Cloudy Commercial Prognosis"

With all the news generated recently about the obesity risks (which may lead to elevated cardio-vascular risks) from Risperdal, Abilify and Zyprexa, et al. -- given the very common long-term use of these sorts of anti-psychotic drugs -- I thought it worthwhile to highlight the view of many analysts, on Asenapine (to be tradenamed "Saphris"), per a Forbes article, out this morning.

Note that this does not bode well for moving the drug over to treating Alzheimers-related dementia:

. . . ."Even if approval occurs, the commercial outlook for Saphris seems challenging," wrote Sanford Berstein analyst Tim Anderson in a note to investors. "The drug would be entering a crowded atypical antipsychotic category where a benchmark product -- Johnson & Johnson's Risperal -- recently went generic, and Schering has no commercial presence in this area, meaning it would need to build infrastructure to market Saphris." Anderson added that his expectations for the drug's approval had been low until this point. . . .

Good luck with that, Dr. Koestler.

Wednesday, January 14, 2009

Another Day -- Another Unfavorable FDA Letter -- Received by Schering. . . .

While this Asenapine delay may turn out to be rather short -- it is also quite possible that FDA will "not like what it sees" ["Cue Salmon, stage left" -- paging Salmon!] in the additional data sets it has requested for Asenapine -- one of Schering's much vaunted "Five Stars" -- now about two years behind the earlier-scheduled US launch date.

This morning's FDA complete response letter comes only one day after the proposed "Over The Counter", or OTC, form of Omeprazole, received an even more unfavorable FDA complete response letter. Wow. That looks like an emerging pattern, here.

More plainly put, it is -- in my experience -- additional evidence that FDA now eyes rather warily every submission from Schering -- given the less than forthcoming nature of the ENHANCE results release-delays, then the attempt to downplay those same results. For what it is worth, Schering is pleased that the letter represents -- it hopes -- only a shortish delay:

. . . .We are pleased with the progress on the Saphris filing and look forward to working with the agency to address its request, finalize the product labeling and gain approval," Thomas Koestler, president of the Schering-Plough Research Institute, said in a statement. . . .

Okay. Right. Check. . . .

Tuesday, January 13, 2009

Dechert LLP Misconstrues Recent ENHANCE FDA "SAFETY" Update, Before Judge Cavanaugh

In a letter-brief filed with the court just yesterday, Ezra D. Rosenberg, of Dechert LLP (Schering's law-firm in Polk, one of the most-important ENHANCE-related putative class actions -- the sales practices and marketing action, Case No. 08-cv-285) urges Judge Cavanaugh to mis-read the FDA's updated safety announcement on Vytorin/Zetia -- as an efficiacy announcement.

Dechert suggests, entirely-erroneously, in its brief before Judge Cavanaugh, that the FDA SAFETY Announcement affirms Vyorin's efficacy. It does no such thing, and I strongly suspect Judge Cavanaugh will sniff this out, immediately. Take a look at the title of the FDA document at issue: "FDA Issues Update to Safety Review on Cholesterol-Lowering Drugs". Safety -- safety -- safety, not efficacy. Sheesh; really.

Dechert goes on to quote this portion of the FDA Announcement (but simply omit the title of the document):

. . . .Preliminary results from ENHANCE (Effect of Combination Ezetimibe and High-Dose Simvastatin vs. Simvastatin Alone on the Atherosclerotic Process in Patients with Heterozygous Familial Hypercholesterolemia) had indicated there was no significant difference between Vytorin and Zocor-treated patients in the thickness of the walls of the blood vessels of the neck (the carotid arteries) although there was greater lowering of the amount of LDL cholesterol in patients with Vytorin compared to Zocor.

Measuring the thickness of the carotid arteries via ultrasound imaging is considered a biomarker of risk for cardiovascular disease.

FDA has now completed its review of the final clinical trial report of ENHANCE. After two years of treatment, there was no significant difference in carotid artery thickness between Vytorin patients and Zocor patients. However, the levels of LDL cholesterol, decreased by 56% in the Vytorin group and decreased by 39% in the Zocor group. . . .

That is precisely the opposite of an efficacy finding. All FDA said was that Vytorin was not definitively unsafe. [Full Dechert letter-brief-filing here, as a PDF file.]

Mechanism of action will prove to be everything, here.

I guess Dechert only listened to the less-well-informed members of the fourth-estate (and the spin-meisters in Kenilworth).

Dechert goes on to make thinly-veiled preemption noises, using the FDA Announcement as fodder, but those seem unavailing, given the firm's misreading of the actual purpose of the FDA's statement last week.

This is, honestly, sort of surprising. Are there no ex-scientists among the lawyers at Dechert? Wild.

Schering Receives Unfavorable FDA "Complete Response" Letter on OTC Omeprazole

This looks to be another way in which having poor relationships at FDA may continue to affect Schering's future prospects, per Reuters:

. . . .Schering received a "complete response" letter, which outlined questions that the U.S. Food and Drug Administration identified during its review of the new drug application for OTC Zegerid.

The FDA issues complete response letters to companies when it is not ready to approve a drug. It does not publicly disclose what steps are needed to win approval. . . .

Schering-Plough is responsible for the development, manufacturing and marketing of Zegerid branded OTC products with the dosage strength of 20 mg of omeprazole for heartburn-related indications in the United States and Canada. . . .


Monday, January 12, 2009

Live-Blogging Any "Highlights" of Schering-Plough's West-Coast JP Morgan Web-Cast Presentation on Monday. . . .

To listen in to the live webcast from JP Morgan, go register, preferably before 6:15 Eastern, at the link.

I'll offer commentary, and real-time analysis, of the more salient parts of Schering's remarks -- likely including some real-time slide screen-captures. . . I honestly don't expect to hear much of a material update -- from what was offered on November 24, 2008 -- at Schering's own R&D Update Web-Cast (similarly live-blogged). We'll see.

at the J.P. Morgan
27th Annual Healthcare Conference

Monday, January 12, 2009
6:30 p.m. EST

▲ 6:53 PM EST -- One small difference -- Dr. Koestler just said that Schering has "recently" met with FDA on Bridion/Sugammadex (which received a non-approvable letter last summer), and has a "plan for a way forward" -- but he did not back off of the November 24 disclosures: that it may take most of the year (2009) to get close to resolving those FDA issues. No real good news, there.

So -- circa 7 PM EST -- Almost nothing new since November 24 -- here's what is the SAME -- in the presentation, from then:

Three of Schering's 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 November 24 slides.

▲ Dr. Koestler just called 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

▲ Now, a regurgitation of the boceprevir Hep C naive treatment data, to date. . . . [see slides from November 24, 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.]

▲ 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.

▲ It is also now a consensus view that Bridion/Sugammadex will be "slowly adopted" in the Operating Suites across Europe (it is not approved in the US) -- it will need to displace, in Carrie Cox's own words, "very-well-entrenched generics" -- meaning it will have to compete on price, as well as efficacy.

▲ 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:

▲ Interestingly, Schering admits, at about Slide 35 of the November 24, 2008 deck, 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. . . .

That was underwhelming, indeed.

Sunday, January 11, 2009

Clarinex®/Descloratadine Patent Litigation Heats Up -- Accelerated Scheduling Order Entered

Recall that just last month, Schering was pushing the notion that it was good news four defendants had "caved" -- and settled -- in the Clarinex® patent litigation. I wandered by to point out that there were still many more defendants "out there", some of which might be looking to launch a generic version of the Clarinex® Redi-TabTM.

Now we learn that at least eight of those defendants are marching, double-quick, toward a trial on the merits -- no slow-roll (toward settlement), here. [Click to enlarge the image, at right, of excerpts from the latest order.]

Also, remember that Sandoz has filed a motion to have one of Schering's central Clarinex patents summarily-declared invalid -- that motion has been pending before federal District Court Judge Toni Bongiovanni since August of 2008.

So -- will there be an at-risk generic launch in 2009? [The branded franchise drug is still worth over $750 million a year in sales to Schering.] My best-guess candidate to do so would be Orchid Pharmaceuticals (or, Defendant Number 4, at right), out of India. We'll have to wait and see.

Thursday, January 8, 2009

FDA Update on Vytorin/Zetia, Issued Today

Despite what some of the ill-informed members of the fourth estate are writing at the moment ("FDA says Vytorin works" -- sheesh -- do read, for content!) -- this doesn't "clear" Vytorin/Zetia, in any sense -- it only says that FDA feels it is not "unsafe". Not a big thing, really.

Second, the real focus of the FDA announcement is to keep people taking their cholesterol meds -- regardless of brand -- until they talk to their doctors about treatment options. This is no "clean bill of health" for Vytorin, or Zetia.

It is not a death sentence, either, though. That will come, via one thousand papercuts, from the third-party payers -- death by (increasingly accelerating) co-pays, and dropping reimbursement levels -- in 2009, vis-a-vis ordinary, old generic statins.

So, pending the results from IMPROVE-IT (not due out, now, until late 2012), all FDA said today was that patients should not stop taking Vytorin or other cholesterol lowering medications -- but should talk to their doctor -- if they have any questions about these medications. Yep, that's all the FDA said today. This FDA update, by its terms, relates only to safety, not to comparative efficacy (measured by relative risk-rates for CV events), however.

FDA Issues Update to Safety Review on Cholesterol-Lowering Drugs

The U.S. Food and Drug Administration today reaffirmed its position that elevated amounts of low-density lipoprotein (LDL), or “bad cholesterol,” are a risk factor for cardiovascular diseases such as heart attack, stroke and sudden death and that lowering LDL cholesterol reduces the risk of these diseases.

FDA’s comments are contained in an update to its Jan. 25, 2008, Early Communication describing the agency’s review of data from ENHANCE, a clinical trial comparing Zocor (simvastatin), a drug that lowers cholesterol production in the liver, to Vytorin, a drug that combines Zocor with another drug, Zetia (ezemtimibe), which inhibits cholesterol absorption.

Preliminary results from ENHANCE (Effect of Combination Ezetimibe and High-Dose Simvastatin vs. Simvastatin Alone on the Atherosclerotic Process in Patients with Heterozygous Familial Hypercholesterolemia) had indicated there was no significant difference between Vytorin and Zocor-treated patients in the thickness of the walls of the blood vessels of the neck (the carotid arteries) although there was greater lowering of the amount of LDL cholesterol in patients with Vytorin compared to Zocor.

Measuring the thickness of the carotid arteries via ultrasound imaging is considered a biomarker of risk for cardiovascular disease.

FDA has now completed its review of the final clinical trial report of ENHANCE. After two years of treatment, there was no significant difference in carotid artery thickness between Vytorin patients and Zocor patients. However, the levels of LDL cholesterol, decreased by 56% in the Vytorin group and decreased by 39% in the Zocor group.

The results from ENHANCE do not change FDA’s position on the benefits of lowering LDL cholesterol. Based on currently available data, patients should not stop taking Vytorin or other cholesterol-lowering drugs and should talk to their doctor or other health care professional if they have any questions about Vytorin, Zetia or the ENHANCE trial.

FDA’s Early Communications are disclosures that the agency has begun evaluating new data about a drug and is considering regulatory action, but has yet to reach a conclusion. . . . .

Later, per a pull-quote from a commenter, below, in the Linda Johnson AP story on this: . . . ."The price differential between the two products [Vytorin/Zetia v. statins] is so big that this may not make much of a difference" in sales of Vytorin and Zetia, given the recession, said analyst Steve Brozak of WBB Securities. . . .

EVEN LATER (01.09.09 -- $18.30 NYSE Close): "I told ya' so!"

VIDEO of Today's Senate Confirmation Hearing: Daschle for HHS

The work of reforming United States health care delivery begins, in earnest, now:

If you cannot see a video feed pane, below, click this, RIGHT HERE, and enable pop-up windows, to see the archived video stream, courtesy of

From former Senator Daschle's opening remarks, this morning (full PDF file):
. . . .The Department of Health and Human Services touches the lives of all Americans in crucial and fundamental ways. It is called upon to protect our citizens as well as offer them assistance in fulfilling essential tasks for their well being. It is called upon to ensure the safety of food and the effectiveness of drugs a mother gives her child; to help find the cure to the disease afflicting a parent and to educate a community on preventing disease; to help the struggling family afford child care so parents can work; to ensure children are receiving the social and developmental care they need as they enter school and prepare to learn; to help the family struggling with caring for an aging parent; and of course, to help our seniors and most vulnerable families by providing health care, which many would otherwise go without.

This Department also will be central to tackling one of the greatest challenges of our time: reforming the U.S. health care system. The flaws in our health system are pervasive and corrosive. They threaten our health and economic security that is why the President-Elect has crafted the new White House Office of Health Reform and I am honored to be chosen to serve in this role as well. If confirmed, I will use these dual roles to marshal the talent and energy necessary to at last succeed in making health care affordable and accessible for all Americans. . . .

Ensuring all Americans have health care is integral to the mission of HHS and the well-being of our families –- but to achieve this goal, we will have to work together to tackle tough challenges. While our investments in research and pioneering work by our scientists lead innovation, too often, patients don’t actually get our best.

In 1994, we had 37 million uninsured. Today, we have nearly 46 million. In 1987, one dollar out of fifteen went toward health care for the average family. Today, it’s one out of six. And even though the U.S. spends more on health care than any other country, we rank low on life expectancy and infant mortality. President-elect Obama recognizes that many of you have been working for many years on these issues, and that any effort at reform will require close collaboration with Congress.

He also realizes that change cannot be dictated from the White House and Washington out –- but must come from the grassroots of this country and involve as many Americans as possible in the process of reform. In addition, to being a collaborative process, it also needs to be an open, transparent process where people know their voices are being heard.

We have already begun to listen. During the Transition, we reached millions of Americans via our website,, to get their input on how best to change our health care system. Tens of thousands of Americans shared their greatest concerns about health reform, and thousands more opened up their homes to host Health Care Community Discussions. We are currently compiling their reports to share, but one thing was crystal clear: America cannot afford more of the same when it comes to health care in this country. On this, I think we all can agree.

It is unacceptable that in a nation of approximately 300 million people, nearly one in six Americans don’t have health insurance. As we face a harsh and deep recession, the problem of the uninsured is likely to grow.

But the number of uninsured only describes part of the problem. Even Americans who do have health insurance don’t always get the care they need, especially high-value preventative care. In some cases, this is due to a shortage of providers –- especially primary care providers in rural areas that we must work to address.

In other cases, it is simply because our health care system is not oriented toward prevention, and therefore, fails to incentivize the screenings and lifestyle changes that can do so much to improve health. Any health care reform plan must make sure every American has preventative care that prevents disease and disability. Coverage after you get sick should be a second line of defense. Today, it’s often the first line of defense.

In addition to being sound medicine, this is sound fiscal policy. Studies have shown that for every $1 spent on prevention we could net a return of $5.60 in health care costs – totaling upwards of $16 billion annually within five years.

But it’s not enough to give every American care. It needs to be high-quality care.

By some measures, nearly one third of the care Americans receive is at best inadequate, and at worst harmful. While we have pockets of excellent care, too often recommended care is not provided.

This quality gap contributes to racial and ethnic disparities in outcomes. On the Pine Ridge reservation in South Dakota, half the people over 40 have diabetes, and the life expectancy is just 47 years, or what life expectancy was for the rest of the country. . . in 1900. This, too, is unacceptable. . . .

Schering's Raplon Defense: "Punctured, Well-Below the Water-Line"

Dr. Feldstein's latest answer to the renewed, and thus persisting, claims (by Schering's lawyers) that Feldstein has done something vaguely untoward in bringing his Qui Tam/False Claims Act action against Organon (now a Schering unit) soundly, and effectively, counter-punches the typical, overly-aggressive Schering posturing defense strategy.

Take a look at these excerpts, from his overnight filing (full PDF file):

. . . .Nevertheless, even after being provided with Dr. Feldstein’s explanation, Defendants persist in their baseless demand for sanctions pursuant to Federal Rule of Civil Procedure 11 and this Court’s inherent authority. Court-imposed sanctions are warranted only in exceptional circumstances, which are not implicated in this case. Absolutely nothing in the record gives rise to even an inference that Dr. Feldstein improperly commenced this action for the purpose of harassing the Defendants, causing delay or creating unnecessary litigation expenses. Moreover, Defendants’ assertion that Dr. Feldstein’s FCA claim is devoid of evidentiary support is absurd.

Not only has Dr. Feldstein repeatedly provided the Court with pleadings, briefs and certifications that explain both the factual and legal basis for his FCA claim, he has also submitted a copy of an internal e-mail between two senior personnel who worked on obtaining Raplon’s approval from the FDA, Dr. Jonathan Deutsch, Organon’s Director of Hospital Products, and Deborah Shapse, Organon’s Vice President of Medical Services, which unequivocally establishes that Organon and, in particular, its Head of Marketing, Michael Novinsky, sought to “downplay” and conceal critical safety information concerning Raplon from the FDA. (Amended Complaint, ¶¶ 13-17.) This is not a situation where sanctions are appropriate because a litigant has raised claims lacking any factual support or for a purpose other than having them fairly adjudicated on the merits. . . .

Organon approached Dr. Carol Hirshman, an anesthesiology professor at Columbia University, to conduct a mechanism-of-action study to determine the cause of the SAEs associated with Raplon. After she agreed, Organon paradoxically failed to authorize the study and dropped the matter. (Amended Complaint, ¶ 18.) Finally, the fact that Dr. Feldstein did not confirm the full extent of Organon’s misconduct until after his termination in no way diminishes the significance of the e-mail and other information he acquired during his employment. . . .

Ouch -- Um, try again, Lowenstein Sandler.

Another Entrant in the Next-Gen Hep C Horse Race?

While this Anadys candidate is clearly well-behind the other entrants, especially compared to Vertex's Teleprevir candidate (for a next generation Hepatitis C treatment) -- it will bear watching, as it is showing very-strong 72 hour early efficiacy (albeit it in small patient groups) -- per today's Xconomy | San Diego:

. . . .An early peek at data from Anadys Pharmaceuticals (NASDAQ: ANDS) suggests the company may have a promising new drug in the works for hepatitis C. The San Diego-based biotech is announcing results today from the first eight patients with the chronic liver infection, which shows its drug has more viral killing pop in the first three days of treatment than was seen in other drugs studied in its class, with minimal side effects.

The company found that its experimental medicine was able to wipe out 99 percent of the virus from the blood (known as a 2.5 logarithmic reduction) within 72 hours at the lowest dose tested in a Phase I clinical trial, says CEO Steve Worland. This finding was in the first group of patients who took a 200 milligram, twice-daily dose of ANA598. It is just the first slice of data available, and the trial is continuing to enroll patients at two higher doses, Worland says. The company hopes to present full data at the European Association for the Study of the Liver meeting in Copenhagen, Denmark in April. . . .

Any way one slices it, Schering's path to a "winner" in next-gen Hep C treatments (with its boceprivir candidate) is increasingly cluttered with significant -- and expanding -- obstructions. . . .

The HeartWire Runs a Story Marilyn Mann Gave Us Almost a Full Week Ago

Michael O'Riordan, at the HeartWire, ran a story overnight that Marilyn Mann pointed out to us, last week -- O'Riordan has additional pull-quotes, and more retrospective background, though, so do go read it all:

. . . .The cancer signal first arose in the Simvastatin and Ezetimibe in Aortic Stenosis (SEAS) study, a trial presented at the European Society of Cardiology (ESC) in Munich, Germany last year and reported by heartwire at that time. Among those treated with the ezetimibe/simvastatin (Vytorin, Merck/Schering-Plough Pharmaceuticals) combination, there were significantly more cases of fatal or nonfatal cancer compared with those treated with placebo.

When the cancer findings became known, it led to an independent analysis of two ongoing ezetimibe studies, the IMPROVE-IT and SHARP trials, by the Oxford investigators, to determine whether the cancer risk was real or chance.

In IMPROVE-IT and SHARP, which provided more cancer data than the SEAS trial alone, including more data in patients with at least three years of follow-up, there was no increased risk of incident cancer or cancer mortality. When all three trials were combined, there remained an increased risk of death from cancer in the active-treatment arm.

As he also pointed out in his letter to the editor, Nissen, in speaking with heartwire, said the decision to analyze data from IMPROVE-IT and SHARP before those studies were completed sets a dangerous precedent, raises scientific and ethical issues, and is not reliable for the evaluation of drug safety.

"A decision to unblind a clinical trial is something that should be done under only the most extreme circumstances," said Nissen. "Once you unblind a trial, you forever alter the conduct of that study. Most individuals who think very hard about clinical trials will tell you that you better have an extremely good reason for unblinding an ongoing clinical trial, and I don't think there was a good reason here."

Moreover, Nissen said these two incomplete trials represent an incomplete experiment and notes that the mean exposure time to the drug in some patients is insufficient, and this dilutes the signal of risk. . . .

Wednesday, January 7, 2009

At Least Fifteen TWO Reasons to Temper Enthusiasm for Gupta -- the Current Obama Choice for US Surgeon General

ERRATA: GoozNews has realized that there are at least two Sanjay Guptas. Oops. I've revised mine. My most sincere apologies -- to the potential nominee. However, consider these tidbits, courtesy of Gooz (below). . . .

As GoozNews has ably pointed out, right here, this morning, Dr. Gupta is fetchingly telegenic, and a great communicator -- but as a supposed-television (CNN) journalist (and certainly as the would-be United States Surgeon General), these ties are troubling -- here are fifteen of his most recently-disclosed financial backers some pull-quotes, per Mr. Goozner's REVISED posting (see page XXV of that PDF-file link):

. . . .check out this Health News blog item by Gary Schwitzer, a journalism professor at the University of Minnesota, last November 20. It discusses a new show launched by CNN for broadcast in hospital and physician waiting rooms:
A powerful contemporary example of entanglement involves a television network called Accent Health (whose logo includes the words "Your target is waiting"), said to be watched monthly by more than 10 million viewers in US medical waiting rooms. The network, which is produced by CNN, overtly offers sponsors, including drug companies, the chance to boost sales of their products, by, for example, putting "your brand in front of the valuable Baby Boomer population just before they discuss their health conditions with their doctor." One of the hosts is Sanjay Gupta, CNN’s chief medical correspondent and host of at least one other CNN health programme that is funded partly through drug company advertising. . . .

Sanjay Gupta, M.D.: Abbott Laboratories, Inc., AstraZeneca Pharmaceuticals LP, Bristol-Myers Squibb Company, Eli Lilly and Company, Forest Laboratories, Inc., GlaxoSmithKline, Johnson and Johnson Pharmaceutical Research and Development, Memory Pharmaceuticals, Myriad Genetics, Inc., Neurochem, Inc., Ono Pharmaceuticals, Inc., Otsuka America Pharmaceutical, Inc., Pfizer Inc., Solvay Pharmaceuticals, Inc., Somaxon Pharmaceuticals. . . .

Nope -- Schering-Plough is not among them -- nor is Merck & Co. But As Merrill more cogently points out, this sort of inter-tangling will make for rather tough-sledding at his confirmation hearing before the Senate.

Tuesday, January 6, 2009

Looking for Ed Silverman. . . .

Reports are surfacing that Ed Silverman has joined Reed Elsevier's Windhover outfit -- and that we may find him on their property as early as next week. . . . Excellent news, if accurate!

. . . .next week at In Vivo blog, or the Pink Sheet (online). . . .

UPDATED: Seems accurate -- per Jim Edwards bNET Pharma "exit interview".

Is Schering-Plough a "Bust-Up" Play, at Present?

Earlier this week, there was some idle speculation that Schering-Plough (NYSE Symbol: SGP) might be a takeover candidate. In this clearly capital/capacity-constrained market? I think not. Here is a comment, followed by my dissection of it, over at the Yahoo stock chat-boards:

. . . .I agree that SGp is an obvious takeover candidate; they have one of the strongest pipelines in the business with 3 novel drugs currently under review by the FDA and another 5-6 in phase 3 clinical development. With a current market cap of ~$26B, there are a number of big players who could take them over, PFE being one, but companies like Novartis (also facing a bad patent cliff), LLY (facing a horrible patent cliff) and MRK would be obvious candidates. Also, Fred Hassan is no stranger to deals, having brokered the Pharmacia-Upjohn deal and the PFE-Pharmacia deals. I would not be surprised if SGP was taken over within the next 12 months, at least if their market cap stays low. I stay long on SGP, and believe that all long could be handsomely rewarded within the next 6-12 months. . . .

By: biotechbull

My answer:

Biotechbull -- the last part of your handle -- "bull" -- suits your above-comment, to a tee. Of the three to which you presumably refer -- one received a "non-approvable" letter from FDA (Sugammadex, in July 2008), and later, Asenapine was delayed for additional safety data, at FDA in the fourth quarter of 2008.

So much for that vaunted near-term pipe. I will grant you that Schering has some interesting possibilities in the 2012 to 2014 time-frame. But they are only possibilities at this point. With this management team, I am sure they'll find a way to screw up the studies/approval process.

That out of the way -- as to the recent SGP share price action -- I think it increasingly clear that Schering is a potential "bust-up" play, at present.

But where is a player to get the deal done? The old-line investment banks don't even exist any longer. And the capital markets are looking for sure things, not "maybes" -- some three to five years, from now.

Schering-Plough -- intact, and "as is" -- is very-likely worth less than the sum of its parts. Look -- it runs an animal health (Organon) business -- being dragged about by an OTC consumer health (Coppertone) segment. . . being lugged along by an aging straight pharma pill (Vytorin) portfolio. . .

No biotech, no bio-equivalent emerging business -- no strategy for self-branded generic capabilities -- in short, no forward momentum, in these cost-constrained times, and segments.

SGP does generate decent cash, and as such, a savvy, very deep-pocketed capitalist, with a three year horizon, could split the parts -- selling each off -- and net a potentially very nice return. Again, where is that capitalist? I dunno.

In any event, current CEO Hassan is, in my opinion, plainly not the man to preside over an auction. He is far too myopic, and ego-invested in his false vision of an "intact Schering" health conglomerate/synergy play.

If it hits $19, I'll likely go short again. It will likely fall again, when December (and year-long) 2008 Vytorin/Zetia scrips data are released by IMS -- and reported by SGP -- in the third week of Janauary 2009. Look for that, in an SEC Form 8-K, probably on a Friday night, if Schering's law department holds true to form.

[Later I added this:]

Schering's psycho-tropic drug candidate, Asenapine, has been delayed by FDA, late in 2008, for additional safety study data.

As the erstwhile Salmon would likely inform us, were he present, now -- Asenapine is a drug that a few other pharma companies spent several years, and several hundred million dollars on, in the last decade, only to abandon it outright over safety (and other) concerns.

Yet Schering persists. Yes, three of CEO Hassan's "five stars" -- from the Nov. 24, 2008 R & D Day Webcast Conference -- are significantly "off-track", with FDA.

For additional clarity: I was not blunt enough about a "bust-up": usually, only a small portion of the "unlocked" value -- from a bust-up -- ever reaches the shareholders of the combined entity -- here the current SGP shareholders. True, one or two units may be spun-off -- as a stock for stock dividend, but most would be sold for cash, to pay down the immense debt Schering took on, when it bought Organon for over $15 billion, in late 2007. A goodly-chunk of that comes due in late-2010.


Ezra Klein -- on Schering -- as an Example of "Useless" Innovation. . . .

Over at The American Prospect, Ezra Klein has a new article up -- his aim, in the main, is to debunk the myth that our current FDA system stifles real innovation.

To make his central point, he highlights Schering's Clarinex/Claritin example. And, yep -- that cha-cha looks alot like the precursor to the Schering's Zocor-to-Vytorin/Zetia "strategy".

Do go read it all, as there is much more in his fine article, but here is a snippet:

. . . .No one wants to be against "innovation." The word is practically a synonym for "awesome." And who wants to be anti-awesome?

But the problem with our health care system is that far too little effort is expended making sure the innovation is good innovation. Take the case of Claritin, the wonder anti-allergy drug. In 2001, loratidine, Claritin's active ingredient, went off patent. Generic producers streamed into the market. Many more people could access Claritin, or at least the compounds that made Claritin powerful.

Right on schedule, Schering, Claritin's producer, emerged with Clarinex. Now the active ingredient was desloratadine [see image at left], and it was said to be effective, for longer. There was little evidence of that. But it was eligible for patent protection, and Schering spent billions of dollars convincing doctors to prescribe it, and so they made profits and health care became a bit more expensive. That was bad, or at least useless and costly, "innovation." On the other side, there's much good innovation. And there should be some status quo bias in favor of protecting a system that does produce important advances. . . .

[Emphasis supplied.]

Specifically, Clarinex does have a longer half-life than Claritin. . . . but there's no proof that it relieves symptoms longer than Claritin. And that is largely "useless" innovation.

In my estimation, this is much the same as Vytorin/Zetia -- it lowers cholesterol numbers, but there is no evidence that its "gut" mechanism actually improves outcomes -- cardio-vascular morbidity risks -- as well as the 20 year-old (now available in generic form), tried and true, class of drugs called statins. Statins work by a liver mechanism, not a gut mechanism. And they have solid, peer-reviewed, replicated data to back their claims -- and, at one-twentieth the price, too.

Monday, January 5, 2009

Schering's Levitra, Others, May Lead to Dangerous Side Effects if Combined With Any of 56 Common Medicines, Consumer Advocates Say. . . .

Bloomberg is pushing a story, tonight, that highlights the serious side-effect risks associated with the entire currently-approved class of so-called "erectile dysfunction" drugs: they shouldn't be taken with any blood pressure medicines -- and 56 other commonly-ingested drugs (and many home redmedies). Let's listen in:

. . . .The Washington-based group Public Citizen posted a list online today of prescription drugs and herbal remedies to avoid when taking. . . Levitra. The 56 products range from treatments for high blood pressure and chest pain to grapefruit juice and St. John’s wort.

. . . .Levitra work[s] by relaxing muscles in blood vessels, which increases blood flow to the penis and spurs an erection. This may be amplified when taken with certain medicines for hypertension, causing a dangerous drop in blood pressure that may lead to a heart attack or stroke, Public Citizen said.

Other drugs prevent the body from appropriately breaking down erectile dysfunction pills, leading to either a toxic buildup of medicine or a less effective treatment, Public Citizen said. . . .

Drugs That May Cause ED Drug
Toxicity by Decreasing CYP3A4 Activity

Generic Name;








Generic Name;







Grapefruit Juice


Generic Name;








Generic Name;









The full Public Citizen listing is now online, free. A press release may also be accessed here.

Be careful under those sheets.

Or maybe -- just maybe: "Why take the risk, for a vanity drug, at all?"

Schering-Plough Lobbied to Change the federal False Claims Act in Q3 2008

The Associated Press reported, this morning, on many of Schering's lobbying contacts with the federal government during the third quarter of 2008 -- but omitted this rather salient contact -- given the earlier ENHANCE False Claim Act suits (among many others), and the Organon/Raplon Qui Tam/False Claim Act matter [click it to enlarge]:

Note also that Schering-Plough lobbied on the various corporate executive pay "shareholder say" amendments -- "Gee, I wonder whether the company was seeking more, as opposed to less, transparency -- and accountability -- to the shareholders, don't you?"

. . . .Legislation regarding shareholder participation in corporate executive compensation decisions. . .