Tuesday, June 28, 2011

IMS's Early Scrip Data: Vertex Captures 3/4ths of US Market

This is yet another facet of Merck's manifold disappointments -- from the once touted Schering-Plough legacy R&D pipeline -- (the one for which Ex-CEO Fred Hassan personally carted off perhaps $325 million in value, while busting-up and selling-off SP to Merck, in November 2009). Per The Street.com's online feed:

. . . .So far, Vertex is beating Merck, which means the marketing battle between Incivek and Victrelis is playing out largely as expected.

For the week ended June 17 (the most current data available), doctors wrote 460 prescriptions for Vertex's Incivek compared to 160 prescriptions written for Merck's Victrelis, according to weekly prescription data compiled by IMS Health. Weekly IMS drug prescription data tracks retail pharmacy, mail order and long-term care distribution channels.

That puts Incivek's market share at 75% compared to Victrelis' 25% with about five weeks of prescription data available. Even before the two drugs launched, investors were expecting Incivek to garner more prescriptions, with some analysts forecasting a 75% market share split for Incivek at peak.

The current consensus 2011 sales forecast for Incivek is $490 million, according to the sell-side analysts who cover Vertex. . . .

We will keep you posted, but the overwhelmingly good nesws here is that we are seeing Hep C being cured, right before our eyes.

Monday, June 20, 2011

A Repatriation Tax Double Whammy: Merck Loses Schering Appeal; NYT Exposes 2005 Repat Strategy

On the same morning that Merck learned it lost the legacy Schering-Plough $473 million tax minimization-by-machination strategy (my prior backgrounder on it), the New York Times made legacy Merck a feature -- highlighting the less than stellar record of jobs creation from prior tax holiday repatriations, thus -- do go read it all.

. . . .Merck, the pharmaceutical giant based in Whitehouse Station, N.J., was one of those big winners. The company brought home $15.9 billion, second overall to Pfizer’s $37 billion. It used the money for “U.S.-based research and development spending, capital investments in U.S. plants, and salaries and wages for the U.S.,” a Merck spokesman, Steven Campanini, said last week.

According to regulatory filings, though, the company cut its work force and capital spending in this country in the three years that followed.

Merck used the cash infusion to continue paying dividends and buying back stock for the benefit of shareholders and executives — even as it was rocked by more than $8 billion in costs to settle a variety of disputes after executive missteps. . . .

And here is some of the AP's coverage of the tax appeal loss, at the Third Circuit:
. . . .The Third Circuit Court of Appeals ruled Merck's Schering-Plough unit was not entitled to a refund of $473 million in taxes, affirming the April 2010 ruling of U.S. District Judge Katherine S. Hayden. Merck, of Whitehouse Station, N.J., had appealed that ruling.

Schering-Plough had argued that funds it received through two transactions involving foreign subsidiaries and a Dutch bank were not immediately taxable in full as proceeds of loans.

Schering-Plough, which became part of Merck in November 2009. . .

The case involves Swiss subsidiaries, Scherico and Limited, owned by Schering-Plough in the early 1990s. They conducted significant manufacturing in Ireland, which then had a favorable corporate income tax, and had earnings of roughly $1 billion not yet been taxed in the U.S.

According to the appeals court ruling, Schering-Plough executed a complex "scheme involving interest-rate swaps" over multiple years among Schering, the Scherico subsidiary and then a third one called Essex Chemie AG, and a Dutch bank. Schering-Plough later reported the transactions as sales and repatriated about $690 million from its subsidiaries.

After a 2004 audit, the IRS assessed Schering-Plough for underpaying nearly $473 million in taxes for 1989, 1991 and 1992, ruling those transactions were loans, not sales. . . .

So it goes.

Tuesday, June 14, 2011

Today's FDA Action Likely Ends Most Future Sunscreen "Battles Royale"

Well, this likely ends future installments of the three year long battle I covered -- between Neutrogena and Coppertone (a legacy Schering-Plough brand), per The New York Times -- do go read it all:

. . . .The F.D.A. said sunscreens must protect equally against two kinds of the sun’s radiation, UVB and UVA, to earn the coveted designation of offering “broad spectrum” protection. UVB rays cause burning; UVA rays cause wrinkling; and both cause cancer.

The rules, which go into effect in a year, will also ban sunscreen manufacturers from claiming their products are waterproof or sweatproof because such claims are false. Instead, they will be allowed to claim that the products are water resistant for either 40 minutes or 80 minutes, depending upon test results, but nothing more. . . .

This is a much delayed, but welcome bit of clarity in the consumer health space.

Monday, June 13, 2011

Merck To Pay $720 Million, For Hanwha (Korea) Biosimilar Rights Through 2024

It is crystal-clear, now -- Whitehouse Station is moving aggressively into the global market for medicines that have fallen off-patent.

A smart move, to be sure, but an invention whose mother is necessity -- as margins shrink globally for the branded, patented medicines that were the lifeblood of most multinational pharma players over the past decades.

And as we all know, that time has ended. Thus reports the Asian version of The Wall Street Journal, overnight -- do go read it all:

. . . .Hanwha Chemical Corp. said Monday it has agreed to sell to Merck & Co. the marketing rights and technology for its drugs to be produced by Merck for around $720 million, in a deal that could give Hanwha access to a broader international market. . . .

By partnering with Hanwha, U.S.-based Merck could boost its profit by selling so-called biosimilar drugs, which attempt to copy the production process for drugs that are no longer protected by a patent.

Hanwha has the technology to produce the drugs, while Merck has the global network through which Hanwha could sell biosimilar drugs, a Hanwha official said.

Under the deal, Hanwha will receive an upfront payment from Merck and will be eligible for additional payments associated with milestones for technology transfer and regulatory progress as well as royalties on sales. . . .

We will keep you posted. UPDATE: Pfizer's aging arthritis drug Enbrel® will be the first important target -- for this biosimilar collaboration.

Saturday, June 11, 2011

Succinctly, From Forbes' Matt Herper: What The Vytorin News Means

For my money, Matt has (by a wide margin), done the best job of condensing what all the news of the week from the FDA means to Merck -- do go read all of his -- but here is the concluding bit:

. . . .Alan Jardine, a cardiologist at the University of Glasgow, writes that the use of Zetia, by itself or in Vytorin, is "not universally approved,funded, or endorsed," and that physicians could feel pretty safe about using Crestor or Lipitor instead because their cholesterol-lowering potency is similar. I emailed him, asking whether Vytorin’s success in kidney disease, where other drugs have failed, was the result of the decision to design the study to include fewer sick patient or special characteristics of the drug. He said that the use of Vytorin was probably a “pragmatic decision” based on the fact that Merck designed the study.

Jardine writes:
I think a statin alone would have the same benefit, and I think most clinicians will use a statin alone. I agree with your interpretation that the benefits are based on the smart design, weighting towards patients with milder kidney disease and the selection of a potentially modifiable end-point. In the UK, 10-15% of the population are classed as having CKD, and that is probably the population they should have studied. The inclusion of patients with more advanced disease was the choice of the investigators – in an attempt to answer the question of the role of statins in dialysis. . . .

The overall trend is that, instead of using Vytorin, doctors are likely to continue starting patients who need intensive cholesterol-lowering on Crestor or Lipitor, and then adding Zetia. The role of the combination could continue to decline. . . .

Indeed. Herper goes on to suggest that Merck's Zetia® may be added to the Crestor® (AstraZeneca) or Lipitor® (Pfizer) mixes, by some doctors for some patients. I agree, but not enough, in any case, to reverse the trendlines he's set out, above.

Finally, regular readers will remember -- of course -- that it was legacy Schering-Plough that actually handled these study design strategies Matt mentions.

Thanks again, Fred and Carrie!

Thursday, June 9, 2011

No Injunction For Legacy Schering-Plough In Three-Summers-Long Suncreen Spat

So, the battle royale over sunscreen ad claims is dying out. Judge Robinson clearly implied, in her order yesterday, that this one is all but over -- after three seasons of suntanning have come and gone (J&J won Round One in 2009; Schering-Plough came out on top in Round 1.5 here):

. . . .On balance, the court finds that plaintiff's proposed injunctive relief is not warranted. Plaintiff has not articulated any particular injuries as a result of defendant's false advertisements, let alone irreparable injury. Even were the court to assume a generalized injury to plaintiff's goodwill during the period of literal falsity, plaintiff adduces only conclusory allegations that money damages are incalculable and, therefore, inadequate to compensate any injuries it may have. Plaintiff 11as not attempted to quantify its loss. Defendant has iterated a strong interest in allowing it full enjoyment of its helioplex® mark under the trademark laws (to the extent permissible by law). While the public interest favors enjoining literally false advertising, the public is not currently being deceived. There is no indication that defendant continues to use the print ad or that 100+ Product (manufactured between April and August 2009) falsely bearing the "helioplex®" mark remain for sale, and the 1 00+ Product now contains DEHN. . . .

IT IS FURTHER ORDERED that, on or before Friday, June 17, 2011, the parties may submit letters to the court8articulating whether any additional issues need be resolved prior to the termination of this litigation. . . .

/s/ Judge Sue L. Robinson

June 8, 2011

So, this one will likely end with a whimper -- not a bang.

Sunday, June 5, 2011

Merck Appeals Its Loss, To Fourth Circuit, In Jennifer Scott's Legacy Schering-Plough Retaliation Case

Back in January 2011, I described the outcome at trial of this case (summarized in graphic at right). Merck has filed an appeal, claiming no reasonable jury could have found against it here.
You decide, from the last substantive filing in the matter: the judge's memorandum opinion (an 8 page PDF file):

. . . .Merck advances several arguments in support of its position. It claims that it was surprised by Scott’s trial testimony regarding the continued employment of Thomas and Steneman, and that it was not prepared to respond with the explanation it now proffers.

According to Merck, it is undisputed that Scott would have lost her job as a result of the merger, and it urges that as a matter of law Scott cannot recover damages for any period beyond the elimination of her position. Furthermore, Merck maintains that Scott’s testimony improperly implied that some members of Liberato’s sales team had not lost their jobs, and it urges that the jury deliberated under this mistaken impression. If the Court declines to remit damages, Merck thus requests a new trial to explain that Thomas and Steneman had indeed been laid off but secured other posts. In this vein, Merck asserts that it would be sheer speculation to posit that Scott, too, would have successfully applied for another position within Merck.

Scott responds that the jury was entitled to conclude, at the very least, that Merck had not presented a complete picture with regard to effects of the merger. As Scott points out, the import of Randall's testimony (that Liberato's entire team had been laid off) is that the team members are no longer employed at Merck. Scott testified that to her knowledge, two of her former teammates were still working at Merck. Thus, Scott's testimony was fair rebuttal. The jury rejected Randall's testimony, meaning that they disbelieved Randall or concluded that Merck found a way to keep favored employees. . . .

The denial of Merck's motion for judgment despite the verdit at trial was just docketed Friday, with the Fourth Circuit. We will keep you posted, but based on the findings at trial, and after it, in the District Court in Maryland, it would seem that Merck has only a very small probability of success on appeal.

The trial court's rulings are based on live testimony, and fall well within factual, as opposed to legal, conclusions. As such, the trial court's determinations will be given great weight on appeal.

Saturday, June 4, 2011

"Seems There's A Lot Of That Going Around" -- Michael Loucks To Skadden Arps

Per The New York Times, this weekend (some of my earlier background on Mr. Loucks):

. . . .But a year and a half ago, Mr. Loucks, a Republican, left the United States attorney’s office in Boston after he was passed over for the top post and President Obama appointed a Democrat. Instead, Mr. Loucks joined Skadden, Arps last July, and has startled former allies by emerging in recent months as zealous a corporate defender as he was a prosecutor, complete with proposals seeking more lenient treatment for the medical companies he once vilified.

In a six-page memo last month to clients in his portfolio, which may include some of the very same corporations he prosecuted repeatedly, Mr. Loucks bemoaned strategies he had embraced.

“The government and the whistle-blower have an advantage,” he wrote, complaining that federal investigators were now using the law unfairly. “While prosecutors often assert the company has engaged in ‘serious’ misconduct, they keep the company in the dark, often for years, as to the specific allegations.”

Those who have known him are quick to recall that his crowning achievement was a $2.3 billion settlement against Pfizer that capped a four-year secret investigation. . . .

Indeed -- one that grew out of Fred Hassan's "leadership" (with the aid of Carrie S. Cox) -- while still at Pharmacia (which they sold to Pfizer).

Friday, June 3, 2011

Merck Joins UN Water Initiative

Per a Whitehouse Station presser:

. . . .The commitment supports Merck's new global water strategy through which the company seeks to achieve sustainable water management within its operations and to minimize its impact on local water supplies, while also working to reduce the impact of water-related illness through its products, partnerships, advocacy efforts, and employee volunteerism. Merck's water strategy is part of its broader environmental sustainability priority, a key component of the company's approach to corporate responsibility.

"Access to clean water is critical to the world's health and our mission," said Merck President and CEO Kenneth C. Frazier. "As Merck grows, our business, customers and supplier networks are expanding into regions of the world where availability of clean water and sanitation are under pressure. We are committed to doing our part to help address this global challenge". . . .


Wednesday, June 1, 2011

Fosamax® ONJ Plaintiffs' Lawyers Now Allowed To Share Medical Records; Documents

The Fosamax® MDL proceedings continue to wend their way toward a likely eventual global settlement conference -- but along the way, the plaintiffs' lawyers have been given the right to share medical records, forms and similar documents, inter se -- for the purpose of evaluating claims, and more accurately assessing the numerosity of the claims, as well as the likely average damages. Here is the very able Judge Keenan's order, of last month, from Manhattan's federal district courthouse, in full (latest background here):




This document relates to all actions.

Case Management Order No. 19

Granting the PSC Access to MDL Plaintiff Profile Forms and Records

On April 18, 2011 the Court notified all parties to this multidistrict litigation (the "Fosamax MDL") that it would grant the Plaintiffs' Steering Corrunittee ("PSC") access to all Plaintiff Proflle Forms, medical records, and dental records, unless a litigant filed a written notice of objection no later than May 18, 2011. The Court has received no objection, and therefore GRANTS the PSC access -- at its own cost -- to all Plaintiff Profile Forms, medical records, and dental records relating to the Fosamax MDL currently in the possession of third-party vendor Medical Research Consultants. The PSC shall have access to these records on the same terms as individual plaintiffs' counsel under paragraph 5 of Case Management Order No. 13. The PSC is directed to use these records solely for the purpose of helping to evaluate the individual cases in the Fosamax MDL, and to abide by the provisions of Case Management Order No. 9 (Stipulation and Order Regarding Confidential Information). The Court remains sensitive to the privacy rights of the individual MDL litigants.

Therefore, the Court DIRECTS counsel for any litigant in a case that becomes a part of the Fosamax MDL subsequent to the entry of this Order, either by transfer of the Judicial Panel on Multidistrict Litigation or by direct filing in the Southern District of New York, who objects to granting the PSC access to their individual case records, to flle a written notice of objection within two weeks of J.P.M.L. transfer or filing of the case in the SD.N.Y. The Court will consider any litigant in a Fosamax MDL case who does not so object to have consented to the PSC's requested access to medical information in the possession of Medical Research Consultants, and the PSC shall have access to this information by operation of this Order at the termination of the two-week period.


/s/ John F. Keenan,
United States District Court

Dated: May 19, 2011

New York, New York
April 19,2011

Do stay tuned, but this order will reduce the overall burden on plaintiffs' counsel significantly -- by not forcing them to "reinvent the wheel" -- when evaluating present and future potential Fosamax ONJ claimants.