Wednesday, August 31, 2011

Secrest Fosamax® ONJ Order Mirrors Boles II (of Oct. 2010) -- Outcome In Boles? $8 Million Verdict Against Merck

Many outlets (Reuters included) are reporting that the very able Judge Keenan, in Manhattan's US District Court, has limited the theories Mrs. Secrest may present to the jury at her bellwether Fosamax® ONJ trial, in a few weeks -- as to her claims of injury from long-term, uninterrupted use of Merck's Fosamax. True, this is good news for Merck. But it may not be enough to avoid liability, to be sure. Why? Well. . . .

What is lost in these current reports is that the same limits were present in the first bellwether case -- called Boles -- and that resulted in an $8 million verdict for Mrs. Boles (subsequently reduced to $1.5 million by Judge Keenan).

In short, a Fosamax design defect claim -- without a possibility of punitive damages -- was enough, for Mrs. Boles. See pages 14 to 15 of the Judge's order, from October of 2010 in Boles II:

. . . .Following the mistrial, Merck again moved for judgment as a matter of law under Rule 50(b). On March 26, 2010, the Court granted the motion in part, finding that Plaintiff had failed to establish proximate causation in that she did not introduce evidence from which a reasonable jury could conclude that Plaintiff’s treating physician would not have prescribed her Fosamax even if he had been warned of the risk of ONJ. See In re Fosamax Prods. Liab. Litig., No. 06 Civ. 9455, 2010 WL 1257299, at *4-5 (S.D.N.Y. Mar. 26, 2010). The Court found, however, that Plaintiff had introduced sufficient evidence at trial to support her negligent design and strict liability design defect claims and thus denied Merck’s motion with respect to those claims. . . . .

We will keep you posted as the Secrest trial gets underway, in earnest, in the coming weeks.

Tuesday, August 30, 2011

One VIOXX® Case Tossed; Hundreds Remain, And $4.8 Billion Settlement Still Being Paid Out

While it is true that the Texas Supreme Court has overturned a $32 million verdict (on lack of relevant, admissable evidence applicable to Garza's particular facts -- only 25 days of Vioxx® dosing, and at the lowest dosage levels), it should be noted that hundreds of individual opt-out cases continue to wend their way toward trials, churning large and ongoing legal fee expense outlays in their wake, at Whitehouse Station.

In addition, most of the $4.85 billion global settlement has already been meted out, but legal fees continue to mount, as various factions angle for larger slices of the legal expenses pie.

At the end of it all, though (despite some mainstream media reports to the contrary) -- there is no reason to believe that the Garza case will reduce -- or even slow -- Merck's burn-rate on the individual Vioxx cases. From the decision, then:

. . . .Respondents contend that Vioxx, a prescription drug, caused their decedent's death. In Merrell Dow Pharmaceuticals, Inc. v. Havner, we set requirements for determining whether epidemiological evidence is scientifically reliable to prove causation. The parties here dispute what those requirements are, whether they apply in this case, and whether they were satisfied. We hold that Havner's requirements apply and were not met, and that the evidence was therefore legally insufficient to prove causation. Accordingly, we reverse the judgment of the court of appeals and render judgment that respondents take nothing. . . .

We will keep following these cases, right here. Most analysts expect that the Vioxx costs will continue through the end of this decade.

Monday, August 29, 2011

Zymeworks, And Merck -- "Sitting In A Tree. . ." -- you know the rest ("K-i-s-s-i-n-g")

Although the two began working together back in 2010, this is (by far) their largest joint effort -- on specific antibodies, with the hope of identifying new oncology and autoimmune disorder therapies -- per a story in this morning's online edition of Xconomy Seattle -- do go read it all:

. . . .Merck has made plain that it needs to elevate its game in biotech drug development, and that means turning to partners for help. The latest chapter in this ongoing story is now unfolding at a little company called Zymeworks in Vancouver, BC.

Zymeworks is announcing today it has secured a partnership with Whitehouse Station, NJ-based Merck to develop new antibody drugs for cancer and autoimmune diseases that are engineered to hit two or more targets on cells instead of just one. In exchange for helping Merck create these so-called “bispecific” antibodies, Zymeworks is getting an undisclosed cash fee upfront, plus milestone payments, which could be worth as much as $187 million over time if drugs from the partnership reach certain goals. Merck will have exclusive worldwide rights to sell drugs from the partnership. . . .

Zymeworks had interest from several partners in its technology, Tehrani says, but chose Merck for a few reasons. First, Merck provided enough validation of the technology, and upfront cash, to help stir up some more interest among investors in putting more capital into the company, Tehrani says. Plus, Merck’s development capabilities at its Palo Alto, CA-based biologics facility were a cut above facilities from other companies, he says.

"We are protein engineers. They are drug developers with a detailed understanding of biologics," Tehrani says. "We see a long term strategic collaboration. . . ."

Zymeworks believes that the antibodies developed using its Azymetric platform, unlike native one, consist of two different heavy chains engineered to exclusively assemble into a single molecule, thereby allowing bi-specific binding of two different antigens -- or drug targets. However, similar to natural antibodies, heterodimeric antibodies retain long serum half-lives and, it is hoped, the ability to induce effector function. Stay tuned -- come 2018 or 2019.

Sunday, August 28, 2011

Roche's CETP Candidate Safely Clears Hurdle

In Paris, the news was not disappointing, but it still remains to be seen whether these CETP inhibitors (as a class) actually improve outcomes for cholesterol management patients -- by increasing HDL (or the so-called "good" cholesterol) -- per's webzine (do go read it all):

. . . ."I think we can say it is safe, that there are no untoward effects like the [other CETP inhibitors], and it does the job in terms of the lipid profile," said Lüscher during a morning press conference announcing the results. "It's a bit less potent than torcetrapib, which increased HDL cholesterol in the range of 60% to 70%, but maybe that's an advantage. We'll see. It was also a bit disappointing, of course, that flow-mediated dilation [FMD] was not improved. It wasn't worsened, but it wasn't improved either. It sets the basis for the safety of the drug to be tested in a large outcomes trial, and we're looking forward to seeing whether it translates into an improvement in clinical outcomes."

The major phase 3 morbidity and mortality study, dal-OUTCOMES, is currently enrolling acute coronary syndrome (ACS) patients and is expected to be presented sometime in 2013, depending on event rates in the two treatment arms. Investigators plan to enroll approximately 16 000 patients, testing the addition of dalcetrapib on top of standard medical therapy for the reduction of cardiovascular events. . . .

So this is about as expected -- and, at least, isn't harbinger of untoward news on Merck's similar CETP candidate.

Friday, August 26, 2011

Irony Alert -- From Earlier This Month -- Ex-CEO Fred Hassan

In view of my immediately prior item (updating the Cain v. Hassan proceedings), this bit of "will to win" Fred Hassan video advice rings with a loud gong of irony:

And, to make my point entirely obvious, here is a snippet from the amended derivative action complaint:
. . . .This action seeks redress for the Defendants' collective and individual breaches of their fiduciary duties of loyalty, good faith, candor, due care, and their knowing, reckless gross negligence and/or conscious disregard of their duties in, inter alia: (i) suppressing the results of the ENHANCE study after the negative results were known to insiders; (ii) allowing the continued dissemination of false and misleading marketing efforts on behalf of ZETIA and VYTORIN while in possession of the unfavorable ENHANCE results; (iii) deceiving the investing public regarding Schering-Plough's business, operations, disappointing results of its number one product, Cholesterol Franchise by making false statements about the continued expectation of revenue from ZETIA/VYTORIN; (iv) falsely inflating the intrinsic value of Schering common stock; (iv) failing to properly implement, oversee and maintain appropriate and adequate accounting and business ethics, internal controls, practices and procedures; (v) enabling Officer and Insider Defendants to sell almost $40 million of their privately held Schering shares while in possession of material adverse non-public infonnation about the Company; (vi) granting the executives millions of dollars in incentive bonuses although they lost the Company and public shareholders many millions of dollars of market capitalization; (vii) harming the value of the Company by their illegal and unethical conduct; and (vii) expending tens or hundred of millions of dollars in attorney fees to defend the miscreant Defendants. . . .

Indeed -- which one is the real Fred Hassan, I wonder? The one on the video -- or the one who has now crushed the life out of three massive and previously successful public life-science companies in a row, with mismanagement -- and perhaps, subtle strategies of obfuscation? Which one, indeed?

Wednesday, August 24, 2011

Amended Complaint -- In Federal Cain v. Hassan ENHANCE SGP Shareholders' Lawsuit

The full 123 page behemoth is here (7 Mb PDF file), but this opening succinctly states the case against Schering-Plough's former C level executive management:

. . . .During the Relevant Period (April 1, 2006 through June 30, 2008), Schering-Plough was emerging from a dark period in the Company's history. It had been plagued by criminal and civil liabilities in connection with illegal sales and marketing programs, SEC violations, abysmal manufacturing processes that lead to nearly $1 billion in fines, civil liabilities and an onerous Consent Decree with the FDA.

2. Each of the 14 members of the Schering Board of Directors knew, from Schering's recent history, the importance to a pharmaceutical company of maintaining transparency and ethical conduct. They also knew to a certainty the following facts:
▲ The cholesterol-lowering drugs VYTORIN and its component ZETIA were far and away the Company's number one product, earning a significant percentage of the Company's revenue and growing;

▲ Information tending to show the inefficiency of VYTORIN/ZETIA in improving the health of patients by reducing or slowing the progression of arterial plaque was material information that must be disclosed to investors.

▲ The clinical trial known as ENHANCE was required to test exactly that hypothesis.

▲ Share prices of competitor companies plying drugs in the cholesterol-lowering market were highly sensitive to disclosures of their clinical trial results.

▲ The Company had publicly announced that the results of the completed ENHANCE study would be announced at the March 2007 American College of Cardiology Convention, but then refused to disclose them, and then promised they would be announced at the November 2007 American Heart Association Convention and then again refused to disclose them.

▲ There was great public interest in the medical community and public media about the ENHANCE results and increasing skepticism about why Schering kept missing deadlines for the release of those results.

▲ The Company was promoting a message regarding cholesterol, "Lower is Better," that it was simultaneously claiming could not yet be verified.

▲ Insiders in the Company, including CEO and Chairman of the Board, Fred Hassan, and Executive Vice President and President of the Company's Global Pharmaceutical Business, Carrie Cox, had reliable information from data analyses of ENHANCE that plausibly showed VYTORIN was ineffective; in other words the results had been "functionally" although not technically de-blinded and known.

3. Nevertheless, in a blatant display of reckless and disloyal behavior in bad faith breach of their fiduciary duties to the Company, each Board member sat idly by and did nothing to prevent and actually ratified the insider scheme to suppress the negative results of the ENHANCE trial from the medical community, patients, regulators and investors for between fifteen and twenty-one months, making a mockery of Schering's newly-dubbed motto "earn trust every day."

4. The Board's complicity with the Schering Officers resulted in catastrophic damage to the Company, including a 41% drop in share price from its high during the Relevant Period of $33.81 from May 23, 2007 to $13.83 on April 2, 2008, when the fall truth was finally revealed, a loss in market capitalization, a rash of states attorneys general. Department of Justice and FDA investigations, class action lawsuits by patients or payors seeking reimbursement for payments for an ineffective product, securities class actions by investors, ERISA class actions by employees, insider trades of approximately $40 million and the expenditure of hundreds of millions of dollars in fines and attorneys' fees. . . .

6. This action is brought by Plaintiff on behalf of Nominal Defendants, New Merck, its predecessor corporation Schering, and all shareholders of New Merck and Schering against the former Schering Board of Directors (the "Board")" and certain of its former executive Officers, seeking to remedy Individual Defendants' breaches of their fiduciary duties of loyalty, candor, and good faith, waste of corporate assets, and unjust enrichment. . . .

Fascinating. Director Hans Becherer (Compensation Committee Chair), and officers Bob Bertolini (Ex-CFO), Tom Sabatino (Ex-GC) and Raul Kohan (Ex-EVP) are also personally named in the fully-revamped and newly amended federal lawsuit.

Boles ONJ Trial "Version 2.5": Judge Keenan Certifies Immediate Appeal -- On One Question Of Law

While I was largely off-grid this summer, Judge Keenan ruled that the third Boles Fosamax ONJ Trial -- on damages -- should be held over, until one crucial question of law is resolved. He has asked the Court of Appeals to answer a crucual question about which legal principle(s) should apply. [My backgrounders, here and here.]

So now Mrs. Boles must wait for her retrial (and inexorably grows older, and more frail, with each passing day, in the process). She must wait until a higher court decides whether it is enough that (as her lawyers contend) she showed evidence at trial that the drug Fosamax was inappropriate for patients like her -- for long term, uninterrupted use (when initially she was not even diagnosed with full-on osteoporosis -- see graphic below); or whether (as Merck's lawyers contend) Merck should be off the hook because the FDA label for Fosamax was accurate when it was issued, without regard to the special risks presented by long term use by patients like Mrs. Boles. Here is the order, signed in July:


. . .[T]he Court certifies that the following is a controlling question of law as to which there is substantial ground for difference of opinion:

May a plaintiff [Shirley Boles] establish that a prescription drug is defective [Fosamax] by showing that its risks outweigh its benefits for a subset of the patient population for whom the drug is indicated [patients like Mrs. Boles], regardless of the risk-benefit calculus for the indicated patient population as a whole [provided by Merck, when originally seeking FDA approval for Fosamax]?

Furthermore, the Court finds that an immediate appeal from the Court's October 4, 2010 Order will materially advance the ultimate termination of this case, as well as the Fosamax MDL.

Therefore, the Court CERTIFIES the above question for review by the U.S. Court of Appeals for the Second Circuit pursuant to 28 U.S.C. § 1292 (b). Proceedings in the case of Boles v. Merck & Co. Inc., No. 06 Civ. 9455 (JFK), are STAYED pending resolution of the appeal or denial of interlocutory appellate review by the Second Circuit.

However, no other proceedings in the Fosamax MDL are stayed by this Opinion and Order. Re: (309 in 1:06-cv-09455-JFK) MOTION for Leave to Appeal Motion to Certify This Matter for Interlocutory Appeal filed by Merck & Co., Inc.

/s/ John F. Keenan,
United States District Court Judge
for the Southern District of New York

We will keep you posted, but Mrs. Boles grows sicker as she waits.

Tuesday, August 23, 2011

Merck "Lassos" Ex-Fort Dodge President -- To Replace Raul Kohan

Perhaps we should have foreseen/intuited this development, when Mr. Kohan began selling his share of New Merck, back in May of 2011, at around $37 a share. . . .

In any event, Richard R. DeLuca Jr. has been hired by New Merck, as executive vice president and president, Merck Animal Health, effective September 15, 2011. Mr. DeLuca will serve on the company’s Executive Committee. He will succeed Raul Kohan, who has decided to retire from the company. Kohan will remain with the company until the end of the year, to ensure a smooth transition -- per press reports:

. . . .DeLuca served as chief financial officer of BD Biosciences since 2010. Prior to that, he was president of Wyeth's Fort Dodge Animal Health division since 2007. While at Wyeth, DeLuca led a global team across all functions of the business unit with worldwide revenues of over $1 billion.

Prior to leading the Fort Dodge Animal Health division, DeLuca was chief operating officer of Fort Dodge from 2006 to 2007, where he oversaw all sales and marketing activities and implemented growth strategies internationally. He also served as the division's executive vice president and chief financial officer from 2002 to 2006, where he was responsible for all finance and administration, information systems and product supply planning and logistics activities. Prior to that, DeLuca held a variety of managerial roles at Wyeth and elsewhere since 1982. . . .

So it goes -- with Raul's retirement, there are hardly any legacy Schering-Plough top executives (EC members) left at New Merck.

But that is in no way surprising.

Sunday, August 21, 2011

Roche's Dalcetrapib -- Next Two Phase II Hurdles -- In Paris, This Weekend

These study results are due on the same class of HDL-increasing agents that Merck is about two years behind Roche in working on. Everyone is hoping to see HDL (the "good" cholesterol) increased, and some measure of arterial plaque reduced, in the two studies offering top-line results this weekend in Paris, France -- at the 2011 European Society of Cardiology Congress. And concurrently, eveyone will be hoping to not see the heart-attack side effects that Pfizer experienced in 2006 with torcetrapib. [My earlier background on it is here, here, here and here.]

Here's a bit of the Bloomberg reporting, on Roche's news -- do go read it all:

. . . .Interim results from the 15,800-patient trial are expected early next year, with a first set of final results by December 2012, Pascal Soriot, Roche’s pharmaceutical unit head, said in a conference call with analysts on July 21.

Still, Cannon said, “if plaque shrinks, that is a huge win and very exciting, and everyone is going to be jumping up and down saying, ‘Hurray, this class works.’” An abstract of data for the dal-Plaque study is scheduled to be posted on the conference website tomorrow. Dal-Vessel is due to be presented in an oral session on. . . [this Saturday].

Eli Lilly & Co. and Merck & Co. have similar drugs in development aimed at increasing good cholesterol, or HDL, in the bloodstream.

HDL flushes fat deposits from arteries to the liver to be eliminated from the body. By contrast, statins such as simvastatin and Pfizer’s Lipitor, the best-selling drug in the world, decrease levels of bad cholesterol, or LDL, which blocks arteries and leads to heart attacks. . . .

“It’s a high-risk project, because what we want to know is that HDL has a positive effect,” Schwan said. “Nobody has proven this yet. I always say dalcetrapib is the biggest proof- of-concept study we ever did.”

In a conference call with analysts in 2010, Schwan said the drug had the potential of “rewriting the textbooks in cardiovascular medicine” and named the pill among a group of medicines with potential for more than 5 billion francs ($6.3 billion) in sales, according to the call transcript. He declined in July to elaborate on the sales potential for the drug. . . .

Keep your fingers crossed -- for all patients struggling with cholesterol management.

So -- what's on your plate this week? Tell us -- in the comment box.

Saturday, August 20, 2011

Vertex Is "Big Winner" -- Over Legacy S-P: Herper In Forbes

This one comes to us courtesy of an anonymous commenter, who saw it -- and posted it -- whilst I was attending to other matters. Clearly Ex-CEO Hassan's rhetoric was egregiously overblown (on boceprevir), given that he too knew of the Phase IIb (and later, Phase III) top-line trial results, between these two Hep C candidates.
In any event, here's Matt Herper (writing for Forbes) on it -- do go read it all:

. . . .Vertex Pharmaceuticals has been going up against drug giant Merck in a marketing battle to treat hepatitis C — and so far it’s winning in a big way.

Despite a partnership with Roche, one of the traditional leaders in the hepatitis C market, Vertex’s Incivek is being prescribed four times as often as Merck’s Victrelis, analysts say. This morning, Geoffrey Porges of Sanford C. Bernstein, a Vertex bull, wrote in a note to investors that Incivek is doing even better than they think.

Porges says that if prescriptions of Incivek were to stop growing entirely, the drug would still generate 2011 sales of $725 million, still slightly above the $700 million average of forecasts by Wall Street analysts. If growth rapidly slows, Incivek will still generate $900 million. If sales keep growing at their current rate, he says that Incivek sales could hit $1.2 billion — impressive given that the medicine was only approved this year. . . .

Indeed -- it was only approved in May of this yead. And so, this was yet another pig in a poke, sold to Merck by Ex-CEO Hassan -- just as we've consistently said, since early 2009. Finally, the proof is out.

Friday, August 19, 2011

Former Merck Asia Exec With "Gift Of Gab" Departs -- For Stryker

You may recall the intemperate remarks made by this fellow (and highlighted by our blog here, and here last year) -- at one point claiming that "Hep C had been cured for many years". And, to be clear, those statements were made before telaprevir and boceprevir had even been filed with FDA, for approval.

In any event, the Michigan-based publicly-traded multinational med-device maker, Stryker (think implants for joints, here), has put him in charge of international, basing him in Singapore -- from the story generated by their presser:

. . . .Stryker Corporation announced today the appointment of Ramesh Subrahmanian to the role of Group President, International, effective September 1, 2011. . . . Subrahmanian joins Stryker after twenty-three years in the pharmaceutical industry where he held a number of senior level leadership roles at Merck, Sanofi-Aventis and Hoechst Marion Roussel Ltd., most recently as Senior Vice President & President, Asia Pacific for Merck & Co. Inc. In his new role, he will have responsibilities for the Company's international business units and will be based in Singapore. . . .


Thursday, August 18, 2011

Sun Wins FDA Approval of Generic Version of Merck's Proscar®, Propecia®

Not a surprise, but news of additional erosion of Merck's branded legacy drug franchises, Proscar® and Propecia®, here. This approval brings the total of approved generic versions to at least seven; none of which require a prescription, while Merck's branded offerings still do. Ouch.

The link to the FDA order granting approval to Sun is here. Here is a shortish blurb from a drug industry source, on Mumbai-based Sun's recent generic approval news:

. . . .Generic drug maker Sun Pharmaceutical Industries has received regulatory approval for a drug designed to treat an enlarged prostate and hair loss in men. . . . Sun Pharma's finasteride tablets in the 5-mg strength were approved on Aug. 16.

Finasteride is the generic equivalent of Proscar and Propecia, which are made by Merck. . . .

So it goes -- as the industry-wide generic/off-patent cliff approaches. Lipitor® (at Pfizer) is next up; the $12 billion a year franchise goes generic in about two months' time.

Sunday, August 14, 2011

Merck Lobby Spend Is WAY Up: 36 Percent In First Half of 2011 vs. 2010

Merck's US lobbyist half-year spend is up again -- $8.3 million, compared to $6.1 million in 2010, and only $3.0 million in 2009. Also, spending on lobyists has nearly tripled in the last three years alone.

Significantly, spending in the first half of 2011, equals what Merck spent in all of 2010. But to be fair, Merck typically spent less in the third and fourth quarters on lobbyists, than in Q1 and Q2, in the last three years.

Merck (or firms and lobbyists it hired) lobbied on specific measures as indicated in the parentheticals, or if no bill indicated, generally about (among other matters):

Δ Against expansion of the Prescription Drug User Fee Act, during reauthorization discussions (no specific bill)

Δ Liberalizing favorable federal income tax treatment (tax-sheltering) repatriation of foreign net profits (no specific bill), and liberalizing deferral of taxation of foreign earned income

Δ Generally, on government budget issues, including Medicare Part D rebates. Discussions and possible legislation amending Title XVIII, Part D (Medicare Part D) of SSA, including issues of "non-interference clause" and Medicare Advantage. Legislation to address physician payments issues, including SGR and related provisions to Medicare package. Health reform implementation. Independent Payment Advisory Board. Support efforts to ensure appropriate access to vaccines and preventive care. . . .

Δ Improving treatment of transfer pricing of intangibles (no specific bill)

Δ Opposing unrestricted re-importation of pharmaceuticals (no specific bill)

Δ In favor of incentives for antibiotic research and devlopment (H.R. 2182); hepatitis C education (no specific bill)

Δ Alleviating pharmaceutical shortages (S. 296, HR. 2245)

Δ In favor of comprehensive tax reform (no specific bill); transfer pricing of intangibles (no specific bill)

Δ In favor of renewal and expansion of the R&D tax credit (H.R. 942); repatriation (no specific bill); territorial tax system (no specific bill)

Δ In favor of Patent law reform (H.R. 1249)

Δ In favor of Access to over-the-counter medications (no specific bill)

Δ In favor of Non-interference in Medicare Part D (no specific bill)

Δ Against Medicaid-style rebates in Medicare Part D (no specific bill)

Δ Against Independent Payment Advisory Board (H.R. 452, S. 668)

Δ In favor of increasing the number of people eligible for health insurance coverage

Δ In favor of U.S. fedeeral deficit reduction (no specific bill)

Δ Lobbying about the WTO Cotton agreement (H.R. 2112)

Δ In favor of FDA funding (H.R. 2112)

Δ In favor of ADAP funding (no specific bill)

Δ In favor of Korea, Colombia and Panama Free Trade Agreements (no specific bills)

Δ In favor of data exclusivity in free trade agrements (no specific bills)

Δ In plainer English then, Merck lobbied to oppose government negotiated prices -- on drugs purchased by government programs, beyond what already exists in the current scheme

Δ And -- of course -- implementation issues regarding H.R. 3590, the Patient Protection and Affordable Care Act, or more plainly, seeking advantage for Merck as health care reform is rolled out. . . .

There. Now you know.

[Now, what else is on your mind(s)?]

This is another open thread for the week of August 15, 2011.