Monday, October 31, 2011

Australian Women Seek Class Action Status -- On Alleged Gardasil® Side-Effects

Perhaps predictably, the international claims against Merck's Gardasil® are beginning to pile up -- right now, in Australia -- per the Herald-Sun, in Melbourne, this morning:

. . . .Naomi Snell, 28, said her life was put on hold for more than two years after she lost the ability to walk, battled crippling back and neck pain, and suffered convulsions that started soon after her first injection in July 2008.

"I never attributed it to my vaccine so I went back for my second and third dose," she said. "My doctors were baffled. They did diagnose me with multiple sclerosis, but have since retracted that and said it was a neurological reaction to the vaccine. . . ."

To date, the number of serious side-effects reported, as compared to the overall number of vaccinations worldwide, has been very small. We will keep you updated -- on this Gardasil Australia putative class action. [H/T Pharmalot.]

Unrelated Side Note: The most-recent FDA SHARP commentary -- on Vytorin® and kidney patients -- won't move the needle much. All of this is old news, and on a smallish population, given that many kidney patients are already being treated in satisfactory fashion with straight generic statins.

Friday, October 28, 2011

Merck's Q3 2011 -- Victrelis® Sales: $53M YTD Vs. $430M For Vertex's Incivek®, Ouch.

In addition, the just released Merck's income statement footnotes reflect a $950 million litigation reserve. Is that the Cain v. Hassan settlement? Oops. That's a 2010 figure footnote, not 2011. My apologies. We'll know soon.

Stay tuned.

▲ After perhaps $300 million in lavish product launch expenses alone, the year to date Victrelis® sales are $53 million (compared to $430 million in same period for Vertex's competing Incivek®). . . . Thanks a bunch, Ex-Schering-Plough CEO Fred Hassan!

So -- that is looking to be close to a 90-10 split (okay, 87-13 more precisely!) of the Hep C market, AGAINST the legacy Schering-Plough star called boceprevir. [Much as I have long predicted, but most concretely -- in July of 2011.]


▲ The Q3 2011 release discloses an addiitonal reduction in R&D spending, $300 million less than was expected at the end of Q2 2011 -- which was reduced by $300 million in Q1 2011. Recall that the very-early 2011 R&D spend goal/projection was around $8.3 billion, then lowered to $8 billion at end of Q2 -- now it stands at $7.7 billion. Said another way, Merck is managing EPS reported to the mavens of Wall Street by reducing R&D spend -- as needed.

▲ Note that sales (net of currency-benefits) are growing in the lower single digits -- but Merck is returning its non-GAAP EPS estimate to the same level it had articulated in very-early 2011 (before withdrawing guidance) -- in part by using R&D expenses as a "backward solve" (or plug figure) for the number Wall Street wants to see on the earnings/EPS line.

▲ That is simply not a sustainable model, beyond the next three years.

▲ 8:08 AM | CEO Ken Frazier is speaking in prepared remarks now -- reciting press release highlights. . . .

▲ All of the above said, Januvia is showing a very strong quater-by-quarter growth ramp.

▲ 8:25 AM Q&A underway. Adam Schecter is explaining that Victrelis books revenue for dosing over a three-times longer period than Vertex does, because Victrelis therapy takes three times longer to deliver.

▲ Q: Jami Rubin (Goldman Sachs): What is the Victrelis actual share of new patients?

▲ A: Adam Schecter -- We think it is around 25 percent, maybe as much as 27 percent. . . .

Missed the rest of the earnings conference call due to a competing call. Ah well.

Thursday, October 27, 2011

Vertex's Incivek®: "best launch of all time in. . . biotech/pharma!"

Well, Vertex has posted its first quarterly profit in company history, due to ferocious uptake in the next-gen Hep C drug triple therapy regimen spear-headed by Vertex's telaprevir (branded as Incivek®) -- thus, per Reuters, just now:

. . . .Vertex. . . reported its first ever quarterly profit and said that its Incivek hepatitis C treatment had sales of nearly $420 million in the first full quarter on the market, making for one of the most impressive new drug launches in history.

Incivek, which was approved in May, is on track to easily surpass $1 billion in sales in its first year on the market.

"It looks like it's the best launch of all time in the history of biotech and pharma," said ISI Group analyst Mark Schoenebaum.

Vertex's first commercial product is fast becoming part of the standard of care for the serious liver disease as it competes with a similar new medicine from Merck that also received U.S. approval in May. . . .

Vertex sales beat even the loftiest analysts' projections this quarter. Let's see if Merck's Victrelis® will project reaching $1 billion in sales in 2011, come tomorrow morning. Hint: Not likely.

Wednesday, October 26, 2011

Merck's Sewer "Camp-Out" -- Holding Whitehouse Station Sewer Rights It Hasn't Used, For 23 Years

Since early 1988, Merck has been "reserving" some 142,000 gallons of daily sewer water capacity, in Readington township, New Jersey -- right next to Whitehouse Station. To be fair here, Merck helped build the expanded sewer capacity, so it ought to get some priority rights. But now, some 23 years later -- only one third of the reserved-capacity is being used by Merck -- while other, newer, businesses are unable to get permits, due in part to the size of Merck's "camp-out" in/on the sewer pipes (gotta' love the imagery -- see graphic, no?).

Soon, Merck's stay will be decided -- and it may be that others will get to move in, and occupy, Merck's vacant "reserved" capacity -- per

On Sept. 6, Superior Court Judge Peter Buchsbaum ruled that within 90 days, the township must exercise its discretion to “recapture” unused sewer capacity as allowed under the township sewer ordinance. . . .

In his written opinion, released on Sept. 21, Buchsbaum criticized the township for not providing a legitimate reason for denying Readington Realty’s request for sewer capacity. Buchsbaum wrote that the ordinance requires the exercise of discretion, not simply a flat policy that the township would never exercise its rights under the ordinance.

Merck. . . then filed motions for a stay of his ruling, pending appeal.

Merck owns most of the unused sewer rights. On June 30, 1988, Merck was granted preliminary approval for a development project, only part of which has since been completed. Merck also helped pay for the expansion of the sewer system in exchange for getting the right to use 141,900 gallons per day of sewer capacity. Merck is using only 46,900, according to court records. . . .

Other property owners also helped pay for the system expansion in exchange for varying amounts of sewer capacity. Some projects have been built and are using the sewer system; others have not even come before the Planning Board, while others are just about to start construction. . . .

We'll keep camping out on this, in our specially designed "sewer pipe hotel" (source of original German-eco-hotel image above at that link) near Readington. Ick. It sure is eco-friendly/green/brown, though, I guess.

Tuesday, October 25, 2011

What Some Wall St. Wags Are Saying. . . On Merck's Q3 2011

Here is one of the Street's prognostications, for Friday morning's coming New Merck earnings call:

. . . .Wall St. Earnings Expectations: The average estimate of analysts is for net income of 91 cents per share, an increase of 7.1% from the company’s actual earnings for the same quarter a year ago. . . . Analysts are projecting profit to increase by 9.1% versus last year to $3.73.

Analysts are projecting a revenuse increase of 4.4% from the year-earlier quarter to $11.61 billion. . . .

Will this be right? Too High? Too low? Do stay tuned, right here. Merck's NYSE-reported common stock price is off 3.7 percent, year to date, just FYI.

Monday, October 24, 2011

Resetting The Table -- For Likely The LAST Three Fosamax® ONJ Bellwethers

I suppose the take-away -- from this particular updating item is that Mrs. Sarah Raber needs to take care of her husband (a man who needs essentially day-by-day care, and there is no one else to take her place). As such, Mrs. Raber's lawyers have presented a novel Americans with Disabilities Act letter-petition, to "re-transfer" her federal Fosamax® ONJ case back down to Florida, nearer her point of care for her husband.

Manhattan -- hotels, and the big city hospitals, would be an extremely difficult health care-providing environment for the now-elderly Mrs. Raber, during the month or more that she might have to reside there, during the pendency of the ONJ bellwether trial, her lawyers argued.

That letter petition was twice denied by Judge John F. Keenan in Manhattan. Whether I agree or disagree with the judge's rulings is now immaterial -- as Mrs. Raber has found another way to set her trial in a venue nearer the point of care for her husband -- albeit likely in the state courts of Florida.

Late last week, Judge Keenan dismissed her case with prejudice in the federal District Courts. That generally means the case may not be refiled in the federal system. Here is the rest of the scheduling order -- as I've earlier indicated, Boles III is up next -- on damages alone:

. . . .The parties' requests to replace plaintiff Sarah Raber's case with another case from the Fosamax MDL are both denied.

Boles v. Merck & Co., Inc., 06 Civ. 9455 (JFK), is set for trial on damages on March 26, 2012, at 10:00 a.m.

Jellema v. Merck & Co., Inc., 09 Civ. 4282 (JFK), is scheduled for trial on May 7, 2012, at 10:00 a.m.

Spano v. Merck & Co., Inc., 09 Civ. 6948 (JFK), is scheduled for trial on September 10, 2012, at 10:00 a.m. As discussed above, the parties are directed to submit pretrial scheduling orders for both Spano and Jellema.


Dated: New York, New York

October 20, 2011. . .

So, to be clear, this means that Sarah Raber is now free to refile her Fosamax ONJ case in the state courts in Florida -- and I expect she will do so shortly. And we will keep you posted, as the Boles III damages re-trial approaches -- in March of 2012.

A Miniscule Retraining Fund -- For Perhaps 150,000 To 200,000 Laid-Off Pharma-Folk

According to published reports, New Jersey-are pharma companies have collectively shed around 200,000 jobs, measuring only as far back as 2005.

That means the $3.6 million in retraining aid allocated in New Jersey (see below) will have to be spread thinly over those laid-off -- as there are just so many former pharma people out of work.

Even so, it is some good news, per Do go read it all, but here is a bit:

. . . .The [New Jersey] state Department of Labor and Workforce Development on Friday announced the availability of $3.6 million in federal funding for retraining and re-employment opportunities for pharmaceutical workers who have been laid off.

Among the eligible workers are those who have worked at such companies as Amicus Therapeutics, Bristol-Myers Squibb, Johnson & Johnson, Merck & Co. and Pfizer, according to Labor. . . .

The grant funding will be used to assist workers who were laid off from specific pharmaceutical operations to find new jobs, or to obtain training to enter employment in other growing industry sectors. Services available include skills assessment, career counseling and skills training;
 qualified candidates may receive up to $5,000 in education grants. . . .

It is something -- true enough -- but nothing near what's needed, to fully redeploy this workforce. Make no mistake, the jobs they once held are not coming back -- at least not to any facility in the United States.

Saturday, October 22, 2011

Merck Q3 2011 Earnings Call This Friday, At 8 AM EDT

Will it be an upside surprise? In-line? Or, below expectations? And, will there be a mention of the ENHANCE-era Cain v. Hassan pending settlement, if the board has met (and approved it) by then?

We shall see.

I'll try to live-blog the highlights -- look for word on how Merck's boceprevir (branded as Victrelis®) is doing against J&J/Vertex's telaprevir (branded as Incivek®) -- in the next gen Hep C cure wars. Here is the Merck site webcast link -- you'll need to sign in (with an email address). Look for it then, then:

. . . .Merck, known as MSD outside the United States and Canada, will hold its third-quarter 2011 sales and earnings conference call with institutional investors and analysts at 8 a.m. EDT on Friday, Oct. 28. During the call, Kenneth C. Frazier, president and chief executive officer, Peter N. Kellogg, executive vice president and chief financial officer, and Adam H. Schechter, president, Global Human Health, will provide an overview of Merck's financial performance for the quarter. . . .

Wednesday, October 19, 2011

BREAKING -- Cain v. Hassan To Be Settled, On Eve Of Officer/Director Depositions


This should be moderately good news for New Merck (depending on the size of the damages) -- as New Merck is starting to put the 2007-2008 ENHANCE debacle in its rear view mirror. It still has to finish swallowing the bitter pill that Hassan fed it, in the form of legacy Schering-Plough, though.

On September 12, 2011, I mentioned that Hans Becherer, a former Schering-Plough director, had been ordered to sit for a deposition, under oath, before Halloween 2011, in the ENHANCE-related shareholders' derivative action pending in the federal District Court for New Jersey, called Cain v. Hassan (08-cv-1022 DMC-JAC). In addition to Mr. Becherer, ex-directors Patricia Russo, Thomas Colligan, Carl Mundy, Kathryn Turner, Phillip Leder and Robert Van Oort were also to be deposed by October 31, 2011 under this prior court order. They were all members of legacy Schering-Plough's Compensation Committee.

Recall also that Mr. Becherer was the Chairman of the Compensation Committee at the time when then-CEO Fred Hassan (and each of the other top six officers of Schering-Plough) were granted a special bolus of stock options, at what the company contemporaneously, and very-publicly claimed were "artifically deflated" prices (due, Mr. Hassan then preposterously said, to "unwarranted confusion" -- out of the long-delayed ENHANCE null-results). In contrast, the graphic below, right, in SGP NYSE stock-price trading terms, told the actual truth. There was no confusion; save the confusion caused by Schering-Plough's delay in releasing the disastrous reults of ENHANCE. But still, Mr. Hassan felt comfortable taking advantage of this supposed "confusion", helping himself and his officers to extra cheap stock options. Disgusting -- and shockingly self-serving.

A terse one page letter (a small PDF download) filed in the federal court sitting in Newark this morning indicates that the parties (subject only to New Merck board approval, and the court's blessing) have agreed in principle to settle this matter. All depositions have been stayed -- pending the settlement's acceptance, by a one page order from the court, also entered this morning, in Newark.

No mention (yet) of the size of the payment to be made to legacy Schering-Plough shareholders (and, in some cases, to some New Merck shareholders, via the merger contortions).

It simply cannot be ignored that this case had been pending since the early part of 2008, and only now -- on the eve of a series of sworn, and cross-examined, Compensation Committee Chairman/Board of Director statements -- does the case get settled. Recall that each of the directors, and most of the executive officers of legacy Schering-Plough, were sued personally -- and, if found liable, would be on the hook, personally, for these alleged damages. That is significant. When the settlement terms and figures are made public, we will report them.

Still pending are the federal securities claims in two ENHANCE matters where the plaintiffs' lawyers are seeking class certification. So, New Merck is far from out of the ENHANCE woods, yet.

Do stay tuned. We will follow this -- as we have, for going on four years now.

Tuesday, October 18, 2011

Saunders/Hassan "Mini-Me" IPO Redux, At Bausch + Lomb?

Not surprisingly -- Brent is clearly channeling his old (and current) boss, Fred Hassan (now as the Chairman of the Board of B+L). Saunders is actively cutting heads, adding low-cost hires off-shore, and dreaming of going public again -- in the hopes of creating a huge five year gain for Warburg Pincus, the firm that created a soft landing for Ex-CEO Fred Hassan in early 2010.

More of my own earlier background on it, here, but this is a bit from Thursday's Reuters story -- do go read it all:

. . . .After four years in private hands, Bausch & Lomb may soon head back to the public market as Chief Executive Brent Saunders is setting sights on an IPO for the U.S. eye-care giant "in the next couple of years. . . ."

In an effort to streamline the business, Saunders said over the past year and a half he took out several hundred managers to slim down in favor of more front-line jobs, whether focused on sales, science or manufacturing.

"We are doing quite a bit of hiring in markets like China, India, Brazil, Russia, Eastern Europe," he said, adding that the company tends to hire several hundred people a year, either to fill opening positions or create new jobs.

"We have a much freer hiring in the developing growth markets and we're a little bit more cautious in the developed world," Saunders said. . . .

It's the Fred Hassan's "Mini-Me" show all over again, no? Overseas hring, local firings, and breathless chatter of an IPO. Public or private -- we'll keep an eye on this for the readership.

Monday, October 17, 2011

Japan Tobacoo And Merck Part Company On Osteoporosis Candidate

I suppose the thought was that this candidate might one day reinvigorate the now-off-patent (and eroding via generics) market formerly held be Fosamax®. Not so, per Reuters, this morning:

. . . .Merck has ended a licensing agreement with Japan Tobacco to develop and market an experimental agent that stimulates bone growth for the treatment of osteoporosis. . . .

The two firms concluded the deal in 2008, giving Merck worldwide rights outside of Japan to develop and market the Japan Tobacco compound. . . .

Probably a wise decision.

Tuesday, October 11, 2011

Exclusive: It May Be That A New Judge Will Ultimately Hear Merck ONJ Fosamax® MDL Cases

Given how blunt the parties have been in their latest exchange of letters, before the trial judge, and how apparently fundamental the misunderstandings between lead plaintiffs' counsel and the very able trial judge have become, it may well be that a new judge will ultimately hear and decide the future MDL case, should Merck not elect to settle this whole set of Fosamax® ONJ matters, by early next year. In fact, Merck's counsel speculated about/suggested just such an outcome, in a letter filed today with the court, in Secrest post trial matters.

Just look at how tense the minute order, in reply to the plaintiffs' lead lawyer is -- I'll note that any trial judge would have every right to be offended, if anyone suggested he was "handing out bellwether favors" in this way, purportedly as a quid pro quo, for the ongoing delay in the Boles III damages trial. Ouch -- see below:

. . . .ORDER: The assertion in Mr. O'Brien's letter dated October 5, 2011, that the Court indicated the Plaintiffs' Steering Committee could "pick" the "next case for trial" is absolutely inaccurate. Mr. O'Brien made no such request, and there was no discussion between the Plaintiffs' Steering Committee, Merck Sharp & Dohme Corp., and the Court concerning the selection of a new case for trial to replace Raber v. Merck & Co., Inc., 06 Civ. 6295 (JFK). Arcemont v. Merck & Co., Inc., 07 Civ. 2389 (JFK) will not be the next case tried. (Signed by Judge John F. Keenan on 10/11/2011). . . .

Meanwhile, the November 7, 2011 trial date for Raber has evaporated, and the scheduling/selection of yet another substitute case is now the subject of motion practice. This is likely to get snarkier, before it settles down.

It seems that at least some of the tension flows from the trial judge's not agreeing to grant a remand (to a federal court closer to home) in two would-be bellwether cases, where constant medical care is required, for the plaintiffs' spouses. Both requests were partially styled by lead plaintiffs' counsel as Americans With Disabilities Act requests for accomodation, and were rejected by Judge Keenan, on procedural grounds. Interesting. Do stay tuned.

Merck Notches An Appellate-Level Win -- In Vioxx® Heart Attack Case

Tonight, sources down under are reporting that the first trial court finding liability on the part of Merck's Australian subsidiary. . . has been overturned. [My earlier background on the case is here; full-text of trial level opinion here.] In any event, regular readers will remember that some 1,500 claims (per my earlier graphic, at right) are still pending related to Vioxx®, and CV events -- in the Australian legal system.

From some Bloomberg reports of tonight, then -- a bit:

. . . .The judgment against Merck should be set aside and the action should be dismissed, Justice Michelle Gordon said on behalf of the appeal panel in Federal Court in Melbourne today. The decision reverses a March 5, 2010, ruling that awarded Graeme Robert Peterson A$287,912 ($286,000), after he found Vioxx contributed to Peterson’s heart attack in 2003. . . .

We will, of course, keep you posted -- but I believe the Petersons (Australian plaintiffs) have at least one additional level of appeal. There's been no word on whether such an appeal will be filed, as yet.

Monday, October 10, 2011

New California Law Limits Parents' Input Into Their 12 Year Old Girls' Gardasil® Vaccinations

Ed Silverman at Pharmalot has the story -- do go read his comprehensive narrative on the history of this highly-astro-turfed initiative. I suppose one of the interest groups will now mount a challenge in the courts, making a persuasive argument that the free exercise clause of the First Amendment, and the parental personal liberty interests (embedded-by-inference) in the Fourteenth Amendment prohibit the state from applying this Gardasil®-benefitting measure against parents in California. We shall see.

Here is a bit from Pharmalot -- do go read it all:

. . . .Following months of controversy, California Governor Jerry Brown late last week signed into law a bill that removes parental consent for vaccinating children 12 and older against sexually transmitted diseases. Although state law already allows children 12 and older to consent to treatment for sexually transmitted diseases without parental involvement, the new law expands that right to immunizations. . . [like Merck's Gardasil.]

"By signing AB 499 to coerce minors into risky Gardasil shots, Jerry Brown is deceptively telling preteen girls it will protect them from HPV, giving them a false sense of security that they can have all the sexual activity they want without risking developing cervical cancer or a raft of other negative consequences," says Randy Thomasson, president of . . .

While I do see the case for the other side of the question, I think 12 years of age is just too young to remove the parents' right to consent to sexually-transmitted disease vaccinations. Gardasil is generally well-tolerated, but because the side effects (when it is not) can be life-long, a mature mind is needed to balance that perhaps small, but real, risk -- against the protection from only some of the strains of HPV that can cause cervical cancers. We will keep you posted.

Saturday, October 8, 2011

After $350 Million Autoimmune License Deal With Merck, Lycera Snags Former MRL Head

Most recently, Kathleen Metters was the senior vice president in charge of worldwide basic research at Merck -- a 20 year veteran there, reports Ed Sliverman, on this.

In addition, the local Ann Arbor online paper covered the Merck/Metters/Lycera connection quite well -- do go read it all -- but here's an interesting bit:

. . . .Lycera hired Kathleen Metters, former senior vice president and head of worldwide basic research for global pharmaceutical company Merck, as its new CEO. The appointment comes seven months after Lycera struck a research and licensing deal with Merck that could be worth more than $300 million. . . .

The hiring also comes after Lycera signed a deal to lease 14,134 square feet of offices and lab space at an ex-Pfizer building now owned by the University of Michigan.

Lycera is developing therapies to treat various autoimmune diseases, including rheumatoid arthritis, psoriasis and multiple sclerosis. . . .

We'll keep an eye on this company, and Ms. Metters, for the readership.

Friday, October 7, 2011

FDA Approves Merck Fixed Dose Combo-Therapy, For Diabetes and Elevated Cholesterol

Not a game changer, by any means, but good news for Whitehouse Station this morning, out of DC. Per the United States FDA's announcement, just now:

. . . .The U.S. Food and Drug Administration today approved Juvisync (sitagliptin and simvastatin), a fixed-dose combination (FDC) prescription medication that contains two previously approved medicines in one tablet for use in adults who need both sitagliptin and simvastatin.

About 20 million people in the United States have type 2 diabetes, and they often have high cholesterol levels as well. These conditions can lead to increased risk of heart disease, stroke, kidney disease and blindness, among other chronic conditions, particularly if left untreated or poorly treated.

Sitagliptin is a dipeptidyl peptidase 4 (DPP-4) inhibitor that enhances the body's own ability to lower elevated blood sugar and is approved for use in combination with diet and exercise to improve glycemic control in adults with type 2 diabetes. Simvastatin is an HMG-CoA reductase inhibitor, or statin, approved for use with diet and exercise to reduce the amount of “bad cholesterol” (low-density lipoprotein cholesterol or LDL-C) in the blood.

"This is the first product to combine a type 2 diabetes drug with a cholesterol lowering drug in one tablet,” said Mary H. Parks, M.D., director of the Division of Metabolism and Endocrinology Products in the FDA's Center for Drug Evaluation and Research. “However, to ensure safe and effective use of this product, tablets containing different doses of sitagliptin and simvastatin in fixed-dose combination have been developed to meet the different needs of individual patients. Dose selection should factor in what other drugs the patient is taking."

This FDC is based on substantial experience with both sitagliptin and simvastatin, and the ability of the single tablet to deliver similar amounts of the drugs to the bloodstream as when sitagliptin and simvastatin are taken separately. Juvisync is a convenience combination and should only be prescribed when it is appropriate for a patient to be placed on both of these drugs. . . .

Both of the components of the combo are mature legacy drugs -- still the patient compliance rates should be higher for the two, when bundled. And that should be worth something.

Thursday, October 6, 2011

Oddly Misshapen (Inferential) Timeline -- Of Vioxx®, And Ray Gilmartin's Blog

Let me say at the outset that I admire Mr. Gilmartin. I do. Lately, he's been writing a blog at the Harvard Business Review -- and one of his central themes is that CEOs need to "think differently" (posthumous credit: Steve Jobs!). I concur -- on that score.

In today's installment, though, I think he leaves much ambiguity unclarified about when (and how) Vioxx® was actually withdrawn in late 2004. Read the bolded portions below, in context:

. . . .When I was Merck's CEO, a Friday telephone call from our head of research started a chain of events that put to test the conviction in our core beliefs. He told me that our long-term safety study of Vioxx was showing an increased risk of cardiovascular events compared to placebo, and the trial was being discontinued. We agreed that whatever course of action we decided to take would be based on what we believed the science said about what was in the best interests of patients.

After analyzing the data further and consulting with outside experts, the Merck scientists recommended that we voluntarily withdraw the drug. They said that it might be possible to go to the FDA, add warnings to the label, and keep Vioxx on the market, but they believed that the most responsible course of action in the interests of the patient was to voluntarily withdraw the drug. I, along with the rest of my management team and the board, agreed with the recommendation, and the drug was withdrawn.

One of the follow-on decisions was what actions we should take, if any, to compensate for the loss of approximately $2.5 billion in revenues. Should we restructure the organization to lower costs and at least partially offset the loss of revenue? We had done a restructuring in 2001 with a significant number of layoffs. At that time, we had major drugs about to go off patent, which would lead to a rapid decline in revenue, and we also had lost drugs in late stages of development that we were counting on for future growth. We viewed restructuring as a last resort. But given those circumstances, we believed it was necessary to lower costs quickly to insure our ability to continue to invest in research to replenish the pipeline.

In 2004, the circumstances were different. We had important new drugs and vaccines that we expected to bring to market over the next few years. In our view, it was important to maintain the organizational capability and the research expenditures to bring these new drugs and vaccines to market successfully. On the other hand, analysts were skeptical of the pipeline, and some were calling for new leadership of the company. Furthermore, analysts were anticipating cost cutting and had built that expectation into their earnings projections for 2005.

We decided against restructuring and reductions in research expenditures. . . .

It may just be me, but it looks to me like he is asking the reader to make a back-handed (and inaccurate) inference that the Vioxx recall occured well before 2004. It didn't. He separates his contrasting statements by a few paragraphs, and then throws the "things were different" line in, connecting it to 2004. Odd.

See here to read about what was "knowable," and when -- about Vioxx CV risks. Somewhere along the line, as AERs were being turned in, between 2000 through 2003, it seems fair, as Yale's Dr. Harlan Krumholz has suggested, to think it could have been pulled earlier. This matters, because -- if so -- it (allegedly) took Merck quite a while to do the right thing here.

And it has paid over $4.9 billion, now due in large part to those delays. Just to keep it straight.

Wednesday, October 5, 2011

Xconomy -- On New Merck's Biosimilars Gambit: "Not Your Ole' Dad's Generics"

First -- do go read the whole Xconomy | New York story. It lines out, in nice detail, the four recent Merck deals that set the course for its biolsimilars efforts. All that is missing now, is the guidance map from FDA. And that piece is expected — literally, at any moment.

Here is a bit of the fine Xconomy | New York article -- as a teaser, on prong three of the strategy. Whitehouse Station is taking aim — with Seoul's Hanwha — at a biosimilar version of Pfizer's $7 billion a year arthritis blockbuster, Enbrel®:

. . . .During his decade at Wyeth, Kamarck [now leading biosimilar efforts at New Merck] worked closely with etanercept (Enbrel), the $7-billion-a-year drug that Amgen and Wyeth (now Pfizer) market together to treat inflammatory diseases such as rheumatoid arthritis. "We scanned everyone who was working on [biosimilar etanercept] to try to find the best one," Kamarck says. "We felt to have one of the big ones would help us learn about this new business. We viewed it very much as a linchpin." But the drug — a molecule known as a "fusion protein" — is complex and not easily duplicated.

Merck found the best biosimilar etanercept, Kamarck says, in an unexpected place—Seoul, Korea. In June, Merck formed a deal with Hanwha Chemical to develop and commercialize its version of the drug, HD203. "They manufactured it, they put it in Phase 1 trials, they shared the data with us," Kamarck says. "It’s a fantastic copy. . . ."

Do stay tuned -- the word could come from FDA at any time, now. These are exciting times, indeed.

The FDA guidance will open new doors to additional, system-wide savings, from the March 2010 US health care reform package called the Affordable Care Act, as non-exclusive, competing versions of large, complex bio-molecules eventually make their way onto the US marketplace.

Tuesday, October 4, 2011

Secrest To Appeal -- In Part, On Allegedly Errant Preemption Instruction: Latest Merck Fosamax® ONJ Verdict

This, from The Wall Street Journal's Law Blog, yesterday -- after the latest Fosamax® ONJ jury's verdict, in Manhattan:

. . . .Timothy O’Brien [Mrs. Secrest's trial counsel], of Levin Papantonio Thomas Mitchell Rafferty & Proctor, said Secrest plans to appeal, contending that the judge improperly dismissed a failure to warn claim against Merck and also improperly instructed the jury that a product is presumed non-defective if approved by the U.S. Food & Drug Administration. . . .

It remains to be seen whether a new trial will be ordered, but it does intrigue me that Mr. O'Brien is assigning error to the presumption of non-defective status, given that the same instructions were given in Boles I and Boles II -- and that resulted in a hung jury, and a favorable verdict, respectively. We will, as ever, keep you posted.

Monday, October 3, 2011

Merck Exonerated In Secrest Fosamax® ONJ Trial In Manhattan

Merck was found not liable in the latest federal Fosamax® (alendronate sodium) ONJ bellwether trial, per AP newswires:

. . . .Merck, known as MSD outside the United States and Canada, today said a federal court jury in New York found in its favor in the Secrest v. Merck case, rejecting the claim of a Florida woman who blamed her dental and jaw-related problems on her Fosamax use. . . .

That leaves two more new bellwether cases, and the retrial on damages in Boles III.

Sunday, October 2, 2011

A Growing Confrontation -- Between Merck/MSD and British Purchaser/Payor Organizations

Here's a story that highlights the tug-of-war over what -- it is thought -- would be an appropriate discount scheme, in a unified payor system. The import of this is clear -- margins are evaporating in the United Kingdom, especially on mature legacy Schering-Plough brands like Nasonex, Neoclarityn and Nuvaring.

Here is just a bit of the full Dispensing Doctors' Association news item, for the United Kingdom -- do go read it all:

. . . .If you order the above products through Alliance there will be no manufacturer discount in addition to its current 7.5% commercial terms. However, all MSD products are excluded from Alliance Healthcare's surcharges.

PSNC has said the scheme reduces competition. Dr Richard West, DDA chairman said: "MSD's RWM shows that the current model of reinbursement minus clawback is no longer viable if the large pharmaceutical firms do not put 11.18% discount in to the system." He also asked: "Why do the large pharmaceutical firms choose not to understand the UK market place?"

An AAH spokesperson told DDA Online: "We are disappointed by this decision as we continue to believe that including AAH as a distribution partner is in the best interests of MSD, patients, customers and the wider NHS."

However, in support of the new arrangements, MSD says they will ensure that dispensing doctors who would like access to the Manufacturer Discount Scheme can get these via Phoenix and Williams. . . .

We will -- of course -- keep you posted.

Cuong Viet Do -- Pharma Outsider -- Merck's New Global Strategy Head

This is the best story I've seen on the recent Whitehouse Station announcement of the appointment of a pharma outsider (Vietnamese by background) as its global head of strategy. A few days after his appointment, he announced his resignation from WuXi PharmaTech’s board, though -- just to be clear. Mr. Do, 45, is an international M&A maven, and a veteran of TE Connectivity and Lenovo -- both global electronics firms:

. . . .Merck, known as MSD outside the United States and Canada, selected a member of WuXi PharmaTech’s board as its own Chief Strategy Director (see story). Cuong Viet Do has experience in both healthcare and M&A, in addition to familiarity with China business. From 1989 to 2006, Do was a director and senior partner at McKinsey & Company, where he worked in global healthcare and then high-tech/corporate finance in China and Asia. Because of his extensive experience in Asia, Do’s appointment underscores the significance of China and Asia to Merck. . . .

Tomorrow we may have a verdict in the Secrest (fifth bellwether) Fosamax® ONJ trial. So, do stay tuned.