Friday, April 27, 2012

Merck Posts $111 million of Victrelis® Sales -- US Formulary Stocking Still Underway

No doubt this is good news -- Merck broke the $90-, $100-,and $110-million/quarter barriers, worldwide. However, it seems that Merck is still benefitting from inventory stock-ups on the drug, while most of that has already washed through Vertex's Incivek® numbers presented last night. The current quarter split, then is about 78-22 in favor of Vertex. That may widen, in later quarters as the stock-up flows out of Merck's reported sales, here. [Last night, Vertex indicated that it sees about 2.3 weeks of inventory at present in most US locations, but Vertex is still seeing strong growth in scrips. Merck didn't get into that level of detail on the call this morning.]

Currencies hurt Merck by 3 percent in Q1 2012 (at current rates), not 2 percent -- but Merck sees it as a 1 percent item, due to current expectations on hedging decisions. That is slightly good news, but could be just deferring the currency effects into later quarters. Moreover, Merck expects mid-single digit pressure on its pharma prices through all of 2012 -- as earlier expected.

Also on a non-GAAP basis, Merck beat at the EPS line by a penny. But I put almost no stock in non-GAAP beats of this sort. It is encouraging that sales were $11.7 billion, but that was about $100 million below the $11.8 billion consensus expectations. Carry-on.

Thursday, April 26, 2012

Well -- Vertex's Q1 2012 Is Public. . . Incivek® Raked In $390 Million Worldwide

Well, that IS interesting -- Vertex just reported Q1 2012 sales for Incivek® were "only" $357 million in the US, plus $33 million under licenses in the EU -- for a total of $390 million. To be fair, here, though -- that's still selling at an around $1.4 billion a year pace. Wow. Could be that all the stocking orders are finally through the US system, and Merck will show proportionately lighter sales, in Q1 2012, too.

It is about $100 million lighter than the early launch quarters for Vertex were -- in 2011.

. . . .Vertex reported total first quarter 2012 revenues of approximately $439 million, including net product revenues of approximately $357 million from INCIVEK® (telaprevir) and approximately $18 million from KALYDECOTM (ivacaftor). Royalty revenues related to the sale of INCIVO® in Europe by our collaborator were approximately $33 million. The company reported GAAP net income of approximately $92 million and non-GAAP net income of approximately $119 million, or $0.43 and $0.55 per diluted share, respective. . .

So, I guess we wait to see if Merck has been able to reach the $90 million barrier, in quarterly Victrelis® sales. Thus far, Merck's high-water mark for any single quarter has been $87 million.

I'll post on it, up or down, tomorrow morning.

Consensus Estimates For Q1; Merck Earnings Call Tomorrow, Pre-NYSE Open

My guess? Probably in-line -- with some 2 percent of continuing (mostly euro-driven) currency headwind, at the sales line -- as J&J reported much the same (earlier in this earnings cycle). But watch closely to see how Merck's boceprevir (branded as Victrelis®) sales for the quarter stack up against Vertex's telaprevir (branded as Incivek®) -- in the Hep C wars. I expect the 85-15 split will hold, in favor of Vertex, when Vertex reports after the closing bell on the NYSE tonight.

Here's just a bit of Linda Johnson's fine reporting for the AP Newswires, this morning -- do go read all of hers:

. . . .Merck is buying a 51 percent stake in a new joint venture in Brazil called Supera Farma Laboratorios SA. It will make and sell new drugs and branded generics made by Merck and the two other partners. All three companies will continue running their own businesses in Brazil, one of the world's biggest and fastest-growing pharmaceutical markets due to its expanding middle class.

[CEO and Chairman of Merck Ken] Frazier is also expected to discuss preparation for the patent expiration of respiratory drug Singulair® this summer. Merck likely will follow the lead of other big drugmakers and make a deal with a generic drugmaker to sell an authorized generic version of Singulair. . . .

Analysts polled by FactSet, on average, expect earnings per share of 98 cents and sales of $11.83 billion.

Merck reported profit of 34 cents per share, or 92 cents excluding one-time items, on revenue of $$11.58 billion [in Q1 2011]. . .

We'll live blog it -- if there's any material upside or downside surprise.

Saturday, April 21, 2012

Sorry To Be So Late Getting To This: Judge Saris Accepts Vioxx® Plea

I've been on the road all week -- but as expected, the very able Judge Patti Saris accepted the agreed plea in the Vioxx® matter, putting at least the criminal portion in the US in Merck's rear-view mirror (a few thousand civil opt-out cases still remain open and pending globally, however), per Bloomberg reporting):

. . . .An official of Merck Sharp & Dohme said today that the company agreed to plead guilty to one count of misbranding Vioxx. U.S. District Judge Patti Saris in Boston accepted the plea as part of the drugmaker’s agreement to pay a $321.6 million criminal fine and $628.3 million to resolve civil claims that it sold Vioxx for unapproved uses and improperly touted its safety.

“I’m certainly going to accept this agreement because I think it’s in the public interest,” Saris said from the bench. “I hope the size of this settlement and the fact that all these cases are being pressed by the federal and state governments -- the 44 states’ attorneys general -- will be a signal that this isn’t acceptable conduct[,” said Judge Saris. . . .]

“The government recognized Merck’s full cooperation with its investigation. . .” Ron Rogers, a Merck spokesman, said today in an e-mailed statement about the plea. . . .

However, Merck never admitted (nor denied) civil responsibility -- in the overall plea deal. So it goes.

Thursday, April 19, 2012

Facebook "Filching" Flap -- The [Partial] Denouement

The final order and memorandum opinion in the [Merck v. Merck] New York "Facebook Filching Flap" is online, as of last night. But that is apparently not the end of the story -- only a curtain, on Act I -- of a three act play.

As the below indicates, Facebook admits that the error in granting agents of US Merck access to the German company's vanity page was entirely Facebook's own:

But then we learn something surpisingly new -- that the two pharmaceutical parties are still duking it out over who will get the final rights to the vanity page address on Facebook. That is -- as I say -- surprising.

Yep -- this multinational dispute could linger-on for years, now. However, it is clear that the New York case is dismissed, as German Merck is subject to a German "choice of law" terms of service provision that applies to its German Facebook account, and thus, this matter (the alleged filching) must be decided under German -- not New York -- law. And so, Judge Huff properly has dismissed the New York action for pre-suit discovery (full PDF of opinion):
. . . .A choice of law provision in Facebook’s Statement of Rights and responsibilities (“Statement”) provides that disputes will be resolved in Santa Clara, California. German Merck states that it seeks pre-action disclosure in New York because California law does not provide for it.
. . .[German Merck] asserts that the choice of law provision (Statement Section 15.1) does not apply to German Merck. An addendum to Section 15.1 provides, in petitioner’s translation from the German: “For users residing in Germany: . . . Item 15.1 is replaced by the following: This statement is subject to German Law.”
German Merck conclusorily states that this means thc choice-of-law provision is void as to it. It does not explain how it means that New York is the proper forum. . . .
So this one may drag on in differing international fora, or private negotiations, for quite some time. As of this moment, however no one "owns" the keys to the Facebook vanity page "/Merck".

[I do think German Merck has a larger point, here -- that it ought to be able to discover (from either US Merck, or Facebook) who, precisely, were the agents of US Merck that were granted access to a vanity address they (allegedly) clearly knew they had not created or maintained.]

We will keep you posted.

Merck Wins Latest State Court Fosamax Trial

Merck announced this morning that the latest individual state court Fosamax ONJ plaintiff in New Jersey was unable to prove that her jaw problems were primarily a result of the Merck drug.

I am on the road this week, and will return with more fullsome reports next week -- including a great tidbit from a loyal reader -- on how a recent study found that more Ezetimibe (branded as Merck's Zetia) is worse than less, for some patients.

Be excellent to one another.

Wednesday, April 11, 2012

Propecia® Website Relaunched -- With Upgraded FDA Warnings On Risks Of Sexual Dysfunction Side Effects

The wind-raked, wavy head of hair was earlier banished from the logo -- and now the air is largely out of the balloon, for Merck's Propecia®.

As Ed has reported, the FDA has required new warnings about the risks of sexual side effects from the male pattern baldness drug. Do go read all of Ed's but here is a bit:

. . . .The changes are a setback for Merck. As of last June, the Propecia labeling said most men who experienced decreased libido, ejaculation disorder and erectile dysfunction were able to rise again. . . .

In the interim, the negative publicity over the side effects and ensuing lawsuits – sexual dysfunction makes for a difficult headline to overcome – have stalled sales. . . Last year, Propecia generated $447 million in revenue, which was flat [Ed. Note: Consider "flaccid" here?] with the year before. . . .

Here is the revamped FDA warning page. Do stay tuned.

This "News" Should Come As No Surprise -- Doctors Prefer Vertex's Incivek®

As if we didn't already know this, Decision Resources (as quoted by the Pharma Letter, do go read it all) is out with a new survey of Hep-C-treating doctors -- in the US.

The results are not pretty -- for the legacy Schering-Plough former R&D "star" called boceprevir -- now Merck's Victrelis®:

. . . .For the treatment of hepatitis C virus (HCV), the majority of surveyed US physicians survey by advisory company Decision Resources who prescribe the Vertex protease inhibitor Incivek (telaprevir) more often than the protease inhibitor Victrelis (boceprevir) from Merck & Co. . . . perceive Incivek as offering a short, simple treatment duration and superior efficacy.

Similarly, surveyed managed care organizations’ (MCOs) pharmacy directors indicate that Incivek’s efficacy is the key driver of formulary inclusion. Physicians’ perception for sustained virologic response (SVR) as a key driver of prescribing for Incivek may suggest that emerging therapies with a higher SVR rate are likely to take patient share from Incivek unless they fall significantly short on other attributes such as safety or convenience. . . .

On a tanget, then (at least to the extent that this blog is primarily about Merck) -- the key question for Vertex is how soon will the "emerging therapies" reach the US market. My hunch is that the runway is relatively clear for Vertex through early 2016. And that gives Vertex nearly four years of an 85 percent share of the market in the US. [It should also be noted that Vertex itself has a very promising next-gen candidate in clinical trials (with partner J&J) -- so it may be able to leverage a follow-on position, from this long 2011 to 2015 smooth runway.]

Thus, in my view, there would be no need to buy the full Decision Resources report -- the market data, outlined in the graphic at upper right, from both companies' public periodic SEC filings -- tells it all.

And, expect that trend to continue, when Merck reports Q1 2012 results on April 27. So it goes -- thanks again, ole' "Fast" Fred "the Dread" Hassan!

Tuesday, April 10, 2012

Merck -- With GAVI -- Makes Rotateq® Vaccine Available At $5 Per Course, To Developing World

This is extremely good news for literally millions of children in the developing world -- including India, parts of South America, and much of Africa. Merck and GlaxoSmithKline are going to make supplies of Rotateq® and Rotarix® (respectively) available for about $5 per course, through the Global Alliance for Vaccines and Immunization ("GAVI").

Here is a bit of the Reuters item -- do go read it all:

. . . .GAVI said on Tuesday its cut-price deal would allow it "to respond to ever-increasing demand from developing countries" and provide the shots this year for 3 million children in eight poor countries.

By 2016, GAVI said it planned to roll out the vaccines in more than 40 of the world's poorest countries, immunizing more than 70 million children.

Around 95 percent of the contracted supply of 132 million doses will be procured at a cost of $5 per two-dose course, GAVI said in a statement. This is a two-thirds price cut compared to the previous lowest price offered to GAVI of $15 a course.

In the United States, the same vaccine course costs public institutions $177 and private health providers $213. . . .

Kudos to Merck and GSK!

Monday, April 9, 2012

New Mediator Appointed in Federal ENHANCE-Era Securities Class Actions -- Pilgrim, For Politan

I just saw this -- over the holiday weekend, Judge Cavanaugh appointed a new mediation firm, in the Schering-Plough (and Merck) ENHANCE-Era securities law class actions.

Apparently the highly-esteemed retired federal jurist Nicholas H. Politan (late of Caldwell, New Jersey, and South Florida), has passed away:

. . . .The Court having notified counsel by letter dated March 29, 2012 that a new mediator would be appointed due to the untimely death of Judge Politan. . . . Pilgrim Mediation, LLC (sole members: Stephen M. Greenberg and Jonathan J. Lerner) is hereby appointed. . . .

Our sincere condolences to the family of Judge Politan. He was always only one twinkling of an eye away from cutting loose a barbed-one-liner -- to deflate several of the overly-self-important trial lawyers who appeared before him. His wit -- and legal accumen -- will be missed.

Wednesday, April 4, 2012

Boles III Fosamax® ONJ Damages Trial Set For Sept. 10, 2012; Scheinberg Bellwether Set For January 14, 2013

A commenter recently asked (way, way below!) whether Boles III (new jury -- damages trial only) is still set for September 2012. It is -- on the 18th tenth of September, to be exact. [UPDATED: 04.16.12 | 5:04 PM EDT -- Under an order entered late last week, jury selection will now begin in Boles III on September 18, 2012 at 10:00 a.m. in Courtroom 20-C of the Daniel Patrick Moynihan United States Courthouse. (Signed by Judge John F. Keenan on 4/10/2012).]

In addition, the very-able Judge Keenan (sitting in Manhattan) has selected another case (that's a short PDF -- one presenting a fact pattern of later Fosamax® use -- after Merck made the Fosamax label change, in mid-2005) for bellwether trial status.

. . . .The Court has previously discussed with the parties the Court's belief that at least one additional bellwether trial should be conducted prior to any consideration of a motion to remand to the transferor courts, to address issues arising in cases where the alleged injury date is after the July 2005 change in the Fosamax label. . . .

On March 28, 2012, in open court, Scheinberg v. Merck & Co., Inc., No. 08 Civ. 4119 (JFK) , was first selected by lot. The Court then selected by lot Diamond v. Merck & Co., Inc., No. 08 Civ. 4204 (JFK) , as an alternate. Scheinberg is scheduled for trial on January 14, 2013 , at 10:00 a.m. in Courtroom 20-C of the Daniel Patrick Moynihan United States Courthouse. . . .


Dated: New York, New York

March 29, 2012. . . .

Finally, we are still awaiting word on the outcome of the state court Fosamax trial -- the one that began last month in Atlantic City, New Jersey. We will update you when we have word on that one. So, do stay tuned.

Facebook Flap -- Merck v. Merck -- Resolved, March 23 , 2012

Back in November of 2011, the German Merck discovered that the Whitehouse Station Merck (no relation, for the last 92 years!) had filched the keys to its vanity address on Facebook. A New York lawsuit was filed. Then silence, presumably as the parties negotiated a settlement.

I neglected to mention that about two weeks ago, a settlement was apparently reached, and the New York case was dismissed:


CASE DISPOSED | CONCLUDED | Friday, Mar 23, 2012. . . .

It would seem -- via a check of Facebook, this morning, that the resulting settlement provides that neither company will get the shorthanded (and thus coveted) "" address. From now on, US Merck will have to use the much clunkier "!/MerckBeWell".

A search on Facebook of the term Merck -- offers both pages as clickable icons, with clear graphics -- as to which is which.

In addition, the US Merck has summarily deleted all the commentary on its own Facebook page -- comments made by Facebook denizens, largely decrying US Merck's conduct in the 2011 squatting flap. It. has. all. been. disappeared. Move along, citizens -- nothing to see, here.

So it goes.

Matt Herper Is -- Of Course -- Completely Right About Gardasil® (Both Good And Bad)

Forbes is running a very important piece on the case for HPV vaccination -- as well as against the undue politicization of the same (at least as to HPV vaccines), through legislative mandates -- all as a sub-rosa means to drive pharmaceutical profits.

Do go read all that Mr. Herper has written -- but here is a bit:

. . . .Merck bears more than a little responsibility for the negative response to Gardasil. When it was introduced in 2006, Merck was still reeling from the 2004 withdrawal of Vioxx and the resulting flood of lawsuits. Instead of going slow, as many of its own advisors recommended, Merck began an advertising push to raise awareness of the risks of HPV and began lobbying state governments to make Gardasil shots mandatory. Perry was the first to sign on. Virginia, which originally voted to make HPV vaccines mandatory, recently reversed the vote. Merck would have done better to take a stance like that of the American College of Obstetricians & Gynecologists, which strongly recommends HPV vaccines for 11- and 12-year-old girls but says they should not be mandatory. . . .

"It would not have been the way the old Merck would have done business," says David Kessler, who ran the Food & Drug Administration from 1990 to 1997. "It was a science-based company, not a marketing company. They would have been able to educate the medical community about the benefits, and the medical community would have adopted the product over time. . . ."

The company seems to agree. "Merck suspended our lobbying five years ago because our involvement became a distraction, and we believed the focus should be on the battle against cervical cancer," a [Merck] spokeswoman says. . . .

Merck's next-gen HPV vaccine -- reputed to cover more genotypes of the HPV virus -- is likely to be filed with FDA in late 2012. Let's hope the folks at Whitehouse Station do heed their lessons earlier learned -- on Gardasil®.

Monday, April 2, 2012

Will GSK's Dolutegravir Ultimately Supplant Merck's Isentress®, In 2013?

Merck's Isentress® holds an enviable position at the moment, in the market for HIV therapies -- at over $18,000 a year (administed twice a day), it is the only true integrase inhibitor presently on the market. And by all accounts, it works.Earlier today, Glaxo (with its Japanese Chinese partner) reported very encouraging top-line results in a late Phase III trial for its dolutegravir candidate. It need only be taken once a day, and it is showing results equal to Isentress in treatment naive patients.Glaxo's spokesperson said it is still possible that FDA will accept it for an NDA filing in 2012. That could mark a 2013 approval, and some serious erosion to the Merck blockbuster's market dominance. Stay tuned, but here is the Wall Street Journal on it all -- do go read; here's a bit:

. . . ."This marks an important milestone for the development of dolutegravir and the Shionogi-ViiV Healthcare joint venture. We look forward to completing further Phase III studies in a variety of clinical settings in order to fully understand the potential clinical benefit for a range of HIV patient populations," said Tsutae Nagata, Shionogi's chief medical officer.

Full results of the Spring-2 study will be presented at an upcoming scientific meeting. It is the first of four Phase III studies on dolutegravir due to be reported this year which are designed to support regulatory filing of the experimental product and are keenly watched by experts and investors, as the full picture of the efficacy and safety of dolutegravir has not been conclusively determined.

"The anticipated timing of the remaining registration studies means we could potentially file dolutegravir in 2012," a Glaxo spokesman said. . . .
As I say -- do stay tuned. Merck may well open off on the NYSE tomorrow.