Tuesday, July 31, 2012

Is This A Good Idea? -- Reloaded

Yep -- "It's 1953 again!" -- or at least some of the marketeers at Consumer Products would like for America to think so.

Yes -- the image was iconic. Yes -- almost all the boomers enjoy trips back to their childhoods. I just think naming a real live 5 year old the new Lil' Miss Coppertone® is. . . well, a little creepy. And I've said so before.

Thanks go to the anonymous commenter below who brought this back to my attention -- here is the story -- from yesterday:

. . . .As if any mother needs confirmation that her daughter is adorable, Kimberlee Thompson of Winter Haven now has it.

Alaina Thompson, her 5-year-old daughter, has been named Little Miss Coppertone, having received more votes than any of the other nine finalists in the online contest. As the winner, Alaina will appear in at least one print advertisement for the venerable sunscreen brand in 2013.

The title also yields a week-long vacation to the destination of Alaina's choice. As of Monday, the kindergartner seemed to favor Hawaii.. . .

From that sublime to the ridiculous, I guess.

Monday, July 30, 2012

Incivek® Q2 2012 Sales Lighter Than Forecast; Full Year 2012 Trimmed

Vertex Pharmaceuticals just reported its Q2 2012 GAAP results -- and the company's shares are surging over 6 percent in NASDAQ after-hours trading -- or $3 -- to $53/share.

However, the Q2 split of US market sales is now more like 75 percent Incivek®, 25 percent Victrelis®. Presumably, as the colder weather months of 2012 arrive, the Incivek sales will accelerate, again.

See the Vertex SEC Form 8-K:

. . . .Full-Year Incivek Revenues: Vertex today revised guidance for full-year 2012 Incivek net revenues. The company expects full-year 2012 net revenues to be in the range of $1.1 billion to $1.25 billion. The revised guidance reflects the recent downward trend in the number of patients initiating treatment within the hepatitis C market. . . .

[Incivek sales were expected to range from $1.5 billion to $1.7 billion, as of February 2, 2012. . . .]

Still a very strong quarterly performance -- by Vertex. Up 6% on the NASDAQ.

UBS Ups Merck Target To $50; Joining Citi

Due in large measure to the strength of Merck's Q2 results -- even in the face of a tough EU zone environment (and impliedly, on confidence in the plan Whitehouse Station has laid out to deal with the Signulair® exclusivity expiry -- later this week -- expected 90 percent decline in sales within weeks, for the twelfth biggest drug franchise in the world), UBS analysts have belatedly-joined the Citi analysts in rating Merck a buy, and placing the next 12 month NYSE price target at $50. I think this a reasonable take on the No. 3 (or 4) drugmaker in the world.

From the Yahoo! blurb, then:

. . . .Merck & Co. (MRK) After a good second quarter, UBS analyst Marc Goodman has increased his price target from $45 to $50. Merck seems to be weathering the patent expiration of Singulair well, and maintained its guidance despite EU headwinds. The pipeline looks promising as well, data from Odanacatib and Cordaptive could be catalysts in the second half. . . .

As ever, we shall see -- but things are clearly looking up at Merck, even if the stock is falling a fraction this morning, on the NYSE, on the news.

Saturday, July 28, 2012

Wild Weekend Whitehouse Station Trivia: Soy Sauce/HIV Candidate Edition

Strange stuff department:

While this is not (in any way) going to affect Merck's near-term NYSE stock price, it is fascinating -- courtesy of one of my anonymous commenters:

. . . . Anonymous said...

FYI, the compound licensed from Yamasa (i.e. EFda -- 4’-ethynyl-2-fluoro-2’-deoxyadenosine) is in fact a flavour agent (note that Yamasa is a soy sauce company). Its ability to act as an inhibitor of HIV reverse transcriptase is a pleasant surprise.

July 25, 2012 7:02 PM. . . .

Who knew? S/he did, of course -- nice find!

Having said that, it must be absolutely clear from the Japanese and US patent filings that Yamasa owns the worldwide exclusive rights to the 4’-ethynyl-2-fluoro-2’-deoxyadenosine protien structure -- otherwise, why would Merck bother to pay for a food flavor agent? In short, it wouldn't. Here's to hoping for an advance -- toward a cure!

Friday, July 27, 2012

Solid Merck Results; Victrelis® Reaches $126 Million In Sales; Vertex Will Report Incivek® Sales Monday

UPDATED: On the earnings call, Adam Schecter just said (@ 8:24 am EDT), that Merck is seeing a slowing in new patient starts, on Victrelis®, and the summer months are usually slow for Hep C therapy. He said that Merck still expects there are appropriate unreached patients for Victrelis, but that is pretty close to an admission that Vertex will always hold the clear market lead here.

And, as I at least expected, the strong US Dollar has cut worldwide sales growth by 4 full percent. If perfectly hedged, Merck's sales revenue would have increased 5 percent in the quarter, but due to currencies, Merck reported only a 1 percent increase in global sales revenue. UPDATE: CFO Kellogg just said that Merck expects currencies "headwind" to decrease FULL-YEAR sales by more than 3 percent. He sees continuing erosion of the euro. On $12.3 billion in quarterly sales, that is a very significant number. Even so, Animal Health showed very strong growth (before currencies) in the quarter.

There was though -- as to IMPROVE-IT, some more "dribbling-out" of the at this point long-delayed news (it is now about three years beyond the originally-expected end date, after being redesigned to vastly increase study size) -- another three month delay on data analysis, bumped back from December 31, 2012, to March 31, 2013:

. . . .Merck previously announced in late March 2012 that the independent Data Safety Monitoring Board of the IMPROVE-IT study planned to review data from the study again in approximately nine months. That review has been scheduled for March 2013, at which point nine months of additional data will have been adjudicated. . . .

However, I think most people think a negative or ambiguous outcome in IMPROVE-IT is probably already priced in.

Now we wait for Vertex -- on Monday, to see how Incivek® did in Q2 2012. I expect the 80-20 split in Vertex's favor will continue to hold, or around $470 million for Vertex.

Wednesday, July 25, 2012

Merck Inks Two Immaterial HIV-Space Collaborations

These are small front-end deals, but -- as ever -- you have to put a horse in the race, to have any chance of winning.

Hard to tell at this stage what the odds will be on either of these turning in a Secretariat-like run -- but here's to hoping.

From today's PharmaTimes, then -- a bit -- do go read it all:

. . . .First up, a deal has been signed with Chimerix giving the US major access to CMX157, the former’s lipid acyclic nucleoside phosphonate which has completed Phase I. . . . Chimerix will receive $17.5 million upfront and be eligible to receive up to $151 million in milestones, plus royalties on future sales.

Merck has also signed an agreement with Japan's Yamasa Corp to develop EFdA (4’-ethynyl-2-fluoro-2’-deoxyadenosine), a nucleoside reverse transcriptase inhibitor candidate in preclinical studies which has shown antiviral activity toward highly-resistant HIV strains. The company will pay an upfront fee and future milestone payments in return for exclusive worldwide rights; financial details were not disclosed. [Ed. Note: That is so, because the payments are not presently expected to be material to Merck -- approaching $49 billion in annual worldwide sales revenue.]

The New Jersey-based firm also disclosed that it intends to initiate a Phase II study for MK-1439, its own next-generation non-nucleoside reverse transcriptase inhibitor. . . .

Next-up -- second quarter 2012 earnings call -- on Friday morning, first thing.

Sunday, July 22, 2012

On Friday, Merck Is Likely To Report 3 to 4 Percent Currency Headwind -- At Sales Line

At 8 a.m., Eastern Daylight Time, this Friday, Whitehouse Station reports its Q2 2012 financial results. After J&J reported European earnings impacted by the strong dollar about eight days ago, and then last week, Baxter reported about 3 to 4 percent weakening Euro impacts -- at the sales line for Q2, I think it entirely fair to expect that Merck will see about the same. Afterall, Merck's total revenue to EU-derived revenue splits are a rough approximation of those same ratios -- at Baxter.

So -- look for currencies to "eat away", at a rate of about three to four percent of all of Merck's EU-derived revenues for the second quarter. And that's no small headwind.

Somewhat mitigating this downturn will be the fact that Merck holds large assets in Europe as well (so depreciation expense is expressed in a matched currency) -- thus, those assets are natural hedges against the weak Euro. Equally important here, is the notion that most of the selling expenses are "local" as well: if Merck sells product it makes in Europe, and details with European-resident sales forces -- then both the revenue and expenses are "matched" in local currency (i.e., the euro). That greatly dampens the impact of the strong dollar -- on Merck's reported bottom-line consolidated earnings per share.

But, at some point in the future, Merck will need to bring those EU-denominated earnings home -- i.e., repatriate them -- for projects here, or to pay dividends, on the NYSE-traded stock. That -- hopefully -- will be able to wait for more favorable exchange rates.

See you Friday.

Monday, July 16, 2012

Legacy Schering-Plough's K-Dur® 20: A Surprising "Pay For Delay" Loss -- On Appeal

Well, it would seem that with real health care reform, comes a renewed vigor in the enforcement of the antitrust laws, as the same apply to payments made by the branded/innovator (beyond the life of the relevant innovator's patents) to keep generic competitors off the U.S. market-shelves. [My prior coverage of this K-Dur® 20 case is under that link. Overnight, I've also updated the graphic for the story -- to make plain that the patented drug is simply a coated potassium chloride crystal, and that the '743 patent was issued nearly 23 years ago. Thus, it is fair to ask whether 23 years is "long enough" -- for a monopoly-term that is supposed to run no more than 17 years.]

This is surprisingly bad news for all of branded US pharma -- given the lower federal courts' prior nearly-unanimous deferential stance, in favor of the innovator/branded pharmaceutical manufacturers. No longer. I suspect this issue is now headed to the Supremes for a final word. After the Chief Justice's recent opinions -- I would not expect too much deference at the high court, as to the branded/innovators' stated reasons for signing such agreements.

Here is the Third Circuit's PDF file (all 43 pages of it!) of the just released opinion, and a bit of the "business end" of the new legal analysis:

. . . .After consideration of the arguments of counsel, the conflicting decisions in the other circuits, the Report of the Special Master, and our own reading, we cannot agree with those courts that apply the scope of the patent test. In our view, that test improperly restricts the application of antitrust law and is contrary to the policies underlying the Hatch-Waxman Act and a long line of Supreme Court precedent on patent litigation and competition.

First, we take issue with the scope of the patent test’s almost unrebuttable presumption of patent validity. This presumption assumes away the question being litigated in the underlying patent suit, enforcing a presumption that the patent holder would have prevailed. We can identify no significant support for such a policy. While persons challenging the validity of a patent in litigation bear the burden of defeating a presumption of validity, this presumption is intended merely as a procedural device and is not a substantive right of the patent holder. See Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534 (Fed. Cir. 1983) (“The presumption, like all legal presumptions, is a procedural device, not substantive law.”). Moreover, the effectively conclusive presumption that a patent holder is entitled to exclude competitors is particularly misguided with respect to agreements – like those here – where the underlying suit concerned patent infringement rather than patent validity: In infringement cases it is the patent holder who bears the burden of showing infringement. See Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 679 (Fed. Cir. 2008).

Rather than adopt an unrebuttable presumption of patent validity, we believe courts must be mindful of the fact that “[a] patent, in the last analysis, simply represents a legal conclusion reached by the Patent Office.” Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969). Many patents issued by the PTO are later found to be invalid or not infringed, and a 2002 study conducted by the FTC concluded that, in Hatch-Waxman challenges made under paragraph IV, the generic challenger prevailed seventy-three percent of the time. . . .

These figures add force to the likelihood – conceded by the Tamoxifen majority – that reverse payments enable the holder of a patent that the holder knows is weak to buy its way out of both competition with the challenging competitor and possible invalidation of the patent. 466 F.3d at 211 (“The less sound the patent or the less clear the infringement, and therefore the less justified the monopoly enjoyed by the patent holder, the more a rule permitting settlement is likely to benefit the patent holder by allowing it to retain the patent.”).
Moreover, we question the assumption underlying the view of the Second Circuit and other courts that subsequent challenges by other generic manufacturers will suffice to eliminate weak patents preserved through a reverse payment to the initial challenger. Cf., e.g., id. at 211-12. We note that the initial generic challenger is necessarily the most motivated because, unlike all subsequent challengers, it stands to benefit from the 180-day exclusivity period of 21 U.S.C. § 355(j)(5)(B)(iv). Additionally, as the experience of at least one court in this Circuit confirms, the high profit margins of a monopolist drug manufacturer may enable it to pay off a whole series of challengers rather than suffer the possible loss of its patent through litigation. . . .

I must confess -- I honestly did not expect this outcome. It will now be interesting to seek whether cert. will be granted (the innovators are all but certain to seek it) -- and whether the Supremes will take the above approach. Do stay tuned, when we return next year -- to take a look at the 2013-2014 docket of the high court. [Do also go read Ed Silverman's fine piece on this topic.]

Thursday, July 12, 2012

Citi Ups Merck Target -- From $34 to $50 -- Now A "Buy"

As I've said before -- Citi is usually late to the party, but it is right about the directionality, here. See the CBS MarketWatch blurb:

. . . .Merck Thursday drew an upgrade to buy from neutral at Citi after the drug maker set plans to close an advanced clinical trial of its odanacatib osteoporosis drug. An interim analysis showed that the drug met its primary goals. Merck plans to apply for regulatory approval of the drug in the U.S., Europe and Japan in the first half of 2013. Citi hiked its price target for Merck to $50 a share from $34 a share and raised its sales estimate for odanacatib to $2 billion by 2020, up from $900 million. "Odanacatib represents the most important asset in Merck's. . . new oral primary care opportunities. . . .

Well done, Whitehouse Station! Merck is up 4 percent at the open, on a down market day.

Wednesday, July 11, 2012

Truly Exciting News! Merck's Next Gen Osteoporosis Candidate -- Early NDA Filing With FDA

While there are still some safety flags that the study's safety monitoring board wants to see fleshed out -- with continuing data, the news tonight is good. Very good. It offers the real possibility of a replacement for the generics- (and to a lesser extent, lawsuits-) beleaguered Fosamax® franchise.

Whenever a trial is halted early for positive efficacy, there is good reason for optimism about the potential for a blockbuster product to emerge. This is one of those times.

Here is a bit of the Reuters updated reporting -- but Merck leapt up 3 percent after-hours on the NASDAQ tonight, on strong volume, too. Do go read all of the Reuters reporting:

. . . .A pivotal trial of Merck & Co's experimental osteoporosis drug odanacatib has shown that it reduces fracture risk, prompting outside monitors to recommend that the study be stopped early.

News that the novel drug was shown to be effective sent shares of Merck up more than 3 percent.

The company said it expects to take a number of months to wind up the trial, which began in 2007, but will continue with an extension trial to follow up on certain safety issues flagged by the Data Monitoring Committee.

Merck said it expects to submit regulatory applications for U.S., European and Japanese approval of odanacatib in the first half of next year. . . .

Whitehouse Station now has news to genuinely rejoice about -- something potentially material, in SEC-speak, to boot. Kudos to Mr. Frazier's entire team.

[It would be well to bear in mind, however, that Lilly's Forteo is progressing nicely, as well, though too.]

Do Go Read Marilyn Mann's Blog -- Now -- On Merck's Zetia®

A long-time friend of this blog, Marilyn Mann, has a great review of two recent (competing) ezetimibe studies up (ezetimibe is the chemical name for Merck's Zetia® -- a legacy Schering-Plough product, BTW) -- be sure to go read all of her fine article.

Separately: to my erstwhile readership -- does any Merck-izen out there know whether New Merck still uses Hill + Knowlton Strategies for its Public Relations/Crisis Management communications? Color me curious, here. Let me know in comments.

In any event -- here is a bit of the fine Mann review:

. . . .Dr. Phan and colleagues find reasons to dismiss the negative results of ENHANCE and ARBITER 6-HALTS as due to “methodological flaws” and use copious amounts of hand-waving to find support for ezetimibe in the SEAS and SHARP trials, even though those trials compared the combination of simvastatin and ezetimibe with placebo and thus can tell us nothing about what, if anything, ezetimibe added to those results. Could the differing views of Doggrell and Phan et al. have anything to do with the fact that Dr. Doggrell declares no conflicts of interest relating to ezetimibe, while Phan, Dayspring and Toth declare the following conflicts:

Binh An Phan is a speaker for Abbott. Thomas Dayspring consults for Abbott, GSK, Health Diagnostic Labs, Kowa Company, Eli Lilly, Merck, Genentech, The Roche Group, Genzyme, and Omthera. He is on the Lecture Bureau for Abbott, GSK, Health Diagnostic Labs, Kowa, Eli Lilly, LipoScience, Merck. Peter P Toth is a speaker for Abbott, AstraZeneca, Amylin, Boehringer-Ingelheim, GSK, Kowa, Merck and consults for Abbott, Aegerion, AstraZeneca, Atherotech, Genzyme, Genentech, Kowa, and Merck.

It is not too surprising that authors who are consultants and on the speaker’s bureau for Merck would take a favorable view of ezetimibe. What is surprising is that anyone would take their word for it. . . .

Indeed -- do go read all of her review.

Tuesday, July 10, 2012

What To Expect -- From Whitehouse Station -- On July 27, 2012

Here's what to expect, according to The Wall Street Journal's reporting -- on July 27, 2012:

. . . .Merck & Co. | Reports July 27 | Wall Street Expectations:

The company is seen reporting earnings of $1.01 and $12.2 billion in revenue. A year earlier, the company earned 65 cents a share, or 95 cents excluding acquisition-related and restructuring charges, on revenue of $12.15 billion.

Key Issues: Merck, like its rivals, has been cutting costs as part of an effort to soften the hit from increased generic competition as the company gears up for the loss of patent exclusivity on its top-selling allergy and asthma medication Singulair in August. Merck also has been hurt by the ripple-effect from generic versions of rival Pfizer Inc.'s cholesterol fighter Lipitor, which have contributed to a slower sales of Merck's anticholesterol drug Vytorin. Meanwhile, Merck recently said AstraZeneca won't exercise its option to acquire Merck's interest in their AstraZeneca L.P. partnership this year, putting any potential loss of its interest in heartburn drugs Prilosec and Nexium off by two years and clarifying the status of the partnership. . . .

Do tune in on July 27, about an hour before the NYSE opening bell. [I should also mention that on July 23, Vertex will post its Q2 2012 results -- and I'll have those Incivek vs. Victrelis Hep C US market share splits, shortly thereafter.]

Texas Legislature Likely To Overrule Gov. Perry's Inane Stance? -- More ACA of 2010 Follow-Up

As the dust settles on Texas Gov. Perry's posturing of yesterday, more sober voices -- including several Republican state legislative leaders in Texas -- have weighed in.

Come January 2013, the Texas legislature will begin maneuvers to ultimately decide whether to accept an expansion of Medicaid, at effectively 1/20th of its actual cost. Said another way, if Texas declines, then citizens of Texas will be effectively paying for all the other states' Medicaid expansions -- with all of the Texas federal income tax dollars its resident citizens pay. [Texas has no state level income tax, BTW -- and its health care system is consistently ranked among the bottom five in the nation. For a family of three to qualify for the draconian version of medical aid imposed by Texas, the family must make less than $189 per month. Of course this is going on in Florida and elsewhere in deep red states, too -- but Texas is a very large, and broken, system for health care delivery -- so it will remain my central example.]

Promisingly, here are bits of two of this morning's local papers' coverage and opinion pieces -- one on the legislators' views, inside Texas -- the other on the plight of Texans' without any other medical options:

. . . .But noticeably absent in support of the governor’s defiance of the federal government were leaders of the Republican-dominated Texas Legislature.

If anything, House Speaker Joe Straus offered only lukewarm support for the governor, telling reporters the Legislature will have lots to say about all of this when it is back in session.

“There are a lot of stakeholders we'd need to hear from before we could make a decision on that,” Straus said. . . .


. . . .Gov. Rick Perry's move to reject the Medicaid expansion and state-based health care exchanges will leave more than 1.2 million previously uninsured low-income Texans without health care coverage. It will also cost Texas an estimated $164 billion in federal aid. . . .

Texas already has the most draconian Medicaid requirements in the nation: to qualify, a family of three must earn no more than $188 per month. Under the new health care law, Medicaid coverage would be expanded to those earning 133 percent of the federal poverty level, which would mean health care for an additional 1.2 million Texans.

According to the Henry J. Kaiser Family Foundation, such a life-saving expansion would cost Texas a mere 3 percent more than it is paying today. Washington would cover the rest. . . .

The good news is that the Texas legislature is likely wiser than its governor -- and more vulnerable to complaints from voters without health care insurance of any kind in the state -- one quarter of all adults, and more than a million children.

Children. I am sure Gov. Perry's mother would be proud. Sheesh. [It is also well-established that people in Texas without insurance end up going to hospital emergency rooms, thus costing all other Texans far more, per visit than their respective conditions would otherwise warrant. All so that Rick Perry can defy our 44th President -- and stamp his feet, like a toy dictator. Nice. Very nice.]

Monday, July 9, 2012

BREAKING: Did Gov. Perry "Rewrite" His Letter -- After This Early-Afternoon's Firestorm?

Here's the original, as quoted by Forbes:

. . . .“If anyone was in doubt, we in Texas have no intention to implement so-called state exchanges or to expand Medicaid under Obamacare. I will not be party to socializing health care and bankrupting my state in direct contradiction to our Constitution and our founding principles of limited government. . . .

And now, here is the "revised" -- toned-down -- copy, as subsequently released on the state.Texas.gov website:
. . . .I oppose both the expansion of Medicaid as provided in the Patient Protection and Affordable Care Act and the creation of a so-called "state" insurance exchange, because both represent brazen intrusions into the sovereignty of our state. I stand proudly with the growing chorus of governors who reject the PPACA power grab. Thank God and our nation's founders that we have the right to do so. . . .

It would seem he realized his original hyperbole was on extremely thin constitutional ice. [My updated graphic above makes reference to another Governor, a nearly a half-century ago, who made a similarly futile attempt at nullifying a federal constitutional mandate. The Medicaid expansion is no mandate -- but you can see why Mr. Perry tempered his remarks, lest he be judged to be on the wrong side of history on this one.] Hmmmm.

Texas Gov. Perry (R): "Take This Law (ACA of 2010) -- And Shove It!"

Forbes has an excellent opinion piece on this -- so I'll quote a little -- but do go read it all, right here.

I am often mystified by the ways politicians have, of doing things in Texas, in particular -- but I wasn't aware that it had renounced the authority of the United States Supreme Court -- until this afternoon:

. . . .Perry’s letter to the HHS Secretary further highlights his complete disdain for the ruling of the United States Supreme Court by pointing out that the law is in “direct contradiction to our Constitution” —a real brain teaser when the Supreme Court has ruled that the law is, indeed, constitutional.

Apparently, a law is only constitutional when Rick Perry says it is constitutional, leaving us to wonder why we even bother with our third branch of government when we should simply be sending these constitutional questions down to Austin for resolution.

It’s hard to know which of Perry’s positions is the more offensive.

I have to confess that I never thought I would see the day when the highest elected official of one of our most populous states would stand before those who look to him for leadership and announce that a ruling by the highest court of the land just doesn’t count simply because the governor doesn’t agree with what the majority of Justices had to say.

Of course, Perry is not alone in his willingness to put extremist politics before the rule of law.

Governors such as Jindal of Louisiana, Haley of South Carolina and McDonnell of Virginia have been right there with Perry in setting an example for the youth of their respective states—an example instructing that the law only matters when a government official chooses to agree with it.

What I wouldn’t pay to be a fly on the wall when one of these governor’s kids get their first speeding ticket and explain to their parent how “it’s all good” given the teenager’s conscientious objection to speeding laws as an unacceptable impingement upon their liberty. . . .

Given that for the first few years, the federal fisc funds 95 percent of the Medicaid expansion -- and thereafter, funds 90 percent of it -- I think I am most offended that Gov. Perry won't accept MY federal taxpayer funds (I don't live in Texas) to help the 6.2 million Texans (my fellow Americans) struggling without any form of health insurance -- in his, um. . . jerkwater state. That is a crime, Mr. Perry. A crime against your own citizens' humanity.

UPDATED | 07.09.12 | 9 PM EDT

Here are the responses of some real -- and educated -- Texans (as quoted by Reuters, tonight):
. . . .Anne Dunkelberg, associate director of the Center for Public Policy Priorities, an Austin group that advocates for low- and middle-income Texans, said the Medicaid expansion would extend health coverage to as many as 2 million uninsured Texans.

"Failing to expand Medicaid would squander the opportunity to pump tens of billions of dollars into our state economy and leave as many as 1.5 to 2 million of struggling Texans out in the cold without insurance coverage," she said in a statement.

Texas Democratic Party spokeswoman Rebecca Acuna called Perry's decision on Medicaid "cruel and negligent."

"Rick Perry's Texas solution is to let Texans stay ill and uninsured," Acuna said in a statement. . . .


Sunday, July 8, 2012

Was Niraparib A Legacy Merck-, Or Legacy Schering-Plough-Program?

So -- I was puzzled by this. Maybe someone out there can help. Is the Niraparib program the same as the old MK-2512 program? Or is it the continuation of the legacy Schering-Plough SCH-900978 program? Or is MK-2512 how New Merck refers to the old SCH-900978 program? Or, are they all the back up compound, for the Rolapitant, or Niraparib candidates? Are there two back-up compounds, or just one? Do let me know -- if you know.

Again -- from Tesaro's IPO disclosure documents:

. . . .We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

The development and commercialization of new drug products is highly competitive. We face competition with respect to our current product candidates, rolapitant, niraparib and TSR-011, and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for which we are developing our product candidates. If rolapitant is successfully commercialized, we expect it to compete with EMEND, an NK-1 receptor antagonist marketed by Merck. Additionally, we are aware that Helsinn Healthcare has an active clinical program for the development of an oral combination NK-1 receptor antagonist and 5-HT3 receptor antagonist (netupitant plus Aloxi (palonestron HCI) that will be marketed by Helsinn Healthcare and Eisai, Inc. and with which rolapitant would compete. . . .

If niraparib is successfully commercialized, we expect it to compete with AstraZeneca Plc's AZD-2281 (olaparib), Abbott Laboratories' ABT-888 (veliparib), Eisai, Inc.'s E-7016, Cephalon, Inc.'s CEP-9722, Clovis Oncology, Inc.'s CO-338 (rucaparib) and Biomarin Pharmaceutical Inc.'s BMN-673, all of which are currently in clinical development. . . .

If TSR-011 is successfully commercialized, we expect it to compete with Xalkori (crizotinib), a dual MET/ALK inhibitor marketed by Pfizer. We are also aware of at least four oral ALK inhibitors in development with which TSR-011 could compete if they are approved in the same market: Chugai Pharmaceutical Co., Ltd.'s AF802, ARIAD Pharmaceuticals, Inc.s' AP26113, Astellas Pharma US, Inc.'s ASP-3026 and Novartis AG's LDK378. Some of these competitive products and therapies are based on scientific approaches that are the same as or similar to our approach, and others are based on entirely different approaches. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

Our product candidates are being developed for cancer therapeutics and oncology supportive care. There are a variety of available therapies and supportive care products marketed for cancer patients. In many cases, these drugs are administered in combination to enhance efficacy or to reduce side effects. Some of these drugs are branded and subject to patent protection, and others are available on a generic basis. Many of these approved drugs are well established therapies or products and are widely accepted by physicians, patients and third-party payors. Insurers and other third-party payors may also encourage the use of generic products. We expect that if our product candidates are approved, they will be priced at a significant premium over competitive generic products. This may make it difficult for us to achieve our business strategy of using our product candidates in combination with existing therapies or replacing existing therapies with our product candidates.

More established companies may have a competitive advantage over us due to their greater size, cash flows and institutional experience. Compared to us, many of our competitors may have significantly greater financial, technical and human resources.

As a result of these factors, our competitors may obtain regulatory approval of their products more rapidly than we are able to or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our product candidates. Our competitors may also develop drugs that are more effective, more widely used and less costly than ours, and may also be more successful than us in manufacturing and marketing their products.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. . . .

In December 2010, we entered into a license agreement with OPKO to obtain exclusive worldwide rights to research, develop, manufacture, market and sell rolapitant. The license agreement also extended to an additional, backup compound, SCH900978, to which we have the same rights and obligations as rolapitant, but which we are not currently advancing. In May 2012, we entered into a license agreement with Merck, under which we obtained exclusive, worldwide rights to certain patents and non-exclusive rights to certain Merck know-how, to research, develop, manufacture, market and sell niraparib and a backup compound, MK-2512, for all therapeutic and prophylactic uses in humans. We are not currently advancing MK-2512. . . .

Does any one out there know -- was SCH-900978 what became the Niraparib oncology program at Merck? Or was MRK-2512 that program? Are they all one program? Are there two back-up compounds, or one? Is one of the two a back-up compound for Rolapitant? Tesaro's IPO prospectus is not terribly clear on the matter. In any event, it seems all of Tesaro's candidates face well-entrenched -- and deeply capitalized -- competitors in the oncology markets.

A Schering Bust-Up Update -- What Became Of The Schering-Plough Rolapitant Cancer Candidate Program?

You may recall that the Hart-Scott authorities at FTC/DoJ Antitrust required New Merck to divest the cancer candidate research and development program around Rolapitant, because there was concern of decreased competition (one of the two soon-to-be internal cancer candidate programs would be moth-balled, and thus price levels increased) -- as a result of the bust-up of legacy Schering-Plough (and swallowing, in large part, by New Merck).

Well, back around bust-up time (late October/early November of 2009), Opko Health acquired -- for a palty $2 million upfront payment -- what was then the legacy Schering-Plough Rolapitant program. Then, in December 2010, Tesaro in-licensed the rights from Opko. Now, as of June 27, 2012, Tesaro has gone public -- although about 68 percent of the shares remain in insiders' hands. Morgan Stanley and Citi were lead underwritiers on the six million share offering -- at an IPO price of $13.50.

Here is the rub -- that Rolapitant program may now one day directly compete with Merck's offerings in the solid tumor space -- including Temodar.

From the Tesaro IPO prospectus then:

. . . .We in-licensed the exclusive worldwide rights to rolapitant from OPKO Health, Inc., or OPKO, in December 2010. OPKO had acquired certain NK-1 receptor related assets in 2010, including rolapitant, from Schering-Plough Corporation, or Schering-Plough, as part of a United States Federal Trade Commission requirement to divest certain assets in connection with Schering-Plough's combination with Merck. Prior to its divestiture of rolapitant, Schering Plough evaluated rolapitant in over 1,000 subjects, including studies for the prevention of post-operative nausea and vomiting, or PONV, and chronic cough, and completed a Phase 2 clinical trial in patients at high risk for CINV. . . .

We currently do not have any products that have gained regulatory approval. The success of our business is dependent upon our ability to develop and commercialize rolapitant, niraparib and TSR-011, which are currently our only product candidates. We are particularly dependent on the future success of rolapitant, because it is our only late-stage product candidate, and it is just beginning a Phase 3 clinical program. Our other product candidates are at an earlier stage of development. While niraparib has undergone a Phase 1 clinical trial in cancer patients as a monotherapy and is currently under evaluation by Merck for use in combination with temozolomide for the treatment of solid tumors, we have not yet established a development plan, and TSR-011 is still in preclinical development. . . .

Success in preclinical testing and early clinical studies does not ensure that later clinical trials will generate adequate data to demonstrate the efficacy and safety of an investigational drug. A number of companies in the pharmaceutical and biotechnology industries, including those with greater resources and experience, have suffered significant setbacks in clinical trials, even after seeing promising results in earlier clinical trials. Despite the results reported in earlier clinical trials for rolapitant and niraparib and in preclinical studies for TSR-011, we do not know whether the clinical trials we may conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market in any particular jurisdiction or jurisdictions any of our product candidates. If later-stage clinical trials do not produce favorable results, our ability to achieve regulatory approval for any of our product candidates may be adversely impacted. . . .

Well -- we shall see whether the Rolapitant candidate ever sees a US market launch. Me? I wouldn't bet the ranch on that notion.

Thursday, July 5, 2012

Fred Hassan's B+L IPO "Deal Goggles" Re-Appear?

The Wall Street Journal tonight ran a piece suggesting that the Warburg Pincus-owned and controlled, Fred Hassan-chaired, Brett Saunders-CEO-ed (both of whom are legacy Schering-Plough execs) private company Bausch & Lomb might go public, again -- as early as year-end 2012 (as I've mentioned before, Warburg took it private, five years ago) -- and pursue a "dual-track" auction, to attract a strategic buyer, from inside the diversified pharmaceuticals space.

Just as I've said, repeatedly -- Fred is busily putting his deal-goggles back on -- for the fourth time in recent memory (he last explored taking B&L public in late 2011). So, you might want to hide your Bausch & Lomb farm animals, because it is certain that his pigs will be "more equal" than all others. From AHP to Upjohn, Pharmacia to Pfizer, and then Schering-Plough to Merck -- he extracted vast value from relatively healthy companies, transferring much of the same to his close friends -- and laying off tens of thousands, in each case. Here we go again, I guess.

Here's a bit -- do go read it all:

. . . .In 2007, private-equity firm Warburg Pincus took Bausch private for $3.7 billion. It's likely to seek a valuation far higher than that in an IPO, the people familiar with the company's thinking said. . . .

Although Bausch executives say the company has turned a corner, it faces competition from heavyweights like Abbott Laboratories, Johnson & Johnson and Novartis. And it carries a significant debt load of around $3.2 billion, including funds borrowed to purchase ISTA.

The company could be attractive to some large pharmaceutical companies. One person familiar with the company's thinking said it could decide to invite takeover bids after it files for an IPO, running what is called a "dual track" process; Bausch has received informal expressions of interest from larger companies before, according to the people familiar with the company's thinking.

A tie-up with a larger player would give Bausch more money to invest in new drugs, surgical equipment and contact lenses and solutions. . . .

New wines; old skins. . . . It was ever thus, whenever Fred gets involved.

Wednesday, July 4, 2012

Trust Marcy Wheeler, Here -- "emptywheel.net"

This -- barring some shockingly different development -- will likely be my last post on the topic of the behind-the-scenes "how, and why" the Supremes came to the truly landmark ACA holding they announced just last Thursday, now.

I really don't care (very much) whether anyone "switched" their vote -- afterall, that is what ought to happen (albeit in absolute internal secrecy), as various Justices read the draft opinions of their colleagues, and become more -- or less -- convinced of the correctness of their own (or the colleagues') analyses of the presented questions.

What would be damaging (in perhaps a very long-lasting way) to the Court as an institution -- and far beyond the pale of ordinary good manners, comity and decorum (to say nothing of the canons of judicial ethics) -- would be if these are conservative Justices, themselves purportedly leaking information about a decision they do not agree with -- even after the fact. Clerks with loose lips are one thing -- but Justices, another entirely. So -- for the future of our republic, I genuinely hope that is not what is going on here.

Having said all of that, I commend this piece -- written by Marcy Wheeler -- to all here assembled. I've followed her for years. She is among the very best of sleuths -- in these sorts of matters -- I've ever encountered. I trust what she writes -- without checking -- because she always does her "weedy-details" homework, before writing anything.

So do go read hers, here -- but enjoy just this bit. Her headline is "Conservatives In Anonymous Disarray" -- that much is certainly true. I do worry that the first Monday in October will be extremely chilly, inside chambers, this fall. Here's the bit:

. . . .Set aside the fact we’ve got a anonymous leak war going on, with neither side inherently garnering credibility. Set aside what Salon’s report, if correct, would suggest about Roberts.

I want to focus on what it means that comity in the court has broken down in this way. If Crawford’s report comes, as many suspected, from the conservative justices themselves, it would suggest they leaked a transparently illogical cover story (in that it didn’t explain the relics that made everyone suspicious about the dissent in the first place). They not only broke SCOTUS protocol about leaks, but did so and, reportedly, lied in doing so.

Then you’ve got a quick response from someone–could this be a Roberts clerk? one of the other conservatives?–calling out that purported lie.

To what end? To shift the emphasis on Roberts’ fickleness? To try to tone down the confrontational claims at the heart of the Crawford piece? And if another of the conservatives is behind the Salon report, then how do the original leakers feel about the story? What are the political objectives of each side of this anonymous leak war?

And all this is just what we can see through the screen of anonymity. The rancor this expresses must be worse in person. . . .

Last -- but certainly not least -- Lyle Denniston (who has covered the Supremes for almost 56 years, now!) has a great -- and worrying -- perspective on it all, over at SCOTUSblog.com. Do go read his, as well -- but his chilling takeaway is that "the content itself is a public rebuke of Roberts, from inside the Court, and amounts to a direct challenge to his ability to lead the Court and to take steps — if that was what his position on the health care law was intended to do — to insulate the Court from the partisan polarization that so dominates the rest of Washington. . . ."

Sadly, I couldn't agree more.

Monday, July 2, 2012

Merck's Q2 2012 Results Webcast: July 27

We will live-blog parts of it, beginning at around 7:55 AM on July 27, 2012. From the press release, but you might listen in then, right here:

. . . .Merck. . . will hold its second-quarter 2012 sales and earnings conference call with institutional investors and analysts at 8 a.m. EDT on Friday, July 27. During the call, Kenneth C. Frazier, chairman 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.. . .

We will see you then. We will be off the grid most of this week, through the weekend -- for the national holiday.