Tuesday, April 30, 2013

Indeed -- Tomorrow Morning May Well Be Entertaining! Earnings Guesses/Revisions? Using Pfizer As Cannon Fodder?


Well, I just poured over Pfizer's Q1 2013 press release (but I did not listen to any of the webcast -- so, if there was some other gloss in the Q&A, forgive me, I'm blissfully unaware). And predictably, Pfizer is getting pounded on the NYSE this morning.

To be sure, Pfizer's miss -- at the sales line -- was operational, as well as foreign currency related.

But the fact that Chairman Read has trimmed full year guidance is fascinating. This arguably creates nice "cover" for Merck to trim back a bit -- citing currencies -- and then over-achieve, in Q3 or Q4 2013 (if all goes well). And, if all doesn't go well, then. . . Merck is still not hurt (as much), because it tamped down Wall Street expectations, here in early May.

Will New Merck Chairman Frazier take this moment of opportunity--  to set himself up to overachieve in the back half of 2013?

Or will he stick to guidance that may become tough to meet, especially if the Japanese Yen stays as weak as it has here early in 2013? With Merck trading nice and high on the NYSE, he could take a little off, and not be banged too terribly.

Afterall, a very significant portion of Merck's sales line is exposed to the Yen -- over $5 billion in 2012 -- that's over 10 per cent of Merck's total revenue. And the euro is a $13 billion exposure, as of the end of 2012 -- that's over 26 per cent.

To be clear, I am not in any way advocating that Merck "intentionally game" Wall Street -- I just think being careful, and then setting oneself up to potentially be a hero, as the year end of 2013 approaches, is adroit management of those pesky Wall Street analysts.

All of that said, I suspect Merck will reaffirm that it is "comfortable with" current consensus Wall Street models, for the full year 2013 (Merck doesn't formally provide self-issued, and management endorsed guidance), tomorrow morning, on the call. And that's exactly what Pfizer did not do, this morning.

Even so, I'll stick to the idea that currencies will influence Merck's sales line, even in Q1 2013, more than most Wall Streeters currently expect -- just as I said on Sunday (again).

See ya' mañana!

Readers: Help Me Out! Did USW Local 10-86 Ratify A New Contract Last Night?


I've been watching this quietly, for over three years now. Back in May of 2010, the United Steel Workers accepted a new three year contract, at West Point -- but it wasn't finalized, and checks for back pay sent out, until August of that year.

And at Merck, three years slowly rolled by. . . the legacy Schering-Plough merger integration was completed; the Merial joint venture was restructured, rolled around with antitrust regulators, and untimately unwound; production was shifted around the globe -- from higher cost jurisdictions -- to havens, in many cases. And so, all the while, more and more new technical jobs (especially in vaccine/API functions) -- the sorts of which were once regularly slated and located at West Point, were being relocated -- all perfectly lawfully -- to Merck's shiny new Durham, North Carolina facilities -- 440, at the last public accounting.

Then, in April 2012, Merck let about 10 percent of the workforce go from its re-acquired Cherokee facility.

Most-recently, at the beginning of this month, Chairman Ken Frazier said that West Point was "safe" -- i.e., would remain open, despite the current initiative to consolidate plants, worldwide.

Now the 2010 three year contract is near exipry -- so, here's the latest -- sourced from the public portion of the USW Local's website:

. . . .The Union and the Company finished Day 18 of Negotiations late Friday night, April 26th. No new bargaining unit agreement was reached. Talks resume Monday, April 29th. The meeting at North Penn High School the same evening is still scheduled. A ratification vote is as yet undecided. Continue to work safe, work complaint and STICK TOGETHER.

In Solidarity. . . .


So -- was an acceptable proposal offered by Merck's management to the Negotiating Committee? Is it a new three year deal? If so, did the local vote to ratify, at last night's meeting? If not, is a ratification vote scheduled?

Monday, April 29, 2013

The Federal Fosamax® Jury Deliberated For Just A Little More Than An Hour. . .


The court's rundown of how the day actually unfolded is on PACER now -- and it offers some interesting details -- including two additional juror requests/questions, via notes passed to Judge Pisano:

. . . .Trial with jury continued before the Honorable Joel A. Pisano.

Case management conference held.

All jurors (8) present.

CHARGE BY COURT.

Ordered lunch provided to the jury (8) at the expense of the Court (Sianna’s Food Service).

Jury note #3 submitted at 10:34 a.m. [Asking what a "learn and treatise" might be. . . that's a learned treatise.]

Ordered jury note # 3 request taken under advisement.

Paul Pennock - Summed for Plaintiffs

Court recess: 12:10 p.m. to 12:45 p.m.

Chilton Warner - Summed for Defendants

Judge Pisano gives final charge to the jury.

Ordered jury to commence deliberations at 2:10 p.m.

Jury note #4 submitted at 2:30 p.m. [A request for a light box, to view x-rays.]

Ordered jury note #4 request Granted.

Ordered Court Security Officer sworn.

Jury returned to Court at 3:30 p.m. with the VERDICT - The plaintiff did not prove her case.

Ordered jury polled and all members concurred with verdict as rendered by their foreperson.

Ordered jury excused.

Ordered judgment DEFERRED until later date.

Ordered trial with jury concluded.

Ordered an in-person status conference set for 4/30/2013 at 9:30 a.m.

Ordered exhibits returned to counsel.

Time commenced: 9:15 a.m.

Time adjourned: 4:30 p.m.

Total hours: 7 hours & 15 minutes. . . .



So the closing arguments/summations all occured today. This is a very strong win for Merck, but I wouldn't read too much into it -- as Mrs. Glynn's fact-pattern included a wrinkle.

The wrinkle? Merck was able to show that the FDA had ruled against Merck, and effectively prevented Merck from changing its warnings related to Fosamax®, at just about the same time -- on the agreed timeline -- as Mrs. Glynn suggested that had she been warned about the fracture risks, she would have discontinued using the drug. But Merck was able to truthfully say that it could not -- as a matter of law -- have given that warning, at that time.

FDA apparently decided that (at that time) the science thus far adduced didn't fully support the link between Fosamax and the femur fractures. That has now changed -- as the warning now appears on the FDA-approved insert.

So. . . now you know.

Merck Wins Federal Bellwether Fosamax® Femur Fracture Jury Verdict: Glynn v. Merck


More soon -- but Judge Pisano let the case reach the jury, and the jury found in favor of Merck.

The ECF/PACER feed ran a little behind on this one -- but clearly, Judge Pisano held the Rule 50(a) motion hearing at 2 p.m. today, while the jury was deliberating.

Likely in large part, just to preserve a complete record on appeal, if the jury had come back in favor of the Glynns' -- and then, of course, Merck would have appealed the Rule 50(a) decisions. [The lawyers were waiting around the courtroom for a verdict already, anyway -- so why not?]

Even so, it seems there will be a pretty fullsome record. But with a jury verdict finding no liability for Merck, here, there will be only the narrowest of alleys for an appeal, for the Glynns.

From Merck's press release, as transcribed by Bloomberg (with a little additional perspective, below), then:
. . . .“We are pleased with the jury’s verdict. The company provided appropriate and timely information about FOSAMAX to consumers and the medical, scientific and regulatory communities,” said Bruce N. Kuhlik, executive vice president and general counsel of Merck. "We remain confident in the efficacy and safety profile of FOSAMAX, and will continue to always act in the best interest of patients. . . ."

The verdict was handed down today in federal court in Trenton, New Jersey, Merck said in a statement. The verdict couldn’t immediately be confirmed in court records. The case is the first to receive a verdict of about 3,300 femur-fracture lawsuits against the company.

Bernadette Glynn sued Merck over claims the company, based in Whitehouse Station, New Jersey, was aware Fosamax might cause brittle bones and increase fracture risks years before the drug was made available to the public. The case was seen as a bellwether for how other cases might be resolved. . . .


So it goes -- Q1 earnings next -- in two days' time.

EXCLUSIVE BREAKING: 2 PM EDT Today -- Hearing On Dismissal Of First Federal Fosmax® Femur Case: Glynn v. Merck


Judge Joel Pisano just entered an order, in the federal District courthouse, in Trenton, New Jersey, setting a 2 p.m. local time hearing, on whether Merck's Rule 50(a) motion shall be granted.

As I reported over the weekend, Merck rested its defense case Friday afternoon, and if the able judge denies (or as he has, in the past, defers) Merck's motion for judgment as a matter of law, closing arguments would begin tomorrow. The jury has likely been excused for the day, as of lunchtime.

Now we wait. My best guess is that Judge Pisano will grant only a part of Merck's motion, and reserve the rest -- I am not in the courtroom, so I cannot assess the credibility of the witnesses the judge has seen, over these last few weeks. Do stay tuned.

Pfizer, Merck Collaborate -- In Experimental Diabetes Combo Space


As ever, we will need to keep an eye on this -- but it would seem that the "new normal" -- even in the largest of the multi-national pharmas' pipelines -- will be to spread the risk, and share the returns, on the iffier "second in class/line" new drug candidates.

That is, even big pharma will be less likely to "go it alone" -- when banking on a misfire in a competitor's class of next-gen candidates. [And yes -- I suppose I should admit it, out loud -- I am saying that Pfizer may now view its ertugliflozin R&D program as no longer "first in the class" of the next gen candidates for type 2 diabetes management.]

Even so, this could be pretty good news for Merck's Januvia® franchise, as it might extend the life of that agent -- and stave off the next gen competition for a year or two.

In any event, here is a bit of this morning's Reuters story on it -- do go read it all:
. . . .Pfizer has so far received $60 million in upfront and milestone payments and will be eligible for additional payments associated with clinical, regulatory and commercial milestones.

Merck and Pfizer will share potential revenue and certain costs on a 60/40 percent basis, the companies said.

Merck and Pfizer will collaborate on the development and marketing of ertugliflozin and ertugliflozin-containing fixed-dose combinations with metformin, a common diabetes treatment, and Merck's Januvia tablets. . . .
Do stay tuned. UPDATED: Gratifyingly, it would seem that the take of the well-regarded maven, Ed Silverman, over at Pharmalot, on this news, agrees with mine -- and independently, so -- I might add. So, I'd call that definitive.

Sunday, April 28, 2013

Merck To Report Quarterly Earnings, Pre-NYSE Open, This Wednesday May 1, 2013


I'll listen in on the webcast -- assuming my other duties don't interfere -- but I don't expect to learn about many (any) out-of-range disclosures.

I think Merck's Q1 2013 results will be generally in-line with Wall Street estimates. Currencies may have taken slightly more out of the gross sales revenues, top-line, than most expect, but I think EPS will be in line, after some special items. [Disclosure: have based my estimate of a 5 per cent overall headwind in currencies, at the sales line for Q1 2013, on a quick analysis of J&J's recently-reported Q1 sales headwinds, in similar geographies as those Merck usually sees, with similar sales concentrations.]

. . . .Q1 2013 Merck & Co., Inc. Earnings Conference Call Wednesday, May 1, 2013 8:00 a.m. ET. . . .
Do stay tuned.

Glynn v. Merck: Federal Fosamax® Femur Fracture Case Closing Arguments Begin Monday Afternoon


Merck's lawyers renewed their Rule 50(a) motion Friday evening -- which is a common federal trial motion strategy -- essentially to ask again, that the case be dismissed -- once the entire affirmative defense case is in. That is to say, I strongly suspect that Merck has finished putting on its defense.

And, on the plaintiffs' side, an amended set of proposed jury instructions (40 some pages worth) have been filed in Trenton's federal District courthouse -- so, at some point on Monday afternoon, I think the very able Judge Joel Pisano is likely to allow closing arguments to begin. It is possible he might grant Merck's Rule 50(a) motion -- and dismiss the case without closing arguments, or a jury charge. But I now doubt it, as he has already reserved a date -- May 20, 2013 -- to hear argument on the portions of the Rule 50(a) motion he did not earlier grant.

So, on balance, I'd expect that the case will reach the jury some time later this coming week, depending on how loquacious Merck's (and the plaintiffs') lawyers wax. Do stay tuned.

Saturday, April 27, 2013

As I Predicted, Gilead's Sofosbuvir Likely To "Leapfrog" Merck's MK-5172, In Hep C


More news is developing out of Amsterdam, at the EASL -- as studies and papers are presented, as of Saturday night, European time. The upshot? These latest tea leaves suggest I was, indeed, right last week: Gilead looks to have the lead dog in the next gen Hep C space. One might even call it the full-on cure. But the study was actually too small to say that with a highly scientific degree of confidence.

But this does make the joint-BMS Daclatasvir combo with MK-5172 announcement look decidedly less exciting -- as doctors are likely to go off label, and prescribe a homemade combo of Sofosbuvir and Daclatasvir, as soon as they are able. True, there could yet be an off-target effect problem -- or some other glitch -- but I now doubt that.

Do go read the Bloomberg piece, in total -- but here's a bit:

. . . .In a study among 41 patients of Gilead’s sofosbuvir combined with Bristol’s daclatasvir, with or without the generic antiviral ribavirin, 40 had undetectable virus in their blood 12 weeks after finishing six months of treatment, according to results presented today at a meeting in Amsterdam. The other patient didn’t turn up to the last appointment and was later found to be virus-clear. Patients in both groups had failed prior treatment with either Vertex's Incivek or Merck’s Victrelis. . . .
Small study? True. But this suggests the effective cure for Hep C -- even the most resistant varieties -- is at hand.

Except for the fact that the combos are likely to cost nearly $100,000 for a course of treament, this is extremely good news for science -- and for the perhaps 170 million people suffering with Hep C, around the world.

The world is changing, in the land of Hep C treatments -- and rapidly. In some ways, this is akin to the momment when polio was cured, just under 60 years ago, now. That is a heady thought.

Off-Topic: Nearly A Half-Century AFTER The Civil Rights Act of 1964 Became The Law Of The Land...


. . .tonight, in rural Georgia, Wilcox County's Public (i.e., state, and federally-funded) High School will hold its first prom open to black students, together with white students. And the students had to organize it themselves, and pay for it, themselves. [Are there no responsible adults in Wilcox County?]


This "integrated" prom occurs two weeks after the white one. You read that right: No black student received an invitation to the official white prom. Not one.

I'll simply observe that this is entirely the fault of the parents of Wilcox County, Georgia -- many of whom have lived there since the Civil Rights Act became law. None of them wanted to rock the boat -- I gather. Shameful.

Here's a bit of the Times' story -- do go read it all:
. . . .Mareshia Rucker watched in frustration last weekend as several dozen classmates in tuxedos and gowns walked into an Art Deco theater for her high school’s “white prom.”
Like all black students at Wilcox County High School, she was not invited. The rural county in central Georgia is one of the last pockets in the country with racially segregated proms. . . .

But this weekend, after decades of separate proms for white students and black students, Wilcox County will have its first integrated prom. Organized by students, it is open to all, at a ballroom in nearby Cordele. Nearly half of the school’s 380 students have registered, with roughly equal numbers of black students and white students. . . .
I'll say no more. The thing speaks for itself (res ispa loquitur) -- but it is at least 50 years overdue.

Thankfully, some 25,000 Facebook fans have helped defray the costs -- so, yes, the nation is behind you, Miss Rucker!

Back to the main topics of this blog come Monday -- but here's to the great kids of the Class of 2013 in Wilcox County -- Well Done! The entire nation is proud of you! I'll close with a toast to you -- from my Black Irish forebearers: "Here's to our noble selves -- God knows, there're few like us. . . and few. . . like us!"

Mr. "Fast Fred" Hassan Only Made It Four Months -- As Avon's "Outside" Chairman Of The Board. . .


It is plain that Mr. Hassan realized that he needs to focus his efforts -- for Warburg Pincus -- to be sure that the investment the Warburg firm made, in taking Bausch & Lomb private, back in 2007, ends in the black. That is almost certainly the primary reason why he is dropping the Avon independent chairman's seat (in my opinion, of course).

Recall that prior to year end 2012, he was pushing the notion that he could sell B + L to a strategic or financial buyer, privately, for around $10 billion. At that price, Warburg Pincus would have shown a nice gain on its risked capital. Unfortunately, no bidder shared his enthusiasm, at that price.

Now it's time to see whether Mr. Hassan can "get 'er done" -- one more time. Me? I wouldn't bet the ranch on it. But that's what makes a horse race. From today's Reuters story -- do go read it all:

. . . .[Avon] said on Friday that longtime board member Fred Hassan resigned from its board to focus on his other professional commitments. . . .

Hassan, who joined Avon's board in 1999, is nonexecutive chairman of Bausch + Lomb, a managing director and partner at private equity firm Warburg Pincus LLC and a board member of Time Warner Inc. . . .

Hassan had only been Avon's nonexecutive chairman since the beginning of the year, taking on the role when former CEO Andrea Jung left her role as executive chairman of the board more than a year earlier than planned. . . .
We will keep you posted -- if/when the B + L IPO is priced. My bet is that it will price below $29.11-- as I've earlier explained. Just search B + L in the box on the top-left of the blog page.

Thursday, April 25, 2013

End Stage Cancer Drug Prices -- Once Again Under Fire -- But Now Comes "The Heavy Artillery"


The New York Times has a front page story up, today, about this morning's lead editorial in the scientific journal Blood. The lead editorial is signed by a stunning array of practicioners -- and will be hard for companies like Novartis, Merck and Pfizer to ignore.

The better strategy here, I think, would be to constructively engage these doctors and patient advocacy groups, acknowledge the plain legitimacy of the issue -- and begin to work toward a less "patchworked" system of rebates and incentives, on price.

We shall see -- but here in America, the implementation of Obamacare is going to force this discussion forward, as well. [Even the Novartis Gleevec® India patent row gets a mention in the Times.] No, this issue is not going to just fade away. . . .

Do go read it all, but heres a bit:

. . . .Prices for cancer drugs have been part of the debate over health care costs for several years. But the decision by so many specialists, from more than 15 countries on five continents, to band together is a sign that doctors, who are on the front lines of caring for patients, are now taking a more active role in resisting high prices.

Some of the doctors who signed on to the commentary said they were inspired by physicians at the Memorial Sloan-Kettering Cancer Center in New York, who last fall refused to use a new colon cancer drug, Zaltrap, because it was twice as expensive as another drug without being better.

After those doctors publicized their objections in an Op-Ed column in The New York Times, Sanofi, which markets Zaltrap, effectively cut the price in half.

What impact the new commentary will have remains to be seen. The authors, however, call merely for a dialogue on pricing to begin. . . .
Obviously, this issue bears watching -- for anyone who follows, invests in, or works for any multinational pharmaceutical company. So we will.

Uncharted Blues Dept.: I Think This "Fixes" The MK-5172 Model -- Do Let Me Know. . .


See here, for some great chemists' assists -- and more of them, here (left by chemist commenters, at the back-up site, actually) -- on this topic, by way of background.

I think this does it -- but before I start replicating it, and using it in more story graphics, do weigh in, and tell me whether I've got it down right.

We have traveled beyond the safe harbors of the chemistry I know (or once knew), out into the vast, deep and uncharted azure blues of the oceans I've never sailed, now. That is, I've hit the wall -- on what little training in chemistry I had, as a lad.

So I now throw myself onto the mercy of the wise and benevolent professors, here assembled. Click at right to enlarge -- then tell me if it works.

Wednesday, April 24, 2013

Merck Melanoma Candidate Granted "Breakthrough" Designation At FDA -- But BMS's Nivolumab Is Out Ahead, On Timelines


Make no mistake, this morning's "ultra" fast-track designation at FDA is good news for Whitehouse Station. And MK-3275, or C6504H10004N1716O2036S46, if you prefer (a honkin' big human G4 peptide, that!) is a great oncology candidate, based primarily on some smallish study results.

It will be chasing Bristol Myers Squibb's Nivolumab, though -- and playing the catch-up game, from here forward, in my estimation.

Either one could still run into late-breaking unforeseen difficulties, changing all of this -- but at the moment the lead looks to belong to BMS. It is theirs to lose -- Nivolumab should reach market first, in this class. That's my guess. Even so, good news at Merck -- and good for the FDA's reputation -- as it tries to act collaboratively -- but still with a vigilant eye on safety -- for truly novel candidates. Life saving candidates -- like these.

A bit from the MarketWatch story, via a hat-tip to my buddy, Ed Silverman, at Pharmalot -- do go read it all.
. . . .The Merck drug is an antibody designed to help the body's immune system go after cancer cells. Lambrolizumab, also known as MK-3475, specifically targets the "programmed death" 1 receptor, or PD-1, which cancer cells can exploit to escape destruction by the immune system. Bristol-Myers Squibb Co. also is developing an anti-PD-1 drug, nivolumab, that is in Phase 3 testing.

In November, Merck said about half of patients in a Phase 1 study for whom results were available at that time experienced tumor shrinkage after treatment with lambrolizumab and about 10% had no detectable cancer after treatment as assessed by imaging techniques.

Some patients experienced adverse events including fatigue, rash and diarrhea. Some adverse events were believed to be related to the drug's mechanism of action of unleashing the body's immune system.

Merck also is studying the drug as a potential treatment for non-small cell lung cancer. . . .


Probably not ever to rise to the level of a blockbuster, for Whitehouse Station, but we will keep you posted, just the same.

Okay -- Trivial Pursuit: "Will the REAL MK-5172. . . Please Stand Up?"

UPDATED | 04.24.13 @ 9:30 PM PDT:

Mystery solved -- thanks to our anonymous commenters! Great chemists one and all -- here is the proof that the PubChem database -- at NIH -- is in need of revision:


In need of revision, as well, are my graphics -- but watching an iMax of "Oblivion" has left me in need of flannel-sheeted bed rest, post haste (!) -- so a retooling of my graphics will wait for morning. Thanks, one and all!

[END, UPDATED PORTION.]

A very alert commenter just mentioned that s/he thinks the graphic I've constructed for Merck's MK-5172 is incorrect -- that I've been using an intermediate step compound/molecule -- not the final MK-5172, in my last two posts.
So -- a simple stick drawing, at right, for easy inspection -- mine, above (click it to enlarge), PubChem's is below. They look to be the same -- to me. Is the PubChem model wrong, as well? Didn't MRL itself submit the PubChem model?

Can anyone out there enlighten us?

Tuesday, April 23, 2013

Merck Lobbying Spend Actually Decreased Slightly, In Q1 2013, Compared To Q1 2012

While it has generally been true that Merck spends more in the middle of the year, on lobbying, than it does in the first quarter, in the past few years -- this could be a sign that Merck will spend less than $10 million in all of 2013, on lobbying and lobbyists.

We will have to wait and see -- but these are the preliminary Q1 2013 figures, and Merck's spend is just about $300,000 lighter than it was in Q1 2012. Do recall though, that in Q1 2012, we did not yet know whether the ACA of 2010 -- or "Obamacare" -- would pass constitutional muster, so there was a lot of scurrying going on, to handle the what-if scenarios. That is all over -- now it is all about implementation of Obamacare -- in ways that best benefit Merck.

Here are the specific items Merck lobbied on or about, per its public filing for the quarter:

. . . .▲ Patent settlements (no specific bill).

Non-interference in Medicare Part D (no specific bill); Medicaid-style rebates in Medicare Part D (no specific bill); Independent Payment Advisory Board (S. 351, H.R. 351).

▲ Alzheimer's education (no specific bill); 340b (no specific bill); hepatitis C education (no specific bill).

▲ Comprehensive tax reform (no specific bill); transfer pricing of intangibles (no specific bill); territorial tax system (no specific bill); deferral of taxation of foreign earned income (no specific bill); tax base erosion (no specific bill).

Trans-Pacific Partnership (no specific bill); biologic data exclusivity (no specific bill); US-EU trade agreement (no specific bill); trade promotion authority (no specific bill).

▲ Supply chain safety (no specific bills).

▲ Access to over-the-counter medications (no specific bill); compounding (no specific bill).

▲ Deficit reduction (no specific bill); ADAP funding (no specific bill).

▲ Animal Drug User Fee Act (ADUFA). . . .

There you have it -- the lobbying against limits on drug patent "pay for delay" is particularly interesting, in my opinion.

Come 2016 Or So, Merck's MK-5172 Is Likely To Cannibalize Some Of Merck's Victrelis® Sales -- But Not Vertex's Incivek® Sales


Yesterday, Merck let it be known that it would partner with BMS -- and its daclatasvir Hep C candidate, to compete in the next wave of treatments (likely all oral) for the disease that affects approximately 170 million people worldwide. Once infected with hepatitis C -- and left untreated -- patients often develop cirrhosis, liver cancer and ultimately, the need for a liver transplant. And so, the disease burden is vast -- as is the correlative market opportunity.

However, nothing I've seen to date in this year 2013 would suggest that even Merck's Phase II/III programs and partnerships will be able to significantly undercut Vertex's current Incivek® lead. There are other promising candidates on the horizon (from other competitors), which may, perhpas as early a mid-2015 unseat Vertex, but it doesn't appear that Merck has a bead on these candidates, at present.

In my experienced opinion, all Merck is poised to do, at the moment, is cannibalize a fair chunk of its own Victrelis® sales (another largely disappointing legacy Schering-Plough "second-in-classs" Hep C drug), come 2015 or 2016. Here is some of my earlier reporting on Vertex's superiority in the Hep C space, at present. For now, Vertex is the lead dog.

Do go read it all, here -- but this is the most-salient bit:

. . . .MK-5172 in combination with peginterferon alfa-2b and ribavirin (PR) was evaluated versus VICTRELIS® (boceprevir), 200 mg Capsules, in combination with PR in treatment-naïve, non-cirrhotic patients with HCV genotype 1. A total of 332 patients were enrolled and randomized to receive MK-5172 at 100, 200, 400 or 800-mg in combination with PR or boceprevir with PR. MK-5172 was administered for 12 weeks with PR, followed by an additional 12 or 36 weeks of PR therapy (depending on the HCV RNA levels at Treatment Week 4). . . .

"We continue to build upon our clinical experience of MK-5172 in chronic hepatitis C,” said Eliav Barr, M.D., vice president, Infectious Diseases, Project Leadership and Management, Merck Research Laboratories. “The interim findings from this study provide clear direction for future larger trials designed to evaluate MK-5172 in novel all oral regimens for HCV. . . ."
By the way, the U.S. Centers for Disease Control and Prevention has recommended all baby boomers, defined by the agency as those born from 1945 to 1965, get tested for Hep C -- a liver infection. Do stay tuned -- we will keep you posted, but Vertex is rising again today, as the papers are being presented at the EASL. The EASL is an annual conference held by the European Association for the Study of the Liver, this year it is convening in Amsterdam.

Merck Did Recently Win -- On Summary Judgment -- In A NJ State Court NuvaRing® Bellwether

This products liability litigation good news for Merck (as the successor to legacy Organon and legacy Schering-Plough) regarding NuvaRingTM comes to us tonight from the usually reliable Law360 -- so I'll take it on faith (as a $$ subscription is required):

. . . .A New Jersey state judge on Thursday tossed seven bellwether cases over injuries allegedly caused by a Merck & Co. Inc. subsidiary's NuvaRing contraceptive, a devastating ruling that will force plaintiffs in upcoming multidistrict litigation to retool their argument on how the drug harmed them.

In granting summary judgment to Merck and Organon USA Inc., Judge Brian Martinotti found that the plaintiffs in a first round of bellwethers had failed to prove NuvaRing caused their injuries. . .
I've offered very little day to day coverage of the state court actions, as it is pretty difficult to follow New Jersey state court actions remotely, online. The New Jersey state courts just aren't nearly as digitized as the federal ones. Even so, I am certain that the win for Merck isn't just a rumor piece.

Make of it what you will, though -- as there are still some 200 similar cases pending in the state courts of New Jersey -- and over 1,315 in the federal District Court, in the Eastern District of Missouri -- where the MDL, or federal multi-district litigation is being heard, by the very capable Judge Rodney Sippel. Judge Sippel has thus far not ruled to categorically exclude various sorts of expert opinion testimony the plaintiffs see as crucial to their cases -- so do stay tuned. Why?

Well, the same sort of a summary judgment motion as the one just granted in New Jersey is pending in the federal MDL, and should be heard "on the merits" in late Spring 2013, according to page 110 of the SEC Form 10-K filed by Merck a few weeks ago. The first trial in the federal MDL is presently set for October 21, 2013.

Monday, April 22, 2013

UPDATED: There Was A 2 PM EDT Hearing On Merck's Saturday Motion -- Granted In Part; Reserved In Part


After the morning docket entry I earlier mentioned, the minute clerk put this in, at some point this afternoon:

. . . .Minute Entry for proceedings held before Judge Joel A. Pisano: Trial with jury held on 4/22/2013.

Defendant's Rule 50(a) motion [#198 -- the Saturday motion] - Ordered Granted in Part & Reserved in Part. Ordered trial with jury continued to 4/23/2013 at 9:15 AM [Editors correction] in Trenton - Courtroom 1 before Judge Joel A. Pisano. (Court Reporter: J. Caruso.). . . .


I didn't mention it over the weekend, but Merck had asked for a dismissal on Mr. Glynn's loss of consortium claim (an "emotional damages" count, to be sure) -- arguing that no evidence was put in by the plaintiffs, on this issue, in their case in chief. This is a pure guess -- but if I were guessing, I'd be inclined to believe the able Judge Pisano would be likely to grant Merck a dismissal fo that part of the case. We will know for certain, once a more formal order issues.

And so -- when an order from today's motion hearing issues (or a transcript of the 2 p.m. motion hearing, serving as the order) -- I'll summarize it right here, as a new post. We can be sure that the jury was excused early today -- as the motion hearing would have been outside of their earshot, in any event.

If I had to make a secondary guess, I'd guess that the issue of which state's substantive law will control -- on punitive damages -- has been decided, as well. And I'd guess that it will be New Jersey law, controlling. But we shall see.

Merck And BMS To Test Once Daily Oral Combo Dosings, For Their Respective Mid-Stage Next-Gen Hep C Candidates


I think this next generation candidates' Hep C research and development collaboration is a good idea -- but it is far from market-moving news, for either player. There are other candidates in various others of the multinational pharmas' pipelines -- and Vertex Pharma's telaprivir still holds a sizeable lead over legacy Schering-Plough's (now Merck's) boceprevir, in the FDA-approved Hep C drug space.

From the AP story, then:

. . . .Merck and Bristol-Myers Squibb will run a mid-stage clinical trial of a drug regimen designed to treat the most common type of the hepatitis C virus.

The trial will study a combination of Bristol's drug daclatasvir, and Merck's MK-5172. Merck will run the trial in which patients with genotype 1 hepatitis C will be monitored. That is both the most common type of the virus and the toughest to treat. . . .
We will keep you posted -- as ever. But I'd bet that a good portion of this "toughest to treat" market will be serviced by some other pharma(s)' lead candidate, come 2016 or so.

Sunday, April 21, 2013

BREAKING: The Glynns' Fosamax® Femur Case Now May (Or May Not) Reach The Finish Line Of Jury Deliberations


UPDATED | 04.22.13 @ 9:45 AM EDT: Judge Pisano has deferred, until May 20, 2013, any decision on Merck's Saturday motion. He will decide it on the papers, without a hearing on that day. What that means, as a practical matter is that Merck must put on its defense case, starting this morning. Merck will likely ask the judge to decide in its favor -- in the same way as outlined below -- once again, at the close of Merck's presentation of its side of the story. We will keep you posted if and when it does so.

[END, UPDATED PORTION]

In a Saturday filing (trial work is seven-days-a-week work!), Merck's legal team has renewed its motion for judgment as a matter of law. That means the Glynns have put in all their evidence -- and concluded their case in chief.

In the simplest terms, the Staturday motion asks the very capable Judge Pisano to decide whether the Glynns have put forward at least a colorable amount of evidence -- enough evidence that at least some combination of reasonable jurors could actually find Merck liable for failure to warn, on the evidence the Glynns presented. I must candidly admit that it reads -- at first blush -- as a pretty strong motion. This is especially true of the attached argument, in Merck's memo of law. Unless Merck's lawyers have mischaracterized the evidence thus far put in, I'd say Merck has a reasonable chance of winning at least some aspects of this motion.

In addition, the memo of law argues that there is now actually scant basis to choose New York law (on the question of punitive damages), and that New Jersey law must thus control the punitives question. Judge Pisano earlier reserved ruling on this, until he heard all of the Glynns' evidence. He now has.

The argument runs that Merck should be allowed to know, as it domiciles its businesses, which state(s) laws will govern its conduct. Merck is a headquartered in New Jersey; its executive officers all work there. That is Merck's locus of control. Of course, the counter argument is that Merck sells its medicines in every state, and every states' consumers ought to enjoy the protection of their own states' laws -- when taking drugs that generate billions of dollars of sales a year, for Merck (even if that means MErck may be subject to punitive dmagaes in one state, but in the adjoining state it would not be so subject -- on the very same facts).

Back to the main story, though: New Jersey law essentially writes punitive damages out of the equasion for any drug that was actually approved by the US FDA for the purpose or indication it was given. In the Glynn case, Fosamax® was approved for Mrs. Glynn's presenting condition. If Judge Pisano holds that there are insufficient contacts with New York related to Mrs. Glynn's case, and that the site of Merck's headquarters ought to control where the "choice of law" falls -- then New Jersey law will apply, and there will almost certainly be no instruction to the jury on punitive damages (unless Merck makes some sort of stunning new admission of bad acts, on cross examination, during its defense case). Not likely; so the jury won't even be given a form that allows them to find punitive damages against Merck.

We will likely know by late tomorrow afternoon, whether Merck will be required to put on a defense -- in short whether Judge Pisano ruled for Merck on its Saturday motion. If Merck is required to put on a full defense in this case, then it will be likely that Judge Pisano will allow the jury to deliberate. He will charge the jury, and see whether a verdict is reached. Even then, he might hold the verdict to be outside the bounds of what any reasonable jury could award on these facts. So, any way one looks at it, the Glynns' still face a good bit of tough sledding, in my experienced opinion.

Stay tuned, in the morning tomorrow

With Pete Loftus' Able Assist, We Look At Dr. Peter S. Kim's Final Three Years Pay At Merck


I'm catching up here, on a glorious Sunday morning -- with this post, about executive compensation trends at Merck, from mid-last week set out by Pete Loftus, in the Wall Street Journal.

Do go read it all here, now that it is on the NASDAQ website for free (no subscription needed) -- but Pete's theme is essentially that the most prominent throttle on full incentive payouts to the executive officers at Merck, over the last three years, has been the number of research setbacks. [Insert here my usual rant about the mostly-faux pipeline "Fast" Fred Hassan transferred, from legacy Schering-Plough, into New Merck.]

This throttling was especially evident in the compensation trend for Dr. Peter S. Kim, outgoing head of Merck Research Labs. However, in the graphic I've prepared at right, the generally rising Merck NYSE stock price over the last two years has all but masked the fact that he has been awarded decreasing amounts of stock-related compensation, in the last two years (his "all in" compensation in 2012 equaled the 2010 level -- in dollars).

From Pete's then -- do go read it all:

. . . .Peter S. Kim, the outgoing leader of Merck's research-and-development arm, saw a 9% increase in the value of total compensation for 2012, to $6.5 million, mainly due to increases in stock awards and pension value and deferred compensation.

The board said Dr. Kim's annual cash incentive--which declined 9% from 2011--reflected "recent challenges" in Merck's late-stage pipeline, but also achievements including the filing for regulatory approval of four new drugs.

Last month, Merck named former Amgen R&D chief Roger Perlmutter to replace Dr. Kim, who is retiring. Dr. Perlmutter took his role this week, and Dr. Kim will remain a company adviser until his retirement in August. . . .
Now, I'm off to enjoy the spring weather -- on this fine day. Keep it spinning in good karma.