Tuesday, December 31, 2013

Another 152 Lost Jobs -- Added To "Fast" Fred Hassan's Tally -- Now At Well Over 48,000


This is a rather somber New Years' Eve duty -- to have to keep track of all the Fred Hassan-engendered job cuts, but we knew when the last of the Saphris® (asenapine) geographies were sold "back" -- to Brent Saunders, at Forest Labs, as its new CEO (in early December 2013) -- this was largely. . . inevitable.

Regrettable, but inevitable. That puts Fred at over 48,000 jobs destroyed -- by his own pen.

More broadly, it puts Fred at very near the top of the list of American corporate job-destroyers. Nice.

Here is Philly.com, on the latest WARN Act notices -- out of Whitehouse Station:

. . . .The continuing cutbacks and restructuring at Merck & Co. included the loss of 152 jobs based in Upper Gwynedd, Montgomery County, when the drugmaker sold the marketing rights to the drug Saphris to Forest Laboratories in early December.

As part of that, Merck filed a WARN notice (named for the Worker Adjustment and Retraining Notification Act), that indicated the layoffs of Saphris sales representatives would be effective Feb. 3, 2014.

Merck said Oct. 1 that it was cutting 8,500 more jobs from its global workforce. About 500 jobs were cut from the facility in West Point, according to a WARN notice posted later in October.

Meanwhile, the local steelworkers union website said that 40 to 45 union workers might lose jobs at West Point in early January. . . .


Yep. These are all ""Fast" Fred related," in one way or another.

Have a safe one, one and all -- remember, as ever, it's "Amateur Night" out there, tonight. We "pros"(!) stay home, tonight. Have fun, but expect occasional idiocy.

Monday, December 30, 2013

A Long New Globe & Mail Story Suggests High Summer Temps, Coupled To Zilmax®, May Have Been In Issue


Canada's Globe and Mail (via Reuters wire services) has put together the most complete story I've yet seen on the various likely and possible connections, and therefor possible interlaced cause(s), of the cattle lameness reported in late August of 2013 -- in the Northwest US. Back story here.

That lameness "outbreak" led Merck to suspend sales of Zilmax®. Interestingly, this year's end of summer, in the Northwest US, was particularly hot -- the hottest in about 25 years, according to meteorologists. And 25 years ago, what was then Intervet (later Schering-Plough) didn't even have Zilmax approved and on the market, yet. So, this story bears a very careful reading, even if (as we believe), Zilmax is not material to Merck's overall financial results.

. . . .Beef Northwest operates a feedlot in Nyssa [Oregon]. Animals making the trip to Pasco would have stood in a trailer for four hours on a 95-degree day as it travelled to Tyson’s plant.

John Wilson, managing partner of Beef Northwest, confirmed that his company was using a Zilmax feed regimen this summer. About 40 of Beef Northwest’s animals “developed lameness after arriving at a packing plant in two incidents in July and August of this year,” he said. Wilson declined to identify the slaughterhouse and would not confirm the animals were destroyed.

Wilson said Beef Northwest had never faced lameness problems with its Zilmax-fed animals before this summer. While Beef Northwest was dispensing Zilmax, Wilson said, the company strictly followed Merck’s dosage and other instructions.

Beef Northwest says it frequently conducted internal and third-party audits to ensure employees were not over-feeding Zilmax to the animals.

“In our cases, dosages were not an issue, never an issue,” Wilson said in a phone interview. “I’d like to think that we were on the upper edge of the industry as far as heavy oversight of all of our protocols. . . .”


We will keep you posted. And even though immaterial, financially to Merck -- I'd suggest we all should evaluate what is in the various things we are now eating. [As I noted, Zilmax wasn't in our cattle, or your burger, 25 years ago.] Do we really need/want traces of zilpaterol, a beta agonist (the primary active ingredient in Zilmax) -- an athsma treatment (when given in higher doses, to human asthma patients) -- appearing even as in trace amounts, or as a trace element, in our ribeye steaks? I am not so certain.

BREAKING!: MSM Points Out Obvious -- $99 DNA Kits Are NOT Supposed To Be A Definitive Medical Condition Diagnosis


Because we've a personal angle -- a dog in the hunt -- on the 23andMe.com story (recent backgrounders here, and here), I'll likely mention it, when a MSM outlet offers later breaking developments.

In today's version of an update to the general topic, we learn that a healthy 28 year old female gets ("I'm. . . shocked"!) slightly differing information -- about her health risks/conditions -- from three separate low end DNA sample companies.

Now, we all know that even fully-sequenced DNA presently only accounts for about 10 per cent of known health conditions. The other 90 is unknown -- or environmental -- not genetic, at all. And we all know that 23andMe.com doesn't sequence the entire human genome of any one person. . . it looks at key snips only.

For what it is worth, here is a bit of the New York Times Aviation Record (Um. . . IDK?!) version of the story -- feel free to read it all, yourself -- not much exciting there, though:

. . . .23andMe said my most elevated risks — about double the average — were for psoriasis and rheumatoid arthritis, with my lifetime odds of getting the diseases at 20.2 percent and 8.2 percent. But according to Genetic Testing Laboratories, my lowest risks were for — you guessed it — psoriasis (2 percent) and rheumatoid arthritis (2.6 percent).

For coronary heart disease, 23andMe and G.T.L. agreed that I had a close-to-average risk, at 26 to 29 percent, but Pathway listed my odds as “above average.”

In the case of Type 2 diabetes, inconsistencies on a semantic level masked similarities in the numbers. G.T.L. said my risk was “medium” at 10.3 percent, but 23andMe said my risk was “decreased” at 15.7 percent. In fact, both companies had calculated my odds to be roughly three-quarters of the average, but they used slightly different averages — and very different words — to interpret the numbers. In isolation, the first would have left me worried; the second, relieved. . . .


Actually. . . I think it rather foolish to be worried -- or relieved -- on the basis of a self-help kit. All of that said, I am still most keenly interested in my detailed genealogy, not my risk assessment. I now have top-line origin data -- am awaiting the detail, in about two more weeks, if the lab is still running on schedule. Cool!

In Which We Quibble -- With The Headline Writers, At Forbes: Merck's R&D Revamp Details, Part III


Over the weekend, San Francisco based business outlets rejoiced -- over the return of a substantial Merck science presence to the Bay Area (it had shuttered one two years ago inside San Francisco, but kept some smaller operations open, in Palo Alto, near Stanford).

Also over the weekend, much of what was written by David Shaywitz in Forbes rang true (do go read it all) -- on the revamp of Merck's research focus. Especially the suggestion that Merck Research Labs, and pharma more broadly, ought to evince more genuine humility (my central theme of Saturday) -- in the face of entire areas of bio-science we still only dimly understand.

It is true that -- again, as I have repeatedly suggested -- in many cases, much of the mechanism by which a given drug works -- i.e., the basic biological function taking place -- may be only guessed at. So, designing drugs will -- for decades to come -- still be as much an art as a science. That much our Forbes writer gets, cold. Kudos.

But I must go on now, to quibble a bit with the headline editors, on that story. I do understand that their idea is to offer a particularly provocative hook, and thus sell more ad impressions, but the story was captioned (in relevant part) "Why. . . may not save. . . pharma" or some such. Seriously? Save? Um. . . save?!

The notion that Merck or Pfizer or Novartis or GSK might die is. . . nonsense. Each one will live on, well into the next half-century -- as each one generates a dizzying amount of cash. These companies are not electronic game makers (whose titles go in and out of fashion, and so too their fortunes) no, the cash-flow from their legacy drugs alone will ensure their survival for two decades more, even if not one of them ever sees another drug approved. So, the notion of saving pharma is. . . a classic false dichotomy. Pharma will live on for decades -- the question is whether the same four or so names will thrive, and lead -- or watch, and follow.

I've quoted immediately below the equally puzzling conclusion to the Forbes piece.

. . . .Ultimately, it’s not clear whether the shift from Research & Development to [Search & Development] will save the industry, or represent just the latest temporizing, shape-shifting maneuver for an industry desperately trying to figure out how to survive in a rapidly changing world. . . .


All in all, Mr. Shaywitz writes a pretty fine piece. His conclusion -- and his headline editors, on the other hand, should be reeled in, a bit. Big pharma is not in any danger of winking out of existence -- and especially so, the $48 billion a year global juggernaut that is Merck. It may one day no longer lead, and it may for a decade or more, only follow the herd. . . . but it will be here, when my children. . . have children, of their own. Bank on it.

Saturday, December 28, 2013

Merck's New R&D Focus: Previously Off-Loaded Saphris®/Secrest® (Asenapine); Now Adopts Much Of The Pfizer/Novartis/J&J Model


As Pete Loftus explained last night (with Jonathan Rockoff's able assist), in addition to "globalizing" its research footprint hubs (opening in London and Shangai), Whitehouse Station is now largely following the Pfizer model. That model looks to partner with outsiders, usually once a new drug candidate or biologic shows some significant study promise. And that model requires an executive team with humility -- the genuine humility to accept that they aren't always the sharpest tools in the shed -- especially in select new disease state approaches. [I'll reserve judgment on that probability, as I am now completely certain Mr. Frazier is able to check his ego at the door -- but I am unsure about the next two layers below his.]

The renewed external R&D "partnering" focus -- i.e., relying on the brain power of the global science crowd -- as opposed to still believing the last century notion that "all the peas grown at home are the best," is fairly new to Merck. [And, at least as to legacy Schering-Plough, many would have also accused it of "planting peas, and expecting to harvest. . . pumpkins."]

So -- Merck moves to its rivals' model (and largely the same one Dr. Perlmutter engineered at Amgen over the prior decade), leaving I think only Eli Lilly as a believer in the "home-made (internal) science is the best science" model. It is true that buying or licensing others' compounds, protiens and inventions means having to share some of the upside, but it correlatively means Merck doesn't have to absorb all of the downside on each project, either. And that makes for a very sound strategic financial play. Here's a bit of the very cogent John Carroll commentary, published just this morning, over at FierceBiotech -- he's right -- do go read it all:

. . . .When Merck announced back at the beginning of October that it was triggering a massive shakeup of its R&D operations after a 7-year blockbuster drought, the pharma giant left out any pesky details on just what the final picture of the new, slimmed down organization would look like. . . .

In Merck's case the "for sale" sign is going up on experimental therapies for glaucoma and antipsychotics, and a male fertility drug.

Perhaps most compelling is the Journal's roster of new execs being lured into Merck by new R&D chief Roger Perlmutter, who had been squeezed out at Amgen. The Journal notes that Merck hired Amgen's former head of external R&D, Iain Dukes, with Roy Baynes replacing a retiring Barry Gertz as head of global clinical development.

Innovation hubs, narrowing and focusing R&D while spinning out assets that no longer fit the new structure, bringing in new talent with a long record, are all now standard features of Big Pharma restructuring. For Merck it is a radical departure from its insulated past. . . .


And of course, I must note that we always said that the legacy Schering-Plough Saphris®/Secrest®(asenapine) anti-psychotic program pushed by Fast Fred Hassan was the classic case of planting peas and expecting to harvest pumpkins. Thanks for that assist, Salmon.

We shall watch and see how this all unfolds, but I'd certainly look for lots more of the smaller, more vibrant research shops -- in and around Boston, London and the Bay Area -- to get early "venture stake/strategic partner" funding (and transfers of technological "know-how" backing) from Whitehouse Station. I'd be particularly looking at cholesterol management, and oncology, among others.

Friday, December 27, 2013

WSJ's Pete Loftus Begins To Fill In Details -- On Merck's New R&D Hubs Approach


Pete Loftus, a good guy, and a quite well informed one to boot, has just put out a solid piece -- providing additional on- and off- the record glimpses at Merck's new R&D footprint and strategic model, under returning chief Dr. Perlmutter.

Do go read it all -- but here's a bit:

. . . .Together, the moves would represent a significant shift for Merck, making it more receptive to external opportunities and less wedded to in-house handling of the entire life cycle of a drug's development, from discovery through clinical trials.

The company has long asked its scientists to stay on top of promising science outside its walls, and has had offices in Boston and Palo Alto, Calif., to further those efforts. Merck became more active doing deals over the past decade, notably its 2009 acquisition of Schering-Plough and the 2011 purchase of Inspire Pharmaceuticals.

Yet the company's laboratories have tended to shun the kinds of full partnerships with outsiders that other pharmaceutical companies now count on heavily for drug candidates and technologies. Merck has also lacked a significant R&D presence in London, while its presence in Shanghai has been primarily commercial operations. . . .

The regional hub plan would resemble approaches taken by other leading drug makers. Pfizer Inc. has drastically reduced the size of its longtime R&D center in Groton, Conn., in favor of building up a presence in cities including Boston; Cambridge, U.K.; and La Jolla, Calif. Johnson & Johnson last year unveiled a plan to establish innovation centers in California, Boston, London and China, to focus on identifying early-stage R&D. GlaxoSmithKline PLC recently said it was opening R&D satellite offices in Boston and San Diego to help manage external collaborations and look for new ones.

"The advantage of having these innovation centers is they capture the academic research at a very early stage," said Kenneth Kaitin, director of the Tufts Center for the Study of Drug Development in Boston. As companies like Pfizer and J&J set up innovation hubs in these research hotbeds, their competitors would stand the risk of being left out if they didn't make similar moves, he said.

Dr. Perlmutter has discussed Merck's potential plan for regional innovation hubs in internal meetings with employees, as has Rupert Vessey, who leads early-stage drug discovery at Merck, according to people familiar with the matter. . . .


We will keep a weather eye on this -- but again it is likely to reduce the footprint inside New Jersey, overall, for research. Boston isn't a terrible change, but having to relocate to San Francisco (while picturesque) would greatly impact the affected employees' discretionary income -- as almost eveything is significantly more expensive in the city by the bay. So, I wouldn't expect too many researchers to relocate to the West Coast -- even if offered that chance.

A good last weekend of the year, to one and all! I'm bolting.

Thursday, December 26, 2013

Do Go Read My Buddy Ed -- In Forbes This Morning -- On ACA Of 2010 And Drugmakers


This prince of a guy has been a close friend of this blog, offering suggestions, encouragement and tips on writing -- which I sorely need -- since its very beginning in mid 2008.

He also happens to be one of the most well-read pharma mavens I know. So -- when he writes -- we all should read. This is from his net-positive take on how Obamacare affects big pharma's bottom line. Do go read the whole Forbes item (and welcome back from your earlier break man! Nice whiskers, Santa!):

. . . .The ACA, you may recall, will close the “donut hole” in the Medicare Part D prescription drug program by 2020. It’s already shrinking, as drugmakers discount the price of brand-name drugs for patients in the donut hole and Medicare picks up the cost of generic drugs. This is particularly significant, since the number of people on Medicare is climbing. GlobalData indicates that the elderly will make up 22 percent of the population by 2020, up from 19 percent today.

What’s more, the ACA puts in place extended patent protection for expensive biologics (brand-name medication), which was granted in exchange for creating a system to approve so-called biosimilars (generic drugs).

It is also worth remembering that, in exchange for supporting the Affordable Care Act, the White House struck a bargain with the pharmaceutical industry in which negotiations over prescription drug prices and so-called importation – which would allow Americans to purchase medicines from other countries – were taken off the negotiating table. . . .


That is true -- and that is how one gets major reforms passed -- with small concessions. The Tea Partiers ought to take note of that.

Tuesday, December 24, 2013

Merck's NuvaRing® (From Legacy Schering-Plough) Subject to Hatch-Waxman Challenge: $600 Million In Sales At Risk


This is not a near term problem, as these proceedings are highly unlikely to be resolved much before mid-2016. But the longer-term outlook for NuvaRingTM was cloudy, even before this development. International March 2011 backgrounder here.

It is possible that Merck might settle, and allow the generic version on market in the US just a tad earlier, given the flattened sales, and the increasing ramp of lawsuits in the US -- related to NuvaRing. We shall see.

Here is Bloomberg, on the Warner-Chilcott vs. Merck Hatch-Waxman proceedings. We will keep an eye on it for you:

. . . .The lawsuit filed today in federal court in Delaware accuses Warner Chilcott of attempting to market the generic before the expiration of Whitehouse Station, New Jersey-based Merck’s patent in 2018.

Actavis, which has global headquarters in Dublin, said in a statement that it may be the first company to file a new drug application with the U.S. Food and Drug Administration for generic versions of the contraceptive.

NuvaRing is a combined hormonal vaginal contraceptive ring that includes both estrogen and progestin to prevent pregnancy. The product, which was linked in a 2011 FDA report to a higher risk for blood clot complications, had sales of $492 million through the third quarter. . . .


Have a peaceful and joyous Noel, one and all. I'm out.

Saturday, December 21, 2013

A Single Lot Of Gardasil® (~740,000 Doses) Recalled -- Only Ten Vials Actually Affected


Two opening notes: (1) this is Merck's entirely voluntary, not government ordered, recall; (2) while glass bits should never be seen in a Gardasil® vaccine vial, it is a near certainty that no girl or woman has been injected with a defective dose -- and only ten non-conforming vials have been found, in the entire lot of nearly three quarters of a million doses. So the whole lot will be destroyed. The risk rate then was just a bit over one thousandth -- of one percent.

In short, the public is not, and was not ever at risk here. All clinics in the US are trained to first visually inspect the dosing vial, and these glass bits are visible to the naked eye. So, it is extremely unlikely that any defect like this would actually be injected. Having said that, there is a separate debate over whether very young girls should be given the vaccine at all -- but that isn't today's story. [We've covered that before, here, in any event.]

Here is a bit of the story from yesterday's Wall Street Journal -- do go read it all:

. . . .Merck & Co. said it is voluntarily recalling one lot of its Gardasil vaccine for human papillomavirus, or HPV, due to the potential for a small number of vials to contain glass particles as a result of breakage during the manufacturing process.

The pharmaceutical giant said the lot was distributed between Aug. 20 and Oct. 9, and that no other distributed lots of Merck product are affected.

According to the U.S. Centers for Disease Control and Prevention, there were 743,360 vials in the lot, and Merck estimated that roughly 10 of those vials could have glass particles in them.

The CDC said that people who have received the HPV vaccine don't need to take any action as a result of this recall, and that to date no adverse events related to this lot have been reported other than mild reactions, like redness or swelling at the injection site. . . .


So it goes. That redness is seen even in perfect lots -- in a small number of people vaccinated. Have a sanguine, safe and joyful holiday -- one and all. And do keep it spinning in good karma, too!

Friday, December 20, 2013

Merck Opens A Behavioral (Largely Non-Pharmaceutical) U.S. Business Sub, In Weight Management


By essentially stealth-acquiring a United States-based leader in weight related behavioral modification solutions, Merck likely contemplates opening its new subsidiary to being a sort of "feeder program" (no pun intended) for emerging pharma related weight management solutions. There are a few out there in early trials, that might also prove to be future Merck targets.

More likely, though, selling into the heart disease management market, and into the diabetis management market, led Merck to choose this vehicle -- to increase direct contact with, and access to, potential future US patients. And I think Merck believes it will be a profitable business, in its own right. After all, the company acquired is itself quite healthy. Here is a link to the press release:

. . . .Merck today announced the launch of a new business focused on providing comprehensive, evidence-based weight management interventions for employers, hospitals, medical groups, health plans and patients. This business is based on providing weight management interventions that combine a structured diet, behavior coaching and monitoring and physical activity to achieve clinically meaningful weight loss that can help reduce the risks of chronic illnesses, such as diabetes and cardiovascular disease.

To bring these interventions to the market more effectively, a new company has been created called HMR Weight Management Services Corporation. . . .


UPDATED: Noon EST | To see the HD version at Vimeo.com, use the password "Merck2013" -- without the quote marks, but with the capital M, No spaces at all, and click here.



But to be clear, this business, on a stand-alone basis is immaterial to Merck, and is likely to turn probably only a third of the margins that the established pharma businesses churn for Whitehouse Station. Good news, just the same. [Ed. Note: HD video (but Blogger's janky converter degraded it to low SD) -- of last night's Messiah -- in a few -- now above.]

Thursday, December 19, 2013

Merck Gets Stuck With Fred Hassan's $21 Million "Bar Tab" -- In Europe -- For (Allegedly) Blocking Generic Subutex®


The French section of the EU's Competition Commission has levied a fine of €15.3 million, or roughly $21 million, against legacy Schering-Plough, for its now more than seven year old efforts to block the entrance of generic competitors to Subutex®, by disparaging competitors in the marketplace — via an allegedly well-organized smear campaign. Subutex (the generic version is known to chemists as the compound buprenorphine, with or without a hydrochloride variant) is an expensive drug used to treat narcotics addictions, on the continent. Merck may or may not appeal that ruling, according to a spokeswoman at Whitehouse Station (per Reuters reporting).

And. . . huge surprise (not!) -- those efforts to (allegedly) restrain lawful price competition occured under Fred, Cary, Tom, Tom and Brent's stellar "leadership" -- at pre-merger Schering-Plough. Ugh.

Here's the relevant bit, from Capital.gr -- but do go read it all:

. . . .France's competition authority Thursday fined Schering-Plough, [now] a unit of U.S. drug giant Merck & Co., 15.3 million euros ($20.94 million), for allegedly attempting to block generic competition for its narcotic addiction treatment, Subutex.

The authority said in a statement that Schering-Plough, colluded with its supplier, the consumer-products maker Reckitt Benckiser Group PLC to elbow out of the market Arrow Group's generic version of Subutex. . . .


The actual financial amount of the fine is not remotely material, but the black eye (reputation damage) in Europe -- of being seen as a bully, and a price gouger, is (once again) disappointing. The $21 million is also -- as irony would have it -- about what Fred paid himself, per year, while at Schering-Plough, all in.

To my experienced eye, it is just more of the Fast Fred Hassan legacy, and a sad one, at that. [Ed. Note: Not feeling Christmas at all today -- all rather blue. . . so I'll likely fall silent a bit here. Maybe a Sing-Along Messiah will do the trick -- tonight. We shall see.]

Wednesday, December 18, 2013

Lambrolizumab To Be Studied (Phase I/II), In A Combo With Glaxo's Votrient® (Pazopanib) -- In Treatment-Naive Advanced Renal Cell Carcinoma


Merck has partnered with GlaxoSmithKline to begin Phase I/II studies with Glaxo's Votrient® (pazopanib), delivered to treatment-naive advanced renal cell carcinoma patients, along with MK-3475 -- Merck's melanoma candidate that recently won breakthrough status at FDA. This will take a year or two to sort out, but could be an important additional indication/market for the MK-3475 Lambrolizumab candidate, should it pan out.

That said, Lambrolizumab is more likely to first reach market in the United States as a skin cancer drug -- as I say, for melanoma treatment -- then later be prescribed "off-label" directly by oncologists, if/when the newly-announced Phase II study shows good efficacy without increased toxicity -- in advanced carcinomas. [To be clear, Merck/GSK cannot market it off-label directly, under applicable US FDA regulations, but clinicians can always use it, investigationally, if they are willing to eat the potential malpractice risk. A good study outcome here will largely blunt that risk, for the US oncologists. That's how actual, practical pharma/medical practice works.]

And once again, this is smart and aggressive preparation, clearly underway at Whitehouse Station -- to allow MK-3475 the widest possible berth it can reasonably garner, when it does reach US markets, some time next year.

Per the Rock Hill Herald Online, then -- a bit -- do go read it all:

. . . .“Collaborations like this are central to Merck’s strategy to evaluate the potential of MK-3475 for the treatment of cancer,” said Iain Dukes, senior vice president, Licensing and External Scientific Affairs, Merck Research Laboratories. “We look forward to initiating further collaborations to investigate MK-3475 in combination with other anti-cancer agents across a range of tumor types.”

Merck and GlaxoSmithKline entered a collaboration to study MK-3475 with Vortrient® (pazopanib) and other agents in the GlaxoSmithKline portfolio in the future. This Phase I/II clinical trial is designed to evaluate the safety and efficacy of a combination of MK-3475 and pazopanib in treatment naïve patients with advanced renal cell carcinoma. Further details of the collaboration were not disclosed. . . .



We will -- as ever -- keep you up to date. This sort of pre-market pump priming, with expensive studies (something north of $100 million per Phase I/II study -- and presumably shared revenue streams, with other drug companies) suggests that Merck believes whole-heartedly in MK-3475. This will pay off handsomely -- if Mr. Frazier is right -- but will look like lots of money down a rabbit hole, should MK-3475 hit a last minute snag. So, taking bigger risks, and making bigger, earlier bets -- may well yield much bigger returns. Yep -- I like his style. [Ed. Note: Graphics up soon. "Let Christmas not be a time looked back upon, only later, with regrets." Words to live by. Maybe, just maybe. . . if only I had listened to him, a little more actively. . .]

Tuesday, December 17, 2013

Intervet and Organon Deliver Again -- In Europe -- Chew-Tabs For Fleas & Ticks Receive Thumbs Up At EMA


It's been quite a while since I last expressed my deep and abiding respect -- for all the legacy scientists who labored under "Fast Fred" Hassan's "Emperor's New Clothes" regime (2004 to 2009). Chief among these were the acquired Organon animal health science teams -- largely out of the Netherlands. Legacy Schering-Plough acquired Organon, only to wildly mis-manage the extremely critical integration process (then dump the entire yard sale like process, on Merck). That is one of the central stories of this blog, laid out over perhaps 600 seperate posts. Just search "Organon" in the box above here -- and sort by date. "Merial" would be a good search term as well.

For that slowly-ending reign of terror, I am sorry. But this is a story of perserverance, even in the face of uncertainty about jobs, and various other executive-officer inflicted adversities. The science team from legacy Organon ought to take a victory lap, here -- as its fluralaner oral tablet (proposed to be branded as BravectoTM) for dogs is very near EU market introduction now. Well done!

Here's a bit of the EIN Newsdesk press release feed, out of Merck EU:

. . . .MSD Animal Health (known as Merck Animal Health in the United States and Canada) today announced that the Committee for Medicinal Products for Veterinary Use (CVMP) of the European Medicines Agency has adopted a positive opinion, recommending the granting of a marketing authorization for the veterinary medicinal product BRAVECTO™ (fluralaner) chewable tablets for dogs (112.5 mg, 250 mg, 500 mg, 1000 mg, 1400 mg).

The active substance of BRAVECTO, fluralaner, a new ectoparasiticide belonging to the isoxazoline group, is systemically active against fleas and ticks. The benefits of BRAVECTO are its efficacy in the treatment of flea and tick infestations in dogs. The most common side effects are mild and transient gastrointestinal effects. . . .


So many, many things that Fred Hassan has mismanaged, apparently with complete impunity (he's off doing the same now at B + L. Ugh.). So it goes. [Since one side effect of the tablet is intermittent gas -- perhaps any puppy dosed with Bravecto, and out on a walk near Mr. Hassan, ought to aim its hind-parts in Mr. Hassan's general direction!] Seriously, well done, again, all of you at MSD Animal Health!

Monday, December 16, 2013

Yet ANOTHER "ENHANCE Non-Disclosure" Federal Securities Suit Gets Underway In NJDC


"Fast Fred" Hassan's "gifts" just keep on giving, at the holidays, even six years later, it seems. It would appear that several, and perhaps dozens, of the largest pension fund, and investment company, holders of what was legacy Schering-Plough timely "opted out" of the global settlement of the securities class action related to the ENHANCE delayed disclosures. Because they can afford to pay their lawyers (perhaps even by the hour, as opposed to on a contingent fee basis) -- now that the principle has been established, that Merck has some financial exposure here (even though the official settlements deny the same), holders like North Sound Capital (claiming through trades in around 1.57 million shares of legacy Schering-Plough), CFSIL ATF CMLA International Share Fund (an affiliate of Commonwealth Bank, claiming trades in around 500,000 shares) and the United Food Commercial Workers Local 1500 Pension Fund have teamed up to bring their claims against Merck, as the surviving renamed company that once was legacy Schering-Plough.

It would seem that these large holders don't much mind that Merck had exhausted its policy limits in settling this past summer, with those thousands and thousands of mostly smaller traders in the shares during the non-, and partial- disclosure periods, of ENHANCE vintage. Afterall, just because the insurance pool had earlier been tapped out, doesn't mean much when your target is a $47 billion a year in revenue multinational, throwing off ten or more billion in cash flow, each year. Of course some must go to dividends and research in progress, but make no mistake, Merck is very healthy from a financial perspective. So, on balance, I'd predict that these big holders have made a winning bet.

Here's a link to the list of "opt-out" institutional holders, and their holdings -- along with a PDF of the massive 175 page complaint at law (1 Mb download -- don't use cellular bandwidth -- use wi fi!).

I'll bet that they will recover more from Merck (on a per share traded basis), than if they had simply ridden along with the crowd, and accepted the NJDC Case Nos. 08-397 and 08-2177 global settlements. Here's a bit, from the complaint:

[Complaint:]

. . . .Schering’s numerous disclosures during the Relevant Period were materially false and misleading when made because they failed to disclose the adverse results of ENHANCE, which contradicted the Company’s repeated assertions that the “science” was favoring Zetia and Vytorin, and which were plainly material to investors such as Plaintiffs, as Schering repeatedly recognized in its SEC filings and other public statements. . . .:]

[Senator Charles Grassley's June 8, 2008 letter -- during a Congessional investigation of the ENHANCE delayed disclosures:]

. . . .A heart patient deserves to know if his medicine lowers cholesterol but doesn't change his cardiovascular condition. The decision to take a particular drug is personal, and people have the right to the whole picture.

Drug makers and drug developers violate the public interest when they work to muzzle the scientific process and fight disclosure of newly emerging information about various pharmaceuticals in order to drive up their sales and profits. Everyone wants new life-enhancing and life-saving therapies. . . . [P]atients and others deserve to have information in order to weigh the risks, benefits and unknowns for themselves. . . .





United States Senator
Ranking Member,
Committee on Finance


We shall see whether this turns out to be a winning investment -- legal fees now, for a larger recovery (per share), later. And of course, we will keep you apprised. In fact, I'm popping the popcorn. Should be entertaining to see Fred Hassan have to give even more depositions "about what he DIDN'T know, and when he didn't know it". Hardly.

Saturday, December 14, 2013

ALK-Abelló CEO Weighs In: Size Of Grastek® Bump Not Known-able, Yet


Just as we said yesterday -- it may be tough to get a premium price here.

From Reuters, overnight:

. . . .The potential for Grastek, an oral allergy drug made by Denmark's ALK Abello and American partner Merck, will depend on the product's label and price in tihe United States, chief executive Jens Bager told Reuters on Friday. . . .


It may be material to ALK-Abelló -- but not to Merck.

Friday, December 13, 2013

Merck's GRASTEK® (Sublingual Timothy Grass Allergy Pill): Favorably-Reviewed By FDA Advisory Panel Yesterday


Merck posseses, by license, the North American rights to a new ragweed-antigen based daily oral drug candidate developed by ALK-Abelló. It has shown moderately positive results, at least as compared to a placebo, in a Phase III trial. The companies propose to sell it under the brand name Grastek®.

Yesterday, a non-binding vote by the FDA Advisory Committee, after reviewing that study, and other data submitted by Whitehouse Station and ALK-Abelló, recommended that the full FDA approve the homeopathic candidate for sale in the United States. That could come within six weeks now. Here's the PharmaTimes story (courtesy a kind anonymous commenter who alerted us to the development) -- and here is a bit of Merck's presser of last night, once the panel voted (and here's my prior backgrounder):

. . . .GRASTEK (Timothy grass pollen allergen extract) is the proposed trade name for the company’s investigational sublingual tablet for the treatment of Timothy grass induced allergic rhinitis, with or without conjunctivitis, in appropriate adult and pediatric patients who are candidates for immunotherapy.

“We are pleased with the positive discussion of GRASTEK at today's advisory committee meeting,” said Dr. Sean Curtis, vice president, Respiratory and Immunology, Merck Research Laboratories. “We believe GRASTEK has the potential to be an important new oral therapeutic option for allergy specialists and their patients who continue to suffer with Timothy grass pollen induced allergic rhinitis, and we look forward to continuing to work with the FDA as the agency completes its review of our biologics license application for GRASTEK.”

The FDA is not bound by the Committee’s guidance, but takes its advice into consideration when reviewing investigational medicines. Merck anticipates the FDA’s review of GRASTEK to be completed in the first half of 2014.

GRASTEK is designed to help treat the underlying cause of allergic rhinitis by generating an immune response to help protect patients against Timothy grass pollen.

Merck has partnered with ALK-Abello to develop its investigational sublingual allergy immunotherapy tablets for Timothy grass pollen, ragweed pollen and house dust mite induced allergic rhinitis in North America. . . .


This is good so far as it goes -- but the field is already deeply-crowded, and this sublingual pill doesn't likely offer the opportunity to premium price (with some strong barrier to entry), since other similar homeopathics are on-market, in the US. True enough, only Merck will be able to make health claims, in its TV advertising for the pill -- but I don't foresee more than $300 million in peak annual sales. Nice, but it is thus only one third of a blockbuster, and immaterial to the overall enterprise.

Thursday, December 12, 2013

Merck Alum Dr. Peter Kim To Join Stanford Med School Faculty Effective February 1, 2014


Just keeping track for the folks at home, here -- this is his alma mater, after all.

Sounds like a great fit for his skill-set, too. Here's the story, out of San Francisco -- do go read it all:

. . . .Kim, 55, who earned his Ph.D. in biochemistry from Stanford in 1985, will also be a member of the new Stanford Institute of Chemical Biology after he joins the school Feb. 1, 2014.

The institute is a joint venture of the School of Medicine, School of Engineering and School of Humanities & Sciences that will look at the chemical foundations of biomedical science. . . .


We wish him all the best. I think he will prove himself to be all we've come to expect of Merck scientists, in the New Millennium.

Wednesday, December 11, 2013

"The Son Of Sunscreens' Patent Battle Royale": L'Oreal Resists "Trial Bifurcation" Efforts -- Of Merck And J&J


Here's my older background, from January 2012 -- since I haven't mentioned this in almost two years:

I don't know whether to file this story under the law of "unintended consequences," or "collateral damage" -- but apparently, back when the three year-long sunscreen Lanham Act Battle Royale (between Neutrogena®, a J&J brand, and Coppertone®, a legacy Schering-Plough/Merck brand) was in high dungeon, an ex-Schering-Plough (now Merck) scientist, one Dr. Patricia Agin, submitted a sworn declaration, as part of Coppertone's case. I believe she was also deposed by the Neutrogena lawyers.

In her rather effusive declaration (quoted at the top of page 4 of the complaint), she explained that the process for stabilizing Coppertone sunscreen in ultraviolet radiation conditions (i.e., out in the sun) "is not, and was never patented by, exclusive to, or invented by, or created by Neutrogena. . . ."

True enough. It actually turns out that L'Oreal owns that patent.

L'Oreal owns a process patent (the weaker vareity of patent rights). L'Oreal's patent lawyers allege that neither Coppertone, nor Neutrogena have a valid patent license from L'Oreal, on it. Ouch.

L’Oreal now ALSO claims it has patent on the composition of matter (the stronger form of patent rights) -- i.e., a mixture of compounds that help stabilize its sunscreen. That mixture appears in so-called avobenzone sunscreens and uses the compound octocrylene. Merck and J&J both use those compositions of matter in the base of their products (just go read the labels on your sunscreens, now shelved in your closets, for the winter!). Uh-Ohs!

So. . . just a few weeks ago, now -- as discovery is progressing -- both Merck's subsidiary, MSDCC, and J&J made motions to bifurcate the trials. In essence, both of the alleged infringers are asking the judge to hold one trial on whether there is any infringement, and then hold a separate trial on what the damages ought to be (if infringement is found, in the first). Merck is concerned that because the disputes now cover over 120 sunscreen product formulations, the base of which contain the claimed L'Oreal patented compositions of matter, and methods patents, any jury will unduly punish Merck if the infringement is found to be willful.

As of the moment, L'Oreal's reasoning (resisting the Merck motion to bifurcate) on this point is under seal. But a redacted version of the J&J L'Oreal answer brief is now online, and public -- at the Delaware federal District courthouse. In J&J's version, it seems clear that Dr. Agin's effusive statement is being used to bolster L'Oreal's claim that the infringement was willful, since 2005. See below.


Yep -- we will keep you slathered in thick white gunk on this, no doubt! But the general rule under American law is that all civil trials ought to decide all issues in dispute, in one trial, so as not to overly tax the court system. We shall see. I love these sorts of "Titans' battles"!

Tuesday, December 10, 2013

Merck's MK-8931 (A β-Amyloid Inhibitor) Candiate For Alzheimer's Clears Another Early Hurdle


First, the caveats: in June of 2013, we reported on Lilly's β-amyloid inhibitor drug candidate -- LY-2886721 -- as Lilly stopped its studies for Alzheimer’s, due to a safety signal in the livers of study participants. [Baxter had earlier seen a similar (but not one-for-one) flame out.]

Given this morning's announcement, though, it would seem likely tht a class-wide side effect will not be seen in the livers of patients on the Merck candidate, MK-8931. That this BACE inhibitor is not showing the emergence of a class-wide effect is very good news for Mr. Frazier. Now, it is time to complete the small study, and move on to much larger trials.

And so, this candidate is still perhaps about four years from being on market in the United States, even if all goes as planned from this point forward. I am aware that my timeline is a little longer than Whitehouse Station's. But I suspect that there will be (as there invariably are) one or two hiccups along the way. Here is Merck's press release -- and a snippet, from it:

. . . .[Whitehouse Station] provided an update on the development program for MK-8931, a novel investigational oral β-amyloid precursor protein site-cleaving enzyme (BACE) inhibitor. The Data Monitoring Committee (DMC) for the Phase II/III “EPOCH” study in patients with mild to moderate Alzheimer's disease recently completed its planned interim safety analysis and recommended that the trial continue to recruit patients, with no changes to the protocol.

The DMC recommendation was made following a planned analysis of interim safety data that included a safety cohort of 200 patients treated with MK-8931 for at least 3 months. Based upon the DMC’s recommendations, Merck will continue enrollment of the EPOCH study. In addition, Merck will initiate dosing in a new Phase III study (APECS study) evaluating MK-8931 in patients with amnestic mild cognitive impairment due to Alzheimer's disease, also known as prodromal Alzheimer’s disease.

“We are pleased to receive the DMC’s recommendation and look forward to continuing the clinical development program for MK-8931,” said Dr. David Michelson, vice president, Neuroscience, Merck Research Laboratories. “Studies to evaluate potential new treatment options are critical as the global health and financial burden of Alzheimer’s disease grows. . . .”


Yes, this is decidely good news. We will keep an eye on this -- as it could be very a very important Merck product launch, come late 2018, or so.

Bloomberg's "Unlikeliest" RUMOR Mill -- Novartis Might Swap: Trade Its Animal Health, For Merck's Consumer Health Biz


First -- this is clearly almost nothing more than idle rumor-mongering.

Why? First of all, because such a straight asset swap raises immense (perhaps insurmountable) antitrust concerns, globally. The rumor posits that Novartis would directly swap its relatively weaker market position in Animal Health, to Merck, where Merck is likely second most dominant -- behind only the Pfizer-spinoff called Zoetis. In return for helping make Merck dominant in Animal Health -- the rumor runs -- Merck would gift Novartis the Coppertone brands, and perhaps all the rest of its Consumer Health assets (the largest chunk of which is legacy Schering-Plough), thus increasing the chances that Novartis could dominate the over-the-counter health care business markets, globally. Uh-huh. "Roger, that."

So, steering the supposed swaps-deal, through US and EU antitrust authorities alone (forgetting Australia and Japan for a moment) -- might require several years worth of structured transactions -- divestitures and joint ventures, with third parties -- to ensure meaningful and vibrant competition would emerge from the end of the swap pipe.

Yep. I think we can safely say this is one of the least credible rumors about Novartis's Animal Health businesses we have yet read. Doesn't mean some wild-eyed young MBA at an i-bank didn't suggest the deal (off the record, of course!) was possible -- to some Bloomberg reporter. . . it just means the reporter needs a little. . . perspective -- before reporting it.

Okay. Need some perspective? Do recall that the Merial Sanofi Animal Health JV series of deals of 2009 to 2010 vintage ultimately foundered on antitrust concerns. In any event, here is the Bloomberg item -- do go read it all, for entertainment value, at least:

. . . .Trading the [Novartis Animal Health] business to Merck or another company is one of several options that Basel, Switzerland-based Novartis is weighing, said the people, who asked not to be identified because the process is private. Novartis has little use for additional cash and may choose to swap the veterinary unit for an asset that would bolster the company in an area in which it is already a leader, the people said.

Merck’s over-the-counter drug business, which includes brands such as Coppertone sunblock and Claritin allergy relief medicine, is attractive to Novartis, the people said. It is not clear whether Merck would be open to such an exchange, the people said. . . .


The notion that (now twice in under four years!) Whitehouse Station would chew through several dozens of millions of dollars (in bankers' and legal fees) to structure and arrange such a convoluted series of deals, only to crater it all -- when it can't clear comepetition authorities' reviews, even remotely intact, is not obvious, to me. Of course, we will watch this, just the same. In fact, I'll pop the popcorn!

Monday, December 9, 2013

[U] $27.7 Million Agreement In Principle To Settle Fosamax® Federal ONJ Claims -- Well. That Was Quick!


UPDATED: 12.09.13 @ 6 PM EST -- This deal is relatively tiny: it only covers the ONJ claimants, and it requires 100 per cent participation by all ONJ claimants, prior to the end of March of 2014, in order to become binding. Most of all, it is for a grand total of $27.7 million. Like I said -- tiny. Now there will be no SEC Form 8-K -- it is decidedly immaterial to $47 billion a year Merck.

The federal 06-1789 MDL has apparently settled (UPDATED: ONJ claims only; no femur, or other, fractures are included in the deal), just this morning. Even if all ONJ claimants signify that they will "opt in" by March 31, 2014, Whitehouse Station may still avoid the deal altogether -- anytime prior to May 15, 2014. This is not really a large, grand bargain, at all. It is very modest, and leaves as many as 4,115 Fosamax® femur claims entirely unaddressed.More soon. So much for a big Christmas deal.

Per Reuters, just now:

. . . .Tim O'Brien, a lawyer at Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor who represents Fosamax plaintiffs, confirmed in an email that the parties had agreed to a "global settlement process. . . ."


I'd expect an SEC Form 8-K in the morning from Merck. We will continue to cover any additional resolution -- and material talks aimed at the same, here.

The Federal Fosamax® MDL Settlement Conference Has Concluded, As Of Noon EDT Today. . .


One can never be certain about these things, but it is encouraging (for both sides, actually).

Merck would perhaps resolve a potentially material uncertainty -- and the plaintiffs would see a payout, much, much sooner than winding through all those trials.

. . . .Minute Entry for proceedings held before Judge John F. Keenan: Settlement Conference held on 12/9/2013. . . .


We will keep an eye on the settlement talks.