Friday, January 31, 2014

Reuters Is "Resurfacing, And Retreading" The Rumor Pieces -- About Merck's AH & OTC Businesses


And just as I said in December 2013, and more forcefully early this month, any Novartis swap deal is listed as a low-probability.

However, Reuters pins that low probability on complexities of valuation. That is simply silly. In every deal -- of any size, the central question is. . . you guessed it: valuation. Said another way, the valuation problem is no more complex in a swap -- than in a levered sale (both sides need to argue until they agree -- or until the bankers say they won't finance it -- on those proffered terms). And yet, Reuters suggests an outright sale gets around the valuation "problem". Silly.

No, what that tells me, by inference, is that bankers for Novartis (and significantly less probably, for Merck) are being. . . coy with the background/off- the-record comments for the story. . . They can safely say it is "complexities" -- but they dare not say it is antitrust driven complexity. So they say "valuation complexity" -- and the largely feckless reporter laps it up, and repeats it -- verbatim, in the final copy. There will be far fewer likely predators circling, if a real antitrust concern is surfaced -- that I've seen, over and over again.

In any event, here is the Reuters story -- with my truth-enhancing edits, inserted -- but do go read it all, as originally written, of course -- to see what I mean:

. . . .Among a range of options it has considered for the consumer unit, Merck discussed a potential asset swap with Novartis AG (NOVN.VX), under which Merck would give up its consumer assets in return for the Swiss drugmaker's animal health and other units, Reuters and others previously reported.

The probability of carrying out such a deal, however, is currently seen as low. . . [Ed. Insert: due to complexity of shedding assets, to satisfy the antitrust laws, and thus] prompting Merck to explore an outright sale of its consumer unit as well, people familiar with the matter said. . . .


So it goes -- and I'll repeat my conjecture from this morning that there is not likely to be any announcement of any major deal, next Wednesday.

Now, please root along, to let my Denver team win on Sunday. Bring on the high altitude good ju ju! [And, on that topic, I think it was Bill Maur who wryly noted that this year's big game features the only combination possible, like this -- of two teams with lawful cannabis, state-wide (and it's actually on-topic, because this is. . . a drugs blog, of sorts!). . . . Should be a very mellow affair, then. And I hear there will be lots of chips and salsa, available, post game, in both locker rooms.]

Condor's "Best Guess-timates®" -- For Next Wednesday Morning Full Year 2013 Non-GAAP Earnings Per Share



I usually make predictions right about at this point in the public company year end reporting cycle -- and this year is no exception. However, I've decided to brand my predictions in 2014, as "Condor's Best Guess-timates®". Heh.

UPDATED @ 2 PM EST: After doing just a little more thinking, and looking at/digging into the Q4 2013 releases of J&J, Abbott and of course Pfizer -- I am increasingly convinced that Merck could come in just a little light at the sales line, in Q4 2013. My initial guess was $11.36 billion (before foreign exchange effects); now I am thinking closer to $11.25 billion, or about $100 million short, at the Q4 2013 sales line. On perhaps $47 billion for the year 2013, that may seem smallish. True enough -- but I do think sales revenue -- more on margin, than on volume/mix -- is contracting a bit, with increasingly constrained payers, across the globe. And we see the first few months of Medicaid expansion in these Q4 figures, which should push volumes up, but margins down.

Now we wait. [END, UPDATED Portion]

I'll add to this, significantly, later today -- but the graphic at right conveys my top line thoughts, at the moment.

I do not expect any "transactional" Animal Health announcement.

In a very similar vein, I do not expect any Consumer Health announcement.

So, stay tuned -- more granularity, some time after the lunch hour. In the mean time, let's keep the Universe spinning in good karma.

Thursday, January 30, 2014

Merck Joins NIH And IOM In Ending Chimp Testing


Pete Loftus writing for The Wall Street Journal has the story -- now that there are many other ways to get essentially the same safety data -- before testing in humans -- it is beyond high time that this practice of doing research on chimps end.

Last June, reacting to an Institute of Medicine study Congress had requested that concluded nearly all chimp research is unnecessary, the NIH announced it would retire and send about 90 percent of government-owned research chimps to the Chimp Haven sanctuary in Keithville, La. It's now home to about 160 chimps, with nearly 60 more to arrive soon. That's a nice start. Pete as ever handles it deftly, here -- do go read it all:

. . . .Ms. Conlee said chimps have cognitive and emotional abilities that can make them vulnerable to post-traumatic stress disorder when used in lab settings. She also said many have been warehoused as newer, alternative methodologies were developed. She estimated about 850 chimps are in labs in the U.S.

The IOM also said newer technologies have brought alternatives to using chimps, including genetically modified mice and computer simulations. Merck didn't specify which alternative methodologies it would use in lieu of chimps.

The U.S. Food and Drug Administration generally requires animal testing for proposed new drugs to measure things such as how much of a drug is absorbed into blood, but has said it supports efforts to reduce unnecessary animal testing.

The National Institutes of Health said last year it would significantly reduce the use of chimps in research and "retire" most of the chimps it owns or supports. Retired chimps were to be sent to wildlife sanctuaries.

Merck has made limited use of testing drugs in chimps, the spokeswoman said. . . .


Yes, this is an encouraging development -- on several fronts. [Pfizer agreed to take the same steps.] Sleep well -- one and all.

Jones Lang LaSalle Tapped To Sell 1.5 Million Square Feet (Former HQ & R&D Space) In Summit, NJ


Well. . . here is the blog's prior backgrounder, from the Fall of 2013.

And as we learn of another 440 legacy Organon people let go tonight in Oss (Netherlands), on the continent -- we reflect on just how hard the world has been on pharma's rank and file employees -- these past seven years.

From an Anon. commenter (much below -- just offered, in a June 2013 post): . . .Another blow for the MSD site in Oss. Today 440 employees of the Development Center were told they will lose their jobs. So much for the R&D activities of what once was the most innovative pharma company in the Netherlands. . . . Truly sad.

To a person, honest, hard working, brilliant, devoted people -- with families and lives -- now forever altered.

Let's just get it over with, then: here's the news item -- from NJBiz.com:
. . . .As part of its effort, the firm [Jones Lang LaSalle] said it will focus on bringing another life science or research company to the 12-building, 88-acre campus on Morris Avenue. Daniel Loughlin, JLL's lead broker in New Jersey, said in a prepared statement that it's looking for a user "who can maximize existing investments made in the property, (including) move-in ready research, innovation and commercialization space."

The site has effectively been on the selling block since last fall when Merck said it would consolidate its operations and move its global headquarters to its Kenilworth campus from the Whitehouse Station section of Readington. The decision came after the pharmaceutical giant first said it would move its headquarters to Summit, but changed course. . . .


Be kind to one another. Unless the other is a. . . troll, of course. Heh.

Merck (And IBM): First Two Multinationals To Receive International Trade Group Privacy Certification


Opening note: As irony would have it, this small bit of news came out overnight -- just as I've started having a bit of an issue with comment trolls. And not the commercial, "buy viagra online" kind. No, these are personal ones -- and I supsect they relate to my "street-law style" self-help justice post, about IsisTheScientist. And so, for a little bit now, all my comments will be moderated.

They will not be tampered with; nor will they be visible to others. I'll see them all -- and you may still make entirely anonymous comments. They just won't become visible -- until I've reviewed them. The goal is to eliminate a chance publishing of libelous and false content, here. And there has been some of that, in the last few evenings -- coincidentally, right around the lunch hour in London. So it goes. Been there. Done this dance before -- got the tee shirt. My sincere apologies to the faithful readership here, as a few bridge trolls occasionally impact everyones' enjoyment. We will be rid of them soon enough, though.

Now, where was I? Oh. Right. Back to our story, then. I'd normally not even mention it, but it seemed the timing was prodigious, given the above. Merck should be celebrated here -- for taking the lead, and getting certified -- on privacy issues. Even so, I should remind readers that Merck's "nascent technologies" investing arm, presently doing business as Merck Capital Ventures, owns a significant stake in a company that is harvesting doctors' prescribing data -- in near real time -- off their PDAs, smart phones, laptops and tablets. It has held the stake since early 2011.

Okay. Here is that typo riddled story from Lexology (seriously, do go read it all), put together by a pair of Winston & Strawn lawyers. That's surprising. But the substance of it is useful -- if not earth-shattering, just the same:

. . . .Merck & Co. Inc. (Merck) became the first health-care company and the second multinational company (after IBM) whose privacy program become [note: tense error in origial] certified under the Asia-Pacific Economic Cooperation (APEC) Cross Border Privacy Rules (CBPR) system.

Merck obtained this certification for its privacy program by developing voluntary and enforceable codes of conduct. Its privacy program is designed around the following key elements: transparency, respecting choices, understanding perspectives, security and treating Merck stakeholders with respect and in a manner consistent with the company’s values.

Overall, the APEC CBPR System is considered to be a self-regulatory initiative designed to protect the privacy of consumer data flowing between the United States and other APEC Member Economies, through voluntary and enforceable codes of conduct on cross-border privacy procedures adopted by participating businesses. . . .


Tip of the fedora to Dr. Gee. Welcome to the bigs, junior.

Wednesday, January 29, 2014

Aurobindo Efavirenz/Sustiva® Hatch Waxman Patent Suit Settled; Is It A "Pay For Delay" Deal?


Back in September 2013, we mentioned this patent suit involving BMS/Merck's Sustiva® HIV drug, known as efavirenz, in its generic form. [Mylan's efavirenz version, I believe, is already on market in the EU, if memory serves. But it seems that almost four year old patent suit is still pending; I'll look into that, another day -- as time permits.] In the Aurobindo case, here in the US, the parties had agreed in principle to settle the suit as early as December 27, 2013 -- (before the court-imposed, but extended, deadline to file a formal answer to the Hatch-Waxman patent complaint -- which answer-at-law would have given others a virtual roadmap to the path/ability to sell the generic efavirenz here in the US, BTW!). . . and, now, as of a few nights ago -- the three parties have finally settled all claims and counterclaims between them. [I was waiting for the final order -- to discuss the below, hoping we'd get some actual terms disclosed. . . oh well.]

And so, the interesting question (apparently held in confidence by the settlement agreement) is whether this is a so-called "pay for delay" deal.

Unless this deal turns out to be material -- in the SEC's parlance -- to Merck (or BMS) -- in each case, not likely to be true -- we are not likely to ever know whether Aurobindo has agreed to delay (in return for a large payment from BMS/Merck) its launch of a generic efavirenz -- into or beyond 2017. At least not until that 2017 date comes and goes.

And so -- my object lesson here -- to most classically-schooled antitrust lawyers, that sort of an arrangement smells quite a bit like some Sherman Act §1, and Clayton Act §7 problems.

And as we have repeatedly noted, the feds are starting to aggressively make that claim -- at the FTC. Just search "pay for delay" as a term on this site's little box, upper left.

So, do stay tuned. Has the FTC asked to see the settlement agreement, unredacted? It plainly has the jurisdiction to do so. I'll pop the popcorn, here.

Tuesday, January 28, 2014

This Evening, Merck's Sublingual Ragweed Treatment, MK-3641, Earned A 6-2 Nod, From FDA Advisory Panel


As ever, the committee's vote does not bind the full Commission, but this was just about as, erh. . . sunny an outcome as Whitehouse Station could have hoped for -- from this particular panel, for some standardized allergen extract, short ragweed (Ambrosia artemisiifolia), which "melts in your mouth" [heh!] -- and is proposed to be branded as Ragwitek®. The biologic candidate is not likely to crack the $500 million a year mark (a half blockbuster), in my opinion, but if approved, it will definitely be a nice franchise, just the same. [UPDATED, for an alternate one-liner -- per my witty commenters below: ". . .is not likely to crack the $500 million a year mark (a half blockbuster), but that's nothing to sneeze at, either!" Heh!]

Go read all about the to and fro at the committee, over at MedScape online -- but here's an interesting bit:

. . . .The FDA accepted the biologic license application (BLA) for Ragwitek in May 2013. Merck's BLA included data from 5 clinical studies in adults aged up to 85 years. The committee vote was partially split, however, because the 2 phase 3 efficacy studies involved only persons aged up to 50 years, and not people aged 50 to 65 years, for which approval has been requested. . . .

With 9 members of the advisory committee voting, 6 voted yes that the data provided evidence of efficacy, 2 voted no, and 1 abstained. Those 3 members, however, agreed that if the language of the question they were asked to vote on had been restricted to people aged up to 50 years, they would have voted yes. . . .


So -- in about six weeks, it ought to get a final full FDA green light. The likely only open question -- at this point -- is whether the full FDA will aprove it through age 65 -- or just through age 50 (for which there are solid data points).

Pfizer Saw Curency Headwinds Of 3% In Q4; 2% For The Full Year 2013


Merck is highly likely to see just about the same. [Note that I first made the graphic at right in April 2013 -- for Q2 2013 -- and things improved a bit here in the back half of the year, as the dollar weakened a bit, against the Yen and euro.]

I'd expect the fourth quarter sales revenue at Merck, as reported, to be trimmed by something like 2.5 per cent. For the full year of 2013, with a slight improvement shown during Q4, 2013 -- like 2.5 to 3 per cent (full year 2014, give or take). Even so, that's about $1 billion -- vanishing into thin air. More than just notion, that.

Here is a bit -- from the morning's Pfizer press release:
. . . .Reported revenues decreased $3.1 billion, or 6%, which reflects an operational decline of $1.9 billion, or 4%, and the unfavorable impact of foreign exchange of $1.2 billion, or 2%. . . .


Now we wait for February 5, 2014 -- before the NYSE opens that morning -- to see how Merck's year has ended. [Remember here that Pfizer is about a quarter again, larger/bulkier, than Merck, at the annual global sales line.]

But they each operate in almost completely overlapping geographies (overall, 122 countries -- but essentially driven by all the developed world's health care consumption decisions), and in nearly identical proportions inside those geographies. So this Pfizer currencies results data is a pretty accurate "canary in the coal mine," in my estimation. They each hedge to the extent economical and feasible, as well. Nice symmetry, there.

Monday, January 27, 2014

Okay. So, Where Did Merck's Political Action Committee Send All Its Money -- In 2013?


Need something warm, cozy and. . . romantic. . . to curl up with, and read, all about -- on this frigid night for the bulk of the nation?

Well, have I got just the thing for you!

If you click this link, you will be able to see the full html file of Merck's 2013 FEC LD-203 Form. It was filed about two hours ago, now, by Whitehouse Station.

That LD-203 lists, by name and dollar amount donated, every political campaign to which the Merck Empoyees' PAC donated money, last year. The full legal name of the filing entity is the "Merck & Co., Inc., Employees Political Action Committee". Enjoy!

To be clear, this LD-203 is sort of the converse of the lobbyist spending (on Form LD-2), I detailed here, and later updated, here. And here's an educated guess at what the rate of return has been, on that $50 million spent, just over the last five years (hint: it was astronomical). [Still, don't get your knickers in a twist about it, just yet. There will be a more complete, and detailed analysis in the next few days -- right here -- about the positions taken by the representatives listed as receiving money, on the just-filed LD-203.]

We will be up early here, tomorrow, scouring the Pfizer 2013 year end earnings release and call -- for hints about Merck's overall 2013 trendlines -- come abut a week from now. Stay warm!

Morgan Stanley Moves Merck's 12 Month Target Up to $60; Rates "Overweight" -- Was "Underweight"


More of the -- I believe -- largely ill-considered reliance here. . . on some sort of bad event, allegedly brewing, at BMS -- and its nivolumab program. David Risinger, writing for Morgan Stanley (apparently believing that something bad, at BMS, is a one-for-one positive, for Merck) does cite one or two other catalysts, to be sure -- to explain the morning's nearly-diametric change in sentiment here.

But the crux of it is that he thinks the bulk of the perhaps $12 to $14 billion a year in peak annual sales (come 2018 to 2020) for a robustly effective anti-PD-1 oncology candidate -- across a wide array of cancers -- might go to Merck.

I don't see it that way -- and more directly, he is virtually alone in this view, on Wall Street. Most others still see the vast bulk of that anti-PD-1 candidate money flowing to Bristol Myers Squibb, and nivolumab. Remember that the most likely combo therapy arena is a franchise BMS controls. Remember also that it could take Merck a year or two to get its data to a point where FDA is comfortable approving MK-3475 for anything other than a melanoma indication. BMS is much further down the path to having good data in several other cancers.

Either (or both) could yet flame out -- but I'd be surprised if the temporary weakness in BMS's stock price lasts beyond the current swoon. BMS has just always been very conservative -- about making concrete drug candidate predictions -- at this stage. So their stock suffers a bit. So it goes.

Candidly, given what I know about Mr. Risinger, I will also be surprised if David is right -- and everyone else is wrong.

But I guess it could all shake out that way -- everything could align perfectly -- for Whitehouse Station. It is my experience that these are never one-for-one tradeoffs. And we will learn so much more at ASCO in late May. . . that (I think) will be the time to make bigger bets -- based on actual data. Not some "maybe. . . ifs". That's my $0.03 (with inflation!).

Mark Timney Leaves His Merck US Post -- To Become CEO of Purdue Pharmaceuticals LP


Merck loses some more executive level talent -- with deep payer navigation experience -- here in the US. Mark also led a team that delivered the launch of boceprevir (for Hep C) into US markets. To be fair, his path looks wider at Purdue than it did, at mother Merck.

And Purdue, the generic company perhaps best known for Rush Limbaugh's (allegedly former) recreational chemical of choice, OxyContin® -- gains a deeply experienced leader, in its new President and CEO. John H. Stewart, the current Purdue CEO, is now retiring. Here's a bit -- do go read it all at Pharmaceutical Processing:

. . . .Purdue Pharma L.P. today announced that the company's Board of Directors has appointed Mark Timney as President and Chief Executive Officer.

"We found a proven leader in Mark Timney," said Dr. Raymond Sackler, co-founder and board member of Purdue. "I am confident that his capabilities and experience, coupled with Purdue's culture of excellence, will grow our business and strengthen our healthcare industry leadership." Mark brings more than 20 years of pharmaceutical sales and marketing experience to Purdue, including success in designing and executing strategies to achieve market leadership. Prior to joining Purdue, he was President of Merck US, where he managed Sales & Marketing, Managed Markets, and Payers. With Mark's guidance, Purdue will continue advancing breakthrough research and development initiatives and pioneering new commercial models.

"I'm honored to begin this new journey at Purdue Pharma, the industry leader in developing innovative medicines to relieve the burden of pain," said Mark Timney. . . .


So it goes, but this is the guy most responsible for integrating the Aza-Site® othamalogy product lines when Merck acquired Inspire; and now that that those rights have been sold off (at a bargain-basement valuation) -- to Akorn, Inc. -- it makes sense that he has chosen to move on with his career, as well.

When World-Wide No. 1 Pfizer Reports On Tuesday Morning, We Will Garner "Kentucky Windage" -- About Merck


Whenever Pfizer reports its annual results earlier on the calendar than Whitehouse Station, as is our usual practice, we tend to "go to school" -- on Pfizer's disclosures, to garner inferences about what might also emerge at Merck, on the morning of February 5, 2014. [Then we. . . um, write about it.]

This year Pfizer reports on the approaching Tuesday morning, a bit before NYSE market open -- so we will let the readership know what we see (especially on currenies). So, do stop by on Tuesday, at some point.

Now, being keenly aware that reading year end financial press releases may be dreadfully boring to many, I thought I'd toss a fun bonus in here:

Compiled from this great web-post at The Toast, here is a bit of a primer -- on how to tell if you are in a Bronte novel(!). Do go read it all -- but here is a bit:

. . . .Your grandest ambition is to open a small school with four chairs and three well-behaved students, and to someday own a vase with a flower in it, and perhaps to have a second dress. . . .

You take that part about the second dress back; you dare not fly so close to the sun, lest Icarus-like, your wings are singed. . . .

Someone compares you to a sparrow. . . . Someone compares the man you secretly love to a hawk or a crow. . . .

You have an enemy who claims to love you. . . . You are competent at embroidering, but not accomplished. . . .

You draw horrifying shipwrecks and lightning-ruined oak trees in your spare time. You have never danced, not even once, not even in your dreams. . . .


Then you -- my dear readers -- are in. . . the Bronte ZONE. . . Bump Bah Baaaaaah! Do go read the rest! More serious fare tomorrow. Or perhaps not.

Sunday, January 26, 2014

Way O/T -- "Artifacts From Last Night" -- Slow News Sunday For Merck Dept.


I do this very infrequently (wander this far off-topic), but I found the all vinyl Malcolm X portrait -- composed entirely of carefully-shattered LP bits -- so intriguing, I just had to drop it in, here for your edification. Do "biggify" it (by clicking):


For those under 30, these things (vinyl LPs) were what used to be CDs. And MP3s are. . . what we used to call CDs. Sort of. Anyhoo -- Stay warm; be good -- have big fun.


Saturday, January 25, 2014

O/T: "Dr. Isis" may have been "naked for a day" -- but Henry Gee ought to be "naked for eternity. Let us all eviscerate him -- in prose."

"Every pimple; every wart, every flaw -- eviscerate him in prose. . . ."

Yes, let his physical and emotional shortcomings be preserved in the 'sphere -- for eternity.1 In November, IsisTheScientist -- with grace, wit and aplomb -- took Nature to task for what may fairly be called a sexism-themed piece of attempted humor. A senior editor of that journal -- Dr. Henry Gee -- chose to respond by attempting to intimidate her -- and "outing" her identity.

Here's a bit of Isis -- in a grace-filled reply to Gee's troll-craft:

. . . .A couple days ago Henry Gee tweeted what he believes to be my real life identity. To address the elephant in the room, if such things are important to you, he was correct in his identification of me. . . .

Henry Gee’s actions were meant to intimidate me into silence. . . .

To think that the editor of a journal would respond to criticism of his professional conduct regarding the fair treatment of women by attempting to personally injure and damage. . . .

I speak only for myself and I have no personal feelings about Henry. My only concern has been in his conduct as an editor of a journal that very publicly represents my profession. When Henry Gee said, in reference to my self-professed boycott of Nature (until they get their act together regarding the treatment of women), “Nature boycotted by [an] inconsequential sports physio… Nature quakes in its boots”, he spoke as a high level representative of that publication, making a statement as to how that publication regards me.

That someone would engage a personal vendetta and conflate it with how I should expect to be treated by an allegedly peer-reviewed publication gives me more pause than having my name displayed publicly. And, it should serve as a gentle reminder of the possible outcome women face when they speak up about misogyny and sexism in their field. Retaliation can be a real bitch. . . .


[And here's a bit of another similarly-offensive incident, in scientific circles -- just to give you the sense that the Isis incident is no outlier.]

UPDATED: 9 AM EST -- I am given to understand that Dr. Gee has apologized engaged in victim blaming. A good start -- as has Nature itself. The blogger(s) at NicoleandMaggie -- Grumpy Rumblings of the (Formerly!) Untenured point out that I have misspoken. They are right. I relied on reports of others (my bad!), about the apologies. My (entirely honest) mistake.

In Gee's case, his apology consists largely of "she had it comin'" rhetoric. In Nature's case, Gee's anonymity is preserved -- just dripping with irony -- and his actions are characterized as a personal dispute. He very publicly (used to) tweet from his perch at Nature. I say used to, because he has -- as all cowardly trolls might -- deleted his twitter account.

For my laziness in the wee hours this morning, I apologize. I'll also link to Grumpy's recommended reading, on the topic. That letter is wise, measured and rings true. And so now -- have at him, one and all.

I now strongly feel commentary about his lack of appeal to the eye may be a fair bit of Chaucerian justice. So -- do feel free, in comments -- or shucks, just email him directly, at his desk -- at Nature.

~~~~~~~~~~~~~~~~~~~~

1. A probably apocryphal Geoffrey Caucer nod -- from very near the opening of a fun movie -- "A Knight's Tale".

"wachemshe hao hao kwangu mtapoa. . ."

Friday, January 24, 2014

Some Additional (Late-Breaking) Bits Of Lobby-Spend At Merck: Forbes-Tate, Capitol Counsel And Mehlman Vogel

So -- add another $107,500 to the 2013 lobby spending total at Merck (due to additional filings) -- that makes it more like $11.38 million on the year. Again -- a record.

Perhaps the more interesting development (more so than the rather waifish additional dollars spent) in these later-filed fourth quarter 2013 Senate Form LD-2 reports is the new/not previously disclosed items in the list of matters on which Merck deployed the lobbyists. Take a look:

. . . .[Mehlman Vogel Castaganetti:]

▲ Budget issues, including Medicare Part D rebates and reductions in Medicare Part D low income subsidies.

▲ Discussions and possible legislation amending Title XVIII, Part D (Medicare Part D) of SSA. . . .

▲ Amendments including issues of "non-interference clause" and Medicare Advantage.

▲ Independent Payment Advisory Board.

▲ Medicare and Entitlement Reform.

▲ Low income subsidy co-pays.

▲ H.R. 1407, Annual Drug User Fee Agreements of 2013.

▲ Trade promotion authority; trade with India. . . .

[Forbes-Tate:] 
 
▲ Issues relating to trade negotiations; PNTR with Russia.

▲ Issues related to pharmaceutical drug safety track and trace program legislation.

▲ Issues related to comparative effectiveness, issues related to the Independent Payment Advisory Board. . . .


As ever, we will keep you up to date.

Bristol Myers Squibb Year End Conference Call Confirms Status Of Nivolumab: We Will Learn More At ASCO


I'll pop in on lunch-hour, just to briefly update the readership, on the state of the race between MK-3475 and Nivolumab, the BMS oncology candidate -- to reach US markets perhaps later this year.

I listened to a replay of the BMS year end earnings call, and in Q&A with management, and Dr. Tim Anderson (Sanford Bernstein), Jami Rubin (Goldman Sachs), Seamus Fernandez (Leerink Swann) and Mark Schoenebaum (at ISI), no matter how the questions were asked -- the answers were consistent and unchanged. BMS remains very encouraged by its candidate, across a very broad array of cancers. In short, there is nothing to Mr. Schoenebaum's now-definitively unfounded conjecture -- that the Checkmate 012 study might have turned up anything worrisome. In the future something might turn up -- to be sure -- but as far as anyone knows, nothing has. [The only people who might know more (independent clinicians/academicians actually overseeing the safety and efficacy parameters of the studies) are blinded to the company, for obvious reasons.]

That said, we will all have to wait to see the full nivolumab study results here at ASCO in Chicago, over Memorial Day Weekend 2014. If that data rolls out as expected, a submission to FDA for approval might occur almost immediately thereafter. Then my much bally-hooed dead-heat race is really on. It seems very unlikely that Whitehouse Station would have a completed FDA filing package in, before late June 2014. So the two are very likely within six months of one another, on either side.

Of course, BMS was careful, and generally taciturn on the call, as this nivolumab news -- whatever shading might occur, as to the disclosures, here on a call -- would be material to BMS, and in some ways, possibly also material -- to Merck. So the repeated mantra was that BMS is very encouraged, and is spending lots -- starting new studies in several other cancers. . . renal/kidney, hematological and lung. But they have very nearly reached the finish line with melanoma -- just like mother Merck.

I'll likely pop in on ASCO in downtown Chicago this Spring, but the likely next "big date" on this horserace will be Merck's year end earnings conference call in a few weeks, on the morning of February 5, 2014 -- to see if the same cast of questioners can tease additional color out of Ken Frazier and crew, on MK-3475 -- and its lung cancer study. Okay -- stay warm and be excellent to one another, this weekend.

New York Federal Court Orders Confirm What I Guessed At Last Week: On Fosamax® MDL


Last Thursday, I speculated that -- based on a largely favorable meeting of the plaintiffs' lawyers committee, down in Atlanta -- the ONJ actions would be settled -- and there would thus be no remand.

Overnight, the eminently capable Judge John F. Keenan, sitting in Manhattan, entered an order confirming what I had guessed. Good progress is being made, indeed, on ONJ cases.

However, the reason I write this morning -- is to note the use of a plural form noun, in the order. Seems odd that I'd highlight/pick at the grammar here, right? But Judge Keenan is extremely careful and able -- and when he writes that the "actions" (plural) "in this litigation" are making good progress toward settlement, it made me think. And yes, a goofy animated little lightbulb popped on, over my Irish noggin.

Is it possible that there are discussions -- well-developed, and advanced discussions -- to settle all the Fosamax® claims? Technically, the MDL covers far more than just ONJ claims. So "actions" may well have a broader meaning than just ONJ actions. We shall see.

. . . .The parties have advised the Court that they are continuing to make progress toward settling the actions in this litigation. Accordingly, the Court's Remand order of August 29, 2013 is hereby stayed to allow that progress to continue. The parties are directed to update the Court on a monthly basis regarding the status of the settlement process.

So Ordered.

(Signed by Judge John F. Keenan on 1/21/2014). . . .


In any event, there will be no spate of district by district federal trials, around the nation, now -- at least not as to the osteonecrosis of the jaw Fosamax claims. We will keep you informed.

Thursday, January 23, 2014

Nivolumab Vs. MK-3475 -- U.S. Gate Timing Is. . . Everything, Now.


As irony would have it, just about an hour or so after I wrote my latest, at least suggesting that the Merck v. BMS "race to clear the FDA's approval gates" was essentially a dead heat now (< +- 6 months). . .

. . .Up pops a Wall Street analyst (at ISI), suggesting that nivolumab (the BMS version) might have hit some snags. I think that is a particularly unfounded guess, on ISI's part. But the sheer breathlessness of it all will help IBD to sell more papers (and ads, online). Here's a bit -- but this first bit is plainly some bird cage liner worthy "analysis":

. . . .The existence of the new trial, however, could mean the data from the nivolumab/Yervoy combo has problems, according to ISI Group analyst Mark Schoenebaum.

"One possibility is that this is not good news, that the data from Checkmate 012 indicate the combo of the two drugs is not sufficiently effective or is excessively toxic in NSCLC," he wrote in an email to clients. "Another possibility is that by starting the new phase-three trial BMY is instead being strategic, perhaps knowing that optimizing the dose for the combo may take time and/or not wanting to put its lead position in NSCLC at risk with others studying their PD1/PDL1 antibody specifically in PDL1+ patients."

The new study adds a further complication to the PD-1 saga, which took a surprising turn last week when Merck (MRK) said it would begin the submission process for its own anti-PD-1 for melanoma, even though Bristol-Myers was generally expected to file first. . . .


As I say, that first paragraph of analysis seems rather overwrought. It is far more likely (in my experienced view) that BMS wants to begin now, to get the actual data to fine tune dosages -- and doesn't mind spending a big chunk of cash to do so (using a new Phase III study -- with an "almost guaranteed" mega blockbuster status, for nivolumab). This would all be aimed at shortening the at least six month burn-in/uptake process with US oncologists, as it flies out of the FDA gating area. But that goofy ISI spin above will sell papers for Investors' Business Daily, no doubt. We will keep you posted.

FDA Oncology Approvals: Why BMS So Ardently Wants Nivolumab To Beat MK-3475 -- By MORE Than Six Months


I've been meaning to post on this for two solid weeks now -- and just haven't found the free thoughtful ten minutes' worth of time. As long as I have a moment over my coffee -- here goes -- even if only half baked(!). (I also finally got around to making a graphic for what will be a series of Condor's predictions/prognostications posts, in various pharmaceutical and bioscience arenas.)

I still think BMS will be on market first (i.e., clear FDA), with nivolumab (my recent backgrounder here) -- the promising Anti-PD-1 cancer candidate -- here in the US. I am just no longer convinced that it will have a six month or more lead, over Merck's MK-3475.

And, since oncologists take a bit to ramp up, a new drug needs more than a six month lead, alone in a given new market, to firmly establish itself as the leader, among the prescribers. Of course, even a later arriving candidate will trump all, if it shows orders of magnitude more efficiacy. But at the moment, BMS and Merck look to be pretty close to parity on clinical trial efficacy and safety.

So -- having the US to oneself for six months or more would be decisive for BMS. (Of course, the same can be said of Merck -- and MK-3475, should it, less probably, garner a six month lead.) We shall see, but MK-3475 is at FDA on a rolling submission now, so they may break from the gate -- at essentially the same moment. And by that, I mean within six months of one another. That will make for a very interesting "off-label" horse race, in other cancers, if both are only initially-approved for melanoma. Now do go read Medicynic, from last summer -- to understand that this is no cure -- from either company.
. . . .This is not a cure but there is clear progress evident with this new drug. Whether this will be sustained remissions with a significant survival benefit, as appears likely, remains to be fully proven.

Medicynical Note: The cost of this new agent will be interesting to track. An unaffordable drug has the same impact as the sound generated by a tree falling in the woods. . . .


More background here -- but I think he is (mostly) wrong on the price notion -- in a good portion of the fully-insured US patient base, at least, as to cancer -- price becomes secondary to significant survival benefits even for the now constrained payers. So -- it should be a fascinating roll-out period, mid-2014. For both companies. How highly will the battling duo be priced, once launched -- at either company? As ever, we shall see.

Wednesday, January 22, 2014

New Header Reminds Us That Ed Is Around. . .


Not primarily about Merck, but my long time buddie Ed Silverman has a nice FDA quality of evidence piece up -- in Forbes, overnight.

Do go read it all. Do it now, if you like Ed's contribution to balance in the journalism we read about life sciences here in the US.

And be assured -- Ed is irrepressible -- he will fully return under his own nameplate, or another's, soon.

Until then, stay warm; and be kind to one another.

Tuesday, January 21, 2014

India Report: Renewed Intellectual Property "Compulsory License" Processes Afoot -- Januvia® and Isentress® Presently Being "Evaluated"


We have talked at length about this issue before (additional background here). And we are awaiting a written opinion, and a formal decision, from the Indian court system, on the Glenmark v. Merck Januvia® patent fight.

To be fair, the debate centers on whether there are some novel medications that -- under India's view of humane social policy -- are so beneficial to her citizenry (and, generally, so far out of reach, financially -- to the average Indian), that a formal government apparatus may/will be invoked, to make the drug available at nearly 95 per cent off of its Western world retail selling price. That is what is meant by "compulsory licensing," in India. Merck has been recently lobbying Congress about this issue, back here, as well. A loss on both drugs, Isentress® especially, might actually turn out to be material to the financial results of consolidated Merck, world-wide.

Here is a bit -- but do go read it all through a Bloomberg newsfeed, this afternoon:

. . . .Among the therapies the committee is preparing to study or had an early look at are. . . diabetes drugs, [including]. . . Merck’s sitagliptin medication, Januvia. . . [and] Merck’s HIV drug raltegravir, sold under the brand name Isentress. . . according to the people.

The panel is also considering other drugs and it still isn’t clear which ones will be shortlisted, the people said.

Patents provide Merck with the incentive to assume the risks associated with drug discovery, the Whitehouse Station, New Jersey-based company said in an e-mailed response to questions. “We encourage the government of India to reassure investors that India respects and values innovation and the protection of intellectual property. . . .”


To be completely fair, this will affect many multinational pharma concerns, with novel life saving therapies on-market in India.

Even so, last quarter, Merck made it clear that India would no longer be among its top five emerging markets' intiatives, primarily based on the uncertainty around this issue. Now we wait to see what the government-appointed panel in India recommends, as to Isentress (a very expensive, but life-saving, HIV/AIDS med), and Januvia (a very potent diabetes medication -- also priced well beyond the reach of an ordinary Indian wage earner). This is a complex moral and legal question. We will keep you apprised.

Monday, January 20, 2014

O/T -- A Bit Of Quiet, Contemplative PBS.Org (Via YouTube) Watching -- For King Day 2014


I am virtually certain that most of the readership is well-acquainted with the PBS series "Eyes On The Prize".

However, if this is new to you -- I'll start you at Episode Two -- since it (I feel) most closely aligns with the secular aspects of today's national holiday -- more precisely, Dr. King's secular role -- in the reforming of the history of our nation.

Do watch all the episodes (follow the links at the end of this episode, or watch it directly at PBS or YouTube). And please -- be of some (even smallish) service to someone -- anyone -- friend, or friend you've not yet met -- today. Namaste.

Sunday, January 19, 2014

Of At Least A Decade Past -- And Legacy Organon's Small Role In The Current "Low-T" Consumer Marketing Battle


As we prepare for a very quiet 2014 Rev. Dr. Martin Luther King Day holiday, in our offices tomorrow, I thought I'd offer a vacation-style piece -- easy, breezy reading, in case Monday turns out to be a slow Merck news day. So, here goes. . . .

Natasha Singer (originally writing for The Gray Lady, but here reprinted regionally, over the weekend) wrote a very nice long form piece late this past week -- on the controversy surrounding the marketing of so-called "LowT" (or low testosterone) treatments -- primarily for Baby-Boomer era men. [I don't believe any Merck affiliated entity still sells a prescription low testosterone male product. I am sure the readership will remind me if Organon still does. UPDATED -- 01.20.2014 7 AM EST: A thoughtful and well-informed commenter reports that MSD still sells Sustanon®, a legacy Organon/Schering-Plough hormone product -- in a few goegraphies, outside the US. Plainly, Merck still sells other hormone-based products, for women, like the birth control hormone implant called NuvaRing®.]

Organon had a small role in "birthing" the current non-branded LowT marketing approach, so I'll mention it. Do go read it all -- as Natasha is a very-gifted writer:

. . . .More than a decade ago, a Dutch pharmaceutical company, Organon BioSciences, asked Morley to devise a screening questionnaire for symptoms common to older men with low testosterone. The way Morley recalls the drugmaker's instructions, "they said, 'Don't make it too long and make it somewhat sexy.'"

In return, he says, Organon gave $40,000 to his university for research into the effects of testosterone on muscle. Along the way, Morley's quiz acquired an official name: the Androgen Deficiency in Aging Males (or ADAM) test. . . .

The test has. . . become controversial. Most of the questions invoke symptoms that are so general that they could apply to many men who are clinically depressed or simply having a bad day — or even to women, says Dr. Adriane J. Fugh-Berman, an associate professor at Georgetown University Medical Center in Washington.

"There are tests that everyone will fail — that is the idea," says Fugh-Berman, who directs PharmedOut, a Georgetown project that educates doctors about drug marketing claims. "'Do you feel tired after dinner?' Depends how long after dinner. We all do eventually. It's called sleep. . . ."


Hah! I'll likely not make much more of this -- but do go read the article. Natasha is a very accomplished med-issues journalist (and Adriane is as smart as a whip). Good reading on a cold clear Sunday morning, over your hot coffee, fresh orange juice, and flaky croissants.

Saturday, January 18, 2014

As Obamacare Goes Increasingly Fully "LIVE" -- An Assessment Of Pharma's Lobbying Spend ROI (2003 to 2013)


Two caveats -- the graphic underlay at right was derived from a non-profit policy group that also was in favor of the ACA of 2010, or Obamacare, if you prefer. Second, if one annualizes the reported 77,500 per cent return, over the would-be ten year "investment" horizon, the return on investment is really "only" 7,750 per cent, per year. Still -- that's IMMENSELY better than Tesla Motors, this past summer -- and/or Apple (to find a more comparable time investment horizon), put together -- times ten. A very great investment, that.

So -- even as Merck closes in on $50 million spent on lobbyists over just the last five years, it is plain that big pharma generally -- and Merck specifically -- will not see the same lofty ROIs in the coming five years.

Why? Because the $90 billion that drives the gargantuan ROI is actually slowly being contributed back, by pharma -- as it moves forward in closing the donut hole, and it had agreed to foot the bill (or a large part of the bill), on various other health care reform measures, in the Obamacare rollout/implementation (2011-2014).

And again, that will be increasingly good news, for the American health care (and drug) consumer. So -- eye-popping figures, to be sure -- but past results in this case, almost certainly will not be a predictor of future performance (on the ROI scale, for Merck, here). From the site of the original underlay graphic then, circa late 2012 (so, it is a bit dated):

. . . .But as long as we have a political system that bends to the whims of Big Money, the best ROI you can get is to [hire] a lobbyist. . . .


It is likely true that Big Oil and Big Business generally, will be able to bend the law, to favor their wishes -- for. . . essentially ever, here in the US. And pharma will be no exception -- it just is unlikely to be the leader of the pack, in the next five years. If nothing else, with federal and state run exchanges and other quasi-governmental payers taking a driver seat, pharma's branded drug margins are definitively going to shrink. And that would be true -- even if generics were not entering the fray. And they are -- in a steady, silent, marching army -- out there, in the snow. . . they are marching into your town, your village -- your pharmacy, right now.

And well. . . the snow is piling up in drifts, yet again -- but the wind chills make it a balmy plus 7, so it is time to go shovel (again). . . in the meantime, be excellent to one another.

At $11.265 Million, Merck's Lobbying Spend Eclipses All-Time Annual High


[Updated: Now $11.38 million.] Back in October, I guessed that Mother Merck would break her post New Millennium high, for annual lobbyists' spending. She has done so, with gusto. Almost all the fourth quarter LD-2 forms are online now, and while Merck (as it usually does) spent less in the fourth quarter of 2013 than it did in the early part of the year, it still spent more than $11 million overall. The rate of increase, year over year, is moderating a bit -- so that is good news (this is the shareholders' money, afterall). Below are the major buckets of expense, with my editorial comments after, in brackets.
. . .▲ Playing Fair on Trade and Innovation Act (HR 3167) [that's the India patent rights row, for Merck, largely about Januvia®, and the sitagliptin phosphate polymorphs]. . . .

▲ Additives in beef cattle (no specific bill) [that's the Zilmax® US/Canada markets withdrawal spat!]. . . .

Patent settlements (no specific bill) [that's the pay to delay controversy, with allegedly collusive generic/branded deals]. . . .

▲ 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) [that's the repatriation of the perhaps $20 billion Merck still has in allegely permanently off-shore earnings, for which it has been lobbying to garner a tax holiday -- and return the cash to the US -- at very, very low rates]. . . .

▲ Tax base erosion (no specific bill) [Note that here Merck lobbies to keep healthy tax bases (keep other taxpayers "roped in"), in all the cities and municipalities where it has facilities -- and note that the US tax policies on foreign income (immediately prior bullet) work directly against that -- by giving Merck incentives to seek tax subsidies on foreign generated income]. IRONIC.

▲ 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). . . .

▲ Sequestration of FDA user fees (S. 1413, H.R.2775) [That kept FDA approval process open during the 16 days of October 2013 (a/k/a the Tea Partiers' shutdown).]
So now you know. And as I've mentioned before (with $20 billion in foreign cash tied up off-shore), Merck spends nearly ten times what Apple spends on lobbying, each year. But Apple (as of mid-2013) has $160 billion similarly tied up offshoe. Interesting, no?
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It is late, and so. . . Some times, a picture is worth a thousand words.

But I'll be back with a few hundred tomorrow, anyway.