Monday, June 30, 2014

Merck Executive VP (For MMD) Nets $4.2 Million -- Via His Rule 10b5-1 Trading Plan's Option Sales (Cashless)

Mr. Deese is a long tenured high ranking executive officer at Merck -- and we should infer almost nothing from his pre-arranged stock trading plan's actions -- about Merck's prospects.

Still, taking $4.2 million out of one's invested total (in Merck) -- while leaving what is essentially the other half -- or, another $5 million or so. . . may signal preparations for a future retirement party. Or it may mean. . . nothing.

But here is his filing, just the same.

Be kind to one another.

With BMS's Nivolumab Right Behind It, Merck Has Filed MK-3475 (Pembrolizumab) With The EMA: On Melanoma


Well, the Anti PD-1 ultra-marathon race is starting to get very interesting -- on the EU regulatory approvals front.

I still think BMS will see approval very shortly after Merck, in melanoma -- but Merck may have a month or two lead on BMS in Europe -- and maybe a little more, here in the US, at least on a melanoma indication. From PharmiWeb, then:

. . . .[Merck] today announced the European Medicines Agency (EMA) has accepted for review a Marketing Authorization Application (MAA) for pembrolizumab (MK-3475) the company’s investigational anti-PD-1 antibody for the treatment of advanced melanoma. If approved by the European Commission (EC) pembrolizumab has the potential to be the first anti-PD-1 therapy in Europe. Additional regulatory filings in other countries outside of Europe are planned by the end of 2014. . . .


Do stay tuned (this will be a multi-faceted, multi-indication ultra marathon, run in at least six stages) -- and we will dip in and out during the shortened week, here. Have a safe and restful holiday week, one and all. Be excellent to one another.

Hart-Scott Waiting Period Now Won't Expire Until July 18, 2014 -- On The Idenix Deal -- Still Closing Q3 2014


In what has become a very common US large-cap M&A accomodation practice -- Merck has agreed to "unfile, and immediately refile" its Hart Scott Rodino notice, at the FTC/DoJ Antitrust window.

This is done to give the able but harried federal folks more time to review the deal. The relevant HSR waiting period is a 15 CALENDAR day rule, not a business day rule -- and so, having a major three day holiday in the middle of such a high-profile deal. . . is daunting for the understaffed and overworked Antitrust division folk. Accordingly, in a show of camaraderie and statesmanship -- Merck "unfiled" late last week (but to take effect July 2, 2014). That will restart the time-clock, when Whitehouse Station's legal team officially refiles this coming Thursday, July 3, 2014. From the latest meaningful tender offer amending file -- at the SEC EDGAR window, then:

. . . .Under the HSR Act, our purchase of Shares in the Offer may not be completed until the expiration of a 15 calendar day waiting period following the filing by Parent, on behalf of Purchaser, of a Premerger Notification and Report Form concerning the Offer with the FTC and the Antitrust Division of the U.S. Department of Justice, unless the waiting period is earlier terminated by the FTC and the Antitrust Division. Each of Parent and Idenix filed on June 18, 2014 a Premerger Notification and Report Form with the FTC and the Antitrust Division in connection with the purchase of Shares in the Offer. Accordingly, the required waiting period with respect to the Offer was set to expire at 11:59 p.m., Eastern time, on July 3, 2014, unless earlier terminated by the FTC and the Antitrust Division.

By notice to the FTC, Parent withdrew its HSR filing effective as of July 2, 2014 and stated its intention to refile its HSR filing on July 3, 2014. Parent took this procedural step to provide the FTC additional time to review the Offer and the Merger. As a result of the withdrawal and refiling by Parent, the waiting period applicable to the purchase of Shares in the Offer is expected to expire at 11:59 p.m., Eastern time, on July 18, 2014, unless earlier terminated by the FTC and the Antitrust Division or unless the FTC or the Antitrust Division issues a request for additional information and documentary material (which we refer to as a “Second Request”) prior to that time. If within the 15 calendar day waiting period either the FTC or the Antitrust Division issues a Second Request, the waiting period with respect to the Offer would be extended until 10 calendar days following the date of substantial compliance by Parent with that request, unless the FTC or the Antitrust Division terminates the additional waiting period before its expiration. After the expiration of the 10 calendar day waiting period, the waiting period could be extended only by court order or with the consent of Parent. In practice, complying with a Second Request can take a significant period of time. Although Idenix is required to file a Premerger Notification and Report Form with the FTC and the Antitrust Division in connection with the Offer, neither Idenix’s failure to file such Premerger Notification and Report Form nor a Second Request issued to Idenix from the FTC or the Antitrust Division will extend the waiting period with respect to the purchase of Shares in the Offer. The Merger will not require an additional filing under the HSR Act if Purchaser owns more than 50% of the outstanding Shares at the time of the Merger or if the Merger occurs within one year after the HSR Act waiting period applicable to the Offer expires or is terminated. The FTC and the Antitrust Division will review the legality under the U.S. federal antitrust laws of Purchaser’s proposed acquisition of Idenix. At any time before or after Purchaser’s acceptance for payment of Shares pursuant to the Offer, if the Antitrust Division or the FTC believes that the Offer would violate the U.S. federal antitrust laws by substantially lessening competition in any line of commerce affecting U.S. consumers, the FTC and the Antitrust Division have the authority to challenge the transaction by seeking a federal court order enjoining the transaction or, if Shares have already been acquired, requiring disposition of such Shares, or the divestiture of substantial assets of Parent, Purchaser, Idenix, or any of their respective subsidiaries or affiliates or requiring other conduct relief. . . . .


Subsequently, Merck mentioned (in an SEC filed amendment, as the rules require) the filing of a goofy (likely losing) putative class action suit in the Massachusetts Commonwealth courts, claiming essentially that Idenix sold itself too cheaply, to Merck. R-i-i-i-i-i-i-ght.

Friday, June 27, 2014

A $100 Million Funding -- Of The NuvaRing® Federal Litigation Settlement -- Draws Nigh


The very able federal District Court Judge Rodney W. Sippel, sitting in Missouri's Eastern Disctrict, has entered what are the nearly complete set of orders -- to establish the $100 million settlement funding, for this MDL. [Prior coverage, or at least some of mine, here, and here. But use the search box, upper left, for "NuvaRing®" -- to see the whole history, incuding patent litigation related to the line.]

As the below excerpt indicates, the plaintiffs' lawyers will share about $11 million in legal fees, and another $4.5 million will be allocated to pay expenses other than straight legal fees -- court reporters, copiers, medical experts and the like. And these counsel will have well-earned all of it. A great result for the plaintiffs -- and it resolves uncertainty in a fairly economical manner for Whitehouse Station. So it goes -- I'd guess someting like mid-September for requests for payment/claims notices to be in the mail -- to the NuvaRing claimants.

. . . .August 13, 2014 [is] the deadline for Organon to deposit the Settlement Funds into a Qualified Settlement Fund. The Court enters the following orders with respect to the implementation of the MSA and related matters. . . .

1. Plaintiffs' Liaison Counsel, Kristine Kraft, by June 30, 2014 shall submit to the Court and Defendants a proposed order that will create a Qualified Settlement Fund, a proposed Fund Administrator, and a proposed financial institution to hold and invest the funds, as well as proposed prudent investments of the funds pursuant to section 6.02 of the MSA. . . .

2. Pursuant to Amended Case Management Order No.3 (Doc. 1129) 11 % of the Settlement Funds shall be placed into a Common Benefit Fees Account and 4.5% shall be placed into a Common Benefit Expense Account allocated separately from the balance of the fund for the Claimants. . . .


We will -- as ever -- keep the readership informed, as to expected timing for payouts to individual claimants -- in this, the NuvaRing products liability litigation settlement.

I'll be off-grid, traveling on biz, for most of the day -- so please -- do be very tender with one another.

Many hundreds of the Merck colleagues, and fellow team members, in your various primary care sales organizations were told their careers have ended, as of yesterday, and their managers heard much the same, this very morning. In some districts, only one remains -- where there were 15 just three years ago.

Rough -- but managed care dictates that doctors have less influence than they had in the past, to force the 'scrip to be a high-priced branded version. That's just reality -- and the benefit to consumers is forcing a correlatively vast dislocation in pharma detailing/sales. So, be kind to one another.

Thursday, June 26, 2014

I'll Not Endorse Anonymous Rumors Here. But You Should Probably Read CafePharma Today.


Apparently in some regions, more than half of the manager level sales team leads are ghosted, or reassigned out of their roles. This is the so called second (taller) wave of sales force cuts.

Apparently, in some of the front line sales pods, only one rep (of seven or eight) will remain, and lines will be combined. One version has it that Manhattan has been almost decimated.

Again, these are rumors, and anonymous sales folk posting at that. Maybe even competitors' sales folk. But the reorg is rolling out today, and the body count is being discussed. You know how to find it -- so I'll not link it. My meditations and genuine concern, for you, and your families, go with you all.

Diabetes Awareness Campaign -- Yes It Helps Sell Januvia® -- AND It Is. . . Good Medicine


Merck is re-launching its diabetes awareness campaign (via updated pressers) with award winning actress S. Epatha Merkerson -- and this is indeed a worthy endeavor.

Here's the stuff:

. . . .The America’s Diabetes Challenge program offers many resources, including tips to help people with type 2 diabetes reach their goals, tools to track their A1C goal, and questions they can ask their doctor. People with type 2 diabetes can access these resources and take the America’s Diabetes Challenge pledge to set and attain their own blood sugar goals by visiting www.AmericasDiabetesChallenge.com. . . .

After being diagnosed with type 2 diabetes in 2003, celebrated film, stage and television actress S. Epatha Merkerson got serious about her health. Now, she’s teaming up with Merck on America’s Diabetes Challenge: Get to Your Goals to urge people with type 2 diabetes to achieve better control of their blood sugar.

"I lost my father and grandmother to complications of type 2 diabetes," says Merkerson, "so I learned firsthand how important it is to know your A1C and make a commitment to getting to your goal. . . ."


The burden of Type II is vast, and accelerating, in the US. So I applaud the effort. That this helps to sell Januvia® (and other Merck meds) is of no moment -- it is the right thing to do.

Wednesday, June 25, 2014

With This Flawlessly-Designed Phase III Study Stoppage -- BMS Is Ready To Submit Nivolumab To FDA; Will It Do So In July?


As I said as ASCO wrapped up in the first few days of June -- BMS has positioned itself to take the best market share, overall -- in the class of anti-PD-1 receptor oncology candidates -- even if Merck receives a slightly-prior approval date in the melanoma indication.

That is so, because, frankly, the BMS studies were more thoughtfully designed (vis-a-vis Merck, and the others, in the space) -- with eventual approvability being the first goal. With a view toward speedy submissions (and approvals, at FDA and EMA) -- once efficacy became evident. It is now quite thoroughly evident. Smartly strategic, in clinical trial management and expenditures. That's a hallmark of the new BMS. So -- I still see nivolumab as garnering the bulk of the overall oncology market share here (for squamous-cell lung cancer, too). BMS is up 3 per cent on the NYSE.

Why? Because. . .

. . .overnight, we learned that BMS is the first to be able to show Phase III melanoma survivablity data worthy of FDA submission. I expect the company will submit nivolumab (as a complete FDA packet) very shortly. Here is Bloomberg on it:

. . . .Bristol-Myers Squibb Co. (BMY) said it stopped a late-stage study of a top experimental drug after skin cancer patients showed “superior overall survival” with the medicine compared with a group on chemotherapy alone.

Patients in the chemotherapy group were “unblinded” and allowed to take the experimental drug, called nivolumab, after an analysis by the trial’s independent data monitoring committee, Bristol-Myers said today in a statement. . . .

The study of patients whose skin cancer had spread “represents the first well-controlled, randomized Phase 3 trial of an investigational PD-1 checkpoint inhibitor to demonstrate an overall survival benefit,” Michael Giordano, head of the New York-based company’s oncology development, said in the statement. . . .


Merck may get there at about the same time, but BMS is now better positioned to pivot the data into FDA approvable letters for at least six other cancers. That represents a $35 billion to $40 billion market. We will keep an eye on it.

Separately -- the Australian deal Merck signed is only a guaranteed $20 million. So, I'll likely not cover it. Waifsh (even though some MSM outlets are reciting the larger, contingent on milestones' acheived figures).

Now, if you believe the boards at CafePharma -- the Merck US sales teams will learn which of their managers and team leads (and higher ups) are without jobs; and which regions are being consolidated and or eliminated, altogether -- come tomorrow by noon. So -- stay tuned for that. A slew of such individuals heard on Monday, that they has been let go -- the ones that do not have seats in the new regional structure, at Merck.

Tuesday, June 24, 2014

Merck Q2 2014 Earnings Call: July 29, 2014 Pre-NYSE Open


This is just a PSA -- we will tune in.



. . . .Merck will hold its second-quarter 2014 sales and earnings conference call with institutional investors and analysts at 8:00 a.m. EDT on Tuesday, July 29. During the call, company executives will provide an overview of Merck’s performance for the quarter. . . .




The Waning Days -- Of "Pay For Delay" In Branded "Buddied Up With" Generic Pharma -- Draw Nigh?


The US FTC is letting it be known that it has begun a novel 10 year post hoc look back (literature and data review, in point of fact) study -- involving most large patent settlements -- for anticompetitive effects. [2009 era backgrounder, here. And a more recent one, here.]

The FTC has seen its spinnaker sails filled with a fresh northerly gale, now that the Supremes have agreed that such settlements violate US antitrust law, if a substantial anticompetitive effect can be demonstrated. Here is a Bloomberg version of this widely circulating story, from yesterday:

. . . .The Federal Trade Commission has opened new investigations into agreements between generic and brand-name drugmakers that may lead the agency to sue for disgorgement of revenues, said Markus Meier, head of the agency’s health-care division. Companies under scrutiny include Forest Laboratories Inc. and Endo International Plc, according to regulatory filings this year.

Our goal is to bring an end to this practice by whatever means are available to us,” Meier said in an interview.

The agency says its enforcement efforts gained strength last June when the Supreme Court ruled antitrust law may bar deals in which brand-name drugmakers compensate generics producers for delaying sales of a particular medication. . . .

With its powers enhanced by the Supreme Court decision, the FTC opened new investigations, Meier said, declining to provide details of the probes. The agency also decided to look at patent settlements between branded and generic drug manufacturers over the past 10 years to see if they warrant a deeper probe for anticompetitive effects, he said. . . .


So, new Merck ought to be a little concerned that legacy Schering-Plough payments (aggregating into the high hundreds of millions of dollars) in such "settlements" -- like those made with Sun, Teva, Mylan and Lupin -- on drugs like Cozaar®, Claritin®, K-Dur®, Temodar® and Zetia®, among many others, may be at risk for a look back enforcement proceeding, in the relatively near future.

And certainly, all future such deals will face heightened FTC scrutiny. Bank on that -- the "by all means available" quote above indicates a rather aggressive level of zeal. By some 2010 estimates, US consumers might save $130 billion (yes, that's a "B") (in the aggregate) on their prescriptions, if all the delay payments were effectively outlawed.

Monday, June 23, 2014

SCOTUS, On Cheney's Halliburton-Era Federal Securities Fraud Class Action: "Fraud On The Market" Still Robustly Viable


This is a decision of note for all public companies, but especially so for companies with high "binary event" potentials: new drug/bio-science product approvals (or large clinical trial study failures); new phone-model adoptions (or flops), and/or new U.S. Defense Department contracts (or debarments) -- to name just a few. These sorts of companies may see wild price swings, based on one single piece of news -- good or bad. So PhRMA was watching this closely, as was Merck. It comes out as a limited loss for the pharma/biotech industry -- truth told. But only a limited loss.

Over the past 16 months, it was feared by some that the conservative wing would require every securities plaintiff to prove they relied on misstatements -- before a class could be certified. Instead, the Supremes have held only that defendants like Halliburton, Pfizer, Amgen, Baxter and yes Merck, may make a showing that the alleged misstatements did not materially affect stock prices -- in order to defeat the claims, prior to class certification. As ever, more soon -- but this is a wise majority opinion (a 47 page PDF file) from the Supremes:

. . . .For the same reasons the Court declines to overrule Basic’s presumption of reliance, it also declines to modify the prerequisites for invoking the presumption by requiring plaintiffs to prove “price im- pact” directly at the class certification stage. The Basic presumption incorporates two constituent presumptions: First, if a plaintiff shows that the defendant’s misrepresentation was public and material and that the stock traded in a generally efficient market, he is entitled to a presumption that the misrepresentation affected the stock price. Second, if the plaintiff also shows that he purchased the stock at the market price during the relevant period, he is entitled to a further presumption that he purchased the stock in reliance on the defend- ant’s misrepresentation. Requiring plaintiffs to prove price impact directly would take away the first constituent presumption. Halliburton’s argument for doing so is the same as its argument for overruling the Basic presumption altogether, and it meets the same fate. . . .

. . . .The Court agrees with Halliburton, however, that defendants must be afforded an opportunity to rebut the presumption of reliance before class certification with evidence of a lack of price impact. Defendants may already introduce such evidence at the merits stage to rebut the Basic presumption, as well as at the class certification stage to counter a plaintiff’s showing of market efficiency. Forbidding defendants to rely on the same evidence prior to class certification for the particular purpose of rebutting the presumption altogether makes no sense, and can readily lead to results that are inconsistent with Basic’s own logic. . . .


In my view, it must be said: Mr Cheney was -- and is -- a morally corrupt man. And, in the same set of emperors' robes -- Mr. Fred Hassan did cost the combined old Merck and legacy Schering-Plough over two-thirds of a billion dollars -- by "gilding the lilly" about the ENHANCE study. Now you know why this is here -- and, squarely on-topic for a life-science industry blog.

"Top Five" Officers' Succession At Whitehouse Station Now Almost Complete: GC To Retire By July 2015


A relatively "new hire" rises swiftly -- to be the General Counsel of Merck -- setting a clear tone about compliance and ethics expectations, top to bottom. [To be fair -- he was already the very able GC at HP -- brought in to bust up an allegedly illicit wiretapping of directors scheme -- by some of the ranking executive officers (including another lawyer -- who had been named CEO), there.]

And so, after a one year transition period, Michael J. Holston (originally added in 2012 to shore up the "new" Merck compliance & ethics functions) will be the chief legal officer of Merck. Here is the presser:

. . . .Holston joined Merck in 2012 as the company’s chief ethics and compliance officer. He was previously general counsel for Hewlett-Packard, where his responsibilities included legal, communications, government affairs and corporate responsibility, in addition to compliance, ethics and privacy matters. Prior to that, Holston was a partner in the law firm of Morgan, Lewis and Bockius, where he served as external counsel to Merck on a wide range of important matters, including product litigation, government investigations and compliance with healthcare laws and regulations. Earlier in his career, Holston was a prosecutor in the criminal division of the U.S. Attorney’s Office in Philadelphia and a partner in the law firm of Drinker Biddle & Reath, where he had a national litigation practice.

[Outgoing GC] Kuhlik joined Merck in 2005 as associate general counsel and played a major role in guiding the company’s VIOXX litigation as well as providing legal support to the U.S. Human Health Division. In 2007, he was appointed general counsel and assumed additional oversight of the communications and public policy functions, including the Merck Foundation. Before joining Merck, Kuhlik was general counsel of the Pharmaceutical Research and Manufacturers of America and a partner in the law firm of Covington and Burling, where he chaired the firm’s food and drug and healthcare practice groups. He also served as Assistant to the Solicitor General in the U.S. Department of Justice. . . .


With this, an entirely new guard is in place -- in the top five officer seats, under Chairman Frazier (come mid 2015). Now Mr. Frazier will likely really make his mark -- on his legacy at Whitehouse Station -- soon to be Kenilworth. We will be watching, with clear and unbiased eyes. I do strongly suspect Mr. Holston will in fact turn out to be a very solid leader, and improve the reputation of Merck's lawyers, worldwide, based on my experiences (in stark contrast to legacy Schering-Plough's "hack-at-it" team of lawyers).

Saturday, June 21, 2014

Proof: I Always Thought "Fast Fred" Was A Used Car Salesman -- But I Suppose That Insults Used Car Salesfolk


Not that all homeopathic remedies are without merit. Far from it. Some are as effective as FDA approved drugs, at a fraction of the cost. And there is good research suggesting that peppermint oils can calm upset stomachs. [But I'll flat out guarantee you there is no peer reviewed research of any kind -- showing that his delivery system here -- microbeaded capsules -- actually achieves any positive clinical outcomes, beyond that of a few pennies a dose, in the form of a drop or two of ordinary peppermint oil, on the tongue. If he had it -- he'd tout it, to the high heavens! Trust that.]

So, what is truly beyond the pale, here -- in my opinion -- is the price ($25 for 48 capsules!?!), and the pseudo-science in which "Fast Fred" drapes his latest "medical food" -- actually something more akin to a nutri-ceutical, if the truth be told. But FDA is taking a hard look at nutri-ceuticals, so Fast Fred is likely trying to "fly under the radar," here -- by calling it a food.

I might ask Fred "How many foods require that they be consumed ONLY under a doctor's close supervision?" Doesn't that contradict the idea of GRAS? How is that "generally recognized as safe"? An overdose of purified, concentrated menthol in the gut can lead to several serious adverse effects. No mention of those, on this slap-dash website.

As I say -- this is quite a come-down for Mr. Hassan -- yet, it does give us a very clear window, to where his head has always been: snagging the hucksters' fast buck -- then moving on, when the regulators show up. And show up, they will.

Note that he is listed (by a laughingly-inane asterisk) as the "non-executive" chairman of this joint. I am sure the others associated with this company, genuinely want to help patients. They have simply put their careers in the hands of the wrong "expert" here. Mark my words, Fred will slip away, saying he had no real responsibility for any regulatory matter, when the FDA shows up for a site visit. His openly making of a medical claim (without accompanying proof, of any kind) in the below YouTube "infomercial" (this is truly priceless -- so amateurish!) just gave FDA clear jurisdiction, trust that. [See it, at about 1:21 onward. . . in the video.] Fred is likely telling IBGard staffers that FDA has no right to come in and tell "us folks" what to do. He is just mistaken about that, in my experienced opinion. Here is his presser:

. . . .IBgard capsules contain individually enteric-coated sustained release microspheres of Ultramen™ an ultra-purified peppermint oil. A patented technology called Site Specific Targeting (SST™) developed by IM HealthScience is used to deliver these microspheres of peppermint oil quickly and reliably to the small intestine.

Peppermint oil is commonly used overseas in well regulated countries such as the United Kingdom. Its use in the United States however has been hampered by the lack of a delivery system that would more precisely deliver it to the small intestine until now.

The concept of IBgard is the brainchild of Fred Hassan founder and chairman* of IM HealthScience. The former CEO of three large global pharmaceutical companies including Schering-Plough Hassan has been associated with many important innovations in biosciences. . . .


The asterisk lists him as non-executive chairman. Hilarious. Okay -- it would be sad -- if it wasn't so funny. Fast Fred -- every bit the late night TV QVC pitchman, here (minus only the countdown clock -- "how many boxes are left, for sale Fred?"):



Sheesh -- you've been warned, America!

Friday, June 20, 2014

Merck Flirts With 52 Week NYSE Highs -- At $59 -- As It Commences Cash Tender For Idenix


The all cash, very friendly, fully-priced tender offer for Idenix kicked off officially with an SEC filing this morning.

And Merck's NYSE specialist firm sees no downside, apparently -- with the order book now regularly kissing numbers over $59 -- last seen as 52 week highs. That makes for a decidedly "Good News Friday" -- for Whitehouse Station.

. . . .Imperial Blue Corporation, a Delaware corporation (which we refer to as the “Purchaser”) and a wholly-owned subsidiary of Merck & Co., Inc., a New Jersey corporation (which we refer to as “Parent”), is offering to purchase for cash any (subject to the Minimum Condition, as described below) and all of the outstanding shares of common stock, par value $0.001 per share (which we refer to as the “Shares”), of Idenix Pharmaceuticals, Inc., a Delaware corporation (which we refer to as “Idenix”), at a price of $24.50 per Share (which we refer to as the “Offer Price”) in cash, net to the seller in cash, without interest, but subject to any required withholding of taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase (which we refer to as the “Offer to Purchase”) and in the related Letter of Transmittal (which we refer to as the “Letter of Transmittal” which, together with this Offer to Purchase and other related materials, as each may be amended or supplemented from time to time, constitutes and we refer to as the “Offer”). . . .


At triple-plus premiums to pre-deal announcement trading prices per share, this one will get done -- and done quickly. Also, look for it to clear Hart Scott easily, and early. Likely closing in Q3 2014.

Now do like I plan to do -- go out, and have an adventure (even if it's a smallish one!) this glorious summer Friday afternoon!

Thursday, June 19, 2014

Merck To Follow Lilly's Lead -- Create A Registry Of 20,000 Diabetes Patients (But Mostly Ones Likely To Take Januvia®)


The softest-touch at marketing is often the most effective, in long term disease states. And to be sure -- this is subtle. And smart. To be sure, much will be learned -- to advance science, as well.

With Lilly already seeing benefits from its program -- it makes sense that Merck would dive in, too. This is a perhaps $1 to $1.5 billion undertaking -- over the next decade. Here's a bit from the diabetes confab in California -- where Merck announced the plan, a few days ago now:

. . . .Comprising 20,000 patients sites across the US, German, France and Japan, Merck said the registry will collect data from 900 sites, such as diabetes clinics and health centres, to help provide real-world evidence to advance care in type 2 diabetes.

It follows a similar project announced earlier this year by Lilly, which is teaming up with the research organization T1D Exchange to build a registry for type 1 diabetes. . . .

Specific areas of interest include incidences of hypoglycaemia, blood sugar control, quality of life and adherence to medicines - a major issue in chronic diseases such as diabetes. . . .

[Merck's] Dr. Stein also explained why Merck chose the countries involved in the registry: “Feasibility is part of it certainly. It's interesting to have different practice settings too. These are regions where Januvia is commonly used and it gives us a good picture of the questions we want answered in those countries. . . .”


We will keep an eye on this -- but it is largely to drive penentration of Januvia® (sitigliptin) -- no doubt. And to prepare to transition these patients to Merck's next gen therapies, as they come online.

Wednesday, June 18, 2014

NuvaRing® Settlement Status Conference Set For 10 AM On July 25, 2014 In USDC -- In Kansas City, Missouri


This should mean the settlement is pretty much final.

The very able Judge Sippel denied a motion to intervene in the NuvaRing® litigation on June 13, 2014 -- and set this upcoming status hearing, for all counsel of record:

. . . .ORDER: IT IS HEREBY ORDERED that a status conference set in this matter is set on July 25, 2014 at 10:00 a.m. in Courtroom 16 South.

IT IS FURTHER ORDERED that Counsel who wish to monitor the status conference are directed to call the conference toll free at (800) XXX-XXXX. . . .


We will keep you posted -- but this is a very good sign.

Sofosbuvir Metabolites: Now, We Offer Merck's Side Of The Gilead Sovaldi® Patent Spat


As we have repeatedly indicated -- billions hang in the balance here. Sovaldi®, by Gilead, is largely a wonder cure for Hep C. But it costs $84,000 a patient. So, Merck. . . wants. . . some.

And Merck says the therapeutic effect of Sofosbuvir, in humans, comes solely via metabolite variants. And Merck's patents teach the methods of synthesizing those metabolites, it says. All methods patents (more on that, another day) -- and thus, this fight. Idenix (soon to be part of Merck) shared those patents with Whitehouse Station. Cozy. In any event, here is Merck's side of their claim (via PDF Answer and Counterclaims) to a running royalty on those billions:

. . . .[Merck and Idenix affiliates] are the owners of the ‘499 patent, entitled “Nucleoside Derivatives as Inhibitors of RNA-Dependent RNA Viral Polymerase,” which the United States Patent and Trademark Office duly and legally issued on September 12, 2006 to [a Merck affiliate's] predecessor in interest. . . .

[Merck and Idenix affiliates] are the owners of the ‘712 patent, entitled “Nucleoside Derivatives as Inhibitors of RNA-Dependent RNA Viral Polymerase,” which the United States Patent and Trademark Office duly and legally issued on July 9, 2013 to [Merck and Idenix affiliates]. . . .

Sofosbuvir is a pro-drug that, following administration to human subjects, is converted into a series of metabolites, including compounds designated as PSI-7411, PSI-7410 and PSI-7409 [Pharmasett and Gilead properties under patent]. . . .

The therapeutic benefit of sofosbuvir depends on its metabolism to PSI-7411, PSI-7410 and PSI-7409 following administration to human subjects. . . . The claims of the ’499 [and '712] patents encompass methods of treating HCV infection by administering sofosbuvir to a human patient. Upon commercialization of sofosbuvir, end users of sofosbuvir who administer the drug to HCV-infected human patients in the United States following FDA approval and prior to expiration of the ‘499 [and '712] patents or any additional patent exclusivity accorded thereto will directly infringe the ‘499 [and '712] patents. . . .

On information and belief, when it filed its Complaint in this action Gilead had knowledge that sofosbuvir, upon administration to human subjects, is converted into metabolites, including PSI-7411, PSI-7410 and PSI-7409, and that the therapeutic benefit of sofosbuvir depends on such conversion. . . .

Gilead will have knowledge of any ruling by this Court that human patients to whom sofosbuvir is administered in the United States in accordance with the directions in the product label will directly infringe the ‘712 patent. Gilead’s commercialization of sofosbuvir in the United States following such a ruling and prior to expiration of the ‘712 patent or any additional patent exclusivity accorded thereto will induce and contribute to infringement of the ‘712 patent. . . .

An actual controversy exists between Gilead and Counterclaimants concerning whether Gilead’s threatened commercial sale and offer for sale of sofosbuvir in the United States will induce or contribute to infringement of the ‘712 patent. . . .


Unless it settles, this will have a mid-2015 trial date in the Northern District of California's federal courts. We will follow it closely. Trust that. And we are talking very high stakes patent trolling here.

After Last Month's European Oncology Filing Withdrawal, Vintafolide Returned To Endocyte


No surprise -- after the disappointing cancer study (non-survival results) surfaced, last month.

Here is the bit from The Pharma Letter, overnight:

. . . .Shares of Endocyte. . . fell 19.7% to $6.20 in after-hours trading yesterday, after the company announced that it has regained the worldwide rights to vintafolide in all indications from US pharma giant Merck & Co. . . .

. . .Merck, through a subsidiary, has decided that it will no longer pursue development of vintafolide. Just last month, Merck and Endocyte withdrew their European marketing approval application for the drug, after an independent monitoring board said that the PROCEED trial with vintafolide in combination with pegylated liposomal doxorubicin (PLD) versus PLD alone did not meet the pre-specified criteria for progression-free survival in patients with platinum-resistant ovarian cancer to allow continuation of the study. . . .


So it goes -- Merck will likely actually save some money from here onward, now that it has sent $120 million in upfronts to Endocyte. At least it won't continue to chase the rabbit down a hole.

Tuesday, June 17, 2014

And. . . Just For General Background -- The Original 2013 Gilead Sovaldi® Patent Complaint


I'll not comment on Gilead's narrative below, in any more detail at this point. [Do remember Merck would tell a rather differing account. In fact it has. That post, tomorrow, time permitting.] Here it is -- a PDF file. [Recall that this suit was filed before Gilead had an FDA approved drug -- and that Gilead acquired these patent rights from Pharmasset.]

In general, just see my other posts about this next gen Hep C patent spat -- by searching the term "Idenix", here. From the PDF, then -- some background, according to Gilead:

. . . .Traditionally, chronic HCV infection has been treated with a combination of antiviral medicines—ribavirin, interferons, and, more recently, protease inhibitors. In addition to relatively limited efficacy, these available treatments have frequent and, at times, permanent side effects including flu-like symptoms, serious hemolytic anemia, worsening of cardiac disease, weight loss, skin rashes, hair loss, muscle or bone pain, diarrhea, and vomiting. Moreover, these treatments must be taken for prolonged periods—24 to 48 weeks—thereby exacerbating the physical and emotional toll on the infected individuals and their families, which can lead to patient discontinuation of treatment. While liver transplantation can be life-saving for HCV-infected individuals in end-stage liver disease, transplantation presents significant risks and is not a readily available option for patients due to donor shortages and potential organ rejection. Even when available, transplantation is costly and requires ongoing post-procedure care, and for HCVpositive transplant recipients, reinfection is almost universal.

Gilead has developed a new, orally administered prescription drug for treatment of chronic HCV infection called sofosbuvir that shortens HCV therapy to no more than 12 to 16 weeks. Invented by Pharmasset, sofosbuvir is a nucleotide analogue NS5B polymerase inhibitor for the treatment of chronic HCV infection. Ultimately, it combats the disease by suppressing the replication of viral RNA and directly interfering with the HCV life cycle.

Sofosbuvir is an all-oral treatment that sets a new standard of care for treating chronic HCV infection. Because of this, sofosbuvir [is] a revolution in hepatitis C treatment. . . . the Sofosbuvir NDA drug product. . . compete[s] against Merck’s Victrelis® product in the HCV market. . . .

On information and belief, during prosecution of the ’499 patent, Merck amended its pending claims in an attempt to cover compounds useful for treating HCV infection and/or methods of treating HCV infection that were the subject of pending Pharmasset patent applications so as to obtain patent rights to attempt to exclude Pharmasset from the market or extract royalty payments in relation to potential future Pharmasset products. . . .

On information and belief, during prosecution of the ’712 patent, Merck became aware of compounds in Pharmasset’s pipeline, including PSI-7977, that were experimental treatments for HCV infection. . . .

On information and belief, during prosecution of the ’712 patent, Merck amended its pending claims in an attempt to cover compounds related to PSI-7977 so as to obtain patent rights to attempt to exclude from the market or extract royalty payments for sofosbuvir. . . .


Word -- to Whitehouse Station: Keep calm. And. Carry on.

I will say that a running 10 per cent royalty on all Sovaldi® sales is a pretty. . . outsized. . . demand, on these facts.

Apparently, Almost All The Non-Participating Fosamax® ONJ Claimants Are. . . Non-Responsive


Small but continuing PSAs in a series here: if you think you are, or might be, an ONJ Fosamax® claimant who hasn't checked in on your case recently, do so. Do so now.

Your lawyer needs to hear from you, in order to comply with some conditional USDC orders issued in Manhattan. The lawyers need to know if you want to take the MDL settlement. . . or not. Here's a bit from last Friday's Memo of Law (PDF), in support of a conditional Lone Pine order, from Judge Keenan -- and he has granted that conditional order:

. . . .On information and belief and based on Merck’s attorneys conversations with the PSC and various Plaintiffs’ counsel, the majority of the roughly 5% of domestic cases where there has been no expressed desire to participate in the settlement involve situations where Plaintiffs have also not affirmatively indicated that they wish to pursue their cases. . . .

Merck has been informed that there are apparently a substantial number of cases where there has been non-existent or limited recent contact between Plaintiffs and their attorneys, or the attorneys designated to dismiss the cases. Consistent with that information, Merck has been informed of less than ten claimants who indicated affirmatively that they wish to turn down the settlement and pursue their cases.

Under these circumstances, a Lone Pine Order will at a minimum allow the parties to determine “what is what” with these remaining cases, will “ensure that the home districts receive only viable cases” . . .if some do need to be remanded, and will provide courts on remand with some basic information about these cases, too. . . .


So -- one way or another -- call your lawyer, if you are an ONJ claimant.

Monday, June 16, 2014

From The "NOT Likely To Prevail" Dept.: Any Claim That Merck Has "Undervalued" Idenix Shares -- At ~320 Per Cent Premiums


Okay -- this suit is just. . . silly. Let us start with the adage that such suits rarely succeed. Any time a target is bought for more than say 30 per cent over its pre-tender trading price, a suit alleging a "too-cheap" buyout/tender offer, almost never meets with success, in Delaware Chancery Court.

You see, Merck is paying well north of triple Idenix's prior trading range. This suit is D.O.A. Truly. Most of the Idenix candidates are Phase I/II. This means there is much uncertainty over whether any actual, FDA-approved drug will ever reach the US market (i.e., any significant rise in annual revenue will appear). An offer that prices Idenix at over three-times what it was worth, according to independent buyers and sellers, the morning before Merck's designs on it became known. . . sure is likely to be deemed very "fair". Now, add to this that the Idenix directors are entitled to the great deference of the "business judgment" rule in Delaware. . . and the case has no legs. Absent a showing that there was some form of collusion in setting the price -- by Idenix directors secretly working for Merck, this will go nowhere. And there will never be such a showing.

In addition, lockups, matching offers and no shop clauses are each common tools -- in public M&A land -- to protect integrity of the negotiations. You can bet the ranch on it. [In fact, Merck has.] Let's listen to a little Bloomberg reporting, here:

. . . .Merck, based in Whitehouse Station, New Jersey, said June 9 that it would acquire Idenix to expand its experimental pipeline for hepatitis C treatments. The proposed purchase price of $24.50 a share is more than triple Cambridge, Massachusetts-based Idenix’s closing level on June 6 of $7.23.

Merck is paying the highest premium on record for any health-care deal of at least $100 million, according to data compiled by Bloomberg. The price still fails to account for Idenix’s “intrinsic value” and resulted from a flawed process that prevents competing bids, investor Ronald Burns claimed in a complaint filed today in Delaware Chancery Court.

The deal includes a no-solicitation clause, grants Merck the right to match any superior offer and provides for a $115.6 million termination fee, according to the complaint. By accepting those terms, Idenix directors have “locked up” a sale to Merck, Burns said. . . .


Were I running external legal matters at Idenix, I'd seek to recover my own attorneys' fees from the plaintiff Burns here (those incurred in defending against such a likely nonsense claim), along with my motion to dismiss. I think a sober judge might likely grant the fee petition. The highest premium in any health care deal over $100 million. This suit has exactly zero -- to negative -- settlement value. It won't even delay the tender offer. Word.

Fascinating: "What's Old -- Is New, Again": Suggestion Of CVRs -- In AZ/PFE Retooled Deal? NOT "Obviously" The Right Answer.




A commenter asked below what I thought of the bankers' rumors -- currently in vogue -- and circulating, suggesting that Pfizer might rework its "tough-guy" offer for AstraZeneca and throw in what are called CVRs -- in a new structure. My answer is in blue, below.

So to it, then: Anonymous said. . . on another topic, your thoughts [on this Reuters article]?

June 16, 2014 at 10:51 AM

-- Anonymous


. . . .Condor said. . .

Well, that is a very common technique -- using CVRs in smaller deals -- to bridge the gap.

To write a contingent value right that means anything though, one must make many, many assumptions about the cost structure and probable price point -- for a given drug/therapy/product. One that might be years -- or half decades -- off.

And then the other side must agree to those assumptions. Otherwise, the solution really amounts to little more than kicking the can down the alley -- i.e., "we will negotiate about it later".

Note that any CVR driven off of a product's sales requires guessing at likely margins to come up with a fair value on the rights.

Similarly so, any EBITDA driven CVR -- for any wholly new business unit.

So -- one can write a CVR driven only by sales revenue totals (as that is a very easily verified number) -- but what percentage of sales should each right be worth? That is a multi-billion dollar conundrum.

So to apply it to Pfizer's largely hostile AZ bidding, if the incremental future oncology sales revenue may reach ten to thirty billions of dollars, then a few points here or there, will really be a fight. A "go to the mat" sort of fight.

Thus one often ends right back -- where this deal broke off: Pfizer wouldn't/won't agree to come up another $4 or $5 billion.

Even on $118 billion, $5 billion is real money.

So -- I'll bet that AZ won't invite Pfizer back at the end of the "cooling-down" period -- three months (under UK takeover rules) -- and when Pfizer pitches again in six, i.e., November (and Pfizer will so pitch!), it ought to pitch closer to $128 to $130 billion.

Just my guesses.

Namaste -- great link!

Do stop back.

June 16, 2014 at 3:25 PM. . . .


M&A arbitrage -- always an entertaining parlor game -- but truly engrossing, at this jaw-droppingly gargantuan scale.

I've Been Following This Quietly Since 2013 -- Will Merck Combine Sales Regions, In One Week? Persistent Rumors Of June 23, 2014


In the main, and mostly, CafePharma is a rumor board. The posted material is often accurate (one circa 2009 era example) -- but it is a rumor chat space -- and, mostly for sales folk, in the life sciences.

That said, not only does this poster get it bang-on right -- s/he ignighted a largely very thoughtful discussion of re-tooling the way US sales/detailing teams ought to function -- given the changed landscape in doctors' offices.

I reprint only a bit -- do go read the whole thread. Ignore the name-calling; and stay for the thoughts. I supsect something akin to the original poster's suggestions will roll-out on or around June 23 -- next Monday. We shall see:
. . . .An Open Letter to Merck Leadership:

I am a Sales Representative in the Southeast Commercial Operations Group and am writing to you on behalf of many of my colleagues in the Southeast. In a recent video address, Mr. Ken Frazier said, “our size and complex operating model have created inefficiencies and redundancies in the way we do business.” In Focus Forward in the U.S. Market, Mr. Bob McMahon requested direct and transparent feedback in areas we succeed and areas in which we need to improve.

In that spirit, I wish to present, in a challenges/solutions format, an area of inefficiency and redundancy my fellow representatives and I are experiencing in our region, neighboring regions and perhaps all regions. The inefficiencies, discussed below, negatively affect not only our bottom line but how my fellow representatives and I make business decisions on a daily basis.

In my region we have eight Customer Team Leaders (CTLs), Sixty-ish representatives, two Medical Account Managers and, of course, one Director of Commercial Operations (DCO). The Region ratio of CTLs to Representatives is 1 to 7.75 with some CTLs managing six or less representatives. Incidentally, our neighboring region has virtually an identical ratio. An individual sales territory, within a district, consists of two CTLs and four representatives. The bottom line is CTLs are required to spend four days per week in the field with representatives. We simply have far too many managers and these managers do not have enough work to keep themselves occupied. The result is managers spending a minimum of two days and on many occasions three days per month with representatives.

Does this situation have a negative impact on our business and the way we make business decisions? Consider the following. In our district we have been asked to focus on and hyper-target our top HCPs. Spending time with those who can have the biggest impact on our business is a strategy we as representatives completely support. Unfortunately, we cannot implement this directive. In order to have an adequate pool of HCPs to accommodate the excess field visits it is necessary for us to develop relationships with everyone so we don’t subject the same high prescribing physicians to constant field visits. So, whether a physician prescribes one product X per year or one product X per hour these HCPs effectively have the same weight or value because we have to cultivate relationships with everyone. This situation is further exacerbated when you throw in the occasional field ride with a Director of Commercial Operations and/or a Medical Account Manager.

During any given month, CTLs are in every sales territory two of the four weeks. Our customers are getting weary of seeing managers as often as they do and are expressing their dissatisfaction. In the late 1990s our company, and industry, made a terrible decision by over-hiring. The result was representative fatigue by HCPs and lack of perceived value by our customers which led to reduced access and lock-outs in some cases. Despite the introduction of the Medical Account Manager, our region has not made any headway in reversing policies of restricted access. We are, once again, going down a similar path of overwhelming customers. This time it is with managers rather than representatives. One of my colleagues referred to this system as a pyramid scheme. How productive is our system when leadership feels they must baby sit representatives and representatives feel their job is to entertain leadership? As an organization we must do a better job at evaluating the laws of unintended consequences before implementing strategies affecting how we interact with our customers. . . .

My solution is as follows: Regions should be combined, immediately. Early in my career, a Regional Business Director (today’s DCO) had two, three even four times as many representatives under their direction as compared to today. CTLs should have a bare minimum of twelve to twenty representatives to manage. Most of the administrative duties of CTLs could easily be handled by a region administrative assistant (approving expense reports, etc.) freeing CTLs up for coaching activities. Another idea is to put a detail bag in the hands of CTLs. Mandate that one day per week (in addition to their office day) CTLs call on customers who have lock-out or sign only in policies place. Perhaps the weight of a CTL title will prove beneficial reopening access to some of our most important customers.

Thank you for your time and consideration. . . .


Now -- we wait -- and see. June? July? Or August? It is coming. . . . and as we all now know, post the ENHANCE $687 million federal securities class action settlement -- CafePharma is often a good pulse on all things sales -- in pharma. Even so, some of the commentary in the thread suggests that the same sort of renewed de-layering -- of management -- may roll out in MRL, this summer, again, as well. We shall see.

Friday, June 13, 2014

"My Man!" Elon Musk Offers "Free Range/Open Source" On Tesla's 'Lectric Patents: Not Entirely O/T


Okay -- some great "Tangent-Related News Friday" stuff: anyone who has really followed Elon. . . knows that his considerable genius lies in upending the conventional wisdom. Consider (while putting yourself back in the relevant time-frame, and "Ordinary Joe or Jane" mindset):

  • PayPal (mid 1990s) -- who'd guess people would trust ordinary gray boxes, with green screens, to make their real live cash purchases happen -- who thought secure internet payment services could be engineered? Elon. That's who.

  • SpaceX -- (early 2000s) space-tourists?! C'mon!

  • And now, ultra fast, ultra sexy, and ultra luxurious 'lectric cars, running on laptop batteries -- by the thousands -- in tightly packed, liquid cooled floating arrays?! Preposterous, right? 
I know. Crazy, right? But wait -- each became multi-billion dollar category creators/killers. So pharmaceutical patent-holders ought to think long and hard -- about this, his latest move. Of course he wants to drive adoption of his tech -- to supplant gas engines -- of course. But, probe a little deeper, and think about it, in branded drug space. What if, for example, real fundamental patent pooling came to pass, for the not-yet developed world's high burden (i.e., low profit margin) diseases? I know there are some small noises, like this -- Merck is even in on one. But it is a weak effort, compared to Elon Musk's give-away. Very weak. Let's read a little Bloomberg reporting, here:
. . . .According to Musk, Tesla made this gesture to—once again—try to nudge the rest of the automotive market along. Tesla’s Model S has proved that there’s massive interest in a well-made, fun-to-drive electric car. Still, Tesla is barely making a dent in the massive auto market. Musk wants to promote a more dramatic shift toward electric cars, so he will do what he can to accelerate things. “I don’t think people quite appreciate the gravity of what is going on [with regard to global warming] or just how much inertia the climate has,” Musk said during a conference call. “We really need to do something. It would be shortsighted if we try to hold these things close to our vest. . . .”

From a competition standpoint, Musk considers Tesla’s place secure. “What we are doing is a modest thing,” he said. “You want to be innovating so fast that you invalidate your prior patents, in terms of what really matters. It’s the velocity of innovation that matters.” As long as Tesla keeps inventing and pushing the limits of the technology, it will remain of ahead of rivals.

Musk believes that opening up the patents around the charging technology could lead to important partnerships. He has talked this week to executives from BMW about sharing the cost of building recharging stations and creating a common infrastructure. . . .


He is a quintessential Renaissance genius. I'd bet there is a lesson here for every industry -- from oil & gas, to tech, to yes. . . pharma. Now go have a funky fun Friday -- I know I am (right now!) -- out to the park, to hear the Blues. Playing "long client lunch" hooky, for certain -- a clear and flawless 70 degree Colorado style sky here! Whoosh! Later, homes.