Sign Of The Times: Merck Ought To Take Heed — Low Cost Producer Licensing In India

September 16, 2014 - One Response

With the extremely high burden of Hep C as a disease in India, it seemed only a matter of time before — either through the mechanism of the DOHA Declaration (in international proceedings), the Indian patent courts, the Ministries of Health in country or otherwise, a life saving drug like Sovaldi® would be made more affordably in India. It will now appear in low cost authorized generic form, in over 90 countries around the globe. It is already there, in Egypt (March 2014). [This development will dampen only marginally the patent fights' income potential, however. That vast trove of money is generated in the post industrial Western world primarily.]

This has as much to do with the high price of it — as it does to do with the fact that it is effectively a cure for Hep C. And more people in India suffer from Hep C than in any single country on the planet. Even so, the price is unlikely to fall to the under $90 per regiment price that WHO experts estimate would put it in the hands of most of the world’s poorest Hep C patients. From the Irish Times then:

. . . .Gilead Sciences will allow seven large Indian generic drug producers to make and sell its blockbuster hepatitis C drug Sovaldi in more than 90 developing countries, in a move it says will ensure affordable access to the potentially life-saving treatment.

The deal with companies including Cipla and Ranbaxy Laboratories follows months of fierce debate over the price of Sovaldi, which has been hailed as the biggest breakthrough in treatment for hepatitis C since the virus was discovered in 1989. . . .

The object lesson here is glaringly obvious: Merck should be prepared for similar pressures in India, as Keytruda® becomes available for more strains of cancers. India’s cancer burden is unimaginably vast. So, India ministers will feel strong pressure to license, even on a compulsory basis, a bio-similar at some point. Stay tuned. The same applies to BMS — and nivolumab. Just my $0.02. [Should be yours, too -- heh.]

Additional FDA Filing Date Delays, For Merck’s Odanacatib — As Safety Signals Seem To Appear

September 15, 2014 - Leave a Response

Once again, the next gen Merck osteoporosis candidate has been run aground, and run aground — hard. Now a mid 2015 FDA filing may be a stretch — and peak sales may come in under $300 million a year. Ouch.

here is our February 2013 background piece on the program.

John Carroll is chief among the smart folks over at FierceBiotech — and he has a nice, pithy analysis of the data, and consequent additional delays up:

. . . .[T]here was also evidence of a troubling side effect profile that could well damage Merck’s prospects. There was a slight increase in the risk of atrial fibrillation as well as more strokes in the odanacatib crowd. A total of 109 patients (1.4%) had a stroke in the drug arm, compared to 89 (1.1%) in the placebo arm.

Cardiovascular side effects are going to attract careful regulatory attention. More morphea-like skin lesions and atypical femoral shaft fractures were also reported for 5 patients in the odanacatib group with none in the placebo group. And Merck–which had been expected to file before the end of this year—says it will now delay its FDA submission until next year after it gathers more data.. . .

We will keep the readership posted.

Tough breaks — rather literally.

Why “Adverse Event” Source Documents Matter, In Discovery Of Incretin Mimetics Litigation

September 15, 2014 - Leave a Response

Incretin mimetics, like Merck’s Januvia® (sitagliptin), and those made and sold by several other manufacturers, are the subject of some consolidated federal MDL action in Southern California.

We’ve begun tracking this narrative, as of relatively recently. [Backgrounder of two weeks ago, there.]

The plaintiffs are angling to get the origial source documents (AERs), or copies of them — of the hundreds of adverse event reports — from Merck and the others. The plaintiffs need them they say to establish causation, as to their claims (increased risk of pancreatitis and possibly, risks of some kinds of cancers). Put succinctly, a summary of the document may look ordinary, while the source itself may reveal patterns not apparent in the very same summaries. So, here is a bit of the plaintiffs’ latest motion, and argument — for discovery and production of the source files:

. . . .Source files are important for many reasons. They show what actually happened with an adverse event. It is not uncommon for MedWatch summaries to mischaracterize or misstate important aspects of an event. For instance, a manufacturer’s MedWatch summary may say an event was not causally related to its drug, when the source documents (e.g., medical records) show the doctors felt the event was caused by the drug. The only way to tell if the MedWatch forms given to the FDA accurately characterize an adverse event is to review the source files for that event. . . .

Source files also show whether pancreatic cancers were properly reported to the FDA. There are reasons to believe such cancers were not correctly reported, and were underreported. . . .

These questions can only be answered by reviewing the source documents for each pancreatic cancer adverse event. . . .

Source files can also show whether “safety signals” have been generated. FDA guidance notes that even one “well-documented” adverse event can be a safety signal. Source files can provide the detailed documentation for those signals. . . . Signal detection leads directly to the assessment of causal association. . . .

Finally, source documents are also necessarily part of Defendants’ preemption defense. To establish that defense, Defendants must prove by “clear evidence” that the FDA would reject any [additional warnings] that fully explained the basis for the proposed warning. . . .

We will keep you posted, but remember, these are the plaintiffs’ arguments. Merck would say all the info the plaintiffs need is already available in a summarized fashion, at MedWatch. Have a peaceful and productive start to the week!

Q.: Is A 10 Per Cent Max. “Sales” Bonus Opportunity Going To Be Adequate — To Sell Keytruda® — In Melanoma?

September 14, 2014 - Leave a Response

At the outset, I’ll suggest that this sales compensation incentive plan decision may well have been driven in large part — by the compliance folks at Merck — being appropriately conservative. [More on that, in the final paragraph after the pull-quote.] To the story, then:

One of our erstwhile anonymous commenters below asks an excellent question — and I will take it as being an accurate characterization of Merck’s current sales incentive plan, as the very same predicate facts have been discussed over at CafePharma during the last 60 or so hours.

Our commenter reports that Merck is only offering a maximum of 110 per cent normal sales bonus opportunity to the oncology reps selling Keytruda® — at least on this initial narrow “non-responder” melanoma patient FDA approval, in the US. As my graphic would suggest, I think the monoclonal antibody largely sells itself (just lay out the clinical trial results to date). Moreover, it is (until BMS’s Opdivo® [nivolumab] clears, here in the US) a monopoly product. Yep — as a breakthrough — hard to see how the biologic won’t sell itself. And then I’d note that perhaps only 1,500 patients meet the current indicated protocol. No need to “beat the bushes” to find them. Their doctors will find Merck, and pronto. The are all facing very dire prognoses without Keytruda.

. . . .Anonymous said. . .

So the sales plan incentives for the program were announced internally today. The top of the heap 10% in sales max out at 110% of target. It looks like management is convinced this one will sell itself.

Another huge mistake.

September 12, 2014 at 10:53 PM. . . .

It may be — I guess we shall see, when BMS prices and rolls out its incentives plan, relative to its Opdivo® (nivolumab) melanoma launch, here in the US, later this year. [Does anyone know how BMS has handled this -- as it launched -- in Japan, back in mid-summer 2014?]

In closing, I will observe that the LAST thing Whitehouse Station wants to deal with, in relation to its single best hope for a “turnaround” drug/biologic francheise, in oncology. . . is an enforcement proceeding/cease and desist order from FDA/DoJ/FTC. The compliance folks likely argued that — a too generous maximum initial bonus opportunity might encourage the Merck reps in the field to actively promote to oncologist/prescribers “off-label“. I think that mindset explains about 60 per cent of the “why” behind this initial sales compensation plan. Just my $0.02. Have a peaceful, sunny and joy-filled Sunday — to one and all, of good will.

BMO Capital Markets Moved Merck To $64, Last Friday — From $62

September 11, 2014 - Leave a Response

I suspect that BMO is now more sanguine about a good strong mega blockbuster showing (i.e., $3 billion to $4 billion a year), beginning two years from now — over those next three years, from Keytruda®.

A bit then:

. . . .Merck had its price target upped by BMO Capital Markets from $62.00 to $64.00 in a research note issued to investors on Friday.

Shares of Merck & Co. opened at 61.05 on Friday. Merck & Co. has a 52-week low of $44.62 and a 52-week high of $61.33. The stock has a 50-day moving average of $58.4 and a 200-day moving average of $57.42. The company has a market cap of $176.1 billion and a price-to-earnings ratio of 32.23. Merck & Co. also was the recipient of a significant decrease in short interest in the month of August. As of August 15th, there was short interest totalling 27,776,659 shares, a decrease of 17.1% from the July 31st total of 33,501,461 shares. Based on an average daily trading volume, of 8,604,040 shares, the days-to-cover ratio is presently 3.2 days. Currently, 1.0% of the company’s shares are short sold. . . .

So it goes — and falling short interest is a bullish sign. . . but I’d bet BMS will handily outpace Merck in immuno-oncology sales, over the next three to five years. And because BMS is smaller than Merck, that sales ramp will show itself, in a more pronounced fashion, in BMS’s stock price. Just my $0.02.

Chairman & CEO Actually ADDS About 3,000 Shares — Via His Cashless Exercises Reported Today

September 10, 2014 - Leave a Response

Some of the minor MSM outlets are reporting it as a net sale — of some 9,000 shares. An “unloading“. Sheesh.

But, in actuality, he has increased his holdings by about 3,000 shares — bringing his total held as calculated for ’34 Act Section 16 purposes to around 338,000 shares.

And, the trigger was pursuant to a pre-arranged plan over which he no longer exercises any discretionary timing control.

So nearly nothing may be inferred from today’s SEC Form 4.

Some More Color — On the Keytruda® (f/k/a Lambrolizumab/ Now Pembrolizumab) Launch. . .

September 9, 2014 - Leave a Response

Very little of any moment was said at the Manhattan Morgan Stanley Global Health Care presetntation this morning.

However, I thought I’d offer this bit of additional color — on the launch of what used to be called lambrolizumab — for the readership. Now branded as Keytruda® — from a bit of Merck’s own edited transcript, then:

. . . .Morgan Stanley Analyst David Risinger: Maybe you could speak to — and this is really a question for any of you — but maybe you could speak to how investors should think about the launch of pembro. Obviously, there will be a lot of demand for it off label for which Merck won’t promote or discuss, but it would seem like the super wealthy in the country with a variety of cancers would be interested in accessing pembro now that it’s going to be commercially available this month. So maybe you could talk about the commercialization strategies, the launch plans and how you manage that. . . .

Adam Schecter, EVP Merck:

. . .So obviously, we are very excited about the commercialization of Keytruda. We received our first orders yesterday and we are shipping today so the product should be available sometime this week. So that is a big moment for us to have the product available so quickly after the approval. We have our salesforce in place. We have a global oncology business unit, as Ken mentioned. In the US specifically, our salesforce is being trained as we speak and they will begin to call on physicians that treat melanoma patients in the very near future. . . .

At the same time, we are going to focus on the indication that we have, which is for utilization after failure on other products for melanoma. If you look, there is about 10,000 patients with metastatic melanoma that are treated every year in the United States. About 5,000 of them are treated on Yervoy first. The other 5,000 usually get a BRAF inhibitor. If you then look at the number of patients available based on our indication for Keytruda, we figure there’s about 300 to 350 patients that will be available per month based upon the flow of patients that will fail on either the two pathways for our indication. We think there is somewhere between 1,000 and 1,500 patients that are currently available in the marketplace based upon previous failures. . . .

217a5-mrk-keytruda-sm-2014So although the indication is relatively restrictive and small and that is where we will focus our promotion and only where we will focus our promotion, we do realize, as you said, that there are physicians that will utilize the product off-label. We won’t promote that, but we realize that that is the reality of what occurs. From a manufacturing perspective, we have a significant amount of supply. Whatever happens in the marketplace, we believe we’ll be able to manufacture and supply immediately, but our focus will be on the indication that we have. But we have reimbursement support lines up and running already. We have everything ready to launch and we are in the middle of it as we speak. . . .

So it goes — but Merck admits, as I noted many months ago (January of 2014, in fact) — the initial FDA approved indication is pretty darn narrow. Under 1,000 patients overall. And Merck cannot lawfully chase off-label ‘scrips. Add to this, that BMS is well ahead in lung study submission timeline — with Opdivo® (Nivolumab). A great horse race, indeed!

Late-Breaking Appearance At Morgan Stanley Global Health Care Conference: Tomorrow — Before NYSE Opens

September 8, 2014 - Leave a Response

Merck Chairman Kenneth C. Frazier — and his team — will present in NYC tomorrow at 8 AM Eastern.

I’ll let the readership know if something material develops — but I don’t think that outcome is likely. Here’s tonight’s presser:

. . . .Merck announced today that Kenneth C. Frazier chairman and chief executive officer; Adam H. Schechter executive vice president and president Global Human Health; and Dr. Roy Baynes senior vice president Clinical Development Merck Research Laboratories are scheduled to participate at the Morgan Stanley Global Healthcare Conference in New York on Sept. 9 2014 at 8:00 a.m. EDT. Investors analysts members of the media and the general public are invited to listen to live audio presentation (reg. req.) of the webcasts. . . .

We will check in on it, time permitting.

Merck To Face Trials? — In False Claim Act Suit, And Qui Tam Suit — On Mumps Vaccine Sold To US Government

September 7, 2014 - Leave a Response

This narrative properly begins… a few years back (in my estimation) — in December of 2010, when Merck quietly ceased production of its individual mumps vacine (I think we were the only outlet to cover this, in real time) — in favor of a combo MMR II vaccine array.

I now wonder if these below (alleged) problems were part of why the solo mumps vaccine program with the government was moth-balled — in favor of a more economical (in terms of overall cost to immunize) and efficacious three way vaccine. We will never know, but on Friday Merck learned that it will have to put on a defense against claims it falsely inflated its efficacy claims for the mumps vaccine — in order to secure a more fullsome federal reimbursement — of the jab. On its face,that makes out a False Claims Act violation, and possibly a qui tam one, as well — for the people who blew the whistle on it all. I suppose Whitehouse Station could settle the cases, by paying money — but I’d not hold my breath, there.

From the Friday article in Law 360o, then a bit [followed by my own edits and a bit of the opinions, from the pen of the very-able federal District Court Judge Jones]:

. . . .Two lawsuits accusing Merck & Co. Inc. of lying about the efficacy of its mumps inoculation in order to keep competitors from bringing their own versions of the vaccine to market will move forward, after a Pennsylvania federal judge ruled in favor of whistleblowers and direct purchasers Thursday. U.S. District Judge C. Darnell Jones II ruled that the whistleblowers had sufficiently pled that Merck might have provided false statements to the government and that the direct purchasers had shown enough evidence to establish that these falsehoods may have caused the government to overpay for the vaccine. . . .

[Specifically, as the order and opinion (42 page PDF file) of Judge Jones relates:] Defendant [Merck] allegedly told Relators that the “objective”of this new methodology was to “[i]dentify a mumps neutralization assay format. . . that permits measurement of a ≥ 95% seroconversion rate in MMR®II vaccines.” Defendant continued to test the vaccine against the virus strain that originated the vaccine. In addition, Defendant added animal antibodies to pre and post vaccinated blood samples. Relators allege that this addition was “for the singular purpose of altering the outcome of the test by boosting the amount of virus neutralization counted in the lab.” Relators claim that the use of animal antibodies created a high number of pre-vaccinated positive results, which Defendant systemically destroyed or falsified in order to legitimize the use of animal antibodies. Relators also allege that senior management was aware, complicit, and in charge of this testing. . . .

Relators reported these alleged infractions to the FDA, leading to an FDA visit. After the FDA visit, Relators were barred from participating in the mumps vaccine testing. Relators assert that Defendant continued to make the false representations of its inflated 95 percent efficacy rate to the government, while deliberately covering up the results of the tests showing a diminished efficacy. . . .

[Plaintiffs based their Complaint on the qui tam action filed by the Relators.] Plaintiffs’ theory is that because the vaccine’s efficacy was diminished, the vaccine was mislabeled and was not the product for which the government paid. As such, Plaintiffs allege that Defendant knowingly presented a fraudulent claim for payment to the U.S. government in violation of 31 U.S.C. § 3729(a)(1)(A).

Second, Plaintiffs allege that Defendant falsified, abandoned, and manipulated testing data that should have been shared with the government in order to fraudulently mislead the government into purchasing the mumps vaccine. (Dkt. No. 12 ¶ 155.) As such, Plaintiffs allege that Defendant knowingly incorporated falsified records material to their fraudulent claims for payment for the vaccine. 31 U.S.C. § 3729(a)(1)(B). . . .

Given that this Court must construe the Complaint in the light most favorable to the plaintiff, construe the CFA liberally, and approach motions to dismiss “with hesitation,” this Court finds that Plaintiffs have adequately pleaded a claim under the CFA. . . .

The court rejects Defendant’s argument that Plaintiffs’ surviving state claims are preempted by Federal law, and finds that Plaintiffs have adequately stated claims under the consumer protection statutes of New York and New Jersey. However, the Court finds that Plaintiffs have failed to state claims for breach of contract and unjust enrichment. Thus, the Court dismisses Count II, except for claims brought under the NYDAPA and the NJCFA; and, dismisses Count III, Count IV, Count V, and Count VI in their entireties. . . .

So this means that the very capable Judge Jones has ruled that Merck cannot dismiss these allegations summarily. Merck must now move forward — to articulate legal defenses — against these allegations. If the relators and plaintiffs prove at trial what they’ve alleged above, that would be enough to make it past a motion for summary judgment, and ultimately get to the jury. We will watch these suits, for the readership, going forward. Have a wonder-filled sunny late summer Sunday, one and all! I know I will.

Some Analysis Of The Anti PD-1 Patent Litigation — Between BMS And Merck

September 6, 2014 - Leave a Response

I’m out for a bit — having my weekend fun — but will report in full, with complaint analysis included — later today. UPDATED | 3 PM EDT: It seems Merck previously brought — and lost — a proceeding to declare BMS patents related to the receptor cover useful in anti PD-1 monoclonal antibodies like nivolumab (belonging to BMS via license from Ono Pharmaceuticals, its co-marketing partner in Japan) invalid in Europe earlier this year.

This multi-faceted IP rights battle is raging across the EU, the UK, Japan and now the US. Into the high teens of billions of dollars at stake. More later. Here is BMS’s full complaint at law, a nine page affair of a PDF file. In the complaint, BMS seeks a ruling that Merck cannot make Keytruda® (Pembrolizumab) without paying a very substantial patent license fee annually to BMS. Alternatively, BMS asks the court to rule (with the aid of jury –to find the facts) that Merck must be enjoined from selling Keytruda in the US. To get there, BMS quite cleverly makes much of the fact that Merck recently challenged the validity of the EU equivalent of the central anti PD-1 cover-structure patent, and. . . lost. That was a trial level holding in the EU — but it did hold that BMS’s patent — on the anti PD-1 monoclonal antibody structural invention — was valid. Thus, Merck is clearly aware that, in the US, BMS might well assert the sale of Keytruda violates that same central patent. This is important because it may go to establish willfulness, on Merck’s part — and thus a tripling of any damages the jury might award. Ouch. Here it is, then:

. . . .BMS has announced that it expects to complete submission of its Biologics License Application (BLA) for nivolumab’s use in treating non-small cell lung cancer [a high burden cancer] by the end of 2014. . . .

Merck is planning to exploit the invention of the 474 patent with an anti-PD-1 antibody called pembrolizumab. On information and belief, Merck started developing pembrolizumab after Plaintiffs had made and started testing nivolumab, and Merck has since been engaged in efforts to meet the FDA regulatory requirements for marketing, distributing offering for sale, and selling pembrolizumab for the treatment of cancer. According to Merck, pembrolizumab is a PD-1 antibody that works by blocking the PD-1 checkpoint to treat cancer. . . .

Merck has had knowledge of the family of patents that includes the 474 patent for many years and has instituted legal proceedings seeking to invalidate the corresponding patents in Europe. Merck initiated an opposition proceeding against European Patent EP 1537878 (“EP 878 patent”), a European counterpart of the 474 patent, in the European Patent Office on June 20, 2011. Merck made numerous submissions in that opposition proceeding and an oral hearing was held on June 4, 2014. On information and belief, Merck’s outside counsel referred to the 474 patent during the oral hearing. That same day, the panel hearing oral argument rejected Merck’s opposition and held the EP 878 patent valid. . . .

On May 22, 2014, Merck filed a revocation action in the United Kingdom seeking to revoke the U.K. patent corresponding to the EP 878 patent. BMS has filed a counterclaim alleging infringement by pembrolizumab in that action. . . .


Separately, OncLive is reporting that BMS’s Opdivo (nivolumab) is already deep into many more clinical trials — for additional cancers, here in the US: “. . .Bristol-Myers Squibb has advanced development of the compound as monotherapy and in combinations across various tumor types in clinical trials that have enrolled an estimated 7000 patients. The FDA has designated nivolumab as a breakthrough therapy in lymphoma and has granted the compound fast track status in non-small cell lung cancer, melanoma, and renal cell carcinoma. The company has said it plans to submit an application to the FDA for nivolumab in melanoma during the third quarter of this year. . . .”

Thanks go to my commenters, for the heads up, here! Namaste.

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