Suvorexant (Now Branded As Belsomra®) Clears FDA — Good News For Whitehouse Station — But Still Highly Likely To Be A Schedule IV Controlled Substance

August 13, 2014 - Leave a Response

The line quoted below — in navy blue — may sound like a punch line — “while having sex. . .” but that is exactly the kind of thing Merck will be concerned about. Suvorexant has — as many Schedule IV drugs do — the real potential to be abused (even as a would be date rape drug). So, I’d not expect Belsomra® to become a higher level multi billion dollar a year drug. Not likely. [Valentine's Day 2014 backgrounder, here.] Schedule IV drugs are kept under extraordinary security (beyond the usual lock and key), at pharmacies and in hospitals, and are subject to rigorous record keeping and evidentiary trails — while in transit. Makes really deep — and wide — dispensing a little less likely.

In addition, the US Drug Enforcement Administration has not finally decided that suvorexant will be Schedule IV, though it seems highly likely. In any event, Merck cannot begin to sell the drug in the US until the DEA announces its final decision. From the FDA presser of this afternoon, then — a bit:

. . . .Like other sleep medicines, there is a risk from Belsomra of sleep-driving and other complex behaviors while not being fully awake, such as preparing and eating food, making phone calls, or having sex. Chances of such activity increase if a person has consumed alcohol or taken other medicines that make them sleepy. Patients or their families should call the prescribing health care professional if this type of activity occurs.

Belsomra will be dispensed with an FDA-approved patient Medication Guide that provides instructions for its use and important safety information. Belsomra is a controlled substance (Schedule-IV) because it can be abused or lead to dependence. . . .

Really?! While having sex?!

I really couldn’t make this stuff up, even if I tried. I promise — I couldn’t. And I don’t mean to make light of a potentially life altering experience. At a minimum, Merck may be sued for unwanted pregnancies — where the allegation will be that he — or she — (or both!) didn’t fully realize they were engaging in baby making behavior. “The Belsomra did it!”

Celltrion Files For US FDA Biosimilar License On Infliximab (Remicade®); It Won’t Change Merck’s Share Price

August 13, 2014 - Leave a Response

J&J, on the other hand, should begin to worry about feeling a pinch — in its Janssen unit (which controls the brand — and the patents, in the US).

Regular readers will recall that the settlement of the massive (potentially $41 billion deal killing) spat occasioned by Mr. Hassan’s mostly goofy-footed attempt at a reverse merger — to avoid a Remicade® rights “walk-off” by J&J (from Schering-Plough), related to jointly marketed monoclonal antibody products (including Simponi®) — led to then “New” Merck settling and surrendering all its US rights to a share of those revenues. So, here in the US, the revenue belongs to J&J — as does this potential downside.

Also here in the US, Celltrion is seeking a declaratory judgment that the Remicade patents are invalid and unenforceable. Here’s a bit of that spat (a 27 page PDF file). So — this morning’s Pharma Times report of the FDA biosimilar filing will really only affect J&J’s revenue, as Merck already suffered its correlative generics entrance revenue hit, almost exactly a year ago, in the EU and Japan — when the Celltrion biosimilar product was aproved in those geographies. Celltrion’s lower-priced competing anti-inflamatory antibody product is now sold in 50 countries around the globe.

We will keep an eye on this, just the same. By their terms, the relevant patents expire in 2018 — but a ruling invalidating the patents altogether, here might bring additional competitors into the EU and Japan, beyond the current Hospira and Celltrion biosimilar offerings. This is perhaps Merck’s second most important franchise, behind only Januvia®/Janumet®. So, we will monitor that Massachusetts federal District Court litigation. Now, go out and enjoy the bright sunshine — we’ve gotcha’ covered — in sunscreens.

Mr. Frazier Has Reduced His SEC Section 16 Reportable Stock Ownership By A Little Over 5,900 Shares. Yawn.

August 12, 2014 - Leave a Response

First — these sales are under a pre-arranged trading plan. Second, they are from the exercise of stock options — set to expire in the next 24 or so months. Finally, Mr. Frazier holds over 335,500 shares (as calculated under the Section 16 rules, so he’s sold less than two per cent of his holdings, in the past month).

Thus, nothing may really be inferred from his sales, this week. Here is his latest SEC Form 4 [08.11.2014], and a quick reconciliation to the July 10, 2014 one he had earlier filed:

. . . .Was holding: 07.10.2014 | 341,487 Shares

Now holding: 08.11.2014 | 335,504 Shares. . . .

Oh, and for the sake of a complete record here: the Chief Corporate Communications Officer also sold a modest number of shares. Now you know.

Great rainy Summer’s evening, here — perfect. . . sleeping weather!

Resetting IMPROVE-IT Countdown Clock, At Left (On Original Site) — To 97 Days, From 109 Days!

August 12, 2014 - Leave a Response

Dr. Larry Husten has the scoop at Forbes — IMPROVE-IT will be revealed on November 17, 2014.

Finally. So I was off by a few days (I was guessing December 2014); not bad though, on a six-year horizon. Here’s a bit — do go read it all:

. . . .Results of the eagerly-awaited and highly controversial IMPROVE-IT trial are finally going to be revealed. The American Heart Association has announced that the trial will be presented by Chris Cannon on November 17 at 11:51 AM (central time) in Chicago at the group’s annual scientific sessions . IMPROVE-IT compared the effect on cardiovascular outcomes of the statin simvastatin with Vytorin (the combination of simvastatin and ezetimibe, manufactured by Merck) in more than 18,000 patients with acute coronary syndromes. . . .

We will report on that — yep, for certain I’ll pop over there, for the live press conference — on 11.17.2014. I was there the morning ENHANCE clanked, also in Chicago, on Sunday, March 30, 2008, too. I personally think this is likely to be the end of the line — for this war horse.

Next Propecia®/Proscar® Status Hearing Date In The E.D.N.Y. M.D.L.: August 20, 2014

August 12, 2014 - Leave a Response

While the two sides wrangle about what portions of Merck’s “privilege logs” should be viewable by the plaintiffs’ lawyers (documents with redactions, or just notes about what each document covers — and which ones), the next larger status hearing is on the morning of August 20, 2014. At that hearing, a schedule to move toward bellwether trials may be set.

Here is the latest summary from Merck’s SEC Form 10-Q (at page 21):

. . . .As previously disclosed, Merck is a defendant in product liability lawsuits in the United States involving Propecia and/or Proscar. As of June 30, 2014, approximately 1,280 lawsuits involving a total of approximately 1,550 plaintiffs (in a few instances spouses are joined as plaintiffs in the suits) who allege that they have experienced persistent sexual side effects following cessation of treatment with Propecia and/or Proscar have been filed against Merck. Approximately 45 of the plaintiffs also allege that Propecia or Proscar has caused or can cause prostate cancer or male breast cancer. The lawsuits have been filed in various federal courts and in state court in New Jersey. The federal lawsuits have been consolidated for pretrial purposes in a federal multidistrict litigation before Judge John Gleeson of the Eastern District of New York. The matters pending in state court in New Jersey have been consolidated before Judge Jessica Mayer in Middlesex County. The Company intends to defend against these lawsuits. . . .

In point of fact, the August 20 hearing will be in the federal MDL.

Separately (in part in a fond memory of Robin Williams), do go out — and have a great adventure on this fine day, wherever you are! Namaste!

Jefferies & Co. Slightly “Slows Its Roll” — On Whitehouse Station

August 11, 2014 - Leave a Response

Not a big deal, here on a quiet news day, because Jefferies had been a little ahead of the rest of the pack, earlier this Spring, in predicting a $63 handle for Merck.

Now, the Jefferies analysts are falling back into the middle — in choosing a $60 handle. That’s the revised 12 month target — with a continuing neutral rating.

As I say, consensus (among the major, first rate Wall Street houses, at least) is somewhere around $60.50 at the moment.

Now. . . do go get it. . . all nice — and tanned up! It is sunscreen season!

Various Hep C Chargeoffs Including Victrelis®; Saphris® (Asenapine) Chargeoffs And Preladenant Chargeoffs: Rationalizing The Balance Sheet

August 11, 2014 - Leave a Response

I’ll not just complain about Mr. Hassan’s role in touting what became (i) Victrelis® (Boceprevir); and (ii) Preladenant (SCH 420814) here. Nope. I won’t.

What I will say is that it is good news that Merck is writing off programs of impaired value. It frees up the balance sheet for other leverage. So — from lemonslemonade. Per pages 15 and 16 of the SEC Form 10-Q, then:

. . . .In connection with mergers and acquisitions, the Company measures the fair value of marketed products and research and development pipeline programs and capitalizes these amounts. During the second quarter and first six months of 2014, the Company recorded intangible asset impairment charges of $660 million within Materials and production costs related to certain products marketed by the Company for the treatment of chronic HCV. Of this amount, $523 million related to PegIntron and $137 million related to Victrelis. Sales of PegIntron and Victrelis are being adversely affected by loss of market share or patient treatment delays in markets anticipating the availability of new therapeutic options. During the second quarter, these trends accelerated more rapidly than previously anticipated by the Company, which led to changes in the cash flow assumptions for both PegIntron and Victrelis. These revisions to cash flows indicated that the PegIntron and Victrelis intangible asset values were not recoverable on an undiscounted cash flows basis. The Company utilized market participant assumptions to determine its best estimate of the fair values of the intangible assets related to PegIntron and Victrelis that, when compared with their related carrying values, resulted in impairment charges noted above.

During the second quarter and first six months of 2013, the Company recorded an intangible asset impairment charge of $330 million within Materials and production costs resulting from lower cash flow projections for Saphris/Sycrest due to reduced expectations in international markets and in the United States. These revisions to cash flows indicated that the Saphris/Sycrest intangible asset value was not recoverable on an undiscounted cash flows basis. The Company utilized market participant assumptions and considered several different scenarios to determine its best estimate of the fair value of the intangible asset related to Saphris/Sycrest that, when compared with its related carrying values, resulted in the impairment charge noted above.

In addition, during the second quarter and first six months of 2013, the Company recorded $234 million and $264 million of IPR&D impairment charges within Research and development expenses. Of these amounts, $181 million related to the write-off of the intangible asset associated with preladenant as a result of the discontinuation of the clinical development program for this compound. In addition, the Company recorded impairment charges resulting from changes in cash flow assumptions for certain compounds. The remaining impairment charges for the first six months of 2013 related to pipeline programs that had previously been deprioritized and were subsequently deemed to have no alternative use in the period. . . .

To be sure, Mr. Frazier is reaching the end of his clearing the decks sweepup. . . and positioning Merck for a solid new run — as a leaner, more tightly focused ocean-liner. But it takes perhaps two years to pivot an ocean liner of this girth.

Schering-Plough Merger/Yard Sale Aftermath: Fire 27,670 Employees; Charge Off $7.5 Billion To $8.2 Billion. Ugh.

August 11, 2014 - Leave a Response

To be clear, the $7.5 billion in writeoff figures listed in the just filed SEC Form 10-Q will not include several of the various closed or abandoned research programs which we have separately discussed (primarily the ones that were straight asset sales; no employees).

For example, it would not include the asset impairment charge of $1.7 billion related to the repeated vorapaxar “clanks.” It would include the “cash” people costs, thought — the firings. SO — at $7.5 billion, Hassan’s value-destruction is likely understated here, perhaps by 30 per cent. To be fair, his damage creation/accretion index, at Schering-Plough, must be a little over $10 billion. And that’s before he took $235 million in compensation, all in over the six years, for himself. And before he (allegedly) caused a $688 million securities fraud settlement to be paid out.

I just think it worthwhile to remark that — without any serious doubt then — Mr. Hassan truly was (and is!) the most heartless CEO in America. His handiwork continues as his minions play the same games at other public pharma companies. You know their names. You’ve all seen their games. Here’s to you Fred — from pages 5 and 6 of the Merck SEC Form 10-Q for the second quarter of 2014:

. . . .Since inception of the Merger Restructuring Program through June 30, 2014, Merck has recorded total pretax accumulated costs of approximately $7.5 billion and eliminated approximately 27,670 positions comprised of employee separations, as well as the elimination of contractors and vacant positions. Approximately 4,890 position eliminations remain pending under this program as of June 30, 2014, which include the remaining actions under the 2008 Restructuring Program that are being reported as part of the Merger Restructuring Program as discussed below. The non-manufacturing related restructuring actions under the Merger Restructuring Program were substantially completed by the end of 2013. The remaining actions under this program relate to ongoing manufacturing facility rationalizations, which are expected to be substantially completed by 2016. The Company expects the estimated total cumulative pretax costs for this program to be approximately $7.9 billion to $8.2 billion. The Company estimates that approximately two-thirds of the cumulative pretax costs relate to cash outlays, primarily related to employee separation expense. Approximately one-third of the cumulative pretax costs are non-cash, relating primarily to the accelerated depreciation of facilities to be closed or divested. . . .

As irony would have it, Mr. Hassan recently wrote about the things one should highlight on one’s resume, to get invited to be on a company’s board of directors. [That blog post looks to be likely "mostly ghosted" by his crony, Ken Banta.] I wonder if these above items appear as dot points, on his resume — as he seeks public company board seats. [He is so brash a fibber, I'm betting yes -- but with each "recast" as how he triumphantly thinned out the "affected" company.]

Perspective: I’m sure we will find other, less dank, matters to mention in the 10-Q. Back later, with those. Namaste — as the day gig beckons.

At Least One NuvaRing® Opt-Out Plaintiff Seeks Remand To “Questionable” Texas State Court Venue

August 9, 2014 - Leave a Response

It is clearly within the rights of any given plaintiff, in a products liability action, to bring that action wherever jurisdiction exists, and venue may be properly laid. Having said that, judges often consolidate (at the defendants’ request) cases in a single district, where the factual issues between claimants vary only slightly. So it was, with the NuvaRing® MDL — consolidated in Kansas City, Missouri federal District Court.

But, now, as the MDL winds down, a handful of plaintiffs have elected to reject the settlement, and press on individually, in the same ways they started. In one of those cases, the plaintiff’s lawyer seeks remand — out of federal court, and back into the the state court system of Texas. But not just any state court in Texas, no. That plaintiff seeks a remand order to Cameron County, Texas. I mention this bit of detail only because that is a local court system with a documented, published history of corruption — and a national reputation for being an overly plaintiff-friendly “hellhole” — among pharma defense lawyers. I have no reason to believe that Merck will not draw an impartial lot in these local courts (should the able Judge Sippel grant remand), but I suspect some it its defense counsel do. So they are opposing a return to the very bottom of Texas, for this case.

Some recent coverage of the problems in this court system — from a local paper, in Southwest Texas, then:

. . . .[U.S. Dist. Ct. Judge] Hanen also issued an order in May during Villalobos’ trial, writing, “This court has heard over the last two weeks of trial and throughout pretrial hearings a troublesome and disturbing tale of unethical conduct involving judges, lawyers and laypersons. . . .”

“This state of affairs was exacerbated by the fact that it has lasted over a number of years and affected numerous cases,” he added.

Hanen said that the court had heard witnesses and seen exhibits that show uncharged illegal acts and violations of disciplinary rules. . . .

We will keep an eye on this case, for the readership. Here is the paperwork seeking remand — in the above mentioned opt-out case.

Slow News Friday: Black Enterprise Magazine Honors Mr. Frazier

August 8, 2014 - Leave a Response

Yep. . . Kinda’ quiet on the news front. So I’ll just mark this one, for the record. Among the thousands laid off, the views of his tenure may vary — but it has been nearly three decades since Merck was in the top five of the leader pack — of the Dow Jones Industrial Average (the “Big Caps”) — and so it is right now, through the first half of 2014. Results. They matter — to shareholders.

I might argue that he is CEO of the Year (diverse or not so) — in all of pharma, too. . . but Gilead’s CEO might be a close contender, there. From the wires,then:

. . . .Kenneth Frazier, chief executive officer of Merck, has been named Corporate Executive of the Year. . . .

Since joining Merck in 1992, Frazier has held a broad range of management positions. Since taking the helm as CEO in 2011, Frazier and his management team have been responsible for increasing shareholder value, which has appreciated by 86%. For his leadership role in bolstering Merck’s corporate performance, driving innovation, and exerting an impact on global health, Frazier has been selected as the 2014 BLACK ENTERPRISE Corporate Executive of the Year.

“We are extremely pleased to honor Merck Chairman and CEO Kenneth Frazier as this year’s Corporate Executive of the Year,” says BLACK ENTERPRISE CEO Earl “Butch” Graves Jr. “With this selection, we continue the tradition of recognizing an African American corporate leader who performs impeccably at the highest level. Ken represents one of the most visionary CEOs among those who run the world’s largest publicly traded companies today. His brand of leadership has demonstrated that the infusion of innovation and diversity can produce a profitable organization that continually develops groundbreaking products, increases shareholder value, and has a tremendous global impact. . . .”

Do have a great August vacation week, ahead!

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