Reuters Has An Exclusive Scoop — On Merck’s Zilmax® Reintroduction Snags. . .

April 4, 2014 - Leave a Response

To be fair to that erstwhile news outlet — I’ll just give you a link — and will only reprint an excerpt tomorrow, after the world has digested it. MONDAY 04.07.14 — NOON UPDATE: Here’s a bit of the copy, FYI:

. . . .Merck plans to conduct the biggest ever test of its kind in an effort to reintroduce the weight-adding drug into the United States and Canada after suspending sales last August. A test herd of this size is currently worth up to $500 million.

Feedlot owners, however, are reluctant to participate in the study until they get a guarantee that slaughterhouses will be willing to buy the Zilmax-fed animals.

Snags with the study, whose size was confirmed to Reuters by Merck, have not been previously reported.

“I’d be happy to sign up, just as soon as Merck tells me who is going to pay me after they’re done,” said a feedlot owner in Texas. “It’s been a horrible time, with the drought. I can’t afford to give away a steer, let alone hundreds. . . .”

I wouldn’t bet on a 2014 reintroduction, now in the US, at least.

Be excellent to one another — have a great weekend!

Making A Biologic At Scale — A Challenge Uniquely Suited To REAL “Big Data” Analysis

April 4, 2014 - Leave a Response

As anyone who has worked around a vaccine shop of size knows, there may be no scientific task more daunting, than growing a perfectly-uniform batch of organisms, from scratch, in the multiple hundreds of thousands of doses scale.

Imagine trying to simultaneously grow upwards of six hundred thousand purple pansies — not one of them with a single blemish, on any petal. At all. Now imagine having to do that over and over, 52 weeks a year. Oh. And yes — every single bit of contaminant, biological or substrate — must vanish before these mythical purple pansies are packed and shipped.

But that is the eye of the needle through which vaccines — and many of the other newer biologic agents — must be passed. In the early 2000s, Baxter could not keep a steady flow of its anti-hemophiliac biologic blood factor reliably streaming from the end of the line of its clearly state of the art facility in Europe, no matter how hard it tried. Similarly, in the 2010 to 2012 timeframe, Merck and MRL could not reliably keep the supplies flowing, on certain vaccines (like its Hep B vaccine) — and likely considered exiting the market altogether.

So. . . unlike a lot of the bluster about uses for big data crunching — this infinitely variable biological problem set is truly an in the wild environment where massively relational computing might help tease out real root causes of production anomalies. Cue the Info-media machines — yes, a feature story follows — on Merck. Diagnosing a vaccine problem, using real big data approaches. Nice. Do go read it all — but here is a bit:

. . . .By early 2013, a Merck team was experimenting with a massively scalable distributed relational database. But when Llado and Megaro learned that Merck Research Laboratories (MRL) could provide their team with cloud-based Hadoop compute, they decided to change course.

Built on a Hortonworks Hadoop distribution running on Amazon Web Services, MRL’s Merck Data Science Platform turned out to be a better fit for the analysis because Hadoop supports a schema-on-read approach. As a result, data from 16 disparate sources could be used in analysis without having to be transformed with time-consuming and expensive ETL processes to conform to a rigid, predefined relational database schema.

“We took all of our data on one vaccine, whether from the labs or the process historians or the environmental systems, and just dropped it into a data lake,” says Llado. . . .

And in the end, they figured it out. Amazing. Know that the next biologic production slowdown (and chaos theory posits that such events are a near certainty, over a large enough n. . .) will likely turn out to be due to the confluence of twenty or thirty wholly-new, and very subtle, biological shifts. . . even ambient external plant humiditiy for example. So I salute the REAL “big data” hunters and gatherers here.

And remember — unlike the competitive gardener, who only loses “best in show”, if her pansies are blemished. . . people may die, if even one vial — of 600,000 doses or so, of a given vaccine is biologically inactive — or contains any form of particulate. The idea that we — in the main — see a safe, stable supply of any widely available modern biologic — is a BIG science. . . miracle. Yes, I think that the right noun. I plainly do intend to mix cosmology and mysticism here — with pure inductive scientific reasoning. It is a modern miracle. Thank you, MRL — and Baxter.

[And. . .what the heck did they put in MY coffee? Wow.]

I Think It Important To Note That Merck Leads The DJIA To This Moment In 2014

April 3, 2014 - Leave a Response

Okay. I pretty regularly point out when, where — and how — I think Merck could do a better job, here in my tiny little electron-filled wood-shed. And so, I want to now loudly, and proudly, note the other side of the coin — going into a quiet Friday.

Quiet, that is — except that the jobs report is due out tomorrow. So, before that roils the markets in the morning (either up or down), let me take a moment on this smoothly peaceful evening to salute Merck: it has led the DJIA, on the NYSE, for all of 2014, through the first three months. Up over 13 per cent in 2014. Nice. [A long while ago -- mid- to late- 1960s -- the Dow had a club it called "the nifty fifty" -- and Merck was usually the leader of that brat pack. And so it is, once again -- at least for the moment. Sweet.]

To be sure, piloting a long-submerged, massive leviathan — like Merck, on a 13 per cent up-bubble — is no mean feat. So this is no April Fools — kudos, Mr. Frazier, and team. Take a bow. Nicely turned.

Looks Likely That Settlement Talks Are Afoot — In The “Son Of” Sunscreens Battle Royale

April 3, 2014 - Comments Off

The readership may well recall that back in early February 2014, I had read an inadvertently un-redacted motion to amend the complaint in this battling sunscreen makers’ patent fight.

Based on what I read there (i.e., allegations of significant inequitable conduct), I would have guessed that the patent holder might be considering settling. Why? Because if the allegations set forth in that motion were to turn out to be based upon solid evidence, the patent holder would be in significant peril, on several fronts, here. So I waited for some sign that concilliatory talks were underway.

Then just yesterday, in the federal District courthouse in Delaware, the able Judge Skleet disclosed that he had entered an oral order on April 1, 2014, pushing that morning’s status call to June 2, 2014. The push was agreed to in advance by counsel for both sides. Given that the parties have completed the vast bulk of taking discovery depositions, in my experience, the longish delay (two months) would likely be. . . to discuss settlement. Each side now likely pretty well understands the other’s positions, arguments, defenses and claims.

So, now we wait for “some white smoke, from the Vatican” (that a final settlement agreement has been reached) — but here is the text of that oral order:

ORAL ORDER

. . . .Pursuant to the request of counsel, IT IS HEREBY ORDERED that: the status teleconference set in this matter for today is RESCHEDULED to 6/2/2014 at 02:30 PM before Judge Sherry R. Fallon. . . .

We shall see — and should it occur in the way I am rather brashly guessing — then the settlement will arrive just in time for summer sunscreen selling season. Good for both parties. [Now, if you want to know more about what the whole five year long fights are about, both patent invalidity and Lanham Act claims, just put "Royale" in the bottom middle search box. I think there are around 25 posts on various aspects of both battles.]

I do wonder aloud anew, as I first did in February, whether J&J will think about reopening the settled original sunscreen battle royale, if it looks like the patent holder has capitulated, here. [To be clear, most settlements of this sort cannot be reopened, absent some later discovered affirmative fraud -- in the explicit factual representations -- upon which the settlement was pinned. So. . . a high bar, to be sure -- but maybe one J&J could clear.] Worth at least a $1 bet, anyway.

Accelerating Trend Alert: Using Social Media To Pressure For Pre-Approval Access — To New Cancer Meds

April 2, 2014 - Leave a Response

MRK-BMS-Access-PD1-Alt-2014I’ve seen several news stories1 on this topic in the past few months, and have seen none that are remotely comprehensive. Of course, this one isn’t either. Heh.

I’ll simply note that even though less than five per cent of these social media campaigns to date have actually caused a pharma major to grant the affected cancer patient pre-approval “compassionate use” access, the trend is accelerating — and all the numbers are certain to balloon. And with that ballooning, will come some very emotional (and quite justifiable) pressure — on the companies — to grant every dying patient access.

The balance, it seems, for the drug or biologic candidate maker, is that all adverse events related to a given candidate must be reported to FDA, as the agency prepares its approvability analysis. Even so, granting stage IV cancer patients access — as an unfortunate matter of biological statistics — means that many of them will die shortly, in any event. And that in turn means that Merck or BMS must then make an evaluation of whether the candidate was any factor in the patient’s demise. And that — like all science — takes time.

So — when someone nearing the end of their battle with melanoma (for example) uses change.org to garner 150,000 signatures for access. . . Merck must think carefully about whether pembrolizumab ought to be sent to their oncologist, for free use.

Of course BMS must do the same for its nivolumab anti PD-1 candidate.

And I have no answers — only more questions. Is the higher societal good served by speeding approvability so that all patients may get immediate access?

Or is the relatively slight delay inherent in post-mortem analyses of compassionate access pre-approval patients’ end of life data, best serving the higher social good? Afterall, in some cases, these biologics will extend to the patient a meaningful amount of quality time — maybe even a year or more. The data is too new to say, with any degree of certainty.

It is a difficult balance, to be sure — but it would be a mistake, in my view, to think that Merck and BMS are insensitive to the plights of the cancer patients. This is far less about the last penny of future profit (in my view, looking at pharma’s motivations, from experience) than it is about trying to get a safe candidate to market — for all patients — as quickly as is humanly possible.

Be excellent to one another — and we will, in any event, have more and better data — at ASCO in Chicago in June. See you then.

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

Note 1: the graphic at above right was derived in part from the NYT story first linked above. My appreciation goes out to Carl Kleiner, for that.

Hawaii BioTech Once Again Moves Closer To Having A Commercially Ready West Nile Vaccine For Merck To [Re-Re-] Acquire(!)

April 1, 2014 - Leave a Response

. . .Although this time around, the openly published hint — from the Hawaii BioTech CEO, Dr. Elliot Parks — is that Pfizer could win the bidding. Moreover, either pharma elephant ought to act more like a partner, than a purchaser, to win the day, when the FDA does finally clear its current West Nile vaccine candidate, according to Dr. Parks.

It seems that the tiny island based company has the only West Nile candidate in clinical trials, at the moment. So it is in an enviable lead position — and clear and away so — should there be a West Nile outbreak in 2015 (and perhaps well beyond — into 2018). [Editorial side-car, here: That he can round-trip his IP virtually at will is emblematic of his demonstrated record of creating powerful vaccines, and his more general scientific prowess -- in the field.

He is usually (experience speaking here) the smartest egg in the room, when it comes to such vaccines. And so, he can reel the pharma majors in and out -- as he is doing in the below interview, toying with the journalist to gently make a point with "the nation's medicine chest".]

You may recall that in April 2013, we reported that Merck had returned much of this same intellectual property to Hawaii BioTech, as Whitehouse Station narrowed its own vaccine R&D focus. It would seem the Merck would now rather “buy” than “make” — for such vaccines — waiting for an outbreak, or near outbreak, to wade in, and acquire biologic inventory here.

You may also recall that it is at least partially accurate to suggest that Hawaii BioTech’s 2010 Chapter 11 bankruptcy might be explained by over-bearing large bulk vaccine acquiror behaviors. [Merck plainly included, here.]

Thus it makes great sense that the CEO would (now in 2014) be appealing for more brotherly (and sisterly) behavior from the pharma majors — given his experiences with the earlier dengue vaccine marketing machinations. Here is a bit from an overnight Pacific Business News feed — do go read it all:

. . . .Hawaii BioTech [scientists]. . . think that the next major outbreak of the West Nile Virus could happen next year, and when and if that happens, the Aiea-based firm will be positioned to help put out this deadly virus, its CEO, Dr. Elliot Parks said. . . .

After the trials are completed, Parks said that the next step is marketing Hawaii Biotech’s vaccine to drug companies such as Merck & Co. and Pfizer.

Hawaii Biotech did a similar transaction in 2012, with Merck purchasing its dengue fever vaccine, although Parks said that this time around, his firm would like to form more of a partnership instead of just a straight acquisition. . . .

So we shall wait and see — but these sorts of medical/biologic wunderkinds don’t appear every dang dynasty – and so they usually get to call the shots, with major pharma, dancing right along, in time. Fox-trot, anyone? Anyone? Anyone? Happy April Fools, now ending. . .

South Korea To Begin Accepting US Zilmax® (Zilpaterol) Enhanced Beef By June 2014?

April 1, 2014 - Leave a Response

The jury is still out on whether extreme localized summer heatwaves — coinciding with some ranchers’ allegedly over-dosing their cattle on zilpaterol (branded as Zilmax® by Merck) was the leading causual culprit in the unusual clustering — of beef-cattle deaths — at processing intake facilities, last summer here in the US and Canada. In fact, it is not yet clear that the deaths weren’t primarily heat- and transportation conditions- related. [The atrociously-inhumane way our beef cattle is handled -- at the end of the delivery cycle, especially -- in industrial meat processing intakes -- could well turn out to be the main problem here. We shall see.]

Even as a blue ribbon panel looks into the matter, and prepares to set standards for a potential reintroduction here, South Korea has moved forward with its plan (originally announced in October 2013) to reintroduce imported beef with minimal levels of zilpaterol, setting specific guidelines for what “minimal” means in this context. If nothing else, the Koreans could pick up some beef on the cheap (since cattle fed a meaningful amount of the additive are essentially unmarketable world-wide, at the moment) — to the extent that there is still some beef “on the hoof” (still in the field) that were fed the additive in mid-2013. Here is Reuters on it (do go read it all) — and a bit:

. . . .South Korea will allow certain levels of animal feed additive zilpaterol in beef from June, a government official said on Tuesday, opening the door to imports of some meat containing the growth enhancer and its domestic sale.

Seoul had said in October that restrictions would be eased sometime in 2014, ending a zero tolerance policy on zilpaterol-based drugs such as Merck & Co’s Zilmax.

The feed additive has been under global scrutiny since a video emerged in the United States in August showing animals struggling to walk and with other signs of distress after taking a growth drug. . . .

To be sure, an open South Korea will not be material to overall Merck, or even to overall Zilmax revenues, compared to 2012 levels. More background on all of this is available here. [And. . . just an unrelated heads-up: HHS Secretary Sebelius will be hosting a Google Hang-Out on "ACA of 2010 Next Steps" -- here on our site, live at @2 PM EDT.] Have an excellent April Fools’ Day!

The Federal “Opt Out” Institutional Plaintiffs In ENHANCE Securities Cases Now Wait For The Supremes’ Word — In IndyMac

March 31, 2014 - Leave a Response

On March 10, 2014, the United States Supreme Court (the “Supremes”) granted certorari in IndyMac.

IndyMac is primarily about whether the three year federal securities statute of limitations is “tolled” (or held-in-suspense, if you will) for all putative plaintiffs in a putative federal securities class action. After all, it wouldn’t serve judicial economy to require that all would-be class members timely file suit, individually, solely in order to protect their rights (in the event, for example, that they ultimately decide they don’t like the outcome of a given class action settlement) — and then leave those complaints at law dormant, on the docket. No, it seems to me that deciding IndyMac in the favor of the issuers who are selling securities would create mayhem on court calendars — nationwide. [But who knows what Scalia or Roberts thinks? Heh.]

Having said that, let me explain what North Sound Capital and GIC Private Limited (backgrounder) — two large institutional holders of legacy Schering-Plough stock — are thinking now. These two (and two others) have agreed to temporarily suspend their opt out suits, while we all wait to find out what the Supremes think is the law, here via IndyMac. All parties in the Enhance federal securities opt out matters apparently agreed — on the record — in the New Jersey federal District courthouse, before the able Judge Freda Wolfson, on March 27, 2014 that their respective rights to bring the suit (or strike it as stale) will be decided by the Supremes in IndyMac. So now we wait until at least Q2 2015 to learn whether these Merck suits (as successor to old Schering-Plough) will go forward. From Judge Wolfson’s order, then:

. . . .WHEREAS, on March 10, 2014, the Supreme Court of the United States (the “Supreme Court”) granted certiorari in Public Employees’ Retirement System of Mississippi v. IndyMac MBS Inc. et al., No. 13-640 (“IndyMac”), to decide whether the filing of a putative class action tolls a statute of repose with respect to the claims of putative class members under the rule of American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974); and

WHEREAS, the Parties have conferred and agree, subject to Court approval, the proceedings in the above-captioned actions should be stayed pending the Supreme Court’s decision in IndyMac, given that it will very likely resolve the threshold issue of whether Plaintiffs’ claims are barred by the statute of repose under the Exchange Act.

NOW, THEREFORE, IT IS HEREBY ORDERED as follows:

The above-captioned actions shall be stayed pending the Supreme Court’s decision in IndyMac. . . .

We shall keep you posted, but it will be a solid year to 18 months — almost certainly — before IndyMac is finally decided.

So sit tight.

By Midnight Tonight, 9.5 Million Previously Uninsured Americans Will Have Basic Health Insurance: “Ah, The Smell Of Victory!”

March 31, 2014 - Leave a Response

With public sentiment now shifting, and a slim majority of Americans declaring that they are either neutral on, or in favor of Obamacare (as opposed to those who want to see a major Republican-led overhaul of the ACA of 2010, or an outright repeal) — we may safely say that when the dust settles — and all the last minute signups are complete. . . Obamacare will have exceeded its targets.

That in turn means he has acheived the greatest expansion in health insurance coverage in at least fifty years (but it is over three-quarters of a century — if one strips out military family benefits enhancements, granted not too long after the second world war ended). That also means that millions of children who have never had health care coverage may now go see a doctor for well-care. The economic benefit — system wide — to preventative health care, from an early age, is incalcuably vast. A bit — from the Chicago Tribune this morning, then:

. . . .President Obama’s healthcare law, despite a rocky rollout and determined opposition from critics, already has spurred the largest expansion in health coverage in America in half a century, national surveys and enrollment data show.

As the law’s initial enrollment period closes, at least 9.5 million previously uninsured people have gained coverage. Some have done so through marketplaces created by the law, some through other private insurance and others through Medicaid, which has expanded under the law in about half the states.

The tally draws from a review of state and federal enrollment reports, surveys and interviews with insurance executives and government officials nationwide. . . .

And, overall, big pharma, via PhRMA, is behind the initiative — it will offer the companies far more customers. And ones who are able to pay (at least a sensible amount) for prescription drugs. This is a bull-market day for pharma, biotech and life science companies in America. Now we get about the small details of fine-tuning the health care reform measures, to work better in the more unusual cases — the oddities and outliers. Do stay tuned.

[NCAA bracket update: With Mr. Obama's Spartans tumbling on Sunday, and my 'Gators hanging tough -- I can now tie him, if the 'Gators win it all. Any other outcome, and he beats me by 5 to 30 points. Should be hilarious here at the end -- but UConn will fall to Florida. Bank on that. And in the title game, I still like Florida -- over all others.]

Rumor 2: If — As Second Anon. Commenter Suggests — It Is Assets Only; No People Or Plants. . .

March 30, 2014 - Leave a Response

To be clear — this too is mere anonymous conjecture.

However, if nothing but the IP portfolio (brands, word-marks and trademarks/ licenses and product-line know how and patented methods/compositions of matter rights) are being sold, then I’ll still say that 3.2 times sales (net of Merck’s then-internal INCREASED restructuring charges — see next paragraph) is a pretty fair guess. Who knows how it will shake out?

As is typical in such “IP strip out” transactions — if Merck doesn’t transfer the bulk of the Consumer Heatlh people in the deal, Merck will be on the hook for perhaps another billion dollars in severance, facility/plant closings and restructuring expenses. Those will need to be deducted from the price the IP only buyer is paying — If announced at the Q2 earnings call.

Personally, I think part of the Merck goal in the purported Consumer Health sale will be to transfer some facilities, some people [and off-load some associated debt]. If it goes as an IP strip, we won’t know for quite a few quarters what the net cash figure was to New Merck. We will have to see the size of the additional restructuring charges. As ever, then — we shall see. Here’s the latest comment:

. . . .Anonymous said. . .

. . .Popular thinking is that Canan was told he would not be CFO that sent him to the exit. He was a lifer at Merck and I cannot imagine he’d be happy one step from the pinnacle of finance. I worked as one of his directs for several years about 10 years ago. He would have made a great CFO.

[Editorial Redaction: The EVP and Chief Strategy Officer] was hired to essentially install the China presence. This was back when we had more than PD-1 in waiting. No surprise at all that he left/was let go considering the new strategy will be licensing deals.

The Consumer sale will be public before the end of 2Q, very likely by tax day. This money is to feed the PD-1 piggy. Last I heard the assets alone are being bought – the staff will not transition to the buyer, at least not a majority. One potential buyer is likely not to take manufacturing assets, either. . . .

March 30, 2014 at 10:31 AM. . . .

Thank you so much! Truly. To be clear — I personally expect Merck will transfer most of the people, and a good bit of the related hard asset-base, in any such deal. But I could be mistaken. Now — sit tight! — we wait and see.

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