Not Any Real Surprise, From Seamus Fernandez — As Both Merck And BMS To Report Q2 Results This Week…

July 25, 2016 - Leave a Response

MRK-Leerink-Q2-Est-2016 If you’ve been reading our regular updates on the two competitors in the checkpoint inhibitor space, you will not be surprised to hear that Leerink Swan analyst Seamus Fernandez is lifting his full year 2016 estimate on BMS’s Opdivo® sales. He sees that franchise as accelerating its growth.

Meanwhile, he does still expect growth from Merck’s Keytruda® when it reports on this coming Friday morning, but he is reducing his full year estimate on the very pricey immuno oncology treatment due to trendlines in IMS scrip data he’s recently reviewed. [I will say we made much the same call, over a year and a quarter ago, now — and without the benefit of the expensive IMS weekly data subscription.] In any event — here is what to look for, as this busy week for drug company and bioscience earnings wears on (per Investors’ Business Daily):

. . . .”Together with Yervoy, Bristol-Myers maintains 85% share of the checkpoint inhibitor market,” Fernandez wrote, referring to the class of cancer drugs to which Opdivo belongs. “Based on these trends, we have increased our full-year 2016 Opdivo sales by $450 million (to $3.8 billion) and expect strong uptake in Japan will improve royalty revenue from Ono. . . .”

Merck, reporting Friday morning, is in a similar situation, but its growth is expected to be more modest — in single digits on the bottom line and flat on revenue. Its blockbuster diabetes franchise is facing increasing competition, even as Opdivo competitor Keytruda takes off.

“We have lowered our near-term estimates for Keytruda and the Januvia franchise based on sales and prescription data, respectively; however we see greater long-term opportunity for each relative to our previous forecasts,” Fernandez wrote. “The recent announcement of an overall survival benefit for Keytruda from Keynote-024 trial raises the prospects for the drug in first-line non-small cell lung cancer (NSCLC). . . .”

Now you know. And now. . . it is just simply too wonderful, outdoors, to stay in any longer — off for a summer afternoon walkabout. Smile!

Important Hearing Tomorrow Morning, In Delaware US District Court — For Gilead And Merck: Patent Spats

July 25, 2016 - Leave a Response

I am in a bit of a hurry now — on a train — but tomorrow’s hearing in Delaware, before the very able Judge Stark portends to set the tone for the rest of the East Coast chapter of the patent fights over Gilead’s Hep C mega blockbusters Harvoni® and Solvaldi®.

I expect that the embarrassing loss of a $200 million jury damage award, in California’s Northern District, will ultimately mean that Merck must settle here — but we shall see. Back with more when I have some free time, this afternoon:

It is hard to imagine that some of the California results will not have already spilled over, into the discovery spats now underway, in Delaware. Moreover, it seems that there is a reasonably high probability that Gilead’s motion for summary judgement might be granted, at Item (3) below (after a few weeks reflection, and time to prepare a well-supported opinion, in Judge Stark’s chambers) — based on what was learned in California. We shall, as ever, see:

. . . .ORAL ORDER:

IT IS HEREBY ORDERED that with respect to the hearing tomorrow, July 26:

(i) the parties shall be prepared to address, all pending motions, as well as the issues raised in the recent status letters to the Court;

(ii) the order in which matters will be argued is as follows:

(1) Idenix motion to strike reports of Dr. Secrist;

(2) Idenix motion to strike good faith defense;

(3) Gilead motion for summary judgment;

(4) Idenix motion to preclude;

(5) Gilead motion to preclude;

(6) status of attorney-client privilege issues; and

(7) trial scheduling; and

(iii) each side will be allocated up to ninety (90) minutes for its argument.

ORDERED by Judge Leonard P. Stark on 7/25/16. . . .

Now you know — with more analysis, as time permits. Big grins!

FDA Breakthrough Designation; EMA “PRIME” Designation — For Merck/NewLink V920 Ebola Vaccine Candidate

July 25, 2016 - Leave a Response

We must remark once again just how hard it is — to overstate the importance of this vaccine candidate — in arresting the last Ebola epidemic, in Africa. The so-called V920 rVSV∆G-ZEBOV-GP vaccine has thus far proven 100 per cent effective, when deployed in a ring fashion, against the virus in people who’ve come in close contact with an active Ebola carrier.

So it makes sense that both the European Medicines Agency, and the US FDA would put the candidate on a fast track to approval. And that’s just what both have done, as of this morning. While Kenilworth certainly deserves generous plaudits for its work in both finishing the R&D, and actually mass-producing the vaccine — and getting it intact and active, into the very difficult geographic environment Africa presents — we should not forget the ten years plus worth of solid work of Canadian Public Health Agency scientists, and the NewLink Genetics team. Here’s a bit from the story, out of Ames, Iowa this morning — do go read it all:

. . . .Merck, known as MSD outside the United States and Canada, [along with Ames, Iowa-based NewLinks Genetics] has reached two key regulatory milestones for the Ebola Zaire vaccine candidate known as V920 (rVSV∆G-ZEBOV-GP). The U.S Food and Drug Administration (FDA) has granted the vaccine candidate Breakthrough Therapy Designation, and the European Medicines Agency (EMA) has provided the vaccine candidate PRIME (PRIority MEdicines) status.

V920 was initially engineered by scientists from the Public Health Agency of Canada and subsequently licensed to NewLink Genetics. In late 2014, when the peak of the Ebola outbreak in western Africa was at its worst, NewLink Genetics licensed V920 to Merck, with the goal of accelerating the development, regulatory approval, and availability of this candidate vaccine. Merck is responsible for the research, development, manufacturing, and regulatory efforts in support of V920. Since that time, Merck continues to work closely with NewLink Genetics and their external collaborators to accelerate development and licensure.

“These regulatory designations reflect great credit upon the extraordinary public-private partnerships which have allowed the vaccine candidate to be included in 12 Phase 1, 2 and 3 studies on three continents in less than two years,” said Thomas P. Monath, M.D., Chief Scientific Officer and Chief Operating Officer of the Infectious Disease Division of NewLink Genetics. Charles L. Link, Jr., M.D., Chairman, Chief Executive Officer and Chief Scientific Officer of NewLink Genetics emphasized that, “While the Ebola Public Health Emergency of International Concern (PHEIC) is over, we know the threat of re-emergence remains. We are encouraged by these FDA and EMA decisions which we hope will aid progress of the candidate vaccine towards potential licensure. . . .”

And bit by bit, the world’s bio-science community is putting the WHO in a position to much more quickly arrest future outbreaks. Sadly, it is an inescapable fact of biology that the virus will eventually reappear — but it need not become an epidemic, the next time around. Smiling widely — on a clear mid-summer Monday morning, now — brimming with optimism on my walk in, here. Be excellent to one another.

O/T: 54 Years Ago This Afternoon, President Kennedy Used Telstar 1 — To Broadcast A Live TV Address, From The US To The UK

July 23, 2016 - Leave a Response

In so doing, he (and Walter Cronkite, later broadcasting the nightly news — and rather improbably, the Chicago Cubs, immediately prior thereto — whose game at Wrigley, with the Philadelphia Phillies was broadcast to England for a few moments, while President Kennedy waited to begin his prepared remarks) paved the way for the global lightning-fast internet we now take for granted. If you are looking at these YouTube video-feeds in Wolverhampton, Tokyo or Dakar — you may well be seeing the below, bounced off a satellite — one of hundreds of far-advanced great great grandchildren of Telstars 1 and 2.

Here more than a half century on, those early, ginger steps led to this day: letting us stay in touch with one another live, and instantly, from Japan to Antarctica, from to Kenya to Canada, and from the US to Turkey. Simply amazing, for those of us who still remember a time when it was not so:

. . . .Telstar 1 was an experimental active communication satellite built by Bell Systems. It was launched with assistance from NASA in July 1962. Approximately 400 transmission sessions were conducted by the satellite with multi-channel telephone, telegraph, facsimile, and television signals in the six month period after Telstar was launched. Hundreds of technical tests and measurements were also made which would help later satellites revolutionize the communications industry. [In the Cubs middle innings, batter Tony Taylor, was seen hitting a ball pitched by Cal Koonce to the right fielder George Altman. Then the video feed cut away to President Kennedy, speaking live in Washington, DC.]

A few months later, during November 1962 the command subsystem on the satellite failed. A brief restoration of services was made in early 1963, however within six weeks the command subsystem again failed. The cause of the failures was due to degradation of transistors, caused by Van Allen belt radiation increases later attributed to very high level troposphere American & Soviet nuclear weapons tests then being conducted. . . .

It is hard to overstate what a “wow factor” that moment in television history held. Kids across the nation watched, glued to their (overwhelmingly) black and white TV sets, as their parents explained satellite orbits. It even inspired/generated an eponymous No. 1 pop-hit, by the Tornados — in both the UK and the USA. Here’s a bit of that live presidential address, at about 24 minutes and 53 seconds in.

Now you know — off (fittingly, now) to see Star Trek Beyond. . . smile. . . .

Pfizer’s Lobby Spend Nearly Doubled Merck’s — In First Half Of 2016: $7.77 Million

July 23, 2016 - Leave a Response

Just as we intoned a few days ago, there is still “embedded” in the huge 2016 first half spend by Pfizer, all that money it had to write off, lobbying to skirt the two-year old Treasury regulations — on inversions, during Q1 2016 — when it had to abandon its $159 billion Allergan re-domicile deal. [That the deal was always going to end up DOA was obvious to most savvy financial people — at least to those not trapped in the Pfizer echo-chamber.] What an ignomious waste of shareholders’ money, that was. It was clear over a 18 months ago, that the regulatory landscape had changed — after Mr. Read’s first failed inversion (at $120 billion, for AZ) went down in flames. Between the two failed deals, Mr. Read likely spent over $600 million — when one includes all the broken deal fees to bankers and counter-parties, and legal, lobbying, tax and accounting expenses. 

Okay — to the specifics, then: Pfizer spent $3.57 million in Q2 2016 (compared to $2.45 million in Q2 2015). And that in turn, compares to its $4.2 million in Q1 2016. Down only 12 per cent, compared to Merck’s cutting lobby-spend in half, in the same time frames.

In any event, I would hope that Mr. Read’s lobby spend decreases more significantly in Q3 2016 — to become more closely proportional to Pfizer’s size relative to Merck’s — as it is clearly a tumor, at this point in the year. With very little happening in the way of actual legislation, until the new President is elected, the whole operation ought to be essentially moth-balled, until January 2017. But that’s just my $0.02 — for Pfizer’s institutional investors, to communicate/advocate with Mr. Read. Here’s some of what he spent on, in Q2 2016 — I’ve bolded the bits that Merck likely also spent on (albeit much smaller sums):

. . . .Trans Pacific Partnership Negotiations, Miscellaneous Tariff Bill (MTB), Trans-Atlantic Trade & Investment Partnership (TTIP,) Canada IP/Trade Issues, South Africa IP Issues, China IP, Saudia Arabia Pricing Issues, United Nations Health Panel [likely along with Merck], Thermacare EU, Privacy Shield, G7/G20, APEC, OECD. . . .

21st Century Cures Initiative, Senate Innovation Project, Drug Pricing, Biosimilars Reimbursement Policy. . . .

Patent Troll Legislation, Defend Trade Secrets Act, Medicare Rebates/Medicare Part D, Non-Interference, Medicare Part B Reimbursement, Medicare Part B CMMI Demo. . . .

Deferral, Comprehensive Tax Reform, Territorial Systems, Patent Innovation Box, Cadillac Tax, Inversions, Section 385 Proposed Regulations. . . .

Omnibus Appropriations Bill, LHHA Appropriations, 2017 FDA & Labor/HHS Appropriation Bills. . . .

Now you know — off to mountain-bike, a workout, and then a longish swim in the cool clear lake waters, then lie on the white sandy beaches, here. . . smile. I love summer Saturdays. . .

Merck Encounters FDA Delay On Its C. Diff. BLA — But Stool Capsules Are Likely Already Eating Into Would-Be Market Share…

July 22, 2016 - Leave a Response

While this offering will, in part, serve as a complement to the Cubist acquisition offerings, it will certainly sell on its own — if and when it garners approval. However, the reality may be that the biologic will be overpriced compared to the purified stool capsules (or alternatively, implants) which have gained increasing favor, as payers look for more economical methods for tackling this otherwise rather common and widely-dispersed infection problem. We shall have to wait and see how it all unfolds, but I expect that Merck has trimmed its peak annual sales expectations for the candidate, given intervening developments on other C. diff. fronts.

Chief among these is the notion that, as I had originally noted — as early as December 2012 — Clostridium difficile biologics franchises may face the reality that purified stool implants (or more recently, carefully insulated oral capsules!) solve the same problem, at a fraction of the biologics’ costs. And some of that filtered through at the earlier FDA Advisory Committee meeting — but here is FierceBiotech on it all, as of this morning:

. . . .Trials for the drug, which is not a traditional antibiotic but designed as a mAb to prevent the recurrence of C. difficile infection by binding to and neutralizing the C. difficile toxin B, have already been chided by an FDA expert panel.

Last month the regulator’s advisory group questioned the Big Pharma giant for its small trial size despite the patient population being huge, with others seeing shortcomings in the data. The panel did vote 10-5 (with one abstention) for a recommendation, but most seemed to harbor differing levels of reservation. . . .

So now the earlierst this BLA will be cleared will be late October, 2016. Now you know — and onward, to a perfect — if smokin’ hot summer weekend — all grins here! I refuse to allow the re-emergence of the name of David Duke — into national politics dialogues, bend the arc of my joy — at all. Next Star Trek movie installment in the offing, as well!

Merck Drastically Cuts Its Lobbyist Spend In Q2 2016

July 21, 2016 - Leave a Response

While final figures for Pfizer are not yet available (as it is almost always tardy in reporting), it looks like Pfizer cut its Q2 2016 lobby spend by only about 12 per cent, compared to Q1 2016.

Merck on the other hand, has cut its Q2 spending in half, compared to Q2 2015 — and spent only about a third of what it spent just last quarter, in Q1 2016. My suspicion would be that this US presidential election year summer brings us to both a congressional recess, and not much in the way of action on major legislative proposals, for or against pharma’s interests — as presidential campaigning now dominates the scene. Even so, here is what Kenilworth says it spent its lobby-dollars on, in Q2 2016:

. . .340B (no specific bill), Hepatitis C (general education; no specific bill), Human papilloma virus and vaccine policies (general education), shingles vaccine policies (general education), antimicrobial resistance (general education and DISARM (H.R. 4187), biosimilars (no specific bill), 21st Century Cures (H.R.6), Senate Innovation Project (no bill number), cost and value of medicines (no specific bill), Strengthening Public Health Emergncy Response Act (H.R. 3299), priority review voucher and medical countermeasures (general education), women’s health (general education), insurance benefit design and value-based contracting (general education), general pharmaceutical issues. . . .

Comprehensive tax reform (no specific bill), international tax proposals (no specific bill), orphan drug legislation (S.1128), base erosion (no specific bill), territorial tax system (no specific bill). . . .

Medicare Part D (general education, no specific bill), changes to low-income subsidy structure in Medicare Part D (general education, no specific bill), H.R. 5122 (Centers for Medicare and Medicaid Innovation demo), Independent Payment Advisory Board (general education, no specific bill), Medicare Part B (general education, no specific bill); Medicaid (no specific bill). . . .

Trans-Pacific Partnership, data exclusivity for biologics, United Nations high level panel. . . .

FY17 Labor HHS Appropriations bills, FY17 Agriculture Appropriations bills, vial size. . . .

The United Nations high level panel above was likely on Ebola and vaccine policies. Now you know. And I think Pfizer’s figures stayed relatively high in Q2 2016, in large part because it was still working to get clearance for the Allergan inversion deal into early Q2 — which it has now abandoned. I’d expect sharper declines from Pfizer, in Q3 2016 — proportionately more in line with Merck’s. But time will tell. I am planning on wholly-avoiding Mr. Trump’s speech tonight — as I don’t want to upset my stomach. But we will see. . . . smile.

It Is Looking More Likely That Judge Labson-Freeman Will Decide Whether Merck Pays $15 Million Of Gilead’s Legal Fees, Even Before The Appeals Are Decided…

July 21, 2016 - Leave a Response

Overnight, the very able federal Disrtict Court Judge Beth Labson-Freeman ordered Gilead, by July 27, 2016 — one week before the hearing on August 4, and one week from now — to provide her with a complete set of so-called “task-based” deeply detailed by time-keeper spreadsheets. These sorts of breakdowns show the number of hours expended by each billing attorney, and on which tasks those hours were expended. She has not required a breakdown of the billing rates for these attorneys (yet). What the Judge is after is a sense of whether the lodestar amount Gilead is seeking from Merck is reasonable.

In addition she has ordered that Merck be allowed to see the aggregated, and individualized breakdowns of hours by task, by lawyer — with client confidences redacted, of course — so that Merck may assess whether the fees sought are reasonable, under the circumstances.

Here is that two page order, for the record — as a PDF file.

For its part, Merck had just asked that the fees motion not be heard until the appeals are completed. It would seem that Judge Labson Freeman is not inclined to wait — as she’d likely rather collect this data while it is right at hand, and everyone’s memories of the to and fro’ of the trial — and trial prep efforts — are fresh.

The August 4, 2016 9 AM PDT in-court appearances, and argument, portend to be rather dramatic, in my experienced estimation. Over $15 million in fees reimbursement hangs in the balance for Merck. We will keep you informed. Were I a betting man, I’d guess that over $13 million will be ordered paid by the judge, in the end. [Again, as she quite sagely did, with the overall original $200 million verdict — she is clearly hinting here that the two ought to get together and settle on a number — from Merck to Gilead — and that she’d likely be disposed to bless it. But if they couldn’t get there on the verdict (now vacated in its entirety), it is not clear they’ll be able to negotiate their way to get to agreement, on the fees, either. She does seem to be hinting that she will award some part of these fees, in seeking this level of detail, right now. Just my $0.02 — to Mr. Frazier.]

Okay — out now, on foot — to find a tart, freshly cool summer fruits salad, on a muggy, heat-domed Thursday early afternoon. . . but outdoor-dining, and with live music, to boot — will be in order, for certain. . . .

O/T: The GOP’s “Party-Unity” Night Went Well — WWF Theatrics Edition(?)…

July 21, 2016 - Leave a Response

Well — these goofy Trumpers have turned the Republican National Convention into a WWF show, overnight. Hilarious. Trump walks in to cut off Mr. Cruz’s speech? The TV monitors cut out from time to time, and the would-be Emperor Trump scowls in anger? [But first, let me plug and support the sublime artist from whom the image at right was derived: do go get your very own Cruz WWF 2020 poster here!]

It was hard to keep up with all the mayhem last night, as it was unfolding essentially simultaneously (i) on the floor, and (ii) on the podium, and (iii) in Mr. Trump’s family box. Pegged hard right on the irony meter, but likely missed by many last night were Mr. Christie’s remarks — to TV reporters, from his seat on the convention floor, calling Mr. Cruz “shameful,” and “not a man of integrity.” Gee — is this the part of Night Three, when the party finally unifies? Cool.

Ted Cruz (whose wife needed a security escort to leave the arena, after his speech) echoed the #NeverTrump movement’s “vote your conscience” mantra — and pointedly REFUSED to endorse the currently proposed ticket.

Some hard-right pundit said he thought the night was boring, but good for party unity — and Mr. Trump. I am not sure what sort of perception-altering meds that guy is on, but do steer clear. Is/was he on Ketamine?

Me? I don’t really think GOP conventioneers threatening a sitting US Senator’s wife qualifies as “good for the party, and Trump”. But what might I know? Overall, it couldn’t happen to a nicer bunch of folks, truly.

Onward — into the abyss, which is a Trump-Pence landslide loss — with Mr. Cruz starting his obviously self-aggrandizing 2020 GOP Presidential nomination run. . . as of last night.

If there is still a GOP by 2020 — in name or otherwise, that is.

The Trump team is handing this 2016 election over to Mrs. Clinton, on a silver platter. 80 per cent probability via Nate Silver; 76 per cent probability via the New York Times models. And all of that was BEFORE last night’s chair throwing WWF cage match. They threatened a spouse of a US Senator, from their own party? That’s beyond the pale — truly. Not that Mr. Cruz was an innocent — but they sure look like brownshirts to me.

I am just all grins — on this second sweltering morning. . . all grins.

Not “Our” Merck — And Not So Sure About This Idea, More Generally…

July 20, 2016 - Leave a Response

Let me say at the outset (per the very impressive line-up of logos, at right) that a lot of extremely smart people have decided to back this with real cash — nearly $50 million, if we include the seed-, and Series A- rounds.

Having said that, I for one am glad that the US Merck (no relation) has kept its venture arm out of this investment. [It would have been a short reach, from Amgen to Dr. Perlmutter (and thoughts of eventual expansion to Alzheimer’s), but that didn’t happen — thankfully, in my opinion.] I’m not at all sure I see a fit, even between the German Merck venture arm, and this idea. Now, Pfizer and Amgen — each is already in the AD/HD space, with drug offerings, so I at least see the theory there.

It would be wonderful — a miraculous development, actually — if it turns out that a mobile video game platform can improve the cognitive abilities of kids with AD/HD. I suspect (having done almost no reading on the topic) it is more likely to be used first as a diagnostic device — to assess kids.

Even so, if the longer term goal is an efficacy trial, for improvement in AD/HD symptoms — I think that will be very tough to demonstrate. But we shall see — here’s a bit, from XconomyBoston, this early morning:

. . . .Akili announced it tacked on $11.9 million to its recent Series B funding round, bringing the round’s total to $42.4 million. The additional money comes from the venture capital arms of pharma giants [GERMAN] Merck and Amgen—both new investors in Akili—along with previous backers, Akili says in a press release. Before the Series B, Akili had raised at least $7 million through venture capital, grants, and industry collaborations.

The deal strengthens Akili’s ties to the pharma industry and likely gives its experimental technology more credibility as it tries to become the first company to receive FDA approval to sell interactive electronic games as a medical device capable of diagnosing and treating a variety of cognitive disorders. Akili now has four relationships with large pharma companies or their investment arms; it previously struck a partnership with Pfizer and snagged an investment from Shire Pharmaceuticals.

Akili marks the first investment by [GERMAN] Merck’s VC arm into a company that sits at the intersection of software and medicine. . . .

Onward now, on a sweltering, humid mid-summer morning — with a wide grin, just the same. . . as more symphony music is in store, in the cool of this coming evening. Be excellent to one another!


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