India’s Sitagliptin Wars Update: Glenmark On Market Only Until Q4 2015, Now

August 4, 2015 - Leave a Response

So — no interim relief for Glenmark, to dispose of its raw materials inventory — via continued manufacturing, from APIs. However, by most calculations, including mine, Glenmark has enough finished goods inventory to supply the Indian market demand for generic sitagliptin through November of 2015. And we should have a final outcome a month or so before then, in India in any event. [Backgrounder here.]

Here is the local coverage, just filed this afternoon, New York time:

. . . .A bench comprising justices Ranjan Gogoi and N. V. Ramana said it didn’t consider it appropriate to create additional rights in favour of Glenmark at this stage, when the Delhi High Court hearing on the dispute between Glenmark and US-based Merck, Sharpe and Dohme (MSD) is about to conclude.

“The registrar of the Delhi High Court is also directed to inform this court about the pending suit relating to the patent infringement after the judgement is delivered by the High Court,” the bench said. . . .

Onward, then on a hazy August Tuesday. . .


[Smiling — as I think of this day, exactly one year ago — and someone’s googly eyes. . . .]

Sobering Ebola News, Out Of Sierra Leone — Will Merck/NewLink Vaccine Be Used, In “Ring” Fashion?

August 3, 2015 - Leave a Response

Having seen this region of Sierra Leone remain free of live Ebola cases for quite a few months, this is truly a disappointing new turn — in the unpredictable chain of human epidemiological events. However, it does present an opportunity — to eradicate the ring of “contact infection” potential, via a vaccination of all known contacts. Will the health ministry in Sierra Leone mandate it? And will Merck be able to solve the logistical nightmare — to get adequate supplies of rVSV-EBOV vaccine down there — all kept at minus 60 degrees — in the Equatorial summer’s heat?

From the local overnight reports, then:

. . . .According to Clarence Roy-MacAulay of the Associated Press, two new cases of Ebola surfaced in Sierra Leone’s Tonkolili district, where a man died last week. The area has been free of the Ebola virus for months until now.

“We now know where the virus is and we are tracking its movement, by surrounding, containing and eradicating its last remaining chain of transmission,” OB Sisay of the National Ebola Response Centre said. Sisay added that the two new cases came from relatives of the man.

Authorities have also quarantined 500 people following the death. “The victim contracted the disease in the capital and then traveled to his home village to mark the end of the Muslim holy month of Ramadan,” MacAulay wrote. . . .

So it goes — two steps ahead, followed by one. . . back. It was ever thus, in the progress of human history. I am just about certain that Merck will supply, free of charge, if asked to do so. Onward, with resolve.

As I Hoped/Predicted Yesterday — Guinea Will “Ring Vaccinate” Ebola Node Contacts — From Now On

August 1, 2015 - Leave a Response

MRK-Guinea-Vac-2015 And the Health Ministry in Guinea is doing so with WHO blessing, it seems. Excellent. Only a matter of time before Sierra Leone and Liberia join in.

This moment, August 1, 2015, is likely the end of large-scale Ebola outbreaks — in Africa (and globally) — in much the way polio was eradicated in most of the world about 75 years ago. Late in coming, to be sure, but this is a triumphant moment for the power of biological science, applied. More later, but Here is Bloomberg on it all:

. . . .Guinea will inoculate all people who have come into contact with new cases of Ebola after successful trials of a vaccine developed by Merck & Co., the head of the campaign against the virus said.

Guinea’s government, the World Health Organization and the medical charity Doctors Without Borders began a series of trials of the VSV-EBOV vaccine in the West African nation on March 7, National Coordinator of the Fight against Ebola in Guinea Sakoba Keita told reporters Friday in the capital, Conakry.

“The vaccine showed a 100 percent efficacy,” Keita said. “From today, all the contacts will be vaccinated so as to stop the evolution of the virus. . . .”

This is quite welcome Saturday morning news!

Ebola Vaccine Good News: 100 Per Cent Efficacy; Phase III Effort Continues

July 31, 2015 - Leave a Response

The focus now shifts to SAGE — and how soon that arm of the World Health Organization will recommend the candidate be used in wide scale vaccination efforts, in country.

We do know there had been a lingering (albeit small-scale) re-appearance/outbreak in Guinea — and more recently, outside Monrovia, Liberia. Might the vaccine now be deployed in a ring fashion, among the 20 or so known to be exposed? I think that a very wise next step. Here is Bloomberg’s reporting overnight:

. . . .Merck & Co.’s vaccine for Ebola is “highly effective,” according to an interim analysis from a panel of experts who recommended that a late-stage trial should continue.

The vaccine was 100 percent effective when it was tested on more than 4,000 people who were in close contact with Ebola patients in the African nation of Guinea, according to a study published today in the Lancet medical journal. . . .

As the authors of the original study put it, in The Lancet (with a hat tip to my erstwhile anonymous commenters, too!) then: “. . .“One important message [here] goes beyond even Ebola — the power of multilateralism and inclusive partnership to devise and execute critical clinical research. . . . Ebola has been a catastrophe for west Africa. But out of this epidemic has come the opportunity to build unprecedented collaborations to generate evidence to advance health. There have been few better examples to prove the value and importance of WHO to strengthen global health security. . . .” Quite so. It’s just long time, in coming, sez me.

And so — a hopeful summer Friday begins, just as August is upon us. Onward.

Pharma’s Latest Trans-Pacific Trade Treaty Negotiating Points — NYT’s Excellent Update From Hawaii

July 30, 2015 - Leave a Response

I will commend this fine long form piece to the attention of our readership. [Our own latest backgrounder is here, from June 2015. It is likely true that whatever deal is reached here, will become the default world wide trade standard — in around five years’ time — so, the stakes are truly titanic.] I’ll take no absolutist positions on any of these issues, as I note there are compelling policy and economic arguments, on all sides. But I do think the US Congress ought to harmonize biologics’ patent protection periods — at around seven years. [Sly smile.]

The New York Timesmorning reporting nicely summarizes the manifold pressures being exerted — on all sides — in the battle over what pharma and biologic patent protections, and market access for imitators will look like, if a deal is struck, in the current round, in Lahaina, Hawaii. Most significantly, Australia is seeking only five years of patent protection on biologics, while the US remains at 12. That alone could be a deal breaker. Do go read it all — from this morning’s Gray Lady:

. . . .The complexity of the pharmaceutical issues illustrates how difficult it will be to agree on broad trade rules for 12 countries, including giants like the United States and Japan and developing counties like Peru, Malaysia, communist Vietnam and tiny Brunei. . . .

[M]edicines remain a delicate problem, and if Japan’s last stand is on rice and Canada’s is on dairy, the United States’ might be on pharmaceuticals.

About 5,600 medicines are in development in the 12 TPP countries, with 3,372 of them in the United States, including more than 900 biologics, which are grown from live cells, according to the Senate Finance Committee. The industry contributes nearly $800 billion to the United States economy each year. . . .

Negotiators already seem to be backing away from the hard-line United States position. Observers to the negotiations say the 12-year patent window almost certainly will be scaled back to five to seven years, a move that will anger both the pharmaceutical firms and their allies, and the activists. The Pacific accord is structured so that other countries can join in the future, and the belief on both sides of the pharmaceutical fight is that once 12 nations ratify rules, they will become international standards. . . .

United States law protects pharmaceutical patents for 12 years, allowing drug makers to recoup their research-and-development investments before generic companies can come in with far cheaper versions. Negotiators for the United States say they are obligated to defend American law, even though President Obama has been pushing to shorten the patent protection to seven years. . . .

Onward, on a perfect Thursday — and if I had to bet, I’d wager that the TPP deal will get done — at seven years, on biologics. The costs of a “no treaty” outcome are just too steep, for all nations. Enjoy your Thursdays — one and all — starting to swelter, already here!

Other Q2 2015 Release Updates: Hep C Candidate Grazoprevir/Elbasvir Granted Priority FDA Review — Decision By January 2016

July 28, 2015 - Leave a Response

MRK-Q2-FDA-2015 So as not to be lost in the shuffles — of revised guidance, Venezuelan charges and the smallish Israeli oncology candidate acquisition. . .

I will separately post on the next gen, once daily combo tab for Hep C Merck is advancing through Phase III, now. FDA has received the packet, and will likely make a decision on it early in 2016. However, Kenilworth already faces some daunting competitors in this space. Just the same, this is moderately good news:

. . . .Separately, Merck said, the U.S. Food and Drug Administration has accepted for review the company’s new drug application for grazoprevir/elbasvir, a once-daily, single-tablet therapy for hepatitis C. The agency granted priority review for the treatment with a decision expected by Jan. 28 [2016]. . . .

Onward. . . knowing that so much of science is mystical, too. . . the stars shine and glisten, for like one’s skin — in a night rain, under a waning moon — it is science. . . that makes it so. . . . But only if we. . . notice, is it so.

Merck Full Year 2015 GAAP Guidance Hit By Venezuelan Deval; Deal Costs

July 28, 2015 - Leave a Response

c5a12-mrk-q2-2015-ecc3 Kenilworth just reported Q2 2015 results. More soon, but the biggest driver is a $715 million charge in the Venezuelan currency carrying values. More broadly, Merck saw a seven per cent downdraft, due to the strong dollar (effect of weak foreign currencies), at the sales line. Listening to the webcast now.

While it raised the full year non-GAAP guidance range for EPS (a feel-good measure by and large), Merck lowered its full-year GAAP EPS guidance, due to the Venezuelan deval charge, and costs of M&A of late. That’s not welcome news, but had been widely expected.

In a separate release, Merck said it spent modestly to acquire another promising set of cancer pipeline candidates out of Israel, called cCAM Biotherapeutics:

. . . .Under terms of the agreement, Merck, through a subsidiary, will acquire all outstanding stock of cCAM in exchange for an upfront payment of $95 million in cash. In addition, cCAM shareholders of record are eligible to receive a total of up to $510 million associated with the attainment of certain clinical development, regulatory and commercial milestones. The transaction is subject to certain closing conditions. . . .

More later — graphics soon Keytruda is showing a nice sales ramp in melanoma in the U.S., where it is the number one therapy — but that is the smaller burden cancer set — since BMS holds the lead in lung cancers. Do keep in mind, as Dr. Perlmutter talks, that BMS is around a year ahead on most fronts, in the highest burden cancers. Morning — one and all!

UPDATE: Forbes Offers Specific Guesses — For Tomorrow’s Q2 2015 Results

July 27, 2015 - Leave a Response

b3330-mrk-csfb-06-15UPDATED — 07.26.15 @ 1 PM EDT: As to the predicted numbers, here is Forbes on it all — “. . .Analysts are forecasting lower quarterly profits compared with last year’s, at $0.80 a share from sales of $9.78 billion, partially because of its 58% forex exposure. In the year-ago period, MRK made per-share earnings of $0.85 and $10.9 billion in revenue. However, Wall Street hasn’t been great at nailing MRK. If history repeats itself, Merck’s results could beat expectations like it has in 10 of the last 11 quarters. . . .” Now we wait. End, updated portion.

To be sure, we will have to wait and see what the release on Tuesday morning harbors, but I’d not expect a nine per cent downdraft, at the sales line, due to currencies, as was seen last week at Bristol Myers Squibb. I think Merck has more hedging in place than BMS, and a better “natural” mix of geographies; and product-margins (each of which ought to dampen currency headwinds somewhat, at Merck).

What I see as one of the most hopeful moments, likely to be echoed on the Kenilworth call, Tuesday, is the notion that (thus far, at least) Opdivo® (and by implication, Keytruda®) won’t see strong payer-side pressure to agree to long term contracts, with significant price discounts, in any cancer set — anytime in the near (24 month) future. And this is potentially a $35 billion market opportunity, all in.

Merck Will Report Q2 On Tuesday; Some Color From BMS’s Views On Newest Immuno-Oncology Agents

July 26, 2015 - Leave a Response

To be sure, we will have to wait and see what the release on Tuesday morning harbors, but I’d not expect a nine per cent downdraft, at the sales line, due to currencies, as was seen last week at Bristol Myers Squibb. I think Merck has more hedging in place than BMS, and a better “natural” mix of geographies; and product-margins (each of which ought to dampen currency headwinds somewhat, at Merck).

What I see as one of the most hopeful moments, likely to be echoed on the Kenilworth call, Tuesday, is the notion that (thus far, at least) Opdivo® (and by implication, Keytruda®) won’t see strong payer-side pressure to agree to long term contracts, with significant price discounts, in any cancer set — anytime in the near (24 month) future. And this is potentially a $35 billion market opportunity, all in. On the BMS call, the question about potential for a Sovaldi® type of pressure/backlash from government- and private insurer- payers was answered thus:

. . . .We’ve really been fortunate with the quality of data that have been generated behind Opdivo and the value that we’ve been able to establish for patients with metastatic melanoma and non-small cell lung cancer. And I think that’s been recognized by payers. We’ve had — we have established very broad and very rapid access in the US.

The breadth of indications that we hope will follow will also further strengthen our ability to weather any attempt that any payers may have to try to restrict these agents, which is very difficult to do in the oncology arena with drugs like Opdivo with overall survival benefits. So we feel very good about our current access and our ability to sustain that going forward. . . .

It would be hard for an insurer to defend being restrictive where the data shows that people will literally die much sooner, without access to the therapy. And that is — in the main — what this data establishes — at both Merck, and BMS. This should mean similar, but smaller, good news ahead for Merck. Keep in mind that in BMS was first to market, and that (at least I predict) Merck will eventually offer to cut price on Keytruda, to win some of the BMS share, in the markets where Merck is likely a year or so behind. Just my $0.02. Onward.

Merck’s Retiring EVP & GC Gets Enhanced Departure Vesting — Purportedly To Enter Public Sector (WTH ?!)

July 25, 2015 - Leave a Response

In general, I’ve held the opinion that Merck has greatly reformed the company’s executive perks and pay practices — especially those that used to prevail at legacy Schering-Plough. [Afterall, this Merck IS the Schering-Plough legacy Delaware holding company, just renamed — with Merck’s legacy assets folded in. In fact, Merck installed double triggers, for all its executive payouts, back when legacy S-P barely had a meaningful “single trigger“. Remember, by 2006, Merck was pulling EARNINGS that regularly TRIPLED S-P’s, despite carrying a much bigger base. For all of this, then CEO Clark earned less than a third (per year) of what that shine-ola salesman Hassan took from legacy Schering-Plough. But I digress.]

Having said all of that, this acceleration of Mr. Kuhlik’s equity awards — and that is what this is — an acceleration, and fixing in cash, the certainty of those awards. . . strikes me as over the top.

I am unconvinced that — as he retires, in normal fashion, from Kenilworth — Merck will receive any meaningful benefit from his entering a government job. And any ordinary person in his role, would simply accept that his choices are. . . his choices — ones that may have real pecuniary consequences, under his previously agreed retirement packages. I’ll wait to see where he turns up, but if he’s to become any judicial or regulatory office holder, getting a “bump” as he departs Merck would seem inappropriate. I am sure he was a very capable GC — but tearing up his retirement agreement, especially where (as here) he is not really retiring at all. . . seems a lil’ like a Fast Fred Hassan move, truthfully. Here’s the bulk of the late Friday evening (i.e., buried) SEC Form 8-K:

. . . .Bruce Kuhlik, who completed his tenure as General Counsel for Merck & Co., Inc. (the “Company”) on June 30, 2015, is entitled to payment of certain compensation following his retirement from the Company (which is effective August 1, 2015) under the Company’s compensation programs, the terms and conditions of which have been previously disclosed. Mr. Kuhlik has advised the Company that following his retirement, he intends to accept a position in the public sector which would require him, as a condition of his employment, to divest himself of any interests in the Company that are subject to variability based on Company performance. The Compensation & Benefits Committee (the “Committee”) of the Company’s Board of Directors determined that it was reasonable and appropriate to allow Mr. Kuhlik to realize a certain amount of income that he would otherwise have had the opportunity to be paid under the Company’s compensation plans and programs had he not been required to divest his interests at this time. Therefore, on July 21, 2015 the Committee authorized and Mr. Kuhlik has accepted changes to certain incentive compensation arrangements previously granted to Mr. Kuhlik, as follows:

1. Accelerate the vesting of that portion of the Stock Option granted to Mr. Kuhlik in 2013 (consisting of 1/3 of the original number of shares), that would have otherwise vested in connection with his retirement so that the final portion of the option is fully exercisable beginning on August 3, 2015, the first business day following Mr. Kuhlik’s retirement, rather than in May 2016. This change does not directly provide a payment to Mr. Kuhlik, but allows him to fully exercise the option in the short term.

2. Accept Mr. Kuhlik’s forfeiture of the portion of each of the stock options granted to Mr. Kuhlik in 2014 and 2015 (consisting of 1/3 of the original number of shares) that would have vested in May 2016 in light of his retirement. The forfeiture will be effective as of his August 1, 2015 retirement date. In addition, the remainder of the options granted in 2014 and 2015 (consisting of the remaining 1/3 and 2/3 of the original number of shares, respectively) will be forfeited in the normal course, also effective as of August 1, 2015.

3. Restructure the Performance Share Units awarded to Mr. Kuhlik in 2013 in respect of the performance period January 1, 2013 – December 31, 2015 (the “2013 PSUs”), in 2014 in respect of the performance period January 1, 2014 – December 31, 2016 (the “2014 PSUs”) and in 2015 in respect of the performance period January 1, 2015 – December 31, 2017 (the “2015 PSUs”) such that Mr. Kuhlik would receive a fixed payment in cash (as opposed to settlement in shares based on achievement of company performance goals) in an amount equal to the product of (x) a pro-rated number of units represented by each of the 2013 PSUs, 2014 PSUs and 2015 PSUs based on his retirement date of August 1, 2015 assuming target performance had been achieved and (y) $58.98, which is the average 60-day closing price of a share of Company common stock for the period of April 24, 2015 – July 20, 2015, the 60-trading days immediately preceding July 21, 2015. The cash payment will occur at the same time as the original distribution of shares would have occurred following the end of the applicable performance period. Payments in respect of these amendments will equal $1,828,498 in 2016, $756,654 in 2017 and $275,319 in 2018.

4. Accept Mr. Kuhlik’s forfeiture of the pro-rated bonus that would have otherwise been paid to him in March 2016 under the terms of the Company’s Executive Incentive Plan. . . .

Great work — if one can get it. [I should point out that the above is only a fraction of his overall retirement benefit.] If he ends up as an Ambassador, weighing in on trade matters, then I can understand this move. Otherwise, not so much. Onward, on a sunny Saturday afternoon.


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