Is This Proof That The J&J Versus Merck Remicade® Arbitration Settled On Very UNFRIENDLY Terms? I Think So.

June 10, 2015 - Leave a Response

This morning, Kenilworth and a bio-similars development subsidiary of the Samsung Japanese entities announced some encouraging Phase III results (prior coverage of that relationship here). Among other things, they announced that the pair’s joint study of a bio-similar to infliximab, the agent branded as Remicade® around the world [and marketed by both J&J and Merck(!)], has shown good results — and will likely allow a filing with non-US, non-EU (i.e., “rest of world“) drug regulators later this year.

This is fascinating. Our readers will likely recall that — as a result of less than perfect lawyering, in the Schering-Plough reverse merger transaction — Merck was forced into an arbitration — against J&J — over the global rights to Remicade. That arbitration ultimately settled with J&J getting US rights, and Merck getting EU, Turkish and Russian rights to market the medicine. That left all the rest of the world as “open territory”. Now Merck is going to sell knockoffs of the stuff, wherever it is not prohibited by license from doing so. I suspect J&J is none too pleased about this development.

Why? It will eat into future market expansion plans of J&J, for the branded product — and (to my eye at least) this is Kenilworth effectively thumbing their collective noses — in the general direction of J&J. [Of course, as we’ve reported, Merck is presently suffering “generic” introductions in parts of the EU, which would lead me to now wonder aloud — whether J&J is quietly “helping out” with that competitive set of efforts.] Hilarious. From the presser then:

. . . .The portfolio includes biosimilar candidates in immunology, oncology and diabetes. There are five candidates in Phase 3 development [Merck partnered territories]:

· SB4 Enbrel (etanercept) [worldwide ex-U.S./EU/Japan]

· SB2 Remicade (infliximab) [worldwide ex-EU/Russia/Turkey]

· SB5 Humira (adalimumab) [worldwide ex-EU/Russia/Turkey]

· SB3 Herceptin (trastuzumab) [worldwide]

· MK-1293 Lantus (insulin glargine) [worldwide]

Each of these five biosimilar candidates is expected to be filed with regulatory authorities around the world between 2015 and 2016. . . .

Do go read all of the FierceBiotech item on the studies, and regulatory filing plans too. Because of the manifold geography limitations, these deals may not turn out to be of much material import, overall — to Merck. Onward we trudge — or forge, depending on our mood. . . missing you. . .

EU First Impression Trademark Ruling: In Favor of MSD, Against Parallel Importer Orifarm

June 9, 2015 - Leave a Response

At the risk of slipping into the admin-is-trivia of internal EU regional trademark rulings, I’ll post just a short note — on a recent Danish Supreme Court decision (across the pond) — which held that a parallel importer must mark its OWN wares, with the following magic words: “[Trademark Name XXX] is a registered trademark of Merck (or MSD)“, to escape infringement liability. This outcome is somewhat surprising, because earlier EU zone decisions had been less inflexible on such matters. The idea was — until now — that it was hard to argue that the foregoing (i.e., missing) words damaged Merck’s own proprietary marks, in any meaningful way. [My prior reporting on related spat history, from four years ago, may be read here.]

But now the decision is out there, and importers must deal with the risk of omitting the magic words (and thus being held liable for trademark reputation damages). The involved MSD products included Nuvaring®, CeraZette®, Diprophos® and Singulair®, in Denmark.

A bit, then from the very fine local Danish law firm newsletter, on this decision:

. . . .The 2015 decision confirms the degree of care that must be taken by parallel importers when using third-party trademarks. As the main purpose of a trademark is to function as an indication of origin, third-party marks cannot be used in a way which confuses the consumer as to its origin. However, hitherto, repackaging which informed consumers of the parallel importer and the name of the manufacturer was deemed by many to be sufficient. This decision illustrates that the reputation of a trademark can also be damaged by omitting a trademark statement along with use of the trademark.

The Supreme Court decision appears to be the first to consider this specific question in the European Union. Similar proceedings are pending in other EU jurisdictions and it will be interesting to see whether the judgment will affect these proceedings. . . .

So now you know. Off to the North — but not quite into the Danish woods — just a road trip, tonight!

What Makes A Giant Into. . . “A Bully”? Merck’s Jury Win — Then It Seeks Its Costs, From Mom, With Kids

June 9, 2015 - 2 Responses

The law plainly allows this sort of odious behavior — I just find it. . . a little over the top, and immoral, truthfully.

From Judge Chesler’s earlier opinions, it was clear that the claimant — a mom with more than one child — made out a prima facie case. She repeated in good faith and truthfully, what was said to her, regarding her pregnancy — and leave.

In the end, the jury found that her termination was not primarily due to her pregnancy status, nor her decision to take a protected family leave.

But now, Merck (and more likely — the individual defendants) have caused their lawyers to file a motion (that’s a full text PDF file) with Judge Chesler, in New Jersey federal District Court, to have the mom pay THEM about $68,000 in costs they say they incurred. To be clear, these are not the attorneys’ hourly fees — just charges for photocopies, messengers, court transcripts, and the like. Even so — this seems to me to be bullying behavior.

For the record, I will note that both of the individual defendants almost certainly had D&O coverage from Merck, as a self insurer at this level of expense, for all these funds.

That is, no one — except a multinational corporation with well over $42 billion in revenue last year — is out $68,000, here. And that could easily be half of the mom’s annual cash salary, in her new job, after taxes. Mr. Frazier — please instruct your lawyers to withdraw their motion — it is redolent of the dank odor of overreach.

Here endeth the sermon.

As We Reported In April 2015 — TECOS Results Lend Merck’s Januvia®/Janumet® A Modest Boost

June 8, 2015 - Leave a Response

Back in April 2015, Merck saw a one-day four percent increase in its NYSE indicated stock price, as quoted after-hours on the NASDAQ. I called that an overreaction.

The stock quickly drifted back to current range bound levels, thereafter. I expect much the same tomorrow, when the NYSE formally opens trading in the name. The full TECOS publication just really means that Merck may pick up some of the slack spooling at AZ’s feet, now — that, related to AZ’s Onglyza® diabetes medication. As I said in April, the larger issue for the Kenilworth franchise here, is “genericization” of sitagliptin, which is leading to price erosion, globally. TECOS removes a smallish overhang for the franchise. Nice, just the same — here is Reuters, on it all — about 20 minutes ago:

. . . .Details of a large heart safety study presented on Monday appear to give Merck’s diabetes drug Januvia a clean bill of health, possibly setting the stage for a return to sales growth for the drugmaker’s biggest product.

Merck in April said the study, called Tecos, of 14,724 patients with type 2 diabetes and a history of heart disease demonstrated that adding Januvia to usual care did not increase major heart problems any more than adding a placebo, removing a cloud that has been holding back sales of the medicine and the company’s share price.

Januvia, an oral medication known chemically as sitagliptin that helps lower blood sugar levels, had sales of about $4 billion in 2014, plus another $1.8 billion for the related combination product Janumet. . . .

Not surprising, and all of this news is certainly baked into tomorrow’s Merck NYSE price. So. . . off to the Symphony — for some Antonin Dvořák, now — but do go ‘hawks, tonight!

Merck Gets Narrow Label (End-Stage) Melanoma Clearance — In Canada — for Keytruda®

June 8, 2015 - Leave a Response

This morning — our gentle neighbors to the north are catching up, with their new monoclonal antibody approvals, here. Canada will — starting today — allow melanoma patients, already in nearly end stage catharsis, to receive pembrolizumab — branded as Merck’s Keytruda®. To be sure, the anti PD-1L inhibitor has shown strong efficacy in clinical trials, in that subsegment of the US and European oncology wards.

This is good news for Kenilworth, but there is likely to be significant pressure on the reimbursement rates, up north. So. . . I’ll notch it as only mildly positive. If memory serves, Nivolumab® (by BMS) is already available in Canada as well. Here’s the Merck presser — and a bit:

. . . .Keytruda is indicated for the treatment of patients with unresectable or metastatic melanoma and disease progression following ipilimumab therapy and, if BRAF V600 mutation positive, following a BRAF or MEK inhibitor. The product has been approved in Canada under the Notice of Compliance with Conditions (NOC/c) policy on the basis of promising evidence of clinical effectiveness and pending the results of trials to verify its anticipated benefit.

“All of us at Merck Canada are thrilled with Keytruda being available in Canada for the treatment of advanced melanoma, as it provides new therapy to patients facing this difficult-to-treat cancer,” said Chirfi Guindo, Managing Director, Merck Canada Inc. “This new product embodies Merck’s unwavering commitment to be at the forefront of scientific discovery and innovation to help Canadian patients. . . .”

Smallish good news, there — but good, nonetheless. Onward.

Credit Suisse Continues To “See Saw” Merck’s 12 Month Price Target

June 8, 2015 - Leave a Response

The call — by Credit Suisse — is still officially neutral. And it was just a month ago that the analysts at old CS First Boston called it at $62 — that being up a buck, from the prior call.

But this morning, CSFB is taking that buck — back. Y A W N. Here’s the bit:

. . . .Merck saw its price target trimmed to $61 from $62 at Credit Suisse, which has the shares sitting a penny lower at $58.98. In recent weeks, the stock has been winding in the $59-$61 range, taking multiple bounces off its 120-day moving average — currently $59.03. . . .

Not of any real moment. . . whatsoever.

“Fast Fred” Hassan Sells His Morris County, New Jersey Mansion

June 8, 2015 - Leave a Response

This is a. . . mostly trivial pursuit — by yours truly — following the latest residential moves, of the legacy Schering-Plough goof-in-chief. And, even so, this still leaves at least one Florida mansion, in his name. Perhaps two. And I am fairly certain that he still holds large estates inside Pakistan, as well, albeit through family members. [In fairness, I suppose it is possible that there are two individuals with multiple-hundreds of millions of dollars in net worth — with the same first and last names — in Morris County, but I’d bet against it.]

Here it is, from the local papers, over the weekend:

. . . .SOLD @ $2.6 million; 5 Pine Valley Way, Florham Park, New Jersey | LISTED @ $2.999 million | 7 bedrooms and 8 full baths, 2 half baths, 10,419 sq. ft. . . .

So. . . now you know. Onward, on a decidedly gray Monday.

Merck’s Mumps Vaccine Efficacy Suits — A Stormy Sunday Morning Update

June 7, 2015 - Leave a Response

I have a nice quiet block of time, here — until my niece’s plane arrives — on a terrifically stormy Sunday morning. . . and so I thought I’d catch the readership up on these developments.

Last September, Merck failed to have the case dismissed, without full discovery. We covered that, in detail. Since then, there have been numerous discovery disputes — the most pressing one of which has just led to a motion to compel being filed against Merck, with the Magistrate Judge. In sum, the complaint is that Merck will not admit that it does not know (and cannot ascertain, without unreasonable expense and effort) what the present day efficacy rate of its monopoly mumps vaccine really is.

And this is important because, it is claimed, Merck was able to artificially create a monopoly in the vaccine, by overstating the actual efficacy rate, thus discouraging all other vaccine makers from producing a competitor — (again allegedly falsely) figuring that theirs would be less effective. That’s the gist of the Qui Tam complaint, here. All discovery is supposed to be complete by September of 2015 — and trial could be as early as this time next year. We shall see. In any event, here is a bit of the latest back and forth — and the full six page PDF letter to the Magistrate Judge. It makes a pretty compelling argument, in my estimation:

. . . .From the outset of this case, Merck has . . . argu[ed that] its mumps vaccine works “phenomenally” and “enormously” well, with “tremendous efficacy.” Merck did so in its unsuccessful motion to dismiss where Merck argued it “remains indisputably true” its vaccine “confer[s] a high degree of protective efficacy against the mumps.” Merck did so again in its Answer to the operative complaint where it denied “the efficacy of the vaccine is falsely represented” on the product’s labeling. And Merck did so again in the Joint Rule 26(f) Report where in the summary of its defenses to this action Merck argued it “has full confidence” in the efficacy of the vaccine and that the product labeling “accurately reflects” that efficacy. . . .

Merck has likewise repeatedly argued how the efficacy of its vaccine is a critical issue in this case. In fact, at oral argument on the motion to dismiss, Merck at least a half-dozen times protested (unsuccessfully) to the Court that the complaint fails to allege “what the actual efficacy of the vaccine is.” See Transcript of MTD Hearing at 6-10. And in its Rule 26(a) Initial Disclosures, Merck identified as among the limited categories of documents “likely to support Merck’s claims and/or defenses,” those relating to the efficacy of the vaccine.

But now, when asked to confirm what Merck believes that efficacy to be, Merck refuses to answer or acknowledge it does not know. This is readily apparent in Merck’s refusal to answer Interrogatory No. 1 (First Set) which asks Merck to “[s]tate, as a percentage, the current Efficacy of the mumps component of Merck’s MMRII vaccine . . . .”1 Rather than answer this interrogatory, however, Merck merely identifies the vaccine’s efficacy as Merck measured it roughly 50 years ago when the vaccine was originally licensed. Merck refuses to identify the current efficacy, arguing “there are no ‘current’ efficacy’ clinical trials involving Merck’s mumps vaccine and [] it is not now possible to conduct such double-blind controlled studies.” . . .

We will keep you apprised.

[The above all happened at the beginning of June, but I was far too. . . lost, to get it out, in real time. . . . Ah, well. . . so it goes, but I will need to know whose DNA she harbors, “Roger” that. . . Onward.]

O/T — Grinning Ear To Ear! — Chrome Was Just Shy Last Year; But Pharoah. . . Just Did It!

June 6, 2015 - Leave a Response

Confession time: I’ve been a rather rabid fan of horseracing ever since my early college days.

I’ve been a bettor, at Churchill Downs, on and off, since the early 1980s. . .

And now, for the first time since (ahem!) I was in high school, I am looking at. . . a Triple Crown winner.

Congrats to American Pharoah — My lil’ California Chrome fell a little short, at Belmont, last year. This year — for the first time in 37 — the top of that rare mountain air, all of it, in fact, belongs to a. . . Pharoah!

We now return you to your regularly scheduled life sciences blogging. . . .

UPDATING: Clear(er) Contrasts — Between Old, And New “Debt Mechanics” — Corp. Fin., Continued

June 6, 2015 - Leave a Response

I’ll not spend a ton of time on detailed text, here — as I think if one compares the below graphic, centered, to the one I made last night. . . one gets the general idea very rapidly.

When a large, cash rich and sophisticated note, commercial paper, or bond buyer (here, Apple) has euros or dollars at the ready, and is well known to the issuer (here, Kenilworth) — nothing in the US securities laws, as modernized, prevents them from reaching a deal all by themselves — directly. And Merck is so well known, and its paper so trust-worthy. . . we might ask whether there really is a role for the underwriters and fund managers, here — other than to provide occasional liquidity. Doubly so, where it is shorter term paper being issued. Merck is not engaging in a “distribution” (as that term is defined in the securities laws), if Apple, Google or Oracle reach out, and ask to invest in the “next” debt deal — i.e., make a reverse inquiry, and leave an indication of interest, with Merck — offering to be a buyer.

I have oversimplified several matters here, for clarity, of course — and in an equity offering, the analysis would differ — and differ materially.

In any event, now you can see how (and where) the savings pile up, over time, so that both Apple and Merck are likely to have better economic outcomes. Fees are literally eliminated. Do enjoy a cool Saturday, and weekend, one and all.


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