Scheduling Update, But No Ratification Vote Set Yet: Merck West Point/USW Local #10-86

May 5, 2016 - Leave a Response

Just as it all unfolded six years ago, it is taking a moment — to get the scriveners’ small changes into the relevant Memorandum of Understanding, on a renewed and amended collective bargaining agreement, here.

So — while there are two union meetings set for next week, at this point neither of them will be for the purpose of ratification, and formally ending all threat of a strike. But it is highly unlikely now — that the deal won’t get done. And even more remote that the USW would call a work stoppage. Here’s the latest from the Local USW:

. . . .The USW Local 10-00086 Membership Meeting will be held Monday, May 9th, at the Towamencin Fire Hall on Bustard Rd. in Kulpsville, Pa. Meeting begins promptly at 5PM. THIS IS NOT THE RATIFICATION MEETING.

The ratification meeting is pending. We are awaiting a copy of the Memorandum of Agreement (MOA) from the Company. When that is in hand we will distribute to membership and give them time to look over the changes. Also, we are looking to post electronically on this website. When all of the above is complete a ratification date will be announced.

The monthly Executive Board Meeting will be held on site, May 9th, at 2PM in the Maine/Montana Rooms. Continue to stay tuned to this website, our 45 Facebook pages and our USW App for further updates.

In Solidarity. . . .

Good progress, that. Onward, on a perfect Spring noon-time — for a city walk-about. . . and so, I’ll indulge. Smile. . . .

Merck’s Q1 2016 Generally In Line; With Currencies Improvement Seen In April 2016; Sales A Lil’ Light

May 5, 2016 - Leave a Response

I’ll have more after the conference call, but Zepatier® sales were slightly behind analysts’ expectations (in testimony to the effects of aggressive price cutting, as I predicted), as were global sales revenues overall.

And while Keytruda® did well in the quarter, BMS’s Opdivo® is clearly pulling away (also as I long predicted). Both are making money hand over fist though, to be fair. Here’s the improved April 2016 currencies translation prediction (which proportionately mirrors the Pfizer experience/effect I mentioned Tuesday — improving from a projected 7 per cent drag on sales, to a far more modest 2 per cent drag, for the full year):

. . . .At mid-April exchange rates, Merck now anticipates full-year 2016 revenues to be between $39.0 billion and $40.2 billion, including an approximately 2 percent negative impact from foreign exchange. . . .

All in all, a solid start to the year — more before too terribly long. G’morning!

More Good News — The Two Young Boys Were Released From Ebola Quarantine — In Guinea

May 3, 2016 - Leave a Response

And so, as of last Friday, local time, in Guinea (and Sierra Leone), the 42 day count-down to an “Africa-wide all clear” has begin anew.

Thus, if all goes well — on the evening of Friday, June 10, 2016 (while I am away at a wedding) Ebola will be tamped out, in this last outbreak, in all of Africa. Here is a bit from the WHO release, overnight:

. . . .Liberia’s and Guinea’s last known Ebola patients in a latest flare-up of the disease that hit both countries have now been discharged. All remaining contacts of confirmed cases that were placed under a 3-week period of medical monitoring have been cleared.

Liberia’s Ministry of Health, WHO and partners involved in the response held a ceremony at the Ebola treatment facility in Monrovia to celebrate the recovery and discharge of a 2-year-old boy, the final patient in the flare-up in Liberia. His 5-year-old brother recovered a week earlier. On 29 April, the country also began a 42-day period of increased surveillance – amounting to two 21-day incubation cycles of the virus. . . .

To help contain the spread, 1500 contacts and contacts of theirs were vaccinated with an experimental Ebola vaccine. Providing the vaccine is part of an ongoing [Merck] drug trial, the outcome of which will inform its possible licensing for future use. . . .

So say thanks to modern science — for saving these latest two young boys’ lives — and those of potentially literally millions of others. This is exactly the sort of legacy to which I referred earlier this evening, in that most recent post. Exactly. Smile.

Excellent News! Tentative Agreement Reached: USW Local #10-86 And Merck West Point, PA

May 3, 2016 - Leave a Response

Just as it all unfolded almost exactly six years ago, now, in early May of 2010 (that’s the same graphic, by the way) — Merck has reached a tentative agreement with the USW Local. This, after a few very tense days of working voluntarily — without an agreement.

I expect we will see a subsequent announcement — for a membership ratification vote date — pretty shortly here, but tonight here is the latest from the union local’s website:

. . . .We have reached a tentative agreement, subject to final review by the Negotiating Committee and the membership, as well as ratification by the membership.  The company had a lot of issues on the table, but with your continued support we were able to force them to remove some of the largest issues we have ever faced.  More information to follow.

Thank you.

President Dan Bangert

And your 2016 Negotiating Committee

As well our legal team from Willig, Williams and Davidson

And Lew “Spike” Dopson. . . .

Kudos go out to BOTH negotiating teams here, for honoring the legacy of excellent life-affirming science to which this company, and its team members, have fallen heir. Onward, with pride — and solidarity.

Pfizer’s Q1 2016 Foreign Exchange/Currency Numbers — As An Early Harbinger Of Merck’s?

May 3, 2016 - Leave a Response

As we are wont to do, from time to time — we looked in on the Pfizer Q1 2016 earnings press release — and noticed that the big blue pill co. did quite well at the foreign exchange line, this quarter.

In fact, Pfizer saw a full $1 billion of favorable currency effect, when translating its sales into US dollars, here at home. That may mean that Mr. Read did not have a lot of hedging in place, in which case I would not expect Merck to be able to repeat a proportionately similar performance. But if it turns out that currencies have shifted even on a hedged basis — then Kenilworth should likely show a strong Q1 2016, on reported sales in US dollars. We will know in two mornings’ time — but here is the Pfizer bit:

. . . .Favorable changes in foreign exchange rates since mid-January 2016, which favorably impacted the midpoint of the guidance range for reported revenue by approximately $1.0 billion and for reported and adjusted diluted EPS by $0.06. . . .

We will let you know, come Thursday morning before NYSE open. Onward. . . on a glorious Spring afternoon. Grinning. As ever.

Q: Might Merck Lose Some Or All Of The $200 Million Jury Award, From Gilead?

May 3, 2016 - Leave a Response

< As we have indicated for many weeks now, we do not expect that Kenilworth will collect all of its putative federal District Court jury award, in the Northern District of California, from the various Gilead patent spats.

While I don’t regard the allegedly false statements under oath as central to the issue of whether Merck’s patents are valid, I do think the able Judge Labson-Freeman is encouraging Merck to take half a slice of pie, or risk receiving none at all. We shall see — but perjury is a very strong word. Here is yesterday’s minute entry, in full:

. . . .Minute Entry for proceedings held before Hon. Beth Labson Freeman:

Motion Hearing held on 4/29/2016.

[403] STIPULATION WITH PROPOSED ORDER Regarding Schedule for Motions and Briefing on Judgment As A Matter of Law filed by Gilead Sciences, Inc.,

[333] MOTION for Judgment as a Matter of Law under Rule 50(a) filed by Gilead Sciences, Inc.,

[406] MOTION for Judgment as a Matter of Law Under Fed. R. Civ. P. 50(b), or in the alternative for a New Trial Under Fed. R. Civ. P. 59, On Gilead’s Derivation and Prior Invention Defenses filed by Gilead Sciences, Inc.,

[298] MOTION Gilead’s Motion to Have Undisputed Facts Read to the Jury filed by Gilead Sciences, Inc.,

[400] MOTION for Judgment on Partial Findings Under Fed. R. Civ. P. 52(c) filed by Gilead Sciences, Inc.,

[410] MOTION to Strike MERCKS UNTIMELY ARGUMENT AND EVIDENCE DEFENDING THAT PERJURY OR TO REOPEN THE RECORD TO FURTHER ADDRESS DR. DURETTE’S PERJURY filed by Gilead Sciences, Inc.,

[372] MOTION for Judgment as a Matter of Law under Rule 50(a) filed by Gilead Sciences, Inc.

The Court takes the matters under submission, written order to follow.

Total Time in Court: 55 minutes.

Court Reporter Name: Irene Rodriguez.

Plaintiff Attorney: Jonathan Singer, John Farrell.

Defendant Attorney: Bruce Genderson, Stephen Rabinowitz, Jessamyn Berniker. . . .

A more substantive one will be up shortly, on Pfizer’s foreign currencies exchange experiences in Q1 2016 — and what it might mean for Merck, in turn, come Thursday’s earnings announcement and call. Smiling — on a flawless morning walking in, here. . . .

[Brooklyn Cross-Post] Update From Martin Shkreli’s Seven Felony Indictments Edition

May 2, 2016 - Leave a Response

Tomorrow, Mr. Shkreli has a largely routine call, for status and timelines, in Brooklyn — related to the seven count felony criminal indictment.

Here’s “what’s good, Miley” — and, here’s what’s new: Mr. Shkreli Has Just Waived His Challenge To Prior Ruling Setting Aside “Client-Attorney Privilege” — In The Felony Criminal Matters, Out East

I know. I KNOW. I said I wouldn’t — “WOULD NOT — but I cannot resist:

So, it seems that Mr. Shkreli’s criminal defense counsel just filed a one page letter, in Brooklyn’s federal District courthouse, in anticipation of tomorrow’s largely routine hearing on schedules & timelines, etc….

The one pager makes it clear that rather than fight about whether Messrs. Shkreli and Greebel have, by their respective courses of conduct, effectively waived attorney-client privilege, under the “crime/fraud” doctrine (as the very able Judge Weinstein has previously ruled, in Brooklyn), Mr. Shkreli will simply not dispute that such a waiver has occured.

In doing so, Mr. Shkreli then may introduce potentially all the Greebel communications he ever received — all then to be made part of the record, or at the very least large, chunks thereof, as evidence. He will then (presumably) argue that he simply relied on Mr. Greebel’s advice — as he (at least arguably) inadvertently commited the crimes for which he has been indicted. Of course: he was an innocent, and just followed his lawyer’s instructions. That’s the gist of it.

Ahem. As a matter of criminal law, that defense will only hold water if a reasonably well-informed lay-person in Mr. Shkreli’s shoes could not have known (with reasonable diligence, on his part) that the conduct was unlawful — or criminal. [He hinted at this line of defense, in an earlier MSM interview, when he said essentially “no one can tell if they’ve broken the securities laws, as they are just so darn complex….” Lunacy, that. For years he’s been telling the world what a sophisticate — as to Wall Street matters — he undoubtably is…]

And as Mr. Shkreli argues this line of thought — Mr. Greebel is highly-likely to counter-argue that Mr. Shkreli was the master-mind, and he (Mr. Greebel) was only trying to dampen Mr. Shkreili’s otherwise allegedly bad intentions, by casting them in more legally-palatable gowns.

This could be a fire-fight for the ages — between these two former compadres.

So I’ll mention it — and commemorate it — with a graphic, above.

It also makes it at least marginally more likely that Mr. Greebel has in fact become a “cooperating witness,” and is trying to cut a plea deal, to keep himself out of prison — and pin it all on Mr. Shkreli. That is pure conjecture, however, on my part, given that from the facts thus far it is now clear that these two close (former) friends are plainly at odds, as to their interests, in describing the predicate events. Fascinating, no?

Having said all that, none of it is likely to materially change events inside the KaloBios Chapter 11, proper.

But now you know. Do go read that letter. It is only a one page PDF. Now I promise not to rubber-neck (too much) at the slow-motion trainwreck unfolding in Brooklyn, on these seven felony criminal charges. Can’t stop. . . smiling. Truly.

FiercePharma: AbbVie’s Q1 2016 Numbers Confirm Effect Of Merck’s Hep C Price Cutting — On Zepatier®

May 2, 2016 - Leave a Response

While I continue to believe that not all the volume and price erosion that Gilead, and now AbbVie, are witnessing will show up as incremental profit for Kenilworth (as I said here, last week), I do think Merck is gaining a toe-hold — especially in the vast VA governmetnal spend.

In early March 2016, we reported on Merck’s deep deep cuts on Zepatier®, to go after the Veterans Affairs (federal government payer — VA Health Care) business — and I do think Merck will show solid Q1 2016 sales volume in Zepatier, on Thursday morning’s earnings call. However, it may well show far less margin (i.e., price performance), due to these steep discounts — to win the business. Here is FiercePharma‘s reporting, of this morning:

. . . .As AbbVie CEO Richard Gonzalez acknowledged on Thursday, Merck has been “more aggressive than we anticipated from a pricing standpoint” — a factor that’s led to both price and volume loss for AbbVie.

Merck’s list price on its med–$54,600–is well below the $83,319 charged by the Illinois pharma for its Viekira Pak before discounts, or the $94,500 charged by Gilead for its combo med Harvoni. And AbbVie interpreted Merck’s pricing move “as a strategy that would go after medical exceptions,” since those “historically are in at more of a list price point.” On that front, Merck has been “somewhat successful” in picking up those medical exceptions, Gonzalez said.

That’s not all. Merck has also introduced steeper-than-expected discounts in public segments, particularly the Department of Veterans Affairs, AbbVie said. And in that arena, the company “ultimately made the decision that we were not going to compete with the lowest overall price in the VA,” adjusting its price downward but not matching Merck’s. The resulting price and volume losses hurt AbbVie, which previously “had a fairly significant share of VA. . . .”

Again, I do see AbbVie ultimately running third, behind leader Gilead, and then Merck — in this latest Hep C iteration of price-warring. Now you know — as we wait for Thursday morning. Onward, with a smile.

From The Recording Secretary Of USW Local #10-86. . . .

May 1, 2016 - Leave a Response

[UPDATED Monday Noon EDT — I now see that the USW has put this letter, below, behind the firewall. If anyone from the USW requests in anonymous comments below, that I remove it — I’ll gladly do so. For my part, I aver that it was on the public side, as of last evening when I copied it — I do not hold a USW membership card, or ID. Just let me know — though based on my traffic stats, this morning, it is clear that many many people in Kenilworth have seen it, now. End, updated portion.]

Tonight, the recording secretary of Local #10-86 of the United Steel Workers has posted a portion of what he calls a “Lost Newsletter“.

I will simply run it — without additional intro or editing.

I will hope that Mr. Frazier sees it by morning, on Monday (he is known to have read this space — and pretty regularly). Here it is, then:

. . . .”The fool who persists in his folly will become wise.”

— William Blake

Foolishness

To our shareholders, stakeholders, and the men and women in the High Castle at Merck, these words are for you.

As you may be aware of by now the collective bargaining agreement at our West Point facility expired at midnight, April 30th. Contract discussions continue. Membership continues to work.

But before negotiations turn ugly there are few things need saying for the record. Because we have every reason to believe our concerns never go any further than the fourth floor of building 53 (Human Resources).

Management’s opening proposals to the Union were insulting. We know this to be typical of any negotiations. Companies ask Unions for their first born children, a blood sacrifice and work backwards from there. Sometimes they break the Union’s spirit. Occasionally they settle for less than what they desired. It all depends on who has leverage. But rarely does the Company “lose.”

That is, unless there is a strike.

West Point has had two major ones. One was in 1969. If memory serves, membership voted down the contract and walked out. The strike lasted for the summer. When it ended the Union won a wage increase called a cost-of-living adjustment (COLA). Thanks to inflation the COLA reached $3.15 an hour before it was capped. All in all that was a win for us.

The other big strike was in 1984. We were OCAW then. The Company proposed a two-tier wage system, an obvious Union-busting tactic. The offer was voted down by membership. We continued working under the old contract for about a month. And then we didn’t. We walked in June and returned in September. We lost that one.

Everyone did. Every single vial and pill made by unskilled labor was trashed. The plant site was a mess. The strike was covered in the local press and nationally by papers like the New York Times. West Point suffered a black eye. Merck’s reputation was tarnished as well. Friendships were destroyed. Some wounds never healed.

There were people back who said it was inevitable. That once in a while an environment becomes so hostile you just have to “bleed” the poison out. As if such a process was a cyclical thing. The way a forest fire destroys dead wood and underbrush in order for new trees to grow.

Such thinking is foolish, and dumb.

More history: in 2004 new plant management arrived. They made no bones about their intent – they would break the Union. The contract of 2007 gave the Company the ability to be more flexible. Flex flow, polling and other workplace changes made it easier to run the business. So we were told. Management made a mess of it. To undermine the Union the Company shot itself in the foot.

In 2010 the Union gave away 144 “positions” of non-core work. By far, it was the worst decision by membership in the history of this Local. For a fat bonus check we sold away the livelihoods of our co-workers. It also allowed contractors the opportunity to get their foot in the door. Carpetbaggers, ignorant and arrogant enough to believe they could find cheap replacements for a highly skilled and educated Union workforce.

2013’s contract gave us an opportunity to fix what was wrong with the previous two. The Company turned around and abused the remedies we had hoped to implement. In fact, management used new drafting language to lay off over 100 bargaining unit members. Despite the fact that production work was plentiful and drafting was rampant. Good people were sacrificed on the altar of Target 2015 to the gods of Wall St.

Not too long ago a senior site leader told us they had a plan. They would remove an entire level of managerial redundancy. At the same time they would create dozens of Working Leader positions. The question we were asked, “Is the Union willing to step up and run the site?” The answer was and is YES. Yet management, like a dysfunctional parent, undermines us at every turn. It’s as if they feel threatened by our potential to succeed at self-direction.

Foolish.

Despite all this nonsense our Company netted $6 billion last year. A good portion was generated here at West Point, the largest medicine manufacturing facility in the world. Vaccines produced by Union hands and Made in America. Citizens for Tax Justice noted in 2015 that Merck has another $60 billion in offshore profits stashed overseas.

And yet we are being asked to make concessions. If Merck was bleeding red from debt we would give back. Whenever this Company has asked Union leadership to work with them we have. We care about being successful. Our President presented language on day one for training and safety. We know these proposals will make us a better business. They were handed back with changes and emphasis on the Company having final say, which means our suggestions were ignored.

In their book Re-engineering the Corporation – a Manifesto for Business Revolution authors Michael Hammer and James Chamby point out that management analyzes the shop floor. But the workers understand it.

So how about this. Give us the next few years to come up with cost saving solutions. Let us use our knowledge, experience and training to implement a robust safety program. Let Union leadership engage the shop floor and convince them they really do have skin in the game. That they can have some say about their futures.

The Company had numerous chances to elevate our game. What does it have to show for it? A grievance system backlogged once again and enough waste and discards to build that idiot’s wall between us and Mexico. To continue down the path you are leading us is simply foolish. You can keep getting it wrong or give us all a chance to get it right.

We are not naïve enough to believe you would hand us the keys to the kingdom. Frankly, we don’t want them. All we ask is you check your egos at the gate. Give us a chance to do things just a little bit better. Let’s see how profitable that can be.

We might surprise you.

Paul Mercurio/Recording Secretary USW Local 10-00086. . . .

Good night, and Good-speed, to all of good will. Tomorrow is another day.

Bloomberg Is Updating My Story Of Last Month — On Merck Vs. Gilead Sovaldi®/Harvoni® Patent Spats, Over The Weekend. . .

May 1, 2016 - Leave a Response

The very able USDC Judge Beth Labson-Freeman, sitting in San Jose, California is again quoted — and the date is now set for argument — on whether there will be remittitur of the verdict amount, now that both side’s briefs are on file.

When she rules, we will cover it right here. In the mean time, I’ll simply let the readership know that there is no real news in this Bloomberg piece, if the readership has been paying attention to our coverage — we had all of this a full month ago (April 2, 2016).

. . . .At trial, Gilead and Merck each tried to show the other was claiming credit for scientific advances that wasn’t due. Over two weeks, a parade of doctors and scientists for Gilead, Pharmasset and Merck and its partner Ionis Pharmaceuticals Inc. testified about their roles in the patent process. . . .

Gilead contends that in 2004, at a point when Merck was exploring a take-over of Pharmasset, [a Merck scientist] participated in a phone call in which the secret details of Pharmasset’s compound were discussed. In a pretrial deposition he gave “unequivocal testimony” that he wasn’t on the call, Gilead said. He went on to recant his statement in court when he told the jury he “forgot” he was on the phone call and he had “overconcluded. . . .”

So now you know — though I’d not be at all surprised to see the parties settle, confidentially, for far less than $200 million. And onward, driving north on a perfect Sunday afternoon with college age folks in tow. Smile. . . .

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