More Granularity, On What BMS’s NSCLC FDA Opdivo® Nod Might Mean In 2015 Through 2017

March 9, 2015 - Leave a Response

An erstwhile anonymous commenter remarked last week that perhaps the FDA nod to Opdivo® would not mean too, too much to Merck’s Keytruda® in NSCLC, longer term. I suppose it may be that the world is changing underfoot (wouldn’t be the first time that’s happened to me!), but it had always been my perception that — in oncology at least — it tends to be “winner take all“. The below reiterates that view.

Of course, I do think there will be perhaps $5 to $7 billion in Keytruda market proceeds for Merck (per year), working into 2018 and beyond. However, I do think in the near term, BMS has scored a vast win, here — by nailing an inroad to NSCLC first — by as much as 9 to 12 months, over Kenilworth.

And I do think — as the below Bloomberg article intones, oncology is. . . different. Both as to price points — and as to prescribing patterns — where (as here) there is a clear survival benefit. A bit, then — from the Bloomberg story of this afternoon:

. . . .That’s because the FDA’s practice of approving drugs by each cancer type and stage of disease. So even if two cancer drugs are similar on paper, they may still not compete directly because they are approved for slightly different uses.

Another factor that helps keeps pricing up is that cancer doctors tend to exclusively prescribe the drug that is perceived to have the most efficacy for each particular cancer type, even if the advantage is narrow.

In oncology, it tends to be winner take all,” Evans said. “Whoever has the best efficacy will get all the sales, and that really preserves the pricing power. . . .”

I still think the commenter has a fine longer term (circa 2018 and beyond) point. And, as much as I hate to say it, once Opdivo starts posting results in lung cancer, inside the oncology wards, day by day — those docs are reasonably likely to write off label for it — and second line vs. third line will become a blurred line, at best. In sum, I just think it is hard to overestimate the significance of Opdivo’s FDA NSCLC nod, last week. For what it is worth.

CEO Frazier To Speak — At The United Nations In New York Tomorrow — “Every Woman, Every Child” At 10:30 AM EDT

March 9, 2015 - Leave a Response

This is both excellent policy-shaping and influencing, and solid corporate citizenship. And to be clear, I am sure Mr. Frazier firmly believes that this appearance tomorrow is “doing well, by doing. . . good.” So do I.

It also happens to be very likely to help Kenilworth’s bottom line, over the coming decades. As these now-emerging nations prosper, and join the 21st Century economies, the thinking goes, each of these economies will allocate more and more GNP expenditures toward advanced pharma, biotech and life sciences treatments. And that will benefit all of the multinational pharma concerns — if they play their cards correctly. And that is precisely what CEO Kenneth Frazier is doing tomorrow. I’ll listen in on his webcast, and post any material notes here. From Merck’s press release, then:

. . . .Merck Chairman and CEO Ken Frazier will participate in a high level event at the United Nations on Tuesday, March 10, from 10:30-11:45 a.m. EDT. Hosted by UN Secretary-General Ban Ki-Moon to launch the Progress Report on the Global Strategy for Women’s and Children’s Health, the Every Woman Every Child event will celebrate progress on and high-level commitment to reducing maternal and child mortality worldwide.

Other participants include: Ms. Vera Brezhneva, UNAIDS Goodwill Ambassador for Eastern Europe and Central Asia; Ms. Emelin Cabrera Lopez, Youth Leader; Mr. Martin Chungong, Secretary General of the Inter-Parliamentary Union; Hon. Julia Duncan-Cassell, Minister of Gender & Development, Republic of Liberia; Ms. Melinda Gates, co-chair of the Bill and Melinda Gates Foundation; H.E. Ms. Esther Lungu, First Lady of Zambia; Ms. Linord Moudou, Host of Health Chat, Voice of America; Dr. Babatunde Osotimehin, Executive Director, UNFPA; and Dr. Ariel Pablos-Mendez, Assistant Administrator for Global Health & Child and Maternal Survival Coordinator, USAID. . . .

Busy sunny Monday here. Onward.

Upstart Incepta Pharma Beats Eleven Others To Market With A Generic Of Sofosbuvir — Gilead’s Brand: Sovaldi®

March 8, 2015 - Leave a Response

Well we all knew it was coming. . . .

And we all know that Merck continues its late stage work on similar Hep C next gen treatments, so this bit of market cannibalism is relevant here. Even wealthy Gilead had long anticipated this day, with W.H.O. and Doctors Without Borders pressuring it to treat sofosbuvir as an “essential medicine” in countries of limited means, and compelling licenses that greatly reduce Sovaldi®‘s asking price.

To avoid that end, Gilead had signed deals with eleven generic makers, to sell reduced price copies of the drug, by the end of last year — so called “authorized” generics.

But when a drug generates over $10 billion in worldwide sales (in only its first full year!), you may bet all the world sits up, and takes notice. And so, because Gilead either hasn’t yet signed deals in countries like Brazil, Egypt, Thailand, Malaysia and Morocco, and Bangladesh — or, if these are geographies where the essential compounds of sofosbuvir are not (yet) patented — a nimble global marketeer could vastly benefit from the new geographies/market opportunities offered from cheap copies of sofosbuvir.

And, as Bloomberg points out today, Incepta Pharma just pulled off exactly that masterstroke. Here’s a bit, but do go read it all:

. . . .Nearly a dozen Indian manufacturers are part of Gilead’s licensing pact for low-income countries, including Cipla Ltd., Hetero Labs Ltd., Mylan Laboratories Ltd., Ranbaxy Laboratories Ltd. and Natco. . . . [Editor’s (Condor’s) Note: However, Incepta is not. It is purely an “at risk” generic company, here.]

“I think everybody is very excited about this product because it offers such a wonderful treatment option,” [Incepta’s] Muktadir said. “But the price is going to come down, and the treatment regimen is only for three months. So, I don’t think it’s going to be a big money-earner.”

Sovaldi was Gilead’s top-selling product last year, bringing in $10.3 billion in sales for the Foster City, California-based company.

Incepta’s copy of Sovaldi, called Hopetavir, is aimed more for international markets than Bangladesh, where hepatitis C prevalence is low, though there is no reliable nationwide data, Muktadir said.

Founded in 1999, Incepta has more than 600 products approved for sale in Bangladesh, ranging from oral solid pills to injectable human insulin, according to the company’s website. The company exports products to more than 40 countries, mostly less regulated markets like Mongolia, Kenya, Somalia, Ethiopia, Mauritania, Democratic Republic of Congo and Afghanistan. It also sells to more regulated markets such as Finland, Ukraine and Turkey, according to the site.

Brazil, home to 2.6 million people with hepatitis C, Thailand, with 1.5 million patients, and Morocco, with 625,000 patients, are all nations not included in Gilead’s agreement with the Indian generics companies. . . .

It is hard to overestimate how important this trend — of making essential medicines affordable to rest of world — is going to be, to the global pharmaceutical markets. Now, here’s to a quiet Sunday evening. . . travel safely, one and all.

Merck’s Pivotal VSV-EBOV Vaccine Candidate Study Begins — In Guinea. . . Tomorrow.

March 6, 2015 - Leave a Response

MRK-Africa-Ebola-3-2015 As our regular readers only too well know, we believe that Merck likely has the most efficacious Ebola vaccine candidate (at least most efficacious — among those in highest state of readiness), so it makes sense that it will be tested first, in Guinea — to prevent outbreaks among people known to have had contact in the wild with any given confirmed Ebola patient. Sadly, Basse Guinée is still seeing significant numbers of new cases, and so that’s where the trial will begin.

Here’s a good piece on it all from PharmaTimes:

. . . .The World Health Organisation, the Health Ministry of Guinea, Médecins Sans Frontières, Epicentre and The Norwegian Institute of Public Health will test VSV-EBOV for efficacy and effectiveness in preventing the killer disease.

Vaccination will take place in areas of Basse Guinée, which has the highest number of cases in the country, and the strategy adopted will be “ring vaccination”, which involves identifying a newly diagnosed case of Ebola – the ‘index case’ – and then tracing of the patient’s contacts, who are then vaccinated.

The dual objectives of the trial are to assess if VSV-EBOV protects the contacts who were vaccinated and if this will successfully create a buffer around the index case to prevent further spread of infection. . . .

Here’s to hoping — that VSV-EBOV. . . is the Lord. . . of the Rings. Quiet Friday nights — to one and all, now.

No Surprise Here: Kenilworth Shutters Various Early Stage R&D Programs At Legacy Cubist Lexington, MA Hub, Post Close

March 6, 2015 - Leave a Response

MRK-Cubist-Cuts2-2015 FiercePharma does a nice job of putting the contextual map in place, on these 120 science job eliminations, post the close of Merck’s acquisition of Cubist. [Backgrounder, from yours truly, here.]

Anyone who’s handled life science M&A in this size range wouldn’t be surprised by this development — but it is still a tough pill to swallow, in Lexington, Massachusetts. Doubly so, for the affected families. A bit from FiercePharma‘s Damian Garde, quoting the Boston Business Journal, here — but do go read it all:

. . . .As the Boston Business Journal reports, the company informed employees today that it’s backing away from the antibiotic specialist’s drug discovery efforts, dialing down operations at Cubist’s Lexington headquarters but promising to keep up work on later-stage products. Merck told the BBJ that it plans to keep at least some of Cubist’s preclinical candidates in development, transferring them to other R&D sites.

The move marks Merck’s first major cuts to Cubist after wrapping up a $9.5 billion buyout in January. Merck expects the acquisition to add about $1 billion to its 2015 revenue, but the pharma giant is apparently less than committed to following through on Cubist’s plans for major spending on antibiotic R&D. . . .

Let’s hold a good thought for the affected families. . . And so, do drive safely, one and all. . . good ju ju goes out to you all, this Friday. Namasté, and may The Infinite ride with each of you.

Off Topic Friday: NASA’s Dawn Spacecraft Enters Orbit Around Ceres Later Today. . .

March 5, 2015 - Leave a Response

Okay — you know I have to break off topic, here on a Friday morning to ask. . . what are those two glowing, and iridescent disks in the larger northern craters — on Ceres? What in heaven’s name would shine. . . like that?

From NASA, then — an astrological mystery:

. . . .NASA’s Dawn spacecraft has returned new images captured on approach to its historic orbit insertion at the dwarf planet Ceres. Dawn will be the first mission to successfully visit a dwarf planet when it enters orbit around Ceres on Friday, March 6.

“Dawn is about to make history,” said Robert Mase, project manager for the Dawn mission at NASA’s Jet Propulsion Laboratory (JPL) in Pasadena, California. “Our team is ready and eager to find out what Ceres has in store for us.”

Recent images show numerous craters and unusual bright spots that scientists believe tell how Ceres, the first object discovered in our solar system’s asteroid belt, formed and whether its surface is changing. As the spacecraft spirals into closer and closer orbits around the dwarf planet, researchers will be looking for signs that these strange features are changing, which would suggest current geological activity. . . .

As I’ve long held — big science equals. . . big fun!

As I Said Over A Year Ago — The Lead In This $16 Billion (2017) Market Belongs To. . . BMS’s Opdivo®

March 5, 2015 - 2 Responses

Only a few days after granting it a priority review, FDA cleared nivolumab (branded as Opdivo®) for use in metastatic lung cancers. Just as I guessed back in February of 2014, the BMS trial data was in fact so robust, BMS was able to pivot quickly toward approval — and the FDA was comfortable approving this life saving biologic essentially. . . immediately.

And, even though it clearly gives BMS first mover advantages in a very high burden of disease sector in the US, Merck does get the back-handed benefit that this is a ringing endorsement of the anti-PD-1 approach. So, when Merck does submit (likely closer to June 2015) a biologic license application for NSCLC to FDA, it too might see a pretty rapid FDA approval. The $16 billion to $35 billion a year juggernaut begins. From the FDA overnight, then:

. . . .The U.S. Food and Drug Administration today expanded the approved use of Opdivo (nivolumab) to treat patients with advanced (metastatic) squamous non-small cell lung cancer (NSCLC) with progression on or after platinum-based chemotherapy. . . .

Lung cancer is the leading cause of cancer death in the United States, with an estimated 224,210 new diagnoses and 159,260 deaths in 2014. The most common type of lung cancer, NSCLC affects seven out of eight lung cancer patients, occurring when cancer forms in the cells of the lung.

Opdivo works by inhibiting the cellular pathway known as PD-1 protein on cells that blocks the body’s immune system from attacking cancerous cells. Opdivo is intended for patients who have previously been treated with platinum-based chemotherapy.

“The FDA worked proactively with the company to facilitate the early submission and review of this important clinical trial when results first became available in late December 2014,” said Richard Pazdur, M.D., director of the Office of Hematology and Oncology Products in the FDA’s Center for Drug Evaluation and Research. “This approval will provide patients and health care providers knowledge of the survival advantage associated with Opdivo and will help guide patient care and future lung cancer trials.”

Opdivo’s efficacy to treat squamous NSCLC was established in a randomized trial of 272 participants, of whom 135 received Opdivo and 137 received docetaxel. The trial was designed to measure the amount of time participants lived after starting treatment (overall survival). On average, participants who received Opdivo lived 3.2 months longer than those participants who received docetaxel. . . .

My guess is that Kenilworth is likely about nine to twelve months behind BMS in lung cancer. Onward.

UPDATED — Mid Arguments: King v. Burwell Prediction — ACA Stands; Petitioners Lose

March 4, 2015 - Leave a Response

All the conjecture aside — I do now know this: Either Chief Justice Roberts, or Justice Kennedy, will almost certainly provide the swing vote — in this case. The Chief Justice asked no questions, so his position is largely occluded. . . opaque.

Justice Kennedy however, has made some clear waves — trouble, that is, for the petitioners — and pretty openly suggested that their reading of the “five words” would lead to some absurd results. Ones, we may reliably infer, Congress would not have intended. A little earlier, Justice Kagan laid a trap for the hapless petitioners, and they fell right into it. They are in well over their heads. Both are quoted below, from the very fine

. . . .[Justice Kagan] offered (something like) the following example: Imagine I tell law clerk A to write a memo, and law clerk B to edit law clerk A’s memo, and then I tell law clerk C to write such memo if law clerk A is too busy. And imagine that happens – law clerk A is too busy, so law clerk C writes it. Should law clerk B edit it? The answer seemed obvious: of course, and Justice Kagan all but told petitioner’s counsel (and her clerks) that they would be fired if they didn’t do their job under those circumstances. In response, petitioner’s counsel said that the context mattered, and it would depend on whether the Justice was indifferent between law clerk A and law clerk C writing the memo in the first instance. But that seemed to play into Justice Kagan’s hand, who made clear that this was her point – that in understanding this text, the context obviously mattered.

That turn to context seemed unprofitable initially for petitioners. Many Justices, including Justice Breyer, Justice Sotomayor, and Justice Kennedy expressed skepticism that the statute would function as intended, in a reasonable fashion, and even constitutionally if petitioners’ reading were accepted. . . .

For those less immersed in the legal niceties, however, I think the key takeaway is that – in a case that seemingly pits literalism against contextualism – Justice Kennedy was very attentive to the consequences of the reading that petitioners urged. He seemed to realize that state legislators would be in an impossible position under that reading – more or less forced to “adopt” or “endorse” the ACA system in order to avoid unmanageable consequences in their states. His plausible conclusion was that Congress either did not intend to put them to that choice, or that the statute shouldn’t be read to have done so, because that’s not typically how our constitutional system works. Instead, the federal government makes and administers federal laws without forcing the states to do some of the work for them. Kennedy seemed to be thinking that this provision should be read more like the typical case, and rather unlike the kind of unusual provision the petitioners suggested. . . .

Justice Kennedy might believe that Congress would not have intended to set up such a dubious system; he might believe that this reading is required but actually unconstitutional (so that he would strike down the statute’s condition that subsidies apply only to exchanges established by the state); or – perhaps most likely – he might believe that the statute should be interpreted so as to avoid the “serious constitutional problem” he identified. . . .

So — we shall see. Onward — and “Forward“. Background here.

Fascinating: NOT “Paying for Prescriptions, Or Referrals” — But Paying — To Provide “Point Of Treatment” Alerts(?)

March 4, 2015 - Leave a Response

Yesterday’s Wall Street Journal ran a story that deserves a little more thoughtful analysis — related to the Merck Vaccines business units, and the intersection of inexorable commerce — with increasingly common electronic patient care record-keeping. [And I guarantee you, many a family practice doc from the 1960s. . . would be moderately aghast — at this new world. This isn’t a “free sample” world, any longer — at all.]

While several companies have offered various versions of this “instant alert” app/pop-up to doctors’ iPads, phones or laptops as available tech for a few years, I for one was not aware that the vaccine makers, like Merck, were paying for the placements, to subsidize the app/software. And I was not aware that the latest business models include a “give-away” of the software — to the point of care provider. Cheeky!

It strikes me that all of this is certainly lawful, so long as all interested parties are informed (patients included) that the doctor is getting a freebie, and a multinational pharma — like Merck — is covering the cost of that freebie, plus a profit margin for the software/app vendor. [Background on the other stories embedded in the graphic, at right, here.] Even so, the doctor featured in the article said he was unaware that Merck was paying for the pop-ups. As I say, a fascinating. . . . new world, indeed. From yesterday’s Wall Street Journal, then — a bit:

. . . .When Allan Treadwell views patient charts on his computer, a yellow alert sometimes pops up—a handy feature that tells him when a patient is due for vaccines for hepatitis B, influenza or other ailments.

“It’s a nice safety net,” said Dr. Treadwell, an internist in San Francisco.

Dr. Treadwell isn’t the only one who is pleased with the alerts. So is Merck & Co., which pays for the notifications sent to Dr. Treadwell and 20,000 other health-care providers. Medical-record software startup Practice Fusion Inc., which sells the alerts and displays them through its software, said that during a four-month study period ending in August, it observed a 73% increase in vaccinations—amounting to 25,000 additional treatments—compared with a control group. The company didn’t disclose its fees for delivering sponsored alerts but said it doesn’t take a cut of sales that result. . . .

I certainly think in at least a few vaccine arenas, for example, where Merck is the sole source (i.e., has a monopoly anyway), this presents very little concern. But if the pop-up advocates one brand of vaccine over another in a contested space (two or more vaccine makers). . . well, I think that at least raises ethical and disclosure questions for the point of care provider. So — what does the readership think (as we wait for the transcript from the King v. Burwell oral argument at the Supremes, to become available later this afternoon). . . What do you think?

Updated SEC Disclosures — Regarding The Keytruda® Vs. Opdivo® Patent Fights

March 3, 2015 - Leave a Response

UPDATED | 11 PM EST: I checked the PACER electronic docket, and if the current agreed scheduling motion holds, trial in the Delaware federal District Court won’t begin until late 2016, or early 2017. So — I’ll lay odds that some set of outcomes, in these other courts around the globe (perhaps the United Kingdom actions), will lead the parties to settle, well before the Delaware trial date arrives. But the probable stakes are preposterously gargantuan. Opdivo® could be raking in north of $8 billion a year by 2017, and my guess on Keytruda® would be about half that. So, if the royalties (in either direction) approach 10 per cent, or are tripled (due to findings of willful infringement), the damages could easily be north of $5 billion over the life of the patents, all in. Yes, this is material litigation — even if it first appears at page 114 of the SEC Form 10-K. Indeed it is one set of spats. . . to watch. END, UPDATED PORTION.

I’ll be back this evening afternoon to explain what all this means to the average Merck investor, on Keytruda®. But make no mistake, this is material litigation, globally for Kenilworth. Backgrounder here.

For now, accept that the proverbial fat lady hasn’t even begun to clear her throat. This could still go either way. From page 114 of the SEC Form 10-K, then:

. . . .As previously disclosed, Ono Pharmaceutical Co. (“Ono”) has a European patent (EP 1 537 878) (“’878”) that broadly claims the use of an anti-PD-1 antibody, such as the Company’s immunotherapy, Keytruda, for the treatment of cancer. Ono has previously licensed its commercial rights to an anti-PD-1 antibody to Bristol-Myers Squibb (“BMS”) in certain markets. The Company believes that the ’878 patent is invalid and filed an opposition in the European Patent Office (the “EPO”) seeking its revocation. In June 2014, the Opposition Division of the EPO found the claims in the ’878 patent are valid. The Company received the Opposition Division’s written opinion in September 2014 and the Company submitted its substantive appeal in February 2015. In April 2014, the Company, and three other companies, opposed another European patent (EP 2 161 336) (“’336”) owned by BMS and Ono that it believes is invalid. The ’336 patent, if valid, broadly claims anti-PD-1 antibodies that could include Keytruda. BMS and Ono recently submitted a request to amend the claims of the ’336 patent. If the EPO allows this amendment, the claims of the ’336 patent would no longer broadly claim anti-PD-1 antibodies such as Keytruda.

In May 2014, the Company filed a lawsuit in the United Kingdom (“UK”) seeking revocation of the UK national versions of both the ’878 and ’336 patents. In July 2014, Ono and BMS sued the Company seeking a declaration that the ’878 patent would be infringed in the UK by the marketing of Keytruda. The Company has sought a declaration from the UK court that Keytruda will not infringe the ’336 patent in the UK. It is anticipated that the issues of validity and infringement of both patents will be heard at the same time by the UK court, which has scheduled the trial to begin in July 2015. BMS and Ono recently notified the Company of their request to amend the claims of the EPO ’336 patent and of their intention to seek permission from the court to similarly amend the UK national version so that the claims of the ’336 patent would no longer broadly claim anti-PD-1 antibodies such as Keytruda.

The Company can file lawsuits seeking revocation of the ’336 and ’878 patents in other national courts in Europe at any time, and Ono and BMS can file patent infringement actions against the Company in other national courts in Europe at or around the time the Company launches Keytruda (if approved). If a national court determines that the Company infringed a valid claim in the ’878 or ’336 patent, Ono and BMS may be entitled to monetary damages, including royalties on future sales of Keytruda, and potentially could seek an injunction to prevent the Company from marketing Keytruda in that country.

The USPTO granted US Patent Nos. 8,728,474 to Ono and 8,779,105 to Ono and BMS. These patents are equivalent to the ’878 and ’336 patents, respectively. In September 2014, BMS and Ono filed a lawsuit in the United States alleging that, by marketing Keytruda, the Company will infringe US Patent No. 8,728,474. BMS and Ono are not seeking to prevent or stop the marketing of Keytruda in the United States. The trial in this matter is currently scheduled to begin in November 2016. The Company believes that the 8,728,474 patent and the 8,779,105 patent are both invalid.

In September 2014, the Company filed a lawsuit in Australia seeking the revocation of Australian patent No. 2011203119, which is equivalent to the ’336 patent.

Ono and BMS have similar and other patents and applications, which the Company is closely monitoring, pending in the United States, Japan and other countries.

The Company is confident that it will be able to market Keytruda in any country in which it is approved and that it will not be prevented from doing so by the Ono or BMS patents or any pending applications. . . .

What it does not say is whether Merck will be able to charge a royalty — or have to pay one — to keep Keytruda on market in various jurisdictions. It also gives no hint as to what those royalties might do to profitability. More later.


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