A Renewed Focus — On Pfizer’s Lobbying Disclosure Compliance Efforts — Part I of II

November 1, 2015 - Leave a Response

It’s suddenly a warm, quiet and sun-dappled Sunday morning here (after a truly ghoulish Irish ginger’s eighth-inning error in the Apple last night) — so I thought we’d begin to follow Pfizer again, a little more closely. Why? Well. . . there is talk of (i) another $100 billion plus inversion with Allergan (nominally in Ireland), and more immediately, because (ii) it seems Ian C. Read is now about ten days overdue in disclosing the Pfizer-led lobbying efforts and expenditures, during the third quarter of 2015. [Is he lobbying for. . . renewed inversion loopholes? We ought to be informed. In fact that’s why the timely disclosure laws exist.]

I’ll take the second one first, here today — because it’s easy. And I like easy, on Sundays. Here is the only remotely likely saving rule (which would allow Pfizer to avoid filing an LD-2 on or before October 20, 2015):

. . . .An organization employing in-house lobbyists whose total expenses in connection with lobbying activities do not exceed and are not expected to exceed $12,500 in the quarterly period during which the registration would be made is not required to be registered. . . .

Now, I suppose it is possible that — despite spending $2.1 million in the third quarter of 2014 — and between $1.2 million and $3.8 million dollars per quarter, every quarter since 1999 — Mr. Read simply turned off the faucet in Q3 2015. Possible. But unlikely. No, I think he’s overdue. What did he spend the shareholders’ money on, last quarter? The applicable federal law requires that he say, and say — in detail. All the other multi-national majors in our pharma space have already complied (Kenilworth plainly included here) — why hasn’t he? We will track this — and his renewed inversion efforts, now pretty closely, in the coming weeks — as time from our myriad other responsibilities permits. Onward!

Ebola Outbreak: A Much Needed (And Largely Missing) Perspective: The “Local” Front Line Doctors’ Take, In Africa

October 31, 2015 - Leave a Response

While I sip some hot fresh coffee, bright but chilled orange juice and eat my banana, on a cool rainy Saturday morning here — I thought I’d help the Aspen Institute New Voices program get the word out. [There was also a piece in The Guardian (UK) this weekend, of a similar bend (though slightly more strident, to be fair).] They (and we, both) think world needs to hear from more African doctors, on the ground — about ongoing Ebola efforts. This is not primarily the story of some lilly white do-gooders/ rescuers — no, this is the story of local people, helping local people — to end a scourge.

But first, the middling good news: there were only three more new cases in all of Guinea reported this week, in the W.H.O.’s latest Situation Report, and those three are all from the same household as the three reported a week earlier. Good news — to be sure. But there are still many, many contacts in both Guinea and Sierra Leone that have been lost to follow up. So we may yet see a few more nodes of viral outbreak emerge. [And Pauline Cafferkey continues her recovery in London’s Royal Free.]

Even so, I think hearing from Dr. Samuel Kargbo, the doctor who was in charge of safe burial practices in Sierra Leone — at the very peak of the crisis. . . is vitally important — do go read it all, for lessons learned (and the yawning infrastructure needs still remaining), courtesy of the Aspen Institute:

. . . .For five months last year, I led the national team responsible for the safe burials of victims of Ebola, which was being transmitted as family members cared for the sick or grieved the dead. At the height of the epidemic, about one hundred people a week succumbed to the disease and it was hard to see the future or remember the past.

Fast forward 15 months. The first week of October marked the third consecutive week in Sierra Leone with no confirmed cases and all contacts of people previously diagnosed with Ebola have cleared as disease free. However, the risk of new cases remains, particularly in Guinea, where public health workers are following 509 contacts. . . .

[E]ven once a vaccine is approved for widespread use, it will be no silver bullet. The gaps in our health care system that allowed Ebola to advance so quickly must be filled if this new vaccine — or any vaccines — are to realize their life-saving potential.

When Ebola hit Sierra Leone, we had fewer than 500 doctors for a population of 6 million. We had five ambulances, and 16 specialized obstetric care centers for the whole country. Perhaps most telling, life expectancy at birth was a mere 45 years, a number brought down by high rates of maternal and infant mortality. . . .

[W]hen Ebola hit, we also had a vision of a better health system. In 2010, President Ernest Koroma and the government had put in place a health care initiative that provided free treatment and medicine to pregnant women, lactating mothers and children under the age of five. Alongside this initiative, doctors and nurses received pay increases, from between 200 and 400 percent. . . .

So it goes — there is still much basic health care infrastructure work needed, in all of Sub-Saharan Africa, as the above eloquently attests.

Now. . . go be spooky — in the best of ways, all you. . . spectres!

MSM Has It Confused: Mr. Frazier’s Option Exercise/Sale Of Yesterday Nets Only $365,000 Pre-Tax

October 30, 2015 - Leave a Response

This quite often happens — when a non financial type looks at a Form 4 filing. Mr. Frazier yesterday exercised and sold 18,666 stock options — long vested, and set to expire next March, if not exercised.

So, he exercised them. But he only netted the difference between the option exercise price, and yesterday’s NYSE share price — not the full $54 and change per option share. So the MSM figure floating around — of around $1.1 million in gross proceeds — is wholly inaccurate. More important than how much he made, however, is how much he still has “at risk” — how much he’s holding.

And he’s still holding well over 438,000 shares of Merck stock (and much more, as yet unvested in restricted, and options) — so, even the full 18,666 is miniscule by comparison. All he is doing is slightly diversifying — afterall, he works there — it is his paycheck — and he holds a gargantuan load of Merck stock, even post the transaction. I’d read almost nothing into his sale.

Now you know — but still a great “treat” — no tricks, this All Hallows’ Eve, for him! Enjoy yourselves, one and all — I’m out!

Sovaldi® Patent Spats UPDATE: No Sealed Case In MA — Just A Typo, By Counsel

October 30, 2015 - Leave a Response

In the Joint Stipulation filed in Delaware earlier in the week, a reference to compliance with a prior order on discovery, entered in Massachusetts federal District Court led to an open, but sealed case in that District Court. I thought that. . . odd, to say the least. So I mentioned it.

After digging around a bit in the federal court archives in Massachusetts, through PACER, overnight — I found the case number that counsel meant to reference. That case ends with a 91109 not 1019. And the case which is sealed is 1109. So it was a pure typo by the lawyers involved in the litigation that led to yesterday’s now stricken story. So it goes.

Even so, it is interesting that the Massachusetts proceeding is apparently an effort to enforce discovery against one person (originally arising in the California litigation), who I am guessing is resident in Massachusetts. The matter has been inactive since mid-April 2015 — so I am guessing that the dispute has been resolved. And that would explain why there is no mention of it in the SEC filings, to date. Here is the latest from that case 15-mc-91109:

. . . .Petitioner Gilead Sciences, Inc. (“Gilead”) respectfully moves this Court for an Order compelling Idenix Pharmaceuticals, Inc. (“Idenix”) to produce all documents and things requested and designate witnesses for the topics in Gilead’s subpoenas to Idenix by no later than May 1, 2015. . . .

Now you know — all administ-trivia actually. . . . Onward now, to a scary, safe and fun-filled Halloween weekend 2015!

[U] More Sovaldi® Patent Wars — Is There A Completely Sealed Proceeding — In Massachusetts Federal District Court — As Well?

October 29, 2015 - Leave a Response

MRK-Gilead-Patent-2015UPDATED: This whole item is the result of a typo by counsel in the litigation — there is NO sealed proceeding — just a mistake in internal case reference numbers: 1109 — counsel should have refernced 91109. See this later item. END, UPDATE.

Overnight, in the Delaware Sovaldi® patent litigation, the parties — Gilead-entites and Merck-entities, respectively — have agreed via a Joint Stipulation (6 page PDF file) that essentially any document produced in the California patent litigation by either party will be available to the other parties, in the Delaware patent litigation, and vice versa. No huge surprise there. But what caught my eye, was a reference (for the first time, I believe) to additional patent litigation between Idenix (Merck’s affiliate) and Gilead, in the Massachusets federal District Court.

That seems new.

Yep — I just verified it — there is no mention of any Massachusetts litigation related to Sovaldi, in the Merck SEC Forms 10-Q or 10-K so far, during this year, 2015. [So we should learn more, when the Q3 2015 SEC Form 10-Q is filed, rather shortly.] And while I think the stipulation quoting it contains a typo as to the case number, I think that piece of litigation (properly designated as 15-1019, not 15-1109) has been sealed, in its entirety:

. . . .Gilead Sciences, Inc., v. Idenix Pharmaceuticals, Inc., 15-mc-1109 [sic] (D. Mass). . .

“. . .The case you specified is SEALED and you are not authorized to see it. . . .”

That is what the PACER query on the above item returns.

Fascinating. In any event, I think the import of the Delaware stipulation is that the later discovery cutoff in Delaware will effectively apply in California, as either party may request in Delaware anything it needs in California — or so it would seem — under this Joint Stipulation. Onward — smile!

An Update — On The Legendary Dr. Roy Vagelos — At Regeneron

October 29, 2015 - Leave a Response

We last checked in on the long retired former Merck chairman (mandatorily retired from Merck in 1995), back in January 2014. In the ensuing year and three quarters, his equity stake at Regeneron — acquired solely for part time work, as a member of the board of directors at Regeneron Pharmaceuticals, has ballooned to over $1 billion.

It is exceedingly rare for a retired chariman of a Fortune 100 public company to make a second billion, solely in board compensation, at any other company. But that is the hook in today’s Bloomberg story.

As the piece goes on to point out in great detail — he has certainly been worth the money, having increased all shareholders’ fortunes by 16,000 per cent during his tenure (assuming you bought when he entered, and held, constantly, without selling, ‘lo all these years). A bit then — and our best to a fine, fine man — and an astonishingly prescient scientist:

. . . .When he joined the Tarrytown, New York-based company in 1995, it sold him 600,000 shares at 50 cents a piece, an 86 percent discount to their price, and kicked off annual option grants that routinely placed him among the highest-paid directors in the U.S. Vagelos, 86, has since helped deliver a 16,000 percent surge in Regeneron’s value.

“Every once in a long while, you find a scientist who has deep understanding of the scientific basis of disease, but who also is a great manager — Vagelos is one of that rare breed,” said Mike Brown, a Nobel Prize recipient and Regeneron board member who recruited Vagelos as the company’s chairman. “He was probably the most successful pharmaceutical company leader of that era. . . .”

Indeed he is/was — and his Midas touch remains quite potent, apparently, even in his relaxing, retired years. We wish him nothing but the best. Onward — with a huge grin. . . .

Prix Galien USA 2015 Awards for Best Biotechnology Product(s) Go To. . . BMS And Merck

October 28, 2015 - Leave a Response

As no small measure of additional proof — that both of these remarkable life saving cancer meds will be with us for the long haul — and both represent breakthroughs of significant scientific moment — this morning, the Prix Galien USA 2015 Award for Best Biotechnology Product(s) were awarded to. . . both Merck and Bristol-Myers Squibb. [Each received this quite-prestigious award — for slightly differing indications.]

Here is the Bristol-Myers Squibb release — and here is the Kenilworth version. A bit then, from each follows:

. . . .[BMS] today announced that it received the Prix Galien USA 2015 Award for Best Biotechnology Product for Opdivo® (nivolumab), the Company’s PD-1 immune checkpoint inhibitor. Bristol-Myers Squibb was recognized for its innovative discovery and development of Opdivo in approved indications for previously treated metastatic squamous non-small cell lung cancer (NSCLC), and in unresectable or metastatic melanoma. . . .

[Merck] today announced that Keytruda® (pembrolizumab), the company’s anti-PD-1 therapy for the treatment of advanced melanoma and metastatic non-small cell lung cancer in patients whose disease has progressed after other therapies, received the Prix Galien USA 2015 Award for Best Biotechnology Product.

“As a company built on a foundation of scientific excellence, Merck is honored to again have been chosen as a recipient of this prestigious award,” said Dr. Roger M. Perlmutter, president, Merck Research Laboratories. “This achievement is a testament to the remarkable contributions of everyone at Merck, as well as the many physicians and patients who participated in our clinical trials, in helping to bring KEYTRUDA to patients”. . . .

So. . . Kudos, all around! Onward, and keep it spinning in life affirming good karma, one and all! Namaste!

And, In Delaware District Court — On The Sovaldi® Patent Litigation. . .

October 27, 2015 - Leave a Response

MRK-Gilead-Patent-2015 Yet another discovery dispute — in the same batch of patent disputes — has risen to the level of requiring judicial intervention. [More often than not, the parties and their lawyers try to work out agreements — to avoid involving the judge in petty rule interpretation matters; but occassionally, the dispute cannot be resolved that way. These — yesterday and today — are two of those times.] Yesterday we mentioned the newly disclosed vials of what might be the pro-drug in question, dating back to 1992 — that was in California federal District Court. Today, an electronic order entered appears in Delaware federal District Court — entered by the very able Judge Stark. Today’s oral order doesn’t indicate what the dispute is about — but it wouldn’t shock me to learn that it is related to yesterday’s motion in California.

Here it is — the hearing/teleconference date is scheduled right before Thanksgiving:

. . . .ORAL ORDER:

After having been advised by Plaintiff(s) and Defendant(s) of their inability to resolve a discovery matter. . .

IT IS HEREBY ORDERED that a teleconference is scheduled for November 23, 2015 at 2:15 p.m. Counsel for the party seeking relief shall initiate the teleconference call to 302-573-4571.

IT IS FURTHER ORDERED that not later than November 16, 2015, any party seeking relief shall file with the Court a letter, not to exceed three (3) pages, outlining the issues in dispute and its position on those issues. Not later than November 18, 2015, any party opposing the application for relief may file a letter, not to exceed three (3) pages, outlining that party’s reasons for its opposition. Each party shall submit to the Court two (2) courtesy copies of its discovery letter and any attachments. Should the Court find further briefing necessary upon conclusion of the telephone conference, the Court will order it.

Alternatively, the Court may choose to resolve the dispute prior to the telephone conference and will, in that event, cancel the conference.

ORDERED by Judge Leonard P. Stark on 10/27/15. . . .

Onward — we will keep the readership informed. Looks like our Commander in Chief, and King James, will be on West Madison tonight. Excellent!

Overall, A Nice Quarter For Kenilworth — But BMS’s Opdivo® Has Widened Its Lead Over Keytruda®

October 27, 2015 - Leave a Response

Just as we long-said it would, Opdivo® has really started to pull away in Q3 2015 revenues, as its deeper and broader approvals kick in. To be sure, there is still a lot of room for Merck’s Keytruda® to be a great oncology franchise, in terms of sales, but it is unlikely to ever catch BMS, now. [BMS Q3 2015 release — from which the chart at right is derived.] That’s just my gut reaction, based on three quarters of global full on-market sales.

As I wrote in a comment this morning, earlier, I was a little too optimistic about currencies — guessing a 7 per cent down bubble, when in fact they came in at. . . eight. So it goes — it was simply a guess, afterall. Here is a bit from Merck’s newly-increased fully year 2015 guidance — which is truly welcome news. So — all in all, a pretty solid Kenilworth quarter:

. . . .Merck has raised its full-year 2015 non-GAAP EPS range to be between $3.55 and $3.60, including a negative impact from foreign exchange. The range excludes acquisition- and divestiture-related costs, costs related to restructuring programs and certain other items. The company also has raised its full-year 2015 GAAP EPS range to be between $1.64 and $1.74.

At current exchange rates, the company now anticipates full-year 2015 revenues to be between $39.2 billion and $39.8 billion, including a negative impact from foreign exchange and approximately $1 billion of net lost sales from acquisitions and divestitures.

In addition, the company continues to expect full-year 2015 non-GAAP marketing and administrative expenses to be below 2014 levels and R&D expenses to be modestly above 2014 levels.

The company continues to anticipate its full-year 2015 non-GAAP tax rate will be in the range of 23 to 24 percent, not including a 2015 R&D tax credit. . . .

The above is likely what is driving MRK’s NYSE share price increase today — and for the record, BMS is up, proportionately more — because (of course) Optivo contributes proportionately more, to BMS’s overall results — and it is, as I say — pulling away. Onward!

“Condor Predicts”: About 7% Headwind From Currency Translation — At Merck’s Sales Line, Tomorrow Morning

October 26, 2015 - Leave a Response

We may see some good hedging out of Kenilworth’s finance folk — so I’ll bring the bubble up a bit — but I’ll lean heavily on the recent J&J Q3 2015 earnings release. . . to guess at an approximate 7 per cent downdraft effect in Merck’s sales, due solely to currencies.

To be clear, I expect Merck to post sales growth, operationally, but that growth will be materially trimmed (by about seven per cent), at the sales line due to a strong US dollar, and weaker euro and Yen primarily. It is just my guess — but here is the J&J Q3 2015 earnings press releasse — as filed with the SEC last week:

. . . .[J&J] today announced sales of $17.1 billion for the third quarter of 2015, a decrease of 7.4% as compared to the third quarter of 2014. Operational sales results increased 0.8% and the negative impact of currency was 8.2%. Domestic sales decreased 0.6%. International sales decreased 13.7%, reflecting operational growth of 2.1% and a negative currency impact of 15.8%. . . .

So — have a great evening, one and all — I’ll cover any surprises, mañana!


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