The stock market turmoil of the last few days - and the divergence of opinion on what will happen next - is certainly present in the biotechnology and pharmaceutical sectors, which are often intertwined.
Biotech stocks have been some of the hottest in the last few years, so much so that Federal Reserve Chair Janet Yellen took the unusual step of mentioning it along with the word "bubble."
On Monday, the Wall Street Journal wrote about how Gilead Sciences - which has gotten very rich on its hepatitis C drugs - was happy to wait a bit more while considering what smaller companies to try to buy because the prices were declining. A link to the story is here, with registration required.
GlaxoSmithKline and Novartis said Friday they struck a deal under which Novartis will pay GSK at least $300 million and perhaps more than $1 billion for the remaining rights to the drug ofatumumab. The drug is already approved for use in treating some cancers and sold by Novartis under the name Arzerra. Novartis will now have the rights for all indications, once approved by regulators, most importantly multiple sclerosis.
GSK gets $300 million when the deal is closed, $200 million if Novartis starts a phase III clinical study of ofatumumab in relapsing remitting multiple sclerosis, and contingent payments of up to $534 million if other development milestones are achieved. GSK would get royalties of 12 percent on any future net sales of ofatumumab in auto-immune indications.
GSK had sold the cancer indication as part of multi-billion dollar deal with Novartis in 2014. GSK kept oncology programs in its pipeline, but sold existing oncology drugs in exchange for the Novartis vaccine portfolio and a majority position in a new joint venture to sell over-the-counter consumer products.
Novartis competes with Roche and Teva in multiple sclerosis drugs. A key Novartis MS drug will lose patent protection in the next few years. Novartis' Sandoz generic division sells the first generic version of Teva's 20 mg Copaxone medication.
"Novartis is pleased to further reinforce our commitment to neuroscience and to add an exciting new treatment to our strong MS portfolio," David Epstein, head of Novartis Pharmaceuticals, said in a statement. "Our vision for patients with MS is to develop treatments that improve on current standards of care, meeting patients' needs at every stage of their disease with innovative and targeted drugs."
Bloomberg News quoted one financial analyst as saying this is a bad deal for Novartis. “It’s a joke,” Fabian Wenner, an analyst at Kepler Cheuvreux in Zurich, said according to Bloomberg. “Patients either want better convenience than the old drugs or they want better efficacy, and ofatumumab is offering neither of those things. The chances of this being successful in MS and generating any sales are zero in my view.”
Philly-area Merck union chief rips CEO Ken Frazier for layoffs, endangering workers at West Point plant
Tension over layoffs and the future of pharmaceutical giant Merck & Co. spilled into the public domain Tuesday evening as a written exchange between CEO Ken Frazier and a union leader cast doubt on the safety of workers and people in the community near the company's factory in West Point, Montgomery County.
“I dread but expect the day when someone forced to work a double shift of work (16 hours) gets in their car after work, drives home and falls asleep at the wheel, hurting themselves, someone else or someone else’s child,” wrote Dan Bangert, a 29-year Merck employee and president of the United Steelworkers Union local. Bangert wrote the internal company blog post on July 30 and it was re-posted on the union website Tuesday evening, along with an exchange of emails between Bangert and Frazier on July 30 and July 31.
Bangert wrote - and other workers have told the Inquirer -- that Merck's decision to cut thousands of jobs to please Wall Street resulted in middle managers forcing workers to accept 16 hour shifts or face termination. Fatigue increases danger of injury at the plant, they said, and on the way home. The frustration grew when Frazier announced July 28 that all employees - except union members - would get an extra day off as a sign of appreciation for their efforts.
California-based drugmaker Amgen has agreed to pay $71 million to 48 states, including Pennsylvania, New Jersey and Delaware, and the District of Columbia to settle allegations that it violated consumer protection laws with misleading promotion of anemia drug Aranesp and its plaque psoriasis drug Enbrel
Pennsylvania is likely to get about $2.4 million of the total, according to the Attorney General’s Office. The New Jersey Attorney General’s Office said that state would get about $1.57 million.
A whistleblower helped start the federal portion of the investigation. Eventually, Amgen pleaded guilty in 2012 to one count of misbranding Aranesp, and agreed to pay $762 million in criminal and civil penalties.
Prof. Uwe E. Reinhardt teaches health economics, comparative health systems, general microeconomics and financial management at Princeton.
In a story last week in the Journal of the American Medical Association, Reinhardt uses some high-level economic language, a few charts and graphs, but, basically, lays bare the American societal conundrum and moral dilemma of high-priced medicine.
The headline was: "Probing our Moral Values in Health Care: the Pricing of Specialty Drugs"
Merck & Co., cut 1,950 jobs in the first six months of 2015 as part of two cost-cutting programs announced in 2010 and 2013, and the near-term pain might not be over.
When the massive layoff programs overlap, the accounting can be more complicated.
That was evident in the quarterly statement filed by Merck with the Securities and Exchange Commission.
If you paid $4.99 for the cell phone app "Mole Detective," in hopes that it would diagnose skin cancer, specifically melanoma, the Federal Trade Commission has bad news for you:
“We haven’t found any scientific evidence that Mole Detective can accurately assess melanoma risk,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement. “If you’re concerned that a mole may be cancerous, please see a health professional.”
The FTC said Thursday (link here) that the owner of the app had settled a charges filed in a February lawsuit and the agreement prevents him from "making any further deceptive health claims about his products."
CSL Limited, parent of CSL Behring, is an Australian-based biopharmaceutical company with operations in King of Prussia and is now adding operations in North Carolina and the United Kingdom. Almost by default, the company has to be global.
While presenting full-year financial results to investment analysts - Wednesday morning in Melbouren, Tuesday night in Philadelphia - chief executive Paul Perreault spoke of the challenges of trying to navigate and sell medicine in the the world's two biggest economies - China and the United States.
"People underestimate the complexity of the U.S. healthcare system," Perreault said, via the webcast. "It's much like everybody rushing to China. Everybody wants to get there and then you get there and you're like, 'Whoa.' "