Ab­b­Vie-Al­ler­gan com­plete, but crit­ics con­tin­ue to raise an­ti-com­pet­i­tive con­cerns

The Ab­b­vie-Al­ler­gan mega-merg­er may now be com­plete, but its crit­ics haven’t had their last say.

In a 7-page let­ter to the Fed­er­al Trade Com­mis­sion, Cal­i­for­nia At­tor­ney Gen­er­al Xavier Be­cer­ra called in­to ques­tion the reme­dies the fed­er­al agency im­posed to solve the an­ti-trust con­cerns in­trin­sic in the $63 bil­lion deal.

Xavier Be­cer­ra

He said the agency did not fol­low its own “best prac­tices” when it comes to the merg­er. Yet even these prac­tices — now com­mon­place in some form or an­oth­er — have con­sis­tent­ly failed to cur­tail an­ti-com­pet­i­tive and price-rais­ing po­ten­tial, Be­cer­ra ar­gued, and should be stud­ied thor­ough­ly in an ef­fort to come up with new fix­es.

“It is wide­ly rec­og­nized that phar­ma­ceu­ti­cal merg­ers that bur­den the pub­lic in the form of high­er prices, few­er drug choic­es, drug short­ages, or oth­er an­ti­com­pet­i­tive ef­fects, must not be al­lowed,” he wrote. “This rais­es the ques­tion of whether, and to what ex­tent, merg­ers that are ap­proved sub­ject to di­vesti­tures re­store the lost com­pe­ti­tion from those merg­ers.”

Di­vesti­tures, in which one com­pa­ny sells off as­sets that would com­pete with oth­er as­sets in the merged com­pa­ny, have be­come the com­mon rem­e­dy for mo­nop­oly con­cerns that have emerged out of an in­creas­ing­ly con­sol­i­dat­ing phar­ma­ceu­ti­cal in­dus­try. Af­ter Bris­tol My­ers Squibb bought Cel­gene, for in­stance, the FTC con­di­tioned ap­proval of the deal on Bris­tol My­ers di­vest­ing Ote­zla, Cel­gene’s an­ti-in­flam­ma­to­ry drug, be­cause Bris­tol My­ers had their own an­ti-in­flam­ma­to­ry drug in the works, al­beit one that used a very dif­fer­ent mech­a­nism. Am­gen bought it for $13.4 bil­lion.

As the FTC re­viewed the Al­ler­gan-Ab­b­Vie deal, though, con­sumer ad­vo­cates ques­tioned both the gen­er­al wis­dom of di­vesti­tures in phar­ma merg­ers and specif­i­cal­ly how they were be­ing ap­plied to this deal. Those were most no­tably put in a sting­ing dis­sent from the FTC rul­ing clear­ing the merg­er, in which com­mis­sion­er Ro­hit Chopra called the pol­i­cy to have com­pa­nies di­vest over­lap­ping drugs “nar­row, flawed, and in­ef­fec­tive.” “It miss­es the big pic­ture,” he wrote, “al­low­ing phar­ma­ceu­ti­cal com­pa­nies to fur­ther ex­ploit their dom­i­nance, block new en­trants, and harm pa­tients in need of life-sav­ing drugs.”

To con­sum­mate the deal, the FTC made Al­ler­gan sell off an ex­per­i­men­tal an­ti-in­flam­ma­to­ry com­pound called brazikum­ab that might com­pete with Ab­b­Vie’s ap­proved Skyrizi. This, Be­cer­ra said, was against FTC guide­lines that call for com­pa­nies to sell off on-mar­ket prod­ucts be­cause ex­per­i­men­tal drugs have a “high rate of fail­ure.” Prod­ucts are al­so sup­posed to be sold to an ex­pe­ri­enced com­pa­ny ready to com­pete. The FTC, though, al­lowed Ab­b­Vie to di­vest the pan­cre­at­ic en­zyme Zen­Pep to Nestlé, “mak­er of choco­lates, bot­tled wa­ter and ba­by food.”

More broad­ly, Be­cer­ra said, there is lit­tle ev­i­dence that di­vesti­tures have been a suc­cess­ful tac­tic. He cit­ed FTC stud­ies showed di­vesti­tures had a 35% fail­ure rate, even when suc­cess is de­fined by the “ex­treme­ly broad and gen­er­ous de­f­i­n­i­tion” of one post-merg­er sale or, for pipeline drugs, sim­ply that the prod­uct was trans­ferred. He al­so cit­ed stud­ies sug­gest­ing the di­vesti­tures don’t pre­vent price in­creas­es.

The at­tor­ney gen­er­al called for a study that would an­a­lyze how well-di­vest­ed on-mar­ket drugs were sold and if pipeline drugs were brought to mar­ket; mea­sures that could be tak­en to guard against the “op­por­tunis­tic se­lec­tion” of di­vesti­ture buy­ers that are less like­ly to ef­fec­tive­ly de­vel­op or mar­ket drugs, such as — in Be­cer­ra’s view — Nestlé; and the role of phar­ma­cy ben­e­fit man­agers who, by cre­at­ing tiered for­mu­las, can block even the best di­vesti­tures from com­pet­ing.

Ul­ti­mate­ly, he of­fered, the FTC might have to do for phar­ma what they of­ten do for oth­er in­dus­tries: im­pose lim­its on what com­pa­nies can do af­ter the merg­er to en­sure the po­ten­tial suc­cess of the di­vest­ed and now ri­val prod­uct.

“Such a rem­e­dy could be es­sen­tial for the suc­cess of drug di­vesti­tures like Brazikum­ab, which is a pipeline drug that, once and if it gets to mar­ket, would need to com­pete against Ab­b­Vie’s in­cum­bent drug for PBM for­mu­la­ry ac­cess,” he wrote.

Regeneron CEO Leonard Schleifer speaks at a meeting with President Donald Trump, members of the Coronavirus Task Force, and pharmaceutical executives in the Cabinet Room of the White House (AP Photo/Andrew Harnik)

OWS shifts spot­light to drugs to fight Covid-19, hand­ing Re­gen­eron $450M to be­gin large scale man­u­fac­tur­ing in the US

The US government is on a spending spree. And after committing billions to vaccines defense operations are now doling out more of the big bucks through Operation Warp Speed to back a rapid flip of a drug into the market to stop Covid-19 from ravaging patients — possibly inside of 2 months.

The beneficiary this morning is Regeneron, the big biotech engaged in a frenzied race to develop an antibody cocktail called REGN-COV2 that just started a late-stage program to prove its worth in fighting the virus. BARDA and the Department of Defense are awarding Regeneron a $450 million contract to cover bulk delivery of the cocktail starting as early as late summer, with money added for fill/finish and storage activities.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,800+ biopharma pros reading Endpoints daily — and it's free.

UP­DAT­ED: Bio­gen shares spike as ex­ecs com­plete a de­layed pitch for their con­tro­ver­sial Alzheimer's drug — the next move be­longs to the FDA

Biogen is stepping out onto the high wire today, reporting that the team working on the controversial Alzheimer’s drug aducanumab has now completed their submission to the FDA. And they want the agency to bless it with a priority review that would cut the agency’s decision-making time to a mere 6 months.

The news drove a 10% spike in Biogen’s stock $BIIB ahead of the bell.

Part of that spike can be attributed to a relief rally. Biogen execs rattled backers and a host of analysts earlier in the year when they unexpectedly delayed their filing to the third quarter. That delay provoked all manner of speculation after CEO Michel Vounatsos and R&D chief Al Sandrock failed to persuade influential observers that the pandemic and other factors had slowed the timeline for filing. Actually making the pitch at least satisfies skeptics that the FDA was not likely pushing back as Biogen was pushing in. From the start, Biogen execs claimed that they were doing everything in cooperation with the FDA, saying that regulators had signaled their interest in reviewing the submission.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,800+ biopharma pros reading Endpoints daily — and it's free.

Daniel O'Day, Gilead CEO (Kevin Dietsch/UPI/Bloomberg via Getty Images)

A new study points to $6.5B in pub­lic sup­port build­ing the sci­en­tif­ic foun­da­tion of Gilead­'s remde­sivir. Should that be re­flect­ed in the price?

By drug R&D standards, Gilead’s move to repurpose remdesivir for Covid-19 and grab an emergency use authorization was a remarkably easy, low-cost layup that required modest efficacy and a clean safety profile from just a small group of patients.

The drug OK also arrived after Gilead had paid much of the freight on getting it positioned to move fast.

In a study by Fred Ledley, director of the Center for Integration of Science and Industry at Bentley University in Waltham, MA, researchers concluded that the NIH had invested only $46.5 million in the research devoted to the drug ahead of the pandemic, a small sum compared to the more than $1 billion Gilead expected to spend getting it out this year, all on top of what it had already cost in R&D expenses.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Donald and Melania Trump watch the smoke of fireworks from the South Lawn of the White House on July 4, 2020 (via Getty)

Which drug de­vel­op­ers of­fer Trump a quick, game-chang­ing ‘so­lu­tion’ as the pan­dem­ic roars back? Eli Lil­ly and Ab­Cellera look to break out of the pack

We are unleashing our nation’s scientific brilliance and will likely have a therapeutic and/or vaccine solution long before the end of the year.

— Donald Trump, July 4

Next week administration officials plan to promote a new study they say shows promising results on therapeutics, the officials said. They wouldn’t describe the study in any further detail because, they said, its disclosure would be “market-moving.”

— NBC News, July 3

Something’s cooking. And it’s not just July 4 leftovers involving stale buns and uneaten hot dogs.

Over the long weekend observers picked up signs that the focus in the Trump administration may swiftly shift from the bright spotlight on vaccines being promised this fall, around the time of the election, to include drugs that could possibly keep patients out of the hospital and take the political sting out of the soaring Covid-19 numbers causing embarrassment in states that swiftly reopened — as Trump cheered along.

So far, Gilead has been the chief beneficiary of the drive on drugs, swiftly offering enough early data to get remdesivir an emergency authorization and into the hands of the US government. But their drug, while helpful in cutting stays, is known for a limited, modest effect. And that won’t tamp down on the hurricane of criticism that’s been tearing at the White House, and buffeting the president’s most stalwart core defenders as the economy suffers.

We’ve had positive early-stage vaccine data, most recently from Pfizer and BioNTech, playing catchup on an mRNA race led by Moderna — where every little sign of potential trouble is magnified into a lethal threat, just as every advance excites a frenzy of support. But that race still has months to play out, with more Phase I data due ahead of the mid-stage numbers looming ahead. A vaccine may not be available in large enough quantities until well into 2021, which is still wildly ambitious.

So what about a drug solution?

Trump’s initial support for a panacea focused on hydroxychloroquine. But that fizzled in the face of data underscoring its ineffectiveness — killing trials that aren’t likely to be restarted because of a recent population-based study offering some support. And there are a number of existing drugs being repurposed to see how they help hospitalized patients.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

FDA bars the door — for now — against Mer­ck’s star can­cer drug af­ter Roche beat them to the punch

Merck has been handed a rare setback at the FDA.

After filing for the accelerated approval of a combination of their star PD-1 drug Keytruda with Eisai’s Lenvima as a first-line treatment for unresectable hepatocellular carcinoma, the FDA nixed the move, handing out a CRL because Roche beat them to the punch on the same indication by a matter of weeks.

According to Merck:

Ahead of the Prescription Drug User Fee Act action dates of Merck’s and Eisai’s applications, another combination therapy was approved based on a randomized, controlled trial that demonstrated overall survival. Consequently, the CRL stated that Merck’s and Eisai’s applications do not provide evidence that Keytruda in combination with Lenvima represents a meaningful advantage over available therapies for the treatment of unresectable or metastatic HCC with no prior systemic therapy for advanced disease. Since the applications for KEYNOTE-524/Study 116 no longer meet the criteria for accelerated approval, both companies plan to work with the FDA to take appropriate next steps, which include conducting a well-controlled clinical trial that demonstrates substantial evidence of effectiveness and the clinical benefit of the combination.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,800+ biopharma pros reading Endpoints daily — and it's free.

Covid-19 roundup: Mod­er­na sticks to Ju­ly for its Phase III as ru­mors swirl; Fol­low­ing US lead, EU buys up Covid-19 treat­ments

The Phase III might be delayed from its original early July goal, but Moderna says it will still kick off the pivotal study for what could ultimately be the first Covid-19 vaccine before the end of the month.

A day after Reuters reported that squabbling between the Cambridge biotech and government regulators had held up the trial by about two weeks, Moderna released a statement saying that they had completed enrollment of their 650-person Phase II trial and were on track to begin Phase III by the end of the month. The protocol for that study, which is meant to prove whether or not the vaccine can prevent people from becoming sick, has been finalized, they said.

Adrian Gottschalk, Foghorn CEO

Mer­ck dan­gles up to $425 mil­lion to team with Flag­ship’s Foghorn Ther­a­peu­tics on drug­ging the shape of DNA

Two years after it first emerged from stealth mode, Flagship’s Foghorn Therapeutics has nabbed its first Big Pharma partner as Merck signs on to the biotech’s vision of drugging the very shape of DNA.

The deal, worth up to $425 million but with the upfront cash undisclosed, comes as Foghorn nears a pivot to a clinical stage biotech. The Cambridge-based company has added nearly 60 staffers from the 25 it had when it first emerged out of Flagship and, CEO Adrian Gottschalk said, they have finally refined the screening technology at the heart of the company, with plans to file their first IND towards the end of the year.

John Reed, Sanofi R&D chief (Endpoints News)

John Reed brings NK cells in­to Sanofi's CD38 ri­val­ry with J&J — and of­fers thumbs up for Kiadis' new fo­cus

Sanofi doesn’t just want to be a challenger to J&J’s dominant Darzalex multiple myeloma franchise. It’s looking to pioneer a new approach by pairing its own — newly approved — anti-CD38 drug with an NK cell therapy it’s just picked up.

The French pharma giant has teed up $19.7 million (€17.5 million) upfront and close to a billion dollars (€857.5 million) in milestones for a license to Kiadis Pharma’s preclinical K-NK004 program, which consists of NK cells that have been genetically engineered not to express CD38.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,800+ biopharma pros reading Endpoints daily — and it's free.

Stephen Hahn, AP

Trump and Navar­ro press again for hy­drox­y­chloro­quine. Can the FDA stay in­de­pen­dent?

Tuesday morning, economist and Trump advisor Peter Navarro walked onto the White House driveway and promptly brought a political cloud back onto the FDA.

Speaking to a White House pool reporter, Navarro said that four Detroit doctors were, based on a single disputed study, filing for the FDA to again issue an emergency authorization for hydroxychloroquine, the anti-malarial pill that President Trump hyped for months as a Covid-19 treatment over the objections of his own scientists. Then, while avoiding directly calling for the FDA to OK the drug, blasted the agency. He said its decision to pull an earlier authorization “was based on bad science” and “had a tremendously negative effect” on doctors and patients.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,800+ biopharma pros reading Endpoints daily — and it's free.