Af­ter com­ing out of bank­rupt­cy, Mallinck­rodt pays out $260M to set­tle Ac­thar Gel law­suits

Al­most 18 months af­ter Mallinck­rodt filed for Chap­ter 11 bank­rupt­cy in Oc­to­ber 2020, the com­pa­ny got its re­or­ga­ni­za­tion ap­proved — and is pay­ing out $260 mil­lion right out of the gate in set­tle­ments.

The US De­part­ment of Jus­tice said in a state­ment on Mon­day that the Staines-up­on-Thames-based com­pa­ny is pay­ing out $260 mil­lion to set­tle 2 law­suits against the phar­ma, which al­leged that Mallinck­rodt vi­o­lat­ed the False Claims Act by un­der­pay­ing Med­ic­aid re­bates due for its mul­ti­ple scle­ro­sis drug Ac­thar Gel, and us­ing a foun­da­tion as a way to pay il­le­gal co-pay sub­si­dies in vi­o­la­tion of an­ti-kick­back laws for that drug.

The set­tle­ment re­quired the US Bank­rupt­cy Court for the Dis­trict of Delaware to sign off on the deal, which it did on March 2.

The set­tle­ment re­solves sep­a­rate cas­es brought by the gov­ern­ment fol­low­ing the US en­ter­ing com­plaints in 2019 and 2020, both in­volv­ing the pop­u­lar drug used to curb seizures in chil­dren. Mallinck­rodt agreed to pay just over $26 mil­lion to set­tle a case on vi­o­lat­ing the an­ti-kick­back statute, and $233 mil­lion to set­tle the case where the com­pa­ny short­ed Med­ic­aid close to $600 mil­lion.

Boston law firm Whistle­blow­er Law Col­lab­o­ra­tive is­sued its own an­nounce­ment about how its client, a for­mer Mallinck­rodt em­ploy­ee named James Lan­dolt, got in­volved. Long sto­ry short, Lan­dolt learned that Mallinck­rodt had been mis­re­port­ing Ac­thar Gel’s base av­er­age man­u­fac­tur­er rice (“AMP”) to the Med­ic­aid Drug Re­bate Pro­gram (MDRP), which re­duced how much Mallinck­rodt had to pay in re­bates to the pro­gram.

Ac­cord­ing to the law firm, Ac­thar’s base AMP should have been re­port­ed us­ing its price in 1990, since it was ap­proved in 1952. How­ev­er, Mallinck­rodt be­gan re­port­ing da­ta to the MDRP as though Ac­thar had been ap­proved in 2010 af­ter some sub­stan­tial price hikes.

For con­text’s sake: Ac­thar Gel used to cost around $50 a vial at the turn of the cen­tu­ry in 2001. In the two decades since then, the price had in­creased to around $40,000 a vial.

While CMS told Mallinck­rodt in 2016 that it had been re­port­ing an in­cor­rect base AMP for the gel and di­rect­ed the com­pa­ny to cor­rect its da­ta re­port­ing, Mallinck­rodt con­tin­ued to re­port the high base AMP, the law firm said.  That short­ed the MDRP of more than $600 mil­lion in re­bates be­tween 2013 and 2020.

The whistle­blow­er left Mallinck­rodt in 2017 and filed a qui tam ac­tion on Sept. 20, 2018, ac­cord­ing to the set­tle­ment. He al­leged that Mallinck­rodt will­ing­ly vi­o­lat­ed fed­er­al and state False Claims Acts, and over a year lat­er, the US joined in on his case.

A fed­er­al court then found Mallinck­rodt li­able for over $600 mil­lion in un­paid Med­ic­aid re­bates for the gel in March 2020. In fol­low­ing court fil­ings, the com­pa­ny said that the rul­ing jeop­ar­dized its abil­i­ty to pay off a mas­sive, $1.6 bil­lion bill to set­tle a horde of oth­er law­suits over the com­pa­ny’s role in the US opi­oid cri­sis.

The com­pa­ny fur­ther warned in June they may “have no op­tion but to take dras­tic and painful mea­sures, up to and in­clud­ing the prospect of bank­rupt­cy.” And just four months lat­er, it filed for Chap­ter 11 bank­rupt­cy.

On the same day the bank­rupt­cy court signed off on Mallinck­rodt’s set­tle­ment, the bank­rupt­cy court is­sued an or­der con­firm­ing Mallinck­rodt’s re­or­ga­ni­za­tion plan. And be­cause of Mallinck­rodt’s bank­rupt­cy, fed­er­al and state gov­ern­ments were not able to re­coup the full amount of the un­paid re­bates.

Pi­o­neer­ing Click Chem­istry in Hu­mans

Reimagining cancer treatments

Cancer is a leading cause of death worldwide, accounting for nearly 10 million deaths in 2020, which is nearly one in six deaths. Recently, we have seen incredible advances in novel cancer therapies such as immune checkpoint inhibitors, cell therapies, and antibody-drug conjugates that have revamped cancer care and improved survival rates for patients.

Despite this significant progress in therapeutic targeting, why are we still seeing such a high mortality rate? The reason is that promising therapies are often limited by their therapeutic index, which is a measure of the effective dose of a drug, relative to its safety. If we could broaden the therapeutic indices of currently available medicines, it would revolutionize cancer treatments. We are still on the quest to find the ultimate cancer medicine – highly effective in several cancer types, safe, and precisely targeted to the tumor site.

Justin Klee (L) and Joshua Cohen, Amylyx co-CEOs (Cody O'Loughlin/The New York Times; courtesy Amylyx)

Ad­vo­cates, ex­perts cry foul over Amy­lyx's new ALS drug, cit­ing is­sues with price, PhI­II com­mit­ment

Not 24 hours after earning the first ALS drug approval in five years, Amylyx Pharmaceuticals’ Relyvrio is already drawing scrutiny. And it’s coming from multiple fronts.

In an investor call Friday morning, Amylyx revealed that it would charge about $158,000 per year, a price point that immediately drew backlash from ALS advocates and some outside observers. The cost reveal had been highly anticipated in the immediate hours after Thursday evening’s approval, though Amylyx only teased Relyvrio would cost less than previously approved drugs.

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Land­mark Amy­lyx OK spurs de­bate; Some... pos­i­tive? Alzheimer's da­ta; Can­cer tri­al bot­tle­neck; Sanofi's CRISPR bet; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

After brief stops in Paris and Boston, John Carroll and the Endpoints crew are staying on the road in October with their return for a live/streaming EUBIO22 in London. The hybrid event fireside chats and panels on mRNA, oncology and the crazy public market. We hope you can join him there.

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Joshua Cohen (L) and Justin Klee, Amylyx co-CEOs

Up­dat­ed: Af­ter long and wind­ing road, FDA ap­proves Amy­lyx's ALS drug in vic­to­ry for pa­tients and ad­vo­ca­cy groups

For just the third time in its 116-year history, the FDA has approved a new treatment for Lou Gehrig’s disease, or ALS.

US regulators gave the thumbs-up to the drug, known as Relyvrio, in a massive win for patients and their families. The approval, given to Boston-area biotech Amylyx Pharmaceuticals, comes after two years of long and contentious debates over the drug’s effectiveness between advocacy groups and FDA scientists, following the readout of a mid-stage clinical trial in September 2020.

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#AAO22: J&J’s first look at com­mon eye dis­ease port­fo­lio pads the case for PhII of gene ther­a­py

CHICAGO — While the later-stage drug developers in the geographic atrophy field are near the finish line, Johnson & Johnson’s Janssen is taking a more deliberate route, with a treatment that it hopes to be a one-time fix.

The Big Pharma will take its Hemera Biosciences-acquired gene therapy into a Phase II study later this year in patients with GA, a common form of age-related macular degeneration that impacts about five million people worldwide. To get there, Janssen touted early-stage safety data at the American Academy of Ophthalmology annual conference Saturday morning, half a day after competitors Apellis and Iveric Bio revealed their own more-detailed Phase III analyses.

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Nooman Haque, head of life sciences and healthcare at Silicon Valley Bank, and John Carroll

I’m head­ed to Lon­don soon for #EU­BIO22. Care to join me?

It was great getting back to a live ESMO conference/webinar in Paris followed by a live pop-up event for the Endpoints 11 in Boston. We’re staying on the road in October with our return for a live/streaming EUBIO22 in London.

Silicon Valley Bank’s Nooman Haque and I are once again jumping back into the thick of it with a slate of virtual and live events on October 12. I’ll get the ball rolling with a virtual fireside chat with Novo Nordisk R&D chief Marcus Schindler, covering their pipeline plans and BD work.

Gilead names 'k­ing­pin­s' in coun­ter­feit HIV med law­suit

Gilead is mounting its counterfeit drug lawsuit, naming two “kingpins” and a complex network of conspirators who allegedly sold imitation bottles of its HIV meds, some of which ended up in US pharmacies.

The pharma giant on Wednesday provided an update on what it called a “large-scale, sophisticated counterfeiting conspiracy,” accusing two new defendants of “leading and orchestrating” a scheme to sell hundreds of millions of dollars in illegitimate drugs posing as meds such as Biktarvy and Descovy.

Some­one old, some­one new: Mod­er­na pro­motes CTO, raids No­var­tis for re­place­ment amid pipeline push

Moderna CEO Stéphane Bancel made clear on the last quarterly call that “now is not the time to slow down.” On Thursday, he made a bit more room in the cockpit.

The company unveiled a new executive role on Thursday, promoting former chief technical operations and quality officer Juan Andres to president of strategic partnerships and enterprise expansion, and poaching a former Novartis exec to take his place.

Tar­sus looks to raise aware­ness of eye­lid mite dis­ease in cam­paign aimed at eye­care spe­cial­ists

Eyelid mite disease may be “gross” but it’s also fairly common, affecting about 25 million people in the US.

Called demodex blepharitis, it’s a well-known condition among eyecare professionals, but they often don’t always realize how common it is. Tarsus Pharmaceuticals wants to change that with a new awareness campaign called “Look at the Lids.”

The campaign and website debut Thursday — just three weeks after Tarsus filed for FDA approval for a drug that treats the disease.

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