US judge rules in fa­vor of J&J in con­tro­ver­sial 'Texas two-step' case

John­son & John­son cel­e­brat­ed a win in bank­rupt­cy court on Fri­day, with a US judge rul­ing in fa­vor of its con­tro­ver­sial Chap­ter 11 fil­ing meant to set­tle 38,000 law­suits al­leg­ing its talc-based prod­ucts caused can­cer.

The tri­al stems back to a moun­tain of claims that J&J’s wide­ly-used ba­by pow­der and oth­er talc prod­ucts con­tained as­bestos and caused mesothe­lioma and ovar­i­an can­cer. In an at­tempt to dig it­self out, the phar­ma gi­ant spun the li­a­bil­i­ties in­to a sep­a­rate com­pa­ny called LTL Man­age­ment and filed for bank­rupt­cy back in Oc­to­ber. But a cou­ple of weeks ago, plain­tiffs kicked off a five-day tri­al seek­ing to dis­miss the bank­rupt­cy case as mis­use of the Chap­ter 11 sys­tem.

Michael Ka­plan

Judge Michael Ka­plan of New Jer­sey re­ject­ed those mo­tions, adding that “the fil­ing of a chap­ter 11 case with the ex­pressed aim of ad­dress­ing the present and fu­ture li­a­bil­i­ties as­so­ci­at­ed with on­go­ing glob­al per­son­al in­jury claims to pre­serve cor­po­rate val­ue is un­ques­tion­ably a prop­er pur­pose un­der the Bank­rupt­cy Code.”

While J&J touts the de­ci­sion as a “pos­i­tive de­vel­op­ment and step for­ward,” oth­ers are fir­ing back. Jon Ruck­de­schel, an at­tor­ney who’s lit­i­gat­ed mesothe­lioma and oth­er as­bestos cas­es for 20 years (in­clud­ing against J&J), said in a state­ment that the de­ci­sion keeps vic­tims from their right to a ju­ry de­ci­sion.

“The bank­rupt­cy code was nev­er in­tend­ed to be abused in this way by mas­sive­ly prof­itable cor­po­ra­tions as a means to de­lay or pre­vent can­cer vic­tims from hav­ing their day in court,” he said. “We are dis­ap­point­ed that J&J’s stooge ‘bank­rupt­cy’ fil­ing for its fall-guy sub­sidiary LTL Man­age­ment was not dis­missed, but this mat­ter will be ap­pealed and oth­er reme­dies will be sought against LTL and J&J as part of the bank­rupt­cy pro­ceed­ing in the mean­time.”

Jon Ruck­de­schel

To spin off its li­a­bil­i­ties, J&J in­voked a Texas law for­mal­ly known as a di­vi­sion­al merg­er but col­lo­qui­al­ly called a “Texas two-step” bank­rupt­cy. The phar­ma gi­ant said in Oc­to­ber that it had racked up about $3.5 bil­lion in pay­ments for set­tle­ments and ver­dicts — and dur­ing the tri­al, it claimed that from Jan­u­ary 2020 to now, it’s been served on av­er­age with one or more ovar­i­an can­cer com­plaints every hour of every day.

Mean­while, those on the claimants’ side — in­clud­ing a group of law pro­fes­sors who filed a “friend of the court” brief — ar­gue that the Texas two-step move is a “di­rect at­tack on the fun­da­men­tal in­tegri­ty of the Chap­ter 11 sys­tem.”

On­ly a hand­ful of talc-re­lat­ed suits have made it to tri­al and been re­solved over the last decade — and though J&J says it has pre­vailed in a ma­jor­i­ty of cas­es, it’s al­so ex­pe­ri­enced some sting­ing loss­es in­clud­ing a Mis­souri case in 2018 when a ju­ry award­ed plain­tiffs more than $4.7 bil­lion in dam­ages.

J&J main­tains that it “nev­er man­u­fac­tured a prod­uct that con­tained as­bestos,” and that its talc prod­ucts are safe. The phar­ma gi­ant stopped man­u­fac­tur­ing the talc-based pow­der in May 2020 but cit­ed de­clin­ing sales as its rea­son­ing.

“LTL stands ready to work with claimants’ coun­sel and the me­di­a­tor to reach an eq­ui­table and ef­fi­cient res­o­lu­tion as or­dered by the Bank­rupt­cy Court,” the com­pa­ny said in a state­ment on Fri­day.

Ka­plan not­ed in his opin­ion that “many of these can­cer vic­tims will not live to see their cas­es through the tri­al and ap­pel­late sys­tems, but cer­tain­ly de­serve the com­fort in know­ing that their fam­i­lies’ fi­nan­cial needs will be ad­dressed time­ly.”

“The Court is aware that its de­ci­sion to­day will be met with much angst and con­cern,” he wrote. “Nonethe­less, the mat­ter be­fore the Court is so much more than an aca­d­e­m­ic ex­er­cise or pub­lic pol­i­cy de­bate. These is­sues im­pact re­al lives.”

Big Phar­ma's Twit­ter ex­o­dus; Mer­ck wa­gers $1.35B on buy­out; $3.5M gene ther­a­py; and more

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As you start planning for #JPM23, we hope you will consider joining Endpoints News for our live and virtual events. For those who are celebrating Thanksgiving, we hope you are enjoying the long weekend with loved ones. And if you’re not — we’ll see you next week!

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Elon Musk (GDA via AP Images)

Biggest drug com­pa­nies halt­ed Twit­ter ad buys af­ter Lil­ly in­sulin spoof

Almost all of the drug industry’s biggest advertisers cut their spending on Twitter to zero or near-zero over the last two weeks amid worries about impersonation of their brands by pranksters and the future of the social media company.

Among 18 of the biggest pharmaceutical advertisers in the US market, 12 cut their Twitter ad spending to nothing for the week beginning Nov. 14, according to Pathmatics, which tracks data on prescription drug ad spending as well as general corporate advertising. The list of drugmakers cutting spending to zero includes Merck, AstraZeneca, Eli Lilly, Novartis, Pfizer and others.

Rob Davis, Merck CEO

Up­dat­ed: No Seagen here: 'Do more' means a small $1.35B pur­chase of Ima­go for Mer­ck

Merck is making an acquisition, the Big Pharma announced before Monday’s opening bell. No, Seagen is not entering the fold, as had been speculated for quarters.

Folding under Merck’s wings will be Pfizer-backed Imago BioSciences. For nearly a year, Merck CEO Rob Davis has been saying the pharma giant needs to “do more” on the business development front after its 2021 $11.5 billion acquisition of Acceleron.

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Paul Perreault, CSL Behring CEO

CSL lands FDA ap­proval for he­mo­phil­ia B gene ther­a­py, sets $3.5M list price

The FDA has approved the world’s first gene therapy for hemophilia B, ushering into the market a treatment that’s historic in both what it promises to do and how much it will cost.

CSL will be marketing the drug, Hemgenix, at a list price of $3.5 million — which sets a new record for the most expensive single-use gene therapy in the US.

In a statement provided to Endpoints News, the Australian company noted that the current costs of treating people with moderate to severe hemophilia B can be significant over a lifetime. By some estimates, healthcare systems could spend more than $20 million per person.

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Dermavant Sciences' first consumer TV ad for its Vtama psoriasis med shows people ready for a new topical treatment.

Roivant’s Der­ma­vant de­buts first-ever TV com­mer­cial for pso­ri­a­sis cream Vta­ma

Dermavant Sciences has been marketing its first product, psoriasis med Vtama, to dermatologists for months, but on Tuesday it rolled out its first consumer campaign. The debut DTC effort including a streaming TV commercial encourages patients to a “Topical Uprising” in a nod to Vtama being a topical cream.

In the new commercial, a swell of people discards scarves and jacket coverings, gathering in the street to converge on a pharmacy to demand a steroid-free prescription. A moment of levity follows when a pharmacist says, “You know you can just talk to your doctor, right?” The gathered crowds collectively says, “Oh.”

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FDA preps for DMD drug gener­ics as Sarep­ta has yet to fin­ish its con­fir­ma­to­ry tri­al

The FDA typically releases guidance to help generic drug manufacturers develop new copycats of small molecule drugs, oftentimes in preparation for a brand name product’s patents or exclusivity to expire.

This week, FDA released such bioequivalence guidance for any generic drugmakers looking to take on Sarepta’s Duchenne muscular dystrophy (DMD) drug Exondys 51 (eteplirsen), even though the drug’s sponsor has yet to convert the accelerated approval to a full approval, showing clinical benefit.

Stanley Erck, Novavax CEO (Andrew Harnik/AP Images)

No­vavax pulls out of Covid-19 vac­cine al­liance with Gavi

Novavax is pulling out of its Covid-19 vaccine deal with Gavi, the Vaccine Alliance, a global partnership tasked with ensuring vaccine access in lower-income countries, following an alleged contract violation.

The Maryland-based company claimed on Friday that Gavi failed to purchase at least 350 million doses of its protein-based vaccine Nuvaxovid by the end of the year, per an advanced purchase agreement. Gavi, the World Health Organization and the Coalition for Epidemic Preparedness Innovations (CEPI) are co-leaders of COVAX, an effort to ensure that all participating countries, regardless of income levels, have access to vaccines.

Alzheimer’s drug bites the dust; Re­struc­ture, re­struc­ture, re­struc­ture; Land­mark di­a­betes OK; 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.

Being in the news business can give one a warped sense of time — it feels like quite a while since we published some of these stories below. But next Saturday’s Endpoints Weekly will definitely be shorter, as we take off Thursday and Friday for Thanksgiving. We will still have the abbreviated edition in your inbox at the usual time.

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Fu­ji­film to build $188M man­u­fac­tur­ing plant in North Car­oli­na’s re­search tri­an­gle

As the Japanese conglomerate Fujifilm continues to invest heavily in its CDMO arm, one of its manufacturing divisions is teeing up a major investment.

Fujifilm Irvine Scientific announced on Tuesday that parent Fujifilm is making a $188 million investment to build a cell culture media manufacturing site in the Research Triangle Park in North Carolina. The new site will mark Fujifilm Irvine’s fifth manufacturing site globally and its second in the US.