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.”

Forge Bi­o­log­ics’ cGMP Com­pli­ant and Com­mer­cial­ly Vi­able Be­spoke Affin­i­ty Chro­matog­ra­phy Plat­form

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Mathai Mammen, FogPharma's next CEO

Math­ai Mam­men hands in J&J's R&D keys to lead Greg Ver­dine’s Fog­Phar­ma 

In the early 1990s, Mathai Mammen was a teaching assistant in Greg Verdine’s Science B46 course at Harvard. In June, the former R&D head at Johnson & Johnson will succeed Verdine as CEO, president and chair of FogPharma, the same month the seven-year-old biotech kickstarts its first clinical trial.

After leading R&D at one of the largest drugmakers in the world, taking the company through more than half a dozen drug approvals in the past few years, not to mention a Covid-19 vaccine race, Mammen departed J&J last month and will take the helm of a Cambridge, MA biotech attempting to go after what Verdine calls the “true emperor of all oncogenes” — beta-catenin.

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Sen­ate Fi­nance Com­mit­tee lobs more bi­par­ti­san pres­sure on­to PBMs

Congress is honing in on how it wants to overhaul the rules of the road for pharmacy benefit managers, with a Senate Finance Committee hearing Thursday serving as the latest example of the Hill’s readiness to make changes to how pharma middlemen operate.

While pledging to ensure patients and pharmacies “don’t get a raw deal,” Finance Committee Chair Ron Wyden (D-OR) laid out the beginning of what looks like a major bipartisan effort — moves the PBM industry is likely to challenge vigorously.

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Nicklas Westerholm, Egetis Therapeutics CEO

Ac­qui­si­tion talks on­go­ing for Swedish rare dis­ease biotech Egetis, shares up al­most 40%

Shares of the Sweden-based rare disease biotech Egetis Therapeutics skyrocketed on Thursday afternoon as the company said it’s engaged in “ongoing discussion” with external parties regarding a “potential acquisition.”

Egetis confirmed rumors with a statement on Thursday while noting that there is no certainty that a takeover offer will be made.

Nonetheless, the possibility of an acquisition has shot up Egetis’ share price. By the afternoon on Thursday, its stock price was {$EGTX.ST} up over 38%. An Egetis spokesperson told Endpoints News in an email that it has no further comments.

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Lu­pus drug de­vel­op­ment mar­ket heat­ing up, while FDA links with ad­vo­ca­cy group to fur­ther ac­cel­er­ate re­search

The long-underserved systemic lupus erythematosus (SLE) market is suddenly buzzing with treatment possibilities. Less than two years after AstraZeneca’s approval for Saphnelo — the first new SLE drug in a decade and joining just one other approved in GSK’s Benlysta – the pipeline of potential drugs numbers in the dozens.

Although most are very early stage — Spherix Global Insights estimates five in Phase II/III — the pharma R&D enthusiasm is catching on among doctors, patients and advocacy groups. On Wednesday, the Lupus Research Alliance and the FDA formed a novel private-public partnership called Lupus Accelerating Breakthroughs Consortium (Lupus ABC) to help advance lupus clinical trial success.

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Stéphane Bancel, Moderna CEO (AP Photo/Markus Schreiber)

Mod­er­na so­lid­i­fies deal with Kenya to build mR­NA man­u­fac­tur­ing fa­cil­i­ty

The mRNA player Moderna is further cementing its presence on the African continent.

Moderna announced on Thursday that it has finalized an agreement with Kenya’s government to partner up and bring an mRNA manufacturing facility to the east African nation. The new facility aims to manufacture up to 500 million doses of vaccines annually. Moderna also said the new facility will have the ability to spike its production capabilities to respond to public health emergencies on the continent or globally.

Luke Miels, GSK chief commercial officer

GSK picks up Scynex­is' FDA-ap­proved an­ti­fun­gal drug for $90M up­front

GSK is dishing out $90 million cash to add an antifungal drug to its commercial portfolio, in a deal spotlighting the pharma giant’s growing focus on infectious diseases.

The upfront will lock in an exclusive license to Scynexis’ Brexafemme, which was approved in 2021 to treat a yeast infection known as vulvovaginal candidiasis, except in China and certain other countries where Scynexis already out-licensed the drug.

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CSL CEO Paul McKenzie (L) and CMO Bill Mezzanotte

Q&A: New­ly-mint­ed CSL chief ex­ec­u­tive Paul McKen­zie and chief med­ical of­fi­cer Bill Mez­zan­otte

Paul McKenzie took over as CEO of Australian pharma giant CSL this month, following in the footsteps of long-time CSL vet Paul Perreault.

With an eye on mRNA, and quickly commercializing its new, $3.5 million-per-shot gene therapy for hemophilia B, McKenzie and chief medical officer Bill Mezzanotte answered some questions from Endpoints News this afternoon about where McKenzie is going to take the company and what advances may be coming to market from CSL’s pipeline. Below is a lightly edited transcript.

Boehringer re­ports ro­bust sales led by type 2 di­a­betes and pul­monary drugs, promis­es more to come high­light­ing obe­si­ty

Boehringer Ingelheim reported human pharma sales of €18.5 billion on Wednesday, led by type 2 diabetes and heart failure drug Jardiance and pulmonary fibrosis med Ofev. Jardiance sales reached €5.8 billion, growing 39% year over year, while Ofev took in €3.2 billion, notching its own 20.6% annual jump.

However, Boehringer is also looking ahead with its pipeline, estimating “In the next seven years the company expects about 20 regulatory approvals in human pharma.”