Giovanni Caforio, Bristol Myers Squibb CEO (Pablo Martinez Monsivais/AP Images)

Bris­tol My­ers faces $1B+ tax fight af­ter ac­ci­den­tal dis­clo­sure re­veals al­leged off­shore patents scheme — re­port

The IRS has bat­tled Big Phar­ma for years over off­shore patent trans­fer schemes, which it said have bilked the pub­lic in­ter­est by bil­lions of dol­lars. Now, loose lips at the agency have re­vealed its pur­suit of an­oth­er drug­mak­er — Bris­tol My­ers Squibb — that it says is on the hook for more than $1 bil­lion in back tax­es.

Bris­tol My­ers could face near­ly $1.4 bil­lion in back tax­es the IRS be­lieves it evad­ed pay­ing as part of a scheme to move its patent rights from the US to an Irish sub­sidiary and reap the in­come write-offs, the New York Times re­ports.

The dis­pute was re­vealed as part of an ac­ci­den­tal dis­clo­sure from the agency last spring, the Times said, which was al­most im­me­di­ate­ly pulled from pub­lic view.

At the cen­ter of the IRS’ claims is Bris­tol’s ef­fort in 2012 to es­tab­lish an Irish sub­sidiary as a ve­hi­cle to shut­tle US drug patent rights over to a coun­try with low­er cor­po­rate tax rates. In a scheme known as amor­ti­za­tion, com­pa­nies can write off the val­ue of an as­set — patents, for in­stance — from their tax­able in­come over a pe­ri­od of time. Bris­tol had al­ready writ­ten off the val­ue of its patents in the US, the IRS said, and set up a plan to move those rights to Ire­land, where that val­ue had not yet been writ­ten off.

The out­come? Around $1.38 bil­lion in back tax­es, the IRS said.

“Bris­tol My­ers Squibb is in com­pli­ance with all ap­plic­a­ble tax rules and reg­u­la­tions,” the com­pa­ny said in a state­ment. “We work with lead­ing ex­perts in this area and will con­tin­ue to work co­op­er­a­tive­ly with the IRS to re­solve this mat­ter. Be­yond that, we don’t com­ment on on­go­ing reg­u­la­to­ry mat­ters.”

The scheme was lu­cra­tive, the Times re­port­ed. The com­pa­ny’s ef­fec­tive cor­po­rate tax rate was -7% in 2012 com­pared with 25% in 2011. The dif­fer­ence was so stark that an­a­lysts re­port­ed­ly quizzed ex­ec­u­tives on the dis­par­i­ty dur­ing a Q4 2012 earn­ings call — ques­tions that Bris­tol re­fused to an­swer.

Mean­while, Bris­tol My­ers’ plan re­port­ed­ly got a sign-off from two cor­po­rate au­di­tors, PwC and White & Case, in late 2012. Both firms sent lengthy let­ters to Bris­tol es­sen­tial­ly clear­ing the scheme — even af­ter Mer­ck had been cit­ed by the IRS back in 2006 for a sim­i­lar off­shoring ef­fort that saved it $1.5 bil­lion in fed­er­al tax­es over 10 years.

In that case, Mer­ck of­floaded its US patents to a Bermu­da sub­sidiary, which it then turned and paid for ac­cess to those patents, the IRS said. The amor­ti­za­tion scheme wasn’t even unique to Mer­ck: Oth­er big-name drug­mak­ers such as J&J, Pfiz­er and Ab­bott have all been im­pli­cat­ed in sim­i­lar plans in the past.

In a 2018 re­port, Ox­fam es­ti­mat­ed that off­shoring schemes were sav­ing those four drug­mak­ers around $2.3 bil­lion per year in US fed­er­al tax­es. In to­tal across nine de­vel­op­ing coun­tries in­clud­ing the US, Ox­fam es­ti­mat­ed the firms were writ­ing off around $3.7 bil­lion per year.

Vi­a­tris with­draws ac­cel­er­at­ed ap­proval for top­i­cal an­timi­cro­bial 24 years lat­er

After 24 years without confirming clinical benefit, the FDA announced Tuesday morning that Viatris (formed via Mylan and Pfizer’s Upjohn) has decided to withdraw a topical antimicrobial agent, Sulfamylon (mafenide acetate), after the company said conducting a confirmatory study was not feasible.

Sulfamylon first won FDA’s accelerated nod in 1998 as a topical burn treatment, with the FDA noting that last December, Mylan told the agency that it wasn’t running the trial.

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Susan Galbraith, AstraZeneca EVP, oncology R&D, at EUBIO22 (Rachel Kiki for Endpoints News)

Up­dat­ed: As­traZeneca jumps deep­er in­to cell ther­a­py 2.0 space with $320M biotech M&A

Right from the start, the execs at Neogene had some lofty goals in mind when they decided to try their hand at a cell therapy that could tackle solid tumors.

Its founders have helped hone a new approach that would pack in multiple neoantigen targets to create a personalized TCR treatment that would not just make the leap from blood to solid tumors, but do it with durability. And they managed to make their way rapidly to the clinic, unveiling their first Phase I program for advanced tumors just last May.

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Ei­sai’s ex­pand­ed Alzheimer’s da­ta leave open ques­tions about safe­ty and clin­i­cal ben­e­fit

Researchers still have key questions about Eisai’s investigational Alzheimer’s drug lecanemab following the publication of more Phase III data in the New England Journal of Medicine Tuesday night.

In the paper, which was released in conjunction with presentations at an Alzheimer’s conference, trial investigators write that a definition of clinical meaningfulness “has not been established.” And the relative lack of new information, following topline data unveiled in September, left experts asking for more — setting up a potential showdown to precisely define how big a difference the drug makes in patients’ lives.

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Illustration: Assistant Editor Kathy Wong for Endpoints News

Twit­ter dis­ar­ray con­tin­ues as phar­ma ad­ver­tis­ers ex­tend paus­es and look around for op­tions, but keep tweet­ing

Pharma advertisers on Twitter are done — at least for now. Ad spending among the previous top spenders flattened even further last week, according to the latest data from ad tracker Pathmatics, amid ongoing turmoil after billionaire boss Elon Musk’s takeover now one month ago.

Among 18 top advertisers tracked for Endpoints News, only two are spending: GSK and Bayer. GSK spending for the full week through Sunday was minimal at just under $1,900. Meanwhile, German drugmaker Bayer remains the industry outlier upping its spending to $499,000 last week from $480,000 the previous week. Bayer’s spending also marks a big increase from a month ago and before the Musk takeover, when it spent $16,000 per week.

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Catal­ent to cut about 200 jobs in Mary­land and Texas

Contract manufacturing company Catalent is cutting about 200 jobs in Maryland and Texas, according to WARN notices, trimming back some of its pandemic-era expansion.

The company will cut 77 jobs by Jan. 15 of next year at a cell therapy facility in Webster, TX, just outside of Houston. In Maryland, the company is reducing staff at two locations, with 82 jobs being eliminated at Catalent’s facility in Gaithersburg, and 53 in Rockville. The layoffs go into effect at those locations on Jan. 14.

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iECURE CEO Joe Truitt and founder Jim Wilson

Jim Wil­son biotech iECURE gets fresh $65M to push pe­di­atric liv­er dis­ease gene ther­a­py in­to the clin­ic

Jim Wilson-founded biotech iECURE has wrapped a $65M Series A extension round to get its lead candidate — a gene replacement therapy for a rare inherited liver disease known as ornithine transcarbamylase deficiency, or OTC — into the clinic.

This round was co-led by Novo Holdings and LYFE Capital, followed by initial investors Versant and OrbiMed as well. In September 2021, iECURE raised a $50 million Series A led by the latter two. The new cash infusion will get iECURE through an initial in-human trial, which CEO Joe Truitt told Endpoints News iECURE hopes to read out in 2024.

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Mar­ket­ingRx roundup: Pfiz­er, BioN­Tech re-up iHeartRa­dio hol­i­day spon­sor­ship; WHO re­names mon­key­pox to 'm­pox'

It’s that time of year again for pop music fans with the return of the iHeartRadio Jingle Ball tour — and Pfizer and BioNTech’s sponsorship. For the second year, the Covid-19 vaccine collaborators are the pharma national sponsors among consumer brand partners, including ESPN, Dunkin, M&Ms, Mercedes and Pepsi.

Pfizer and BioNTech are also sponsoring the official Jingle Ball Radio streaming station on iHeart’s network, programmed with music from past and present concert performers. This year they include Lizzo, Dua Lipa, Dove Cameron and Charlie Puth. Pfizer-sponsored radio ads and online video and digital banner ads encourage listeners to get updated Covid-19 booster shots.

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Mark Schneider, Nestlé CEO (AP Images)

Nestlé re­con­sid­ers peanut al­ler­gy pro­gram two years af­ter $2.6B buy­out

It seems Nestlé is experiencing some buyer’s remorse two years after throwing down $2.6 billion for Aimmune Therapeutics and its peanut allergy pill Palforzia.

CEO Mark Schneider announced on Tuesday that Nestlé is “exploring strategic options” for Palforzia following lower-than-expected demand. A company spokesperson declined to confirm whether a potential sale is in consideration.

“The review is expected to be completed in the first half of 2023. Going forward, Nestlé Health Science will sharpen its focus on Consumer Care and Medical Nutrition,” the company said in a news release.

Tom Riga, Spectrum Pharmaceuticals CEO

Spec­trum im­plodes af­ter a harsh pub­lic slap­down and now a CRL from Richard Paz­dur

The FDA has gone out of its way several times to flatten any expectations for Spectrum’s lung cancer drug poziotinib, including slamming the regulatory door in the biotech’s face four years ago when the their executive crew came calling for a breakthrough drug designation and encouragement from the oncology wing of the FDA.

That stinging early rebuke pointed straight down the path to a corrosive in-house agency review of Spectrum’s attempt to land an accelerated approval for the oral EGFR TKI and a public whipping that included a classic takedown by none other than Richard Pazdur, who slammed the company for “poor drug development” that led to confusion over the dose needed for a slice of NSCLC patients harboring HER2 exon 20 insertion mutations.

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