DoJ ex­pands crack­down on Medicare kick­back schemes — Astel­las and Am­gen to pay near­ly $125M to re­solve al­le­ga­tions

Weeks af­ter Jazz Phar­ma, Lund­beck and Alex­ion were dis­ci­plined by the US De­part­ment of Jus­tice for al­leged­ly em­ploy­ing char­i­ta­ble foun­da­tions to help cov­er Medicare out-of-pock­et costs to urge the use of their own med­i­cines, two oth­er drug­mak­ers — Astel­las and Am­gen — are in trou­ble for pur­port­ed­ly en­gag­ing in sim­i­lar kick­back schemes.

The two com­pa­nies have agreed to pay the DoJ a com­bined $124.75 mil­lion to re­solve the al­le­ga­tions and signed to five-year cor­po­rate in­tegri­ty agree­ments, which re­quire them to set up mea­sures to pro­mote in­de­pen­dence from any pa­tient as­sis­tance pro­grams to which they do­nate, and to pro­cure com­pli­ance-re­lat­ed cer­ti­fi­ca­tions from com­pa­ny ex­ec­u­tives and board mem­bers.

An­drew Lelling

“(T)he com­pa­nies’ pay­ments to the foun­da­tions were not ‘do­na­tions,’ but rather were kick­backs that un­der­mined the struc­ture of the Medicare pro­gram and il­le­gal­ly sub­si­dized the high costs of the com­pa­nies’ drugs at the ex­pense of Amer­i­can tax­pay­ers,” said Unit­ed States At­tor­ney An­drew Lelling in a state­ment.

Astel­las, with part­ner Pfiz­er $PFE, sells an an­dro­gen re­cep­tor in­hibitor (ARI) called Xtan­di to treat cer­tain pa­tients with prostate can­cer (the drug gen­er­at­ed 2018 sales of near­ly $3 bil­lion); no oth­er ther­a­peu­tic used to treat the con­di­tion is an ARI. The gov­ern­ment has ac­cused Astel­las in 2013 of con­vinc­ing two foun­da­tions to open ARI-on­ly co­pay funds, in which the Japan­ese drug­mak­er came to be the sole donor. Medicare pa­tients tak­ing Xtan­di re­ceived near­ly all of the co­pay as­sis­tance from the two ARI funds, the gov­ern­ment said, al­leg­ing that Astel­las pro­mot­ed the ex­is­tence of the funds as a com­pet­i­tive ad­van­tage for Xtan­di over ri­val drugs to en­cour­age the adop­tion of the treat­ment by med­ical providers. Astel­las has agreed to pay $100 mil­lion to re­solve the al­le­ga­tions.

Mean­while, Am­gen $AMGN is in trou­ble for two of its med­i­cines: the sec­ondary hy­per­parathy­roidism drug Sen­si­par (which gen­er­at­ed $1.78 bil­lion in 2018 sales) and the mul­ti­ple myelo­ma drug Kypro­lis (which raked in $968 mil­lion last year).

In late 2011, Am­gen halt­ed do­na­tions to a foun­da­tion that pro­vid­ed fi­nan­cial sup­port to pa­tients tak­ing any of sev­er­al sec­ondary hy­per­parathy­roidism drugs and ap­proached a new foun­da­tion about cre­at­ing a “Sec­ondary Hy­per­parathy­roidism” fund that would sup­port on­ly Sen­si­par pa­tients, the gov­ern­ment al­leged. The drug­mak­er — which then came to be the sole donor to the new fund — al­leged­ly made pay­ments to the fund even though the cost of these pay­ments ex­ceed­ed the cost to Am­gen of pro­vid­ing free Sen­si­par to fi­nan­cial­ly needy pa­tients (al­though by in­di­rect­ly fund­ing the co­pays of Medicare ben­e­fi­cia­ries, Am­gen caused claims to be sub­mit­ted to Medicare and gen­er­at­ed rev­enue for it­self).

Am­gen gained ac­cess to Kypro­lis when it swal­lowed Onyx Phar­ma­ceu­ti­cals in 2013. The lat­ter had al­ready asked a foun­da­tion to cre­ate a fund that os­ten­si­bly would cov­er health care re­lat­ed trav­el ex­pens­es for pa­tients tak­ing any mul­ti­ple myelo­ma drug, but was used al­most ex­clu­sive­ly to cov­er such ex­pens­es for pa­tients tak­ing Kypro­lis, which must be in­fused at cer­tain health care fa­cil­i­ties, the gov­ern­ment al­leged. Onyx was the sole donor to this trav­el fund and Am­gen — af­ter in­te­grat­ing Onyx in­to its op­er­a­tions in 2015 — con­tin­ued to do­nate to the fund, the gov­ern­ment said. The fund al­so op­er­at­ed a sec­ond fund to cov­er co­pays for mul­ti­ple myelo­ma drugs — but Onyx tai­lored its do­na­tions to just the amount need­ed to cov­er the co­pays of Kypro­lis pa­tients, the gov­ern­ment added. Am­gen has agreed to pay $24.75 mil­lion to re­solve the al­le­ga­tions.

Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

Daniel O'Day [via AP Images]

UP­DAT­ED: Gilead un­leash­es a $5B late-stage cash al­liance with Gala­pa­gos — lay­ing out O'­Day's R&D strat­e­gy

Daniel O’Day is executing his first major development deal since taking over as CEO of Gilead $GILD. And he’s going in deep to ally himself with a longstanding partner.

O’Day announced today that he is spending $5 billion in cash to add new late-stage drugs to Gilead’s pipeline, picking up rights to Galapagos’ $GLPG Phase III IPF drug GLPG1690 alongside adoption of the biotech’s Phase IIb drug GLPG1972 for osteoarthritis. And Gilead is also putting billions more on the table for milestones, gaining options for everything else in Galapagos’ pipeline, with a shot at all rights outside of Europe.

Altogether, Gilead is gaining rights to 6 clinical-stage assets, 20 preclinical programs and everything else being hatched in translation.

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Alk­er­mes adds bipo­lar de­pres­sion to its FDA wish­list; Con­go con­firms first Ebo­la case in large city

→ An ever-ambitious Alkermes $ALKS team plans to add bipolar depression to its list of conditions for ALKS-3831, which it plans to pitch to the FDA in Q4. Alkermes says they were persuaded to add bipolar depression after a pre-NDA meeting with the agency, which came about 7 months after the biotech reported positive data for schizophrenia. The drug is a combo using olanzapine/samidorphan, which they hope will be shown to be as effective as olanzapine without the substantial increase in the risk of weight gain.

Pe­ter Kolchin­sky and Raj Shah raise a $300M fund de­vot­ed to biotech star­tups

Peter Kolchinsky and Raj Shah have another $300 million-plus to play with on the biotech venture side of their investment business. 

The two announced Monday morning that they’ve put together their first pure-play venture fund at RA Capital Management, which has been known to bet on just about every angle in healthcare investing — from rounds to follow-on investments at public companies. This new fund of theirs arrives well into a go-go era of new startup financing, with a particular focus on building new biotechs.

Boehringer buys Swiss biotech in its lat­est M&A deal, go­ing the next-gen can­cer vac­cine route

Boehringer Ingelheim has snapped up a Swiss biotech startup and added their group as a new platform for the oncology pipeline. 

The German biopharma company has bagged Geneva-based AMAL Therapeutics, paying out an unspecified upfront in a $358 million deal — cash, milestones and everything else, all in. Plus there’s 100 million euros on the line for commercial milestones.

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Hal Bar­ron's team at GSK scores a win with pos­i­tive Ze­ju­la PhI­II front­line study — now comes the hard part

Score one for Hal Barron and the new R&D team steering GlaxoSmithKline’s pipeline.

The pharma giant reported this morning that its recently acquired PARP, Zejula (niraparib), hit the primary endpoint on progression-free survival in a frontline maintenance setting for women suffering ovarian cancer — following chemo and regardless of their BRCA status.

GSK bet $5 billion on the Tesaro buyout primarily to get this drug, drawing the shaking heads of biopharma. Why pay a big premium for a drug like this when AstraZeneca was going from strength to strength with Lynparza, ran the argument, having won a hugely important accelerated approval to jump out ahead — way ahead — of the rest of the PARP players? Lynparza — now co-owned by a powerhouse cancer team at Merck — won the first approval in frontline maintenance in ovarian cancer.

Ab­b­Vie beefs up the on­col­o­gy pipeline, bag­ging an up­start STING play­er with its own unique ap­proach

AbbVie isn’t letting its $63 billion buyout of Allergan stop its M&A/deals team from continuing their work.

Monday morning we learned that the pharma giant is snapping up tiny Mavupharma out of Seattle, a Frazier-backed startup that has its own unique take on STING — which is on the threshold of their first clinical trial.

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Billing it­self as the first AI biotech to launch hu­man tri­als, Re­cur­sion adds $121M C round

Billing itself as the first AI biotech with programs in the clinic, Salt Lake City-based Recursion now has a $121 million bankroll to start gathering human data to see if it’s on the right track. 

“We’re trying to build this discovery engine,” Recursion CEO Chris Gibson tells me ahead of the C round news. “We now have the first two programs in the clinic.” And that, he adds, qualifies as a first for any AI establishment “that actually have something in the clinic.”

FDA bats back As­traZeneca's SGLT di­a­betes drug for Type 1 di­a­betes — block­ing a class on safe­ty fears

The FDA has just fired its latest salvo at the SGLT class of diabetes drugs, blowing up some commercial opportunity at AstraZeneca as part of the collateral damage.

The pharma giant reported early Monday that the FDA has rejected its blockbuster drug Farxiga for Type 1 diabetes that can’t be controlled by insulin. And while the pharma giant maintained its usual grim silence in the face of a setback, this one should be easy to interpret.