Drown­ing in lit­i­ga­tion, Mallinck­rodt be­comes third opi­oid pro­duc­er to file for bank­rupt­cy

Be­set by hun­dreds of opi­oid law­suits and hun­dreds of mil­lions in pay­ments owed un­der a re­cent fed­er­al rul­ing on one of their best-sell­ing drugs, Mallinck­rodt, the 150-year-old Irish drug­mak­er, has filed for Chap­ter 11 bank­rupt­cy.

Mallinck­rodt, a com­pa­ny that once sold more opi­oids in the US than any oth­er, be­comes the third ma­jor opi­oid pro­duc­er to file for bank­rupt­cy amid a sea of lit­i­ga­tion. Pur­due Phar­ma and In­sys Ther­a­peu­tics each filed for bank­rupt­cy last year.

Bank­rupt­cy has be­come a com­mon tac­tic for the com­pa­nies that prof­it­ed off the opi­oid epi­dem­ic and now face thou­sands of law­suits in part, crit­ics say, be­cause it can freeze lit­i­ga­tion and leave those lit­i­gants com­pet­ing for pay­outs with a com­pa­ny’s cred­i­tors. Mallinck­rodt said they plan to con­tin­ue with a ten­ta­tive set­tle­ment they reached ear­li­er this year.

Ru­mors of a Mallinck­rodt bank­rupt­cy have swirled for months. In Feb­ru­ary, the drug­mak­er agreed to a set­tle­ment with most of its lit­i­gants, in­clud­ing 47 states and US ter­ri­to­ries, that would see it pay $1.6 bil­lion to re­solve claims over its role in the opi­oid cri­sis.

In March, though, a fed­er­al court found Mallinck­rodt li­able for over $600 mil­lion in un­paid Med­ic­aid re­bates for its top-sell­ing mul­ti­ple scle­ro­sis drug Ac­thar Gel. In sub­se­quent court fil­ings and state­ments, the com­pa­ny said that the rul­ing jeop­ar­dized their abil­i­ty to pay off the opi­oid set­tle­ment, warn­ing in June they may “have no op­tion but to take dras­tic and painful mea­sures, up to and in­clud­ing the prospect of bank­rupt­cy.”

The com­pa­ny said to­day they’ve agreed to pay $260 mil­lion to set­tle Med­ic­aid claims and that they plan to pro­ceed with the $1.6 bil­lion opi­oid set­tle­ment, pay­ing out the lat­ter over 8 years, be­gin­ning with a $450 mil­lion pay­out when they emerge from bank­rupt­cy. The par­ties in the law­suit will al­so re­ceive shares worth about 20% of the com­pa­ny.

Mallinck­rodt list­ed be­tween $1 and $10 bil­lion in as­sets and li­a­bil­i­ties. They are hop­ing to pare down their debt by $1.3 bil­lion.

Un­like Pur­due, which is at­tempt­ing to re-emerge post-bank­rupt­cy as a pro­duc­er of an­ti-ad­dic­tion drugs, Mallinck­rodt in­tends to con­tin­ue de­vel­op­ing new com­pounds dur­ing and post-bank­rupt­cy. Its pipeline, how­ev­er, has been less than ro­bust in re­cent years. Their lead ex­per­i­men­tal com­pound, the rare kid­ney dis­ease drug Ter­li­pressin, was re­ject­ed by the FDA for a sec­ond time last month, af­ter an in­ter­nal re­view spot­light­ed safe­ty con­cerns and lin­ger­ing ques­tions over whether the drug was ef­fec­tive.

Has the mo­ment fi­nal­ly ar­rived for val­ue-based health­care?

RBC Capital Markets’ Healthcare Technology Analyst, Sean Dodge, spotlights a new breed of tech-enabled providers who are rapidly transforming the way clinicians deliver healthcare, and explores the key question: can this accelerating revolution overturn the US healthcare system?

Key points

Tech-enabled healthcare providers are poised to help the US transition to value, not volume, as the basis for reward.
The move to value-based care has policy momentum, but is risky and complex for clinicians.
Outsourced tech specialists are emerging to provide the required expertise, while healthcare and tech are also converging through M&A.
Value-based care remains in its early stages, but the transition is accelerating and represents a huge addressable market.

Lat­est on ul­tra-rare dis­ease ap­proval; Pos­i­tive, if mixed, signs for Bio­gen's ALS drug; Clay Sie­gall finds a new job; and more

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FDA ad­vi­sors unan­i­mous­ly rec­om­mend ac­cel­er­at­ed ap­proval for Bio­gen's ALS drug

A panel of outside advisors to the FDA unanimously recommended that the agency grant accelerated approval to Biogen’s ALS drug tofersen despite the drug failing the primary goal of its Phase III study, an endorsement that could pave a path forward for the treatment.

By a 9-0 vote, members of the Peripheral and Central Nervous System Drugs Advisory Committee said there was sufficient evidence that tofersen’s effect on a certain protein associated with ALS is reasonably likely to predict a benefit for patients. But panelists stopped short of advocating for a full approval, voting 3-5 against (with one abstention) and largely citing the failed pivotal study.

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FDA spells out how can­cer drug de­vel­op­ers can use one tri­al for both ac­cel­er­at­ed and full ap­provals

The FDA’s Oncology Center of Excellence has been a bright spot within the agency in terms of speeding new treatments to patients. That flexibility was on full display this morning as FDA released new draft guidance spelling out exactly how oncology drug developers can fulfill both the accelerated and full approval’s requirements with just a single randomized controlled trial.

While Congress recently passed legislation that will allow FDA to require confirmatory trials to be recruiting and ongoing prior to granting an accelerated approval, the agency is now making clear that the initial trial used to win the AA, if designed appropriately, can also serve as the trial for converting the accelerated approval into a full approval.

Clay Siegall, Morphimmune CEO

Up­dat­ed: Ex-Seagen chief Clay Sie­gall emerges as CEO of pri­vate biotech

Clay Siegall will be back in the CEO seat, taking the helm of a private startup working on targeted cancer therapies.

It’s been almost a year since Siegall resigned from Seagen, the biotech he co-founded and led for more than 20 years, in the wake of domestic violence allegations by his then-wife. His eventual successor, David Epstein, sold the company to Pfizer in a $43 billion deal unveiled last week.

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Eu­ro­pean doc­tors di­al up dig­i­tal com­mu­ni­ca­tion with phar­mas, but still lean to­ward in-per­son med meet­ings, study finds

As in-person sales rep access declines in the big five European countries, a corresponding uptick in virtual rep access is happening. It’s not surprising, but it does run counter to pharma companies’ assessment – along with long-held sales rep sway in Europe – that in-person access hadn’t changed.

CMI Media Group and Medscape’s recent study reports that 75% of physicians in the EU5 countries of Spain, Germany, Italy, France and the UK already limit engagements with pharma sales reps, and 25% of those surveyed plan to decrease time with reps.

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Judge al­lows ex­pert tes­ti­mo­ny in GSK tri­al al­leg­ing Zan­tac link to can­cer

A California judge will allow a plaintiff in a state court case to introduce expert testimony connecting a potential carcinogen in former blockbuster medicine Zantac to cancer.

The order was handed down on Thursday from state judge Evelio Grillo, who is now allowing both parties to introduce expert testimony in an upcoming trial after what’s known as a Sargon hearing, where a judge determines the admissibility of expert witnesses and expert opinions.

No­vo Nordisk oral semaglu­tide tri­al shows re­duc­tion in blood sug­ar, plus weight loss

Novo Nordisk is testing higher levels of its oral version of its GLP-1, semaglutide, and its type 2 diabetes trial results released today show reductions in blood sugar as well as weight loss.

In the Phase IIIb trial, Novo compared its oral semaglutide in 25 mg and 50 mg doses with the 14 mg version that’s currently the maximum approved dose. The trial looked at how the doses compared when added to a stable dose of one to three oral antidiabetic medicines in people with type 2 diabetes who were in need of an intensified treatment.

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Ly­me vac­cine test com­ple­tion is pushed back by a year as Pfiz­er, Val­ne­va say they'll ad­just tri­al

Valneva and Pfizer have adjusted the end date for the Phase III study of their investigational Lyme disease vaccine, pushing it back by a year after issues at a contract researcher led to thousands of US patients being dropped from the test.

In a March 20 update to clinicaltrials.gov, Valneva and Pfizer moved the primary completion date on the trial, called VALOR, from the end of 2024 to the end of 2025.

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