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.

ZS Per­spec­tive: 3 Pre­dic­tions on the Fu­ture of Cell & Gene Ther­a­pies

The field of cell and gene therapies (C&GTs) has seen a renaissance, with first generation commercial therapies such as Kymriah, Yescarta, and Luxturna laying the groundwork for an incoming wave of potentially transformative C&GTs that aim to address diverse disease areas. With this renaissance comes several potential opportunities, of which we discuss three predictions below.

Allogenic Natural Killer (NK) Cells have the potential to displace current Cell Therapies in oncology if proven durable.

Despite being early in development, Allogenic NKs are proving to be an attractive new treatment paradigm in oncology. The question of durability of response with allogenic therapies is still an unknown. Fate Therapeutics’ recent phase 1 data for FT516 showed relatively quicker relapses vs already approved autologous CAR-Ts. However, other manufacturers, like Allogene for their allogenic CAR-T therapy ALLO-501A, are exploring novel lymphodepletion approaches to improve persistence of allogenic cells. Nevertheless, allogenic NKs demonstrate a strong value proposition relative to their T cell counterparts due to comparable response rates (so far) combined with the added advantage of a significantly safer AE profile. Specifically, little to no risk of graft versus host disease (GvHD), cytotoxic release syndrome (CRS), and neurotoxicity (NT) have been seen so far with allogenic NK cells (Fig. 1). In addition, being able to harness an allogenic cell source gives way to operational advantages as “off-the-shelf” products provide improved turnaround time (TAT), scalability, and potentially reduced cost. NKs are currently in development for a variety of overlapping hematological indications with chimeric antigen receptor T cells (CAR-Ts) today, and the question remains to what extent they will disrupt the current cell therapy landscape. Click for more details.

A $3B+ peak sales win? Pfiz­er thinks so, as FDA of­fers a tardy green light to its JAK1 drug abroc­i­tinib

Back in the fall of 2020, newly crowned Pfizer chief Albert Bourla confidently put their JAK1 inhibitor abrocitinib at the top of the list of blockbuster drugs in the late-stage pipeline with a $3 billion-plus peak sales estimate.

Since then it’s been subjected to serious criticism for the safety warnings associated with the class, held back by a cautious FDA and questioned when researchers rolled out a top-line boast that their heavyweight contender had beaten the champ in the field of atopic dermatitis — Dupixent — in a head-to-head study.

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Michel Vounatsos, Biogen CEO (World Economic Forum/Ciaran McCrickard)

Bio­gen vows to fight CM­S' draft cov­er­age de­ci­sion for Aduhelm be­fore April fi­nal­iza­tion

Biogen executives made clear in an investor call Thursday they are not preparing to run a new CMS-approved clinical trial for their controversial Alzheimer’s drug anytime soon.

As requested in a draft national coverage decision from CMS earlier this week, Biogen and other anti-amyloid drugs will need to show “a meaningful improvement in health outcomes” for Alzheimer’s patients in a randomized, placebo-controlled trial to get paid for their drugs, rather than just the reduction in amyloid plaques that won Aduhelm its accelerated approval in June.

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Lat­est news on Pfiz­er's $3B+ JAK1 win; Pacts over M&A at #JPM22; 2021 by the num­bers; Bio­gen's Aduhelm reck­on­ing; The sto­ry of sotro­vimab; 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.

For those of you who attended #JPM22 in any shape or form, we hope you had a fruitful time. Regardless of how you spent the past hectic week, may your weekend be just what you need it to be.

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‘Skin­ny la­bels’ on gener­ics can save pa­tients mon­ey, re­search shows, but re­cent court de­ci­sions cloud fu­ture

New research shows how generic drug companies can successfully market a limited number of approved indications for a brand name drug, prior to coming to market for all of the indications. But several recent court decisions have created a layer of uncertainty around these so-called “skinny” labels.

While courts have generally allowed generic manufacturers to use their statutorily permitted skinny-label approvals, last summer, a federal circuit court found that Teva Pharmaceuticals was liable for inducing prescribers and patients to infringe GlaxoSmithKline’s patents through advertising and marketing practices that suggested Teva’s generic, with its skinny label, could be employed for the patented uses.

Robert Califf, FDA commissioner nominee (Graeme Sloan/Sipa USA/Sipa via AP Images)

Rob Califf ad­vances as Biden's FDA nom­i­nee, with a close com­mit­tee vote

Rob Califf’s second confirmation process as FDA commissioner is already much more difficult than his near unanimous confirmation under the Obama administration.

The Senate Health Committee on Thursday voted 13-8 in favor of advancing Califf’s nomination to a full Senate vote. Several Democrats voted against Califf, including Sen. Bernie Sanders and Sen. Maggie Hassan. Several other Democrats who aren’t on the committee, like West Virginia’s Joe Manchin and Ed Markey of Massachusetts, also said Thursday that they would not vote for Califf. Markey, Hassan and Manchin all previously expressed reservations about the prospect of Janet Woodcock as an FDA commissioner nominee too.

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UP­DAT­ED: CMS to re­strict cov­er­age of Bio­gen's con­tro­ver­sial Alzheimer's drug to on­ly clin­i­cal tri­als

The Centers for Medicare and Medicaid Services on Tuesday said it will only pay for Biogen’s Aduhelm and other FDA-approved anti-amyloid monoclonal antibodies for Alzheimer’s disease under CMS-approved randomized controlled trials.

The draft national coverage decision, which insurers nationwide are likely to follow, makes clear that CMS will be looking for randomized controlled trials that “demonstrate a clinically meaningful benefit in cognition and function.” That will be a tough task for Biogen, which previously showed conflicting benefits from past Aduhelm trials that were initially cut short due to futility and then resurrected for the accelerated approval.

CRO own­er pleads guilty to ob­struct­ing FDA in­ves­ti­ga­tion in­to fal­si­fied clin­i­cal tri­al da­ta

The co-owner of a Florida-based clinical research site pleaded guilty to lying to an FDA investigator during a 2017 inspection, revealing that she falsely portrayed part of a GlaxoSmithKline pediatric asthma study as legitimate, when in fact she knew that certain data had been falsified, the Department of Justice said Wednesday.

Three other employees — Yvelice Villaman Bencosme, Lisett Raventos and Maytee Lledo — previously pleaded guilty and were sentenced in connection with falsifying data associated with the trial at the CRO Unlimited Medical Research.

Susan Galbraith, AstraZeneca EVP, Oncology R&D

Can­cer pow­er­house As­traZeneca rolls the dice on a $75M cash bet on a buzzy up­start in the on­col­o­gy field

After establishing itself in the front ranks of cancer drug developers and marketers, AstraZeneca is putting its scientific shoulder — and a significant amount of cash — behind the wheel of a brash new upstart in the biotech world.

The pharma giant trumpeted news this morning that it is handing over $75 million upfront to ally itself with Scorpion Therapeutics, one of those biotechs that was newly birthed by some top scientific, venture and executive talent and bequeathed with a fortune by way of a bankroll to advance an only hazily explained drug platform. And they are still very much in the discovery and preclinical phase.

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