In­sys founder, for­mer ex­ecs face decades in jail af­ter be­ing found guilty in land­mark opi­oid case

In­sys should’ve paid heed to this ill-fat­ed line from its own sales rap song. “If you want to be great, lis­ten to my voice. You can be great — but its your choice.” In­stead, its (for­mer) bil­lion­aire founder John Kapoor and four of his high rank­ing col­leagues were found guilty of en­gag­ing in a bribery scheme to get doc­tors to pre­scribe its po­tent, ad­dic­tive painkiller and dupe in­sur­ers in­to pay­ing for the drug, by a fed­er­al ju­ry on Thurs­day.

Each de­fen­dant — for­mer Chair­man Kapoor; for­mer vice-pres­i­dent of man­aged mar­kets Michael Gur­ry; for­mer na­tion­al di­rec­tor of sales Richard Si­mon; and for­mer re­gion­al sales di­rec­tors Sun­rise Lee and Joseph Rowan — faces up to twen­ty years in jail, al­though they have de­nied any wrong­do­ing and sig­naled plans to ap­peal. The crim­i­nal con­vic­tion is his­toric as it takes aim at the pow­er­ful mas­ter­minds be­hind a mar­ket­ing ploy de­signed to put prof­it ahead of pa­tients — in­stead of mere fines, or let­ting pow­er­ful ex­ec­u­tives make sac­ri­fi­cial lambs of their lieu­tenants.

Kapoor cre­at­ed In­sys $IN­SY in 1990. In 2012, the com­pa­ny’s fen­tanyl spray Sub­sys was ap­proved by the FDA for break­through can­cer pain. Fen­tanyl is a man-made opi­oid 50 times more po­tent than hero­in and 100 times more po­tent than mor­phine, ac­cord­ing to the CDC. Three years lat­er, Rod­dy Boyd of the South­ern In­ves­tiga­tive Re­port­ing Foun­da­tion first brought to light the dead­ly im­pact of in­dis­crim­i­nate Sub­sys pre­scrib­ing, trig­gered by In­sys’ ques­tion­able mar­ket­ing prac­tices in this damn­ing re­port. In 2017, the In­di­an-born Kapoor was charged with the crim­i­nal con­spir­a­cy — on the very day Pres­i­dent Trump de­clared the US opi­oid cri­sis a pub­lic health emer­gency.

Pros­e­cu­tors charged In­sys with in­flat­ing Sub­sys sales by brib­ing doc­tors to pre­scribe the drug to pa­tients with­out can­cer — in an elab­o­rate scheme that in­clud­ed win­ing and din­ing them, pay­ing them to speak at “ed­u­ca­tion­al events” and in one case even a lap dance — fu­el­ing the rag­ing opi­oid cri­sis that kills 130 Amer­i­cans every day.

Tri­al ju­rors were giv­en a front-row seat to the ob­scene video de­signed to train sales reps, in which two im­pec­ca­bly suit­ed men — os­ten­si­bly In­sys em­ploy­ees — ‘rap’ the Ari­zona-based drug­mak­er’s sin­is­ter strat­e­gy re­plete with rapid hand ges­tures: “I love titra­tions. Yeah, that’s not a prob­lem. I got new pa­tients, and I got a lot of ‘em…If you want to be great, lis­ten to my voice. You can be great — but it’s your choice.”

Al­though Kapoor’s lawyers as­sert­ed that the 75-year-old was kept in the dark about these ac­tiv­i­ties, the tes­ti­mo­ny of for­mer In­sys sales head Alec Burlakoff — who emerges as the man adorn­ing the Sub­sys cos­tume in the video that lit­er­al­ly blue­prints In­sys’ reck­less mar­ket­ing strat­e­gy — sul­lied that ar­gu­ment as the gov­ern­ment’s key wit­ness. Burlakoff, along with for­mer chief ex­ec­u­tive Michael Babich, tes­ti­fied against Kapoor af­ter plead­ing guilty to par­tic­i­pat­ing in the scheme.

Alec Burlakoff

The tri­al’s ver­dict is in­dica­tive of the “ac­tions of a se­lect few for­mer em­ploy­ees of the com­pa­ny,” In­sys spokesper­son Jack­ie Mar­cus told End­points News in an emailed state­ment, adding that “Kapoor’s (In­sys) shares have been and will re­main man­aged by an in­de­pen­dent trust, with which Kapoor is not in­volved.”

Last Au­gust, In­sys had agreed to fork over at least $150 mil­lion in a re­lat­ed set­tle­ment with the U.S. Jus­tice De­part­ment. Un­der fire for the role in played in the cri­sis of opi­oid abuse, mis­use and ad­dic­tion in the Unit­ed States, the com­pa­ny in No­vem­ber said it was look­ing to di­vest its ar­se­nal of opi­oid as­sets — in­clud­ing Sub­sys — to sharp­en its fo­cus on its pipeline of cannabis-de­rived ther­a­peu­tics.

Michael Babich

But as the com­pa­ny’s le­gal fees be­gan to add up, In­sys’ au­di­tor last month raised doubts on the drug­mak­er’s abil­i­ty to con­tin­ue as a go­ing con­cern. In­sys is hard­ly the on­ly opi­oid drug mak­er in fi­nan­cial trou­ble. Pur­due Phar­ma — the mak­er of one of most wide­ly abused pre­scrip­tion opi­oid painkiller Oxy­con­tin — is re­port­ed­ly con­sid­er­ing bank­rupt­cy.

Mean­while, oth­er drug man­u­fac­tur­ers, dis­trib­u­tors and phar­ma­cies are al­so fac­ing hun­dreds of civ­il law­suits for their role in the prop­a­gat­ing opi­oid cri­sis.


Im­age Source: John Kapoor. AP

Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

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Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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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).

On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.

Den­mark's Gen­mab hits the jack­pot with $500M+ US IPO as small­er biotechs rake in a com­bined $147M

Danish drugmaker Genmab A/S is off to the races with perhaps one of the biggest biotech public listings in decades, having reaped over $500 million on the Nasdaq, as it positions itself as a bonafide player in antibody-based cancer therapies.

The company, which has long served as J&J’s $JNJ key partner on the blockbuster multiple myeloma therapy Darzalex, has asserted it has been looking to launch its own proprietary product — one it owns at least half of — by 2025.

FDA over­rides ad­comm opin­ions a fifth of the time, study finds — but why?

For drugmakers, FDA advisory panels are often an apprehended barometer of regulators’ final decisions. While the experts’ endorsement or criticism often translate directly to final outcomes, the FDA sometimes stun observers by diverging from recommendations.

A new paper out of Milbank Quarterly put a number on that trend by analyzing 376 voting meetings and subsequent actions from 2008 through 2015, confirming the general impression that regulators tend to agree with the adcomms most of the time — with discordances in only 22% of the cases.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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