My­lan at­tacks Al­ler­gan over its Mo­hawk-al­lied patent strat­e­gy — but the CEO is stick­ing to his guns

Brent Saun­ders (cen­ter, with mi­cro­phone) speaks at an End­points News event at the JP Mor­gan con­fer­ence ear­li­er this year End­points News


My­lan didn’t wait long be­fore chal­leng­ing Al­ler­gan’s bid to safe­guard its patents for its block­buster eye drug Resta­sis by flip­ping the rights to the drug to a Mo­hawk In­di­an tribe and then li­cens­ing them back.

Last week’s le­gal gam­bit, My­lan said in a court fil­ing, is a sim­ple at­tempt to “mis­use Na­tive Amer­i­can sov­er­eign­ty to shield in­valid patents from can­cel­la­tion.”

But don’t look for Al­ler­gan — or its lawyers — to cave in now or any­time. No mat­ter what re­ac­tion they get, they plan to fight this one out.

The move by Al­ler­gan trig­gered a num­ber of crit­i­cal re­views, in­clud­ing one of my own late last week that un­der­scored my thoughts that Al­ler­gan had squan­dered what­ev­er moral ad­van­tage it had gained by show­ing re­straint on drug pric­ing last fall with a bit of le­gal trick­ery that would on­ly reignite the pub­lic’s scorn for un­scrupu­lous phar­ma com­pa­nies and their lawyers.

Al­ler­gan CEO Brent Saun­ders and chief le­gal of­fi­cer Bob Bai­ley took a few min­utes on Mon­day to ex­plain their po­si­tion. (They can re­ply to My­lan in court.)

“We can cer­tain­ly agree to dis­agree,” Saun­ders told me, adding adamant­ly that “every­thing we have done here is com­plete­ly con­sis­tent with our so­cial con­tract.”

The CEO and chief le­gal of­fi­cer at Al­ler­gan say what’s un­fair is be­ing forced to square off si­mul­ta­ne­ous­ly on two sep­a­rate le­gal fronts as it fights to keep con­trol of its big fran­chise ther­a­py. The IRP chal­lenge, adds Saun­ders, is a flawed process that hedge funds and oth­ers have grabbed on to in search of an Achilles heel they can tar­get. Patent chal­lenges should be re­strict­ed to the fed­er­al court.

Be­sides, they add, state uni­ver­si­ties have the same pro­tect­ed patent sta­tus as the tribes achieve with sov­er­eign im­mu­ni­ty, and no one makes a fuss about that. Pay­ing the Saint Reg­is Mo­hawk tribe — look­ing to di­ver­si­fy be­yond its casi­no op­er­a­tion — $13.75 mil­lion for this, they ar­gue, al­so is an op­por­tu­ni­ty to help out an im­pov­er­ished peo­ple who can use the mon­ey for health­care and oth­er ser­vices.

“We are ab­solute­ly go­ing to stick with this,” adds the CEO, as a nec­es­sary strat­e­gy for bal­anc­ing the needs of the mar­ket and in­vestors against the un­cer­tain world of drug R&D, where the risk of fail­ure runs deep.

To in­vest in R&D, they add, “we need the full pro­tec­tion of the courts.” If any­thing, the fo­cus should be on patent re­form.

To me, it all just looks like an “any­thing goes” ap­proach that land­ed the in­dus­try in a tub of boil­ing hot pub­lic dis­gust on mar­ket­ing prac­tices — which con­tin­ues to taint the in­dus­try. And there are plen­ty of ways they can help im­pov­er­ished peo­ple with­out get­ting patent at­tor­neys in­volved.

But I’m not chang­ing any­one’s mind at Al­ler­gan ei­ther. The con­tro­ver­sy over the ma­neu­ver, though, will on­ly grow. Reuters re­ports to­day that a tech group has al­so trans­ferred patents to the tribe, and an at­tor­ney in­volved says that you can ex­pect plen­ty more such cas­es to fol­low.

The deals an­nounced so far “are just the tip of the ice­berg,” said David Prid­ham, chief ex­ec­u­tive of the Dal­las-based Do­min­ion Har­bor Group. “There are dozens and dozens of tribes talk­ing to law firms about this struc­ture.”

A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Short at­tack­er Sahm Ad­ran­gi draws crosshairs over a fa­vorite of Sanofi’s new CEO — with PhII da­ta loom­ing

Sahm Adrang Kerrisdale

Kerrisdale chief Sahm Adrangi took a lengthy break from his series of biotech short attacks after his chief analyst in the field pulled up stakes and went solo. But he’s making a return to drug development this morning, drawing crosshairs over a company that’s one of new Sanofi CEO Paul Hudson’s favorite collaborators.

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Patrik Jonsson, the president of Lilly Bio-Medicines

Who knew? Der­mi­ra’s board kept watch as its stock price tracked Eli Lil­ly’s se­cret bid­ding on a $1.1B buy­out

In just 8 days, from December 6 to December 14, the stock jumped from $7.88 to $12.70 — just under the initial $13 bid. There was no hard news about the company that would explain a rise like that tracking closely to the bid offer, raising the obvious question of whether insider info has leaked out to traders.

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Civi­ca and Blue Cross Blue Shield launch new ven­ture to low­er gener­ic prices

Five years after Martin Shkreli put a smug face to the volatile prices companies can charge even for generic drugs, payers and governments are coming up with outside-the-box solutions.

The latest fix is a new venture from the Blue Cross Blue Shield Association, 18 of its members and Civica, the generics company founded in 2018 by hospitals fed up with high prices for drugs that had long-since lost patent protection. While Civica focused on drugs that hospitals purchased, the new company will aim to lower prices on drugs that, like Shkreli’s Daraprim, are purchased by individuals.

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Merck Invests in State-Of-The-Art Biotech Development Facility in Switzerland

Mer­ck KGaA match­es lofty R&D goals with €250M in­vest­ment in­to a new clin­i­cal man­u­fac­tur­ing site in Switzer­land

As Merck KGaA strives to prove itself as a capable biopharma R&D player, it has begun construction on a €250 million facility dedicated to developing and manufacturing drugs for use in clinical trials.

The German drugmaker chose a location at Corsier-sur-Vevey, Switzerland, where it already has a commercial manufacturing site, in order to “bridge together research and manufacturing.”

“This investment in the Merck Biotech Development Center reflects our commitment to speed up the availability of new medicines for patients in need, and confirms the importance of Switzerland as our prime hub for the manufacturing of biotech medicines,” CEO Stefan Oschmann said at the groundbreaking ceremony, according to a statement.

Breast can­cer ap­proval in tow, As­traZeneca, Dai­ichi armed an­ti­body scores in key gas­tric can­cer study

AstraZeneca kicked off Monday with a flurry of good news. Apart from unveiling positive results on its stroke trial testing its clot-fighter Brilinta, and welcoming its experimental IL-23 inhibitor brazikumab back from Allergan — the British drugmaker also disclosed some upbeat gastric cancer data on its HER2-positive oncology therapy it is collaborating on with Daiichi Sankyo.

Buoyed by the performance of its oncology drugs, last March AstraZeneca chief Pascal Soriot bet big to partner with Daiichi on the cancer drug, with $1.35 billion upfront in a deal worth up to roughly $7 billion. Roughly 8 months later, as 2019 drew to a close, the FDA swiftly approved the drug — trastuzumab deruxtecan — for use in breast cancer, months ahead of the expected decision date.

Sor­ren­to shrugs off an anony­mous pri­vate eq­ui­ty group’s $1B of­fer to buy the com­pa­ny

San Diego-based Sorrento Therapeutics isn’t going the M&A route — at least not today.

The biotech caused quite a stir when it put out word a few weeks ago that an unidentified private equity group was bidding a billion dollars-plus for the company. The news drove a quick spike in the company’s share price as investors hooked up for the ride — that didn’t happen.

The update sparked a 5% drop in the share price $SRNE ahead of the bell. It’s now trading just above $4, without any evidence that the $7 price looked like it was firm.

UP­DAT­ED: Ab­b­Vie do­nates $1M+ of the HIV drug that Chi­na is now rec­om­mend­ing for coro­n­avirus treat­ment

AbbVie is donating more than $1 million worth of an HIV drug to help combat the fast-spreading coronavirus outbreak in China, the company announced on Friday.

China’s National Health Commission has suggested Aluvia, a pill containing lopinavir and ritonavir, as one of two possible treatments for the symptoms of the virus currently known as 2019-nCoV in the absence of effective antiviral medications. The other part is nebulized alpha-interferon.

UP­DAT­ED: Ab­b­Vie and Al­ler­gan di­vesti­tures are in, and an old As­traZeneca drug comes home

When AbbVie announced their $63-billion Allergan acquisition last year, executives acknowledged the two companies would have to divest some drugs to satisfy regulators. The two main assets in discussion have now been sold off – and one of them is coming home.

AstraZeneca will acquire brazikumab, Allergan’s late-stage IL-23 candidate for Crohn’s disease and ulcerative colitis. The drug was originally developed by AstraZeneca’s defunct subsidiary MedImmune, in collaboration with Amgen. Allergan licensed it for $250 million upfront and $1.27 billion in milestones.

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