No­var­tis sac­ri­fices its top at­tor­ney in an at­tempt to quell clam­or over $1.2M in Co­hen pay­ments — while ex-CEO Jimenez strug­gles to ex­plain

BioReg­num — The view from John Car­roll


Faced with a grow­ing cri­sis over its $1.2 mil­lion in pay­ments to Pres­i­dent Don­ald Trump’s per­son­al at­tor­ney Michael Co­hen, No­var­tis an­nounced ear­ly Wednes­day that the com­pa­ny’s top lawyer has abrupt­ly re­signed in hopes of bring­ing the whole tawdry af­fair to an end.

“Al­though the con­tract (with Co­hen) was legal­ly in or­der, it was an er­ror,” said Fe­lix Ehrat, group gen­er­al coun­sel of No­var­tis, in a state­ment. “As a co-sig­na­to­ry with our for­mer CEO, I take per­son­al re­spon­si­bil­i­ty to bring the pub­lic de­bate on this mat­ter to an end.”

The chances of that hap­pen­ing, though, are ze­ro. If any­thing, this move will on­ly height­en pres­sure on No­var­tis to ful­ly ex­plain why it agreed to pay $1.2 mil­lion to an at­tor­ney whose on­ly rel­e­vant at­trac­tion to the phar­ma gi­ant was his close per­son­al tie to the pres­i­dent. That re­mains the bot­tom line af­ter ex-CEO Joe Jimenez gave an in­ter­view to Forbes’ Matthew Her­p­er, where he strug­gled to ex­plain why the com­pa­ny hired Co­hen.

“If we were the ex­perts on pol­i­cy, he was the ex­pert on the way that they think, to­geth­er as a team it could be a way for us to bet­ter nav­i­gate what was go­ing to be a pret­ty sticky Af­ford­able Care Act Re­peal-and-Re­place,” Jimenez told Her­p­er in the in­ter­view.

Jimenez al­so took “full re­spon­si­bil­i­ty,” say­ing that his re­place­ment, Vas Narasimhan, was not in­volved. And he re­peat­ed­ly em­pha­sized the un­cer­tain­ty around Trump’s elec­tion for the move to gain some clar­i­ty.

“He was one of the very few num­ber of peo­ple who knew peo­ple in the ad­min­is­tra­tion,” Jimenez not­ed.

Ehrat’s sud­den ex­it — as well as the Jimenez in­ter­view — un­der­score how deeply the com­pa­ny has been bat­tered by the con­tro­ver­sy and the grow­ing list of ques­tions Narasimhan still faces. Com­pa­ny ex­ecs had pri­vate­ly been pin­ning the blame on Jimenez, who stepped down from the CEO’s job at the end of Jan­u­ary. Adding the gen­er­al coun­sel to the list of re­spon­si­ble play­ers — and send­ing him through the ex­its — does noth­ing to ad­dress the many ques­tions the com­pa­ny faces , while clum­sy at­tempts to apol­o­gize and re­fo­cus on the busi­ness un­der­score its in­abil­i­ty to man­age events.

The 41-year-old Narasimhan — who has nev­er ex­plained when he first heard about the Co­hen deal — is still fac­ing a drum­beat of omi­nous news.

We now hear that Switzer­land’s Of­fice of the At­tor­ney Gen­er­al has been dis­cussing the pos­si­bil­i­ty of launch­ing their own probe in­to the pay­ments, though the of­fi­cials there say that no for­mal probe is now un­der­way. And two promi­nent De­mo­c­ra­t­ic sen­a­tors, Eliz­a­beth War­ren and Richard Blu­men­thal, joined Ron Wyden and Pat­ty Mur­ray in scold­ing the com­pa­ny and ask­ing some point­ed ques­tions about ex­act­ly why it paid Co­hen that much and what it got in re­turn.

“Giv­en these on­go­ing mat­ters, the un­usu­al se­ries of pay­ments.by No­var­tis to the Pres­i­dent’s per­son­al at­tor­ney raise ob­vi­ous ques­tions about cor­rup­tion and whether No­var­tis and the Trump Ad­min­is­tra­tion were en­gaged in a pay-for-play op­er­a­tion,” War­ren and Blu­men­thal wrote, ahead of their list of queries.

Joe Jimenez

While the din of dis­ap­proval rose around the Basel head­quar­ters, Narasimhan him­self re­port­ed­ly took to the phone to tell thou­sands of the com­pa­ny’s man­agers that No­var­tis needs to clean up its act. Ac­cord­ing to a re­port from Bloomberg, Narasimhan told his man­agers by phone that the com­pa­ny had to move to re­think its re­la­tion­ship with lob­by­ists and re­gain the pub­lic’s trust.

Com­pa­ny ex­ecs knew back in No­vem­ber that they could face a hue and cry, when Robert Mueller’s team came in to ask ques­tions about the re­la­tion­ship. Co­hen him­self has been at the cen­ter of a me­dia cir­cus sur­round­ing the rev­e­la­tion that he had paid porn star Stormy Daniels $130,000 to keep qui­et about an al­leged af­fair with Trump — writ­ing a check from the same shell com­pa­ny that No­var­tis paid in­to. But No­var­tis nev­er dis­closed any­thing about the fed­er­al in­ves­ti­ga­tion in pub­lic fil­ings.

Ex­act­ly how Narasimhan plans to re­spond while re­main­ing hun­kered down in­side the com­pa­ny’s walls, though, re­mains to be seen. Does the CEO — now stout­ly de­fend­ed by a pha­lanx of me­dia con­tacts who in­sist the com­pa­ny will co­op­er­ate with all in­ves­ti­ga­tions — sub­mit to a Q&A with a friend­ly or per­haps high­ly rep­utable me­dia out­let? Does he start to pub­licly ad­dress the per­sis­tent ques­tions sur­round­ing No­var­tis pay­ments? Does some­one else get the ax?

No­var­tis rec­og­nizes it faces a cri­sis. But for now, there’s still no clear plan to deal with it in any kind of pub­lic way.


Im­age: Vas Narasimhan. GET­TY IM­AGES

De­vel­op­ment of the Next Gen­er­a­tion NKG2D CAR T-cell Man­u­fac­tur­ing Process

Celyad’s view on developing and delivering a CAR T-cell therapy with multi-tumor specificity combined with cell manufacturing success
Overview
Transitioning potential therapeutic assets from academia into the commercial environment is an exercise that is largely underappreciated by stakeholders, except for drug developers themselves. The promise of preclinical or early clinical results drives enthusiasm, but the pragmatic delivery of a therapy outside of small, local testing is most often a major challenge for drug developers especially, including among other things, the manufacturing challenges that surround the production of just-in-time and personalized autologous cell therapy products.

Roger Perlmutter, Merck

#ASH19: Here’s why Mer­ck is pay­ing $2.7B to­day to grab Ar­Qule and its next-gen BTK drug, lin­ing up Eli Lil­ly ri­val­ry

Just a few months after making a splash at the European Hematology Association scientific confab with an early snapshot of positive data for their BTK inhibitor ARQ 531, ArQule has won a $2.7 billion buyout deal from Merck.

Merck is scooping up a next-gen BTK drug — which is making a splash at ASH today — from ArQule in an M&A pact set at $20 a share $ARQL. That’s more than twice Friday’s $9.66 close. And Merck R&D chief Roger Perlmutter heralded a deal that nets “multiple clinical-stage oral kinase inhibitors.”

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Game on: Re­gen­eron's BC­MA bis­pe­cif­ic makes clin­i­cal da­ta de­but, kick­ing off mul­ti­ple myelo­ma matchup with Bris­tol-My­ers

As J&J attempts to jostle past Bristol-Myers Squibb and bluebird for a landmark approval of its anti-BCMA CAR-T — and while GlaxoSmithKline maps a quick path to the FDA riding on its own BCMA-targeting antibody-drug conjugates — the bispecifics are arriving on the scene to stake a claim for a market that could cross $10 billion per year.

The main rivalry in multiple myeloma is shaping up to be one between Regeneron and Bristol-Myers, which picked up a bispecific antibody to BCMA through its recently closed $74 billion takeover of Celgene. Both presented promising first-in-human data at the ASH 2019 meeting.

FDA lifts hold on Abeon­a's but­ter­fly dis­ease ther­a­py, paving way for piv­otal study

It’s been a difficult few years for gene and cell therapy startup Abeona Therapeutics. Its newly crowned chief Carsten Thiel was forced out last year following accusations of unspecified “personal misconduct,” and this September, the FDA imposed a clinical hold on its therapy for a form of “butterfly” disease. But things are beginning to perk up. On Monday, the company said the regulator had lifted its hold and the experimental therapy is now set to be evaluated in a late-stage study.

Paul Hudson. Sanofi

New Sanofi CEO Hud­son adds next-gen can­cer drug tech to the R&D quest, buy­ing Syn­thorx for $2.5B

When Paul Hudson lays out his R&D vision for Sanofi tomorrow, he will have a new slate of interleukin therapies and a synthetic biology platform to boast about.

The French pharma giant announced early Monday that it is snagging San Diego biotech Synthorx in a $2.5 billion deal. That marks an affordable bolt-on for Sanofi but a considerable return for Synthorx backers, including Avalon, RA Capital and OrbiMed: At $68 per share, the price represents a 172% premium to Friday’s closing.

Synthorx’s take on alternative IL-2 drugs for both cancer and autoimmune disorders — enabled by a synthetic DNA base pair pioneered by Scripps professor Floyd Romesberg — “fits perfectly” with the kind of innovation that he wants at Sanofi, Hudson said.

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Roche faces an­oth­er de­lay in strug­gle to nav­i­gate Spark deal past reg­u­la­tors — but this one is very short

Roche today issued the latest in a long string of delays of its $4.3 billion buyout of Philadelphia-based Spark Therapeutics. The delay comes as little surprise — it is their 10th in as many months — as their most recent delay was scheduled to expire before a key regulatory deadline.

But it is notable for its length: 6 days.

Previous extensions had moved the goalposts by about 3 weeks to a month, with the latest on November 22 expiring tomorrow. The new delay sets a deadline for next Monday, December 16, the same day by which the UK Competition and Markets Authority has to give its initial ruling on the deal. And they already reportedly have lined up an OK from the FTC staff – although that’s only one level of a multi-step process.

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KalVis­ta's di­a­bet­ic mac­u­lar ede­ma da­ta falls short — will Mer­ck walk away?

Merck’s 2017 bet on KalVista Pharmaceuticals may have soured, after the UK/US-based biotech’s lead drug failed a mid-stage study in patients with diabetic macular edema (DME).

Two doses of the intravitreal injection, KVD001, were tested against a placebo in a 129-patient trial. Patients who continued to experience significant inflammation and diminished visual acuity, despite anti-VEGF therapy, were recruited to the trial. Typically patients with DME — the most frequent cause of vision loss related to diabetes — are treated with anti-VEGF therapies such as Regeneron’s flagship Eylea or Roche’s Avastin and Lucentis.

UP­DAT­ED: Ob­sE­va makes case for best-in-class hor­mone sup­pres­sive ther­a­py in pos­i­tive uter­ine fi­broid study

About a month after the Swiss biotech disclosed a failed late-stage study in its IVF program, ObsEva on Monday unveiled positive pivotal data on its experimental treatment for heavy menstrual bleeding triggered by uterine fibroids.

ObsEva in-licensed the drug, linzagolix, from Japan’s Kissei Pharmaceutical in 2015. Two doses of the drug (100 mg and 200 mg) were tested against a placebo in the 535-patient Phase III study, dubbed PRIMROSE 2, in patients who were both on and off hormonal add-back therapy (ABT).

Ear­ly-stage can­cer biotech nails $85M C round; Flem­ming Orn­skov's Gal­der­ma scores 'break­through' sta­tus

→ Zentalis Pharmaceuticals just nabbed an $85 million round from a syndicate that includes Matrix Capital, Viking Global Investors, Redmile Group, Farallon Capital, Perceptive Advisors, Surveyor Capital and Eventide Asset Management. Their lead drug is ZN-c5, which is currently in Phase I/II trials. The biotech describes that drug as a “potential best-in-class oral Selective Estrogen Receptor Degrader for estrogen receptor-positive, HER2-negative (ER+/ HER2-) breast cancer.”