Once val­ued at $4B, an em­bat­tled Ako­rn — nurs­ing a mar­ket cap of rough­ly $37M — files for bank­rupt­cy

Scarred by a se­ries of FDA warn­ings, a scorned buy­er and the un­cer­tain­ty of Covid-19, Ako­rn is fi­nal­ly throw­ing in the tow­el.

On Wednes­day, the spe­cial­ty gener­ic drug­mak­er said it was fil­ing for Chap­ter 11, weeks af­ter it said it had giv­en up on find­ing it­self a buy­er amidst the broad­er un­cer­tain­ty of Covid-19.

Some of Ako­rn’s lenders have agreed to a stalk­ing horse bid to pur­chase the Lake For­est, Illi­nois-based drug­mak­er’s as­sets, set­ting a base­ment price for the court-su­per­vised sale of the busi­ness. On the dock­et are the com­pa­ny’s US busi­ness and sub­sidiaries — Ako­rn’s en­ti­ties in In­dia and Switzer­land are ex­empt from the bank­rupt­cy process. Ako­rn hopes to com­plete the sale process by the third quar­ter.

The move is hard­ly shock­ing, giv­en Ako­rn’s calami­tous past few years. Last year, the spe­cial­ty gener­ic drug­mak­er re­ceived two warn­ing let­ters from the FDA. The lat­ter let­ter, sent in June 2019, in­volved an in­spec­tion by the agency of its Som­er­set, New Jer­sey man­u­fac­tur­ing fa­cil­i­ty in Ju­ly and Au­gust of 2018.

Ear­li­er in Jan­u­ary 2019, Ako­rn re­ceived a warn­ing let­ter re­lat­ed to an­oth­er plant — one in De­catur, Illi­nois —  fol­low­ing an in­spec­tion the pre­vi­ous April and May. The FDA de­tailed stan­dard man­u­fac­tur­ing vi­o­la­tions, in­clud­ing poor asep­tic and san­i­ti­za­tion prac­tices. Then in Feb­ru­ary, the com­pa­ny’s Ami­tyville, New York fa­cil­i­ty was hit with an­oth­er warn­ing, in the form of a Form 483, which high­light­ed records were not kept for the main­te­nance, clean­ing, san­i­tiz­ing and in­spec­tion of equip­ment.

Apart from pre­vi­ous­ly re­stat­ing its fi­nan­cial state­ments, in April 2018 dial­y­sis provider Fre­se­nius walked away from a $4 bil­lion takeover of Ako­rn, cit­ing an in­ves­ti­ga­tion that found Ako­rn had ma­te­ri­al­ly breached the FDA’s da­ta in­tegri­ty re­quire­ments. In its Jan­u­ary warn­ing let­ter, the FDA said it had con­cerns that Ako­rn’s qual­i­ty sys­tem does not “en­sure the ac­cu­ra­cy and in­tegri­ty of da­ta to sup­port the safe­ty, ef­fec­tive­ness, and qual­i­ty of the drugs you man­u­fac­ture.”

The com­pa­ny, which sells a range of brand­ed and gener­ic drugs in­clud­ing a li­do­caine gel and a mor­phine sul­fate oral so­lu­tion, gen­er­at­ed net sales of $682 mil­lion last year, down 2% from the $694 mil­lion it gen­er­at­ed in 2018. As of March 2020, the com­pa­ny had net debt of $781,446.

Doug Boothe

“We look for­ward to sep­a­rat­ing lega­cy lit­i­ga­tion and debt from the Com­pa­ny’s most valu­able as­sets – our prod­ucts, our peo­ple, our man­u­fac­tur­ing fa­cil­i­ties and our knowl­edge – so that we can move for­ward un­en­cum­bered by these li­a­bil­i­ty ex­po­sures un­der new own­er­ship that be­lieves in our fu­ture,” Ako­rn chief Doug Boothe said in a state­ment.

The com­pa­ny’s in­vestors did not quite see it that way, push­ing Ako­rn’s shares $AKRX deep­er in­to pen­ny stock ter­ri­to­ry by falling more than 19% to 22 cents in ear­ly trad­ing, and a mar­ket cap hov­er­ing at $36.6 mil­lion.

“We con­tin­ue to be­lieve that the com­mer­cial port­fo­lio has the kind of prod­uct mix that is less like­ly to see sig­nif­i­cant com­modi­ti­za­tion/ero­sion, par­tic­u­lar­ly the hos­pi­tal in­jectable seg­ment (this is bear­ing in mind that the sig­nif­i­cant pres­sure on the busi­ness in re­cent years was main­ly a func­tion of high­er-mar­gin as­sets such as in­jectable ephedrine that at one point had lim­it­ed com­pe­ti­tion but that sub­se­quent­ly saw sig­nif­i­cant com­pe­ti­tion ma­te­ri­al­ize),” Piper San­dler an­a­lysts wrote in a note last month.

Inside FDA HQ (File photo)

The FDA just ap­proved the third Duchenne MD drug. And reg­u­la­tors still don’t know if any of them work

Last year Sarepta hit center stage with the FDA’s controversial reversal of its CRL for the company’s second Duchenne muscular dystrophy drug — after the biotech was ambushed by agency insiders ready to reject a second pitch based on the same disease biomarker used for the first approval for eteplirsen, without actual data on the efficacy of the drug.

On Wednesday the FDA approved the third Duchenne MD drug, based on the same biomarker. And regulators were ready to act yet again despite the lack of efficacy data.

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Franz-Werner Haas, CureVac CEO

UP­DAT­ED: On the heels of a snap $1B raise, Cure­Vac out­lines plans to seek emer­gency OK for Covid-19 vac­cine -- shares rock­et up

CureVac is going from being one of the quietest players in the race to develop a new vaccine to fight the worst public health crisis in a century to a challenger for the multibillion-dollar market that awaits the first vaccines to make it over the finish line. Typically low-key at a time of brash comments and incredibly ambitious development timelines from the leaders, CureVac now is jumping straight into the spotlight.

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FDA ap­proves the third NSOMD drug in 18 months as Roche/Genen­tech beefs up its port­fo­lio of drugs for neu­ro­log­i­cal dis­or­ders

There were no FDA approved treatments for neuromyelitis optica spectrum disorder at the start of 2019. Now, as of Friday, there are three.

The latest entrant to the market is the Roche/Genentech drug satralizumab after US regulators gave it the thumbs up late Friday. An IL-6 inhibitor, the drug joins Alexion’s Soliris and AstraZeneca spinout Viela Bio’s Uplizna. The annual cost of satralizumab — which will hit the market as Enspryng — will be $190,000 for 13 doses, a Genentech spokesperson said, though the first year of treatment requires 15 doses and cost about $220,000.

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Stéphane Bancel speaks to President Donald Trump at the White House meeting on March 2 (AP Images)

UP­DAT­ED: Mod­er­na of­fers steep dis­count in US sup­ply deal — but still takes the crown with close to $2.5B in vac­cine con­tracts

The US pre-order for Moderna’s Covid-19 vaccine is in.

Operation Warp Speed is reserving $1.525 billion for 100 million doses of Moderna’s Phase III mRNA candidate, rounding out to about $15 per dose — including $300 million in incentive payments for timely delivery. Given that Moderna has a two-dose regimen, it’s good for vaccinating 50 million people. The US government also has the option to purchase another 400 million doses for a total of $6.6 billion, or $16.5 per dose.

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US gov­ern­ment re­port­ed­ly be­gins prepar­ing for Covid-19 chal­lenge tri­als. Are they eth­i­cal?

Controversial human challenge trials for potential Covid-19 vaccines reportedly have a new booster — the US government.

Scientists working for the government have begun manufacturing a strain of the novel coronavirus that could be used in such studies, Reuters reported Friday morning. The trials would enroll healthy volunteers to be vaccinated and then intentionally infected with a weakened coronavirus.

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Sanofi vet Kather­ine Bowdish named CEO of PIC Ther­a­peu­tics; As the world Terns: Liv­er dis­ease biotech makes ex­ec­u­tive changes

PIC Therapeutics hasn’t raised much money, yet. But the fledgling biotech has attracted a high-profile player to the helm.

The Boston-based biotech has handed the reins to Katherine Bowdish as its president and CEO. Bowdish will also join the board of directors of PIC. Bowdish joins from Sanofi where she served as VP and head of R&D strategy, as well as helping launch and lead Sanofi Sunrise, a venture investment and partnering vehicle at Sanofi. Before that, Bowdish held several exec roles at Permeon Biologics, Anaphore, Alexion Pharmaceuticals and Prolifaron (acquired by Alexion).

Martin Shkreli (Shutterstock)

Mar­tin Shkre­li con­tin­ued to or­ches­trate an­ti-com­pet­i­tive schemes for Dara­prim be­hind bars — FTC

Martin Shkreli didn’t just blog, read up on drug development news and run his biotech business with a contraband cell phone in prison. According to the FTC, he was also coordinating the anticompetitive scheme to shield Daraprim — the drug at the center of a price-gouging controversy that earned him the “Pharma Bro” nickname — from generic rivals.

Back in January the FTC, together with New York’s attorney general, launched a federal lawsuit against Shkreli, who’s now serving a 7-year sentence for defrauding investors in his hedge fund, alleging that he effectively created a drug monopoly. While Shkreli’s notorious move to raise the per tablet price of Daraprim from $17.50 to $750 was perfectly legal, the tactics he allegedly deployed to box out competitors weren’t.

Silviu Itescu, Mesoblast CEO

FDA's ODAC shrugs off ob­jec­tions to Mesoblast's GVHD drug for chil­dren, vot­ing 9-1 in fa­vor and im­prov­ing the odds of an ap­proval

The FDA’s Oncologic Drugs Advisory Committee once again waved through an investigational drug, clearing the potential final hurdle before the agency’s decision.

Thursday’s winner was Mesoblast $MESO, an Australian stem-cell company that submitted its Ryoncil drug for the treatment of steroid refractory acute graft-versus-host disease in children younger than 12. ODAC gave Ryoncil the thumbs up by a 9-1 vote, shrugging off concerns about trial design and pushing aside the need for an additional study.

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A lab technician works during research on coronavirus at Johnson & Johnson subsidiary Janssen Pharmaceutical in Beerse, Belgium, Wednesday, June 17, 2020. (Virginia Mayo/AP Images)

UP­DAT­ED: End­points News ranks all 28 play­ers in the Covid-19 vac­cine race. Here's how it stacks up to­day

(This piece was last updated on August 14. Endpoints News will continue to track the latest developments through the FDA’s marketing decisions.)

The 28 players now in or close to the clinical race to get a Covid-19 vaccine over the finish line are angling for a piece of a multibillion-dollar market. And being first — or among the leaders — will play a big role in determining just how big a piece.

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