Sig­ma-Aldrich hit with $9M fine for mis­lead­ing in­fo dur­ing Mer­ck KGaA merg­er

Al­though it’s been more than six years since Mer­ck KGaA first no­ti­fied the Eu­ro­pean Com­mis­sion of its plan to ac­quire Sig­ma-Aldrich, the Eu­ro­pean Com­mis­sion an­nounced Mon­day that it has fined Sig­ma-Aldrich €7.5 mil­lion ($9 mil­lion) for mis­lead­ing the com­mis­sion dur­ing an in­ves­ti­ga­tion in­to the merg­er.

While the de­ci­sion won’t im­pact the com­mis­sion’s de­ci­sion to au­tho­rize the $17 bil­lion merg­er, which was fi­nal­ized last sum­mer, the fine serves as a warn­ing shot to the rest of the in­dus­try that ly­ing or pro­vid­ing mis­lead­ing in­for­ma­tion will not be tol­er­at­ed.

In this case, the com­mis­sion raised com­pe­ti­tion con­cerns as Mer­ck and Sig­ma-Aldrich are the two lead­ing Eu­ro­pean sup­pli­ers of lab sol­vents and in­or­gan­ics used by bio­phar­ma and oth­er re­search com­pa­nies.

“The com­bi­na­tion of all these el­e­ments would have led to the loss of an im­por­tant com­pet­i­tive force in the sup­ply of sol­vents and in­or­gan­ics fol­low­ing the merg­er,” the EC said.

To help re­solve these con­cerns, the com­pa­nies agreed to di­vest cer­tain lab chem­i­cal as­sets. But the com­mis­sion says that Sig­ma-Aldrich didn’t dis­close an in­no­va­tion project, known as iCap, that was rel­e­vant to these di­vesti­tures.

“Had this project been cor­rect­ly dis­closed to the Com­mis­sion, it would have had to be in­clud­ed in the rem­e­dy pack­age,” the com­mis­sion said. “This is be­cause the in­no­va­tion at stake was close­ly linked to the di­vest­ed busi­ness and had the po­ten­tial to sub­stan­tial­ly in­crease its sales. By not in­clud­ing it, the vi­a­bil­i­ty and com­pet­i­tive­ness of the di­vest­ed busi­ness was im­paired.”

Over­all, the com­mis­sion said it found three Sig­ma-Aldrich in­fringe­ments, which “are of se­ri­ous na­ture and par­tic­u­lar­ly grave” be­cause the in­cor­rect or mis­lead­ing in­for­ma­tion was “clear­ly re­lat­ed to and im­por­tant for the di­vest­ment busi­ness,” and be­cause it was a se­cret and sen­si­tive project, so the com­mis­sion’s on­ly way to ob­tain the rel­e­vant in­for­ma­tion was from Sig­ma-Aldrich.

A Mer­ck spokesper­son said in an emailed state­ment: “We dis­agree with the EU Com­mis­sion’s con­clu­sions, re­ject the al­le­ga­tions of in­ten­tion­al or even neg­li­gent be­hav­ior and will re­view the de­ci­sion in de­tail. We have ful­ly co­op­er­at­ed with the EU Com­mis­sion and act­ed with in­tegri­ty and trans­paren­cy through­out the en­tire process.”

The fine will like­ly have wider ram­i­fi­ca­tions as the com­mis­sion works close­ly with the US Fed­er­al Trade Com­mis­sion as part of an in­ter­na­tion­al work­ing group that is be­ing set up to more close­ly eval­u­ate phar­ma­ceu­ti­cal com­pa­ny merg­ers in light of con­cerns around an­ti­com­pet­i­tive be­hav­ior.

In ad­di­tion to this fine, the Eu­ro­pean Com­mis­sion in March al­so opened a for­mal an­titrust in­ves­ti­ga­tion in­to whether Te­va Phar­ma­ceu­ti­cals has il­le­gal­ly de­layed the mar­ket en­try and up­take of drugs that com­pete with its block­buster mul­ti­ple scle­ro­sis drug Co­pax­one (glati­ramer ac­etate).

Un­lock­ing ESG strate­gies for growth with Gilead Sci­ences

RBC Capital Markets explores what is material in ESG for biopharma companies with the ESG leads at Gilead Sciences. Gilead has long focused on sustainability but recognized a more robust framework was needed. Based on a materiality assessment, Gilead’s ESG strategy today focuses first on drug access and pricing, while also addressing D&I and climate change. Find out why Gilead’s board is “acutely aware” of the contribution that ESG makes to firm’s overall success.

End­points News is now 5 years old. Here's how you can sup­port us for the next phase of growth

Endpoints News turned five years old over the weekend. I wanted to mark the happy occasion by extending our deepest gratitude to Endpoints’ premium subscribers while outlining several other ways to support us as we go broader and get bigger this year and beyond.

Same as any business, we’ve got to create value and get paid for delivering it. So if you depend on Endpoints to stay abreast on biopharma developments, we depend on you too.

Emma Walmsley, GlaxoSmithKline CEO (Credit: Fang Zhe/Xinhua/Alamy Live News)

Ac­tivist in­vestor El­liott in talks with oth­er Glax­o­SmithK­line in­vestors about re­plac­ing Em­ma Walm­s­ley, spin­ning off vac­cine busi­ness — re­port

As Emma Walmsley reveals details this Wednesday about the upcoming split of GlaxoSmithKline’s pharma and consumer units, some tough questions may be coming her way.

Elliott Management, the activist investor that’s previously threatened an attack on GSK (but eventually backed off), is floating more radical changes like replacing the CEO, further breaking up the company and spinning out the vaccine unit, or reviewing the focus on cancer drugs, the Financial Times reported.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 109,800+ biopharma pros reading Endpoints daily — and it's free.

Tim Walbert, Horizon CEO (Horizon via YouTube)

Or­phan drug spe­cial­ist Hori­zon looks to dou­ble down on its gout ex­per­tise with ac­quired rights to Ar­row­head­'s RNAi med

Horizon Therapeutics has made a name for taking orphan drugs once left on the scrap heap and spinning them into approved therapies. Along the way, the biotech has picked up an expertise in gout with bestselling Krystexxa, and now it’s looking to double down in that space with a licensing deal for an Arrowhead drug.

Horizon will pay $40 million upfront for global rights to Arrowhead Pharmaceuticals’ ARO-XDH, an investigational RNAi therapy for uncontrolled gout, the partners said Monday.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 109,800+ biopharma pros reading Endpoints daily — and it's free.

Cyril Ramaphosa (AP Images)

South African con­sor­tium es­tab­lish­es mR­NA tech trans­fer hub to get vac­cines to a re­gion of­ten over­looked by phar­ma

The WHO and COVAX on Monday announced the support of a South African consortium to establish a Covid-19 mRNA vaccine technology transfer hub. Over the next few weeks, partners from Biovac, Afrigen Biologics and Vaccines, the African CDC and a network of universities will negotiate details with the South African government to establish ground rules.

A technology transfer hub will allow manufacturers to receive training in vaccine technology and learn about the intellectual property of large drugmakers. The news is key for the continent, advocates say, because of its lack of widespread access to vaccines.

South Ko­re­an vac­cine mak­er pumps up its pro­duc­tion ca­pac­i­ty as Covid-19 de­mand holds steady

After receiving big investments from the Bill and Melinda Gates Foundation and the Coalition for Epidemic Preparedness Innovations, South Korean SK bioscience will expand vaccine production with a $132 million investment to add production capacity for both mRNA and viral-vector vaccines. The production capacity is expected to be operational by 2024.

The expansion will add more than 1 million square feet of production space in the city of Andong, which is roughly 118 miles southeast of Seoul, Reuters reported. The facility gained GMP certification from the EU last week and makes vaccines for the European market.

Bris­tol My­ers breaks the bank on Ei­sai's fo­late re­cep­tor ADC drug, lay­ing out more than $3B+ for rights

For years, innovation in oncology has been a crapshoot with Big Pharma — the whales at the table — dropping the big bucks for the key to the next generation of tumor fighters. Bristol Myers Squibb hasn’t exactly made a name for being an innovator in the space, but that doesn’t mean it won’t splash in when it sees a potential winner.

Now, with a massive check in hand, the drugmaker is willing to put its intuition to the test.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 109,800+ biopharma pros reading Endpoints daily — and it's free.

Michael Chambers (L) and John Ballantyne

Dana­her strikes deal to buy boom­ing next-gen man­u­fac­tur­er Alde­vron for $9.6B

Life sciences conglomerate Danaher Corp. $DHR has struck a deal to buy the fast-growing Aldevron, one of the world’s top manufacturers of hotly sought-after plasmid DNA, mRNA and recombinant proteins for the burgeoning world of vaccine and drugmakers pushing some game-changing technologies.

Buyout talks set the stage for Danaher to settle on a $9.6 billion cash pact to acquire the private Fargo, ND-based company — a key supplier for a disruptive new Covid vaccine as well as a host of gene and cell therapy and CRISPR gene editing players — founded by Michael Chambers and CSO John Ballantyne as a crew of 2 back in 1998.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

HHS backs down in le­gal fight over drug dis­count pro­gram with As­traZeneca, Eli Lil­ly, No­vo and Sanofi

HHS’ Office of the General Counsel late Friday withdrew an advisory opinion from December “in light of ongoing confusion” about its scope and impact, and which said drugmakers are obligated to deliver covered outpatient drugs to contract pharmacies under the drug discount program known as 340B.

The backpedal from HHS comes as drugmakers including AstraZeneca, Eli Lilly, Novo Nordisk and Sanofi sued HHS after the department threatened to fine them after they placed restrictions on which entities could receive deeply discounted prices for certain drugs, which originally had been for uninsured and vulnerable populations, but now included an increasing number of hospitals’ contract pharmacies. HHS said those restrictions placed by the drugmakers were in direct violation of the 340B statute, while the drugmakers said the number of new contract pharmacies has ballooned in recent years and driven up their costs.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 109,800+ biopharma pros reading Endpoints daily — and it's free.