Un­der a cloud of opi­oid law­suits, Mallinck­rodt sus­pends spe­cial­ty gener­ics spin­off

Mallinck­rodt $MNK is halt­ing plans to spin off its spe­cial­ty gener­ics busi­ness, cit­ing “cur­rent mar­ket con­di­tions and de­vel­op­ments, in­clud­ing in­creas­ing un­cer­tain­ties cre­at­ed by the opi­oid lit­i­ga­tion.”

The UK drug­mak­er had in­tend­ed to es­tab­lish a new, pub­licly-trad­ed com­pa­ny bear­ing the Mallinck­rodt name while re­nam­ing the spe­cial­ty brands unit Sono­rant Ther­a­peu­tics and adopt­ing the new sym­bol $SRTX. It first an­nounced the spin­off last De­cem­ber at the end of a 2-year re­view.

While nu­mer­ous law­suits and me­dia re­ports have pinned the blame for the opi­oid cri­sis on Pur­due Phar­ma for its ag­gres­sive, and al­leged­ly de­cep­tive, mar­ket­ing of Oxy­con­tin, gener­ic man­u­fac­tur­ers of oxy­codone are al­so sur­fac­ing as cul­prits. In re­cent days the Wash­ing­ton Post shone a spot­light on the role its SpecGx sub­sidiary played in fu­el­ing the cri­sis, iden­ti­fy­ing it as one of three com­pa­nies ac­count­ing for the vast ma­jor­i­ty of 76 bil­lion opi­oid pills pro­duced and shipped from 2006 to 2012.

The com­pa­ny paid $35 mil­lion in 2017 to set­tle DEA com­plaints ac­cus­ing it of in­ad­e­quate de­tec­tion of sus­pi­cious opi­oid or­ders.

Mean­while, Mallinck­rodt is al­so bat­tling con­tin­ued pay­er scruti­ny and re­sis­tance to­ward Ac­thar, the old gel it ac­quired in the Quest­cor buy­out in 2014. The list price of Ac­thar — which would re­main in the spe­cial­ty brand­ed busi­ness fol­low­ing the split — had been hiked from $40 per vial in 2001 to a whop­ping $38,892 in Ju­ly.

An­tho­ny Petrone

Jef­feries an­a­lyst An­tho­ny Petrone not­ed that the debt mar­kets might be tak­ing a wait and see ap­proach, as a law­suit brought by Ok­la­homa against J&J is ex­pect­ed to con­clude late Au­gust and the size of the pay­out there might be in­dica­tive of the out­come of Mallinck­rodt’s case with Ok­la­homa, to com­mence in Oc­to­ber.

“The news to sus­pend the SpecGx spin-off is in­dica­tive of both fund­ing con­cerns in the debt mar­kets (con­firmed with JEF high-yield desk) which it­self is as­so­ci­at­ed with un­knowns around fu­ture dam­age/ set­tle­ment li­a­bil­i­ties re­lat­ed to the var­i­ous opi­oid law­suits,” he wrote in a note.

Mallinck­rodt is nonethe­less still com­mit­ted to sep­a­rat­ing the gener­ics and brand­ed op­er­a­tions, the com­pa­ny said, with a range of op­tions be­ing con­sid­ered.

Brian Kaspar. AveXis via Twitter

AveX­is sci­en­tif­ic founder fires back at No­var­tis CEO Vas Narasimhan, 'cat­e­gor­i­cal­ly de­nies any wrong­do­ing'

Brian Kaspar’s head was among the first to roll at Novartis after company execs became aware of the fact that manipulated data had been included in its application for Zolgensma, now the world’s most expensive therapy.

But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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Novartis CEO Vas Narasimhan [via Bloomberg/Getty]

I’m not per­fect: No­var­tis chief Vas Narasimhan al­most apol­o­gizes in the wake of a new cri­sis

Vas Narasimhan has warily stepped up with what might pass as something close to a borderline apology for the latest scandal to engulf Novartis.

But he couldn’t quite get there.

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FDA to Sarep­ta: Your wide­ly an­tic­i­pat­ed fol­lowup to Ex­ondys 51 is not get­ting an ac­cel­er­at­ed OK for Duchenne MD

In one of the least anticipated moves of the year, the FDA has rejected Sarepta’s application for an accelerated approval of its Duchenne MD drug golodirsen after fretting over safety issues.

In a statement that arrived after the bell on Monday, Sarepta explained the CRL, saying:

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Levi Garraway. Broad Institute via Youtube

Roche raids Eli Lil­ly for its next chief med­ical of­fi­cer as San­dra Horn­ing plans to step down

We found out Monday morning where Levi Garraway was headed after he left Eli Lilly as head of oncology R&D a few days ago. Roche named Garraway as their new chief medical officer, replacing Sandra Horning, who they say is retiring from the company.

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Af­ter a posse of Wall Street an­a­lysts pre­dict a like­ly new win for Sarep­ta, we're down to the wire on a crit­i­cal FDA de­ci­sion

As Bloomberg notes, most of the Wall Street analysts that cover Sarepta $SRPT are an upbeat bunch, ready to cheer on the team when it comes to their Duchenne MD drugs, or offer explanations when an odd setback occurs — as happened recently with a safety signal that was ‘erroneously’ reported last week.

Ritu Baral Cowen
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UP­DAT­ED: No­var­tis spin­off Nabri­va fi­nal­ly scores its first an­tibi­ot­ic ap­proval

In May, Nabriva Therapeutics suffered a setback after the FDA rejected its antibiotic for complicated urinary tract infections — the Novartis spinoff has now had some better luck with the US agency, which on Monday approved its other drug for community-acquired bacterial pneumonia.

The drug, lefamulin, has been developed as an intravenous and oral formulation and been tested in two late-stage clinical trials. The semi-synthetic compound, whose dosing can be switched between the two formulations, is engineered to inhibit the synthesis of bacterial protein by binding to a part of the bacterial ribosome.

Saqib Islam. CheckRare via YouTube

Spring­Works seeks $115M to push Pfiz­er drugs across fin­ish line while Sat­suma sells mi­graine play in $86M IPO

SpringWorks and Satsuma — both biotech spinouts that have closed B rounds in April — are loading up with IPO cash to boost their respective late-stage plans.
SpringWorks

Bain-backed SpringWorks is the better-known company of the two, and it’s gunning for a larger windfall of $115 million to add to $228 million from previous financings. In the process, the Stamford, CT-based team is also drawing the curtains on the partnerships it has in mind for the pair of assets it had initially licensed from Pfizer.

Mi­nor­i­ty racial groups con­tin­ue to be dis­mal­ly rep­re­sent­ed in can­cer tri­als — study

Data reveal that different racial and ethnic groups — by nature and/or nurture — can respond differently in terms of pharmacokinetics, efficacy, or safety to therapeutics, but this disparity is not necessarily accounted for in clinical trials. A fresh analysis of the last decade of US cancer drug approvals suggests the trend continues, cementing previous research that suggests oncology trials are woefully under-representative of the racial makeup of the real world.

Van­da shares slide af­ter FDA spurns their big end­point and re­jects a pitch on jet lag re­lief

Back in the spring of last year, Vanda Pharmaceuticals $VNDA served up a hot stew of mixed data for a slate of endpoints related to what they called clear evidence that their melatonin sleep drug Hetlioz (tasimelteon) could help millions of travelers suffering from jet lag.

Never mind that they couldn’t get a planned 90 people in the study, settling for 25 instead; Vanda CEO Mihael H. Polymeropoulos said they were building on a body of data to prove it would help jet-lagged patients looking for added sleep benefits. And that, they added, would be worth a major upgrade from the agency as they sought to tackle a big market.