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M&A MADNESS (CONT’D)
BIOGEN IDEC will consider the first round of bids this week from parties seeking to buy the company, and according to press reports, the interested outfits are Pfizer, Merck, Johnson & Johnson, and possibly AstraZeneca. However, some analysts think the process will not necessarily create a Big Pharma bidding frenzy, citing the inflated multiples associated with recent biotech acquisitions. The final price-tag for Biogen is likely to exceed its current market capitalization of Cdn$20 billion. An observer tells Britain’s Financial Times newspaper: “All these assets are going for nose bleed prices.”
AT LAST, AN END TO THE VIOXX DEBACLE?
IT TURNS OUT THAT EVERY TIME during the past 38 months that a Merck spokesman said, “We’re not settling the Vioxx litigation,” what they really meant was: “We’re going to suffer through three years of damaging publicity, and then we’ll settle.” And so last Friday (11/09), Merck and lawyers representing 47,000 plaintiffs reportedly agreed to forgive and forget the matter, once the company has forked over the tidy sum of US$4.85 billion. The average plaintiff will receive around US$100,000, from which will be deducted 30 to 50 per cent in legal fees. Merck finally will be able to stop paying its lawyers more than US$50 million each month in costs, and may take some consolation in having struck what some observers think was a good deal. Analysts had previously guessed that the Vioxx mess stood to cost the company somewhere between $10- to $25 billion. u However, the settlement, once approved by the courts, will not be the final word on the subject, since not all plaintiffs will elect to end their suits, and Merck says it will continue fighting all litigation not covered by last week’s agreement. (As a precedent, Wyeth is still dealing with the last of its Phen-Fen and Redux lawsuits, a full decade after offering its initial settlement.) Merck boss Richard Clark was pleased to move on, saying: “The agreement is structured to provide a significant degree of certainty toward resolving the majority of the outstanding Vioxx product-liability claims in the United States for a fixed amount.” Toronto lawyer Greg Monforton, who represents 300 Canadian cases, was also cheered by the settlement. Says he: “We simply refused to allow Merck to get off the hook and now we will see these innocent victims receive fair compensation.” u Merck’s record in fighting Vioxx lawsuits was so-so, winning 11 cases and losing five. However, there’s little doubt that the image of the entire industry suffered each time the matter was brought before the public eye, in part contributing to Big Pharma’s sullied reputation over the past three years. u Elsewhere, one other drugmaker reached a tentative end to a stateside class-action suit last week. Warner Chilcott settled an anti-trust suit brought by purchasers of the Ovcon 35 contraceptive. Warner’s getting off the hook for a tad less money, however: just nine million bucks, all cash.
BIZARRO-WORLD CURES
FOR MERCK, last week may have represented one pesky foundation-crack having been fixed while another was opening. Stateside officials last week released data from a trial of Merck’s failed HIV vaccine candidate, discontinued in September. Two troubling facts have emerged: there were more HIV infections among subjects who received the vaccine than the control group, and those who were less immuno-compromised at the start of the trial had a higher risk after receiving vaccination. Said one researcher: “The possibility that there would be a trend toward more infections in the vaccinated group was not something that people anticipated. This is going to take a lot of additional work to try to figure out what happened.” Interviewed by Newsweek magazine, Merck’s vaccine vee-pee Dr. Keith Gottesdiener was asked what the company is doing for once-healthy trial volunteers who may now be more susceptible to HIV infection. He replied, “There’s extensive counselling, and that counselling is effective over time.”
WAKE UP AND SMELL THE SIDE-EFFECT
COMPLETING A TRIFECTA of fascinating news stories involving Merck last week, scientists at the University of California San Diego last week found evidence linking anti-lipemic simvastatin (Zocor, Merck) with sleep disorders. A study compared incidents of insomnia among patients receiving simvastatin with those taking pravastatin (Pravachol, Bristol-Myers Squibb) or a placebo. Says lead researcher Beatrice Golomb: “A significantly greater number of individuals taking simvastatin reported sleep problems.” Both statins have been genericized, but simvastatin is part of a combo CV Tx marketed by a Merck-Schering Plough joint venture.
EARLIEST OTC SWITCH IN HISTORY
WE’RE PRETTY SURE THAT THINGS are not supposed to work this way, but Neurochem announced last week it will sell its Alzheimer’s Tx candidate tramiprostate (Alzhemed) as an OTC nutraceutical, beginning as early as three months. The FDA ruled three months ago that data on the compound was inconclusive, and Dr. Francesco Bellini, boss of the Laval, Que. outfit, isn’t keen on funding new trials. So, he’s setting up a new subsidiary to find shelf-space in the supplements counter, and predicts he’ll sell a billion dollars worth of Alzhemed annually. Bellini had previously predicted $4.5 billion in yearly revenues from the Rx as a prescription product. Says he: “If I didn’t believe it worked I would not have done what I did,” adding that he feels “a moral responsibility” to offer the product. Not that Neurochem is planning to abandon the hunt for an FDA-approved prescription Tx for Alzheimer’s. The company says it will focus on developing another candidate, NRM-8499.
CORNER-OFFICE ROTISSERIE
YOU CAN’T BLAME DEIRDRE CONNELLY for wanting to get out of the office every now and then. The prexy of Eli Lilly’s stateside unit, speaking at a drugbiz conference recently, explained that she likes to return to her roots as a bag-carrier, and sometimes wanders off disguised as an everyday drug rep in order to see what life is like among the little people. Sometimes she’s surprised. Dropping by a medical practice close to Lilly’s Indianapolis HQ, she received the high-hat treatment from one physician who seemed miffed that Connelly wasn’t his usual rep. The medico turned even more frosty when he learned Connelly wasn’t bearing samples, but merely wanted the opportunity to chat for a spell. “Mphf,” said the doctor, “let’s have a look at your business card.” He paused 20 seconds, before asking, “President! President of what?” u Not that any female drugbiz employee would even want her company’s top job after hearing that story, but a new project was undertaken last week aimed at helping more women attain senior positions in the drugbiz. Management consultants Booz Allen Hamilton and the Healthcare Businesswoman’s Association released research defining “essential environmental factors” which allow women to better compete for executive positions. They are: career-flexibility models; customized development programs; a merit-based culture; program metrics to track gender-equality progress; recruiting efforts that emphasize diversity targets; and unambiguous support for women from senior managers.
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