Amgen To Cut 380 R&D Jobs: Biotech's Weekly Round-Up Of Mishaps

by: The Burrill Report

Amgen (NASDAQ:AMGN) announced that it will eliminate 380 R&D jobs across the company in an effort to improve focus and re-allocate research and development resources. Although the layoff will affect employees at its major U.S. R&D sites in Thousand Oaks, Seattle, San Francisco, and Boston, Amgen isn’t closing any of its research sites around the world or eliminating any therapeutic areas from its pipeline. An Amgen spokesperson stated the company plans to continue to invest significantly in R&D, but the layoffs were necessary to shift resources to more expensive late-stage development projects.

KV Pharmaceutical (KV.A) has filed a lawsuit against its former board chairman and CEO Marc Hermelin in an effort to not pay him $36.9 million in retirement benefits. The dispute between KV and Hermelin dates back to 2008, when an internal investigation found that Hermelin had not acted in good faith when he had taken no action to correct known issues in the manufacturing and distribution of KV’s morphine pills. The lawsuit alleges that “he acted solely to protect his own interests and bonus, which was, by contract, calculated as a percent of KV’s profit.” Soon after his non-action, the FDA shut down the pharmaceutical business of KV for shipping over-sized morphine pills. Hermelin plead guilty in March to two criminal misdemeanor counts of mislabeling drugs. Hermelin has since claimed that he was not fired by KV, but rather that he resigned and in turn should be paid retirement benefits and be reimbursed for his legal expenses in connection with the criminal proceedings against him. KV contends that it owes Hermelin nothing.

The U.S. Food and Drug Administration issued a warning letter Wednesday to Jazz Pharmaceutical (NASDAQ:JAZZ) because it said the company failed to properly submit reports and develop adequate written procedures on serious adverse drug events. The October 11 letter gave the company has 15 days to provide the agency with specific steps it has taken to correct the violations. Jazz says it plans to respond quickly to the warning letter and address the FDA’s concerns.

The U.S. Court of Appeals upheld a 2002 decision requiring Apotex to pay Sanofi and Bristol-Myers Squibb $442 million for infringing on a patent for their blood thinner drug Plavix. However, the court tossed out the $108 million levy in interest. Apotex, a privately-held Canadian drugmaker, had briefly brought to market a generic version of Plavix while challenging the validity of Sanofi and Bristol-Myers’ patent but the court ruled that the company had infringed on the patent and forced Apotex to stop selling its generic drug. Sanofi filed its lawsuit against Apotex in 2002.

A former U.S. Food and Drug Administration chemist pleaded guilty to insider trading by investing in pharmaceutical stocks based on information he had gathered via his access to confidential drug-approval data at the FDA. Cheng Yi Liang, a longtime chemist at the FDA who worked in the Center for Drug Evaluation and Research, pleaded guilty to one count of securities fraud and one count of making false statements. Liang admitted that between 2006 and 2011 he had bought and sold stocks in more than 25 companies based on inside information he had gathered from his access to the FDA’s handling of experimental drugs. As part of his plea agreement, Liang has agreed to forfeit the $3.8 million he made on the insider-trading scheme. The FDA said it cooperated with the investigation and called Liang’s actions “an inexcusable departure from the high ethical standards that thousands of dedicated FDA employees maintain.”

The U.S. Food and Drug Administration said they sent a letter to GlaxoSmithKline (NYSE:GSK) on October 7 informing the company that it had violated the agency’s good-manufacturing practice rules at a U.K. plant, Dow Jones reported. The letter was in regards to a March 2011 inspection of a drug-manufacturing plant in Worthing West Sussex, United Kingdom. Federal regulators said that the company failed to establish proper procedures that would prevent the microbiological contamination of its products. It was found that the disinfectant that GSK was using to clean its manufacturing areas wasn’t strong enough to remove all types of bacteria. The letter also referenced failures to follow various laboratory-control procedures. GSK has said that it is working closely with the FDA to ensure it corrects all errors in the warning letter.

On the same day that Abbott Laboratories (NYSE:ABT) announced its plan to split into two companies, it also recorded a $1.5 billion charge for the third quarter to cover a potential settlement stemming from an investigation alleging that it promoted Dapakote, its anti-seizure drug, for off-label uses, the Wall Street Journal reported. The U.S. Justice Department has been investigating whether Abbott violated any laws by marketing Depakote as a treatment for agitation, aggression in the elderly, and other uses not yet approved by the FDA. If the investigation does result in a $1.5 billion settlement, it would rank as the second-biggest off-label settlement in history.

EU antitrust regulators probed Johnson & Johnson (NYSE:JNJ) and Novartis (NYSE:NVS) over speculation that they have colluded to block the sale of a cheaper generic medicine on the Dutch market, Reuters reported. J&J makes a painkiller patch called Fentanyl that is used to treat cancer pain and has an agreement with Novartis allowing its Sandoz division to sell a generic version in markets where J&J patents on Fentanyl have expired. The EU commission aims to find out “whether contractual arrangements” between the two companies “may have had the object or effect of hindering the entry on to the market of generic versions of Fentanyl in the Netherlands.” This is the latest investigation in an ongoing probe by the EU commission to crack down on pharmaceutical drug makers who may be paying generic rivals to delay their launches of low-cost copies of branded medicine. Novartis and J&J have confirmed that they have received notice of the investigation but have declined to comment further on the matter.