Humana has filed a complaint against Teva and a host of other generic companies.
The complaint alleges massive pricing fixing conspiracy against these companies for some of their generic drugs.
Merck, Kadmon, and FibroGen are among other newsmakers this time.
Insurance company versus big pharma - whose money is it anyway?
Humana Inc. (NYSE:HUM), a $39 billion health insurance company, accuses Teva Pharmaceutical Industries (NYSE:TEVA), an $8 billion company, and a few other generic drug makers, of playing ugly in the generic drugs market. In a 610-page complaint filed with a Philadelphia federal court, Humana has accused these companies of conspiring to keep the prices of over 10 dozen generics at high levels. The price collusion scheme, allegedly "spearheaded" by Teva, peaked during 3Q-2013 to 1Q-2015. This new case is a follow-up by Humana of a similar civil lawsuit they had filed earlier in August 2018 against several companies including Actavis (merged into Allergan (NYSE:AGN) now), Mylan (NASDAQ:MYL), Novartis (NYSE:NVS), and Teva among nearly 30 other drug makers related to 16 generic drugs. Humana threw its hat in the ring of ongoing federal and state antitrust investigations of the generic drug industry, seeking "to recover damages it incurred from egregious overcharges it paid for certain widely-used generic drugs," according to the lawsuit. Humana believes there is an "understanding" within the generic drug industry referred to as the "rules of engagement" and alleges these to be "massive price-fixing conspiracies in the history of the United States." Just when we thought the drug industry didn't have any more pricing problems.
Mean and lean Merck
According to summary notices posted on the Pennsylvania (PA) Department of Labor and Industry (DLI) website, Merck & Co. (NYSE:MRK) will lay off 500 (including remote workers residing outside of PA) effective 1/3/2020. These layoffs are reportedly from the sales and commercial teams and will have separation packages. Meanwhile, the company will be recruiting new personnel in the U.S., with a focus on research and development in the oncology sector. Merck reduced its overall workforce by over 45,000 positions between 2010 and 2018. While, on the one hand, Merck goes on reducing its workforce, the company has grown around 125% in the same period. The key driver of the company's growth is the cancer drug Keytruda (pembrolizumab) that alone brought in over $7 billion in sales in 2018, with 2019 sales guidance of over $10 billion.
Kadmon's room temperature stable trientine generic approved
Kadmon Holdings (NYSE:KDMN) received the U.S. FDA's approval for Clovique, a room temperature stable trientine hydrochloride product, to be supplied in a portable blister pack. Kadmon's generic trientine hydrochloride capsule, USP, 250 mg, was earlier approved in September 2019 for the treatment of Wilson's disease, especially for patients intolerant to penicillamine. The FDA determined Kadmon’s trientine hydrochloride capsules to be biosimilar and therapeutically equivalent to the reference-listed drug, Syprine capsules, 250 mg, marketed by Bausch Health Companies (NYSE:BHC). Storage of the drug had been cited as an inconvenience by 30% patients in a survey by the company, hence the new portable blister pack. Clovique is the first FDA-approved trientine product to offer room temperature stability for up to 30 days. Wilson's disease is a rare inherited disorder which results in excess copper in the body. Trientine hydrochloride is a "chelating" agent that removes the excess copper from the body via the kidneys. This process indirectly inhibits cancer or tumor growth by inhibiting angiogenesis. This orphan drug also does not have adverse effects (AEs) seen in the previous standard penicillamine treatment for Wilson's disease. The drug is also being studied for clinical applications in Alzheimer's disease, cancer, diabetes mellitus, and vascular dementia.
Kadmon's development pipeline includes KD025, an oral small molecule inhibitor of the Rho-associated coiled-coil kinase 2 (ROCK2) signaling pathway. KD025 is being studied in three phase 2 trials for patients with chronic graft-versus-host disease (cGVHD), systemic sclerosis, idiopathic pulmonary fibrosis (IPF), respectively. The pipeline also includes KD045, a ROCK inhibitor for the treatment of fibrotic diseases, and KD033, an anti-PD-L1/IL-15 fusion protein, both in the IND enabling stage. Kadmon is a company to be watched for its development of KD025.
FibroGen looking for accelerated review of pamrevlumab
On 10/23/2019, FibroGen (NASDAQ:FGEN) announced the dosing of the first patient in the LAPIS pivotal phase 3 clinical trial of pamrevlumab in patients with unresectable locally advanced pancreatic cancer (LAPC). This multinational randomized, double-blind, placebo-controlled phase 3 study will evaluate the efficacy and safety of neoadjuvant pamrevlumab in combination with chemotherapy (gemcitabine and nab-paclitaxel). The study design is similar to FibroGen’s phase 2 trials, which demonstrated a higher percentage of patients achieving surgical resection and a statistically significant median survival rate when treated with the pamrevlumab combination. Approximately 260 patients will be enrolled in the phase 3 study, with primary endpoint of overall survival - randomization to death due to any cause or until the last subject to complete treatment reaches 18 months post-treatment. Subjects who complete 6 cycles of treatment (28 days each) will be evaluated for surgical exploration for possible R0 or R1 resection. The resection rate after 24 weeks treatment is a surrogate endpoint. If the resection rates favor the pamrevlumab combination therapy, FibroGen plans to discuss a marketing application under the provisions of accelerated approval with the U.S. FDA. The estimated primary completion date is 3Q-2022. Presently, there is no optimal therapeutic strategy for LAPC. Less than 20% of LAPC patients have chances of tumour resection (removal by surgery). Hence, this therapy’s capability to change the tumor from unresectable to resectable stage is of utmost importance.
Back in March 2019, we wrote about FibroGen's progress on multiple candidates in multiple indications. An interesting development earlier this month shows the strong footing that FibroGen develops on. The company's scientific advisory board includes the 2019 Nobel prize awardee in physiology or medicine, William G. Kaelin, Jr., who shares the award with Sir Peter J. Ratcliffe and Gregg L. Semenza for their discoveries of how cells sense and adapt to oxygen availability. Jim Schoeneck, FibroGen’s Interim CEO, has this to say about William:
“We are proud of our long-standing relationship with Bill, who, as a compassionate physician and meticulous scientist, applies a rigorous scientific approach to investigation of clinical problems. Bill’s research, identifying key components of the body’s oxygen-sensing pathway, has been fundamental to the development of a new field of therapeutics with far-reaching application, including our first in class HIF-PH inhibitor, roxadustat.”
Thanks for reading. At the Total Pharma Tracker, we do more than follow biotech news. Using our IOMachine, our team of analysts work to be ahead of the curve.
That means that when the catalyst comes that will make or break a stock, we've positioned ourselves for success. And we share that positioning and all the analysis behind it with our members.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.