The Burrill Report

GlaxoSmithKline agreed in principal to pay the U.S. government $3 billion to settle several long-standing criminal and civil investigations into its sales and marketing practices. The agreement is expected to be finalized in 2012 and GSK has stated that it will pay the settlement through cash resources. The cases date back to 2004 and include investigations of possible price irregularities and improper development and marketing of its diabetes drug Avandia. CEO, Andrew Witty stated that the settlement “is a significant step toward resolving difficult, long-standing matters which do not reflect the company that we are today.” Witty also stated that GSK has fundamentally changed its marketing and selling procedures over the years to ensure that it operates with high standards of integrity. GSK shares fell .5 percent in early morning trading on the London Stock Exchange following the announcement.

Exelixis shares plunged 37.9 percent in early trading November 1 after the company said it would push ahead with a late-stage trial of its prostate cancer drug candidate, cabozantinib, without an FDA agreement. Exelixis had been hoping to convince the agency to approve the drug following a small late-stage study demonstrating pain reduction in late stage cancer patients. The FDA, however, refused to support the strategy and to grant Exelixis a Special Protocol Assessment. By choosing to go ahead with the “go-fast” trial without the SPA agreement, Exelixis could face a lengthy delay in gaining approval for cabozantinib.
Sanofi’s acquisition of Genzyme and the impending loss of exclusivity on key drugs has the company planning to lay off hundreds of U.S. sales and research and development workers over the coming months.

Sanofi informed employees that it would shrink its sales force and consolidate its R&D operations in the northeast, Pharmalot reported. The sales force cuts will be focused on Sanofi’s cardiovascular and oncology group, primarily because of the patent expiration, due in a couple months, of its blood thinner medication, Plavix. Sanofi’s R&D operations Massachusetts will be consolidated with Genzyme’s Boston hub while later-stage developments will maintain a camp in New Jersey. CEO Christopher Viehbacher stated that he was aiming for $2.9 billion in cost savings per year and foresees expansion into emerging markets as a way of alleviating some excess costs. Despite the 9,000 plus jobs cuts made over the last several years in mature markets, Sanofi has added more than 3,700 jobs in faster growing and emerging markets since 2008.

Dendreon shares plummeted 37 percent to $6.55 on November 3 after it announced weaker-than-expected sales growth numbers for its prostate cancer vaccine, Provenge, the day before. The company’s third quarter financials revealed that quarterly losses increased by 86 percent to $147 million from the same quarter a year ago and that it anticipated November sales for Provenge to slow further due to the holiday season. The announcement by rival, Medivation, that it had received positive results in its interim analysis of its prostate cancer drug, MDV-3100 may have also hurt Dendreon’s performance. Though Dendreon has managed to show modest revenue growth, its quarter-to-quarter revenue jumped to $64.3 million from $20.3 million in the third quarter, it hasn’t been enough to meet expectations.

Medtronic’s bone-stimulation product, Amplify, might increase the risk of cancer according to a newly released study. Amplify, a higher-dose formulation of Medtronic’s currently marketed Infuse, was already rejected by the FDA earlier this year. According to the study, the worry is that Amplify uses the same active ingredient as Infuse, and doctors often prescribe the Infuse off-label at dosages much higher than those recommended, meaning patients very well could be receiving amounts of the active ingredient at concentrations equivalent to Amplify. Lead author of the new study, Eugene Carragee, was alarmed by results showing a significantly higher number of cancers in Amplify patients than in those who received a bone graft suggesting that patients using Infuse may be at risk. For its part, Medtronic has funded an independent study through Yale University but that isn’t expected to be completed until next year.

A new research study from Visante finds that prescription “co-pay coupons” will raise health costs for employers, unions, and state governments by $32 billion. The study, released by Pharmaceutical Care Management Association, an association of pharmaceutical benefits managers, says that the co-pay coupons undermine generics and tiered co-pay plans by assigning higher consumer co-pays to expensive drugs and lower co-pays to more affordable drugs. The basic economics of the programs allow drug companies to entice consumers into higher-cost products by helping to cover the co-pay rates allowing larger margins of revenue, paid for by the employer, union, or state government that is offering the coverage. CEO of the PMCA, Mark Merritt, says that “co-pay coupons are designed to undermine generics, increase sales of more expensive brands and stick employers with the tab.”


November 04, 2011
http://www.burrillreport.com/article-gsk_reaches_3_billion_settlement_with_u_s_over_criminal_and_civil_investigations.html