Allon Therapeutics, a Canadian biotech focused on therapies for central nervous system diseases involving dysfunctional tau protein, filed a proposal for bankruptcy and reorganization, and the Toronto Stock Exchange halted trading of the company's common shares. In December 2012 Allon Therapeutics’ lead therapeutic candidate, davunetide, failed a pivotal mid-late stage trial late for efficacy as a treatment for progressive supranuclear palsy and the company has been considering its options since then. According to the filed Bankruptcy and Insolvency Act proposal, rather than undergo liquidation, Allon will transfer all issued and outstanding shares to Canadian-based Paladin Labs, which will pay Allon $1 for all the shares plus $900,000 in cash. All outstanding employee stock options will be cancelled.

Satori Pharmaceuticals, founded in 2005 by PureTech Ventures and leading experts in neurodegenerative diseases, ceased operations following safety complications in pre-clinical studies of its lead compound for the treatment of Alzheimer’s disease. Jeff Jonker, Satori’s chief business officer, told FierceBiotech that the studies showed that the company’s gamma secretase inhibitor unexpectedly disrupted adrenal function in monkeys and that the side effect was completely unrelated to the gamma secretase target. Other compounds in the company’s pipeline have the same complication. “I think we fundamentally lack an understanding of the pathogenesis of this disease,” Jonker said. “And because we lack an animal model that replicates the human biology, we really are flying blind pre-clinically.”

Predictive Biosciences will cease to operate and will lay off 91 employees because an insurance company contracted by Medicare will no longer cover the company’s bladder cancer diagnostic, according to BioCentury. Center for Medicare & Medicaid Services administrators in January 2013 stopped paying claims for the CertNDx tests, CEO Pierre Cassigneul told BioCentury. In April 2013, CMS informed him that coverage would resume only when the company could provide evidence of clinical utility. Cassigneul said that meeting the request could take two years and that “our investors are not willing to go further in supporting the company.” Predictive Biosciences’ three bladder cancer tests were previously reimbursed at about $380 per test.

Bausch + Lomb unit ISTA Pharmaceuticals will pay $33.5 million in fines after pleading guilty to fraud and violations of the United States Federal Anti-Kickback Statute for conspiracy. The U.S. Food and Drug Administration approved of ISTA’s non-steroidal anti-inflammatory Xibrom for treatment of pain and inflammation following cataract surgery. But according to the Justice Department, between 2005 and 2010, ISTA employees promoted use of the drug for the treatment and prevention of cystoid macular edema, as well as for pain and inflammation after Lasik and glaucoma surgeries, indications not approved by the FDA. ISTA admitted telling employees not to leave a paper trail in their notes or in physicians’ offices and that physicians were financially rewarded for prescribing off-label use of Xibrom. Under the terms of the plea agreement, ISTA will pay $18.5 million, including a criminal fine of $16.1 million for the conspiracy to introduce misbranded Xibrom into interstate commerce, $500,000 for the conspiracy to violate the anti-kickback statute, and $1,850,000 in asset forfeiture. The company will also pay $15 million to the federal government and states for civil settlement claims arising from the marketing of Xibrom and resultant false claims that were submitted to government health care programs.

GlaxoSmithKline’s Discovery Fast Track competition was deemed inappropriate for University of California, Los Angeles research faculty due to the university’s intellectual property concerns. GSK designed the competition to speed translational research from academic labs into new therapies. But university officials objected to the elimination of initial contract negotiations between academic researchers and the company. Researchers in the contest would have turned over their ideas directly to GSK so the company could screen them for development potential. According to GSK, initial contract negotiations “are often perceived as the biggest bottleneck in the pharma/academia collaborative process.” UCLA’s vice chancellor for research James Economou and executive director of entrepreneurship Brendan Rauw see a different issue. They advised university faculty that the terms and conditions of the competition “do not adhere” to University of California policies and that participating in the competition would violate university policies and faculty obligations. “We are trying, as a university, to be open for industry and find opportunities for increased collaboration. But there is a balance there,” says Rauw. “We had to make a decision that this went too far.”

The U.S. Food and Drug Administration rejected Valeant Pharmaceutical’s new drug application for efinaconazole, a treatment for nail fungus. The rejection was based on concerns regarding the chemistry, manufacturing, and control of the container closure used. Valeant said the issues can be handled in a timely fashion and is working on a response to the FDA. The global pharmaceutical company manufactures a wide variety of generic, over-the-counter, and specialty drugs.

Four teams from multiple institutions tried and failed to replicate results from a highly publicized 2012 study on the use of a T-cell lymphoma drug for the treatment of Alzheimer’s disease. The original work, published in Science, showed that in a mouse model of Alzheimer’s, mice treated with bexarotene showed reduced plaques and rapid reversal of the pathological, cognitive and memory deficits related to Alzheimer’s and that this effect was likely due to increased expression of apolipoprotein E and subsequent increased clearance of cellular beta-amyloid. “Anecdotally, we have all heard that physicians are treating their Alzheimer's patients with bexarotene, a cancer drug with severe side effects,” said Robert Vassar, a professor of cell and molecular biology at Northwestern University’s Feinberg School of Medicine and co-author of the new report discrediting the original research. “This practice should be ended immediately, given the failure of three independent research groups to replicate the plaque-lowering effects of bexarotene.” Marketed as Targretin, bexarotene is a retinoid that selectively activates retinoid X receptors primarily located in the liver and kidney. It was approved in 1999 for cutaneous T cell lymphoma.