Market Place
Insys founder sentenced to jail in opioid case; Ipsen’s Clementia bet misfires
This week, Phispers has news on Insys Therapeutics. Indicted for fraud, the founder of the company, John Kapoor, and several other (former) executives of Insys were sentenced to imprisonment and held criminally liable for the opioid crisis in the US.
Ipsen, which had acquired Clementia Pharmaceuticals for US$ 1.3 billion last year, saw its bet backfire as the latter’s experimental rare bone disease drug failed a futility analysis.
Allergan sold off drugs to AstraZeneca and Nestle in order to comply with the regulatory approval process for its acquisition by AbbVie.
Pharma bro Martin Shkreli was back in the news as his company got sued for withholding samples of Daraprim so that generic competitors could not conduct bioequivalence tests to enter the market.
And Deerfield Management and MLP Ventures are pumping in US$ 1.1 billion in creating the world’s biggest cell and gene therapy CDMO with a campus in Pennsylvania.
Insys’ founder, senior executives sentenced to jail in opioid-related fraud
In the US, John Kapoor, former billionaire and founder of Insys Therapeutics, was sentenced to 66 months imprisonment last week for his role in a conspiracy to bribe doctors to prescribe his company’s potent fentanyl painkiller to patients who didn’t need it.
The founder of the company that is known for its fentanyl-spray — Subsys — is now the highest-ranking pharma executive to be sentenced in a case linked to the opioid crisis. Subsys was approved to treat intense pain in cancer patients.
Along with Kapoor, Insys’ former vice president of sales, Alec Burlakoff, was sentenced to 26 months in prison and its former CEO Michael Babich was sentenced to 30 months in prison.
Two other former executives — Richard Simon and Joseph Rowan — were sentenced to more than two years in federal prison. Along with these executives, Sunrise Lee, a former stripper who became a regional sales manager for Insys, was sentenced to a year in prison. Lee claimed she was exploited by Insys and that she didn’t know that the company’s policies were wrong.
This is the first case where an opioid maker and its executives are being held criminally liable for the opioid crisis which has claimed nearly 400,000 lives over two decades. Since then, a handful of other drug companies have faced criminal charges.
Between 2012 and 2015, Kapoor and the other executives had conspired to bribe doctors and other medical practitioners to prescribe Subsys unnecessarily. Victims told the judge they lived in a haze of addiction after being prescribed Subsys for no reason. They also described losing their teeth and being unable to put two thoughts together due to the drug.
In 2015, Subsys’ annual sales hit US$ 329 million. Last June, Insys reached a US$ 225 million settlement with the Department of Justice and admitted to having illegally marketed and paid kickbacks to medical practitioners in exchange for prescribing Subsys. Days later the company filed for Chapter 11 bankruptcy.
Ipsen’s US$ 1.3 billion bet on Clementia backfires as experimental drug fails test
French drugmaker Ipsen has paused a phase III trial of palovarotene, an experimental rare bone disease drug, after an interim analysis found it is unlikely to meet its primary efficacy endpoint.
The decision to pause the trial is based on the results of a futility analysis reviewed by the Independent Data Monitoring Committee (IDMC).
This marks yet another blow for palovarotene, which has run into safety and efficacy problems since Ipsen acquired it in a US$ 1.3 billion (€1.1 billion) takeover of Clementia Pharmaceuticals. In December, a safety concern prompted the FDA to halt dosing in children.
At the time of acquiring Clementia last year, David Meek, the then CEO of Ipsen, had called the drug “a largely derisked asset”. Since then, palovarotene has been the subject of a safety signal that led the FDA to stop the trial in children, a key population. The drug has now been rocked by an analysis that questions its efficacy.
Doubts about palovarotene arose soon after the Clementia deal was announced, as Ipsen reportedly disregarded several red flags. These included an uncertain patent life for the project, diminished economics because of royalties payable to Roche, and the failure of a phase II trial in 2018.
Allergan
sells off two drugs to clear way for merger with AbbVie
Allergan Plc announced this week that it has entered into definitive agreements to divest brazikumab and Zenpep to AstraZeneca and Nestle SA respectively. Nestle will also acquire Viokace, another pancreatic enzyme preparation, as part of the same transaction.
Allergan is being acquired by AbbVie. And these agreements are in conjunction with the ongoing regulatory approval process for AbbVie’s acquisition of Allergan to create Allergan Aesthetics.
Brazikumab is an investigational IL-23 inhibitor in Phase IIb/III development for Crohn's Disease and in Phase II development for ulcerative colitis.
Zenpep is a gastrointestinal medication used to treat exocrine pancreatic insufficiency due to cystic fibrosis and other conditions. Zenpep’s 2018 net sales were US$ 237 million.
The companies did not disclose the financial details of the transactions.
“Today, we move another step closer to completing AbbVie’s acquisition of Allergan. Allergan’s commercial and R&D teams have invested so much of themselves into the development of brazikumab and the commercialization of Zenpep, and these divestiture agreements will enable that work to continue following the close of our planned acquisition,” said Brent Saunders, chairman and chief executive officer of Allergan.
Shkreli
back in the news, sued by FTC, New York attorney for unfair trade
practices
Pharma Bro Martin Shkreli — who is serving a seven-year term in a federal prison in Pennsylvania. — has an uncanny knack of being in the news for all the wrong reasons. In July last year, a federal appeals court had upheld the criminal conviction of Shkreli and the panel in the US Court of Appeals for the Second Circuit had upheld the forfeiture (of more than US$ 6.4 million) that a judge had imposed on Shkreli in 2018 when he was convicted on two counts of securities fraud and one count of conspiracy to commit securities fraud.
This week, the Federal Trade Commission (FTC) and the New York Attorney General filed a lawsuit against Vyera Pharmaceuticals, which was previously known as Turing Pharmaceuticals (a company run by Shkreli).
The FTC and New York lawsuit explains how Vyera withheld samples of Daraprim so that generic competitors could not conduct bioequivalence tests to enter the market. For instance, in August 2015, Vyera and a Daraprim distributor agreed that the distributor would not sell more than five bottles to a single customer without Vyera’s express approval.
In August 2019, the redacted suit also says that Shkreli had several conversations about limiting all sales of Daraprim to one bottle at a time in order to prevent a generic competitor from obtaining sufficient Daraprim samples to conduct the necessary testing.
Shkreli rose to infamy back in 2015 for raising the price of the toxoplasmosis drug Daraprim (pyrimethamine), first approved by FDA in 1953, from US$ 17.50 to US$ 750 per tablet.
US$
1.1 billion gene therapy CDMO to come up in Pennsylvania
A newly founded CDMO — Center for Breakthrough Medicines — plans to invest US$ 1.1 billion to emerge as the world’s biggest cell and gene therapy service provider. The company behind the CDMO — Deerfield Management Company — is creating the CDMO along with MLP Ventures’ The Discovery Labs. MLP Ventures is promoted by real estate impresario Brian O’Neil.
The Discovery Labs is developing a former GlaxoSmithKline site into a US$ 500 million, 1.6 million square foot life science campus in Pennsylvania, US. The Center for Breakthrough Medicines will occupy over 40 percent of this campus. In that space, the CDMO will install 10 plasmid suites, 20 viral vector suites, 36 universal cell processing suites and 20 current good manufacturing practice (cGMP) testing, process development and cell banking suites.
Eli Lilly invests in injectables site: Eli Lilly is investing over US$ 470 million in Durham (North Carolina, US) that will create more than 460 new jobs in the region. The project will bring a new state-of-the-art drug facility to North Carolina’s Research Triangle Park that will manufacture parenteral (or injectable) products and delivery devices.
Allergan invests in botox facility: Botox-maker Allergan has completed a US$ 176 million (€160 million) investment in its Westport facility in Ireland, ahead of its impending takeover by Abbvie in March. Allergan officially opened the facility this week, which will create 63 jobs.
Allergan Westport site lead and vice-president of global manufacturing Paul Coffey said: “The Westport operation is a key part of Allergan today – we expect it to be a key part of any future organization also,” he added.
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