Does Sanofi-Aventis ALREADY “Effectively Control” Merial Schering-Plough’s Intervet?

Even though the final clause of of the below Section 10.4 — at subsection 10.4.3 — specifically disclaims control, there is a reasonable case to be made that Sanofi-Aventis tonight, through crafty negative covenantry, possesses at least a “veto right” — as to most important business matters concerning the Intervet franchises, businesses that are (at least nominally) still now owned by Schering-Plough (and to be owned by New Merck, if the reverse merger is consummated). Surprisingly, this veto, or negative control, in favor of Sanofi, now exists over a series of businesses worth, by some accounts, over $9 billion. Any sale, divestiture, or other rearranging of any asset or liability that comprises more than one-half of one percent, in most cases, or one percent (in some other cases) is a “trip-wire” — creating default remedies in favor of Sanofi-Aventis. The tightness of the guardrails is actually rather astonishing. These clauses are common in multinational M&A settings, but usually provide much wider dollar discretion to a target of Intervet’s size, scope and scale. Fascinating.

Take a look — again, a link to the full “call option” agreement is here, at the SEC’s EDGAR window:

. . . .10.4 Conduct of the Intervet/Schering-Plough Entities

10.4.1 Except (i) to the extent required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to Sellers, Sellers’ Subsidiaries and the Intervet Schering-Plough (“I/SP”) Entities and their Subsidiaries, (ii) as otherwise permitted or contemplated by this Agreement or the Related Agreements, (iii) as set forth in Schedule 10.4, or (iv) as consented to in writing by Sanofi-Aventis (which consent shall not be unreasonably withheld, conditioned or delayed), during the period from the date hereof until the earlier of (A) the Closing Date or (B) the termination of this Agreement in accordance with Article 14 hereof, Sellers shall, and shall cause each of their Subsidiaries (including the I/SP Entities and their Subsidiaries) to, conduct the businesses and operations of the I/SP Business in all material respects in the Ordinary Course, and to the extent consistent therewith, Sellers shall, and shall cause each of their Subsidiaries (including the I/SP Entities and their Subsidiaries) to, use their respective reasonable efforts to (1) preserve the I/SP Entities’ and their respective Subsidiaries’ existing assets and properties, (2) preserve the I/SP Business’ business organization intact and maintain the I/SP Business’ existing relations and goodwill with customers, suppliers, distributors, creditors and lessors, and (3) comply in all material respects with Laws applicable to the I/SP Business.

10.4.2 Without limiting the generality of the foregoing, except (w) to the extent required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to Sellers, Sellers’ Subsidiaries and the I/SP Entities, (x) as otherwise permitted or contemplated by this Agreement or the Related Agreements, (y) as set forth in Schedule 10.4, or (z) as consented to in writing by Sanofi-Aventis (which consent shall not be unreasonably withheld, conditioned or delayed), during the period from the date hereof to the Closing Date, Sellers shall cause each of the I/SP Entities and their Subsidiaries not to:

(i) modify or amend in any material respect any of the organizational documents of any of the I/SP Entities or their Subsidiaries;

(ii) issue, sell or otherwise transfer any Equity Securities of any of the I/SP Entities or any of their Subsidiaries (other than issuances, sales or other transfers to the I/SP Entities or any wholly-owned Subsidiary of an I/SP Entity);

(iii) split, combine, redeem or reclassify any Equity Securities of any of the I/SP Entities;

(iv) permit any of the I/SP Entities or any of their respective Subsidiaries to incur or suffer to exist any Indebtedness in excess of $50 million in the aggregate except (x) for working capital borrowings incurred in the Ordinary Course, or (y) as listed in Schedule 10.4.2(iv);

(v) enter into any Contract that would prohibit any of the I/SP Entities or any of its Subsidiaries, after the Closing, from competing in any line of business or with any Person in any geographic area, except for such prohibitions that would not, individually or in the aggregate, reasonably be expected to be materially adverse to the I/SP Business;

(vi) other than acquisitions (a) listed in Schedule 10.4.2(vi) or (b) not in excess of $10 million individually or $20 million in the aggregate, permit any of the I/SP Entities or any of their respective Subsidiaries to acquire any business by merger, consolidation or otherwise;

(vii) divest, sell or otherwise dispose of, or encumber any material asset of the I/SP Entities or their Subsidiaries outside of the Ordinary Course (other than as permitted by subsection (ii) above) except (a) as listed in Schedule 10.4.2(vii), (b) for transactions involving assets of the I/SP Entities or their Subsidiaries having a value no greater than $20 million in the aggregate for all such transfers, or (c) in connection with any waiver, release, assignment, settlement, compromise of litigation otherwise permitted under this Agreement;

(viii) permit any of the I/SP Entities or any of their respective Subsidiaries to adopt a plan or agreement of complete or partial liquidation, dissolution, or recapitalization;

(ix) permit any of the I/SP Entities or any of their respective Subsidiaries to enter into or adopt any Plan, or amend any I/SP Entities Plan other than in the Ordinary Course consistent with past practice;

(x) increase the rate of compensation, commission, bonus, or other direct or indirect remuneration payable, or agree to pay, conditionally or otherwise, any bonus, incentive, retention, change in control payment or other compensation, retirement, welfare, fringe or severance benefit or vacation pay, to or in respect of any employee, officer or director of any of the I/SP Entities or any of their respective Subsidiaries, except (a) in the Ordinary Course or (b) to the extent required by any Plan disclosed in Schedule 8.17.1;

(xi) materially delay or accelerate the payment of any account payable or other Liability of the I/SP Business other than in the Ordinary Course, materially delay or accelerate the collection of any account receivable or other amount owed to the I/SP Entities and their Subsidiaries relating to the I/SP Business other than in the Ordinary Course, or directly or indirectly encourage or require agents, distributors or other purchasers of products from the I/SP Business to purchase or commit to purchase such products in volumes or in accordance with an order or delivery schedule other than in the Ordinary Course;

(xii) make, incur or authorize any individual capital expenditures or commitment for capital expenditures in connection with the I/SP Business in excess of $20 million individually or $100 million in the aggregate;

(xiii) pay any dividend (including interim dividends or other similar forms of distribution), other than dividends or distributions that would be reflected in the calculation of the I/SP Value (as defined in the Call Option Agreement) pursuant to the Call Option Agreement;

(xiv) enter into new agreements, or modify any existing agreements, between Schering-Plough or its Affiliates, on the one hand, and the I/SP Entities or its Subsidiaries, on the other hand, that would continue to be effective following the Closing unless such agreements are substantially on an arm’s-length basis, other than customary agreements and intracompany arrangements for items such as cash management, tax sharing, data sharing and other similar ordinary course purposes with Schering-Plough or its Affiliates; or

(xv) authorize, agree, resolve or consent to any of the foregoing.

10.4.3 Nothing contained in this Agreement shall give to Sanofi-Aventis, directly or indirectly, rights to control or direct the operations of any of the I/SP Entities, their respective Subsidiaries prior to the Closing. Prior to the Closing, each of the I/SP Entities and their Subsidiaries, as applicable, shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its operations. Notwithstanding anything to the contrary in this Agreement, no consent of Sanofi-Aventis shall be required with respect to any matter set forth in this Section 10.4 or elsewhere in this Agreement to the extent that the requirement of such consent would violate or conflict with applicable Law. . . .

Whew. That’s quite a bit of de facto veto power, or negative control, of a series of businesses worth, by some accounts, over $9 billion. And $50 million or $100 million is a trip-wire threshold amount? Yikes. Sanofi is effectively now running this Intervet show.

BREAKING: Schering-Plough Just Disclosed the Full “Merial-Sanofi-Intervet Call” Agreement

It was just uploaded to the SEC, via a prospectus-supplement exhibit.

This is a complicated deal. I’ll have more, after I digest it:

. . . .Subject to and upon the terms and conditions described in this Agreement, Schering-Plough offers herein to Sanofi-Aventis an option, and Sanofi-Aventis accepts such option (without undertaking to exercise it), to, following the completion of the Merger and the acquisition by Sanofi-Aventis of the Merial Equity Interests pursuant to the Share Purchase Agreement, cause the I/SP Entities, which would, at the Closing, collectively conduct all of the I/SP Business, to be combined with Merial (by way of contribution) upon the terms and conditions described in this Agreement, as a result of which Sanofi-Aventis and Schering-Plough would each, directly or indirectly, hold 50% of the equity interests in such combined company. . . .

And here is the main share purchase agreement, just filed, as well. I’ll offer analysis, after I read it — in the morning — tomorrow. Check that — done — see above.

From the “Sublime — to Ridiculous” Dept.: Why It’s Always a Good Idea to Proof Press Releases. . . .

Seeking Alpha, a great resource site, has dutifully lifted the first version of Schering-Plough’s asenapine press release, of last afternoon, to source this (below). The problem is that Schering-Plough’s original press release used a would-be “New-Joisey“-homonym in place of the intended word — “use” (erroneously substituting “youth“, instead).

With the error, the sentence is wholly-unintelligible. There was no vote for approvability, of that sort, yesterday. So, I guess it is usually wise to really proof corporate press releases — especially on one of Schering-Plough’s “Five Star” candidates, now pending-action, at FDA:

. . . .in favor of Saphris (asenapine) sublingual tablets as effective and safe for the acute treatment of manic or mixed episodes associated with bipolar I disorder in adults and in favor of youth USE(!) in acute treatment of schizophrenia in adults. . . .

That was the Seeing Alpha quote, as corrected, here. It seems “the lights are all on“, in Kenilworth, but “no one’s home“(!). I actually thought the pronunciation of “youth“, as a New Joisey near-homonym for “use” was more of a “Sout-Philly” thing. As I say — trivial, but telling, nonetheless.

Asenapine Chronicles: WSJ Finally Discovers the Full FDA Background Materials. . . .

Well, better late than never, I guess. Jennifer Corbett Dooren, for The Wall Street Journal, has apparently found the 1,067 page PDF we’ve been blogging about for the last few days:

. . . .An FDA memo released in advance of the meeting said the data in support of Saphris’ short-term efficacy, or effectiveness, in treating schizophrenia “are not overwhelming for this drug. . . .”

[And earlier, she wrote:]

If approved, Saphris would compete with other top-selling antipsychotic drugs like AstraZeneca’s Seroquel . . . and Eli Lilly’s top-selling drug Zyprexa. . . .

If nothing else, one would get the sense from The Wall Street Journal article that this is a market already crowded with best-selling, entrenched franchise names. And that — coupled with the lukewarm-at-best official PDAC remarks — may explain why Schering-Plough’s stock actually fell into negative territory (even though it had gapped higher, at the NYSE open), after the PDAC vote news was released. For the last three NYSE Schering-Plough trading sessions, more than double the usual daily volume has crossed the tape. The smart money may be moving — and moving, away (SGP topped the WSJ’s “selling on strength” list, yesterday). We shall see. Overnight, Reuters quoted a BMO Capital analyst, thus:

. . . .BMO Capital Markets analyst Robert Hazlett boosted his sales estimates for the drug following the panel’s positive vote, saying he expects Saphris to earn $25 million in 2009, $125 million in 2010 and $200 million in 2011. . . .

Only $200 million by the end of 2011. That would confirm my “already-crowded space” theory, on the drug.

Now, I guess, it is in the hands of the full Commission.

Salmon’s Latest “Asenapine Chronicles” Report — Filed From Inside the Room. . . .

Salmon favors us with an “on the scene” report — from inside the FDA Psychopharmacologic Drugs Advisory Committee’s Hilton meeting room — in Silver Springs, Maryland — Thanks, Salmon!:

. . . .The PDAC meeting has ended.

Like the last few meetings on AC member wanted a third question of given that they’ve voted on if a drug is “acceptably safe” or not she wants to then vote on safe relative to the efficacy. To me the idea of safe has to by it’s nature include a intellectual balance with efficacy. Because you can’t vote on rates of AEs and safety is a judgement on rates of AEs, severity of AEs etc. as compared to the efficacy and the alterative of not treating.

Then it did come out that the AC members are abstaining on voting regarding safety if they vote no on efficacy. To me this is absurd because the way it’s reported and used the abstentions are basically ignored.

Here are the tallies:

Schizophrenia Indication

Vote	Efficacious	Safe	Balance
Yes	10	10	9
No	2	0	1
Abstain	0	2	2

Bi-Polar Indication

Vote	Efficacious	Safe	Balance
Yes	12	12	12
No	0	0	0
Abstain	0	0	0

The way the questions are worded they only vote on safety for the 3 – 6 weeks of the studies. Even though it will likely be approved later for long term and Dr. Laughren indicated long term use will be implied by the labeling (since no one would ever switch to another drug and standard is long term use).

Based on the standards used in the meeting today thalidomide would have been approved.

You know how SP spins the financials? Well, their presentations today were the same. There was a discussion about suicides and Schering-Plough acknowledged that they were comparing six week placebo rates to one year drug rates and then ASSUMED rates were stable (bad assumption) since we know suicide is most likely to occur early with drug treatments in depression etc.

[". . .Table 181 of the Sponsor’s analysis confirms that the differences although statistically significant, may have minimal clinical significance. . . ." See page image, at right, Page 757 (of 1,067) -- as ever, click it to enlarge -- Per Salmon's later thoughts, below:]

Nice catch of Table 181 on Page 757 Organon’s (now Schering-Plough’s) modeling on the response in bipolar. Notice that the population mean is higher than the median and the individual model prediction and how the latter two overlap. This may be indicative of differences in response by disease severity and supports the reviewer’s post hoc exploratory analysis on page 761.

You know all these companies get these drugs approved for Bipolar 1 (YMRS >/= 20) but people use them for Bipolar 2 (YMRS 12 – 19) yet the average score at the end of 3 weeks is only around 12. So you know it isn’t likely to differentiate from placebo in Bipolar 2. This is probably why no company even tries to study these drugs in Bipolar 2 (hypomania). Plus you know there’s got to be a minimum cutoff below which you can’t show a difference and it’s well known as that response in depression trials and schizo trials is related to disease severity with a positive study if sicker patients are used. So a priori the reviewer’s post hoc exploration by disease severity makes sense to do. What would make sense is to confirm this is to go into FDA files and see if one sees similar patterns with other drugs in NDAs. However I doubt FDA management would like analyses about other NDAs showing up in the review of a competitor’s drug. Otherwise one would see comparisons of safety across similar drugs in the NDA reviews that are released — and we don’t. FDA management might be able to say something about that, but I doubt they can totally stop someone from putting something in the review about the drug in question. Although I imagine — based on Dave Graham, Andy Mosholder and others — they might try to suppress it, or dismiss it, like they did by calling up the journal that Graham was trying to publish in. . . .

~~~~~~~~~~~~~~~~

[Back to the main post:]

As for efficacy NO mention at all that the baseline disease severity was not comparable in study 004.

No mention at all of the concerns of PAH long term.

No mention at all regarding the possibility that efficacy in bipolar might be related to disease severity (see page 759 – 764 and especially the graph on page 761). Although there was discussion how the placebo response rate in schizophrenia has been going up over the past 20 years (likely because they’re studying less severely ill people.)

They did seem concerned about long term safety and kids, but basically said the drug was safer than Zyprexa because it didn’t cause as much weight gain. In spite of the fact that it appears the diabetes might be due to a toxic effect on the pancreas and not due to the weight gain.

There was no discussion at all of the dose and time dependent hepatotoxicity (page 385) that appears to be due to a toxic metabolite that’s formed on swallowing. Which is probably why the instructions are not to eat or drink for 10 minutes and the real reason for BID dosing and not the half-life of D2 receptor occupancy as they claimed. If BID dosing and efficacy is because of D2 receptor occupancy then why even develop a drug to block serotonin receptors and why were the early studies with low oral doses once daily.

AC members talked about Schering-Plough coming out with a 2.5 mg dose for children (as distinct from adolescents) yet admitted in practice people dose differently than labeled (which often means pushing the dose).

I can just see little kids (5 – 6 yo) given this because it’s sublingual, the doc pushing the dose to the maximum adult dose (10 mg bid), and the kid swallowing the drug once the tablet disintegrates.

Personally I think we’re going to be seeing a lot of liver failure in kids.

Since PAH is already being reported with the other atypicals in kids I think this one will also be problematic. We just won’t know how bad until someone like Dave Graham (Vioxx) fights FDA management to let the info out.

Look for it in about 5 years.

– Salmon

July 30, 2009 3:34 PM

[Later: Click image of Slide 34, at right, to enlarge. . . .]

Take a look at slide 34 on page 857 which contains the efficacy data for the four schizophrenia studies.

The statistician on the the AC committee voted no on efficacy for schizophrenia because he thought the efficacy for the 5 mg dose in study in 41023 could be due to chance and there were problems such as attrition rates.

Plus for study 41004 [the other 'postive study' (really failed study)] you can see where not only is the baseline for the asenapine group high but the placebo response compared to the three other studies is weak.

I think there are potential issues with both of the two so-called positive studies.

– Salmon

July 30, 2009 5:07 PM. . . .

More “Asenapine Chronicles” — Our Irrepressible Salmon — Protecting All “Pharmed” Salmon, Too(!)

Even if one tried, it would be difficult to make up a stranger story, stranger than the true story: the one that leads to this moment, in the “Further Asenapine Chronicles” — now awaiting word from the FDA’s PDUC meeting — on Saphris/Asenapine, this evening [click thumbnails of pages, at right to enlarge]:

. . . .Take a look beginning at page 963 of the asenapine PDAC background package. The OCP reviewer begins to lay out structure activity relationships and why similar toxicities may be occurring with a wide variety of drugs ( i.e. the 3D structures may allow binding to the same binding sites.)

On page 967 he looks at the antihelminic mectins (Merck and SP animal drugs) and you can see he’s postulating that the effects on bones seen with the animals studies of the various antipsychotics described elsewhere in the reviews may be related to these drugs causing bone chips in the knees of race horses.

Since these drugs are also given to farmed salmon(!) this raises the possibility of these being toxins in the human food chain. [Ed. Note: Click at right -- to enlarge the image of Page 969 -- Agent Orange; Dioxin. . . .]

There’s actually an article related to this in the December 2008 issue of of Drug Safety as well as another article in that issue by Dr. Zornberg the FDA team leader on asenapine that basically outlines all the OCP reviewer’s concerns.

Coincidence(s)?

– Salmon
July 30, 2009 12:36 PM. . . .

Wow. Keep it comin’. . . we still are awaiting word from the Hilton on Colesville Road, in Silver Springs, Maryland.

So — “Merial to Sanofi” — With A “Two-Step Acquisition” Option on Intervet: Sanofi CEO

I guess this makes my “. . .Or, Both?” headline, of two months ago (on June 5, 2009), not such a terrible conjecture afterall, per Reuters, this morning:

. . . .If Sanofi and the new Merck agree to join Merial and Intervet/Schering-Plough (ISP), the value of Merial would be $8 billion and $9.25 billion for ISP. Any such joint venture would be subject to antitrust approval, however.

Sanofi Chief Executive Chris Viehbacher said at a conference call he saw little duplication in the wider alliance as Merial focuses on pet animals and ISP focuses on livestock. Merial’s prime brands include flea and tick product Frontline and dog heartworm prevention Heartgard.

“There is a little bit of overlap, but not very significant,” said Viehbacher. “If we get the opportunity … we could end up with a business that is better balanced between production animals and companion animals,” he added. . . .

UPDATED @ 10 AM EDT — from the Sanofi Webcast call on the transaction:

On the webcast this morning, Sanofi CEO Viehbacher referred to Sanofi’s Intervet call option as a potential “two-step acquisition“ of Intervet. . . . exerciseable within 100 days after of the closing of the Merck Schering-Plough merger. . . .

That is definitely the wholly-unvarnished truth — so here is the relevant slide, from the webcast, with my commentary — as ever, click it to enlarge:

Okay. For this first part of the deal, I’ll once again admire Merck’s negotiating strategy, and execution. Sanofi paid right at the top of the market, for the half of Merial it did not already own — more than three times sales. This is an especially rich price, given the swoon I’ve noted — actual sales decreases in constant currencies (of 7 percent; and 10 percent more, with currency headwinds), at least in Intervet, in this past quarter [Merck hasn't filed its SEC Form 10-Q yet]. Wow. As I said here, I would not be at all surprised to see CEO Clark raise more cash, to pay down post-merger debt, by “partnering off” a chunk, or all, of Intervet. Thus — especially in view of Sanofi’s Slide No. 9, above, we’ll style this installment as “The Bust-up Chronicles“, Chapter 7: “. . . .Step 3: Assess potential [additional] divestments. . . .” — Yikes.

On the other hand, now that I think about it for a minute, the foreign currency exchange rates, at present, should be a tailwind to Sanofi, at least for now — it is a Euro-based, and Euro-reporting entity. Thus, all the dollar sales of Merial ought to be enhanced by the present rates of foreign currency exchange. Fascinating — might that explain part of the high price?

And yet, still we wait, for FDA’s asenapine PDAC meeting news, this evening. . . .

“The Blues” Sue Schering-Plough and Merck, Under federal Racketeering and Wire Fraud Statutes. . . . .

While we wait for the FDA’s PDAC Asenapine Meeting developments to unfold, tomorrow — I thought I’d just mention that last week, “The Blues“, i.e., Blue Cross Blue Shield of Illinois, Blue Cross Blue Shield of Texas, Blue Cross Blue Shield of New Mexico, and Blue Cross Blue Shield of Oklahoma have collectively, via the parent entity of each of them filed a federal suit against Schering-Plough, Merck and the M-SP joint venture entity, alleging various RICO violations, wire-fraud, common law fraud and deceptive trade practices — all related to Vytorin/Zetia, and ENHANCE results disclosure delays. The suit seeks treble damages, as is allowed under civil RICO claims.

While it is a near-certainty that this suit will shortly be transferred from the Eastern District of Texas, into Judge Cavanaugh’s courtroom, and consolidated with the other 150-plus lawsuits pending, on these matters — in the New Jersey US District Courthouse, in Newark — I thought it worth noting. I think this one suit represents the largest group of health care insurance companies yet to file an action against the companies, and the cholesterol joint venture, related to ENHANCE.

The overpayment damages these Blue Cross/Blue Shield entities may be able to establish, in the aggretate, could easily run well-north of a half-billion dollars.

I’ll keep you posted on it.

FDA Reviewer on Asenapine: “Schering-Plough Knew About this Toxicity and Specifically Tried to Prevent FDA Detecting it. . . .”

UPDATED: 07.29.09 @ 7:05 PM EDT – At least one MSM news outlet is showing the beginnings of covering both sides of the Saphris (asenapine) FDA story. Well, it’s a small start — but a welcome one — and in Greece, of all places.

Much more from the cogent keyboard of Salmon, tonight:

. . . .Here are some timelines from the background package on anemia.

Looks like the OCP reviewer got a quick look at multiple cell lines dropping and went to the medical reviewer who sidestepped the clin pharm reviewer and then surreptitiously dismissed it.

The OCP reviewer then took a closer look at the data including plotting and found progression toward neutropenia without adequate monitioring (if standard monitoring for clozapine had been started when the trend was detected then perhaps the patients wouldn’t have died).

The medical review team then tried to dismiss this and Tom Laughren, the psych division director said there’s no need for an advisory committee meeting (wonder why he wouldn’t want to present such data for impartial adjudication).

The citations from the background package follow:

Gwen Zornberg
5/1/2008 07:16:30 PM
MEDICAL OFFICER

CMC review was completed 11 APR 2008 recommending AE. Dr. Levin reported to me today verbally that no major toxicities including cases of aplastic anemia evident in clinical data. The data supporting acute efficacy in SZ and BP appear satisfactory.

Page 481 OCP Briefing May 12, 2008

Page 850 and 851

Slides of decreases in Hematologic Cell Lines on initial lab sheets thought that might be aplastic anemia, however after plotting it appears platelets might not have been dropping fast enough, however microhemorrhages were noted in the brain on autopsy. Consequently this is definitely neutropenia with RBC anemia, with presumptive death due to agranulocytosis and possible aplastic anemia.

Page 51 6/12/08 CDTL Review Gwen Zornberg – Ex-Pfizer Employee

OCP stated in the section on “Comments Previously Provided to the Medical Review Team” on page 42 of their review that on 1 May 2008 “this reviewer went to the medical division to discuss a death in the ongoing studies. Due to workload the medical review team requested followup midweek the following week. On Thursday May 8, 2008 a followup email was sent to the medical review team informing them of a possible case of aplastic anemia.” In the data, Dr. Levin found no evidence of pancytopenia. If this were the case, as CDTL working with Drs. Levin, Laughren and Mathis and Lieutenant Commander Kiedrow, we would have used one of our reserved meeting times to review the action plan.

Page 58 6/12/08

8.0 PSYCHOPHARMACOLOGICAL DRUGS ADVISORY COMMITTEE
(PDAC)

It was decided by Dr. Laughren that there was no need to take this application to the
PDAC in terms of the clinical data, which are consistent with a typical second generation antipsychotic drug.

– Salmon

July 29, 2009 5:21 PM. . . .

~~~~~~~~~~~
[End, Updated Portion]
~~~~~~~~~~~

This is page 885 of 1,067 — this e-mail was sent May 16, 2008, by an FDA staff reviewer. Page 886 indicates at least one of the addressees (his supervisor?) initially deleted this email without reading it.

Click it to enlarge:

May 16, 2008

. . . .changing my recommendation for Asenapine to non-approval. . . .

information in the review indicates that Asenapine causes pulmonary arterial hypertension and cardiac effects. . . .

the sponsor [Schering-Plough] knew about this toxicity and specifically tried to prevent our [FDA's] detecting it. . . .

[At Page 936:]

. . . .In addition, the sponsor’s [Schering-Plough's] conclusions and sponsor’s labeling proposals appear to be intentionally misleading especially with respect to subjects with mild hepatic impairment and this conclusion is supported by analyses in the original OCP NDA review.

The sponsor’s signatory for this study is Larry Alphs, MD from Pfizer. Dr. Alphs was also one of the signatories to the request for the Drug Safety Monitoring Board that is contemporaneous with the SAE in the woman who may have died from agranulocytosis, but was not reported.

The information available leads this reviewer to believe that one or more individuals at Pfizer and Organon as well as others at other companies intentionally mislead the FDA as to important information regarding the safety of asenapine that would have been needed to make a decision regarding this NDA.

Based on this and Chapter 18 of the United States Code this reviewer believes that the Inspector General or another criminal investigative unit must be informed.

As this reviewer was instructed by Dr. Mehta that any such requests must obtain prior approval by FDA management, this request will be included in the recommendations. . . .

[It is important to note that this site has not independently-verified the above; and it has not sought the comment of anyone named in these materials. These documents reflect but one side of the story -- they are public documents, though, afterall.]

As Salmon was the first to flag this one, I’ll let him tell the rest of the story, in the comments, below. Stupifying. While we wait for Salmon’s narrative, I’ll post the suggested pages we are pointed to (in green text below), by Salmon’s review, thus far:

777 777 Other Safety Issues 780 780 Hepatotoxicity Study 85136 (dose and time dependent) 784 784 Study 25509 785 785 IV Study 25506 787 787 Cardiologist’s Report 794 diabetes and heart attack 794 diabetes and heart attack 798 798 Table of selected Cardiac AEs 799 799 Agranulocytosis and Pancytopenia 810 810 Studies not to be reviewed per Management instructions 885 885 e-mail recommending nonapproval due to toxicity and coverups 895-898 895-898 Summary of Major Conclusions 914 Cardiopulmonary Safety Signals Time dependent > 1 year 916 – 918 especially at bottom of 918 Summary of Patients who died. Causes and preponderance with asenapine compared to olanzapine.

923 923 Beginning of section on animal data. Embryofetal studies suggesting effects consistent with neonatal pulmonary arterial hypertension (phen-fen and Vioxx like.) 932 932 neonatal effects of cis-asenapine 933 933 Conclusions regarding neonatal effects. Potential Developmental Risks. 936* 936 Larry Alphs, M.D. Pfizer (Is this possible evidence of criminal activity?) 937 937 Suspicious SAEs from 120 day safety update 945 – the long term studies for negative symptoms 945 Relative Rates of CV and Pulmonary SAEs 6.6 fold higher for asenapine in long term studies 954 basic pharmacology 954 Major Deficiencies and Reassessment of Approvability 965 bifeprunox 965 Bifeprunox causes choreoathetosis (maybe not turned down for being less efficacious as claimed) 972-973 Conclusions re: biological systems hypothesis 984 983 Phen-Fen like effects with Symbyax (Zyprexa and Prozac Combo)

Bloomberg: Merck to Sell Its 50 Percent Stake in Merial To Sanofi; Announcement Pending

Originally, this was a Reuters report, but now Bloomberg is carrying it, as well:

. . . .Sanofi-Aventis SA agreed to buy Merck & Co.’s stake in their Merial animal-health venture to help the French drugmaker weather generic competition to its best-selling drugs, said two people familiar with the situation.

The acquisition is set to be announced this week, said the people, who declined to be identified as an official announcement hasn’t been made. They didn’t disclose the price of the transaction. The stake may be worth about 2 billion euros ($2.8 billion), according to Eric Le Berrigaud, an analyst at Raymond James in Paris. . . .

We shall see. At least to my understanding, it would not preclude a deal for some parts of Intervet — though it would make a large deal, on that front, rather unlikely.