Merck Dinged Twice At FDA: SEC Form 10-Q; Immediately After, Board, And CEO Frazier Hike Dividend 10.5%

As Ed, over at Pharmalot forcefully points out, Whitehouse Station buried the two immaterial non-approvable letters from FDA, on page 54 of its SEC Form 10-Q. That is, of course, a perfectly lawful practice. It is sort of against the grain for a company claiming transparency as a new mantra, though. A press release would have been far more typical — in addition to the page 54 mention in the Form 10-Q.

But on Wall and Broad this morning, all is forgotten, as Merck gaps up — due to a dividend hike of 10.5 percent, per slide 29 of the slide deck (of 229, in total!) just filed with the SEC this morning, and this press report:

. . . .Merck & Co. Inc. said Thursday it will increase it quarterly dividend by 10.5% to 42 cents a share from 38 cents a share. The pharmaceutical company said shareholders of record as of Dec. 15 will be paid the dividend on Jan. 9, 2012. . . .

These two were pretty clearly immaterial programs — still, the common practice is to press release complete response letters from FDA, even on immaterial projects. Why?

Because a company’s trend line, on non-approvals and follow-up data requests, is important. One should hope that this doesn’t foretell a more skeptical eye — at FDA — as to Whitehouse Station’s submissions, more generally.

Oh, and not-entirely-coincidentally, here — Merck has just announced (at the R&D Day) a goal of resubmitting to FDA the legacy Schering-Plough Bridion® (sugammadex) O.R. drug product, dinged by FDA in August of 2008, on a similar complete response/non-approvable letter. . . . that’s a complete re-submission (do-over, with additional data needed) almost four years after Ex-CEO Fred Hassan declared it an expected FDA-approved breakthrough product, and one of his “five stars“.

In any event, we will be able to track how FDA reacts to the resubmission, here — as sugammadex is a material program at Merck (already approved in Japan and the EU) — thus, it will be press-released. And, to be sure, a second bad outcome at FDA after 2012, would be ominous for continued approval in the EU and Japan, in my estimation.

So it goes.


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