Novartis Paid $400,000 to Consulting Company Established by Trump Lawyer

Two names that people may not have expected to see in the same sentence are Stormy Daniels and Novartis AG. But late Tuesday reports began to come in that Swiss-based Novartis had made nearly $400,000 in payments to a shell company used by Michael Cohen, the attorney who made a $130,000 payment to the adult actress for President Donald Trump.

Novartis made four payments of $99,980 to Essential Consultants, a company that has been described as a shell company that was used by Cohen to make the payment to Daniels, the adult entertainment actress that Trump reportedly had an affair with. The Novartis payments were revealed by documents released by Daniels’ lawyer, Michael Avenatti, STAT Newsreported. The Novartis payments were made between October 2017 and January 2018.

The Novartis payments are raising eyebrows as the last payment came just weeks before Novartis Chief Executive Officer Vas Narasimhan met with Trump at the World Economic Forum in Davos, Switzerland. Trump met with Narasimhan and other life science leaders in Europe to encourage more investment in the United States. At the time Narasimhan met with Trump in Davos, he had not yet assumed the reins of Novartis. Narasimhan took over as CEO on Feb. 1.

Novartis has not denied making the payments. In a statement released to Marketwatch the Swiss company said: “In February 2017, Novartis entered into a one-year agreement with Essential Consultants shortly after the election of President Trump,” and the deal was “focused on U.S. health-care policy matters.”

Novartis added that the arrangement with Essential Consultants, which was established by Cohen, “were consistent with the market.” Novartis also stressed in its statement that the payments to Essential Consultants were made prior to Narasimhan having taken over as CEO.

With the payments to Essential Consultants, Novartis, as well as other companies like AT&T, is now being discussed in the same breath as Viktor Vekselberg, a close ally of Russian President Vladimir Putin, who sent payments totaling $500,000 to Essential as well. With monies from Novartis going into the same company, that has perked the interest of Robert Mueller, the special investigator looking into allegations of Russian involvement in the 2016 presidential election. Novartis, Marketwatch reported, acknowledged it has been contacted by Mueller’s team regarding the payments to Cohen’s Essential Consultants.

“Novartis cooperated fully with the special counsel’s office and provided all the information requested. Novartis considers this matter closed as to itself and is not aware of any outstanding questions regarding the agreement,” Novartis said in a statement, according to Marketwatch.

What the payments to Essential Consultants were intended for is not yet known. Novartis has agents who lobby the U.S. government and state governments on its behalf. Citing data from the Center for Responsive Politics, STAT noted that Novartis spent about $8.8 million in federal lobbying expenses last year.

The nearly $400,000 raises questions of pay-to-play scandals Novartis has been embroiled in before. In the U.S. Novartis is facing an investigation over allegations that the company hosted about 80,000 “sham” events in which the government maintains the drug company “wined and dined” doctors to prescribe the company’s cardiovascular drugs.

Overseas the company has faced multiple scandals for alleged kickback schemes. Throughout much of last year, there were allegations that company employees bribed physicians and other public officials in Greece to boost prescriptions and company sales. The investigation by the government of Greece ended in February. In November 2015 Novartis agreed to pay $390 million to settle a civil lawsuit related to the kickback payments to specialty pharmacy companies that distributed the drugs Exjade and Myfortic. Although Novartis paid the amount, they neither admitted nor denied liability. In 2016 Novartis executives in South Korea, including the former chief executive of the Korea division, Haksun Moon, were indicted for allegedly making $2 million in payments to physicians in exchange for them prescribing Novartis medications. According to reports, the monies were paid out to physicians over a five-year period, from 2011 to 2016. The company also agreed to pay $25 million in 2016 to settle charges it violated China’s Foreign Corrupt Practices Act. The company was fined for allegedly bribing healthcare providers in that country to distribute its drugs.

https://bit.ly/2IpKVpM

Mallinckrodt (MNK) Tops Q1 EPS by 22c, Beats on Revenues

Mallinckrodt (NYSE: MNK) reported Q1 EPS of $1.31, $0.22 better than the analyst estimate of $1.09. Revenue for the quarter came in at $572.6 million versus the consensus estimate of $563.9 million.

• GAAP diluted loss per share results from continuing operations was $0.50 compared with a loss per share from continuing operations of $0.43. Adjusted diluted earningsper share were $1.31 versus $1.04.
• Net sales were $572.6 million in the first quarter as compared to $560.0 million in the comparable period, up 2.3%, or 1.7% on a constant-currency basis.
  • SPECIALTY BRANDS SEGMENT RESULTSNet sales for the segment were $572.6 million.
    • H.P. Acthar Gel (repository corticotropin injection) net sales were $243.8 million, a 10.3%2 decrease over $271.8 million, resulting from the residual impact of patient withdrawal issues.
    • INOMAX® (nitric oxide) gas, for inhalation, net sales were $139.8 million, up 8.9%, or 8.8% on a constant-currency basis, over $128.4 million, due to strong utilization and favorable contractual renewals.
    • OFIRMEV® (acetaminophen) injection net sales were $82.0 million compared with $73.4 million, an increase of 11.7%2, benefiting from commercial execution and strong demand.
    • Therakos® immunology platform net sales were $57.4 million compared with $51.2 million, an increase of 12.1%, or 7.7% on a constant-currency basis, resulting from strong commercial execution, particularly in Europe.
    • AMITIZA® (lubiprostone) net sales were $23.0 million for the first quarter, a partial quarter since the acquisition closed in mid-February.
    • BioVectra, the company\’s contract manufacturing business in Canada, generated net sales of $10.5 million.
    • Other net sales were $16.1 million, impacted by the sale of the Intrathecal business in the first quarter of 2017.

https://bit.ly/2K4ghPQ

Mersana Is A Buy On Differentiated Platform For Cancer Indications: Baird

Mersana Therapeutics Inc MRSN 2.77% is closing out its first year as a public company, and in that time it’s secured approval for an investigational new drug and earned endorsements from four Street analysts.

Baird Equity Research expects the biotech will get even better with time.

The Rating

Analyst Michael Ulz initiated coverage on Mersana with an Outperform rating and $30 price target.

The Thesis

Baird is bullish on the potential efficacy and tolerability of Mersana’s dolaflexin platform — a view validated by recent Takeda and Merck KGaA partnerships. (See Ulz’s track record here.)

“Currently approved, traditional antibody drug conjugates are limited by a narrow therapeutic index, and we believe Mersana’s proprietary dolaflexin platform has the potential to overcome this challenge,” Ulz said in the initiation note.

The HER2-targeting XMT-1522 has demonstrated potency superior to that of approved ADCs, and it could see derisking in the June release of preliminary Phase 1 safety data and mid-2019 release of early proof-of-concept efficacy data, the analyst said.

“We believe XMT-1522 has the potential to address an unmet need and meaningfully expand the market opportunity for ADCs beyond HER2+ breast cancer,” Ulz said.

Baird anticipates potential in lung and gastric cancers and models peak U.S. sales of $1.4 billion.

The NaPi2b-targeting XMT-1536 is expected to face limited competition for lung and ovarian cancer indications and generate $800 million in U.S. peak sales, Ulz said. Its Phase 1 study is on pace to yield safety data by the end of the year, with efficacy data in 2019, he said.

“We believe wholly owned XMT-1536 is largely underappreciated and expect success could drive meaningful upside.”

https://bit.ly/2I2rZxM

Myriad Genetics Spikes On Better-Than-Expected Q3 Print

Molecular diagnostics and personalized medicine company Myriad Genetics, Inc. MYGN 15.77% announced its fiscal third-quarter financial results Tuesday.

What Happened

Myriad Genetics reported better-than-expected earnings and raised its full-year 2018 guidance. The company also provided an update on recent business highlights.

The market expected adjusted EPS of 27 cents and Myriad delivered 31 cents per share, a 15-percent increase from the same period in 2017. Third-quarter revenue came in at $193.5 million against a $188.22-million consensus estimate.

Why It’s Important

“Financial results were better than anticipated due to hereditary cancer volumes, strong new product volume growth and the success of the Elevate 2020 program,” Myriad Genetics President and CEO Mark Capone said in a statement.

New products now represent 71 percent of sample volume and 36 percent of Myriad’s revenue, Capone said.

GeneSight, Vectra DA and Polaris testing revenue increased 27 percent, 34 percent and 91 percent, respectively, from the same period in 2017.

GeneSight clinical trial results caught the attention of a top-20 mid-Atlantic payer, which resulted in a commercial coverage decision, according to Myriad Genetics.

What’s Next

The company expects to achieve full-year 2018 revenue in a range between $771 and $773 million. It forecast adjusted EPS between $1.19 and $1.21 per share.

https://bit.ly/2I9Xy56

Trump to deliver speech on drug prices on Friday: White House

U.S. President Donald Trump on Friday will deliver a speech about lowering prescription drug prices, a White House spokesman said on Tuesday.

Trump, who has said that pharmaceutical companies are “getting away with murder” when it comes to charging consumers high prices for drugs, has delayed the speech at least twice. He made the lowering of drug prices a key issue during his 2016 presidential campaign, but his administration and the U.S. Congress have so far failed to deliver meaningful changes.

The administration outlined a series of proposals aimed at lowering drug prices in its budget proposal in February, but some health policy experts have said those policies would not significantly alter the pricing landscape.

It remains unclear what Trump will say in his speech or whether he will announce concrete policies that the administration plans to implement.

https://reut.rs/2ruu8Z7

Mylan says U.S. customers may have trouble getting EpiPens

Mylan NV said on Tuesday that U.S. consumers may have difficulty getting EpiPen prescriptions filled after manufacturing problems constrained supply, but the drugmaker did not say there was a shortage of its emergency allergy treatment.

This was Mylan’s first acknowledgment of possible U.S. supply issues following reports of EpiPen shortages in Canada and Britain last month.

Shares of Mylan, which is due to report quarterly financial results on Wednesday, fell 2 percent to $35.37.

Food allergy groups have been pressing U.S. regulators for answers after more than 400 people in 45 states told advocacy group Food Allergy Research & Education (FARE) that they have had trouble getting prescriptions filled for the potentially lifesaving autoinjectors of the drug epinephrine.

Still, the U.S. Food and Drug Administration said it does not believe there is a shortage.

“Mylan has continued to report adequate supply of EpiPens in the U.S.,” FDA Press Officer Theresa Eisenman said in a statement. “Occasionally pharmacies report local supply issues, however these are usually temporary and involve distribution issues and resolve when the pharmacy is able to reorder from their distributor.”

Last week, the American Society of Health-System Pharmacists (ASHP), which has different criteria for what constitutes a shortage than the FDA, added EpiPen, a lower dose version called EpiPen Jr, and Mylan’s own generic versions of those products to its list of drugs in short supply in the United States.

Mylan, which had declined to comment about possible U.S. EpiPen shortages for nearly a month, on Tuesday said it notified the FDA a few months ago of “intermittent supply constraints” due to delays at its manufacturing partner Pfizer Inc.

Mylan said it is currently receiving “continual” supply from Pfizer unit Meridian Medical Technologies, which produces all EpiPens sold globally at a single plant near St. Louis, Missouri.

“Supply levels may vary across wholesalers and pharmacies,” Mylan spokeswoman Lauren Kashtan said in an email. She said patients having trouble getting an EpiPen should call 800-796-9526 for assistance.

“There’s a problem out there. The FDA may not be fully aware of it because the companies that manufacture and distribute the EpiPen are not saying anything,” FARE Chief Executive Dr. James Baker said. “We’ve got people who literally can’t fill their prescriptions.”

Pfizer said it is currently shipping EpiPens and that they have been increasing over the last few months. It said April shipments exceeded projections, but the company did not disclose those projections.

Meridian Medical has been hit by a series of manufacturing problems. In March 2017, Mylan recalled tens of thousands of devices after complaints that some had failed to activate.

In September, Meridian received a warning letter from the FDA, saying the company failed to thoroughly investigate product failures, including EpiPen products, associated with patient deaths and severe illnesses. It said Meridian failed to take corrective actions until FDA’s inspection.

At the time Mylan said it did not anticipate any impact on EpiPen supply based on the warning letter.

EpiPen autoinjectors deliver a dose of epinephrine in the event of severe allergic reaction, such as to bee stings or exposure to peanuts.

https://reut.rs/2I9rCxD

GOP chairman in talks with Trump officials on more ObamaCare actions

Sen. Lamar Alexander (R-Tenn.) wrote in a recent letter that bipartisan efforts to fix ObamaCare have failed and he is now turning to focus on additional actions the Trump administration can take on its own regarding the health-care law.

Alexander worked for months with Sen. Patty Murray (D-Wash.) on a bipartisan effort to provide funding to bring down ObamaCare premiums, but the effort fell apart in March. Alexander, in a letter to supporters sent Monday and obtained by The Hill, said he does not see any path forward for bipartisanship on the issue.

“Given Democrats’ attitude, I know of nothing that Republicans and Democrats can agree on to stabilize the individual health insurance market,” Alexander wrote.

“So now efforts to help Americans paying skyrocketing premiums will turn to the Trump Administration and the states,” he added.

He said he is talking to Trump administration officials about “other administrative actions they can take to give states more flexibility to help lower health insurance premiums, especially for the 9 million working Americans in the individual market who do not receive a federal subsidy.”

The letter comes as Democrats are ramping up their attacks on Republicans for upcoming ObamaCare premium increases, pointing to actions like the GOP-led repeal of the mandate to have health insurance last December.

But Democrats say they still want to work with Republicans, even if Republicans don’t see a path forward.

“I would hope that especially now, after giving insurers a huge tax cut and as families are starting to see headlines about higher premiums next year due to Republican sabotage, my colleagues on the other side of the aisle would want to work with Democrats to fix these problems,” Murray said in a statement.

“It’s disappointing that instead, they are digging in their heels, doubling down on partisanship, and forcing families to pay the price by allowing insurers to skirt patient protections—but as I’ve said before, Democrats are not walking away from the table even if Republicans are,” she added.

Among other issues, the key dispute in March that broke down bipartisan talks was a dispute over abortion restrictions. Republicans said a deal must include restrictions known as the Hyde Amendment, preventing federal funding from going to abortions, but Democrats rejected the language, saying the restrictions would effectively prevent insurers from offering abortion coverage at all.

There was never a way found around that impasse.

https://bit.ly/2won1WR