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Tuesday, May 22, 2018

Drug users got exploited. Disabled patients got hurt. One woman benefited

Jennifer Warren has spent years recruiting the poor and desperate to her drug rehabilitation program in the mountains outside Asheville, North Carolina.
She promised them counseling and recovery for free. When they arrived, she put them to work 16 hours a day for no pay at adult care homes for the elderly and disabled.
Thrust into the homes with little training or sleep, the rehab participants changed diapers, bathed patients and sometimes dispensed the same prescription drugs that sent them spiraling into addiction in the first place.
For some, the temptation proved too great. They snorted prescription pain pills, swallowed droplets of morphine from used medical syringes and peeled fentanyl pain patches off patients and sucked them to get high.
Then there were the allegations of assault. At least seven participants from Warren’s program, Recovery Connections Community, have been accused of sexual misconduct or assault of patients at the homes. Former participants and workers said no one reported the incidents to social services, as required by law. The accused continued working or were simply transferred to another care home.
“There’s a whole lot in the program that’s covered up,” said Charles Polk, who completed Warren’s program in 2017 for alcohol addiction. “The only thing she thinks about is the money.”
Amid a nationwide opioid epidemic, treatment remains out of grasp for most people struggling with addiction. Those with wealth and insurance often are able to pay thousands of dollars for private long-term programs. But the less fortunate have become easy prey for rehabs with a tantalizing promise: freedom from addiction for free.
To pay for their stay, participants must work full-time jobs and surrender their pay. An ongoing investigation by Reveal from The Center for Investigative Reporting has found that many programs exploit this arrangement, providing few actual services while turning participants into indentured servants.
In North Carolina, Warren has turned her nonprofit rehabilitation program into her personal empire. She worked the people in her program to exhaustion, while regularly vacationing in places such as Paris, Greece and New Orleans for Mardi Gras, according to former participants and state records. She diverted nonprofit donations meant for the program – appointments at beauty salons and concert tickets – to herself and used participants’ food stamps to stock her own kitchen.
In addition to working at adult care homes, the 40 or so men and women in Warren’s program have baby-sat her children, cared for hundreds of her exotic pets and cleaned her house.
“It’s like slavery,” said Denise Cool, who was addicted to crack cocaine when a judge ordered her to the rehab in 2011, “like we were on the plantation.”
Even after being stripped of her counseling license in 2012, Warren continued to operate her program with impunity. Authorities from four separate state agencies neglected complaints, botched investigations and stood by for years as Warren flouted rules they were supposed to enforce.
It was not until Reveal questioned state officials about their inaction that they began taking steps to curb the abuses.
Warren, who is 51 years old, declined to answer questions from Reveal.
“I have no reason to believe that you will report anything positive about our program or are interested in the people’s success stories, of which there are many,” Warren wrote in an email.
When confronted by a former participant in a private Facebook message in February, Warren responded, “It’s so easy to buy into the negativity.”
“Because of the structure of this kind of program, many people leave with resentments and are disgruntled,” she wrote in the message, obtained by Reveal. “I have spent the majority of my adult life trying to give back.”
Founded in 2011, Recovery Connections Community has grown to include three locations, run from rural homes near Asheville and Raleigh.
Hundreds of people have sought help from Recovery Connections over the years. Many are sent there by the courts as an alternative to prison. Others come directly from hospitals, mental health facilities and state-funded detox centers.
Whitney Richardson was addicted to heroin and facing prison time for burglary when a North Carolina judge ordered her to complete the two-year program in 2014 as part of a plea agreement.
Judges and probation officers weren’t supposed to use unlicensed rehabs such as Recovery Connections for treatment. And the rehab specifically had been on probation officials’ radar. In internal emails, one official said it was “a bad agency and is run by dangerous people.”
Richardson fled four months later. She was so scarred by the experience that she vowed never to attend rehab again. When she later relapsed, she said she got herself clean by buying Suboxone on the street.
“It’s not right to take advantage and subject people to abuse like that when they’re trying to better their lives,” Richardson said. “No one should ever go to that place.”
***
Jennifer Warren – known then as Jennifer Hollowell – was working on a doctorate at the University of Alabama when she got hooked on crack cocaine.
She dropped out of her clinical psychology program and at 27 years old checked herself into a residential rehab program in Winston-Salem that required that she and other participants work for free.
Warren flourished in the rehab, becoming the director’s assistant once she graduated. “I wanted to be like her, and she became my role model,” she would later recall.
But in 2002, after the director left amid allegations that she had stolen money and – former employees said – dated a client, Warren and several other clients decided to start a program of their own. They called it Recovery Ventures.
With her flowing blond hair and colorful dresses, Warren projected the image of a free spirit. She described clients as family and would invite them to socialize in her home, which was adorned with fairy figurines and painted bright purple inside.
“She could just look at you and just read straight through you, I swear to God,” said former client Lakindra Edwards. “Like, wow. She don’t even know me, but she told me everything about me.”
But Warren soon began to cross ethical lines. She instructed her clients to clean her home and care for her growing collection of llamas, miniature ponies and exotic birds. Then she, too, began a romantic relationship in 2008 with a client she was counseling.
Phillip Warren would spend the night at her house, and they would kiss around other clients. Dating a participant violated a host of state ethics rules, but when friends and colleagues tried to intervene, Jennifer Warren crumpled into tears.
“What am I supposed to do?” she cried during one intervention. “I love him.”
Undeterred, she moved up Phillip Warren’s graduation date and moved him into her house. The two married years later.
By 2011, multiple complaints about Jennifer Warren had reached the North Carolina professional licensing board. In the official document later filed against her, the board chastised her for her ethical breaches and said she wasn’t cut out for the rehab business. In fact, the more time patients spent around her, the licensing board wrote, the more likely they were to relapse.
Warren “used and exploited her clients for her personal benefit” and “failed to maintain appropriate boundaries between herself and her clients,” the board wrote. The state eventually revoked her counseling license.
The rehab fired her in 2011. A few days later, Warren struck out on her own, founding Recovery Connections. To pay for her program, she turned to a handful of employers always in need of workers: adult care homes.
***
Rachel Thomas was working one night in 2016 at Candler Living Center, a home near Asheville for mentally ill and disabled adults, when a worker from Jennifer Warren’s program came sprinting down the hall.
An elderly resident was gasping for air and repeatedly vomiting. Thomas discovered that the rehab worker – who was not trained to dispense prescription drugs – had given the patient the wrong medication.
“He actually about killed one of the residents,” said Thomas, who no longer works at Candler. “He had no idea what was going on.”
Participants from Recovery Connections worked in at least nine homes over the years. Some worked as janitors and cooks, but the majority worked as personal care aides.
In North Carolina, personal care aides must receive at least 80 hours of training, during which they learn how to safely feed, lift and bathe patients. But many rehab workers interviewed by Reveal said they never received the training required by law. Some Recovery Connections participants also dispensed medication with no training, even though state law requires a special certification.
“I would die if someone like that was taking care of my mom,” said Renee Thayer, a former program participant who was assigned to work as a personal care aide in 2012.
The rehab workers cost the facilities less than regular employees. Some homes paid Recovery Connections the minimum wage – $7.25 an hour – for each worker and did not pay workers’ compensation, insurance or overtime, according to former managers and internal records obtained by Reveal.
Disasters happened all the time.
One employee at Hominy Valley Retirement Center would unlock the medicine cart and place pain pills into white paper cups. Then, rather than take the prescription drugs to the residents herself, she would order the rehab workers to pass out the pills while she slept on a recliner, said Charles Polk, a former participant who also dispensed the drugs.
“Lots of people relapsed and got high that way,” he said. “They stole the meds. They would just take it.”
Fentanyl pain patches, which slowly release an opioid up to 50 times more powerful than heroin, were in particularly high demand. When it was time to shower patients in chronic pain, some rehab workers would peel off the patches and keep them for themselves.
“They would take their patches off them and suck the fentanyl out,” said Ian Hays, a former manager at Recovery Connections. “One girl told me, ‘I got high every day in the fucking program.’ ”
At least seven rehab workers have been accused of sexual assault or misconduct with patients at the homes. Former employees said none of the allegations were reported to authorities, as required by law. Reveal could find no mention of any of the alleged assaults in thousands of pages of police reports, Adult Protective Services records and county and state inspections. The accused continued working or simply were transferred to other facilities.
One male rehab worker was accused of sexually assaulting a disabled elderly woman in the shower at Candler in 2016. After the incident, the woman refused to let the rehab worker shower her.
“I don’t want him to do it!” she cried while pointing at the worker, recalled Polk, who witnessed the interaction.
In response, Candler barred male rehab workers from bathing female residents, according to seven current and former employees and participants. As of mid-May, the man still was working at the home.
Chris Damiani, chief executive officer of the company that owns Candler and Hominy Valley, said his agency had never had problems with rehab workers. He said that none of the alleged assaults were reported to management and that his company was investigating the issues raised by Reveal’s reporting.
“We do not take any report of abuse, neglect, assault, theft or drug use lightly,” Damiani said.
In 2014, another rehab worker was accused of sexually assaulting a disabled woman in her bedroom at Cedarbrook Residential Center, the woman and four former employees said.
She said she fought him off and immediately reported the incident, but the administrator “plumb out ignored me.”
“I hated the place,” said the woman, who left the facility in 2016. “I felt like I was literally in hell.”
Frederic Leonard, Cedarbrook’s owner, said the facility never filed a formal report with the county Department of Social Services because the facility conducted its own investigation and concluded that an assault had not occurred. He declined to provide more details about the internal investigation.
“We have safeguards in place to prevent misconduct of this type,” he said. “It is difficult when mentally ill adults, who are suffering from severe mental illness, are also poor historians of fact.”
The accused worker continued to work at the facility for several days. His presence terrified the patient who had accused him, she and a former employee said.
At Recovery Connections, Warren dealt with the alleged assault in her weekly therapy group. Rather than call police, she placed the man in the middle of a circle while his peers screamed at him and called him a sexual predator, according to two former participants.
“They all went off on him,” said Blake Loving, who attended the therapy session. “He just sat there.”
After the session, Warren sent the accused worker to another care home.
“It was really sick,” said Whitney Richardson, who also attended. “They just kind of wanted to brush it under the rug.”
***
Jennifer Warren collects a salary of about $65,000 a year, according to tax filings, but that money alone never seemed to be enough. For years, she has used her rehab’s nonprofit status as a vehicle for personal enrichment.
Every day, a group of Warren’s clients said they were expected to make hundreds of phone calls to businesses and major corporations asking them to donate goods and services, according to state records, former participants and staff. They asked Tommy Hilfiger for designer clothes, Hilton for hotel stays and The Cheesecake Factory for free meals. Warren used the nonprofit to score free concert tickets to see her favorite bands.

JENNIFER WARREN’S TRIPS

The donations were tax deductible and were supposed to go to program participants. But Warren got first pick of everything.
“Jennifer and them got all the good stuff,” said Jessica Stanley, who attended the rehab in 2016 and called businesses on the program’s behalf. “It was a little hustle-scam.”
Participants routinely called nail and hair salons to book free appointments. They said the salon visits would help rehab participants “build their self-esteem.” But Warren was the one who showed up.
“She was taking advantage of all the donated manicures and pedicures,” said Ian Hays, the former Recovery Connections manager. “She used to go to one place in the mall all the time.”
During one appointment, a hairstylist asked Warren how long she had been in the program, according to a former staff member who witnessed the interaction and records from a state investigation. When Warren admitted she was the founder, the stylist was livid.
Warren also ordered program participants to sign up for food stamps, which former participants said she used to stock her own kitchen.
In 2015, Warren pleaded guilty to financial assistance fraud for lying about her income and illegally collecting thousands of dollars’ worth of food stamps. She was sentenced to 45 days of probation. But participants say she continued to use their benefits to fill her personal pantry.
While Warren got steaks, participants said they often were left with little more than Hamburger Helper, crackers and tubs of peanut butter. At times, they complained there was no food at all.
“Sometimes we ate ramen noodles at night,” recalled Roshawnda McIllwain, a former participant who left the program last year. “Some days, I went hungry.”
But there was always money for animals.
Warren spent more than $32,000 in program funds on animal expenses, according to the nonprofit’s tax filings from 2014 and 2015.
She bought goats and sheep at animal auctions around the country. She had two arctic foxes, large ostrich-like birds called rheas and sugar gliders – small marsupials that resemble flying squirrels. Warren claimed they were for the rehab’s animal therapy program.
“Some people collect stamps. Some people collect shoes. Jennifer’s got a thing for collecting animals,” said Hays, the former manager.
Warren keeps dozens of them at her home in Black Mountain, participants said. Her bedroom is stacked with cages of toucans and other tropical birds.
At one of Recovery Connections’ outposts near Raleigh, an entire barn is crammed with animals, according to participants. Guinea pigs tumble over each other in crates. Rats multiply by the dozens. Inside a dimly lit garage, monkeys languish in cramped cages. Several participants recalled burying dead llamas in the program’s yard.
Even though the program had horses for its “equine therapy program,” participants said they weren’t allowed to ride them.
Julia Harris said she was struck with one thought when she checked herself into the program in 2017.
“I have landed in an insane asylum,” she remembers thinking. “I’m in a filthy house with animals and animal fur. And this is supposed to be a rehab?”
***
For some people, the worst part of Jennifer Warren’s program was not the work at the care homes or the personal chores – it was the therapy groups.
The sessions usually occurred at Warren’s house. The group sat in a large circle of folding chairs and loveseats while each person took a turn in “the hot seat” in the middle. The other patients then cursed, screamed and hurled insults at the person for up to 45 minutes at a time.
Spoiled brat.
Stupid bitch.
Motherfucking whore.
Participation was mandatory. People frequently broke down crying. Some participants said Warren and others seemed to relish it.
“You see certain people planning this shit all week, looking for stuff to use against you,” said Scott Hucks, who left the program in 2016. “It’s like a joke, it’s like a game. Just entertainment.”
Sometimes, Warren would black out the windows and keep a select group awake for days on end as they recited their life stories. If anyone started to doze off, participants said they were sprayed with water. Some people said they began to hallucinate.
“It’s like CIA torture,” said Heather Fox, who left the program last year.
Warren said the groups were meant to teach participants conflict resolution skills. They learned how to confront the harshest realities of their lives and move past it, she explained in a deposition for a 2010 lawsuit brought by a client who found her first rehab, Recovery Ventures, abusive.
“I wouldn’t say it’s verbal abuse,” she said. “It’s an incredible healing opportunity.”
“Is there screaming involved?” the lawyer asked her.
“Sometimes,” Warren replied.
Warren’s therapeutic tactics are rooted in a drug rehab program called Synanon, which was founded in 1958. Studies have shown that the group sessions, which involve screaming and insults, can be catastrophic for people with poor mental health and low self-esteem. Law enforcement officials later denounced the program as a cult.
Most participants interviewed by Reveal said they found Warren’s therapy sessions humiliating. Those who complained were punished with more work. They were forced to scrub floors with a toothbrush or cut grass with a pair of scissors.
“They wanted us to be so broken down emotionally that we would listen to whatever they said,” said Heather Teatzner-Brown, who attended the rehab for alcohol addiction and fled in the middle of the night in 2016. “Just take it and not have an opinion or your own mind.”
Some former participants interviewed by Reveal spoke positively about the program, saying Warren and her rehab were there for them when no one else was.
“If you’re at a crossroads in your life and you’ve burned up every bridge out there, it’s the best way,” said Rick Taylor, who graduated in 2014 and credits it with helping him overcome a drug addiction. “All I had to do was just surrender and do what I was told.”
Others left the program worse off than when they arrived. Some turned to drugs to cope. Many participants told Reveal that they fled into the mountains, sometimes in the rain or snow or in the middle of the night.
“I was physically sober, but my mind was way worse than it ever was before when I was using,” recalled Tommy Farwick, who attended the program in 2012. “I had zero desire to live anymore. I just wanted to die.”
Through all this, Warren demanded that people work around the clock because the more they worked, the more money they brought in for the rehab.
“Y’all need to make some money,” Hays recalled her saying.
***
North Carolina regulators were well aware of the abuse at Recovery Connections.
Soon after Jennifer Warren opened in 2011, the Department of Health and Human Services received a complaint alleging that she was operating an unlicensed rehab program, in violation of state law. In North Carolina, any facility offering 24-hour treatment is required to be licensed.
When investigator Joy Allison arrived at Recovery Connections to check it out, Warren greeted her warmly. Even though Warren was advertising her program as “substance abuse treatment” online and in brochures, she told Allison a different story: She was running halfway houses, not a treatment program.
Allison accepted that explanation and then offered Warren a tip: If she said she was operating a “12-step, self-help” program, Warren could avoid state oversight completely. Warren used the new language on promotional materials but changed little else.
Seven years later, that decision continues to allow Warren to operate her rehab free of government oversight. But the complaints haven’t stopped: forced labor, self-dealing and abuse.
Participants told the department that Warren was forcing them to work “16 hours/day, 7 days/week” and keeping all their pay. Another man said the program was so abusive that he “ ‘escaped’ by jumping off the third floor balcony.”
Each time, Allison gave the same answer. “I have continued to receive calls/complaints about this program but, have explained that they are exempt from licensure,” she wrote in an internal email in 2016.
After questions from Reveal, the state health department finally began to crack down.
On Wednesday, it banned Recovery Connections from sending participants to work as caregivers at adult care homes, potentially cutting off the program’s main source of funding. The department said Recovery Connections must be licensed as a staffing agency to continue dispatching workers.
But the department said the program still is not required to be licensed as a drug rehab center.
Recovery Connections has escaped accountability from other state agencies as well.
Since 2011, the North Carolina secretary of state’s office has received complaints that Warren has pocketed donations meant for the program. Its investigators conducted a full investigation, speaking with business owners who had been defrauded by Warren and reviewing internal call logs and financial documents.
But the agency ultimately dropped the case. Its reason: Participants never sent officials signed and notarized affidavits.
Recovery Connections got to keep its charitable solicitation license and nonprofit status, which allows Warren to continue to collect tax-deductible donations from businesses and the public.
In exasperated emails to authorities, the directors of several licensed rehab centers expressed their dismay that Warren kept dodging accountability.
“This individual believes that the rules do not apply to her, no matter how many warnings or disciplinary actions are taken,” David Martin, who had co-founded Warren’s first rehab with her, wrote to the attorney general’s office in a July 2012 email.
Martin ticked off her latest transgression. Warren “spent the entire month of June at the beach” and used the rehab’s food stamps for herself, he wrote. Was this something the attorney general would pursue?
An investigator promised to look into it, but nothing came of it.
The North Carolina Department of Public Safety had its turn to crack down around the same time. Probation officers began hearing complaints in 2012 from people who had been ordered by the court to go to Recovery Connections.
In internal emails, probation officials agreed that the program was unsuitable for offenders and griped about Warren’s sordid history. But they continued to allow probationers to attend.
“We are not responsible for policing the agencies available to the offenders,” one administrator wrote in an internal email.
Following questions from Reveal, probation officials finally took action against the rehab.
“We have determined that the Recovery Connections locations do not align with our mission, vision, or goals,” the department wrote in a May 8 memo. Going forward, no probationer will be allowed there.
But hospitals and short-term treatment centers continue to send people to the program. So do social workers at state-funded detox and psychiatric facilities. Recovery Connections is always willing to accept those who have nowhere else to go.
Jennifer Warren is waiting for them.

Cancer research association tries new funding model

The American Association for Cancer Research is experimenting with a novel research funding mechanism, similar to one pioneered by the Cystic Fibrosis Foundation but with money from Wall Street.
At last month’s American Association for Cancer Research annual meeting in Chicago, AACR announced at a special press conference that it would receive an initial gift of $1.2 million from the UBS Oncology Impact Fund (OIF) for an AACR-MPM Transformative Cancer Research Grants Program to support “innovative research that will accelerate breakthroughs against cancer.”
A matching $1.2 million will also be donated to UBS’s Optimus Foundation supporting emerging market access to cancer care. Additional funds will flow from OIF to the two groups as time goes on and the fund continues to earn profits.
OIF is one of many so-called social impact funds established both by big investment firms (Goldman Sachs and others have established their own) as well as by nonprofit foundations and advocacy groups. Like other managed investment funds, their capital comes from private investors and a fund manager invests the money into different ventures expected to turn profits. The difference is that social impact funds seek to “do good” in the community while earning a competitive return for their investors.
But while social impact funding is not new, dedicating its profits specifically to cancer research is innovative, and the great success achieved by the pioneering efforts of the Cystic Fibrosis Foundation a few years ago demonstrated how a charity could benefit from targeted venture philanthropy by providing funding to biotech and pharmaceutical companies to develop drugs for rare diseases.
In that case, CFF used $75 million in donations to sponsor research leading to the development of ivacaftor (Kalydeco). The foundation retained intellectual property rights to that research; the pharmaceutical company that brought the drug to market pays a substantial royalty to CFF.
Another initiative somewhat similar to the CFF’s and AACR’s was launched last week, with the American Heart Association and co-investors Philips and the University of Pittsburgh Medical Center announcing Cardeation Capital, a $30-million collaborative effort to enhance innovation in heart disease and stroke care.
OIF is dedicating 20% of its capital to public equity investments and the rest to private companies involved in antibody technologies, cancer vaccines, checkpoint inhibitors, immune stimulators, targeted therapies, targeted radio-therapeutics, oncolytic viruses, and cell therapies.
A portion of future profits will be distributed equally to AACR and the Optimus Foundation, and both will also benefit from a portion of future royalties that might be generated by some of the drugs developed by fund-portfolio companies. Funding to both organizations will continue throughout the life of the fund, according to UBS.
The idea of creating a dedicated social impact fund for cancer research was the result of a brainstorming session in 2015 between principals from UBS — which provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland — and MPM Capital — a Massachusetts-based venture firm involved in founding and investing in early stage life-sciences companies seeking to cure major diseases by translating scientific innovations into positive clinical outcomes — which is managing the $471-million fund.
MPM managing director Christiana Bardon, MD, MBA, said neither MPM nor UBS will have rights to any intellectual property or future royalties from product sales related to the research funded under the initiatives. The funding “is a true gift to them,” she said.
“UBS has a series of long-term sustainable investment themes including oncology, and the themes are driven by three interests: aging, population growth, and urbanization,” said Andrew Lee, managing director and head of sustainable and impact investing with UBS’s Wealth Management Chief Investment Office (in interviews monitored by a UBS media representative). “We raised the capital from our clients for the vehicle and are responsible for creating and structuring the fund itself.”
He said that MPM was chosen as UBS’s service partner to deploy capital and is responsible for selecting investments, portfolio construction, and ongoing management of companies in the portfolio.
Said Bardon, “UBS had this exciting new class of social impact funds that could generate financial returns but also do good for society and emphasize sustainability, and MPM was thinking about building an investment fund around cancer research that could provide sustainability in health care research and give back to the research world, as well as helping the next generation of researchers.”
She added that AACR’s involvement in preclinical and translational research made it a natural partner, and that funding the Optimus Foundation would “give back to the patient population by enabling cancer drug access in the third world.”
AACR and MPM are establishing a seven-member scientific advisory board to select grant recipients, with representatives of both entities, although most will have strong ties to AACR.
So far MPM has named as Nobel laureate H. Robert Horvitz, PhD, as board chair. Horvitz holds an endowed chair at Massachusetts Institute of Technology. Other members include David P. Ryan, MD, chair hematology/oncology at Massachusetts General Hospital, and William C. Hahn, MD, PhD, chief research strategy officer and chief of molecular and cellular oncology at Dana-Farber Cancer Institute.
AACR CEO Margaret Foti, PhD, told MedPage Today during a telephone interview (which included an AACR media representative) that the association has yet to appoint its representatives, but she expects the committee to be functional by the summer with requests for proposals perhaps going out in the fall.
“AACR did not go after this money; MPM came to us, which was thrilling,” she said.
“The decision was made internally at MPM that we were the most appropriate organization since AACR is the leading organization for basic cancer research related to oncology and with our translational and clinical research we are the only major organization that spans the spectrum from basic science to the clinic.”
She said that George Q. Daley, MD, PhD, who is currently dean of Harvard Medical School, approached AACR on behalf of MPM in 2015 about becoming the sole scientific recipient of the funds.
“We have no idea of the ultimate size of the funds that will be coming, but it has enormous potential to provide substantial funds for transformative research that will have an impact on future clinical practice,” she said, adding that grants will be made to both early career and mid-career scientists.
An official at the Association of Fundraising Professionals said the AACR grant was part of a growing trend.
“There seems to be so much more blurring of lines, but not in a bad way, between business and philanthropy as organizations look for other ways to fund charitable goals through means other than just direct gifts,” said Michael Nilsen, the group’s vice president of public affairs. “This has been going on for a couple of decades but seems to be accelerating faster and faster.”
He cautioned, however, that from a public perspective there could be a risk if something goes wrong and the charity is linked to the fund.
“It could be devastating if it does happen, charities don’t have profits, but work on trust and perception,” he said, noting the damage that can be done in a world of 24/7 social media.
Rob King, ACS senior vice president for Enterprise Planning and Business Integration, told MedPage Today by phone that he did not know if the AACR/UBS/MPM model was the first of its kind social impact fund dealing with cancer, but there were other venture philanthropy models that also used collaborative efforts to drive faster patient outcomes.
“ACS is now getting involved in the venture philanthropy cancer space and moving toward our own version of the venture philanthropy platform with Bright Edge Ventures,” he said.
The program is now in the process of being developed, and will be a philanthropic activity, not a true venture fund that raises dollars through investors trying to get a return, he explained.
“It is a way to utilize our ACS research network and help grow our research.”
King added that ACS would consider getting involved in models similar to the UBS Cancer Impact Fund if it could help the society’s mission to drive patient outcomes, but would first want to know who the partners were and how they were engaging with investors, and what were the mutual arrangements to make sure it was “comfortable with all the pieces of the pie.”

Ex-Valeant, Philidor executives convicted of kickback scheme

A former Valeant Pharmaceuticals International Inc (VRX.TO) executive and the former chief of mail order pharmacy Philidor Rx Services were found guilty on Tuesday of defrauding Valeant through a multimillion-dollar kickback scheme.
The verdict, handed up by a jury in Manhattan federal court, comes on the heels of Valeant’s announcement that it will change its name to Bausch Health Companies Inc as it seeks to distance itself from a series of scandals under its previous management. Gary Tanner, a former senior director at Valeant, and Andrew Davenport, the former head of the now-defunct Philidor, were convicted of fraud and conspiracy.
Lawyers for the two defendants were not immediately available for comment.
The two-week trial of Tanner and Davenport put a spotlight on the relationship between Valeant and Philidor, which had drawn concern from investors and regulators.

Prosecutors claimed that Valeant was the victim of a scheme in which Tanner passed inside information to Davenport to bolster Philidor’s business as Valeant’s primary pharmacy partner.
In exchange for Tanner’s help, prosecutors said, Davenport paid Tanner nearly $10 million when Valeant exercised an option to buy Philidor, taking $40 million for himself.
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At times using the fake name “Brian Wilson,” Tanner sabotaged potential deals between Valeant and other pharmacies, according to prosecutors.
The defendants’ lawyers argued that there was nothing illegal about the dealings between the two men, or between Valeant and Philidor. They said Tanner was hired by Valeant to help Philidor grow and that the companies’ close relationship made Valeant hundreds of millions of dollars.
Valeant’s stock fell sharply in October 2015 after it disclosed it had been subpoenaed by U.S. prosecutors over various business practices. Later that month, a short-selling firm published a report claiming Valeant hid its ties to Philidor, and used the pharmacy to artificially inflate sales to drive up prices.
The company has denied any wrongdoing in connection with Philidor.

Allergan acquires NMDA depression drug from Aptinyx collaboration

Allergan has acquired an investigational NMDA receptor modulator discovered by Aptinyx, exercising its option under an ongoing collaboration, and plans to pair it with its rapastinel depression therapy currently under development.
The oral, small-molecule drug AGN-241751 had previously been selected for further clinical development by Allergan under the joint NMDA research project.
Over the past two years, Allergan has negotiated a series of deals to extend its reach in R&D—including acquiring Repros Therapeutics and its phase 3-ready uterine fibroid drug late last year. Some have paid off, but other moves have shown little success, with Allergan recently writing offthe second of two dermatology candidates acquired in a 2016 takeover of Vitae Pharmaceuticals.
Aptinyx and its work in neurologic disorders were spun out from its predecessor, Naurex, after the latter was acquired by Allergan for $560 million in 2015. Allergan retained development and commercialization rights to a set number of Aptinyx’s candidates in a limited range of indications in return for funding a portion of the discovery collaboration.

Through the deal, Allergan also acquired rapastinel, formerly known as GLYX-13, an intravenous NMDA receptor-modulating tetrapeptide currently being evaluated in phase 3 studies for major depressive disorder. Rapastinel would go on to receive a breakthrough therapy designation from the FDA.
“Through our productive research collaboration with Aptinyx and parallel development of rapastinel, we have gained important insights into NMDA receptor modulation as a potential therapeutic approach for depression,” C. David Nicholson, chief R&D officer at Allergan, said in a statement. Data from rapastinel are expected next year.
“We plan to advance AGN-241751 for the treatment of MDD and believe its pharmacological profile will enable it to become an oral complement to rapastinel, further bolstering our pipeline of therapeutics addressing areas of significant unmet medical need,” Nicholson added.

None of the molecules Aptinyx has already advanced into clinical development—including NMDA compounds granted FDA Fast Track status in chronic pain and post-traumatic stress disorder—are subject to any Allergan option right, the company said in the statement.
NMDA-acting drugs have been seen as the next major class of drugs for treating depression, with Johnson & Johnson prepping its own filing in the field. J&J has presented a study showing its esketamine outperforming placebo in combination with oral antidepressants, but a second study was unable to achieve statistical significance in older patients
In addition, a 2017 Informa Pharma Intelligence report suggested that NMDA drugs could increase U.S. antidepressant sales from around $4.6 billion a year in 2016 to more than $7 billion in 2024.

Spark hemophilia B gene therapy clears test on route to Pfizer-sponsored phase 3

Spark Therapeutics has presented data on hemophilia B patients who received a version of its gene therapy manufactured using a modified process. Early data on the patients suggest the new batch of therapies is at least as effective as its predecessor, clearing away a potential pitfall on Spark’s path to market.
Philadelphia-based Spark switched to the new vector manufacturing process last year in anticipation of producing the gene therapy, SPK-9001, at commercial scale. The mid-development switch created a risk that the gene therapy Spark and partner Pfizer moved into phase 3 would be less effective than the one that shone in phase 1/2. Data shared this week allay that fear.
Presenting at the World Federation of Hemophilia World Congress, Spark provided data on the first three patients to receive the gene therapy made under the new process. Each of these patients had 12 weeks of follow up, the length of time needed for factor IX activity levels to reach steady state.
Factor IX activity levels in the three patients ranged from 38.1% to 54.5%. Going into the trial, the patients had factor IX activity levels of less than 2%. The readout links the latest gene therapy to big increases in factor IX activity that are in line with those seen in patients treated with product made under the old process. Factor IX levels in these 10 patients range from 14.3% to 76.8%.
The factor IX activity of all 13 patients with 12 weeks of follow up is well above the levels needed to improve outcomes. Across all 15 patients—two of whom lack 12 weeks of follow up—the rate of annualized bleeding is down 98%. The annualized factor IX infusion rate is down 99%. People who used to suffer multiple bleeds a year and take repeated infusions are largely free of these burdens.
Spark is now working with Pfizer to generate the phase 3 data needed to validate the potential of the gene therapy and bring it to market. The next steps are for Spark to transfer the clinical program to Pfizer—something it expects to happen this summer—and provide it with study drug for the phase 3.
If all goes to plan, Pfizer will ace the phase 3 and the phase 1/2 will continue to show the long-term efficacy of the one-shot treatment. That will give Pfizer and Spark a shot at disrupting the existing hemophilia B market while holding off rival gene therapies from companies including uniQure.

Centene took Iowa Medicaid contract from Unitedhealth, Anthem

Piper Jaffray analyst Sarah James says Centene (CNC) yesterday received an intent to award in Iowa, a $1.5B, 600,000 member Medicaid contract currently held by UnitedHealth (UNH) and Anthem (ANTM). While Iowa insurers have faced issues with rates in the past, the state has taken steps to return the contract to profitability, James tells investors in a research note. She estimates Centene could add up to 100,000 members in Iowa, generating $250M in revenue and 2c of earnings per share, with the contract set to begin July 1, 2019. The analyst keeps an Overweight rating on the shares with a $134 price target.

Pfizer begins Phase 1/2 study to evaluate RSV vaccine


Pfizer announced that it has started a Phase 1/2 trial of its respiratory syncytial virus, or RSV, vaccine candidate in healthy adult volunteers. RSV is a common respiratory virus that affects the lungs and airways, with significant impact on young children and older adults. The highest risk of severe outcome from RSV occurs in the first months of life. Currently available prophylactic treatments for RSV are limited for use in high risk young children and infants, including very premature infants. If successful, Pfizer’s investigational RSV vaccine could help protect young infants through the immunity created following vaccination of pregnant women. The maternal vaccine candidate is intended to raise RSV neutralizing antibody levels in pregnant women who then pass these protective antibodies to their unborn child and provide immunity during the early months of an infant’s life. Pfizer is also advancing a maternal vaccine candidate against Group B streptococcus, or GBS, currently in Phase 1/2 trials. For older adults, RSV is the second leading cause of moderate to severe respiratory illness, following influenza. The risk of serious infection increases with age and for those with chronic heart or lung disease or a weakened immune system. There is no specific treatment for RSV and currently no licensed vaccine to prevent the disease. The trial is designed as a Phase 1/2 randomized, placebo-controlled, observer-blind, dose-ranging study with two age groups enrolled in parallel to support both the maternal and older adult indications. One age group includes males and females 18-49 years of age; the other includes males and females 50-85 years of age. The study’s primary endpoints are safety and tolerability, and its secondary endpoint is immunogenicity