Pharmas Market with Mike Huckman


  Thursday, 4 Mar 2010 | 4:06 PM ET

Battling Bets On Byetta

Posted By: Mike Huckman

I guess this is what makes a market.

This morning, BMO Capital Markets biotech analyst Jason Zhang downgraded shares of Amylin Pharmaceuticals to the equivalent of "Sell."

On or before March 12th, the FDA is scheduled to decide whether to approve the first once-a-week drug for diabetes. It's a reformulated version of twice-a-day Byetta from AMLN and Lilly . Alkermes provides the technology that makes the Byetta last longer. But Zhang thinks the FDA is going to punt. He tells clients in the research note that he believes the agency will want more data about possible side effects, which will push approval of the drug until mid or late 2011. His call moved the stock, which Zhang now targets as being headed for $12, down from his previous $14.

But on the flip side, biotech analyst Thomas Wei at Jefferies put out a note this morning saying, "We acknowledge a higher chance of approval of (once-a-week Byetta) on March 12 than we had previously factored....We see the risk-reward on AMLN as favorable." He has a $27 target on the shares. Wei's call is based on his conversation with a former senior FDA official. "We were surprised by his assessment that our previous thesis on the need for AMLN to add more thyroid data is unlikely to cause a delay in approval." The thyroid data he's referring to is a problem that was seen only in lab rodents given a similar drug from Novo Nordisk .

Last week, the FDA put off its scheduled decision deadline date by one week because of the recent snowstorms that shut down its offices for several days.

The two conflicting analyst calls today are emblematic of an intensifying debate on Wall Street about what the FDA is going to do here. I've covered the beat long enough to know you can't predict such things.

Jefferies makes a market in AMLN and ALKS. BMO makes a market in AMLN.

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman

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  Wednesday, 3 Mar 2010 | 2:12 PM ET

The Statin Of The Union

Posted By: Mike Huckman
President Barack Obama
Photo by: Pete Souza
President Barack Obama

President Obama has high cholesterol.

For now, his doctors are prescribing healthy living. But some say he should be put on a statin or cholesterol-lowering drug pronto.

I'm not a doctor or a political expert, but I think the President might be missing an opportunity to lower his LDL number and raise his POLL numbers.

While I'm certain Pfizer, Merck and AstraZeneca would give anything to have it leak that Obama's been put on Lipitor, Vytorin or Crestor, respectively, he might be better off, politically, at least, going on generic Zocor.

What better way to set an example about how to save the health care system money as the debate over reform rages on?

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  Wednesday, 3 Mar 2010 | 11:39 AM ET

Democrats Look to Obama for Health Care Momentum

Posted By: AP

President Barack Obama is urging Congress to finally push through his massive health care overhaul, freshening it with a handful of Republican ideas in a gesture of bipartisanship but strongly signaling Democrats will go it alone.

The president planned to describe his plan at the White House on Wednesday, a day after he said he was open to melding four Republican ideas into his proposal. In a measure of the partisanship that has dominated the battle, his embrace of those GOP policies drew no plaudits from Republicans; instead, it appeared designed to coax votes from nervous Democratic moderates by demonstrating an attempt to cooperate with the other party.

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  Tuesday, 2 Mar 2010 | 3:17 PM ET

Nuthin' Like A Little Dendreon Dendrama

Posted By: Mike Huckman

I'm still decompressing from a very stressful morning.

Shares of Dendreon fell around 10 percent before the market opened. And now, in regular trading, they're at a new intra-day high.

Here's what happened.

Dr. Elliot Favus emailed me a research note this morning. I'd never heard of him before. He was telling investors to sell DNDN because he claimed to have been in contact with doctors who told him they'd been invited by the FDA to sit on an advisory committee to review Dendreon's prostate cancer treatment Provenge.

So, why would that be a big deal?

Well, biotech investors don't necessarily like outside FDA panels. They usually translate into a delay on an FDA decision about whether to approve a drug and they increase the uncertainty about a drug's fate. The committees only make recommendations to the agency on what it should do. The FDA usually, but not always follows the advice of its expert panels. Veteran DNDN investors learned about that the hard way. A few years ago, an advisory committee recommended approval of Provenge. The stock soared. Then, the FDA shocked the Street and said, "No." The shares tanked.

I emailed Dr. Favus to find out a little bit about him and his research. I asked him to send me some of his previous research reports on DNDN, including his coverage initiation note. He got back to me quickly saying this was his first call on DNDN, that he doesn't do "passive, ongoing research," and that his relatively new boutique firm, bearing his name, focuses on providing "money making ideas and divergent information in the healthcare sector."

He boasts that since he started the company a little more than a year ago that he's written a dozen reports, 10 of them with "Sell" recommendations. Dr. Favus used to work at Lazard Capital Markets.

Anyway, the controversial call triggered a flurry of tweets in my Twitterverse and a selloff in the stock in the pre-market and shortly after the opening bell. But then the FDA took the rare step of publicly commenting on whether a product would go before an advisory committee. Bloomberg broke it, the stock suddenly did an about face and started trading at new highs.

My producer and I began frantically trying to confirm the story on our own. But lemme tell ya how difficult it was reaching the media relations folks at the agency. We repeatedly emailed and voicemailed them; called the main news media line at the FDA, sometimes got a live person, sometimes voicemail, were told the people we needed to talk to were in a meeting, and on and on. Argh!

I told the person on the other end of the line to get the person out of the meeting. This was urgent. I'm on deadline. No luck. Eventually, I got a call back from one point-person and my producer got patched through to another. Both of them confirmed the FDA will not convene another Provenege panel. I hung up, ran downstairs and jumped on the air.

After I caught my breath, I sent Dr. Favus a follow-up email. Did he still stand by his call? Were the doctors he cited misinformed? Did he care to comment on what the FDA said? I haven't heard back.

Meantime, the FDA is expected to make a decision on Provenge on or before May 1st, which is a Saturday, by the way.

Update: After two spokespeople told me over the phone this morning that there would be no FDA panel meeting on Provenge, one of them sent this email to my producer this afternoon:

"Whatever you folks are saying on Provenge it should be this: Upcoming meeting dates for the Committee are published on the FDA website and in the Federal Register. At this time there no dates published for CTGTAC meetings for 2010. FDA will post meeting dates for the CTGTAC as soon as they are available. As you know we can not disclose any AC meeting prior to the FR notice. Currently, there is no advisory committee scheduled to discuss Provenge."

CTGAC stands for Cellular, Tissue and Gene Therapies Advisory Committee.

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman

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  Monday, 1 Mar 2010 | 11:48 AM ET

Can't Get A Break From Bristol

Posted By: Mike Huckman
DreamPictures | The Image Bank | Getty Images

When a major pharma company holds analyst/investor meetings as infrequently as Bristol-Myers Squibb , it's kind of a must-cover event.

But here's why I'll be following BMY's event in New York City this Thursday from my desk, via webcast, here at CNBC HQ.

Longtime "Pharma's Market" readers probably know I have little tolerance or patience for CEOs who don't do TV. It's a way for them to communicate in real time with a big audience of current and prospective shareholders and to answer important questions on the fly. But Bristol Chairman and CEO Jim Cornelius hasn't done and won't be doing any TV interviews.

I mean, c'mon, even Warren Buffett did three straight hours of live TV this morning on "Squawk Box" fielding questions from viewers via social media and email. But Cornelius can't sit down for four minutes with me? Some CEOs are unafraid of the camera and lights and do a good job on TV. Others, not so much. There's a whole industry, much of it populated by former TV news anchors and reporters, devoted to training execs to look and be more relaxed on camera. Expensive coaching like that works for a lot of folks. Others, not so much. I have no idea whether Cornelius has been coached or what his deal is.

The last time BMY held a big meeting with Wall Street, a company spokesperson had officially confirmed a live CNBC interview with Cornelius. So, we went through all of the logistical preparation of arranging cameras and a live satellite hook-up. It's no easy technical task, especially when the meeting is held on a high floor in a Manhattan skyscraper. It's very labor intensive and it takes hours to set up. But at the next-to-the-last minute BMY canceled the interview saying Cornelius was sick. The CEO made reference to his feeling under the weather when he addressed the crowd for several minutes at the meeting, but he soldiered on. And, then, came the last straw. During a coffee break, Cornelius walked into the hallway and started doing an impromptu little news conference with print and wire reporters. It went on for several minutes. But he apparently didn't have the time or the good health to talk to me.

Cornelius still hasn't done a CNBC interview and a spokesman told me this morning he won't be doing one at this week's meeting. There've been scattered reports and rumors he'll be retiring soon. Hopefully, his successor is more of a 20th-century (20th is not a misprint) kind of person and TV savvy and friendly. In 2010, for gosh sakes, it should be a prerequisite for any CEO candidate.

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman

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  Thursday, 25 Feb 2010 | 12:15 PM ET

FDA Says "Snow" To Lilly, Amylin & Alkermes

Posted By: Mike Huckman

The Food and Drug Administration says its decisions are always based on the science. But on rare occasions ol' mother nature apparently can get in the way.

Usually the FDA delays a decision on whether to approve or reject a drug because the agency simply needs some more time, wants more data, a company didn't cross a "t" or dot an "i" on its application, etc.

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  Wednesday, 24 Feb 2010 | 4:03 PM ET

Glaxo Gets Aggressive On Avandia

Posted By: Mike Huckman
The company logo of GlaxoSmithKline, is seen on the headquarters building in London, Wednesday May 10, 2006. GlaxoSmithKline PLC said Wednesday it has been granted a High Court injunction against animal rights activists who sent threats to the drugmaker's shareholders, barring them from sending more letters or revealing private information about the investors. (AP Photo/Alastair Grant)
Alastair Grant
The company logo of GlaxoSmithKline, is seen on the headquarters building in London, Wednesday May 10, 2006. GlaxoSmithKline PLC said Wednesday it has been granted a High Court injunction against animal rights activists who sent threats to the drugmaker's shareholders, barring them from sending more letters or revealing private information about the investors. (AP Photo/Alastair Grant)

On day five of Avandiagate, GlaxoSmithKline communiques about the brouhaha surrounding the controversial diabetes drug now number six.

One rejecting the conclusions drawn in the "New York Times ," which broke the story, another rejecting the findings of the Senate Finance Committee investigation that the Times story was about, two blogposts , including a rare one penned by the company's top U.S. corporate communications exec, and today a press release and 30-page "White Paper" formal response to the Senate probe.

Someone's been burning the midnight oil.

The Senate investigation claims GSK knew about the heart safety risks of Avandia long before The Cleveland Clinic's Dr. Steven Nissen published a study about them and tried to conceal and/or downplay the evidence. Dr. Nissen's study, which is the subject of much debate, caused Avandia sales to plummet. But GSK is trying to protect what's left of the franchise and to defend itself from litigation.

According to plaintiffs' lawyer Mark Lanier, who made a name for himself in big pharma suing Merck over Vioxx, there are approximately 15,000 Avandia lawsuits.

He's scheduled to try the first one in June in Philadelphia, where, until recently, the British Glaxo had its U.S. headquarters. But that number pales in comparison to the nealy 50,000 Vioxx cases. And, what's more, Lanier says the statute of limitations has already run out on Avandia in most states. The FDA ordered that a boxed warning be put on the Avandia label about the possible heart risks a couple of years ago, so Lanier says it'd be really tough for any new plaintiffs to claim they didn't know the drug might hurt their heart.

Lanier calls the Senate findings "old news" because he's been working with the same, previously undisclosed info for a couple of years already. I was incredulous when Lanier of all people told me that over the weekend. I expected him to be drooling, ready to pounce on Glaxo and jump on TV. But as Joe Kernen suggested on "Squawk Box " the other day, Lanier may see more dollar signs in Toyota cases right now. His is a big firm, though, so I'm certain it can handle lots of different stuff.

And the rhetoric is escalating. Here are just a few colorful snippets from the deep dive GSK takes in its "White Paper":

"...the (Senate) Staff Report mischaracterizes and distorts the efforts that GlaxoSmithKline took to continue to monitor the safety and efficacy of its diabetes medication. The Staff Report repeatedly cites documents out of context; thereby, crafting a misleading narrative...."

"These numbers (about heart risk cited by an FDA whistleblower) simply do not reflect reality."

"There is no scientific basis on which to assume that Avandia causes excess (heart attacks) or cardiovascular death."

"...methodology is seriously flawed and based on incomplete data."

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  Monday, 22 Feb 2010 | 3:41 PM ET

Is AstraZeneca's Crestor Cresting?

Posted By: Mike Huckman

In a federal courthouse today, a trial is getting underway that could determine the fate and fortune of AstraZeneca and its blockbuster cholesterol drug Crestor.

The company is suing more than half a dozen generic drug firms that want to make a cheaper copy of Crestor years before the patent on the drug is set to expire. But you won't find me sitting in the pews furiously taking notes.

No doubt this case is a big deal.

AZN sold $4.5 billion worth of Crestor last year. And 2009 Crestor revenue grew a whopping 25 percent at a time when sales of the other brand-name statin, Pfizer's Lipitor, are going down. Crestor sales could climb again this year because the company just won FDA approval of a new use for the drug.

But first of all, it's a trial in federal district court.

You can't bring in a TV camera or any recording equipment, for that matter. Video of armies of corporate and patent lawyers walking in and out of court with their assistants pushing dollies loaded up with cardboard boxes containing documents just doesn't make for compelling TV. No offense against courtroom artists, but there's only so many ways you can shoot (take video of) that stuff. And the subject matter here is dense, dull and dry. A few years ago I sat through a couple of relatively short hearings on the Plavix patent when Bristol-Myers Squibb and Sanofi-Aventis were fending off a threat from privately-held Canadian generic drug company Apotex. As they were taking boring testimony about who discovered the bloodthinner and how, I discovered the cure for insomnia. I haven't patented it yet, though.

And to make matters worse in this case an AstraZeneca spokesperson says the scientists who own the patents and the lawyers defending them speak Japanese. So, all of the questions and answers from those key witnesses will apparently have to be translated in court by interpreters. Can you imagine being the poor stenographer?

Leerink Swann pharma analyst Seamus Fernandez says there's a 30 percent chance AZN loses the case. He claims the judge has a track record of favoring patent holders. And you have to take into consideration that the trial is on AZN's home turf of Wilmington, Delaware where its U.S. headquarters are located. The company says between 4,000 and 4,500 people work there. And I'd be willing to bet the judge might know or live in the same neighborhood as some of them, maybe even golf or go to church with them. But, of course, decisions are based solely on the evidence.

Sure, there will be an appeal no matter who wins, but Fernandez estimates if the company ultimately runs out of legal options and comes out on the losing end that it could cost as much as 80 to 90 cents in earnings per share. At first he had forecast the stock could take a five to six dollar hit in a discounted cash flow value analysis, but in a research note to clients today Fernandez bumped that up to eight to nine bucks. LS may trade in BMY shares.

Finally, it's not like this is a jury trial where there will be deliberations that result in a verdict. It's a bench trial. So, when it's over the judge will ask the attorneys to submit some more stuff and then make a decision down the road. He recently announced he's retiring in July, so presumably the ruling will come by then. For now, I will be following dispatches from unfortunate wire service reporters who've been assigned courthouse duty on this one and from a Fernandez team member who has been planted in the courtroom for the duration of the trial.

The analyst told me he'll owe that guy big time.

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman

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  Monday, 22 Feb 2010 | 2:26 PM ET

Closing Bell Washington Agenda

Posted By: Lulu Chiang

A full agenda on Closing Bell as Maria Bartiromo report live from Washington today. It’s all about the economy, the consumer, jobs… jobs… jobs and healthcare.

National Governors Association held their annual meeting over the weekend.

Bartiromo hosted a panel among the governors, the top issue: economy. Governor James Douglas, Republican from Vermont, who is also the chairman of the National Governors Association and Governor Brian Schweitzer, Democrat from Montana will join us this afternoon to talk about redesigning states in this post-recession economy. Douglas says most states to continue to struggle saying that the economic health in most states is still “fairly poor.” Douglas warns, “the worst probably is yet to come.” Governors met with President Obama today to ask for more aid.

Unemployment continues to be a key concern for the governors. We’ll sit down with the labor secretary, Hilda Solis and get a better idea what our government plans to do to improve the job market.

Today’s new credit card rules take effect. Austan Goolsbee, Staff Director and Chief Economist of the President's Economic Recovery Advisory Board will join us to explain what these new rules mean for the consumer. Basically the new rule mean that credit card companies can no longer retroactively increase rates or increase rates in the first year you open an account, charge misleading late fees or use over-limit fee traps. Sounds good on the surface right? We’ll dig deeper into the issue to make sure that the consumer is protected.

Last but not least, healthcare. The recession has also taken a big toll on healthcare. Nancy Brinker, Founder & CEO of Susan G. Komen For The Cure says the recession is taking a toll on federal and state programs.

Tune into Closing Bell this afternoon from 3-5PM ET. Send us your thoughts.



Questions? Comments? Write toinvestoragenda@cnbc.com

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  Monday, 22 Feb 2010 | 9:53 AM ET

Tony Fratto: Instead of Fixing Health Insurance Markets, Obama Plans to Fix Prices

I suppose it’s possible President Obama could have come up with a more anti-market reform to deal with its concerns over higher health insurance rates, but short of creating a single-payer health system, creating a seven-member panel to dictate the prices of health insurance is pretty close.

The proposal, as reported in the New York Times this morning , would give a small panel appointed by the president the power to block what it sees as “excessive” rates for health insurance policies sold to individuals – basically, a price-setting panel.

The White House, flailing to find traction for the huge health care spending plans developed by congressional Democrats, hopes that outrage over a planned rate increase by one California insurer will help to turn public opinion around. The White House will say that anyone who opposes the President’s idea to fix prices must support increases in health insurance premiums.

That’s a false choice, of course, but it won’t stop them from trying to make the case.

What is “excessive”?

What are legitimate costs to factor into rate increases?

Is there differentiation in markets?

Is one firm an outlier?

Are there other options?

Is a firm offering a different type of coverage?

Are rate increases keeping up with costs, including wages for health providers?

Is there any such thing as a rate increase that would be acceptable to a small, powerful, politically sensitive panel appointed by the President of the United States? If a 39% rate increase is deemed “excessive”, what about a 29% increase? How about a 19% increase? Is even a 9% increase politically acceptable.

Regardless of any external factors that would lead to pricing differentiation, for a presidential panel there would be no “politically acceptable” rate increase above the overall rate of inflation. The White House will be answerable for the price and the quality of service provided to every health insurance consumer.

Make no mistake: having a White House-appointed panel set prices in health insurance is – effectively – government-run health insurance, and far more onerous than the so-called “public option” rejected by Congress and the American people over the past year.

There was an opportunity to for President Obama to start over on health insurance reform this week, scrap the monstrosity created by congressional Democrats, and work for a truly bipartisan, market-oriented effort. Rejecting this opportunity, the White House is instead planning to use the failed blueprint created by Democrats on the hill, and adding this decidedly anti-market plan to the mix.

Tony Fratto is a CNBC on-air contributor and most recently served as Deputy Assistant to the President and Deputy Press Secretary for the Bush Administration.

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