Accidental court filing reveals Novartis' kickback settlement talks: report

fiercepharma | June 12, 2019

After six years of legal wrangling and unflattering headlines, Novartis appears close to putting a doctor kickback lawsuit behind it—and the revelation came from a court filing that was supposed to be kept secret. The whistleblower suit against Novartis, joined by the U.S. Department of Justice (DOJ) in 2013, claimed the drugmaker used sham educational events as cover for kickbacks to doctors. In exchange for fancy dinners, fishing trips and other entertainment, Novartis was basically buying prescriptions for its cardiovascular meds Lotrel and Valturna and diabetes drug Starlix, the suit claims. The company reportedly has been negotiating a settlement worth up to $1 billion, which would rank it among the biggest-ever marketing settlements in pharma. Tuesday, a letter filed in the court’s docket and then quickly removed said the two sides had made “significant progress” toward a settlement, Bloomberg reported. U.S. Attorney Geoffrey Berman intended for the letter to stay confidential as the talks are ongoing, but it was mistakenly posted publicly for a short time, the news service noted. The letter showed a settlement proposal has been submitted to the DOJ for expedited approval. Berman said the settlement will be “substantially complete” by June 18, and the parties have until Aug. 18 to finalize it.

Spotlight

Medication shortages come with a substantial cost to pharmaceutical companies—loss of revenue, provider loyalty, and brand reputation pose significant and detrimental threats to business. Currently, the United States Food and Drug Administration (U.S. FDA) lists over 150 drug shortages, costing the United States $216M in labor and $200M in substitution costs, each year.

Spotlight

Medication shortages come with a substantial cost to pharmaceutical companies—loss of revenue, provider loyalty, and brand reputation pose significant and detrimental threats to business. Currently, the United States Food and Drug Administration (U.S. FDA) lists over 150 drug shortages, costing the United States $216M in labor and $200M in substitution costs, each year.

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BUSINESS INSIGHTS

Azzur Group Announces Executive Leadership Changes

Azzur Group, LLC | January 13, 2022

To support rapid company growth and best meet the demands of the business, Azzur Group announces new executive leadership appointments. Originally founded in Philadelphia in 2010, Azzur is a market-leading provider of GxP services for the pharmaceutical, biotechnology, medical device, and healthcare industries with offices and on-demand cleanrooms locations throughout the United States. Today, the organization provides comprehensive GxP solutions through its on-demand cleanrooms, consulting and advisory services, microbiology labs, and aseptic and GxP training. Ryan Ott has been promoted to Chief Operating Officer of Azzur Group. A long-time partner at Azzur, Ryan most recently served as Chief Administrative Officer. During his tenure, he has been instrumental in the overall strategic development of Azzur Group, initially in the Greater Philadelphia Region, while taking on additional responsibility with ongoing national expansion. In his new role, he collaborates with corporate and service-line leaders throughout the organization to execute on Azzur Group's strategic business plan. This includes Shaleen Parekh, who has been appointed to Sr. Vice President of Professional Services, with continuing oversight for Azzur Consulting, Azzur Labs, and Azzur Training Center; and Molly McGlaughlin, who has been appointed Sr. Vice President of Facilities Services, with continuing oversight for Azzur Cleanrooms on Demand™ as its Chief Operating Officer. Appointed to the new role of Chief Innovation Officer is Ravi Samavedam. In this role, he will focus on bringing forward new business concepts and service areas for Azzur's continued expansion. Ravi's extensive life sciences industry experience and dynamic leadership of Azzur Cleanrooms on Demand™ from its creation in 2018 through its national expansion, ideally position him to proactively identify novel service offerings for the enterprise. Most recently, Ravi served as President and COO of Azzur Cleanrooms on Demand™. He has been a member of Azzur Group since 2014. Ilya Vasserman has been promoted to Chief Information Officer (CIO) of Azzur Group and is responsible for overseeing the management and scale-out of Azzur's corporate information technology infrastructure while forming and leading a new corporate-wide procurement group. Ilya will also continue to spearhead technology adoption and internal tool development, furthering our business insights capabilities. Ilya most recently served as Senior Director of Financial Services and has been a member of Azzur Group since 2016. After nearly two years with Azzur Group, David Frank has been promoted to Vice President of Client Development, furthering the growth and maturation of Azzur's business development and marketing capabilities. As part of his expanded responsibilities, David will work closely with the executive leadership team to develop client-centric strategies across the organization to meet customer needs. Since joining Azzur Group in 2020, David has served as the Senior Director, Sales and Marketing. "I'm incredibly thrilled to announce the changes to the Azzur Group executive leadership team. Not only have these individuals proven to be excellent strategic partners for our enterprise, but each embodies Azzur Group's core values in their daily leadership. I offer my sincerest congratulations to Ryan, Ravi, Shaleen, Molly, Ilya, and David, and wish them much success in their new roles." Michael Khavinson, Azzur's Chief Executive Officer About Azzur Group Azzur Group provides the life science community with full lifecycle solutions for all their GxP needs. From Azzur Cleanrooms on Demand™ facilities, to labs, training centers, and consulting and advisory offices across the nation, Azzur helps organizations start, scale, and sustain their enterprises. With four decades of service to the industry, we've become a trusted partner to leading pharmaceutical, biotechnology, medical device, and healthcare companies, as well as their supply chain.

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Fuisz Pharma LLC Receives a Patent for a Non-Invasive Urological Device to Treat Benign Prostate Hyperplasia Symptoms (BPH)

FUISZ LLC | April 19, 2022

The first patent for Fuisz Pharma LLC's non-invasive urological device platform to alleviate symptoms of BPH, US 11,213,41, entitled "Device and Method for Reducing Urinary Retention," was issued via Fuisz LLC. Fuisz Pharma LLC is still looking for additional patent protection to go along with the one that was obtained. The Fuisz device is non-invasive, simple to use, and has been shown to help initiate urination, minimize dribbling and nocturia, and decrease urine retention, all of which are frequent symptoms of BPH. The gadget can be used for easy and fast double voids. The Fuisz device works on the principle of using a cool, rapidly transferred thermal transfer to induce the start of urination. Urination stream pressure requirements are dropped simultaneously. The Fuisz gadget isn't intended to replace existing pharmaceutical or surgical treatments. It is meant to be used as an auxiliary non-invasive therapy to address symptoms. “Millions of American men suffer from urinary symptoms associated with BPH. These symptoms raise serious quality of life issues for patients. No male wishes to pause at a bathroom stall to initiate urination; be fearful of urgency during a trip to the store; or be deprived of a restful night by nocturia.” Joseph Fuisz, the Managing Member of Fuisz Pharma “The non-invasive Fuisz device offers substantial benefits for patients with BPH-type symptoms.” “We are preparing to seek approval for the Fuisz device as a medical device.”

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Recro Announces Acquisition of San Diego-based IRISYS, Creating Bi-Coastal, Full Service CDMO

Recro Pharma, Inc. | August 16, 2021

Recro Pharma, Inc. a contract development and manufacturing organization dedicated to solving complex formulation and manufacturing challenges for companies developing oral solid dose drug products, today announced its acquisition of IRISYS, a San Diego-based CDMO that possesses capabilities that complement and expand those of Recro. Recro acquired IRISYS for approximately $50 million in a combination of cash, shares of Recro common stock and a seller promissory note. With its acquisition of IRISYS, Recro has transformed itself into a full service CDMO with operations on both the East and West Coast of the U.S. capable of offering its now expanded global client base access to services spanning from pre-Investigational New Drug (IND) development to commercial manufacturing and packaging for wide range of dosage forms. “Today’s acquisition of IRISYS is truly a transformative transaction for Recro. The joining of these two companies creates an organization that is ideally positioned to achieve Recro’s previously disclosed four-pronged strategy for growth, which includes strengthening the organization’s leadership and talent, expanding and diversifying our client base, fortifying our financial position, and enhancing our capabilities and competencies,” said David Enloe, president and chief executive officer of Recro. “Adding the personnel, facilities, capabilities and global customer base of IRISYS advances each of these goals and positions Recro for sustainable, profitable growth moving forward. We welcome the members of the IRISYS team to the Recro family and are eager to begin implementing the integration of the companies.” IRISYS is a full service CDMO based in San Diego, CA with capabilities that range from formulation development to commercial manufacturing for various dosage forms including oral liquids, sterile injectables, tablets, topicals, liquid/powder filled capsules, ophthalmic droppers, liposomes and nano/microparticles. IRISYS serves a diverse, global client base within the biopharmaceutical industry with its nearly 40 clients located in six different countries around the world. This includes manufacturing support for four commercial and near-commercial products. Importantly, IRISYS recently added automated, aseptic fill/finish and lyophilization capabilities to its existing facility, offering a new key avenue for significant near-term growth. IRISYS expects to generate $15.4 million in revenue for full year 2021 and has approximately $23 million spanning its contracted backlog and vetted sales pipeline. Strategic Rationale Recro’s acquisition of IRISYS was driven by a number of compelling factors covering the four prongs of the company’s ongoing growth strategy. Enhances Capabilities and Competencies: Expands technical focus beyond oral solid dose to include sterile injectables oral liquids, tablets, topicals, liquid/powder filled capsules, ophthalmic droppers, liposomes and nano/microparticles; Adds new capabilities in the areas of aseptic fill/finish and lyophilization; and Establishes bi-coastal footprint from which to better serve clients within the U.S., as well as globally. Expands and Diversifies Client Base: Adds more than three dozen clients spanning six countries, reducing Recro’s customer dependency risk; Provides greater balance between our clinical and commercial project mix; and Diversifies portfolio from exclusively oral solid dose to a balance of multiple advanced dosage forms and oral solid dose. Fortifies Financial Position: Adds profitable business with IRISYS full year 2021 estimated revenues of $15.4 million, net income of $2.1 million and EBITDA* of $2.8 million; the corresponding anticipated improvement in Recro’s EBITDA will be beneficial to Recro’s debt covenants under its credit agreement. Recro intends to provide updated financial guidance when it releases third quarter 2021 earnings; Offers significant revenue diversification, reducing financial reliance on any particular client or service offering; Becomes accretive by the fourth quarter of 2021, excluding integration costs; and Enables transaction-related paydown of credit facility and an extension of the due date, leading to improved cash flow. In addition to the advancement of the company’s four-pronged growth strategy, the acquisition was also driven by key synergies between Recro and IRISYS within business development, clinical development and commercial scale-up, as well as a strong cultural alignment and fit between the companies. Transaction Details Under terms of the agreement, Recro has acquired 100% of the equity interests of IRISYS in exchange for consideration having an aggregate value of approximately $49.850 million. The purchase price was paid through: (i) $25.5 million of cash at closing; (ii) 9,302,718 shares of common stock of Recro to be issued in six months; and (iii) a seller promissory note of $6.1 million. The seller note has a three (3) year maturity date from the date of closing and bears interest at a rate of 6% annually. The seller note is expressly subordinated and unsecured in right of payment and priority to Recro’s existing debt with Athyrium Capital Management. Bailey Southwell & Co. served as the exclusive financial advisor to IRISYS. William Blair & Company, L.L.C. represented Recro on the transaction. Non-GAAP Financial Measures Certain financial measures of IRISYS presented in this press release, including EBITDA, were not calculated using U.S. generally accepted accounting principles (“GAAP”). We believe these financial measures are helpful in understanding IRISYS’ business because it allows for greater transparency of supplemental information used by Recro’s management in connection with the acquisition of IRISYS. These measures are used by investors, as well as Recro’s management, in assessing IRISYS’ past and potential future performance. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, reported GAAP results. Further, Non-GAAP financial measures, even if similarly titled, may not be calculated in the same manner by all companies, and therefore should not be compared. Please see the section of this press release titled “IRISYS, LLC Reconciliation of GAAP to Non-GAAP Financial Measures” for a reconciliation of Non-GAAP EBITDA, to its most directly comparable GAAP measure. About Recro Recro is a contract development and manufacturing organization with capabilities from early feasibility to commercial manufacturing. With an expertise in solving complex manufacturing problems, Recro is a CDMO providing oral solid dosage form development, end-to-end regulatory support, clinical and commercial manufacturing, and packaging and logistics services to the global pharmaceutical market. In addition to our experience in handling DEA controlled substances and developing and manufacturing modified release oral solid dosage forms, Recro has the expertise to deliver on our clients’ pharmaceutical development and manufacturing projects, regardless of complexity level. We do all of this in our best-in-class facilities, which total 120,000 square feet, in Gainesville, Georgia.

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