Georgia joins $44.3 million pharmaceutical settlement
Georgia has joined other states and the U.S. government in reaching a $44.3 million settlement with the pharmaceutical manufacturer EMD Serono Inc., the state Attorney General’s Office said Thursday.
The agreement settles allegations that false or fraudulent claims for the drug Rebif, which treats multiple sclerosis, were submitted to the Medicaid program. From 2002 through 2009, according to the allegations, EMD Serono paid inducements to health-care professionals to get them to prescribe Rebif. Under the agreement, Georgia will receive $399,412.
The inducements included activities such as promotional speaking engagements, attending speaker training, advisory and consultant meetings, educational grants and charitable contributions, the AG’s office said. The investigation was launched after a federal whistle-blower lawsuit was filed against the company in Maryland.
Investigators from the National Association of Medicaid Fraud Controls Units participated in the probe and conducted settlement negotiations with EMD Serono on behalf of the states, the AG’s office said.
Par 1Q profit falls on costs, lower sales
Par Pharmaceutical posted a first-quarter loss Thursday following a quarter in which the generic drug developer saw sales of a key drug slide and also a hefty legal charge.
The $196 million charge was related to a settlement related for federal and state claims that the company improperly inflated wholesale drug prices. Excluding the charge, the company said it earned 96 cents per share. Analysts polled by FactSet expected 89 cents per share in profit on $227.8 million in revenue.
The company lost $109 million, or $3.07 per share, compared with a profit of $26.3 million, or 75 cents per share, during the same period a year prior. Revenue fell 20 percent to $233 million from $291.9 million.
Savient Pharmaceuticals Reports First Quarter 2011 Financial Results
Savient Pharmaceuticals, Inc. (NASDAQ: SVNT) today reported financial results for the three months ended March 31, 2011. Savient ended the quarter with $268.0 million in cash and short-term investments, an increase of $203.1 million since December 31, 2010, primarily due to the issuance and sale of $230 million in convertible notes during February 2011. For the first quarter of 2011, the Company had a net loss of $13.5 million, or $0.19 per share, on total revenues of $1.3 million. This compares with a net loss of $8.3 million, or $0.13 per share, on total revenues of $1.1 million for the same period in 2010.
“The first quarter of 2011 was dedicated to the U.S. launch of KRYSTEXXA® into the refractory chronic gout market,” said John H. Johnson, chief executive officer of Savient. “Since the March market introduction, we have had a laser focus on our commercialization efforts and we are pleased with the positive reception that KRYSTEXXA has received. As part of our long-term strategy to expand the global opportunity for KRYSTEXXA, we have submitted a Marketing Authorization Application to the European Medicines Agency. We are focused on achieving our goals while carefully managing costs and building value for shareholders.”
Johnson continued, “In the short period of time since our launch, we have learned a great deal and we now have a clearer picture of how we can most effectively accelerate the market introduction of KRYSTEXXA. The miscellaneous J-code has presented some Medicare billing concerns. We expect to receive the permanent J-code in January, which we believe will provide a catalyst for many doctors to move their patients onto KRYSTEXXA, and anticipate that the full effect of our efforts on the ramp up will be realized in the second quarter 2012.”
Submitted a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for KRYSTEXXA for the treatment of chronic gout in adult patients refractory to conventional therapy.
Announced that three abstracts will be presented at the European League Against Rheumatism (EULAR) 2011 Annual Congress, two for oral presentation and one for poster presentation.
Enhanced management team with key new members, including Rick Crowley as Executive Vice President Biopharmaceutical Operations.
Received a contract by the U.S. Department of Veterans Affairs (VA) to supply KRYSTEXXA and Oxandrin® to the VA for a term of five years effective April 1, 2011.
Received notice from the Centers for Medicare and Medicaid Services that a temporary “C-code” has been assigned to KRYSTEXXA (pegloticase) effective April 1, 2011.
Financial Results of Operations for the Three Months Ended March 31, 2011
Total revenues increased $0.2 million, or 18%, to $1.3 million for the three months ended March 31, 2011, as compared to $1.1 million for the three months ended March 31, 2010. The increase in net sales resulted primarily from the Company’s full commercial launch of KRYSTEXXA during March 2011, generating $0.3 million in net sales during the quarter.
Research and development expenses decreased $2.6 million, or 41%, to $3.7 million for the three months ended March 31, 2011, as compared to the three months ended March 31, 2010. The decrease in expenses related to lower costs associated with process validation work at our potential secondary source supplier of pegloticase drug substance coupled with a decrease in clinical trial costs relating to the wind down of the open label extension study for KRYSTEXXA in 2010.
Selling, general and administrative expenses increased $11.7 million, or 236%, to $16.6 million for the three months ended March 31, 2011, from $4.9 million for the three months ended March 31, 2010. The higher costs were primarily due to increased selling and marketing expenses associated with the full commercial launch of KRYSTEXXA in March 2011. We incurred significant costs related to the build out of a commercial infrastructure to support the launch of KRYSTEXXA including the hiring of a 60-person sales force and other sales support personnel.
Interest expense was $3.1 million for the three months ended March 31, 2011, primarily related to $1.7 million of interest expense from the 4.75% coupon on our convertible notes coupled with $1.4 million of non-cash amortization expense also associated with the issuance of our convertible notes.
Global Pharmaceutical Market Remains in Declining Growth Trend
Decision Resources, one of the world’s leading research and advisory firms for pharmaceutical and healthcare issues, finds that in 2010, the global pharmaceutical market continued to show declining growth. According to new data from Decision Resources’ Pharmaview suite, global pharmaceutical sales grew year-over-year by a mere 3.2 percent to reach $669 billion, compared with 3.5 percent year-over-year growth in 2009 and 7.5 percent year-over-year growth in 2008. Over the next seven years, the global market is expected to record a compound annual growth rate (CAGR) of 2.2 percent, reaching $778 billion in 2017.
“The limited growth is not surprising as patent expires, payer cost-containment strategies and lack of research and development productivity continue to negatively impact the pharmaceutical market”
In the United States, sales continued to stagnate, with 0.7 percent year-over-year growth in 2010, increasing to $283 billion. The U.S. market will continue to idle, with an expected CAGR of 1.7 percent between 2010 and 2017, reaching $318 billion in 2017.
“The limited growth is not surprising as patent expires, payer cost-containment strategies and lack of research and development productivity continue to negatively impact the pharmaceutical market,” said Decision Resources’ Pharmaview Director Alasdair Milton, Ph.D. “In response, many large pharmaceutical companies are revamping R&D efforts, diversifying their business models into consumer health and generics, and collaborating with small biotechs and peer companies. They are also looking at emerging markets; while the sheer size of patient numbers involved make these geographies attractive targets, companies should realize that doing business in these areas poses its own unique challenges.”
The sales findings are from the most recent release of Decision Resources’ Pharmaview, which assesses the commercial aspect of the global pharmaceutical market and provides continually updated analysis of more than 2,200 drugs from more than 240 companies, covering 150 product classes and 14 therapy areas. Pharmaview also provides company profiles on the leading players in the pharmaceutical market, recently adding Otsuka to its coverage.