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Hedge Fund Attacks Savient Over Financials PDF Print E-mail
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Sunday, 06 May 2012 06:36

The weekly round-up of failed trials, missed targets, and other business mishaps.

Savient Pharmaceuticals saw its shares tumble after Tang Capital Partners, a hedge fund focusing on the life sciences, asserted that the company is insolvent and requested that a judge appoint a receiver to liquidate and distribute the company’s assets. Tang is also asking for $100 million in compensatory damages.

The hedge fund owns Savient debt totaling $38.9 million of about 17 percent of the company’s outstanding convertible notes. Among some of its more substantial claims, it asserted that the company’s execution of its drug launch for its gout drug, Krystexxa, was among the worst of any new drug launch in the history of the pharmaceutical industry. Though shares of Savient tumbled 25 percent to finish at $1.77 on May 1, the company issued a statement that said it believes the claims alleged by Tang to be without merit, and plans to defend itself vigorously.

Alexza Pharmaceuticals has hit another snag in attempting to gain approval of Adusave, its investigational therapy for schizophrenia and bipolar disorder. After being slapped with a delayed U.S. Food and Drug Administration review and FDA safety concerns, Alexza has now been told that Adusave cannot be approved until a deficiency at one of its manufacturing facility is resolved. Alexza’s shares fell 24 percent following the announcement to close at 44 cents. Alexza said it plans to meet with the FDA to get a better understanding of the specific deficiencies, but believes the deficiencies are medical-device specific and readily addressable.

Aveo Pharmaceuticals says it missed the main endpoints of a mid-stage trial in Asia for ficlatuzumab for the treatment of lung cancer. The mid-stage study treated patients with a combination of ficlatuzumab and gefitinib and it was found that the combination drug didn’t show any statistically significant response when compared to patients who took gefitinib alone. Though shares of the Aveo have slipped 4.5 percent since the announcement, the study did appear to have identified a subset of patients who benefited significantly from the treatment. The company says it believes the finding warrants further study.

Pfizer agreed to pay Brigham Young University $450 million and endow a chair in the name of Daniel Simmons, a professor who claimed the drugmaker wrongfully cheated him out of money and credit for research that led to the discovery the painkiller, Celebrex. A trial had been scheduled to begin in late May. Simmons has maintained that he discovered the Cox-2 enzyme in 1991 that eventually morphed into Celebrex and that BYU had signed a research agreement with Monsanto, which later became part of Pfizer. In their lawsuit, Simmons and BYU allege that research agreement was fraudulently ended without compensation. Celebrex eventually became a best-seller for Pfizer, generating billions in sales over the years. Last year alone, Celebrex surpassed $2.5 billion in sales.

 

GlaxoSmithKline and Human Genome Sciences received bad news when Germany’s healthcare cost agency rejected the companies’ lupus drug, Benlysta. The rejection by the German Institute for Quality and Efficiency in Health Care (IQWiG ) follows last week’s rebuff from the U.K.’s National Institute for Health and Clinical Excellence. Though Benlysta provides the first new treatment for lupus in more than half-a-century, and despite gaining approval from the U.S. Food and Drug Administration and the European Medicines Agency, Benlysta has hit major roadblocks from healthcare cost watchdogs in Europe. In a statement, GSK said that IQWiG’s decision was “completely inexplicable from a medical point of view and disregards genuine progress in therapy.”

 
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