New York reaches settlement over opioid drugs

NY AG announces $1.1B agreement with big three drug distributors over opioids

New York Attorney General Letitia James announced an agreement with McKesson (MCK), Cardinal Health (CAH), and Amerisource Bergen (ABC) – three of the nation’s largest drug distributors – that will deliver up to $1.1B to New York state to combat the ongoing opioid epidemic.

“The $1.1B agreement is the largest monetary settlement ever negotiated by Attorney General James. The agreement resolves claims made by Attorney General James for the three companies’ role in helping to fuel the opioid epidemic and will remove the three distributors from New York’s ongoing opioid trial, currently underway in Suffolk County State Supreme Court…

Additionally, late last month, Attorney General James announced an agreement with Johnson & Johnson (JNJ) that removed the company from New York’s opioid trial in exchange for up to $230M for the state’s opioid prevention and treatment efforts, as well as it ending the sale of opioids nationwide.

The trial against the three remaining defendants – Endo Health Solutions (ENDP), Teva Pharmaceuticals USA (TEVA), and Allergan Finance (ABBV) – is currently underway and will continue in state court,” the AG stated.

As part of today’s agreement, McKesson, Cardinal Health, and Amerisource Bergen will pay New York state a total of up to $1,179,251,066.68, of which more than $1 billion will go towards abatement.

Payments will start in just two months and will continue over the course of the next 17 years, the AG said.

Opioids are a class of drugs that include the illegal drug heroin, synthetic opioids such as fentanyl, and pain relievers available legally by prescription, such as oxycodone (OxyContin®), hydrocodone (Vicodin®), codeine, morphine, and many others. 

Fentanyl and similar compounds like carfentanil are powerful synthetic opioids — 50 to 100 times more potent than morphine. High doses of opioids, especially potent opioids such as fentanyl, can cause breathing to stop completely, which can lead to death.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Mallinckrodt Pays $1.6B into Opioid Trust Fund, Avoids Bankruptcy

North Carolina AG announces $1.6B opioid settlement with Mallinckrodt

North Carolina Attorney General Josh Stein announced a global settlement framework agreement between state attorneys general, local subdivisions, and the opioid manufacturer Mallinckrodt (MNK), its subsidiaries, and certain other affiliates.

MNK is currently the largest generic opioid manufacturer in the United States.

MNK pays $1.6B to avoid bankruptcy, Stockwinners

In the agreement, MNK agrees to pay $1.6B in cash to a trust that will cover the costs of opioid addiction treatment and related efforts, with the potential for increased payment to the trust.

The agreement in principle has been reached with a court-appointed plaintiffs’ executive committee representing the interests of thousands of plaintiffs in the opioid multidistrict litigation, and is supported by a broad-based group of 47 state and U.S. Territory Attorneys General.

Under the terms of the proposed settlement, which would become effective upon Specialty Generics’ emergence from a contemplated Chapter 11 process, subject to court approval and other conditions: Plaintiffs would receive $1.6B in structured payments, of which $300M would be received upon Specialty Generics’ emergence from the completed Chapter 11 case, $200M would be received on each of the first and second anniversaries of emergence, and $150M would be received on each of the third through eighth anniversaries of emergence.

The substantial majority of those payments are expected to be contributed to a trust which, among other things, would establish an abatement fund to be administered to cover the costs of opioid-addiction treatment and related efforts.

Upon Specialty Generics’ emergence from the contemplated Chapter 11 process, the trust would receive warrants, exercisable at $3.15 per share, to purchase ordinary shares that would represent approximately 19.99% of the company’s fully diluted outstanding shares, including after giving effect to the exercise of the warrants.

To implement the proposed settlement, the company expects that Specialty Generics, which manufactures certain generic opioid products, among other products, will file voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the coming months.

Mallinckrodt and its Specialty Brands-related subsidiaries would not be part of the Chapter 11 filing.

This court-supervised process is expected to lead to the creation of a trust which, among other things, would establish an abatement fund to offset the expense of helping to combat opioid addiction and providing support to communities impacted by opioid abuse.

The court-supervised process is also expected to provide a fair, orderly, efficient and legally binding mechanism to resolve all opioid-related claims against the company, Specialty Generics, and all of Mallinckrodt’s other subsidiaries and related entities. It is expected that Mallinckrodt plc would receive the benefit of a “channeling injunction” that would provide for the release of all opioid-related claims that have been or could have been asserted against Mallinckrodt or its subsidiaries related to Specialty Generics’ manufacture and sale of opioids prior to the time the Specialty Generics Chapter 11 plan becomes effective.

MNK also agrees that its future generic opioid business will be subject to stringent injunctive relief that, among other things, will prevent marketing and ensure systems are in place to prevent drug misuse.

“Confronting the opioid epidemic has been my top priority as North Carolina’s Attorney General,” said Attorney General Josh Stein. “Families all across our state have been torn apart as far too many of our relatives, friends, and neighbors have become sick with addiction and died. The companies that helped to create and fuel this deadly crisis must help us recover. That is exactly why I led negotiations with Mallinckrodt and fought to bring these needed funds home to North Carolina where they will help people get well.”

MNK is up 63 cents to $4.80.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Insys Therapeutics sued by N. Carolina

N. Carolina AG Stein files lawsuit against Insys Therapeutics over Subsys

N. Carolina files lawsuit against Insys. Stockwinners.com
N. Carolina files lawsuit against Insys Therapeutics 

North Carolina Attorney General Josh Stein filed a lawsuit against drug manufacturer Insys Therapeutics (INSY) alleging an extensive scheme involving kickbacks, deception and fraud in marketing its drug #Subsys.

Subsys is a spray form of the synthetic opioid fentanyl, which is approximately 50 times stronger than heroin and 100 times more potent than morphine.

Subsys is approved only for adult cancer patients who are already on round-the-clock opioids for pain, but experience additional, breakthrough pain and for whom no other pain medications are effective.

The lawsuit alleges that Insys gave illegal kickbacks to doctors for promoting and prescribing Subsys for non-cancer patients, including through a multi-million dollar speaker program that rewarded physicians who wrote prescriptions for the drug.

Insys employees also allegedly pushed doctors to switch patients who were being prescribed non-equivalent fentanyl prescriptions to Subsys, and often at a starting dose of up to twelve or sixteen times larger than the label directed.

Finally, the suit alleges that Insys deceived health insurers into covering Subsys prescription claiming Insys employees often posed as prescribers or their staff and invented medical histories for patients to ensure the drug would be covered.

Only about 10% of prescriptions for which Insys sought prior authorization from insurers were for patients with breakthrough cancer pain, the only use the FDA had approved.

INSY is down 18 cents to $7.02.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Depomed Tumbles on Results, Downgrades

Analyst says sell Depomed as challenging opioid environment seen persisting

Depomed Tumbles on Results, Downgrades. See Stockwinners.com Market Radar to read more.

Shares of Depomed (DEPO) are plunging after the company reported weaker than expected second quarter results and lowered its guidance. Reacting to the announcement, Janney Capital and Morgan Stanley downgraded the stock to Neutral and Underweight, respectively.

RESULTS

Last night, Depomed reported second quarter earnings per share of 8c, which was below consensus of 9c, and announced revenue of $100M for the quarter, beating the expected $99.42M. The company also said it sees 2017 revenue of $400M-$415M, compared to consensus of $418M and the company’s prior view of $410M-$430M issued in May.

MOVING TO THE SIDELINES

In a post-earnings note to investors, Janney Capital analyst Ken Trbovich downgraded Depomed to Neutral from Buy after another “disappointment.” While the company had pre-released second quarter results just weeks ago and had reaffirmed its full year guidance, Depomed surprised by lowering its full-year outlook for revenues and raising its expense guidance, the analyst pointed out.

#Trbovich noted that the revised guidance seems to be an admission that the challenges facing its business are far greater to overcome than fixing the sales force realignment implemented by the prior CEO.

Further, the analyst argued that the new CEO’s hope for demonstrating separation for negative industry trends for opioids by year-end has been replaced by the possibility it happens sometime next year. He also cut his fair value estimate on the stock to $8 from $18.

SELL DEPOMED

Meanwhile, Morgan Stanley analyst David #Risinger downgraded Depomed this morning to Underweight, a sell-equivalent rating, as he fears it will continue to underperform given pressures on the company’s number one franchise, Nucynta, an opioid for pain.

The analyst pointed out that opioid prescription market declines are driving lower Nucynta sales than expected, even though it has gained some market share. Government officials have been voicing increasing concerns about the opioid crisis in America, and they are intent on driving use down, Risinger said, adding that it appears that Nucynta will continue to be under pressure.

Moreover, the analyst highlighted that IMS prescription market trends indicate that short-acting opioids are declining 8% year over year and long-acting opioids are declining 11% year over year. While saying it is unclear if new management appointed earlier this year and the company’s board can unlock value, Risinger noted he learned that activist board member Gavin #Molinelli of #Starboard will shift from the Board Member seat he assumed in March 2017 to “Board Observer” on August 15.

He also lowered his price target on Depomed’s shares to $5 from $12.

OPIOID ENVIRONMENT

On June 8, Depomed and Insys Therapeutics (INSY) were under pressure after the Food and Drug Administration requested that Endo Pharmaceuticals (ENDP) remove its opioid pain medication, reformulated Opana ER, from the market. After careful consideration, the agency is seeking removal based on its concern that the benefits of the drug may no longer outweigh its risks, the FDA stated. This was the first time the agency has taken steps to remove a currently marketed opioid pain medication from sale due to the public health consequences of abuse.

PRICE ACTION

In Tuesday morning trading, shares of Depomed dropped $3.01, or 32.5%, to $6.22.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to StockwinnersStockwinners offers stock picks, option picks, daily stock upgrades, stock downgrades, and earnings reports that are delivered to your email.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Watch Nektar Therapeutics on its Opioid Painkiller

Nektar says NKTR-181 shows ‘significantly less abuse potential’ than oxycodone

Stockwinners offers winning stock and option picks since 1998

Nektar Therapeutics (NKTR) announced topline results from an oral Human Abuse Potential study of #NKTR-181, an opioid analgesic that is the first full mu-opioid agonist molecule designed to provide potent pain relief without the high levels of euphoria that can lead to abuse and addiction with standard opioids.

The NKTR-181 HAP study was designed to confirm and assess the relative oral abuse potential of NKTR-181 at its maximum analgesic or therapeutic dose of 400 mg and at a supratherapeutic dose of 3 times to 12 times greater than its analgesic dose range of 100 mg to 400 mg compared to common therapeutic doses of a Schedule II opioid, oxycodone.

In the study, NKTR-181 400 mg had a significantly lower rating of peak liking compared to oxycodone 40 mg; NKTR-181 400 mg had a significantly lower rating of peak liking compared to oxycodone 60 mg; NKTR-181 600 mg had a significantly lower rating of peak liking compared to oxycodone 40 mg; NKTR-181 600 mg had a significantly lower rating of peak liking compared to oxycodone 60 mg; and NKTR-181 1200 mg had a significantly lower rating of peak drug liking compared to oxycodone 60 mg.

This dose was not statistically different from #oxycodone 40 mg, the company said.

Ivan #Gergel, Chief Medical Officer of Nektar, said, “It is clear from our new study results that NKTR-181 is highly differentiated in this respect from oxycodone, which is a choice drug of abuse.

Further, and critically important in the context of this public health emergency, NKTR-181’s less rewarding properties and strong analgesia are inherent to its novel molecular structure and independent of any abuse-deterrent formulation…We are committed to bringing this new pain treatment to patients and physicians as quickly as possible.”

STOCKWINNERS

To read timely stories similar to this along with money making trade ideas, sign up for a membership to Stockwinners.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Cara Therapeutics’ Rise Could Continue

Watch Cara Therapeutics into osteoarthritis pain results

Stockwinners.com/blog

Cara Therapeutics (CARA) has soared this month amid the wider biotech rally, but research firm Janney argues the stock could continue higher on a pending release of data from a study of its potential treatment for osteoarthritis pain.

BACKGROUND

Cara Therapeutics is a clinical-stage researcher focused on treating pain and pruritus, or itching, by targeting the body’s so-called “kappa” #opioid receptors.

The company’s pipeline includes #CR845 and #CR701, the former of which is in advanced studies for both oral and intravenous forms.

In its most recent earnings report on May 4, Cara said it expects top-line data from the Phase 2b trial of oral CR845 for osteoarthritis-related pain in Q2, and the company confirmed on its conference call that the trial is “now fully enrolled at 480 patients and on track for a data readout later in Q2.” Cara’s second quarter ends June 30.

JANNEY SEES BIG POTENTIAL MOVE

Janney’s Ken #Trbovich said Wednesday he expects “significant volatility” in Cara Therapeutics as investors await the Phase 2 osteoarthritis data.

Highlighting the stock’s all-time highs on the back of the biotech rally and Friday’s announcement of “breakthrough therapy” designation, the analyst nevertheless says positive osteoarthritis data can “easily justify” a move into the $31-$36 range, though he warns that negative results could take the stock to $10-$15.

The long-term potential of oral #CR845 in chronic pain is “tantalizing” for a company whose market cap remains below $1B — with Trbovich offering Nektar’s (NKTR) 42% surge on the back of Phase 3 opioid data as an example — but the analyst cautions that the pending results are only mid-stage and that “a portion” of the potential upside has already been priced in.

Modeling the company on a discounted cash flow basis while factoring any potential dilution necessary to fund and launch oral CR845, Trbovich ends up at $31-$34 per share assuming peak sales of just over $1B.

On the other hand, he expects a retrace to $15 if data is negative, or even as low as $10-$12 if results are particularly bad and investors apply the news to Cara’s pain program for intravenous CR845.

POSITIVE HINT FROM UNRELATED TRIAL

H.C. #Wainwright analyst Corey Davis wrote June 22 that the osteoarthritis data is “expected any day.” #Davis added that Cara’s announcement that week of continuing its Phase 3 trial of I.V.

#CR845 in postoperative pain after an interim analysis — while largely unconnected from the osteoarthritis trial — is “still a slight positive indicator” given the lack of futility or safety signals.

PRICE ACTION:

CARA last traded at $27.72.

See our recent post on CARA.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section. No credit card required. 

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

FDA Asks Removal of Endo Pharmaceuticals’ Opana from the Market

FDA requested that Endo Pharmaceuticals remove its opioid pain medication from the market

This is the first time the FDA has taken steps to remove a currently marketed opioid pain medication

https://Stockwinners.com/blog

The U.S. Food and Drug Administration requested that Endo Pharmaceuticals remove its opioid pain medication, reformulated Opana ER (oxymorphone hydrochloride), from the market. After careful consideration, the agency is seeking removal based on its concern that the benefits of the drug may no longer outweigh its risks. This is the first time the agency has taken steps to remove a currently marketed opioid pain medication from sale due to the public health consequences of abuse.

“We are facing an opioid epidemic – a public health crisis, and we must take all necessary steps to reduce the scope of opioid misuse and abuse,” said FDA Commissioner Scott #Gottlieb, M.D. “We will continue to take regulatory steps when we see situations where an opioid product’s risks outweigh its benefits, not only for its intended patient population but also in regard to its potential for misuse and abuse.”

Endo said it is reviewing the request and is evaluating the full range of potential options as we determine the appropriate path forward.

“While the benefits of opioids in treating and managing pain are widely recognized, the misuse and abuse of these products have increased greatly in the U.S.,” the company said in a statement.

“As a pharmaceutical company with a demonstrated commitment to the improvement of pain management, Endo feels a strong sense of responsibility to improve the care of pain for patients while at the same time taking comprehensive steps to minimize the potential misuse of its products. Despite the FDA’s request to withdraw OPANA ER from the market, this request does not indicate uncertainty with the product’s safety or efficacy when taken as prescribed. Endo remains confident in the body of evidence established through clinical research demonstrating that OPANA ER has a favorable risk-benefit profile when used as intended in appropriate patients.”

Other Stocks to Watch

Shares of pain treatment makers Depomed (DEPO) and Insys Therapeutics (INSY) are weaker in extended trading.

Collegium Pharmaceuticals (COLL), shares are up  due to its competing drug. It last traded at $10.50. COLL has a 52-week trading range of $7.37 – $20.55.

ENDP last traded at $12.80. ENDP has a 52-weeks trading range of $9.70 – $24.92.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.