Eli Lilly buying ImClone for $6.5 billion, companies announce
NEW YORK After weeks of speculation, Eli Lilly will pay $6.5 billion for biotech ImClone Systems, the two companies announced Monday in a joint statement.
Under the deal, Indianapolis-based Lilly will pay $70 per share in cash for the New York-based biotech, which will add as many as three new cancer drugs in phase III testing next year to Lilly’s pipeline. ImClone already promotes the cancer drug Erbitux (ddd) with Bristol-Myers Squibb, which owns 16.6 percent of the company and unsuccessfully tried to acquire it for $62 a share. Bristol markets the drug with Germany’s Merck KGaA, which is independent from the New York-based Merck.
“We are excited about the possibilities of improving outcomes for individual patients and building value for shareholders,” Lilly president and chief executive officer John Lechleiter said in a statement. “We look forward to working with the ImClone team and their partners to ensure a smooth transition.”
ImClone’s impending acquisition was known for several weeks, but ImClone did not disclose the buyer until last week. Bristol initially made a $60-per-share offer for the biotech and later increased it to $62 a share, but ImClone chairman Carl Icahn rejected it as too low.
Cardinal reaches settlement on controlled-substances charge
DUBLIN, Ohio Resolving a major legal impasse that had threatened both its own business and that of some of its retail pharmacy customers, Cardinal Health has settled a wide-ranging series of charges that it violated federal reporting requirements in its handling of controlled substances. The agreement will allow the drug wholesaling and health services giant to resume shipments of controlled substances at all affected distribution centers.
Under terms of the legal pact, Cardinal will pay a total of $34 million in civil penalties to the U.S. Drug Enforcement Administration and seven U.S. attorneys’ offices to resolve the charges. The settlement “will result in reinstated licenses to distribute controlled substances from the company’s Auburn, Wash., Lakeland, Fla., and Swedesboro, N.J. distribution centers,” noted the company.
The charges were serious, and they had hampered Cardinal’s operations at those three facilities. According to the DEA, the violations led to large-scale diversion of controlled drugs.
“Cardinal Health, which operates 27 DEA-registered distribution facilities, failed to report to DEA suspicious orders of hydrocodone that it then distributed to pharmacies that filled illegitimate prescriptions originating from rogue Internet pharmacy Web sites,” noted the DEA in a statement. “These prescriptions violated applicable federal and state law because they were not issued for a legitimate medical purpose by physicians acting within the usual course of professional practice.
“Cardinal’s conduct allowed the ‘diversion’ of millions of dosage units of hydrocodone from legitimate to non-legitimate channels,” the agency reported.
Without admitting any wrongdoing, Cardinal agreed both to pay the fines and alter some of its practices to prevent any possibility of diverted products. “Specifically, the company has expanded its training, implemented new processes, introduced an electronic system that identifies and blocks potentially suspicious orders pending further investigation, and enhanced the expertise and overall staffing of its pharmaceutical distribution compliance team,” Cardinal reported. In addition, “to strengthen its overall compliance practices,” the company noted that it has hired former acting deputy U.S. attorney general Craig Morford to an expanded role as chief compliance officer.
“Protecting the integrity of the pharmaceutical supply chain is a responsibility we take very seriously, and preventing prescription drug abuse is a public policy goal that Cardinal Health fully supports,” said R. Kerry Clark, chairman and chief executive officer. “We settled this matter so that we could quickly resume the distribution of these vital medicines to our valued customers, and we will continue to work with the DEA and other supply chain partners to take all necessary steps to keep these powerful drugs out of the wrong hands.”
Cardinal spokesperson Tara Schumacher said the company was working to restore normal supply operations at the three affected DCs by the end of November. “As you can imagine, these license suspensions have caused challenges for some of our customers, particularly retail independents in the affected service areas,” she told Drug Store News today. “We worked diligently with the DEA to address its concerns, agreed to pay $34 million to settle the matter, and have invested more than $20 million to enhance our controls against diversion.”
Cardinal’s goal, said Schumacher, is “resolving this matter quickly so we could resume shipments to our valued customers, who need these medicines to in turn serve their patients.”
Exelixis applies for approval of cancer treatment innovation
SOUTH SAN FRANCISCO, Calif. Exelixis has filed an approval application with the Food and Drug Administration for the cancer-treating compound XL888, the biotech announced Thursday.
The drug is designed to inhibit the chaperone protein HSP90, which helps tumors grow and survive.
“Natural product-based inhibitors of HSP90 are currently in clinical trials and have shown encouraging signs of efficacy, but their utility has been limited by poor pharmacokinetic properties and by their side effect profiles,” Exelixis executive vice president and chief medical officer Gisela Schwab said.