Acquisitions & Buyouts
For the past several months I have been getting an education by reading up on Pharmaceutical companies and it is amazing to me the billions they spend on growth trying to get the biggest piece of the pie. We all know by now that Johnson & Johnson own the biggest piece of the implant pie up to now, but Boston Scientific and Medtronic are fast gaining. They think nothing of spending billions to acquire or buy out another company while all along screwing the people damaged by their implants. Believe me none of it is lost on me, but I know many women are not paying that much attention.
All my life I have been interested in many things and I have continued to educate myself by reading and learning. These days the Internet is a wealth of information and you can learn about anything if you are so inclined. I never kept up with any of this until a few months ago, because I used all my strength to get through surgeries and my aim was to survive. However, by not learning I know I am vulnerable, so when in the mood I will read up on these companies not just about mesh implants but about all the crap that is approved by the FDA and then it goes wrong.
For instance. A new patch for headaches was brought out onto the market after approval by the FDA and before long people were being injured. The company has just dropped it and this is what it is all about.
Seeking to offset early Copaxone sales declines, Teva swept up NuPathe a few years ago to get its hands on the only migraine patch approved in the U.S. But in less than a year after launch, the FDA has laid out concerns about “serious” adverse events including burning and scarring.
Teva’s Zecuity is now under the radar as a “large number” of users have reported those problems plus severe redness, pain, skin discoloration, blistering and cracked skin, the FDA reported. The patch first hit the market last September.
In a statement, a Teva spokesperson said the FDA’s decision was made “as a precautionary measure,” and that “there is nothing more important to us than the health and safety of those who use our products.”
“Patient wellbeing is at the heart of everything we do,” the statement said. “Teva is working closely with the FDA on the investigation.”
The development marks a headache for Teva, which bought Zecuity developer NuPathe in early 2014 for about $114 million, eclipsing Endo’s $105 million offer. At that time, the generics giant was looking to grow sales in the face of an earlier-than-expected patent loss for its megablockbuster multiple sclerosis drug Copaxone. That patent loss is still having repurcussions at the Israeli generics giant, with Q1 2016 results that fell short of expectations.
The investigation may also upset NuPathe investors, who stand to gain from tiered Zecuity sales milestones set up through the Teva deal.
Powered by a battery, Zecuity administers sumatriptan through a single-use device placed around a patient’s upper arm or thigh.
Though the patch has been FDA-approved since 2013 from NuPathe’s efforts, Teva didn’t get the product on the market in the U.S. until the second half of 2015. In promoting the product, the Israeli generics giant cited a study finding that Zecuity outperformed a nonmedicated patch in reducing headache pain and cutting light/sound sensitivity.
The FDA alert comes as Teva works to close a $41 billion deal to buy Allergan’s generics business, a price which some investors and investment bankers called into question this week because market dynamics have changed since the agreement.
So what did the FDA report? I highlighted dates in blue so you can read when each alert post including the latest. The last one was June 13th this year, 2016.
Zecuity manufacturer Teva Pharmaceuticals has decided to temporarily suspend sales, marketing, and distribution to investigate the cause of burns and scars associated with the Zecuity patch. Health care professionals should discontinue prescribing Zecuity, and patients should stop using any remaining patches and contact their prescribers for an alternative migraine medicine.
AUDIENCE: Internal Medicine, Pain Management, Neurology, Pharmacy
ISSUE: FDA is investigating the risk of serious burns and potential permanent scarring with the use of Zecuity (sumatriptan iontophoretic transdermal system) patch for migraine headaches. Since marketing of the Zecuity patch began in September 2015, a large number of patients have reported they experienced burns or scars on the skin where the patch was worn. The reports included descriptions of severe redness, pain, skin discoloration, blistering, and cracked skin. As a result, FDA is investigating these serious adverse events to determine whether future regulatory action is needed, and will update the public with new information when the FDA review is complete.
BACKGROUND: The Zecuity patch contains the active ingredient sumatriptan, a prescription medicine used to treat acute migraine headaches in adults. The patch delivery system is designed to deliver a dose of medicine by way of a single-use, battery-powered patch that is wrapped around the upper arm or thigh. It should remain in place for no longer than four hours.
RECOMMENDATION: Patients who experience moderate to severe pain at the Zecuity patch site should immediately remove it to avoid possible burns or scarring, regardless of how long the patch has been worn, and contact your health care professional. Do not bathe, shower, or swim while wearing the patch. Read the Patient Information leaflet and the Instructions for Use section in the drug label, and talk with your health care professional if you have any questions or concerns.
Health care professionals should advise patients who complain of moderate to severe pain at the application site to remove the Zecuity patch immediately. Consider a different formulation of sumatriptan or switch these patients to an alternative migraine medicine. Evaluate patients and the application site as needed.
Healthcare professionals and patients are encouraged to report adverse events or side effects related to the use of this product to the FDA’s MedWatch Safety Information and Adverse Event Reporting Program:
So then this report also came out on June 13th 2016, the same day as the FDA said doctors should suspend these patches from their patients. So now what will happen?
Lawyers will jump on the bandwagon and they will be taking class actions cases against the manufacturer. However the end results will be people who will be as disillusioned about lawsuits as I am and equally as disillusioned by BIG PHARMA. Now read this.
So much for the $114 million Teva shelled out to get its hands on Zecuity developer NuPathe. After less than a year on the market, the Israeli drugmaker is pulling the migraine patch.
Monday, the company announced that it would stop sales, marketing and distribution of the product on post-marketing reports of burning and scarring at the patch application site. Teva has also launched a recall of the med from pharmacies.
The discontinuation follows an FDA alert on the drug from earlier this month that cited “severe redness, pain, skin discoloration, blistering, and cracked skin.”
“At Teva, the wellbeing of people using our products is always the first priority,” Teva CEO of global specialty meds Rob Koremans said in a statement, noting that the company would “continue our investigation into the root cause of these adverse skin reactions” and work closely with regulators to resolve any outstanding questions. Too little, too late for those who are injured, both by this company and the FDA.
It’s a blow to the Petah Tikva-based generics giant, which nabbed NuPathe in 2014 in its quest to bulk up on the specialty side before Copaxone copies hit. And while that process took longer than industry-watchers expected–allowing Teva to switch the majority of patients over to a long-lasting, patent-protected formulation of its multiple sclerosis superstar–the therapy still took a hit last year, recording a 14% decline to $960 million and coming in shy of the billion-dollar tally analysts expected.
Meanwhile, Teva is also working hard to close the $40-billion deal for Allergan’s generics unit that it expects to solidify its No. 1 position in the generics space. After coming to terms on the acquisition last summer, the companies have been making divestments to satisfy antitrust regulators; Monday, India’s Dr. Reddy’s said it had agreed to pick up 8 drugs from Teva–including one already-marketed treatment–for $350 million.
So what else is going on? I can only give you a sampling. Let’s begin with Boston Scientific, the company who screwed me up for LIFE and I love so much…… Yeah right. A little sarcastic humor.
Coming off a successful first quarter in which four of its 7 businesses posted double-digit organic growth, Boston Scientific is now planning a makeover. The Marlborough, MA-based device maker announced a global restructuring program on Wednesday to “support long-term growth and innovation.”
Boston Scientific is facing more pushback in its legal saga over vaginal mesh implants. Federal prosecutors are convening a grand jury to consider evidence that the company used defective counterfeit raw materials from China for its devices. I have not found anything new on counterfeit mesh than I have already given you, but don’t worry, when I do I will let you know.
Now for Medtronic. Reading this makes me realize this is all about cat and mice games with the government. Be aware that Medronic bought out Covidien and that increased their growth while they screwed women out of proper compensation.
A federal judge delivered a win for Medtronic in its $1.4 billion lawsuit against the Internal Revenue Service over how much of its profits should be taxed federally and how much should face lower taxes in Puerto Rico.
The dispute surrounds the device giant’s 2005 and 2006 tax returns, made before the devicemaker merged with Covidien. “Transfer pricing” allows companies to assign profits from goods made and sold in the U.S. to a business unit in another country; in this case, Medtronic attributed profits to its Puerto Rican subsidiary. Though Puerto Rico is part of the U.S., it is considered foreign for tax purposes. Its tax rate is lower than the federal rate. The IRS disagreed with the way Medtronic allocated its profits and demanded the device maker pay $548 million in federal taxes for 2005 and $810 million for 2006.
Judge Kathleen Kerrigan wrote in a 144-page opinion that the IRS interpreted Medtronic’s “transfer pricing” in an “arbitrary, capricious, and unreasonable” way. Medtronic’s Puerto Rican subsidiary was “involved in every aspect of the manufacturing process,” including the performance of some processes that required skilled workers because they could not be automated, Kerrigan wrote. She found that the Puerto Rican unit was contributing significantly to the company’s profits.
While Kerrigan ruled in Medtronic’s favor, she did not specify at the time how much Medtronic will end up forking over to the IRS. According to The Wall Street Journal, Medtronic will evaluate the ruling and said it could take several months or longer if an appeal is made.
Medtronic, which switched its tax domicile to Ireland following its merger with Covidien, can breathe a sigh of relief at the finding. Had the court taken the IRS’s side, every tax return from 2007 forward could come into question, and the IRS could conceivably have shaken the company down for billions more in taxes, the WSJ reported.
Now for the lovely Johnson & Johnson. When you read this blog, bear in mind there are rumors that both my daughter and I take money from these companies. What a stupid joke! Talk about deflection by those who really ARE taking money.
Johnson & Johnson’s medical device segment has become something of a red-headed stepchild for the company, with sales for the unit lagging behind its fast-growing pharma business. But the company is rolling out a game plan to get things back on track, with job cuts featuring at the top of its to-do list. I am sure you feel sorry for J & J…..
The New Brunswick, NJ-based company is axing approximately 3,000 jobs in its medical devices division in an effort to save up to $1 billion in costs by 2018, J&J said in a statement. The cuts comprise about 2.5% of the company’s global workforce and up to 6% of its medical device segment, and will apply to J&J’s orthopedics, surgery and cardiovascular businesses. Other medical device units and vision care and diabetes care businesses will not be affected by the move.
Yes don’t worry, they will come back to screw more people in the world with drugs and implants. They certainly are not going anywhere.
Johnson & Johnson laid out its plans to turn around its medical device business–pledging annual growth for it of about 4% to 6% through 2020. To drive that, it’s looking to further enhance its fastest growing market segments–such as electrophysiology and neurovascular–while getting to market in surgical robotics and entering structural heart devices, the company told investors on May 18.
Here is a bit more about J & J. I highlighted in blue a few interesting facts.
The Financial Times reported in a Jan. 27 article that the firm’s managing director Daniel O’Keefe made a presentation last year to the board and execs at J&J to lobby for a split into three separate companies for its biopharma, consumer and medical device businesses. The last has been performing poorly and was just the focus of a restructuring announced earlier this week.
Artisan Partners followed up with an open letter from O’Keefe to the J&J board on Jan. 28 that details the firm’s objections to J&J’s existing structure. The firm, which has roughly $100 billion under management, had a $445 million stake in J&J at Sept. 30.
The chief complaint from Artisan was of poor M&A execution, with the $19 billion acquisition of medical device player Synthes in 2012 as the chief example. Despite that deal, the $8 billion in profits generated by the medical device business remains roughly the same as in 2010, noted the letter. On the whole, J&J spent $150 billion from 2006
onward on M&A, integration, restructuring, capital expenses and R&D–but has only increased its profits by $7 billion.
The letter also noted the more than $8 billion in product liability and expenses. This shareholder action comes, ironically, at the same time as the conglomerate also makes its first major vaginal mesh settlement of $120 million. Sorry I have to say this. It is a drop of piss in a bucket and they will be sure to try to screw anyone injured. They will also try to get rid of as many women as possible by illumination, trying to blame YOU for your problems caused by your implant.
Summed up O’Keefe on J&J’s failings, particularly on the medical device and consumer groups, “Two of the three businesses are among the worst-performing participants in their industry. In my view, separation of the three businesses
would create immediate near and long-term value as greater focus and accountability is brought to bear.” Everyone wants them out of the implant business INCLUDING ALL THE INJURED WOMEN.
He called on the board to conduct a review of J&J’s M&A history and a restructuring of its capital allocation. O’Keefe also advocated for the company to adopt a “return on capital” approach to executive incentives; he complained that CEO compensation was $200 million for 2007 through 2014.
Finally, he asked the company to offer publicly financial targets for the “faltering medical devices and consumer businesses.”
O’Keefe continued, “Absent their return to industry-leading performance, the board should commit to spin those businesses off to shareholders so that new, focused and accountable management teams can lead them into the future.”
At last year’s presentation, O’Keefe reportedly made the case that such a split would boost the enterprise value of the company by almost $90 billion. That would be substantial given that the current enterprise value is almost $270 billion. Unlike market cap, another measure of valuation, enterprise value takes debt into account.
The shareholders of course do not give a crap about what is happening to women, because they too are all about money.
Here is part of the shareholders complaint.
JNJ’s extensive M&A activity has destroyed significant value.
JNJ paid $17 billion for the Pfizer consumer business in 2006 and the profits of the consumer business are smaller today than before the acquisitions.
JNJ paid $19 billion for Synthes in 2012, has since spent $3 billion restructuring it, and recently announced another $2 billion restructuring. Despite this $24 billion investment, the medical device business is generating adjusted EBITA of less than $8 billion, roughly the same level of profit it made in 2010.
Over the period from 2006 through today, the Company has spent more than $150 billion on mergers & acquisitions, integration & restructuring, capital expenditures and research & development. Yet over that time, EBITA has increased by only about $7 billion. By any measure, the return on capital reinvested in the Company has been unacceptable. So if you received a settlement offer, how do you feel about it after reading this?
There are also other questionable acquisitions going on. It seems although Jane Akre has been asking women to give her money for the past five years, she has suddenly given Lana Keaton five hundred dollars.
Now considering Akre has been collecting money off of injured women for the past five years, I do wonder what she wants from Keaton. Here is Keaton’s thank you. The date is May 19th 2016.
It was not that long ago when Akre was raising money for HERSELF. In case you have forgotten here it is.
Could it be because Keaton has a new goal?
Is Jane Akre acquiring
the services of Keaton for the future?
What surprised me was that she stated that she wanted to move to Washington D.C. The reason is, is because the State of Washington is a VERY expensive place to live. You can read this to see what I mean.
Consumer Prices in Miami, FL are 12.23% lower
Consumer Prices Including Rent in Miami, FL are 17.33%
Rent Prices in Miami, FL are 24.32% lower
Restaurant Prices in Miami, FL are 0.69%
Groceries Prices in Miami, FL are 8.02%
Local Purchasing Power in Miami, FL is 13.85%
If she cannot afford the rent where she is living, how will she afford it in Washington DC?
Keaton likes to visit with politicians, shake hands and do photo shoots, but the truth is, lobbying for money will be pretty hard when you want to get rid of mesh. I don’t think any company is paying out for that service and with what happened to Keaton, I am sure she doesn’t want to keep it on the market.
So what exactly does Jane Akre want for her $500? It will be interesting to learn the truth, but I doubt if we will. Akre stays under wraps about what she is really up to.