Anaheim drug maker Questcor Pharmaceuticals Inc. is making a move toward “vertical/backward integration” with its buy of a contract manufacturer in Canada.
The maker of H.P. Acthar Gel said earlier this month that it would pay $51 million for BioVectra Inc., which has been Questcor’s manufacturing partner for Acthar for some 10 years, and also makes specialty chemicals.
“Questcor will get considerable benefit from the transaction,” Ahmed Ishtiaq, a member of the Efsinvestment investor website team, said in an article published on Seeking Alpha.
The drug maker will reduce a layer from its supply chain and get increased control over the manufacturing of Acthar, according to Ishtiaq.
He said the deal also bolsters protection for intellectual property on Acthar.
“Although BioVectra was a trustworthy long-term partner—a danger of misconduct always remains,” he said.
Acthar is Questcor’s only drug and has several uses, including treatment of kidney disorder nephrotic syndrome, multiple sclerosis flare-ups and infantile spasms, a rare epilepsy variant.
Acthar costs about $40,000 for a course of treatment for multiple sclerosis flare-ups, $100,000 for infantile spasms, and as much as $250,000 for nephrotic syndrome.
Those prices drew the attention of The New York Times recently. A Times article that ran at the end of December featured a quote from a Louisiana radiologist who had used Acthar for gout in the early 1990s, at a time when it used to cost $50 a vial.
Questcor Chief Executive Don Bailey defended Questcor’s pricing for Acthar, noting that it needs high prices to keep the drug on the market because the infantile spasm market is so small.
The Times noted that only 10% of Acthar’s current sales are for infantile spasms, although the share of overall revenue from treatments for that condition could rise as insurers reconsider coverage of other uses. The Times story also noted that Questcor’s shares fell in September after Hartford, Conn.-based insurer Aetna Inc. said it wouldn’t pay for Acthar except for infantile spasms because of lack of evidence that the drug worked for other conditions. Blue Cross Blue Shield of Michigan more recently said its coverage of Acthar would be limited to treatment of infantile spasms for similar reasons.
Bailey also responded to a question about whether Acthar’s price is still justified because it is now pursuing larger markets: “We could lower the price and make less money, and then we would be sued by our shareholders.”
Cohen Gets New Job
Veteran Orange County medical device executive Raymond Cohen has a new job.
Cohen has been appointed as executive chairman of JenaValve Technology Inc., a venture-backed, privately held company based in Wilmington, Del., that is developing a transcatheter aortic replacement heart valve. Michael Dormer is transitioning from his position as JenaValve’s non-executive chairman to an advisory role.
Cohen was most recently chief executive of Laguna Hills-based Vessix Vascular Inc., which makes a renal denervation device to treat high blood pressure that does not respond to drugs. He oversaw Vessix’s sale last year to Natick, Mass.-based Boston Scientific Corp., a deal that could eventually be valued at up to about $425 million.
Cohen left after the completion of the Vessix deal, which marked the second time he had guided an OC device maker to an acquisition by a larger competitor. He previously was chief executive of Cardiac Science Inc., an Irvine-based defibrillator maker sold to Bothell, Wash.-based Quinton Cardiology in 2005.
JenaValve’s transapical device, which is inserted via a catheter through a small rib incision, is now being sold in Europe. The company is also developing a transfemoral approach for the valve. That approach is in the final phase of development and is anticipated to be available for sale in 2014.
Samueli Center
The Susan Samueli Center for Integrative Medicine wants a new clinic.
Irvine city records show that there is a planning hearing scheduled Feb. 13 for a conditional use permit to house the center in a building at 17861 Von Karman Ave. near the John Wayne Airport.
That 47,000-square-foot building now holds the Kids Institute for Development and Advancement, which works with children who have autism spectrum disorders.
The Samueli Center is affiliated with the University of California, Irvine. Its treatments include acupuncture, naturopathy, Chinese herbal medicine, nutritional supplements, a therapeutic lifestyle program and education. It also works on scientific research in complementary and alternative medicine.
Center spokesperson Laurie Macaulay said that the institute is looking to occupy about 6,000 feet of the building that is not occupied by the Kids Institute for Development and Advancement.
Macaulay said the Samueli Center has outgrown its current 1,200-square-foot clinic on Birch Street, and mentioned that it also needs the space because it now houses UC Irvine’s executive health program as well.
The center will remain affiliated with UCI, Macaulay said.
Philanthropists Henry and Susan Samueli started the center at UCI in 2000 with a $5.7 million gift. Susan Samueli’s degrees include one from the British Institute of Homeopathy and a Ph.D. in nutrition from the American Holistic College of Nutrition, now the Clayton College of Natural Health in Montgomery, Ala.
“Like many people of the era that I’m from, those of us who got into alternative medicine had a health crisis themselves and didn’t find much help from conventional, western doctors,” she told the Business Journal in an earlier interview.
