There has been so much wishful thinking on these threads of late, specifically about the reasons why Teva quit the CHF trial at such a late stage. Here, I intend to debunk some of these myths.
Firstly, here's my central case, based on information in MSB's disclosures to the ASX, SEC filings and conference calls:
Teva have stopped funding the trial, therefore the surrogate endpoints must have been missed.
There have been various demonstrably false, or at the very least highly improbable counterarguments made to this:
Teva walked because recruitment was slow, not because of bad data
Q3 conference call – Silviu said “The trial is recruiting well across North American sites. The primary endpoint is a comparison of recurrent Heart Failure-MACE between MPC treated patients in controls. And during the second half, during the same quarter of this year, European sites will be initiated for the trial that will substantially increase recruitment across many sites. We will be providing together with Teva updated timelines for completion of the current Phase 3 trial for FDA and EMA regulatory submissions and for overall progress completion including the need for consolatory trial.”
Business update call – Emerson C Perrin “So this is a trial that is absolutely on target of all our goals in terms of enrollment.”
Silviu denied that Teva had seen any data from the trial.
No he didn’t, he denied that Teva had seen any patient level data. Business update call:
Q: ”Now, once we have this interim analysis, can you just reconfirm that neither you nor Teva actually saw the results beyond what you had reported on the safety? “
A: “This is a randomized blinded Phase 3 program. Nobody has access to detailed patient level results other than the trial's independent data monitoring committee. They see all the patient level data. After reviewing the full efficacy and safety data of the first 175 patients, they recommended that the trial proceed as planned. We're very pleased by this outcome. We cannot provide detailed data to the market because the FDA prevents any detailed data being disseminated in order to maintain the integrity of a Phase 3 trial.”
Silviu didn’t answer the question. He answered a different question that hadn’t been asked. This has since been misconstrued by many to suggest that Teva haven’t seen the data that they were entitled to.
Teva and MSB mutually agreed to tear up their contracts without seeing any data. Maybe the FDA said they couldn’t see any data.
This requires us to believe that Teva, a $60bn healthcare company lacks the ability to define what does and doesn’t constitute deblinding to the satisfaction of the FDA - it's not plausible. This is a continuation of Silviu’s non-denial – the FDA don’t let anyone see deblinded, patient level data – that’s not the same as no high-level data, especially when that data is defined in advance. As JPM note
As for MSB suddenly deciding they wanted the CHF trial back and out of the goodness of their heart Teva agreed to hand it back without seeing data, we should review the Q3 conference call.
Silviu seemed pretty happy with the idea of Teva continuing to fund the trials, and had every belief that even after reviewing the data, they would continue to do so. They had previously had the opportunity to walk, but chose not to.
MSB didn't want to fund the trials themselves, that's why they bring in partners, and why everyone got excited about Celgene! They've now had to set up an "equity facility" that sounds suspiciously like an ATM - this is not an action that a rational company would take if there was another option, due to the carnage it is likely to inflict on the share price once they start selling their own stock on market.
In either case – the published, on the record information all shows that Teva get yes/no answers to specified questions at the interim analysis, and can walk if and ONLY if the statistician says NO.
Teva wanted to walk because they’re funding the Allergan generics acquisition, they can’t afford to fund this trial, even if they think it will be a success.
This one’s hilarious! Teva borrow 5 year money at 2.5%. They’re a US$60bn EV company with annual free cash flow of more than US$5bn. The US$40bn they’re buying the generics portfolio for will be self-funding from the roughly $2bn of free cash flow the portfolio generates annually. The idea that they would hand back for free a trial that had met the surrogate endpoints because they couldn’t find a measly US$70m down the back of the sofa is utterly, utterly ridiculous.
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Teva set up the trial in such a way as they could review the surrogate endpoints at the interim stage, and walk only if the data was poor. Upon reviewing the data, they walked.
This is the only explanation I can find that fits all the facts.
(20min delay)