Bausch Health, former known as Valeant Pharmaceuticals International, announced that the U.S. Food and Drug Administration (FDA) had approved its Duobrii (halobetasol propionate and tazoretene) Lotion for plaque psoriasis.
Bausch Health, formerly known as Valeant Pharmaceuticals International, announced that the U.S. Food and Drug Administration (FDA) had approved its Duobrii (halobetasol propionate and tazoretene) Lotion for plaque psoriasis.
The drug, developed by a Bausch division, Ortho Dermatologics, was rejected by the agency in June 2018. Although few details were released, Bausch’s chairman and chief executive officer, Joseph Papa, stated at the time, “The CRL did not specify any deficiencies related to the clinical efficacy or safety of Duobrii and no issues with CMC [Chemistry, Manufacturing and Controls] processes. The CRL only noted questions regarding pharmacokinetic data. We are working to resolve this matter expeditiously and have already requested a meeting with the FDA.”
Psoriasis is a chronic, painful and often life-altering immune-mediated inflammatory skin disease. More than 75% of patients with moderate-to-severe plaque psoriasis have significant itching, and more than 55% report moderate or worse levels of pain.
Duobrii is a combination of halobetasol propionate and tazarotene. When used separately to treat plaque psoriasis, they can only be used for four weeks or less and have a high rate of adverse side effects. However, the combination, because of a dual mechanism of action, expands duration of use and has a proven safety profile.
This approval will likely help a company that has had a long slow climb out of the scandals that overturned its management and caused a rebranding effort. From about 2014 through 2016, the Canadian company had numerous scandals ranging from insider trading to channel stuffing. In 2014, Pershing Square, a hedge fund run by activist investor William Ackman, acquired a multi-billion-dollar stake, about 10%, in Allergan. Part of Ackman’s goal was to force Allergan into being acquired by Valeant. Between 2008 and 2014, Valeant had made over 108 acquisitions.
There were almost immediate accusations of insider trading when, a month after buying the stake, Valeant and Pershing announced their joint bid and the stock climbed 15%, giving Pershing about $1 billion in gains overnight. Allergan responded with a lawsuit and the U.S. Securities and Exchange Commission (SEC) launched an investigation.
In the midst of all of this, investigate reports with the Southern Investigative Reporting Foundation uncovered fraudulent practices with Valeant’s specialty pharmaceutical channel Philidor that pushed the company’s drugs on insurers and benefits managers. Philidor’s leaders eventually faced criminal charges.
Valeant also faced charges of price gouging similar to those of the so-called “pharma bro,” Martin Shkreli. There were several examples for Valeant, although most notable was probably Nitropress, used to treat patients with high blood pressure. Before Valeant acquired the drug, it sold for around $200 per vial, but Valeant acquired the drug and increased the price to $805 almost immediately.
By the time company’s chief executive officer, J. Michael Pearson and much of the executive suite were ousted, Valeant had $30 billion in debt, the company had lost about 90% of its value, and its iffy reputation was in tatters. Joe Papa took over the company, began selling off assets and restructuring, the company was renamed and in January 2018, Valeant and Pershing settled the insider trading lawsuit with Allergan and paid $290 million, although Ackman claimed to the end that there was no insider trading.
At the news of the Duobrii approval, Bausch Health shares rose 3.6%. The drug is expected to launch in June. Company shares have risen 29% so far this year. Shares are currently trading around $23.79, still dramatically lower than July 24, 2015, when shares traded at $251.92.
