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Michael Milken, 60,000 Deaths, and the Story of Dendreon (Chapter 9 of 15)

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Michael Milken, 60,000 Deaths, and the Story of Dendreon (Chapter 9 of 15)



What follows is PART 9 of a 15-PART series. The remaining installments will appear on Deep Capture in the coming days, after which point the story will be published in its entirety.

Click here to read PART 1

Click here to read PART 2

Click here to read PART 3

Click here to read PART 4

Click here to read PART 5

Click here to read PART 6

Click here to read PART 7

Click here to read PART 8

Where we left off, we had learned that on March 29, 2007, an FDA advisory panel had voted overwhelmingly that Dendreon’s promising treatment for prostate cancer should be approved. As a result, most financial analysts and investors were predicting that Dendreon’s future looked extremely promising.

As we had also learned, however, ten hedge funds (out of a universe of 11,500 hedge funds) held large numbers of Dendreon put options (bets against the company), suggesting they had reason to believe that Dendreon would be derailed. At least seven of those hedge funds can be tied to Michael Milken or his close associates. Michael Milken himself also stood to profit if Dendreon were to experience any problems receiving FDA approval. This is because Milken was the early financier and principal deal maker for ProQuest Investments, a fund that controlled, along with an affiliate, a company called Novacea, which was one of Dendreon’s putative competitors in the race to produce a new treatment for prostate cancer. Meanwhile, a Milken crony, Lindsay Rosenwald (who once helped run a Mafia-linked brokerage called D.H. Blair) controlled Cougar Biotechnology, the only other company that purported to be developing a treatment for prostate cancer. We had learned that Milken’s “philanthropic” outfit, the Prostate Cancer Foundation, had supported Novacea and Cougar, while turning its back on Dendreon.

Finally, we had learned that on April 13, 2007, The Cancer Letter, a newsletter with a history of publishing information leaked from the FDA, and reputation for being an organ of Wall Street hedge funds, published a confidential letter to FDA commissioners from an FDA-contracted doctor named Howard Scher, who was a board member and executive of Milken’s ProQuest Investments and the chairman of the “Therapeutic Consortium” of Milken’s Prostate Cancer Foundation.  In this letter (an unprecedented attempt to lobby the FDA after an advisory panel had already voted), Dr. Scher argued vehemently that Dendreon’s treatment should not be approved.

Now we learn more about Dr. Scher’s letter…

* * * * * * * *

As Dr. Scher made clear in his letter, his concern about Dendreon was not, strictly speaking, that it didn’t work, but that it would render irrelevant his work on Novacea’s competing treatment, Asentar. A new phase 3 trial to test the effectiveness of Asentar (referred to in the letter by its medical name, DN-101) had been “designed, initiated and continues to accrue,” Dr. Scher wrote. “I am the International Investigator on this trial.”

Nowhere in his letter (and nowhere in the conflict-of-interest waiver form that he submitted in order to get a seat on the FDA advisory panel that voted on Dendreon’s treatment) did Dr. Scher mention that he was not just the lead investigator in the Asentar trials, but also a board member and executive of Milken’s ProQuest Investments, which was, along with affiliate Domain Associates, the biggest investor in Novacea, the company that was developing Asentar.

Also left unmentioned was the fact that Dr. Scher was the chairman of the “Therapeutic Consortium” of Milken’s Prostate Cancer Foundation. The “Therapeutic Consortium” helps Milken’s “philanthropic” outfit decide which treatments and hospitals deserve its support.  It is clear that the Prostate Cancer Foundation’s donations to hospitals such as Dr. Scher’s Memorial Sloan are linked to the hospitals’ support of specific treatments being developed by specific Milken-affiliated companies.

For example, in one typical press release, the Prostate Cancer Foundation stated that the “Therapeutic Clinical Investigation Consortium [the Milken Prostate Cancer Foundation outfit of which Dr. Scher is the chairman] played an important role by accelerating testing of this new agent [Abiraterone, the agent developed by Milken crony Lindsay Rosenwald’s Cougar Biotechnology] in Phase II clinical trials…Right now, at MD Anderson and Memorial Sloan-Kettering, both NCI funded cancer centers, the Phase III trials of Abiraterone [Cougar’s treatment] are going on. PCF contributions to Sloan-Kettering reached $18 million to date, possibly more…”

In other words, Milken raised money from unsuspecting donors, including the ordinary folks who slipped cash into the buckets that the Prostate Cancer Foundation places outside of supermarkets and shopping malls. Then Milken, with the support of Dr. Scher, directed that money to Dr. Scher’s hospital, with the understanding that Scher and his hospital would attach their prominent names to drugs developed by companies in which either Milken or Milken’s friends were investors.

Keep in mind that the prostate cancer drugs developed by Milken-affiliated companies were in the earliest stages of development – there was not yet much evidence that they could help patients. But, as we will see, there was lots of potential for them to make money for Milken and his friends.

Meanwhile, the Prostate Cancer Foundation and affiliated doctors diverted attention, or (in the case of Dr. Scher) attacked Dendreon, the only company with a new treatment for prostate cancer that could be delivered to patients right away, and for which “substantial evidence” existed that showed it worked.

This is not exactly “philanthropy” in its purest form.

* * * * * * * *

Remember, on March 29, 2007, when Dr. Scher sat on the FDA’s advisory panel, he was one of the 17 doctors who voted unanimously that Dendreon’s treatment was safe. And two weeks later Dr. Scher wrote a letter to the FDA in which he vigorously trashed Dendreon’s treatment.

As mentioned, this letter was strange in that it was unprecedented for an FDA-contracted doctor to lobby the FDA after an advisory panel had already voted. It was strange in that the presumably confidential letter was quickly published by The Cancer Letter, an outfit with a reputation for being an organ of short selling hedge funds. And the letter was strange in that it was disingenuous, to the say the least.

For one, Dr. Scher seemed to have changed his mind with regards to the safety of Dendreon’s treatment.

In his letter to the FDA, he noted that the advisory panel had discussed the fact that Dendreon’s trials showed that 4.9% of patients treated with Provenge had experienced “cerebrovascular events” compared to 1.7% of patients who were given a placebo.

The panel’s 17 doctors, Scher included, had voted unanimously that this was an acceptable risk for patients with a deadly disease – especially since, in other regards, Provenge appeared to be perfectly safe.  But now Scher was insisting in a letter to the FDA that these rare “cerebrovascular events” (few of which were fatal) were worrisome enough to deprive end-stage prostate cancer patients of a treatment that might extend their lives.

But Dr. Scher’s “cerebrovascular events” argument was not new. It was precisely the same canard that had been delivered to the press by those dubious Wall Street players — the singing Sendek, and doctor-impersonating Aschoff, the troubled UBS, and the whispering hedge fund managers.

As to the effectiveness of Provenge, Dr. Scher averred in his letter that Dendreon had not met its “primary end-points” and the data was “not considered definitive.” He insisted that the treatment be delayed until Dendreon could provide “proof” that Provenge extended lives.

This was absurd. As Dr. Scher must have known, rarely in history has data on an experimental treatment shown definitive “proof” that the treatment works in every case. Instead, the legally established criteria for FDA approval (especially of treatments for life-threatening diseases) is that the data show “substantial evidence” that the treatment improves the health of patients.  Neither medicine nor science progresses by “definitive proof”.

Even if trials do not meet their “primary end-points,” the FDA usually approves treatments for deadly diseases if the odds are nonetheless good that the treatments increase survival. The odds might not be 100 percent, but if they are 98 percent, or even 51% percent, the treatment should be delivered to patients who will otherwise die. This criteria – “substantial evidence” of increased patient survival – is referred to as “the Gold Standard” by FDA officials and doctors everywhere.

In any case, “it may be time we focus less on statistical significance, and more on patient benefit.” So said Dr. Scher himself, in an interview with a medical journal, just a few weeks before he wrote a letter to the FDA harping on Dendreon’s statistical significance. Most likely, Dr. Scher was thinking about his trials of Asentar (the drug under development by Novacea, which was controlled by Milken’s ProQuest Investments and an affiliate) and Abiraterone (the drug developed by Milken crony Lindsay Rosenwald’s Cougar Biotechnology). These trials had not yielded particularly good results.

In fact, as we will see, Asentar was not just unhelpful to patients. During trials of the treatment, patients dropped dead. They dropped dead earlier than expected. And, as Novacea later acknowledged, the cause was clear: Asentar actually killed a significant number of people who were hoped to benefit from it. Provenge  increased “cerebrovascular events” in a small number of patients, but patients on Asentar died in such large numbers that Novacea had to discontinue its trials of the drug.

The question is: Did Milken’s Prostate Cancer Foundation, Dr. Scher, and the Wall Street hedge funds really believe that competing treatments were superior to Provenge when they began their attack on Dendreon?  Or were their attacks motivated by their financial interests?

* * * * * * * *

It was not necessary for Asentar to receive FDA approval in order for Milken’s ProQuest to make heaps of money from its investment in Novacea. As we will see, the Milken clan had hatched a plan to cash in on their Novacea stock, regardless of what the FDA had to say about the company’s prostate cancer treatment, and regardless of whether that treatment would eventually be shown to kill an unacceptable number of people.

Same goes for Cougar Biotechnology’s investors, who included not just controlling shareholder Lindsay Rosenwald (who once helped run the Mafia-affiliated D.H. Blair, which was indicted on 173 counts of securities fraud and was famous for pumping phony biotech companies), but also two of the seven Milken network hedge funds that were betting big against Dendreon. Cougar’s treatment, supported by Milken’s philanthropy and by the four Prostate Cancer Foundation doctors who sat on Cougar’s advisory board, was virtually untested, but as we will see, this did not prevent the company’s investors from cashing in.

When Dendreon came under attack, similar plans to cash in had been hatched by investors in a company called Cell Genesys, whose experimental (and, we will see, ineffective) treatment was promoted in a most peculiar fashion (which I will describe in due course) by Milken’s Prostate Cancer Foundation.

Investors in those companies did not need FDA approval to make money, but as we will see, their money-making plans would have been foiled if Dendreon had received approval. In reading the transcript of the FDA advisory panel meeting that voted on Provenge in March 2007, one has to wonder if  Dr. Scher—who led trials for not only Novacea and Cougar, but also Cell Genesys–knew of these money-making plans, and if this knowledge informed the lobbying he undertook at the panel meeting, and in the days following it.

Among Dr. Scher’s more revealing statements at the advisory panel meeting was this: “So if I start thinking, am I denying a potentially useful agent [Dendreon’s Provenge] to men who clearly need it, the answer is unfortunately I don’t know. So I say, well, what if we think that this really should be available, start thinking about the number of agents that are currently under development.”

This is the same message that was whispered in the ears of reporters, who eagerly transcribed it into their stories. If the FDA approved Provenge, they said, it would become the standard of care. This would be unfortunate because other treatments “under development” might be better. The problem with this argument is that there were very few other treatments “under development.” And when Dr. Scher referred to treatments “under development,” there was little else he could have been referring to other than the above-mentioned Asentar (Novacea), Abiraterone (Cougar Biotechnology), and GVAX (Cell Genesys).

As mentioned, Dr. Scher was connected to all three of those companies. Novacea’s Asentar, we know, was killing people. At the time of Dr. Scher’s attack on Dendreon, Cougar’s Abiraterone had been tested on a total of 38 patients. The data showed that some of those 38 patients saw their blood tests improve, and Cougar Biotechnology trumpeted this information in multiple press releases, but there was zero evidence that Abiraterone increased patient survival. GVAX had been tested on 80 patients, and some of them lived longer, but the data did not yet show “substantial evidence” that GVAX was the reason.

All of these treatments had undergone only Phase 2 trials, whereas Dendreon had completed Phase 3 trials on 170 patients. The data from the Dendreon trials had reached statistical significance, and showed that Provenge reduced mortality. In other words, none of the competing treatments (all financed by Milken or Milken’s friends and promoted by Milken’s “philanthropic” foundation) had come anywhere close to achieving results like Dendreon’s.

But Dr. Scher was insistent – ”a number of alternatives [those “alternatives” being drugs under development by Milken and his cronies with the assistance of Dr. Scher and Milken’s ‘philanthropy’, drugs that would prove, in time, to be inferior] were “currently under development.”  And so patients must not have access to Dendreon’s drug  – a drug that was capable of saving lives right away.

* * * * * * * *

To understand the lengths to which some people went to derail Dendreon, it is necessary to recall the Dendreon conference call, when the singing-Sendek kept asking whether the FDA might have to “change the question.”  Others on Wall Street were whispering about “the question,” the press transcribed into their stories these same whisperings about “the question,” and Dr. Scher made  “the question” a key feature of his letter to the FDA. All of them suggested that the FDA advisory panel vote was invalid because the 13 panelists who had voted that Provenge worked had, in fact, voted on the “wrong question.”

The transcript of the Dendreon advisory panel meeting clarifies what was meant by all of this questioning of the “question”. As noted, advisory panels are always asked to vote on two questions: Is the treatment safe? And, is there “substantial evidence” that the treatment is effective?

This is not just custom. It is the law of the land. The 1962 Kefauver Harris Drug Amendments, ratified by the U.S. Congress, stipulated that manufacturers of drug products must establish a drug’s effectiveness by “substantial evidence.”

On the first question, “Is the treatment safe?” the advisory panel had voted “yes”, 17-0. Those 17 included Dr. Scher (though, as has been explained, within weeks he was lobbying the FDA by raising doubts as to the safety of Provenge).

The second question to be addressed was, therefore, “Is there substantial evidence that the treatment is effective?” Dendreon had clearly met this standard – the “Gold Standard” of providing “substantial evidence” of increased survival.

But remarkably, somebody at the FDA advisory panel meeting rewrote the “question.” The chairman of the panel read the question out loud: “Does the submitted data establish the efficacy of [Provenge] in the intended population?”

Immediately, there was confusion. This was not the usual question. Did “establish the efficacy” mean that the panelists had to vote on whether the data had proved, with 100% conclusiveness, that Provenge extended lives? No experimental drug had ever faced such a standard.

Dr. Scher interjected to say that Dendreon’s trials had failed to meet their “two primary end-points.” To this, the FDA’s representative on the panel, Cecilia Witten, remarked that the FDA was aware that the trials failed to meet its two primary endpoints, but that was not the issue. The issue was whether the evidence suggested that Dendreon’s treatment saved lives.

“You know,” Witten said. “We’re given the application based on survival.”

The chairman of the panel resumed with the same question. “Again I’ll read it,” he said. “Does the submitted data establish the efficacy…?”

Thus began the voting. Dr. Scher quickly voted, “No.” So did another physician, Dr. Maha Hussain, and two other doctors. But confusion reigned.

One panelist, a certain Dr. Alexander, said, “So that’s – so my vote is, I don’t know what you would call that…”

A Dr. Chamberlain said, “Well, so I guess at this point I’m not sure how to answer this question. It’s not a yes or no question in my opinion the way it’s phrased. With the safety data and with what we’ve seen, I see no reason not to make this drug available, but I don’t think it’s 100 percent proven that it’s efficacious.”

A Dr. Chappell said, “There’s a degree of belief, and ‘establish’ implies much more certainty…you need please, to specify, at least to me, what you mean.”

A Dr. Alexander piped in, “Like is it a reasonable doubt, a shadow of a doubt?”

At this, there was a lot of mumbling and some laughter. Finally, the FDA’s representative clarified. “Yes,” she said, “the regulatory definition is ‘provide substantial evidence.’ So that’s our standard. Is there substantial evidence that it works…”

The chairman of the committee responded, “So just to clarify what you’re asking, is there substantial evidence that the product is efficacious?”

“Yes,” said the FDA’s representative.

That resolved any doubts, and 13 of the 17 doctors on the panel confidently voted “Yes.”  That is to say, when the doctors voted on the correct question – the question that was stipulated by law, as opposed to the question that had been tampered with — the overwhelming consensus was that Dendreon’s treatment should be approved.

* * * * * * * *

To be continued….Click here for Chapter 10.

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