Calvert engages Assertio on future opioid exposure

28 November 2018 - 12:00 am UTC

Calvert Research and Management continues to engage with Assertio Therapeutics [NASDAQ: ASRT] about the specialty pharmaceutical company’s report on its exposure to risks related to its opioid business, Calvert’s Stu Dalheim told Activistmonitor
Dalheim, vice president of Calvert’s shareholder advocacy program, said the report incorporates risks on past exposure but it does not fully address them that it may need to face in the future.
The Assertio report – released on 7 September – details how it monitors and manages the financial and reputational risks related to the opioid crisis in the US.
Calvert and UAW Retiree Medical Benefits Trust had sponsored a request for the report. Sixty-two percent of shareholders approved the proposal for the company to detail the measures it has taken since 2013 to address opioid risks more effectively.
Assertio, which changed its name from Depomed in August, has been making changes to its business, shifting away from opioids to its neurology and specialty businesses.
In January, it closed on a deal for Collegium Pharmaceutical to commercialize its NUCYNTA franchise of pain products and eliminated its sales force, with Assertio receiving royalties based on sales.
It also entered a deal last year and sold all the rights to Lazanda, a nasal spray that contained an opioid.
Calvert and UAW Retiree highlighted the regulatory and legal pressure Assertio has been under in its call for the report.
The proposal pointed to the subpoenas and demands for investigation from several states and the US Department of Justice, including a request from Senator Claire McCaskill, who asked for information on its role in the opioid epidemic.
McCaskill’s investigation asserted that Assertio was one of five opioid manufacturers that paid money to organizations to promote opioid prescriptions and attempted to downplay the risk of addiction to opioids. She claimed the firms lobbied against restrictions on overprescription.
The shareholder proposal also highlighted an MSCI report, which characterized Assertio’s opioid-related controversy level as “severe,” estimating potential fines at up to 20% of the company’s enterprise value.
A company spokesperson said Assertio has engaged with Calvert and UAW Retiree, holding extensive talks with the investors before this year’s annual shareholders meeting, during the meeting, and following the release of the report.
Assertio had only been marketing NUCYNTA for a just few years before the Collegium agreement, the spokesperson noted. Assertio acquired the US licensing rights for NUCYNTA from Johnson & Johnson’s [NYSE: JNJ] Janssen Pharmaceuticals in April 2015.
Dalheim said of particular concern is whether the marketing deals and the structure of these deals is sufficient to rid Assertio of liabilities related to its pain business.
While the Collegium deal removes some of the risk, he questioned whether it eliminates all the risks since the company still receives a lot of money from its opioid products. This is where Calvert would like to see the report to be more forward looking, Dalheim said.
In the 3Q earnings release, Assertio announced that it amended and strengthened its commercial agreement with Collegium, with Assertio saying the amendment strengthens the collaboration and further aligns the parties’ mutual interest in growing the franchise, ensuring a certain range of sales and a cap on financial impact from the relationship.
by Ed Mullane in New York