ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT
MEMORANDUM
TO: Leonard Cross, Responsible Partner
FROM: Jeffrey Park, Lead Associate (Litigation (General))
CC: Nathaniel Bower, Billing Partner; Audrey Zhou, Working Associate (Capital Markets)
DATE: November 8, 2023
RE: Internal Investigation Plan — Penterra Pharmaceuticals Corp. / FDA OPDP Inquiry (OPDP-2023-1847) re Zelvara® (trepivant sodium) Promotional Practices
C&H Matter No.: 1018-00002
PRIVILEGE NOTICE: This memorandum is protected by the attorney-client privilege and constitutes attorney work product prepared in anticipation of litigation and/or regulatory proceedings. It should not be disclosed to any person outside Calderwood & Harkness LLP without express authorization from the Responsible Partner. Any inadvertent disclosure does not constitute a waiver of any applicable privilege or protection.
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I. Purpose and Executive Summary
This memorandum establishes the plan, scope, methodology, timeline, budget, and deliverables for Calderwood & Harkness LLP's ("C&H") internal investigation of the promotional practices of Penterra Pharmaceuticals Corp. ("Penterra" or "PPC") relating to its flagship migraine drug Zelvara® (trepivant sodium, NDA #214-837). The investigation has been undertaken at the direction of Penterra's legal department and is designed to develop a comprehensive factual record in connection with, and in anticipation of, regulatory proceedings and potential litigation arising from a recent inquiry by the U.S. Food and Drug Administration's ("FDA") Office of Prescription Drug Promotion ("OPDP").
On October 12, 2023, OPDP issued an inquiry letter (ref. OPDP-2023-1847) addressed to Penterra's Vice President of Regulatory Affairs. The letter, signed by Dr. Carla M. Witherspoon, Pharm.D., Regulatory Review Officer in the Division of Drug Marketing, Advertising, and Communications within the Center for Drug Evaluation and Research ("CDER"), identified three specific promotional materials from Penterra's "Clarity Campaign" (Q2–Q3 2023) that OPDP determined to contain potentially misleading efficacy claims and to omit or minimize material risk information associated with Zelvara®. Penterra received the inquiry letter on October 16, 2023.
C&H's engagement on this matter was formally opened on October 30, 2023, pursuant to an engagement letter executed by Margaret Tan, Executive Vice President & General Counsel of Penterra. On November 1, 2023, C&H submitted a written request on Penterra's behalf to OPDP seeking an extension of the original November 15, 2023 response deadline. On November 8, 2023, OPDP granted the extension, establishing a new deadline of January 15, 2024 for Penterra's formal response. This extension provides the necessary time to conduct a thorough internal investigation and to prepare a well-supported response to the inquiry.
The investigation is designed to achieve four principal objectives:
1. Scope Determination. Determine the full scope of any promotional-compliance deficiencies beyond the three materials specifically cited in the OPDP inquiry letter, including whether additional Zelvara® promotional materials developed in 2023 contain similar or related issues.
2. Root-Cause Analysis. Identify the root causes of the compliance deficiencies, including any failures in Penterra's Promotional Review Committee ("PRC") process, inadequacies in the medical-legal review of promotional claims, and breakdowns in the oversight of the external agency responsible for campaign development.
3. Off-Label Promotion Assessment. Assess whether off-label promotion occurred in the field through sales-representative interactions with healthcare providers, including any verbal claims promoting Zelvara® for indications beyond its FDA-approved labeling (i.e., acute treatment of migraine with or without aura in adults).
4. Factual Record Development. Develop a comprehensive and well-documented factual record to support Penterra's formal FDA response, to inform the development of a corrective action plan, and to position Penterra favorably in any subsequent regulatory or enforcement proceedings.
To accomplish these objectives, the investigation is organized around four principal workstreams, each described in detail in Section III below:
• Workstream 1 — Promotional Materials Review: A comprehensive review of all 67 Zelvara® promotional materials approved by Penterra's PRC during the period January 1, 2023 through October 16, 2023.
• Workstream 2 — PRC Minutes Review: A detailed examination of the minutes from all nine PRC meetings held during the same period, with particular focus on the approval processes for the three cited materials and the circumstances surrounding the overruling of Medical Affairs objections.
• Workstream 3 — Forensic Review of Sales Representative Communications: An e-discovery and forensic review of CRM records, email communications, and text messages of 14 identified sales representatives in the Northeast region, conducted with the assistance of Tavrenis Stern Consulting Group LLC.
• Workstream 4 — Witness Interviews: A series of interviews with key Penterra personnel and, if feasible, the external agency account lead, to be conducted under appropriate Upjohn/corporate-counsel warnings.
The target date for completion of all four workstreams is December 10, 2023, with a draft Investigation Findings Memorandum to be circulated internally by December 15, 2023, a final Investigation Findings Memorandum delivered to Penterra by December 20, 2023, and a draft FDA response letter incorporating investigation findings to be prepared by January 5, 2024. The formal response to OPDP is targeted for submission by January 12, 2024, three days in advance of the January 15, 2024 deadline.
II. Background
A. The OPDP Inquiry
On October 12, 2023, OPDP issued an inquiry letter to Penterra Pharmaceuticals Corp. bearing reference number OPDP-2023-1847. The letter was signed by Dr. Carla M. Witherspoon, Pharm.D., Regulatory Review Officer in the Division of Drug Marketing, Advertising, and Communications within the Office of Prescription Drug Promotion, CDER, FDA. Penterra received the inquiry letter at its corporate headquarters on October 16, 2023. The inquiry letter identified three specific promotional materials associated with Penterra's "Clarity Campaign" and set forth OPDP's preliminary concerns regarding potential violations of federal law and regulation.
The three cited materials and the associated concerns are as follows:
1. Digital Banner Ad (Material ID: ZVR-2023-BNR-044). This digital banner advertisement ran on MedLinkPro, a healthcare-professional-targeted medical-education platform, from April 15 through August 31, 2023. OPDP's inquiry letter states that the banner ad contained the claim "Fastest Onset in Its Class" without adequate substantiation. The letter further alleges that the banner ad omitted any reference to the risk of hepatotoxicity, a labeled risk of Zelvara® that includes alanine aminotransferase ("ALT") elevations greater than three times the upper limit of normal ("ULN"), which were observed in 1.8% of clinical-trial subjects in the pivotal SUMMIT program. OPDP characterized this omission as a failure to present adequate fair-balance risk information in a promotional context where specific efficacy claims were being made.
2. Physician Email Blast (Material ID: ZVR-2023-EML-019). This email communication was sent on June 7, 2023, to a distribution list of approximately 42,000 neurologists and primary-care physicians. The email featured a bar chart comparing the 2-hour pain-freedom rates of Zelvara® versus placebo, drawn from data in the SUMMIT-3 clinical trial (23.7% vs. 14.2% for placebo, p < 0.001, n = 1,842). OPDP's inquiry letter states that the bar chart utilized a truncated y-axis that visually exaggerated the efficacy differential between Zelvara® and the comparator (lasmiditan), rendering the graphical presentation misleading. The letter further notes that the visual impression created by the truncated y-axis was inconsistent with the actual magnitude of the treatment difference, potentially giving healthcare providers an inflated perception of the drug's comparative efficacy.
3. Sales Representative Detail Aid (Material ID: ZVR-2023-DA-007). This printed detail aid was approved by Penterra's PRC on March 22, 2023 and was subsequently distributed to the company's field sales force for use in physician-office visits. OPDP's inquiry letter states that the detail aid cited an unpublished retrospective chart review (Harmon et al., poster presentation at the American Headache Society annual meeting, 2022) without disclosing that the study was funded by Penterra or that it lacked a control arm. OPDP characterized the citation as potentially misleading because it presented the Harmon et al. data in a manner that suggested a level of evidentiary rigor that the study design did not support, while omitting information material to a prescriber's evaluation of the data's reliability.
The OPDP inquiry letter alleges that the cited materials may violate the following provisions of federal law and regulation:
• 21 U.S.C. § 352(n), which provides that a drug is misbranded if its labeling or advertising is false or misleading in any particular, or fails to present a true statement of information regarding the drug's efficacy, side effects, and contraindications.
• 21 CFR § 202.1(e)(5), which requires that prescription-drug advertisements present a fair balance between information relating to the drug's effectiveness and information relating to its side effects and contraindications, and which prohibits the omission or minimization of risk information.
• 21 CFR § 202.1(e)(6), which prohibits prescription-drug advertisements that contain representations or suggestions that a drug is safer or more effective than has been demonstrated by substantial evidence or substantial clinical experience, including unsubstantiated superiority claims and misleading graphical presentations of data.
B. Penterra and Zelvara® Overview
Penterra Pharmaceuticals Corp. is a Delaware corporation traded on the New York Stock Exchange under the ticker symbol PTPH. The company is headquartered at 480 Overlook Drive, Suite 700, Summit, New Jersey 07901. Penterra is a specialty pharmaceutical company focused on therapeutics in the central nervous system ("CNS") and pain management areas. As of the date of this memorandum, Penterra employs approximately 4,200 people, including a field sales organization of approximately 680 sales representatives deployed across the United States.
For fiscal year 2022, Penterra reported total revenue of approximately $2.18 billion. Zelvara® accounted for net revenue of $814.6 million in FY 2022, representing approximately 37.4% of the company's total revenue and establishing the product as Penterra's flagship commercial asset. For the first three quarters of fiscal year 2023 (Q1–Q3), Zelvara® generated net revenue of $612.3 million, representing an annualized run rate of approximately $816.4 million, roughly in line with FY 2022 performance. As of October 2023, Penterra's market capitalization stood at approximately $6.9 billion. These figures underscore the commercial significance of Zelvara® to Penterra and, correspondingly, the materiality of any regulatory action that could affect the product's promotional activities or market position.
Zelvara® (trepivant sodium) is available in 75 mg and 150 mg oral tablet formulations. The product received FDA approval on October 11, 2019, under NDA #214-837, for the acute treatment of migraine with or without aura in adults. Zelvara® does not carry a boxed warning. The key risks identified in the approved prescribing information include cardiovascular events (myocardial infarction and stroke in patients with cardiovascular risk factors), medication-overuse headache, serotonin syndrome when co-administered with SSRIs or SNRIs, and hepatotoxicity. The hepatotoxicity risk — specifically, ALT elevations greater than three times the ULN observed in 1.8% of clinical-trial subjects — is directly relevant to the OPDP inquiry's allegation that the digital banner ad omitted material risk information.
C. The Clarity Campaign and Ridgeline Health Analytics
All three promotional materials cited in the OPDP inquiry letter were developed as part of the "Clarity Campaign," a multi-channel promotional initiative for Zelvara® that was designed and executed by Ridgeline Health Analytics LLC ("Ridgeline"), an external healthcare-communications agency. Ridgeline is a Delaware limited liability company with its principal office located at 1155 Avenue of the Americas, 18th Floor, New York, New York 10036.
Penterra and Ridgeline are parties to a Master Services Agreement dated March 15, 2021, under which Ridgeline provides healthcare-communications and promotional-development services to Penterra on a retained basis. The annual retainer under the Master Services Agreement is $3.4 million. The Clarity Campaign was governed by a specific Statement of Work ("SOW") dated January 9, 2023, with a dedicated campaign budget of $1.85 million. The Ridgeline Managing Partner with overall responsibility for the Penterra relationship is Victor Saldana. The Account Lead assigned to the Penterra account, and the individual who served as the day-to-day point of contact for the Clarity Campaign, is Monica Chu.
A preliminary observation of significance to this investigation is that the Clarity Campaign SOW did not include a requirement for Ridgeline to conduct an independent medical-legal review of promotional claims before submitting draft materials to Penterra's PRC. This gap in the contractual framework may have contributed to the compliance deficiencies identified by OPDP, as it effectively placed the entire burden of medical-legal review on Penterra's internal PRC process. The investigation will examine whether this omission was an anomaly specific to the Clarity Campaign SOW or was consistent with the parties' broader course of dealing under the Master Services Agreement.
D. Prior Remedial Steps
Upon receipt of the OPDP inquiry letter and in consultation with C&H, Penterra took prompt remedial action with respect to the three cited materials. Specifically, Penterra voluntarily withdrew all three promotional materials from circulation and use as of November 3, 2023. The digital banner ad (ZVR-2023-BNR-044) was removed from the MedLinkPro platform. The physician email blast (ZVR-2023-EML-019) was removed from Penterra's outbound email system and the underlying distribution list was deactivated. The sales representative detail aid (ZVR-2023-DA-007) was recalled from the field sales force, and all physical and digital copies in the possession of sales representatives were collected or deleted pursuant to instructions from the Commercial Operations team.
In addition, on November 6, 2023, Penterra filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission disclosing the OPDP inquiry as a material regulatory matter. The 8-K disclosure was prepared with the involvement of Audrey Zhou, who provided securities-law guidance on the disclosure's content and scope. The filing is relevant to this investigation insofar as it reflects Penterra's assessment that the OPDP inquiry could have a material impact on the company's business, financial condition, or results of operations, and insofar as it may be referenced in any subsequent shareholder inquiry or derivative demand.
III. Scope of Investigation
A. Workstream 1 — Review of Zelvara® Promotional Materials
The first workstream of the investigation consists of a comprehensive review of all Zelvara® promotional materials approved by Penterra's PRC during the period from January 1, 2023 through October 16, 2023 (the date on which Penterra received the OPDP inquiry letter). Penterra's Regulatory Affairs team, under the direction of Christine Holloway, Vice President of Regulatory Affairs, has identified a total universe of 67 promotional pieces that were approved during this period. These materials span multiple channels and formats, including digital banner advertisements, email communications, sales-representative detail aids, leave-behind materials, journal advertisements, conference booth panels, and social-media content directed at healthcare professionals.
The primary objective of this workstream is to determine whether the compliance deficiencies identified by OPDP in the three cited materials extend to other Zelvara® promotional materials in Penterra's 2023 promotional portfolio. In addition, the workstream seeks to identify any materials that contain unsubstantiated claims, omitted or minimized risk information, off-label messaging, or other compliance deficiencies that, while not specifically cited by OPDP, could nonetheless present regulatory risk if reviewed by the agency or if they remain in circulation.
The review will focus on the following specific areas of concern, each of which is informed by the nature of the issues identified in the OPDP inquiry letter:
(a) "Fastest Onset in Its Class" Claim. The review will identify any materials beyond the digital banner ad (ZVR-2023-BNR-044) that contain the "Fastest Onset in Its Class" claim or derivative language suggesting onset superiority (e.g., "rapid onset," "faster relief," "first to act," or similar formulations). For each such material, the review will assess whether the claim is adequately substantiated by data from the approved prescribing information, from published and peer-reviewed clinical studies, or from other sources meeting the evidentiary standards applicable to promotional claims under FDA regulations and guidance.
(b) Keswick Bioanalytics ITC Meta-Analysis. The review will identify any materials that rely on or cite the indirect treatment comparison ("ITC") meta-analysis commissioned by Penterra from Keswick Bioanalytics Inc. It is C&H's understanding, based on preliminary information from Penterra's Medical Affairs department, that the Keswick ITC was commissioned to provide data supporting comparative efficacy claims for Zelvara® but has never been published in a peer-reviewed journal and contained acknowledged methodological limitations, including heterogeneity across the included trial populations and sensitivity to the choice of comparator endpoints. For each material citing or relying on the Keswick ITC, the review will assess whether the limitations of the analysis were adequately disclosed and whether the promotional claims drawn from it are supportable under applicable FDA standards.
(c) Harmon et al. Poster Citation. The review will identify any materials beyond the detail aid (ZVR-2023-DA-007) that cite the Harmon et al. retrospective chart review (poster presentation, American Headache Society annual meeting, 2022). For each such material, the review will assess whether the citation adequately discloses Penterra's sponsorship of the study and the absence of a control arm, and whether the data are presented in a manner that accurately represents the evidentiary weight of the study design.
(d) Graphical Presentations of Efficacy Data. The review will examine all graphical presentations of efficacy data across the 67 materials, including bar charts, line graphs, and other visual formats. Each graphical presentation will be assessed for y-axis scaling, visual formatting, use of color or other design elements that could exaggerate treatment differences, and overall fidelity to the underlying data. This assessment is directly responsive to OPDP's concern regarding the truncated y-axis in the email blast (ZVR-2023-EML-019).
(e) Fair-Balance Risk Disclosures. The review will assess the adequacy of fair-balance risk disclosures in each of the 67 materials, with particular attention to the disclosure of the hepatotoxicity risk (ALT elevations >3× ULN in 1.8% of clinical-trial subjects). The review will evaluate whether each material presents risk information in a manner that is reasonably comparable in prominence and scope to the efficacy claims presented, consistent with the requirements of 21 CFR § 202.1(e)(5) and applicable OPDP guidance.
Methodology. Each promotional piece will be reviewed against the approved Zelvara® prescribing information (the current PI as approved under NDA 214-837), the FDA-approved labeling, the applicable provisions of 21 U.S.C. § 352(n) and 21 CFR § 202.1(e)(5) and (e)(6), and relevant OPDP guidance documents, including the Draft Guidance for Industry on Presenting Quantitative Efficacy and Risk Information in Direct-to-Consumer Promotional Labeling and Advertisements (2018) and the Guidance for Industry on Internet/Social Media Platforms (2014), to the extent applicable. Each material will be categorized on a risk scale (high, medium, low) based on the severity and nature of any identified deficiency.
Assignments. Jeffrey Park and Audrey Zhou will conduct the primary substantive review of the 67 promotional materials. Materials flagged as presenting medium- or high-risk compliance concerns will be forwarded to Dr. Hannah Whitfield and Thomas Crane at Whitfield Bauer & Associates LLP, our regulatory co-counsel (1330 Connecticut Avenue NW, Suite 500, Washington, DC 20036), for independent regulatory-compliance analysis and a second assessment of the identified issues.
Estimated Timeline. November 11 through December 1, 2023. Given the volume of materials (67 pieces), Jeffrey Park and Audrey Zhou will divide the materials between them and conduct parallel reviews, with cross-checks on flagged items. Materials identified as requiring co-counsel review will be transmitted to Whitfield Bauer on a rolling basis to avoid bottlenecking the review process at the end of the workstream period.
B. Workstream 2 — Review of PRC Meeting Minutes
The second workstream involves a detailed review of the minutes from all nine PRC meetings held during the period from January 2023 through October 2023. The PRC is Penterra's internal committee responsible for the review and approval of all promotional materials prior to their use in the marketplace. The committee is chaired by Alan Renwick, Director of the Promotional Review Committee, and its membership typically includes representatives from Medical Affairs, Regulatory Affairs, Legal, Commercial Operations, and Marketing.
The objectives of this workstream are to understand the PRC's approval process for the three cited materials, to identify any procedural failures or deviations from established standard operating procedures ("SOPs") that may have contributed to the approval of non-compliant materials, and to assess whether the PRC's general practices during 2023 were adequate to ensure compliance with FDA promotional regulations.
The review will focus on the following specific areas:
(a) May 18, 2023 PRC Meeting — Email Blast (ZVR-2023-EML-019). This meeting is of particular significance because, based on preliminary information from Penterra, the truncated y-axis in the email blast bar chart was specifically flagged as a concern by Dr. Lina Gerhardt, Pharm.D., Senior Director of Medical Affairs, and her Medical Affairs team. Despite this objection, the email blast was approved by a vote of 4-3, with Medical Affairs voting against approval. The investigation will examine the PRC minutes to identify which committee members voted for and against approval, the reasons articulated in support of each position, whether the Medical Affairs objection was based on scientific or regulatory grounds (or both), and whether the dissent was adequately documented in the minutes. The investigation will further assess whether the dissenting position was escalated through any established escalation mechanism, and if not, whether the PRC's SOPs required or permitted such escalation.
(b) March 22, 2023 PRC Meeting — Detail Aid (ZVR-2023-DA-007). The review will examine the minutes of this meeting to assess the PRC's discussion, if any, of the Harmon et al. poster citation, including whether the committee considered and addressed the study's limitations (uncontrolled retrospective design), Penterra's sponsorship of the study, and the adequacy of disclosure regarding both in the proposed detail aid. The review will also assess whether Medical Affairs or Regulatory Affairs raised any concerns at this meeting and, if so, how those concerns were resolved.
(c) Approval Process for Digital Banner Ad (ZVR-2023-BNR-044). The review will identify the PRC meeting at which the digital banner ad was reviewed and approved, and will examine the minutes to determine when and how the "Fastest Onset in Its Class" claim was presented to the committee, what substantiation was offered, whether any committee member raised concerns about the claim or the omission of hepatotoxicity risk information, and how the committee reached its approval decision.
(d) General PRC Practices. Beyond the three specific materials, the review will assess the PRC's general practices during 2023 regarding the substantiation of comparative and superiority claims, the requirements for fair-balance risk disclosures, the role and weight accorded to Medical Affairs input, the handling of dissenting votes or objections, and the committee's adherence to its own SOPs. The objective is to determine whether the issues identified by OPDP represent isolated lapses or are symptomatic of systemic weaknesses in the PRC process.
(e) Other Materials of Concern. The review will identify any other materials whose PRC approval process, as reflected in the minutes, raises compliance questions — for example, materials approved over objections from Medical Affairs or Regulatory Affairs, materials for which substantiation was contested, or materials for which the approval discussion suggests awareness of potential compliance risk.
Methodology. The review will consist of a document-by-document analysis of the minutes from each of the nine PRC meetings, cross-referenced against the corresponding approved promotional materials (to the extent such materials fall within the Workstream 1 review universe) and the PRC SOPs in effect during 2023. The review will produce a detailed chronological record of all approval decisions, with annotations identifying any procedural irregularities or substantive concerns.
Assignments. Jeffrey Park will conduct the primary review of the PRC minutes. Audrey Zhou will assist with cross-referencing the minutes against the promotional materials reviewed in Workstream 1 and with identifying any inconsistencies between the committee's documented deliberations and the final approved materials.
Estimated Timeline. November 13 through November 27, 2023. This workstream will proceed in parallel with Workstream 1, with the PRC minutes review informing the promotional-materials review and vice versa.
C. Workstream 3 — Forensic Review of Sales Representative Communications
The third workstream involves a forensic review of communications and records associated with Penterra's field sales representatives, with a focus on identifying evidence of off-label promotion or other departures from approved promotional messaging. This workstream requires the engagement of an external e-discovery and forensic consulting firm for data collection, processing, and review-platform hosting.
E-discovery Vendor Engagement. C&H has engaged Tavrenis Stern Consulting Group LLC ("Tavrenis Stern"), an Illinois limited liability company with offices at 311 South Wacker Drive, Suite 2400, Chicago, Illinois 60606, to provide e-discovery and forensic data-management services for this workstream. The engagement lead at Tavrenis Stern is Patricia Okoro. The scope of Tavrenis Stern's engagement encompasses data collection from Penterra's systems, data processing (de-duplication, de-NISTing, and metadata extraction), and hosting of a document-review platform for C&H attorney use. The engagement is structured as a fixed fee of $87,500 for the defined scope of work. Tavrenis Stern has been engaged under the direction and control of Calderwood & Harkness LLP, and all communications between Tavrenis Stern and Penterra personnel relating to this engagement will be routed through C&H, in order to preserve attorney-client privilege and work-product protection over the forensic review process and its results.
Data Sources. The following data sources will be collected from Penterra's systems for the 14 identified sales representatives in the Northeast region who are known to have distributed Detail Aid ZVR-2023-DA-007:
(i) CRM System Records. Call notes, detail records, physician interaction logs, and related data maintained in Penterra's customer relationship management system, reflecting the sales representatives' documented interactions with healthcare providers during the relevant period.
(ii) Corporate Email Accounts. The full contents of the corporate email accounts assigned to each of the 14 sales representatives, including sent and received messages, attachments, calendar entries, and contact lists.
(iii) Text Messages. Text messages from corporate-issued mobile devices, as well as text messages from personal ("BYOD") devices to the extent such messages have been preserved in accordance with Penterra's data-retention policies and the preservation notice issued by Penterra's legal department.
The date range for all data collection is January 1, 2023 through October 16, 2023. This range is designed to capture the full period during which the Clarity Campaign materials were in use, as well as any pre-campaign communications that may shed light on the development and dissemination of off-label messaging.
Objectives. The forensic review is designed to achieve the following objectives:
(i) Determine whether any of the 14 sales representatives made verbal or written off-label claims — that is, promoted Zelvara® for indications beyond its FDA-approved indication for the acute treatment of migraine with or without aura in adults — including, specifically, whether any representatives suggested that Zelvara® was efficacious for the treatment of cluster headache or could be used as a prophylactic or preventive therapy.
(ii) Identify any communications suggesting the distribution of non-approved promotional materials, the use of non-approved talking points, or other deviations from the promotional messaging approved by Penterra's PRC.
(iii) Assess the frequency, geographic distribution, and severity of any compliance issues identified, in order to determine whether the issues are isolated to specific individuals or reflect a broader pattern within the sales organization.
Preliminary intelligence. Based on initial information provided by Penterra's compliance department, three of the 14 Northeast-region sales representatives are suspected of making verbal off-label claims suggesting Zelvara® efficacy for cluster headache during physician office visits conducted between May and July 2023. This suspicion is based on the content of CRM call notes that were identified by Penterra's internal compliance monitoring function. The forensic review will seek to corroborate, expand upon, or refute these preliminary findings through a comprehensive examination of the full data set.
Review Methodology. Tavrenis Stern will process all collected data, perform de-duplication and de-NISTing, extract metadata, and load the processed data set onto a hosted document-review platform. C&H attorneys — Jeffrey Park and Audrey Zhou — will conduct the first-level substantive review using targeted keyword searches. The initial keyword list will include, but is not limited to, the following terms and their variants: "cluster," "off-label," "headache types," "prevention," "prophylaxis," "prophylactic," "daily use," "chronic," "tension," and specific physician names identified from the CRM records. The keyword list may be refined iteratively as the review progresses and patterns emerge. Documents identified as potentially responsive to the investigation's objectives will be tagged and categorized. Documents identified as potentially privileged (e.g., communications between sales representatives and Penterra's legal or compliance departments) will be separately tagged and logged on the privilege log maintained as part of the investigation.
Estimated Timeline. Data collection is scheduled for November 10 through November 17, 2023. Tavrenis Stern will process the collected data and load it onto the review platform during the period November 18 through November 22, 2023. Attorney review of the hosted data is scheduled for November 23 through December 10, 2023.
D. Workstream 4 — Witness Interviews
The fourth workstream consists of a series of witness interviews with key individuals who possess knowledge relevant to the investigation's objectives. The interviews are designed to supplement and contextualize the information obtained through the documentary review and forensic analysis in Workstreams 1 through 3. The interviews will be conducted by Jeffrey Park, with Audrey Zhou attending to take contemporaneous notes.
Upjohn/Corporate-Counsel Warnings. All interviews will be conducted under appropriate Upjohn/corporate-counsel warnings. Prior to the commencement of each interview, the interviewee will be advised of the following: (i) that Calderwood & Harkness LLP represents Penterra Pharmaceuticals Corp. as an entity, and does not represent the interviewee in his or her individual capacity; (ii) that the purpose of the interview is to gather facts relevant to the internal investigation; (iii) that the conversation between the interviewee and C&H is protected by the attorney-client privilege; (iv) that the privilege belongs to Penterra and that Penterra, acting through its authorized representatives, controls the privilege and may choose to waive it at any time; and (v) that the interviewee should not discuss the substance of the interview with anyone other than his or her personal attorney, if any. These warnings will be delivered orally at the outset of each interview and will be documented in the interview memorandum prepared following each session.
The following individuals have been identified for interviews in the initial phase of the investigation:
1. Derek Foss — Vice President, Commercial Operations & Marketing, Penterra Pharmaceuticals Corp.
Mr. Foss is the senior Penterra executive with direct responsibility for the company's commercial marketing activities, including the oversight and direction of external agencies such as Ridgeline Health Analytics. The interview with Mr. Foss will focus on the following topics:
• His role in developing and approving the overall strategic direction of the Clarity Campaign, including the key messages and claims to be communicated;
• The instructions and direction provided to Ridgeline Health Analytics regarding the messaging, claims, and creative approach for the Clarity Campaign materials;
• His knowledge of the origin and substantiation basis for the "Fastest Onset in Its Class" claim, including whether the claim was developed internally by Penterra or proposed by Ridgeline, and what data were relied upon to support it;
• His oversight of the field sales force, including the training provided to sales representatives on the Clarity Campaign materials and the approved talking points for physician interactions;
• His awareness, if any, of reports or allegations of off-label communications by sales representatives in the Northeast region or elsewhere.
Expected date: Week of November 20, 2023.
2. Alan Renwick — Director, Promotional Review Committee, Penterra Pharmaceuticals Corp.
Mr. Renwick chairs the PRC and is responsible for the committee's procedures, agenda, and documentation. The interview with Mr. Renwick will focus on the following topics:
• The PRC's standard procedures for reviewing and approving promotional materials, including the committee's SOPs, the substantiation standards applied to efficacy claims, the requirements for fair-balance risk disclosures, and the process for resolving disagreements among committee members;
• The specific circumstances of the May 18, 2023 PRC vote on the physician email blast (ZVR-2023-EML-019), including the nature of the discussion preceding the vote, the reasons articulated by members voting in favor of approval despite Medical Affairs' objection, and whether any formal or informal escalation of the dissenting position occurred after the vote;
• The approval of the sales representative detail aid (ZVR-2023-DA-007) at the March 22, 2023 PRC meeting, including the extent of the committee's discussion of the Harmon et al. poster citation, the study's design limitations, and the disclosure of Penterra's sponsorship;
• The PRC's general practices during 2023 regarding the weight accorded to Medical Affairs input, the handling of comparative and superiority claims, and any changes or trends in the committee's approach during the year.
Expected date: Week of November 20, 2023.
3. Dr. Lina Gerhardt, Pharm.D. — Senior Director, Medical Affairs, Penterra Pharmaceuticals Corp.
Dr. Gerhardt leads the Medical Affairs function at Penterra and is understood to have been the most senior Medical Affairs representative involved in the PRC's review of the Clarity Campaign materials. Preliminary information indicates that Dr. Gerhardt and her team raised objections to the truncated y-axis in the email blast bar chart at the May 18, 2023 PRC meeting. The interview with Dr. Gerhardt will focus on the following topics:
• The nature and scientific or regulatory basis of Medical Affairs' objection to the truncated y-axis at the May 18, 2023 PRC meeting, including whether the objection was based on the potential for the graphical presentation to mislead healthcare providers, on regulatory risk, or on both;
• Whether Medical Affairs escalated the objection after being overruled by the 4-3 PRC vote, and if so, to whom and through what mechanism; if Medical Affairs did not escalate, the reasons for that decision;
• Medical Affairs' assessment of the Keswick Bioanalytics ITC meta-analysis that provided the data supporting the "Fastest Onset in Its Class" claim, including whether Medical Affairs reviewed the ITC, what conclusions Medical Affairs reached regarding its methodological soundness, and whether Medical Affairs raised any concerns about the use of the ITC to support promotional claims;
• Any other concerns raised by Medical Affairs about Zelvara® promotional materials during 2023, whether or not those concerns were documented in PRC minutes or other written records.
Expected date: Week of November 27, 2023.
4. Monica Chu — Account Lead (Penterra Account), Ridgeline Health Analytics LLC
Ms. Chu served as the primary Ridgeline contact for the Clarity Campaign and was involved in the development of the promotional materials cited by OPDP. Because Ms. Chu is employed by a third party, her participation in the interview is voluntary, and the interview must be coordinated with Ridgeline's outside counsel if Ridgeline is separately represented. The interview with Ms. Chu will focus on the following topics:
• Ridgeline's internal process for developing promotional claims and graphical presentations for pharmaceutical clients, including the role (if any) of internal medical-legal review prior to submission of draft materials to a client's PRC;
• Whether Ridgeline conducted, or was contractually required to conduct, independent medical-legal review of the Clarity Campaign claims before submitting draft materials to Penterra's PRC, and if not, whether Ridgeline's standard practice included such review for other clients;
• The development of the "Fastest Onset in Its Class" claim, including the source materials provided by Penterra to Ridgeline, whether the claim originated with Ridgeline or with Penterra, and the extent of Ridgeline's independent evaluation of the claim's substantiation;
• The design choices underlying the truncated y-axis bar chart in the physician email blast (ZVR-2023-EML-019), including whether the truncated y-axis was a deliberate design choice or an oversight, whether any Ridgeline personnel flagged the truncated y-axis as a potential compliance concern, and whether Penterra provided direction on the chart's formatting.
Note: C&H will contact Ridgeline's general counsel or, if Ridgeline has engaged outside counsel in connection with this matter, Ridgeline's outside counsel to coordinate the scheduling and terms of Ms. Chu's interview. If Ridgeline declines to make Ms. Chu available, the investigation will proceed on the basis of documentary evidence and testimony from Penterra personnel, with appropriate notation in the Investigation Findings Memorandum.
Expected date: Week of December 4, 2023.
Additional Interviews. Depending on the findings from Workstreams 1 through 3 and the initial round of interviews, the following additional interviews may be warranted:
• Christine Holloway, Vice President, Regulatory Affairs, Penterra. If questions arise from the PRC minutes review regarding the nature and extent of Regulatory Affairs' input into the PRC's deliberations, or if discrepancies are identified between the Regulatory Affairs review record and the PRC minutes.
• Dr. Rajeev Anand, M.D., Ph.D., Chief Medical Officer, Penterra. If the investigation identifies systemic issues in Penterra's medical oversight of promotional activities, or if the findings suggest that the concerns raised by Dr. Gerhardt and Medical Affairs were not adequately considered or escalated at the senior-management level.
• Individual Sales Representatives (Northeast Region). If the forensic review in Workstream 3 reveals specific individuals whose communications require follow-up questioning, particularly the three representatives currently suspected of making off-label claims regarding cluster headache.
• Representatives of Keswick Bioanalytics Inc. If it becomes necessary to understand the ITC methodology and its limitations in greater detail than is available from documentary sources and Penterra personnel, representatives of Keswick Bioanalytics may be contacted. As with Ridgeline, Keswick is a third party whose cooperation is voluntary.
The decision to conduct additional interviews will be made by Jeffrey Park in consultation with Leonard Cross, based on the findings from the initial workstreams and interviews.
IV. Privilege and Work-Product Protections
Maintaining the integrity of the attorney-client privilege and the work-product doctrine is of paramount importance throughout this investigation. The investigation is being conducted at the direction of Penterra's legal department and in anticipation of regulatory proceedings and potential litigation. Accordingly, all investigation activities, communications, and work product are intended to be protected by the attorney-client privilege and/or the work-product doctrine.
This section summarizes the key elements of the privilege framework for this investigation. A comprehensive Privilege and Work-Product Protection Protocol Memorandum, dated October 31, 2023, has been separately circulated to all members of the C&H investigation team and to Margaret Tan and Christine Holloway at Penterra. That protocol memorandum governs all aspects of privilege maintenance and should be consulted for detailed guidance.
Tavrenis Stern Consulting Group LLC. Tavrenis Stern has been engaged under the direction and control of Calderwood & Harkness LLP to provide e-discovery and forensic consulting services in support of this investigation. All communications between Tavrenis Stern and C&H, and all work product generated by Tavrenis Stern in connection with this engagement, are intended to be protected by the attorney-client privilege and the work-product doctrine. To that end, all communications between Tavrenis Stern and Penterra personnel relating to data collection, access, or technical matters will be coordinated through and routed through C&H attorneys, rather than conducted directly between Tavrenis Stern and Penterra business personnel outside the legal department. Tavrenis Stern's engagement letter contains express provisions acknowledging that Tavrenis Stern is acting as an agent of C&H for privilege purposes and that all materials generated in connection with the engagement are the property of C&H.
Interview Memoranda. All memoranda documenting witness interviews will be prominently marked "Attorney-Client Privileged and Confidential — Attorney Work Product" and will be maintained in C&H's files. Interview memoranda will not be shared with Penterra business units or personnel outside the legal department without the prior written approval of Margaret Tan. Interview notes taken by Audrey Zhou will be treated as attorney work product and will likewise be maintained in C&H's files with the same access restrictions.
Document Review Platform. Access to the document-review platform hosted by Tavrenis Stern will be restricted to C&H personnel (Jeffrey Park, Audrey Zhou, and, to the extent necessary, Leonard Cross). Penterra access to the platform will be limited to Margaret Tan and Christine Holloway, solely for the purpose of privilege-review functions, and will not extend to any other Penterra employees or business units. All platform access will be logged and auditable.
Communications with Co-Counsel. Communications between C&H and Whitfield Bauer & Associates LLP (regulatory co-counsel) in connection with this investigation are treated as common-interest privileged communications. Both firms represent or are engaged for the benefit of Penterra in connection with the same matter, and their communications in furtherance of the shared objective of providing legal advice and services to Penterra are protected by the common-interest doctrine. All written communications between C&H and Whitfield Bauer relating to this matter should be marked as privileged and confidential.
V. Timeline and Milestones
The following table sets forth the key dates, milestones, and deadlines for the investigation, from the approval of this investigation plan through the target submission of Penterra's formal response to OPDP:
The timeline is designed to provide adequate time for a thorough and methodical investigation while ensuring that Penterra's formal response to OPDP is submitted well in advance of the January 15, 2024 deadline. Weekly status reports (as described in Section VII below) will identify any potential delays or deviations from the above schedule as early as possible to permit adjustments.
VI. Budget and Staffing
A. Calderwood & Harkness LLP — Internal Costs
The investigation will be staffed as follows within C&H:
• Jeffrey Park (Lead Associate, Litigation (General)) — Lead Associate for all four workstreams; primary interviewer for Workstream 4; primary reviewer for Workstreams 1, 2, and 3; principal author of the Investigation Findings Memorandum and contributor to the FDA response letter.
• Audrey Zhou (Working Associate, Capital Markets) — Assisting on Workstreams 1, 2, and 3; note-taker for Workstream 4 interviews; responsible for securities-disclosure aspects of the matter (8-K filing, ongoing disclosure obligations).
• Leonard Cross (Responsible Partner) — Partner oversight and supervision of the investigation; review of key deliverables, including the Investigation Findings Memorandum and the FDA response letter; strategic guidance on regulatory-response approach.
• Nathaniel Bower (Billing Partner, Bankruptcy & Restructuring) — Billing administration.
The billing arrangement for this matter is hourly, with a blended rate of approximately $785 per hour across the C&H team. The engagement letter executed by Margaret Tan on October 30, 2023 establishes a fee cap of $450,000 covering all C&H work on this matter, including the investigation, the preparation of the FDA response letter, and securities-disclosure advice. The investigation-specific component of C&H's time is estimated at approximately 250 to 300 hours across Jeffrey Park and Audrey Zhou, with approximately 15 to 20 hours of partner time from Leonard Cross. Based on the applicable hourly rates, the estimated C&H cost attributable to the investigation component is approximately $196,000 to $235,000, which falls within the $450,000 overall fee cap and leaves adequate room for the FDA response drafting and securities-disclosure work that will follow the investigation.
B. Tavrenis Stern Consulting Group LLC
Tavrenis Stern has been engaged at a fixed fee of $87,500 for the defined scope of work encompassing data collection from Penterra's systems, data processing (de-duplication, de-NISTing, metadata extraction), and hosting of the document-review platform for the duration of the attorney-review period. The engagement lead is Patricia Okoro. The fixed-fee arrangement does not include hourly overage provisions; any expansion of the scope of work beyond the originally defined parameters (e.g., extension to additional custodians or data sources, extension of the date range, or additional platform-hosting beyond the initial period) would require a separate scope-of-work amendment with authorization from Leonard Cross and Margaret Tan prior to commencement.
C. Whitfield Bauer & Associates LLP
Whitfield Bauer & Associates LLP serves as regulatory co-counsel for this matter. The firm's applicable hourly rates are $950 per hour for Dr. Hannah Whitfield and $625 per hour for Thomas Crane. Whitfield Bauer's contribution to the investigation will consist primarily of the review of flagged promotional materials from Workstream 1 and the provision of regulatory-compliance analysis regarding the identified issues. The estimated co-counsel investigation time is approximately 20 to 30 hours, with the bulk of the work performed by Thomas Crane under the oversight of Dr. Whitfield. Based on these estimates, the co-counsel fees attributable to the investigation component are projected at approximately $15,000 to $22,000. Co-counsel fees are billed separately to Penterra pursuant to a co-counsel engagement letter dated November 10, 2023, and are not included within the C&H fee cap.
D. Total Estimated Investigation Budget
The total estimated budget for the investigation is summarized as follows:
All costs fall within the overall matter-budget parameters approved by Margaret Tan. The C&H investigation component is a subset of the $450,000 fee cap, and the Tavrenis Stern and Whitfield Bauer costs are separately budgeted and approved. In the event that investigation findings necessitate a material expansion of scope (see Section IX below), supplemental budget authorization will be sought before any additional expenditures are incurred.
VII. Deliverables
The investigation will produce the following deliverables:
1. Weekly Status Reports. Jeffrey Park will provide informal email updates on a weekly basis to Leonard Cross and Margaret Tan summarizing the progress across all four workstreams. Each weekly status report will identify key activities completed during the preceding week, significant findings or developments, any obstacles or delays encountered, anticipated activities for the following week, and any issues requiring partner-level or client-level decision-making. Weekly status reports will be marked as privileged and confidential.
2. Interim Findings Summaries. Upon the completion of each workstream, or earlier if material findings are identified that warrant immediate attention, Jeffrey Park will provide an oral briefing to Leonard Cross and Margaret Tan. Interim findings summaries are designed to ensure that the investigation team, the supervising partner, and the client's legal department are aligned on the trajectory of the investigation and can make informed decisions about the investigation's scope, the FDA response strategy, and any additional remedial steps that may be warranted. If material findings require contemporaneous documentation, a written interim summary will be prepared and marked as privileged attorney work product.
3. Internal Investigation Findings Memorandum. The principal deliverable of the investigation will be a comprehensive privileged memorandum documenting all findings, conclusions, and recommendations arising from the four workstreams. The Investigation Findings Memorandum will include: (a) a detailed factual record of the compliance deficiencies identified in the OPDP-cited materials and any additional materials; (b) the root-cause analysis, including identified failures in the PRC process, the Ridgeline engagement structure, and sales-force oversight; (c) the results of the forensic review of sales-representative communications, including any evidence of off-label promotion; (d) a synthesis of key witness testimony; and (e) recommendations for corrective actions and for the content and approach of the formal FDA response. The draft Investigation Findings Memorandum is targeted for internal circulation to Leonard Cross by December 15, 2023, with the final version delivered to Penterra (Margaret Tan and Christine Holloway) by December 20, 2023.
4. Privilege Log. A privilege log will be maintained throughout the investigation documenting all privileged materials generated or reviewed in connection with the investigation, including interview memoranda, attorney work-product analyses, privileged communications, and any responsive documents identified during the forensic review that are withheld on privilege grounds. The privilege log will be maintained in a format suitable for production in the event that a privilege challenge arises in subsequent proceedings.
5. Contribution to FDA Response. The investigation findings will be incorporated into the formal FDA response letter and corrective action plan to be submitted to OPDP. Jeffrey Park and Audrey Zhou, in coordination with Thomas Crane and Dr. Hannah Whitfield at Whitfield Bauer, will contribute the factual and analytical sections of the response letter, while the strategic framing and remediation commitments will be developed in consultation with Leonard Cross and Margaret Tan. The target date for the draft FDA response letter is January 5, 2024, with the target submission date of January 12, 2024.
VIII. Coordination with Penterra and Co-Counsel
Effective coordination among C&H, Penterra, and co-counsel is essential to the efficient conduct of the investigation and the integrity of the resulting factual record.
Primary Penterra Contacts. The primary contacts at Penterra for all aspects of this investigation are Margaret Tan, Executive Vice President & General Counsel, and Christine Holloway, Vice President, Regulatory Affairs. All document requests, data-access requests, and interview-scheduling requests will be coordinated through Margaret Tan's office. No C&H personnel will communicate directly with Penterra employees outside the legal department regarding the substance of the investigation without prior coordination with Margaret Tan.
Employee Cooperation and Document Preservation. Penterra has agreed to direct all employees with information relevant to the investigation to cooperate fully with C&H's inquiries. In addition, Penterra's legal department will issue a document-preservation notice to all potentially relevant custodians, directing them to preserve all documents, communications, and data that may be potentially relevant to the OPDP inquiry. The preservation notice will be directed to all 680 field sales representatives, all PRC members, and all personnel in the Marketing, Medical Affairs, and Regulatory Affairs departments. The preservation notice will be issued under the authority of Margaret Tan and will describe the categories of materials to be preserved and the potential consequences of non-compliance. C&H will review the preservation notice before it is issued to confirm its adequacy.
Co-Counsel Coordination. Coordination with Whitfield Bauer & Associates LLP will be maintained through a weekly call between Jeffrey Park and Thomas Crane, to be held at a mutually convenient time each week during the investigation period. Dr. Hannah Whitfield will participate in the weekly calls at key decision points, including the initial scoping of Whitfield Bauer's role in Workstream 1, the review of flagged materials, and the formulation of regulatory-compliance conclusions. All substantive communications between C&H and Whitfield Bauer will be conducted in writing where practicable and will be marked as privileged and confidential.
Ridgeline Health Analytics LLC. All communications with Ridgeline Health Analytics LLC in connection with this investigation will be directed through Penterra's General Counsel. If Ridgeline engages its own outside counsel in connection with the OPDP inquiry or this investigation, C&H will coordinate with Ridgeline's counsel regarding the scheduling and terms of the Monica Chu interview and any other requests for Ridgeline's cooperation. C&H will not communicate directly with Ridgeline employees without first confirming through appropriate channels whether Ridgeline is represented by counsel in connection with this matter.
IX. Risk Factors and Contingencies
The investigation plan set forth in this memorandum is based on the information currently available to C&H and reflects certain assumptions about the scope, complexity, and trajectory of the investigation. The following risk factors and contingencies have been identified:
1. Expanded Scope of Compliance Issues. The investigation may reveal compliance deficiencies in Zelvara® promotional materials beyond the three materials cited by OPDP. If such additional deficiencies are identified, the scope of the corrective action plan will need to be expanded accordingly, and consideration will need to be given to whether voluntary withdrawal of additional materials is appropriate. In the most adverse scenario, the investigation could reveal systemic weaknesses in Penterra's promotional-compliance infrastructure that would require a comprehensive remediation program extending well beyond the scope of the current OPDP inquiry.
2. Off-Label Promotion by Sales Representatives. The current preliminary intelligence suggests that three of the 14 Northeast-region sales representatives may have made off-label claims regarding cluster headache. The forensic review in Workstream 3 may reveal that off-label promotion was more widespread than currently suspected — either involving additional representatives within the Northeast region or extending to sales representatives in other regions or across the entire 680-representative sales force. If the investigation reveals widespread off-label promotion, the scope and nature of corrective actions would be materially affected, and Penterra's obligations regarding additional reporting to the FDA or other regulatory or enforcement authorities (including the Department of Justice and the Office of Inspector General of the Department of Health and Human Services) would need to be carefully assessed.
3. Ridgeline Cooperation. As a third party, Ridgeline Health Analytics LLC is not compelled to cooperate with this investigation or to make its personnel, including Monica Chu, available for interviews. While C&H anticipates that Ridgeline will cooperate in the interest of maintaining its commercial relationship with Penterra, the investigation plan includes a contingency for proceeding without Ridgeline testimony if necessary. In such a scenario, the investigation would rely on documentary evidence (including the Master Services Agreement, the Clarity Campaign SOW, email communications between Penterra and Ridgeline personnel, and draft materials exchanged between the parties) and on the testimony of P