I thoroughly enjoy reading about a drug that has the potential to not only be a transformational breakthrough drug for certain types of treatment, but also when the drug can become a major revenue source for a company. The drug Ketamine has great potential as one of these revenue drugs for Johnson & Johnson (JNJ).
Ketamine is a general anesthesia drug commonly used on humans and animals. Husseini Manji was instrumental in discovering that this drug could rapidly ease symptoms of depression and suicidal tendencies for 24 hours after it was injected in seven out of 10 patients.
There is a brain receptor called (N-methyl-D aspirate) (NMDA) that plays a key role in depression and Ketamine has a positive effect upon this receptor.
In one study at Icahn School of Medicine at Mount Sinai Hospital in New York City, patients classified as "treatment resistant" to major depression went to a clinical study. If you are unfamiliar with the term "treatment resistant" it means the patient's depression failed to respond to two or more different medicines. Some patients were given an active intravenous for 40 minutes of Ketamine while others were given a placebo and then they were interviewed within 24 hours and then seven days later. After 24 hours the response from the Ketamine group was 68.3% while the placebo was only 28%. After seven days the benefit went down to 45.7% and 18%, respectively. It didn't last a long time, but the results are still amazing compared to the old traditional antidepressants that can take a long time to make a difference.
In another study done by the National Institute of Mental Health, a single dose of Ketamine produced fast antidepressant effects in patients with bipolar disorder that were depressed. The study was independently replicated with similar results.
I would say that is great potential for the company.
Economic Impact for Johnson & Johnson
The Agency for Healthcare Research and Quality has estimated that the cost of mental health care in the United States alone is over $50 billion and rivals the cost of cancer. But the costs are different. Cancer costs are usually centered on the cost of care while mental health costs are centered on the economic burden of mental illness. What I mean by that is the loss of income, expenses for social support, and other costs that may be due to disabilities that could begin early in life.
What we are talking about here is the "behavioral health care" portion of mental health. In the United States this accounts for almost 5% of the entire healthcare spending. We are talking close to $100 billion annually.
This breakthrough drug, Esketamine, by Johnson & Johnson has no comparable drugs on the market at this time. This will be the first time that an isomer from Ketamine would be marketed to the public. For this reason there is no comparable drug to look at a track record of what other companies have accomplished with similar comparisons.
The key for Johnson & Johnson here lies in the fact that the drug is being given preferential treatment to push through because it is recognized as a breakthrough drug with no competitors on the market yet. Considering the whole mental health arena is worth over $100 billion and suicide prevention itself is estimated to come in at $15 billion a year, there is a huge market for the drug.
If testing concludes like it is expected to, the drug will have a great effect upon people who need immediate help with depression or suicidal tendencies. The potential market for this drug is in the single billions of dollars within a short period of time and could become one of the larger moneymakers for Johnson & Johnson.
Mr. Manji now works for Johnson & Johnson along with four other scientists who worked alongside him on the research when the effect of Ketamine was discovered at the National Institute of Health. JNJ is going to bring this drug to the market and its first form will be called Esketamine. Esketamine is a derivative of Ketamine that has the same molecular formula but it's just structured a little differently. This particular isomer will lower the Ketamine dose and be given as a nose spray instead of an intravenous drug like Ketamine is given. It should have 1/12 the strength of the anesthesia. The "breakthrough designation" allows certain companies to take a shortcut to the market based on early trial data, but this is only for transformational new therapies.
If you are interested in investing in JNJ, keep an eye on this drug because it could become one of its breakthrough drugs that greatly increases revenue for the company and carries it for many years.
How is this significant for the arena of mental health in medical care? Antidepressants, on the market today, take anywhere from weeks to months before they have effects upon patients. The results of helping patients are well under 50%. Imagine being able to help someone with suicidal tendencies in just one day. What do you do with patients on the old antidepressants as you wait for them to kick in? Do you admit them to a mental facility and wait for the drugs to kick in before you let them go? The cost is phenomenally high and if Ketamine can significantly change all that, not only will this result an incredible breakthrough, but the cost will also go down significantly.