Dainippon Sumitomo Picks a Hard Fight for Its First U.S. Foray

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 |  Includes: DNPUF, JNJ, LLY, PFE, SGP, VNDA
by: EP Vantage

Just when it seemed like there could not be any more room for another atypical antipsychotic, Dainippon Sumitomo Pharma (OTC:DNPUF) has announced positive results from a second pivotal trial of its contribution to the crowded field, lurasidone.

The drug will be filed with the FDA early next year, and its launch would mark the Japanese firm’s first foray into the US market. With an attractive once-a-day dose and benign side effect profile, the pill certainly holds promise. However, following three recent approvals in the US for yet more antipsychotic drugs, the company will have its work cut out to carve a niche in this hugely competitive field. Dainippon now faces a difficult decision: set up its own sales force, buy a sales force or find a partner.

New generation

The anti-psychotics represent a huge area of medicine, generating $17.88bn in revenues last year, but a wave of patent losses is about to strike the first generation medicines, including Risperdal, Zyprexa and Seroquel (Therapeutic focus - Real innovation in antipsychotics is on distant horizon, May 7, 2009).

This year, however, has seen a raft of approvals for new generation pills, which promise more convenient dosing and fewer side effects. Vanda’s (NASDAQ:VNDA) Fanapt, Schering-Plough’s (SGP) Saphris and Johnson & Johnson’s (NYSE:JNJ) Invega Sustenna all fall into this category (Saphris and Invega Sustenna hoping to create a difference in the market , August 4, 2009).

Lurasidone would certainly belong to this latter category; in fact it is closest to Fanapt, both of which are serotonin & D2 antagonists. The Dainippon drug has been described as one of the most benign atypical antipsychotics in terms of side effects, a class that has long been associated with weight gain and the development of diabetes.

Important differentiation

In the results published yesterday, from a trial called Pearl 2, lurasidone demonstrated superior efficacy in terms of treating the symptoms of schizophrenia; weight and metabolic changes were similar to placebo. This confirms results seen in other previous trials, including the first phase III called Pearl 1, and several large phase II trials.

Pearl 2 used Zyprexa in a comparator arm, for “purposes of establishing assay sensitivity”, Dainippon said, and although the drug arms were not compared, results from the Eli Lilly (NYSE:LLY) drug were published. As expected, efficacy in reducing the symptoms of schizophrenia was significantly improved, but the side effect profile was notably worse. Patients in the Zyprexa arm reported a 3.1kg increase in median weight gain, and the incidence of clinically significant weight gain was 34%, compared with 7% for placebo, whilst lipid changes were also much higher than placebo.

This sort of differentiation is going to be hugely important for these new anti-psychotics; the makers of Fanapt and Saphris are likely to be making similar claims in their marketing campaigns. Not only will they be fighting against each other, they will be fighting against the cheaper generic versions of the first generation pills.

Tough fight

Dainippon has been planning its global expansion for some time now; in July it established a holding company in the US, capitalised with $23m and with an initial focus of the development and launch of lurasidone.

A company spokeswoman in the US said final plans for lurasidone are still under review, and that all options are still being considered. Finding a partner, at least one with a significant sales force in place, will not be easy and Vanda appears to have also found this hard; despite receiving approval back in May, the company still has not announced a marketing partner.

Making the right decision is hugely important for the company; lurasidone is seen as Dainippon’s biggest growth driver over the next six years, with sales of $230m forecast for 2014, according to consensus data from EvaluatePharma. The company’s biggest selling product currently is Pfizer’s (NYSE:PFE) hypertension treatment Norvasc, which is sold in Japan as Amlodin, generating $578m last year and accounting for around a fifth of the company’s total revenues. However, like the parent pill, generics are starting to bite, and new revenue sources are needed.

For its first foray into the US, Dainippon has certainly picked a hard fight.