Pfizer's Best Selling Drug Lyrica is Growing Rapidly in the US Fibromyalgia Market.
Lyrica is Set to Eclipse $1 Billion in Annual Sales in the Market.
With Good Data and at 1/1,000 the Size, Tonix Pharmaceuticals Could Have the Sales Equivalent.
Tough Times After Lipitor
Pfizer (NYSE:PFE) is one of the largest pharmaceutical companies in the world, but it has had a rough few years since its best selling drug Lipitor came off patent in 2011.
Lipitor sales peaked at almost $13 billion in 2006, and did almost $10 billion in the 2011 year that its patent expired, but then fell to less than $4 billion in 2012.
Pfizer's total sales dropped 10% on Lipitor's 59% fall, but that was partially offset by its new best selling drug, Lyrica. Lyrica grew 13% in 2012 for $4.2 billion in sales.
Pfizer's revenues continued to drop 6% in 2013, and fell at a 5% rate in the first half of 2014, but Lyrica has continued to grow to over $5 billion in worldwide sales ($1.315 billion in 2014 Q2).
Times are tough for Pfizer, but the growth of its best selling drug Lyrica is helping to stem the tide.
US Leads the Way
The United States has been accounting for most of Lyrica's growth. In the US, Lyrica is approved for:
- 3 kinds of nerve pain (diabetic peripheral neuropathy, spinal cord injury nerve pain, and postherpetic neuralgia - nerve pain following shingles)
Pfizer does not break out the revenues per indication, but in 2013 US sales for Lyrica grew 17% (from the 2013 Annual Report, click here for all filings):
In the U.S., (Lyrica) revenues increased 17% in 2013 compared to 2012 driven by price and volume growth, despite continued competition from generic versions of competitive medicines, as well as managed care pricing and formulary pressures.
Internationally, Lyrica revenues increased 6% in 2013 compared to 2012
The first quarter of 2014 was more of the same, and the quarterly report offered some insight to the success (from the 2014 Q1 10-Q):
In the U.S., revenues increased 17% in the first quarter of 2014, compared to the same period in 2013, driven by increased investment in effective direct-to-consumer advertising and despite continued competition from generic versions of competitive medicines.
The "effective direct-to-consumer advertising" is ads geared toward patients (not doctors).
In the second quarter of 2014 Lyrica sales in the US accelerated to a lusty 22%. The quarterly report again noted the effectiveness of direct-to-consumer advertising, and new supportive data in fibromyalgia:
In the U.S., revenues increased 22% in the second quarter of 2014, and 20% in the first six months of 2014, compared to the same periods in 2013, driven by increased investment in effective direct-to-consumer advertising combined with strong field force performance and the recent promotional launch of new data demonstrating efficacy in treating fibromyalgia patients receiving antidepressants for their co-morbid depression, despite continued competition from generic versions of competitive medicines.
Fibromyalgia seems to be behind much of the US sales growth. It is the only specifically mentioned indication Pfizer cites in explaining the gaudy US growth of Lyrica over the last year and a half.
In addition, the direct-to-consumer advertising seems to be largely focused on fibromyalgia. Googling videos for "Lyrica commercials" brings up 7 fibromylagia commercials in the top 10, with the other 3 being for diabetic nerve pain. Lyrica.com also lists fibromyalgia first on its site, followed by diabetic nerve pain and spinal cord injury nerve pain.
Another clue that fibromyagia is behind much of Lyrica's US growth is that while US sales were up 20% in the first half of 2014, international sales were only up 6%. Lyrica is approved in Japan for fibromyalgia, but it is not approved in the much larger EU market for the disease. That would seem to explain much of the international segment's lag behind the US.
While Pfizer does not provide them, we can do some math and come up with US sales figures. From the 2014 Q2 10-Q:
in the U.S., biopharmaceutical revenues decreased $332 million, or 7%, in the second quarter of 2014...
partially offset by:
◦ the strong performance of Lyrica (approximately $110 million in the second quarter of 2014 and $186 million in the first six months of 2014)
So the first six month's 20% US growth equaled $184 million.
If we annualize (double) that $184 million we get $368 million of growth for the year 2014, at a growth rate of 20%. So we can solve for approximate 2013 US Lyrica Sales:
(2013 US Lyrica Sales) X .2 = $368 million
2013 US Lyrica Sales = $1.840 billion
At the 20% current growth rate that projects to:
2014 US Lyrica Sales = $1.840 billion + $368
2014 US Lyrica Sales = $2.208 billion
We also saw that 2013 US sales grew at 17%, so we can solve for 2012 US sales:
(2012 US Lyrica Sales) X 1.17 = $1.840 billion
2012 US Lyrica Sales = $1.573 billion
- 2012: $1.573 billion
- 2013: $1.840 billion
- 2014: $2.208 billion
So what kind of sales is Lyrica having in fibromyalgia in the US?
As many products used for the treatment of FM are approved and marketed for other conditions, sales of these products related specifically to FM can only be estimated. Based on information obtained from publicly available sources, we believe U.S. sales of prescription drugs specifically for the treatment of FM totaled approximately $1.5 billion in 2012, and we believe this segment had grown at a compounded annual growth rate of approximately 14% between 2007 and 2012. Based on information obtained from publicly available sources, we believe 2012 sales of Cymbalta, Lyrica, and Savella in FM were approximately $600 million, $475 million, and $100 million, respectively. Cymbalta lost its U.S. patent exclusivity in December 2013.
That $475 million in 2012 was 30.2% of our 2012 total US Lyrica sales number:
$475 million / $1.573 billion = 30.2%
If we use that same 30.2% for 2014 we get:
.302 X $2.208 billion = $667 million
$667 million projects fibromyalgia's growth as in line with the segment with 17% 2013 growth and 20% 2014 growth.
But we saw that fibromyalgia was the only indication cited for the high recent growth, that the "effective" ad campaign had a primary focus on fibromyalgia, and that there was a large difference between the US and international segments where fibromyalgia accounts for a much smaller portion of sales.
If fibromyalgia is the most important reason for Lyrica's recent US sales growth, then its sales and growth must be higher than the already high rates for the entire US segment, and its actual sales are likely somewhere higher than $667 million.
How Could That Be?
Isn't that kind of high? Somewhere better than 20% accelerating compound annual growth for an indication approved more than 7 years ago?
Fibromyalgia has a long history of disease denial by the medical community, and Pfizer getting Lyrica approved in 2007 (the first drug approved in the disease) was a major breakthrough for acceptance and diagnosis of fibromyalgia.
The low end of the estimates have 5 million American adults with the disease, and the high end of the estimates have double digit millions. Lyrica costs about $2,400 a year, so reaching a little more than 400,000 patients equates to $1 billion in annual revenue.
Lyrica has only scratched the surface of the US fibromyalgia market that it helped to open, and the market is potentially very large.
Even at the overall segment growth rates Lyrica is set to eclipse $1 billion in US fibromyalgia sales within 3 years.
Is that because Lyrica is an especially effective treatment in fibromyalgia?
We saw that in 2012 it was only the second best selling prescription drug, behind Cymbalta. We also saw that Lyrica was not approved in Europe (from the 2011 Q2 10-Q):
In April 2009, the European Medicines Agency's Committee for Medicinal Products for Human Use issued a negative opinion, recommending that the European Commission not add an indication for the treatment of fibromyalgia to the marketing authorization for Lyrica. The CHMP was of the opinion that the benefits of Lyrica in the treatment of fibromyalgia did not outweigh its risks
Cymbalta was also denied approval in the EU - yet both are on track for $1 billion in US sales.
If TNX-102 SL's pending BESTFIT data shows symptom improvement that is similar to what Lyrica and Cymbalta showed in trials, it should conservatively project to $1 billion in peak US fibromyalgia sales.
Another thing to note is that we saw Pfizer repeatedly say that it got its numbers despite generic pressure, and likewise the best seller Cymbalta is an SNRI anti-depressant with structurally similar generics available. But both drugs are getting the sales, and it is seemingly because they have the data and the approvals.
Additionally TNX-102 SL is a sleep quality drug, the only one of its kind in the segment, and not a direct competitor to any of the approved drugs.
Pfizer's US Lyrica approval in fibromyalgia blazed the way for the approved medicines in the fibromyalgia market, and likely continues to increase diagnosis of the disease.
Tonix has a great opportunity to bring a $1 billion drug to market if it has data similar to Lyrica and Cymbalta.
TNX-102 SL could be the equivalent of Pfizer's biggest drug in its best market. This is remarkable - at $183 billion in market cap, Pfizer is about 1,000 times the size of Tonix.
Tonix reports results from its pivotal BESTFIT trial in about one or two months. With good data - that does not have to be spectacular - TNX-102 SL should conservatively project to $1 billion in peak US fibromyalgia sales.