Nupathe's Zelrix Going Down A Path With Multiple Headwinds

| About: Teva Pharmaceutical (TEVA)

Zelrix, developed by Nupathe (PATH), is an old molecule with a new delivery mechanism for the treatment of migraines. Zelrix is a transdermal patch that delivers sumatriptan - a compound in the selective serotonin receptor agonist class and many times referred to as "triptans" - through the skin using a small electric current and sustains steady therapeutic levels in providing relief during migraine episodes. Zelrix faces many challenges - the most immediate being the Complete Response Letter issued by the FDA after the agency declined to approve the drug. According to Nupathe, the FDA had questions regarding the "chemistry, manufacturing, and safety", which of course, the company is diligently working to address. The company plans to resubmit a NDA in the first-half of 2012. Beyond this, to gain significant traction in the migraine market, the company has other hurdles to overcome, namely the number of generic triptans and insurance coverage. There are seven other triptans available, some of which are generic, with different drug delivery options:

  • Sumatriptan (Imitrex)

o Available in oral, intranasal, and subcutaneous dosage form

o Generics available for all forms (various manufacturers)

o Brand available by GlaxoSmithKline (NYSE:GSK)

  • Sumatriptan (Sumavel DosePro)

o Needleless subcutaneous injection

o No generic available

o Manufactured by Zogenix (NASDAQ:ZGNX)

  • Almotriptan (Axert)

o Oral dosage form

o No generic available

o Manufactured by Janssen Pharmaceuticals

  • Eletriptan (Relpax)

o Oral dosage form

o No generic available

o Manufactured by Pfizer Pharmaceuticals (NYSE:PFE)

  • Frovatriptan (Frova)

o Oral dosage form

o No generic available

o Manufactured by Endo Pharmaceuticals (NASDAQ:ENDP)

  • Naratriptan (Amerge)

o Oral dosage form

o Generic available (various manufacturers)

o Brand available by GlaxoSmithKline (GSK)

  • Rizatriptan (Maxalt)

o Available in oral and orally-disintegrating forms

o No generic available

o Manufactured by Merck (NYSE:MRK)

  • Zolmitriptan (Zomig)

o Available in oral, intranasal, and orally-disintegrating forms

o No generic available

o Manufactured by AstraZeneca (NYSE:AZN)

An advantage of Zelrix, and often promoted in company literature, is the ability for it to deliver medication while bypassing the gastrointestinal tract. Absorption of medication through the gastrointestinal tract can be erratic at times, especially in migraneurs where the motility of the tract is decreased. Furthermore, the transdermal route allows Zelrix to deliver sumatriptan in those patients who cannot or do not want take anything orally because of nausea and vomiting during their migraine episode. These features of Zelrix are attractive in the migraine population, but the generic triptans that are on the market today can address all of these concerns.

The most immediate threat to the Zelrix franchise is generic sumatriptan and the various dosage forms that it comes in. Like Zelrix, intranasal and injectable sumatriptan avoid the gastrointestinal tract and is not taken orally. If patients don’t mind sticking themselves, an additional advantage to the injectable sumatriptan is the faster onset time and provides relief sooner compared to Zelrix.

In an environment where there is a strong push for generic utilization, Zelrix is already at a disadvantage. There are viable generic alternatives on the market that will cost less than Zelrix and third-party payers (insurance companies) and institutional formularies may not want to cover this medication.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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