Biotechnology companies spend an extraordinary amount of resources-capital, time, and personnel- to get to this point, a final dance with the FDA seeking drug approval. On average, drug companies spend anywhere from $800 million to $1.8 billion and 12 years to get a single compound approved and into your medicine cabinet. The road to drug approval is long and treacherous with many pitfalls. Inefficacy, inferiority, and/or adverse effects such as elevated liver enzymes or unexpected cardiovascular events can doom a compound. A molecule that demonstrates great promise in preclinical studies may not perform the same way in phase 1 trials. It is especially risky for small pharmaceutical companies with limited amount of resources to navigate through this process. However, at the end of this road, the rewards can be great. Lives can be saved, quality of life can be improved, and large sums of money can be made.
Vivus (NASDAQ:VVUS) and MAP Pharmaceuticals (NASDAQ:MAPP), at $1 billion and $460 million in market capitalization, respectively, have made it through the arduous clinical trial process and have a dance with the FDA in the first half of 2012.
Vivus is seeking approval for two compounds, Qnexa for obesity and avanafil for erectile dysfunction. The PDUFA date for Qnexa is set for April 17, 2012 and avanafil has a date of April 29, 2012.
For Qnexa, this is the second attempt by Vivus to gain approval as the FDA, citing safety concerns, rejected the drug in 2010. The market for obesity is huge, but Qnexa will have a very small slice of that pie, if it gets approval. Qnexa is a combination of phentermine and topiramate. Qnexa has a series of problematic and dangerous side effects-namely, heart palpitations, thoughts of suicide, and memory lapses. Topiramate is teratogenic and has been linked to cleft palates and other birth defects in mothers taking this anti-epileptic during pregnancy. The chance of approval is low and the market potential is limited if given the green light by the FDA.
Avanafil, the second molecule from Vivus seeking regulatory approval has a better outlook relative to Qnexa. Avnafil is a second-generation PDE5 inhibitor used to treat erectile dysfunction, a market that generated 4 billion dollars in sales from current therapies. Data from the phase 3, REVIVE study, demonstrated significant erectile function improvement in 646 patients with a history of erectile dysfunction for at least 6 years. Most importantly, the results from the REVIVE study showed that 71 percent of patients were able to have intercourse in 15 minutes or less with a duration of action at greater than six hours. This compares to onset times of 30 minutes to 1 hour for the other three erectile dysfunction medications - Viagra from Pfizer (NYSE:PFE), Cialis from Eli Lilly (NYSE:LLY), and Levitra from GlaxoSmithKline (NYSE:GSK). Furthermore, because of the higher selectivity as a PDE5 inhibitor, avanafil has a more favorable side effect profile. In 2010, Viagra had sales of one billion and Cialis had sales of $750,000. Avanafil will gain significant traction in the erectile-dysfunction market.
Map Pharmaceuticals is seeking approval for Levadex, a treatment for migraines. The PDUFA date is set for March 26, 2012.
Levadex is a novel and game-changing treatment for migraines. The active ingredient, dihydroergotamine, has been available since 1946, but the modality of drug delivery is new and cutting edge. Using the Tempo inhaler, migraineurs inhale the medication orally providing pain relief in as little as 30 minutes for some patients. While not statistically significant, the proportion of patients experiencing pain relief at 10 minutes was 50 percent greater than placebo. Before the arrival of Levadex, migraine treatments with dihydroergotamine had been plagued with undesirable clinical effects-namely, serious cardiovascular effects such as heart attacks, vasospasms, and a large number of potentially fatal drug and food interactions. Studies have demonstrated that Levadex, using the Tempo inhaler, is able to circumvent these adverse problems and provide fast and sustained pain relief to migraine sufferers.
Hesitation for approval, if any, by the FDA may result from the modality of drug delivery. Although drug delivery through the lungs is a promising technology, some in the medical community may still be skeptical. However, investors should be encouraged that the FDA did not require a second pivotal phase 3 study for Levadex and Map was able submit a NDA with results from their FREEDOM study.
The market size for migraine treatment and cost burden of disease are great. Approximately 30 million Americans suffer from migraines and American employers lose 13 billion dollars per year. This is in addition to the most important non-quantifiable decrease in quality of life for migraine sufferers. Levadex, if approved, will capture a significant amount of market share from triptans (i.e. Maxalt from Merck (NYSE:MRK) and Zomig from AstraZeneca (NYSE:AZN)), the standard-of-care abortive migraine treatment. Levadex will have peak sales of over one billion dollars and gain blockbuster status.
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