Afrezza Partnered…Now What?

Dreamboat

This morning we learned that Sanofi is the winner in the “Where on Earth is the Partner for Afrezza?” sweepstakes.

We’ll defer to the many news outlets for the details. But one interesting take on the deal is from TheStreet.com. A few good points were raised:

  • Sanofi advanced $175 MM to MannKind as part of the deal, which presumably MannKind will have to repay.
  • Both Profits and Losses will be shared. Unlike relatively neat and clean Royalty deals, this means both Sanofi and MannKind will smile and cry together, depending on how the product performs.
  • The deal clearly works in Sanofi’s favor. Does this reflect the unpartner-ability of this asset? Possibly.
  • What remains unknown to us is how well Afrezza will be reimbursed by the payers.

It will be really interesting to see some of the sales number when they start coming out next year.

For a more detailed analysis of the rationale for this deal from a Sanofi perspective, check out this article on seekingalpha.com

Yes, and it might be worth it.

Yesterday, Daiichi Sankyo announced an incredible $650 million deal with Florida-based Charleston Laboratories for the development and commercialization of a family of fixed dose combination products.

The lead candidate, CL-108, is a fixed dose combination of promethazine, hydrocodone, and acetaminophen. The deal was signed on the back of a completed Phase III trial demonstrating efficacy in both reducing pain and reducing opioid-induced nausea and vomiting (OINV).

On the surface, this just looks like a combination of Vicodin and Phenergan. So why would Daiichi Sankyo commit $650 million for this combination?

1. The combination provides a clinical benefit claim over other hydrocodone/acetaminophen combination products, such as Vicodin, Norco, and others. The messaging will be easy…”It’s Vicodin, but with an extra ingredient so you don’t feel as nauseous when taking it.”

2. If a patient has a history of OINV, the combination saves the patient the issue of swallowing two tablets. Now swallowing a second tablet may not sound like a big deal to most of us. But when there is significant pain and nausea, taking one tablet will be far easier.

3. OINV is a real problem. According to the press release, up to 30% of hydrocodone experience nausea, and 15% experience vomiting. It does a patient no good to take a pain reliever, only to then lose it due to vomiting. This also creates a lot of questions and uncertainties for the patient. Should the patient take another tablet if vomiting occurred? Was enough absorbed to get an effect? What about the problem of trying to get a refill too early because the patient was taking more tablets than prescribed, simply due to the vomiting?

4. This product could capture share from Vicodin (which interestingly has 300 mg acetaminophen, not 325 mg), Norco (which has a 7.5/325 mg dose), and their generics.

The Big Question…

…is, “Will this product gain widespread reimbursement support?”

We’ve already seen combinations of pain relievers co-formulated with drug to reduce side effects get kicked off formularies. For example, Duexis, a fixed dose combination of ibuprofen (800 mg) and famotidine (26.6 mg) will be removed from the formularies of both Express Scripts and CVS Caremark.

These PBMs are also removing Vimovo (naproxen 500 mg/esomeprazole 20 mg) from their formularies.

Other novel formulations of established pain relievers, such as Zorvolex (diclofenac) and Tivorbex (indomethacin) are excluded from various formularies.

The key difference with this product will lie in its clinical benefit claim. If payers can be convinced that the combination makes it easier for a nauseous patient to take his/her pain medication, thereby improving compliance, then Daiichi Sankyo have an excellent opportunity to earn share against well-entrenched hydrocodone brands. 

The Premium of a Big Pharma License Deal

 

Source: Nature Biotechnology, 32, 617–619, (2014), Published online 08 July 2014

Our good friends at Venture Valuation published an interesting study in the July issue of Nature Biotechnology.

In the study, the authors address an interesting question, namely, do small-to-medium sized enterprises (SMEs) receive more lucrative deals from Big Pharma compared to other SMEs?

Now at first glance, it might seem like an obvious answer.

Big Pharma has more money. Therefore, they can and will pay more.

However, as with most things, it’s far more nuanced than that.

We encourage you to check out the article for their analysis, as we won’t steal their thunder here.

However, one interesting statistic from the study is that out of 833 in-licensing deals in their database (which runs from 1996-2013), only 66 deals (8%) involved big pharma out-licensing internal products either to other big pharma (42/66) or SMEs (24/66).

Only 8%!

Looking at that data more closely, we see that Pharma to Pharma out-licensing has been more common at the Research stage (12/42), then Preclinical (8/42). Pharma to Pharma out-licensing at the Filed stage (3/42) is comparatively rare.

Interestingly, the pattern is reversed in the Pharma to SME data. Pharma to SME out-licensing at the Filed stage (7/24) is more common than the Research stage (1/24).

Now this can be explained by the fact that Pharma would rather out-license a Research-stage asset to a “colleague” to shift development risk, until such time as the asset is de-risked and a future co-development or marketing deal can be struck. Similarly, a Big Pharma company is unlikely to find an SME with the capital required to develop an NCE through commercialization.

It would be interesting to explore these data over time. For example, are Big Pharma more willing to out-license or divest assets in this environment, compared to the 1990s?

These data also strike us as interesting because there are a number of companies (we now you’re out there…) who are seeking “underperforming” on-market assets from Big Pharma.

These data support the notion that it is not an easy thing to do.

Why is Big Pharma unwilling to part with their brands, even if they are underperforming?

That’s an issue we’ll deal with in a future post.

 

Top 10 Drug Products in India

 

Do you know which are the top branded drug products in India?

We didn’t until we found this handy chart and article

We took their IMS data a step further by compiling a new table that includes generic names, companies, and sales in US dollars. 

Top Drugs in India

A few quick observations:

  • Cough/cold and antibiotics, both short-term conditions, make up 5 of the top 10 brands.
  • The top 5 products come from “Big Pharma” companies, such as GSK and Pfizer.
  • None of these products exceeded $50 million in sales for the 12 months ending May, 2013.
  • Of the chronic conditions we see in Western Markets, only diabetes is represented in the top 10.