Feeling No Pain - Pharmaceutical Executive

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Feeling No Pain
Endo is nicely poised to grab a big piece of the rapidly expanding pain-management market.


Pharmaceutical Executive


(The hearing was scheduled for November 3, after this story went to press. The final decision in the case is not expected for another three to six months after that.)

Fentanyl patch. The abbreviated new drug application (ANDA) for a generic version of Johnson & Johnson's Duragesic—the most frequently prescribed product for cancer pain—was submitted by Endo's development partner, Novena Pharmaceuticals, in July 2003. Analysts expect this drug to be Endo's greatest source of new revenue (up to $150 million a year), even though it will have multiple competitors.

Ammon describes her strategy: "We entered into a relationship with Novena to be able to be market its AB-rated generic equivalent of Duragesic. We are waiting for approval of that product, and we hope to be in the market at the same time as anybody that gets there in January 2005. It competes in that strong opioid market."

More to Come In addition to the products that are now under FDA review, Endo also has pipeline projects and licensing deals that will not only expand its pain-management franchise but will also permit Endo to enter complementary therapeutic areas such as neurology, peri-operative care, and supportive-care oncology. One late-stage product is propofol, an anesthesia licensed from SkyePharma. And in Phase II is a development project with Durect that is intended for patients with chronic pain.

"Chronogesic (sufentanil) is a very strong opioid, contained in a small, implantable pump about the size of a matchstick," Ammon explains. "It is implanted in the subcutaneous tissue of the arm in a very quick procedure—a couple of minutes in a doctor's office. Over a course of three months, it is intended to deliver relief for chronic pain."

In another Phase II development, the company is testing its Lidoderm patch in patients with both acute and chronic lower-back pain. The market for this indication could be substantial, because low-back pain is the most common chronic pain condition, affecting an estimated 36 million Americans. Endo is also evaluating another licensed product, LidoPAIN BP from EpiCept, for acute low-back pain. And in very early stages is a deal with MakScientific to develop cannabinoids, a promising new way to treat pain. Several other companies are working on cannabis-based drugs, and the future market for these products could be very competitive.

Endo also recently signed two new licensing agreements. One is with Swedish Orexo AB to develop and market Rapinyl, an oral, fast-dissolving fentanyl tablet for breakthrough cancer pain. The other deal (previously mentioned), in which it licensed marketing rights to Frova, is projected to generate $50 million in sales next year.

"What we saw in Frova was that it seems to be differentiated from all the other triptans in that is has a very long half-life—26 hours," Ammon explains. "The next longest half-life of any of the products out there is four or five hours. The other interesting piece about this product is that Vernalis had completed a successful Phase III study looking at a potential indication in prophylaxis for menstrually associated migraines. If you look at the migraine market, about 70 percent of the sufferers are women. And the majority of their migraines seem to be of greater intensity and greater occurrence during the menstrual cycle." Endo hopes to file a supplemental new drug application for that indication in the first half of 2006.

Growth Strategy Because the basic compounds used to treat pain are mostly off patent, this market is particularly competitive, and the distinction between brands and generics is a little blurry. Endo, which has both brands and generics and an aggressive in-licensing strategy, seems geared to be a strong competitor. "Now is the time investors should be revisiting the stock," says one analyst. "As we move into 2005 it becomes far more interesting." And C.E. Unterberg, Towbin rates Endo a "buy," even if it loses its court case involving the generic version of Purdue's OxyContin.


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