Almirall resuscitates ailing COPD drug

Among the surprises in Laboratorios Almirall’s update statement today, alongside an intention to in-license a product in Spain before the end of the year, was the announcement it would be continuing development of COPD drug aclidinium bromide, LAS 34273.

In September, less than impressive phase III data for the drug, where it failed to meet primary endpoints in two trials, caused shares in the group to plunge by almost 40%. Many had been expecting the drug to do well due to its strong showing in phase II trials and the level of disappointment caused some to think that Almirall and US partner Forest Laboratories would abandon the project.

Indeed the drug, which once had a valuation of $1.52bn, according to EvaluatePharma’s NPV Analyzer, and was forecast to have sales of $526m by 2014, is no longer included in any analyst models. Even today the most bullish of analysts refused to replace the drug in their valuations.

Salvation at a price

LAS 34273 may have been snatched back from the edge of oblivion, but its resurrection is unlikely to come cheaply. The group estimates that they will file in Europe in 2011, with earliest approval in 2012. This is a one to two year delay to the original expected launch. The time lag also suggests that Almirall and Forest may be forced to expand ongoing phase II trials of the drug.

While this will inevitably push up R&D costs, the blow could be softened if Almirall picks its proposed in-licensed product well and it generates sales to offset this additional expense.

What will be harder to undo is both the time lost, given that there will be additional competition by 2012, and the edge that both the trial results and delay give to Spiriva, which recently received a boost following data that showed the drug did not increase cardiovascular risk or risk of death.

LAS 34273’s lack of efficacy during the initial phase III trials also means that unless something dramatic happens in the new trials it may struggle to get approval given the agency’s stance on me-too drugs. To counter that, the treatment does have in its favour fewer side effects than other COPD drugs.

Glass half full

While many in the market are pessimistic about LAS 34273’s chances, Ben Yeoh, pharma analyst at Deutsche Bank is more positive, arguing that doctors who prescribe the drug may pay less attention to the FEV1 scores and more to how much better patients get while using it.

However, even he conceded that there are risks. “There is a 50% chance that they get through the FDA,” he said. He also added that sales would be small on approval, but it could create a nice niche for Almirall.

“There are somewhere between 10-30% of Spiriva patients who don’t like the device with the product or find that the drug does not work for them and might want to switch onto something else.” he said.

Mr Yeoh estimated that even if 15% of Spiriva patients switch it could create a significant uplift for Almirall, given that last year the Boehringer Ingelheim and Pfizer drug had sales of $2.5bn.

More explaining to do

Explaining their decision to continue with the drug, Almirall and Forest said that the differences between the phase II trial, where the drug outperformed Spiriva, and the phase III Acclaim tests could be put down to the number of Acclaim patients on other medications and the way results were measured.

Almirall might have more saliently decided to resurrect the drug due to the fact that there is little else in the development pipeline, other than Sativex, the cannabis based drug it in-licensed European rights for from GW Pharma in 2005.

While the group will have the opportunity to fully explain their reasoning this afternoon in an update for analysts and investors, the market responded to the decision positively. Shares in the group, which had fallen as low as €4.65 in recent weeks were up 5% at €6.24.

However, that is still below the €6.50 that some analysts believed the shares would fall to if LAS 34273 was abandoned, suggesting that there is a long way to go before confidence in the product returns.

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