Event – Meda hoping for summer success with hay fever drug

Analysis

With a brace of positive phase III data reported today for its nasal hay fever drug Dymista, a PDUFA date of early May in the FDA diary and a possible European approval in the same month, Swedish specialty pharma company Meda could be gearing up for a very positive first half of 2012.

But approval will be just the first hurdle the drug will have to clear. Granting Dymista marketing authorisation will see it enter a very crowded, largely generic over-the-counter market both in the US and Europe. As such differentiating itself based on superior efficacy or convenience will be vital if Dymista is to succeed.

Company Meda
Product Dymista
Market cap $2.8bn
Product NPV $255m
% of market cap 9%
Event type PDUFA EMA decision date
Date May, 2012

Supportive data

The results of three pivotal phase trials unveiled today might help towards that goal. In patients with chronic allergic or non-allergic rhinitis, Dymista showed sustained and superior efficacy when compared with the corticosteroid fluticasone propionate. The other two studies focused on patients with seasonal allergic rhinitis, where the drug provided better relief of nasal and eye symptoms compared with fluticasone and placebo, and a greater reduction in eye discomfort compared with placebo alone.

Based on these and previous results Meda is positioning Dymista as a treatment for patients who have persistent hay fever symptoms and could be using the drug longer term.

Not to be sniffed at

Also in its favour is Dymista’s twice daily nasal method of administration, which means that it has a faster onset of action than many of the traditional oral products.

The current branded market leader, Merck & Co’s Nasonex, is also nasally delivered. The Merck corticosteroid chalked up sales of $1.22bn in 2010 and is due to go off patent in 2014, something that will add to the pressure on Dymista.

Currently 2016 forecasts for Dymista, which is a combination of an already approved cortisteroid and anti-histamine, stand at a more modest $148m. Even so, analysts' forecasts paint the drug as the second biggest growth driver at Meda over the next four years so a lot is riding on its success.

Out the blocks

With this in mind Meda plans to come out fighting. The group announced in its fourth quarter results release last month that it would be making a substantial investment in the launch and subsequent marketing. Meda also has a US sales force on hand thanks to its acquisition of MedPointe in 2007, and Swedbank healthcare analyst Johan Unnerus believes it will not have to be ramped up significantly to sell Dymista.

Investors were, unfortunately, less impressed by the fighting talk and sent Meda shares down by 9% on the day of the announcement, over concerns about the strategy and also stagnant organic growth in the company. Today, the shares, which recently benefited from speculation the company might be a target for Valeant Pharmaceuticals, were up 2% on the data to SKr63.90 (Valeant's rumoured move on Meda makes sense in parts, July 27, 2011).

But investors have a right to be worried because alongside the looming patent expiry of Nasonex, Dymista could also be slugging it out with the new crop of hay fever vaccines that are slowly making their way to market.

New approaches

A successful vaccination approach to hay fever could mean patients having much longer lasting if not eventually permanent resistance to tree and grass allergens, a very attractive proposition.

Allergy Therapeutic’s Pollinex Quattro Grass is already filed in Europe and is expected to get approval this year, Stallergenes has managed to get Oralair on the market in Canada so far. Phase III also holds a number of vaccine candidates including Merck’s SCH 697243, which was originally in-licensed in 2007 from ALK-Abelló. Analysts are expecting the product to reach the market by the middle of 2013.

Interestingly, courtesy of its acquisition of UK company RestiVert in 2010 Johnson & Johnson has a kinase inhibitor RV-568 in phase III development (J&J signals rekindled interest in early-stage respiratory research, June 02, 2010).

So with all of this potential competition hot on its heels and the branded and generic incumbents to contend with Meda will have its work cut out to make Dymista a success.

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