Event – Second chance Supernus aims for approval

In business, as in life, it pays to have a plan B. The six-month delay to the US launch of Supernus’s anti-epileptic Trokendi XR, initially planned for early 2013, means that the firm’s hopes now ride on its second drug, SPN-804, approval of which is expected in October.

While there is disappointment over Trokendi XR, analysts and investors alike believe that Supernus’s strategy of taking elderly instant-release epilepsy and other CNS drugs and turning them into once-daily extended-release products with better safety and efficacy profiles could make the company one to watch. The share price has more than doubled over the past six months, despite the delay to Trokendi XR, and with two potential launches in 2013 it could have further to go.

Company  Supernus Pharmaceuticals 
Product  SPN-804
Market cap  $303m
Product NPV  $201m 
% of market cap  66%
Event type  PDUFA 
Date  October 19, 2012 

Trokendi XR, a once-daily form of J&J’s Topamax, gained tentative approval from the FDA last month, but confirmation that J&J holds paediatric exclusivity until June 22, 2013 has forced Supernus to hold fire on launch, now expected next July. Supernus, however, has not given up on an earlier entry on the market and the Rockville, Maryland firm is attempting to persuade the FDA to let it go ahead anyway.

With Trokendi XR relegated to the subs' bench for now, the market’s attention has turned to SPN-804, a once-daily extended-release version of oxcarbazepine, Novartis’s epilepsy adjunct Trileptal. Formerly known as Epliga, the once-daily pill is highly likely to get the FDA’s blessing and – unlike Trokendi XR – automatic Hatch-Waxman exclusivity, as it is backed by a successful phase III trial. Trokendi XR, by contrast, was given the nod on bioequivalence data alone, and the agency might not grant the three years of exclusivity requested by Supernus.

Blessings in disguise

The delay is not all bad news, however: launch of Trokendi XR next autumn will allow Supernus time to shore up its patent protection, critical for a successful launch. A decision on its patents, currently under review by the US Patent and Trademark Office, is due in January and if positive could see the shares rise again. In theory Supernus, a spin-out from Shire, should be fairly safe from generic copies of its drug given its novel bead-coated technology.

The other silver lining to the delay is that it ought to allow Supernus time to build its sales force, potentially allowing a bigger sales push on Trokendi XR come July, as it will have built relationships with doctors through its marketing of SPN-804. If the firm pitches the drugs to senior neurologists rather than primary care physicians, it should be able to sell them in-house.

The delay to the drug is also unlikely to hand rivals in the space much of an advantage. Upsher-Smith Laboratories, which is working on its own extended-release Topamax, is not due to complete phase III trials until the first quarter of 2013, with launch estimated for the first quarter of 2014 at the earliest. This should give Trokendi XR valuable time to take market share as the sole extended-release product.

Finding a niche

What should help both drugs in a highly genericised market is the once-daily formulations that ensure their consistent dosing over 24 hours, something that should improve both patient compliance and tolerability. Additionally, Trokendi XR’s regulatory pathway has given it an epilepsy indication matching that of Topamax, meaning that it will be used in front-line treatment, unlike other new agents, which are usually indicated for adjunctive use.

Based on EvaluatePharma’s consensus data, 2018 sales of Trokendi XR are forecast to reach $221m in the US and analysts at Cowen and Company expect the drug to take an 11% share of all US topiramate prescriptions. SPN-804 is set to gain up to 25% market share of oxcarbazepine prescriptions in the US according to Cowen, and consensus forecasts are for sales reaching $111m by 2018.

At $201m, the NPV for SPN-804 is two thirds of Supernus’s $303m market cap, and the NPV for Trokendi XR, $409m, dwarfs this entirely. While this shows the huge importance of both products to Supernus, it could also be argued that if they are successful Supernus, which has only been trading since May, is looking undervalued (IPO prices sheared as companies continue to take haircuts, August 14, 2012).

To contact the writer of this story email Elizabeth Cairns in London at [email protected]

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