Event – Shire casts its net for bigger Vyvanse catch

Analysis

With Vyvanse comfortably atop the sales leaderboard in an increasingly genericised category, Shire is now casting around for new sources of growth for its biggest seller. Readout of phase III data in major depressive disorder (MDD) will be a sign of whether the UK group can expand beyond the key indication of attention deficit/hyperactivity disorder (ADHD).

Analysts have been warning that growth in the number of prescriptions has faltered, so positive news in depression would be welcome. Corporate reorganisation and M&A were Shire’s biggest moves of 2013; now the group must show that it can execute in the clinic; the pill recently got good news in treating binge eating disorder, and depression might equal that indication.

Product Vyvanse
Company Shire
Market cap $29bn
Product NPV $6.93bn
Indication NPV* $693m
% of market cap 2%
Event type Phase III trial in major depressive disorder
Date Q2 2014
*based on MDD representing 10% of Vyvanse sales

Trial binge

Two trials pairing Vyvanse with an antidepressant such as Cymbalta in major depressive disorder, which enrolled more than 2,300 patients, have been completed and are expected to read out in the second quarter of 2014. The goal was to determine whether the Shire drug could improve patients’ scores on the 60-point Montgomery–Åsberg depression rating scale (MADRS) by an average of three points over eight weeks of treatment when compared with the antidepressant alone.

A win could unlock a revenue stream pushing as much as $600m a year, according to analysts from Bank of America-Merrill Lynch – EvaluatePharma’s consensus estimates that the depression indication could account for 10% of the $2.2bn in sales, a risk-adjusted figure that reflects the development stage of the indication.

The positive results in binge eating came as a bit of a surprise, and helped to sustain a late-year share rally (Binge eating disorder rides to Vyvanse’s aid, November 5, 2013). Depression is viewed as a risky proposition, however; the Merrill Lynch analysts rate the chance of success at a low 35% based on modest phase II improvements of 2.3 points on the MADRS scale, a result that did not meet usual standards of statistical significance.

Success, however, would obviously be helpful – analysts from Morgan Stanley suggest that the two new indications together could account for a share price increase of £4; the company's shares are currently at £30.93.

Pushing against pushback

The push to expand Vyvanse’s indications comes in the context of flattening demand for ADHD as payers turn to generic versions of drugs like Ritalin, Concerta and Adderall. Shire raised prices on Vyvanse at the beginning of 2014, which might not help improve market share although it could help with revenue.

Shire has initiated a head-to-head trial against Concerta to demonstrate that it is worth the brand-name price, a strategy that has not always turned out well for sponsors; data from this trial could be reported later this year.

Ambitions for Vyvanse's expansion come as one of Shire's late-stage pipeline hopes, lifitegrast, returned mixed phase III results (Uncertain path for Shire’s dry eye drug following mixed phase III, December 6, 2013). Beyond lifitegrast, Shire has no significant phase III candidates, and its phase II stable is three years or more from launch; thus, there are high expectations of additional M&A beyond the ViroPharma takeout it completed in January.

Lifecycle extension for Vyvanse in the form of a win in depression could help keep the deal bankers at bay. However, given the pressure to generate growth and diversify its business, Shire will remain in the M&A game.

Trial IDs NCT01436149
NCT01436162

To contact the writer of this story email Jonathan Gardner in London at jonathang@epvantage.com or follow @JonEPVantage on Twitter

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