Pharming, Jerini, Dyax set to fight for the HAE market, but pickings could be slim for all

Analysis

August 31, 2007 - After decades of limited treatment options for patients with the debilitating condition hereditary angiodema (HAE), the field looks about to become very crowded.

Sanquin, a not-for-profit Dutch company that been making an unregistered treatment derived from human blood plasma for 30 years, is close to completing its first pivotal clinical study. Germany’s CSL Behring is in a similar position, with a similar product.

And three biotechs – Dutch-based Pharming, Germany’s Jerini and Dyax of the US -- have new drugs in phase III trials.

HAE is a genetic condition that causes attacks of oedema, swellings in the soft tissue such as skin, the intestines and mouth and throat. Sufferers, which lack the protein called C1 inhibitor, will typically have around 12 attacks a year. Around 1 in 30,000 people are diagnosed with the condition.

C1 inhibitor derived from human blood plasma has been on the market in Europe for many years, but levels of blood donation can limit availability. And some countries, such as the US, have prohibited its use in the absence of official regulatory scrutiny.

The market for the currently available products, which are on sale in a handful of markets, is worth around €280m.

Analysts believe the new products from the biotechs, which will be priced at a premium and available in more countries, will result in a market worth 500 mln eur.

That isn’t a massive market to split between all the players, which means the race to launch first is likely to be important. Pharming looks likely to win in Europe, with a regulatory decision on the cards towards the end of the year.

Jerini’s icatibant is just behind, with approval possible at the beginning of 2008. In the important US market, Lev and Sanquin are likely to launch first. And while the product is not new, the fact that there are no effective treatments for HAE currently available, means it could capture a significant share, at least initially.

Of the new products, Jerini is likely to launch first in the US, followed by Dyax with DX-88 and then Pharming.

However all are small biotechs, and they will need marketing partners.

Jerini was handed back the rights by Abbott, inherited from takeover target Kos Pharmaceuticals, in early September.

Dyax co-developed DX-88 with Genzyme, but the company is currently looking for a new partner after the US biotech also decided it was not interested.

Pharming confirmed in August that talks in the US are underway, and flagged a deal this year.

That level of competition, with all companies looking to launch at the same time, could mean the respective management teams struggle to strike particularly lucrative deals.

“With three products for a small market I doubt whether we are talking mega bucks,” commented Jon Senior, a director of corporate finance  at Nomura Code Securities.

Jerini has expressed a desire to go it alone in the US, maybe after coming to that conclusion.

Other factors to differentiate the products, such as mode of administration and speed of effectiveness are also not hugely dissimilar. All are either given subcutaneously or intravenously, which means hospital visits are likely.

Pharming’s Rhucin and Dyax’s DX-88 have to be refrigerated, which could give Jerini an edge.

Rhucin’s average time to onset of action is 1 hour, compared to 2 hours for Jerini, and 2.5 hours for Dyax, potentially a selling point for Pharming.

Pharming’s Rhucin is based on the C1 inhibitor protein, like the tradition Sanquin and CSL products. But the company has developed a way of producing the protein in large quantities, from the milk of genetically engineered rabbits.

Jerini has developed a drug called icatibant, which is a peptide analogue bradykinin B2-antagonist. It inhibits the inflammatory cascade at a different stage to the C1 inhibitor.

And US biotech Dyax’s drug DX-88, a recombinant plasma kallikrein inhibitor, targets the inflammatory process in a third way, by inhibiting a key enzyme.

These new techniques come at a price, and eventually the competition could boil down to cost. Pharming initially mooted a cost of €4,000 per attack, but with Jerini quoting figures closer to €2,000, the company is unlikely to get away with anything near that.

So a crowded, relatively small market, with similar products potentially having to compete on cost effectiveness, could in the end mean slim pickings for all involved.

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