Therapeutic focus – Tough market for new wave of epilepsy drugs

Analysis

For a therapeutic area that generated an impressive annual growth rate of 16% over the past ten years, the market for epilepsy drugs is set for a dramatic decline following the sudden expiry of key patents for four of the top five biggest-selling blockbuster products within the last nine months. Having peaked at $12.8bn in 2008 sales of epileptic drugs are set to decline 5% annually to $9.32bn by 2014 (see table below).

Nevertheless, a number of new epilepsy drugs are set to reach the market within the next couple of years and assuming they match current expectations could generate significant revenues for the likes of UCB and Johnson & Johnson. For UCB a successful launch of Vimpat in the US and positive phase III data for Rikelta are crucial events this year which will have a strong bearing on the group’s market valuation.

Market heads into reverse

Of the top five epilepsy drugs last year, only Pfizer’s Lyrica is set to continue to dominate the market over the next few years, although it is important to note that a significant portion of forecast sales are also attributed to the drug’s use for neuropathic pain, anxiety and fibromyalgia.

Anti-epileptic market: top 10 products in 2014 WW annual sales ($m)
Rank Product Company Pharmacological Class Market status Patent Expiry 2008 2014 CAGR (08 - 14)
 1   Lyrica   Pfizer   Alpha 2 delta ligand   Marketed  Dec 2018  2,573  4,671  10%
 2   Vimpat   UCB   CRMP-2 modulator   Marketed  Mar 2017  3  725  150%
 3   RWJ333369   Johnson & Johnson   Anti-convulsant   Filed  -  -  485  n/a
 4   Rikelta   UCB   Pyrrolidone   Phase III  Dec 2021  -  438  n/a
 5   Depakine   Sanofi-Aventis   GABA agonist   Marketed  Jan 2005  483  413  (3%)
 6   Tegretol   Novartis   Iminostilbene   Marketed  Feb 2011  451  346  (4%)
 7   Lamictal   GlaxoSmithKline   Sodium channel antagonist   Marketed  Jan 2009  1,714  322  (24%)
 8   Neurontin   Pfizer   GABA agonist   Marketed  Jul 2000  387  181  (12%)
 9   Depakote   Abbott Laboratories   GABA agonist   Marketed  Jul 2008  1,364  145  (31%)
 10   Inovelon   Eisai   Anti-convulsant   Marketed  Nov 2015  12  137  51%
  Other  5,802  1,455  (21%)
Total anti-epileptic market 12,789 9,317 (5%)

The following table highlights the products that will contribute the most to the overall decline in revenues for epilepsy drugs, as almost 90% of aggregate sales of $8.1bn in 2008 are expected to be lost by 2014.

Anti-epileptic market: growth brakes (2008 - 2014) WW annual sales ($m)
Rank Product Company Patent expiry 2008 2014 CAGR (08 - 14) Total change ($m)
 1   Topamax   Johnson & Johnson  Mar 2009  2,731  127   (40%)   (2,604)
 2   Keppra   UCB  Nov 2008  1,855  79   (41%)   (1,776)
 3   Lamictal   GlaxoSmithKline  Jan 2009  1,714  322   (24%)   (1,393)
 4   Depakote   Abbott Laboratories  Jul 2008  1,364  145   (31%)   (1,219)
 5   Neurontin   Pfizer  Jul 2000  387  181   (12%)   (206)
Total  8,052  854   (7,198)

New products attempt to offset decline

Behind Lyrica, the importance of successful launches and approvals of three new drugs is clear.

Vimpat, which suffered a significant setback when the FDA rejected its use for diabetic neuropathic pain in July 2008, finally gained approval for epilepsy in October (UCB finally has something to celebrate, October 29, 2008). The setback in the pain setting has already significantly reduced the drug’s commercial prospects. Archive consensus forecasts from EvaluatePharma reveal that since the FDA rejection estimates for sales by 2014 have been trimmed by over a quarter to currently sit at $725m. Vimpat’s imminent launch in the US and initial uptake rate will therefore be of great interest to investors and analysts alike.

The first set of phase III data for another of UCB’s pipeline epilepsy drugs, Rikelta, due in the third quarter, will also provide a binary event for the company’s share price. Currently estimated to be worth as much as $930m, according to EvaluatePharma’s NPV Analyzer, the drug is also the second most valuable product in the Belgian group’s portfolio.

Meanwhile, J&J’s RWJ333369 was filed with the FDA last October and therefore has an estimated PDUFA date in August. Valued at $870m the drug is J&J’s fourth most valuable pipeline candidate and also slated to be one of the biggest product launches this year (Which of 2009's launches will be future blockbusters?,February 17, 2009).

The following table lists some other important late stage clinical candidates which could also help to offset the overall decline in the epilepsy market.

Anti-epileptic market: R&D pipeline WW annual sales ($m)
Phase Product Generic Name Company Pharmacological Class NDA Classification First Introduction 2010 2012 2014
Filed RWJ333369 carisbamate Johnson & Johnson Anti-convulsant New molecular entity  Dec 2009  139  322  485
Lamictal XR lamotrigine GlaxoSmithKline Sodium channel antagonist NDA  Dec 2009  77  43  11
Stedesa eslicarbazepine Sepracor Iminostilbene New molecular entity  Jun 2010  25  76  119
Phase III Rikelta brivaracetam UCB Pyrrolidone New molecular entity  Jun 2010  66  242  438
Retigabine retigabine GlaxoSmithKline + Valeant Pharmaceuticals + Meda GABA agonist & potassium channel agonist New molecular entity  Jun 2010  9  54  128
DM-5689/DM-1796 gabapentin Depomed + Solvay GABA agonist NDA  Jun 2011  -  35  91
IV Carbamazepine carbamazepine Lundbeck Iminostilbene NDA  -  -  -  -
Fosphenytoin fosphenytoin CyDex Anti-convulsant NDA  -  -  -  -
Epliga oxcarbazepine Supernus Pharmaceuticals Iminostilbene NDA  -  -  -  -
Phase II JZP-8 clonazepam Jazz Pharmaceuticals Benzodiazepine NDA  Jun 2012  -  -  25
Ganaxolone ganaxolone Marinus Pharmaceuticals GABA A receptor modulator New molecular entity  -  -  -  -
SPN-538 topiramate Supernus Pharmaceuticals Sulphamate NDA  -  -  -  -
SRx-502 - Spherics CNS agent New molecular entity  -  -  -  -
DP-VPA - D-Pharm Anti-convulsant New molecular entity  -  -  -  -

Upcoming events

As well as the potentially catalytic events already discussed, the summary below of EvaluatePharma’s Calendar of Events highlights some further important milestones to take place in the epilepsy market this year.

A product largely under the radar and which could yet generate far larger revenues than currently forecast is GlaxoSmithKline’s retigabine. Licensed from Valeant Pharmaceuticals last August for $125m upfront and potentially a further $545m in milestones, Glaxo clearly has high hopes for the drug, although the timing of regulatory filings in both the US and Europe appears to have slipped slightly, from the first quarter to sometime this year.

EvaluatePharma's Calendar of Events: selected key events for anti-epileptic drugs
Event Type Product Company NPV ($m) NPV as % of Mkt Cap Event Event Status Start Date End Date
US Product Launch Vimpat UCB  705  13% Expect US Launch of Vimpat (lacosamide) for Partial Onset Seizures in Adults with Epilepsy In-Play (62%) 01 Jan 2009 30 Jun 2009
US Product Approval (PDUFA) Lamictal XR GlaxoSmithKline  131  0% FDA Decision Date (PDUFA) on Lamictal XR for Epilepsy Overdue by 104 days 09 Jan 2009 09 Jan 2009
Sabril Ovation Pharmaceuticals  0 FDA Decision Date (PDUFA) on Sabril for Infantile Spasms (IS) & Refractory Complex Partial Seizures (CPS) Overdue by 23 days 08 Jan 2009 31 Mar 2009
RWJ333369 Johnson & Johnson  870  1% FDA Decision Date (PDUFA) on RWJ333369 for Epilepsy Starts in 123 days 24 Aug 2009 24 Aug 2009
US Product Filing Retigabine GlaxoSmithKline  152  0% Expect US Filing for Retigabine in Epilepsy Overdue by 23 days 01 Jan 2009 31 Mar 2009
EU Product Filing Retigabine GlaxoSmithKline  152  0% Expect EU Filing for Retigabine in Epilepsy Overdue by 23 days 01 Jan 2009 31 Mar 2009
Phase III Trial Results Rikelta UCB  929  17% Phase III Trial Results for Rikelta as Adjunctive Treatment in Partial-Onset Epilepsy Starts in 69 days 01 Jul 2009 30 Sep 2009
Phase II Trial Results JZP-8 Jazz Pharmaceuticals  49  257% Phase II Trial Results for JZP-8 for Epilepsy In-Play (62%) 01 Jan 2009 30 Jun 2009

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