With a diminutive stock market valuation Pfenex is not an obvious thorn in the side of Lilly and its huge Forteo franchise. However, the small drug developer is in with a good chance of launching one of the first generic versions of the $1.8bn-a-year osteoporosis product next year.
Making the most of this seemingly huge opportunity will be far from straightforward, however, which is why Pfenex is still only worth $175m, even after today’s 21% share price jump. Even if the company manages to complete its regulatory journey successfully, the efforts of motivated competitors in the shape of Radius Health and the generics giant Teva cannot be ignored.
Radius is not a generic competitor to Lilly – it launched Tymlos in the US in the middle of last year, but this osteoporosis therapy is essentially an improved version of Forteo. Both are based on the human parathyroid hormone-related protein, which helps the body build bone; Forteo is a recombinant version while Tymlos is a parathyroid hormone-related peptide analogue.
In clinical trials this structural difference translated into only marginal improvements in efficacy for Tymlos, in terms of bone mass density and fracture rates, and Radius has had to launch the drug at a substantial discount to Forteo to win market share. The company recently reported first-quarter sales of $14.5m, and said it had captured 13% of the market for anabolic bone builders. While Radius insists that a slow start was to be expected as it negotiates coverage with payers, its ability to wrest substantial share from a powerful incumbent remains to be proven.
Enter Pfenex, which will be facing many of the same challenges as Radius, assuming it wins marketing approval for PF708 as expected. Forteo’s main patent expires around August 2019, and Pfenex is hoping to launch around the same time.
On a conference call yesterday Pfenex executives said they would likely price their product at around the same level as Tymlos, which itself is around 40% cheaper than Forteo.
Radius’s pricing strategy is notable and perhaps again speaks to Tymlos’s lack of clear clinical advantages, although it is also worth remembering that Tymlos itself has a pretty limited patent life. Its composition of matter patent has already expired, so unless Radius can enforce other IP the drug will only enjoy five years' data exclusivity.
Data released last night by Pfenex suggest that PF708 could become a worthy competitor to both incumbents. PF708 proved itself noninferior to Forteo on antidrug antibody incidence, the primary endpoint of the study, and the company claimed comparability on several other measures.
Pfenex is filing under the US 505(b)(2) regulatory pathway, using Forteo as the reference drug. It is also striving for an AB rating, which means that PF708 could be substituted for Forteo at the pharmacy. This outcome – which is far from guaranteed – carries perhaps the biggest threat to both Lilly and Radius, should Pfenex choose to pursue a more aggressive pricing policy.
There are two more wild cards here. The first is held by Radius, which is developing a patch version of Tymlos that could presumably offer a big convenience advantage. This will not enter phase III until mid-2019, however.
The second is held by Teva, which filed its own Forteo knock-off under the ANDA pathway in 2016. Lilly and Teva have settled the lawsuit that followed this filing, although terms have not been disclosed. The Israeli generics giant is also striving for an AB-rated product.
Analysts covering Teva have pencilled a 2019 launch, meaning that next year is crunch time for all the companies involved.