Progenics needs the tide to turn on Relistor

Wyeth’s quarterly update this week contained disappointing sales figures for newly-launched constipation drug Relistor, suggesting that commentators who warned a slow launch was likely, were on the right track.

The news is more alarming for Wyeth’s partner Progenics, which is heavily reliant on the success of the drug. It seems likely that sales forecasts, some of which look highly ambitious, are going to head south; a fact that was mirrored in the biotech group’s share price on the day, which fell 10% to close at $9.43 and even further yesterday to $9.17.

Wyeth revealed that sales of Relistor, launched in the US over the summer, totalled $800,000 in the third quarter, making $2.9m so far this year. According to consensus data from EvaluatePharma, analysts are anticipating sales of $47m for 2008, a number that now looks unachievable.

Admittedly, forecasts range widely. It is likely that some models do not yet reflect the growing realisation that an oral version of the drug, a much bigger opportunity, may not reach the market for several years. Wyeth is considering which oral formulation to take forward and should provide an update in the next few months. Phase III trials should start next year, much later than hoped.

Forecasts coming down

This all means that high-end forecasts are likely to come down to meet those already on the conservative side. Forecasts for 2008 range from $10m to $120m, while for 2012, the range is $150m to $1.1bn.

Such downgrades will not have a huge impact on Wyeth, as the drug is not a significant part of its portfolio. For Progenics, it is everything, and further sales figures over the coming quarters will continue to be scrutinised.

Unfortunately, it is not the first time that Relistor has caused concerns for the US biotech and its investors. The failure of the drug to establish efficacy in post-operative ileus (POI) in March caused shares in the company to plunge to a record low of $4.33. Approval since then in both the EU and US in opioid-induced constipation (OIC) helped the stock recover, but it has been on the decline again since the beginning of August. The shares are down 49% so far this year.

The POI failure and a gradual erosion of confidence in Relistor means forecasts for the drug have dropped significantly over the last 18 months. At the beginning of 2007 consensus for 2012 sales was $884m, a figure that now stands at $509m, and is likely to fall further.

Positive news required

Admittedly, the Relistor launch is in the very early stages. However, the $800,000 generated in the third quarter compares to $2.1m in the previous period. The substantial decline has been attributed to free sampling, and encouragingly Progenics said that actual sales to pharmacists have been increasing on a month by month basis.

Whatever the reasons, the recent sales figures make it look very unlikely that royalties this year will reach the $6m being forecast by analysts, according to consensus data from EvaluatePharma.

On the positive side, data due at the end of the year from a phase III trial of Relistor in chronic OIC pain has the potential to provide a boost in confidence, and might drive off-label sales, some analysts believe. Meanwhile, an update on Wyeth’s plans for the oral pill is eagerly awaited.

However, for both consensus estimates and Progenics' share price to stop heading south, positive news on all fronts is required.

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