Shire just became a little more reliant on ADHD. Its bid to expand Vyvanse use to depressed patients has come to naught, forcing the UK group to shut down development work in an indication that if successful could have been worth $1bn in annual sales.
It is the second clinical stumble in three months, as lifitegrast’s mixed data have also put its future in doubt. Vyvanse’s momentum in ADHD has slowed, and with most of Shire’s clinical projects at least two years from launch investors are focusing on dealmaking to give the company a lift.
The trials, which enrolled more than 800 patients, failed to show that Vyvanse could improve the symptoms of major depressive disorder when added to a SNRI like Cymbalta or an SSRI like Zoloft. Patients taking both Vyvanse and an antidepressant improved scores on the 60-point Montgomery-Ǻsberg Depression Rating Scale (MADRS) after eight weeks by an average of 7.3 points in one trial and 6.1 in the other, compared to 6.8 and 6.3 for patients taking the antidepressant alone, a non-significant difference in both trials.
They were viewed as high-risk trials by most analysts, but could have resulted in new sales of as much as $1bn at peak. The risky nature of it was illustrated by phase II trial results that showed a rather modest 2.3 point improvement on MADRS, while the phase III trials were powered to detect a clinically relevant 3-point difference.
EvaluatePharma’s heavily risk-adjusted forecast suggests depression would account for 10% of Vyvanse’s $2.4bn in sales in 2018. With Vyvanse’s net present value at $6.9bn, the value of the depression indication was $690m, or roughly 2% of Shire’s market capitalisation; thus, today’s share fall of about 1% to £31.11 in mid-afternoon trading seems in-line (Event – Shire casts its net for bigger Vyvanse catch, February 5, 2014).
Where is the growth?
Analysts have been raising concerns about Shire’s dependence on ADHD, especially as the category has become increasingly genericised. It is taking a big risk by pitting Vyvanse head-to-head against Concerta, but it probably is the only way to impress upon payers that Vyvanse is worth the extra money.
Aside from Vyvanse, Shire has a significant franchise in orphan drugs that has mostly single-digit growth prospects, with the exception of hereditary angioedema (HAE) drug Firazyr, an injection that will peak at $400m in sales in 2018 – nothing to sneeze at, but a rather short tail for a product that just launched in 2008. Thus the Viropharma acquisition was received well by investors, as it brings on board a second HAE product in Cinryze.
However, its inability to squeeze even more indications out of Vyvanse just increases the likelihood that Shire will make some more moves like Viropharma to beef up its pipeline and marketed product offerings. It will be a challenging task in a market where valuations are sky high.