Theratechnologies looking global after Egrifta US approval

With a unanimous advisory committee vote behind it, Egrifta was an odds-on candidate to get FDA approval, and the regulator did not disappoint (Theratechnologies defies doubts and gets OK from FDA adcom, May 28, 2010). Approval last night of Theratechnologies’ treatment to reduce belly fat in HIV patients triggered a $25m milestone for the Quebec group and a 4% boost in its share price to C$5.24.

The milestone covers the company’s estimated expenses for 2011 and allows it to get about the business of preparing for launch and signing a European deal for the hormone treatment known generically as tesamorelin. In a call with investors today, the company said there was sufficient Egrifta inventory already to support an imminent launch by US partner Merck KGaA.

HIV complications

Egrifta is a daily injection of a growth hormone factor analogue that treats excess abdominal fat in patients with HIV-associated lipodystrophy. Lipodystrophy is characterised by a loss of fat in the face, limbs and buttocks, and accumulation of adipose fat around abdominal organs, blood dyslipidemia and vascular inflammation.

Research has not determined whether it is the virus itself or treatments such as antiretroviral therapies that cause lipodystrophy. However, HIV specialists fear it could lead to complications such as heart disease or diabetes and have been looking for a treatment (Event - Theratechnologies hopes adcom will stimulate growth in more than one way, May 12, 2010).

In addition, specialists also have expressed concern that the maldistribution of fatty tissue may also lead to reduced compliance with HIV treatments.

Label, safety cautions

The FDA approved label specifies that Egrifta treats only the abdominal fat, and does not address the other aspects of lipodystrophy. Because of uncertainty about cardiovascular benefit and risk physicians should be cautious about long-term use in patients who do not respond by shrinkage in waist circumference or other indicators of efficacy.

The regulator also says there is no evidence to support improved compliance with other HIV treatments.

Whilst the agency did not order a risk evaluation and management strategy, a demand that is becoming almost rote in drug approvals, it is asking for a routine post-marketing observational safety study, a change from a multiple-vial to single-vial formulation, and a study on diabetic retinopathy in patients with HIV-associated lipodystrophy.

Key approval

Egrifta is Theratechnologies’ only late stage product. Estimated royalties of $75m by 2016 values the drug at $308m according to EvaluatePharma's NPV Analyzer, in-line with the company’s market capitalisation of $291m. FDA approval was therefore expected and already reflected in the company's share price, hence the relatively modest gains today, although the stock initially surged 15% to a two-year high of C$5.75.

Investors can expect a European partner or expanded indications to add value, and in a conference call with investors today outgoing chief executive Yves Rosconi said talks are underway with potential partners outside the US, although he did not say whether German-based Merck was one of those interested companies.

Indeed it is strange that Merck would not be interested in the European market for this drug, although as Mr Rosconi notes, the 230,000 patients in the US with HIV-associated lipodystrophy represent 60-65% of the global market.

Tesamorelin is also in phase II trials in the indications of growth hormone deficiency in abdominal obesity and pre-Alzheimer’s syndrome, but approval in either indication is likely many years off. Merck has opt-in rights on secondary indications, and Mr Rosconi said the two companies are coming “to crunch time” in making decisions about expanded development of the drug.

FDA approval is a major landmark for Theratechnologies, giving them some cushion for deal-making and pipeline planning. The next step in the company’s evolution will be managing the life cycle of Egrifta.

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