Transcept and Vivus hoping to buck the trend with another approval chance

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Transcept Pharmaceuticals and Vivus are certainly trying their hardest to prove that good things do come to those who keep plugging away. Having both experienced rejections at the hands of the FDA, last week their shares rose on the news that the regulator was allowing them to resubmit NDAs for their respective insomnia and obesity drugs by the end of the month.

Transcept’s stock more than doubled to $5.65, while Vivus saw its shares finish the week 7% higher at $8.79. But while their sheer dogged determination to get their drugs to market should be admired, for the companies who have gone before them and succeeded in getting approval after one or more knock-backs the rewards may not have matched their efforts.

What investors in Transcept appear to have seized upon is that sleep product Intermezzo will not have to go through another round of clinical trials. But even with a doubling of the share price, the stock is still not back to the levels it was when Transcept announced in July that its second attempt at approval had failed (Intermezzo disappointment another rude awakening for Transcept, July 13, 2011).

As for Vivus the drug was turned down by the FDA last year, but in an announcement last week the group reveiled that the FDA would allow an early resubmission of the drug, but only in men and women of non-childbearing potential. Vivus is now planning on resubmitting Qnexa ahead of the end of its 2,500 mother and child pair Fortress study examining the outcomes of children who were exposed to topiramate, one of the ingredients of Qnexa, in the first trimester of pregnancy. Top line data from Fortress is expected in December and an advisory committee for Qnexa is scheduled for the first quarter of 2012 (Complete response letter revives Vivus, October 29, 2010).

Only the beginning

Both drugs also face a huge uphill battle if and when they are approved. While Intermezzo is in a niche market as a sleep drug for middle of the night waking, drugs that have recently been approved in the space have struggled.

Somaxon Pharmaceuticals' Silenor, which got marketing approval in March 2010 (Somaxon wins approval for Silenor and hunt for partner begins, March 19, 2010), has seen its 2016 sales forecasts downgraded in the last 12 months by 33% to $229m. The drug also struggled to find a marketing partner and in the end struck a heavily risk-loaded deal with Procter & Gamble (Somaxon seeks to wake up Silenor launch with P&G alarm clock, August 26, 2010).

As for Vivus’ Qnexa, it is now the brightest hope in what was a three-way race to get a new obesity treatment approved. Rivals Orexigen Therapeutics and Arena Pharmaceuticals are facing lengthy delays to approval following complete response letters from the FDA over respective cardiovascular and cancer concerns (Without delay, FDA sends Lorqess back for more work, October 25, 2010).

Even if Vivus is successful, its sales might not live up to expectations given that the whole space has been tainted by the safety worries around the drugs. In July 2010 analysts were forecasting sales of $1.3bn for the drug in 2016; these have fallen back to $849m.

Poor precedents

The post approval experience of other companies that have faced lengthy and difficult approval processes also do not set a good precedent for hopes that Intermezzo and Qnexa will be roaring successes if they eventually get the regulatory green light.

Savient Pharmaceutical’s gout treatment Krystexxa, which was refused approval in August 2009, only to be granted it in September the following year, has failed to live up to expectations and many are now speculating that the market opportunity for the drug may be much lower than first thought.

Another drug that has seen its sales forecasts drop like a stone is Avanir Pharmaceuticals' Nuedexta, a treatment for pseudobulbar affect (PBA), which involves involuntary, sudden and frequent episodes of laughing and/or crying. Over the last six months 2016 forecasts have fallen by 41% to $378m and could fall further. Uptake of the drug has been slower than expected and also repeat prescriptions have started to tail off, meaning the future is not looking bright for Nuedexta if the trend continues.

Cadence Pharmaceutials' Ofirmev and Labopharm's Oleptro are further examples of products which had a chequered regulatory path to approval and have subsequently struggled to carve out a segment of the market expected of them.

Although there are questions marks over the commercial and clinical relevance of these products, both Transcept and Vivus will be hoping that their products will be exceptions to the rule that seems to say a difficult approval process equals poor sales, and that they will achieve healthy turnover post marketing.

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