Specialising on one particular therapeutic area is not necessarily a bad strategy for a pharma group. A focus on CNS disorders, however, is a poor choice of basket in which to put all your eggs. The failure of Lundbeck’s treatment-resistant schizophrenia project Lu AF35700 in phase III has hurt the company badly, its 27% share price fall yesterday being its worst one-day collapse in its history.
Worse, there is nothing much else in its pipeline. Lu AF35700 was its only phase III-stage drug, and the only one at any stage to which sales forecasts have been appended.
A look at the Danish group’s top 10 bestsellers shows just how badly it needed the antipsychotic to succeed. Onfi, the antiepileptic that is Lundbeck’s current biggest seller, saw its first generic competition launch on Tuesday and its sales are now forecast to decline by 28% each year.
Only three of Lundbeck’s top 10 products are forecast to grow in sales out to 2024, and overall the company’s top line is forecast to shrink by 7% in the next six years, EvaluatePharma’s consensus data shows.
|Lundbeck's top 10 products|
|Annual Sales WW ($m)|
|Product||Therapeutic Subcategory||2017||2024||CAGR||WW phase||Patent expiry|
|Lu AF35700||Antipsychotics||-||106||N/A||Phase III||-|
|Northera||Cardiac therapy||250||97||-13%||Marketed||Feb 2019|
|Azilect||Anti-Parkinson's agents||30||43||5%||Marketed||Dec 2017|
|Xenazine||Other CNS drugs||159||28||-22%||Marketed||Aug 2015|
Lu AF35700’s own sales forecast is modest at $106m in 2024, but this is still enough to make it Lundbeck’s third biggest seller that year. It now has no chance of making that figure, and is almost certain to be abandoned entirely. That 7% annual drop in revenue is now closer to 8%.
The Daybreak study tested two doses of ’35700, 10 and 20mg, versus Risperdal and Zyprexa, following a six-week lead-in period with the generic combo. All that Lundbeck has said so far is that Daybreak’s primary endpoint, superiority versus the conventional therapy on change in score on the positive and negative syndrome scale after ten weeks of therapy, was not met.
Bernstein analysts cling to hope. They write that superiority may yet be proven with longer-term data from the Debut study, which doses the drug over more than a year and will report in late 2019. Another possibility they entertain is that the full Daybreak data might show a numerical advantage for ’35700. “Regardless,” they write, “this is a very bad outcome”.
Now Lundbeck finds itself with zero prospect of getting anything new on the market in the short term, and thus slowing its sales slide, unless it starts buying. It had a cash pile amounting to DKr4.6bn ($698m) at the end of June, and that will not get it much in the way of market-ready assets.
|Lundbeck's clinical pipeline|
|Lu AF35700||Dopamine D1 receptor regulator||Schizophrenia||Phase III|
|OV101 (licensed from Ovid Therapeutics)||GABA A receptor agonist||Angelman syndrome||Phase II|
|Fragile X syndrome||Phase II|
|IMR-687 (licensed to Imara)||PDE9 inhibitor||Sickle cell disease||Phase II|
|Foliglurax||mGluR4 regulator||Parkinson's disease||Phase II|
|Lu AE04621||Dopamine receptor agonist||Parkinson's disease||Phase I|
|Lu AF82422||Alpha-synuclein accumulation antibody||Parkinson's disease||Phase I|
|Lu AF20513||Unclassified||Alzheimer's disease||Phase I|
|Brexpiprazole LAI||5-HT2 receptor antagonist; 5-HT1A receptor partial agonist; Dopamine D2 receptor partial agonist||Schizophrenia||Phase I|
|Lu AF76432||PDE1 inhibitor||Alzheimer's disease||Phase I|
|Lu AF28996||Unclassified||Parkinson's disease||Phase I|