United punished as oral Remodulin flops again

United Therapeutics is nothing if not a glass-half-full kind of company. Despite the failure of two phase III trials of its most important pipeline project, oral treprostinil, and underwhelming results from a third, the company defiantly insisted today a filing with the FDA remains firmly on the cards.

But with real questions marks over the drug’s approvability, let alone its commercial value, few will be prepared to share United’s continuing optimism for the project. News of the second pivotal failure prompted an 18% plunge in United’s share price in early trade, adding to the 22% decline seen since June in the wake of the earlier disappointment. The stock is now testing 15-month lows of $39.11.

Optimistic

Oral treprostinil represents United Therapeutics' attempt to protect and extend its valuable pulmonary arterial hypertension (PAH) franchise. Currently comprised of Remodulin and Tyvaso, injected and inhaled versions of treprostinil, these prostacyclin vasodilators generated sales of $556m for the company last year.

Analysts anticipate the two products growing to be worth more than $1bn in revenues by 2016, consensus data from EvaluatePharmashow. The oral pill was expected to be generating $243m by 2016, although following the second phase III disappointment announced today this figure now looks wildly optimistic.

This morning the company announced the Freedom-C2 study, that tested oral treprostinil in combination with other therapies prescribed for PAH - endothelin receptor antagonist or phosphodiesterase-5 inhibitors - failed to hit its primary or any secondary endpoints.

Disappointments

At the start of the study the 310 patients could walk a mean distance of 333 metres in six minutes – the company was striving to prove that oral treprostinil could significantly improve that by more than a placebo pill, after 16 weeks.

Financial analysts tracking the company were expecting to see around an 18 metre benefit, over placebo – the 10 metre benefit registered is therefore a big disappointment.

The first Freedom-C combination study yielded similarly disappointing results in late 2008, improving the six minute walking test by only 11 metres.

Meanwhile at the beginning of June, United announced that the shorter Freedom-M trial, a monotherapy study, produced a significant 23 metre improvement over placebo (United alone at celebration party for oral treprostinil, June 7, 2011). Although this hit statistical measures, many questioned whether the improvement was clinically relevant, given that other available PAH therapies have produced improvements in the 45-55 metre range. Those that kept the faith in this project following the lacklustre results from Freedom-M did so on the proviso that Freedom-C2 would impress.

Hard won

On a conference call this morning United Therapeutics executives said approval would be sought for first-line, monotherapy use, based on the Freedom-M study.

While admitting that regulators are unlikely to allow any claims to be made for the therapy in combination, they believe the failed clinical trials at least show the drug does patients no harm – providing “an additional lever” to support a positive risk-benefit evaluation.

Whether this washes with regulators remains to be seen; the drug’s benefit appears marginal at best, an attribute that the FDA in particular is becoming increasingly uncomfortable with.

An oral version of treprostinil does offer substantial improvements over the injected and inhaled version, and not just on convenience - both have serious tolerability issues. But with the PAH market looking increasingly competitive, even if this pill does make it on to the market, reimbursement arguments will be very hard won.

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