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Flexion wins approval of Zilretta for OA knee pain

By Randy Osborne, Staff Writer

Backed by strong data and boasting a mechanism of action that avoids the opioid route, Zilretta (FX006, triamcinolone acetonide with a poly lactic-co-glycolic acid matrix) – the pain drug for osteoarthritis of the knee from Flexion Therapeutics Inc. – won FDA approval smack on its PDUFA date.

Shares of Burlington, Mass.-based Flexion (NASDAQ:FLXN) were trading at 28.87, up $1.75.

Given by intra-articular (IA) injection, sustained-release Zilretta conquered placebo and immediate-release (IR) triamcinolone acetonide, the most commonly injected IA corticosteroid, in phase III results disclosed in February 2016. The drug succeeded at each measured time point in weeks one through 16, meeting the primary endpoint at week 12 with a "p" value of <0.0001. The NDA was submitted in December with fast track designation and using the abbreviated 505(b)(2) regulatory approval process. (See BioWorld Today, Feb. 18, 2016.)

During the second-quarter earnings conference call with investors in August, CEO Michael Clayman said that “there is nothing in our interaction with FDA that dissuades us from the view that we are on track to see an approval consistent with our PDUFA date.” And so it happened, with Laidlaw & Co. analyst Francois Brisebois also predicting the happy outcome. “As Flexion intends to hire all 103 or so sales reps (contingent on PDUFA for optimal talent) at once, we have increased our selling, general and administrative expenses estimates,” he wrote in a Sept. 25 report. “In terms of launch expectations, we see 2018 as a foundational year, and have consequently pulled back on topline revenue from $54.6 million to $34.1 million.” Small-company, single-product launches are “always challenging,” but the efficacy profile of Zilretta and the large market, “we continue to feel confident in our sales of $518 million in 2021.”

Zilretta’s record, though, isn’t perfect, and some might have been forgiven for a shade of pessimism. After the FDA had agreed to accept efficacy data from a confirmatory phase IIb study along with the phase III data as part of a regulatory submission that contained two pivotal studies of single-dose administration of the drug. But the phase IIb study missed statistical significance in its primary endpoint of superiority over placebo in pain relief at 12 weeks. (See BioWorld Today, Sept. 5, 2014.)

Another benefit of Zilretta is that, unlike IR corticosteroids that provide two-week pain relief while elevating blood glucose, it pushes back pain for at least three months without effecting serum sugar, a major boon for about 4.5 million OA patients in the U.S. with diabetes.

More recently than Laidlaw’s Brisebois, analyst Carl Byrnes of Northland Capital Markets said he, too, was “highly confident of approval with a commercially-relevant label” on Zilretta, and pegged peak potential sales at $750 million. The treatment “addresses a sizeable market opportunity as approximately 15 million people are afflicted with OA of the knee, with approximately 7.5 million IA injections of either corticosteroids or hyaluronic acid (HA) administered annually,” he wrote in a report Wednesday. The peak sales forecast “could prove conservative, with [added revenues via] label expansion and potential new indications such as osteoarthritis of the hip and shoulder (for which clinical trials are anticipated to initiate by the end of this year),” in Byrnes’ view.

During the earnings call, Dan Deardorf, senior vice president of commercial operations, was asked about the rollout of Zilretta, given the competition from HA and IR therapies. “Based on the clinical profile we've got compared with both IR steroids and HA, we believe we’ve got a market-changing product. So we will clearly position and promote the product as first-line therapy. I think, frankly, that since often steroids are injected prior to HA, what might naturally happen in the marketplace is that the use of HA will ultimately be pushed out in the paradigm a little bit as there are very few options. But we would see Zilretta being used first-line, and hopefully for some time, until such time as [doctors and patients] felt like they needed to move to the next therapeutic option.”

There’s always the matter of price, but analyst Brisebois saw Zilretta’s cost as an unlikely obstacle. “Regardless of pricing advantage of IR steroid vs. Zilretta, we continue to believe Zilretta’s significantly greater Western Ontario and McMaster Universities Osteoarthritis Index A, B and C scores, as well as the lack of hyperglycemia commonly seen in diabetic patients, should encourage physicians to use Zilretta as first-line therapy,” in his opinion. “While we don’t expect sales reps to add much to their bag in the first couple years, Flexion reiterated their intent to in-license assets in the near term to complement their recently announced FX-101 product, which has shown two times Zilretta’s extended-release profile in pre-clinical trials.” The company, he said, “is well-funded to launch Zilretta and has taken every precautionary step to be successful.” CEO Clayman said during the earnings call that FX-101, an extended-release form of fluticasone, leverages Flexion’s microsphere technology. “Based on our preclinical in vivo pharmacokinetics studies, we believe FX-101 has the potential to provide patients with pain relief for up to six months. We intend to conduct good laboratory practice toxicology studies, and pending successful results, we will file an IND to advance into clinical trials.”