Wider meaning of the 76 percent drop in first-quarter Testim sales related to the prospects for Testopel may not be simple, but Auxilium Pharmaceuticals Inc.'s former (a gel) is apparently on the skids and the latter (a long-acting implantable therapy) falls as well into a suddenly risky field: testosterone replacement therapy (TRT).

During the conference call on earnings, Chesterbrook, Pa.-based Auxilium CEO Adrian Adams pointed to a "significant decline overall in the market" for TRTs, saying "that, in essence, [has] been driving an awful lot of the revised guidance that we gave on Testim."

The FDA's safety communication in late January about its plan to investigate TRTs sounded fairly bland. "At this time, [the] FDA has not concluded that FDA-approved testosterone treatment increases the risk of stroke, heart attack, or death," went the wording. "Patients should not stop taking prescribed testosterone products without first discussing any questions or concerns with their health care professionals."

But the agency's concern was enough to create jitters, following journal articles that suggested a higher possibility of cardiovascular (CV) events in men on TRTs, including one in the Sept. 5, 2013, issue of the Journal of the American Medical Association (JAMA) and another in Jan. 29, 2014, PLOS One.

In a scenario that echoes the long-ago findings that estrogen therapy for women during menopause could boost their cancer likelihood, the $2 billion-plus market in TRTs for hypogonadism seems bound to be affected at least short term by the CV studies, and possibly longer term if the closer look finds more. Lawyers are already on the bandwagon, gathering plaintiffs for actions against TRT makers.

Despite the Testim shortfall, healthy Auxilium reported first quarter earnings of $88.5 million, compared to $66.2 million for the first quarter of 2013, a 34 percent increase that was due mainly to the added revenues from products gained in the takeover of Actient Holdings LLC, of Lake Forest, Ill., in April 2013. The launches of Stendra (avanafil) for erectile dysfunction (ED) and Xiaflex (collagenase clostridium histolyticum) for Peyronie's disease during the first quarter of 2014 helped, too.

On the conference call, analysts sought to gauge the impact of the TRT issue. One caller pointed out that Auxilium had reduced top-line guidance by $70 million for the year, and in a press release last week said Testim sales were expected to be less than $85 million in 2014. Did this mean that the original expectations were for Testim to sell no more than $155 million?

"We didn't give product-by-product revenue guidance, so I don't know that I would say it's an appropriate assumption to just say that was our original number for Testim," said James Fickenscher, chief financial officer. "We look across all of our products when we do a re-forecast." Company officials have "certainly seen and believe that [Xiaflex for] Peyronie's and Stendra are doing better than our original expectation."

Xiaflex may expand into the large cellulite market; phase IIb data are due in the first part of next year. If the compound wins FDA approval in that important space, sales could double, thereby making Auxilium an acquisition candidate by a cosmetics-based specialty pharma. Or a bigger outfit might want to merge with Auxilium based on its dozen men's-health urology drugs, noted RBC Capital Markets analyst Michael Yee in a research report. "Some may argue [that] Testim getting out of the way makes Auxilium even more attractive in the current M&A environment," in Yee's view.

A WIN FOR REPROS?

Meanwhile, Jefferies analyst Thomas Wei contended Xiaflex in Peyronie's will "pace outperformance," and Testopel may be in less danger than some may fear. "While there are the sharp declines projected for Testim and the testosterone gel market, we are encouraged by management guidance that these factors may not have an impact on Testopel sales," wrote Wei in a report. Auxilium found that "urology specialists have been less impacted by the recent [CV] safety warnings than the primary care physicians, supported by analyses of prescription data from the gel market, where the 15 weeks year-to-date versus the final 15 weeks in 2013 show growing prescriptions by urologists," Wei added. Benefit verification requests for Testopel came in strong during the first quarter of this year and exceeded system capacity.

A beneficiary of the TRT uproar may be Repros Therapeutics Inc., of The Woodlands, Texas, which is developing Androxal (enclomiphene), for secondary hypogonadism. Repros "has provided a thoughtful explanation why the CV risk may be unique for testosterone and especially patients whose hematocrits aren't kept in check," wrote Piper Jaffray analyst Joshua Schimmer in a research report. If Repros "can steer Androxal through development and regulatory review without CV baggage, it may find itself with a unique and favorably differentiated label compared to the testosterone gels, in which case market share gains may be simplified and patients who dropped off gels may be more comfortable returning to treatment with a new approach," Schimmer added.

In February, Repros said the FDA agreed that the company will not need new safety tests with the estrogen receptor antagonist before submitting the new drug application later this year. The agency did require, though, that Repros finish the phase III trials called ZA-304 and ZA-305, saying that the studies known as ZA-301 and ZA-302 would not be enough. (See BioWorld Today, Feb. 10, 2014.)