Editor

When Pfizer Inc. won U.S. approval of its alpha-2 delta ligand Lyrica, people with fibromyalgia syndrome (FMS) gained their first official therapy for the painful, head-to-toe disorder, which brings a dreary lineup of added symptoms that include fatigue, muscle stiffness, cognitive dysfunction and insomnia.

First, of course, is seldom best.

Check out milnacipran, a dual-reuptake inhibitor that blocks the reuptake of norepinephrine with higher potency than serotonin. Cypress Bioscience Inc. and partner Forest Laboratories Inc. capped 2007 with word that the new drug application has landed on the FDA's desk. Investors could have cause for rejoicing at the milnacipran news, in that the drug's profile seems to beat Lyrica (pregabalin), bringing less fatigue, better memory and no weight gain.

Not until 1990 did physicians reach consensus on how to diagnose FMS. Criteria established by the American College of Rheumatology (ACR) call for a history of widespread and longstanding pain, as measured by pain upon application of pressure in 11 of 18 designated tender points. The disease afflicts about 2 percent to 4 percent of the population worldwide, including 6 million to 12 million in the U.S.

Milnacipran might also have an edge in those departments over Eli Lilly and Co.'s Cymbalta (duloxetine), cleared for painful diabetic neuropathy as well as depression, and sometimes prescribed for FMS.

In the summer of 2001, Cypress gained rights from the French firm Pierre Fabre Medicament to develop and market milnacipran for FMS in the U.S. and Canada, and about two years later the firms expanded their deal to include any product containing milnacipran as an active ingredient for any indication in those territories.

The potential $250 million hookup with Forest came four years ago, and left the pharma firm responsible for U.S. marketing. Specific financial details of that deal were not disclosed at the time, but SEC paperwork shows Forest has exercised its option for Canada, paying a $1 million fee in July 2007. Forest also has an option for a specified time period to get an exclusive license in the U.S. and Canada to any drugs developed under the Cypress deal with Collegium Pharmaceutical Inc., from which Cypress licensed patents related to milnacipran.

From Forest, Cypress got an upfront payment of $25 million, of which $1.25 million was paid to Pierre Fabre as a sub-license fee. A $5 million milestone payment was paid in June 2007, when the second successful Phase III trial finished, of which $250,000 went to Pierre Fabre. Cypress also got a $1 million fee for Forest's extension of rights into Canada, and shared $50,000 of the amount with the French licensor.

In all, the $250 million in the Forest deal breaks out to $205 million in development-related milestones, largely based on sales, and up to $45 million more if milnacipran is developed for other indications. Royalties for Cypress are included in the deal, and Forest has assumed the royalty payments due to Pierre Fabre, as well as the undisclosed transfer price for milnacipran's active ingredient.

The NDA for milnacipran is based on a "composite responder" analysis, after two Phase III trials showed the compound improved FMS and pain, though 2005 data from the first trial missed statistical significance. The FDA later revised its rules, allowing Cypress and Forest to use a different analysis. Under that one, the daily dose of 200 mg hit the mark. At 100 mg daily, the drug reached statistical significance difference on the FMS composite endpoint, and trended toward significance on the pain composite goal, using a baseline observation carried forward, or BOCF, analysis. In May, the second Phase III trial hit statistical significance in its primary endpoint using the BOCF analysis, too.

A third U.S. study is under way, with top-line results expected in the second half of this year. Pierre Fabre is conducting a Phase III trial with results expected in the first half.

What does it all mean? Good things, quite possibly, for Cypress and Forest, not to mention FMS patients. CIBC World Markets predicted in a research report that milnacipran's profile should let the drug grab decent sales - more than $800 million by 2012 - even though it might be the third FMS treatment to reach the market. Most likely, the "churn" phenomenon will drive that market, i.e., when patients quit responding to Cymbalta or Lyrica (usually after 6 months to 9 months), they'll be switched to milnacipran.

One potential glitch is the drug's cardiovascular risk. Lazard Capital Market's expert recently saw this element as likely to be dealt with in the milnacipran's label, so that approval would not be blocked, though several others at the ACR meeting earlier said doctors might balk at using therapies in the milnacipran class at such high doses. In late November, Lazard stuck to its "hold" rating on Cypress' shares.

Among other players in FMS is Jazz Pharmaceuticals Inc., which went public in June, raising $108 million to help launch Luvox CR, approved in December by the FDA for obsessive-compulsive disorder, though the agency said it wanted more information about the selective serotonin reuptake inhibitor when used in anxiety disorders. Luvox CR is licensed from Solvay Pharmaceuticals Inc.

In FMS, Jazz has Xyrem, an oral solution of sodium oxybate that is already marketed for cataplexy and for daytime sleepiness in narcolepsy patients. Gained through the April 2005 buyout of Orphan Medical Inc., Xyrem - called JZP-6 for FMS - is undergoing two pivotal Phase III trials, with data expected around the time when more milnacipran data pops, during the second half of this year. In 54 countries outside the U.S., the Belgian firm UCB S/A owns commercial rights.

Pipex Pharmaceuticals Inc. is making an FMS bid, too. The firm, created in late 2006 through the merger of Pipex Therapeutics Inc. and the shell company Sheffield Pharmaceuticals Inc., has the analgesic flupirtine at the Phase II stage. Brought to market in Europe more than two decades ago by Germany's Asta Medica AG for chronic lower back pain, flupirtine has not been approved for any indication in the U.S., though Pipex hopes to change that.

Branded Effirma, Pipex's flupirtine - given to a "small number" of U.S. patients suffering from FMS refractive to other analgesics and therapies - showed preliminary anecdotal efficacy in tests by a scientific collaborator, the company said.

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