Vivus Inc. won FDA approval of its Evamist product, triggering a $140 million milestone payment from a partnership entered earlier this year
The FDA approved the product, a metered-dose transdermal estradiol spray, for the treatment of moderate to severe vasomotor symptoms due to menopause. Four months ago, KV Pharmaceutical Co. gained rights to the product in the U.S. Vivus was entitled to $10 million up front in that deal, $140 million upon FDA approval and up to $30 million more in sales-based milestone payments.
Vivus, of Mountain View, Calif., plans to use the funds for upcoming pivotal Phase III trials of its obesity product Qnexa.
"Getting the NDA approved is significant for us," said Timothy Morris, chief financial officer at Vivus. "We only licensed this technology in the beginning of 2004" and took it through approval in a little more than three years. "This is a nice example of what we can do. The fact that we got the new drug application approved on its PDUFA date goes to the quality of the NDA and the quality of the data," Morris told BioWorld Today. He said the approval also marked the first metered-dose transdermal spray product ever approved by the FDA, as well as the first estradiol transdermal spray.
Morris said Evamist will compete in the market for transdermal estrogen products, which was estimated at $270 million in 2006. The entire estrogen market, he said, was about $1.3 billion, mostly for oral products. He said Evamist has some advantages vs. other transdermal products, while the transdermal class has some safety advantages vs. oral products.
The approval in vasomotor symptoms of menopause includes most notably hot flashes, as well as discomfort during intercourse due to vaginal atrophy and changes in skin and hair.
But Vivus now is out of the Evamist business, other than the potential $30 million in milestones. The first $10 million of that would be triggered the first time Evamist annual sales reach $100 million. The remaining $20 million would be paid the first time yearly sales reach $200 million.
Morris said it was a tough decision for Vivus to relinquish rights to Evamist, but that the offer was too good to refuse. "It came down to economics," Morris said of the March 30 deal with St. Louis-based KV Pharma. "We would have loved to take the product to market ourselves and bring the company back to commercialization."
But given the $270 million market, "someone was writing us a check for more than half the market up front," along with taking out all marketing risk and the costs associated with developing a sales infrastructure. "It would have taken us seven to eight years to net that kind of cash."
KV Pharma, with an established sales force and presence in the OB/GYN community, should be able to ramp up sales quickly. Morris said he anticipates KV launching the product in January.
The deal, meanwhile, is expected to provide all the funding needed for the Phase III obesity program on Qnexa, which incorporates low doses of active ingredients from two FDA-approved products, the weight-loss drug phentermine and topiramate, which is used to prevent epilepsy and migraine.
Vivus in June completed an end-of-Phase II meeting with the FDA and reported plans for a 4,500-patient Phase III program. Morris said placebo-controlled trials are expected to start this fall, with data expected to be available about two years later. Patients will receive Qnexa treatment for 52 weeks. One study will be in obese patients, the other in obese patients with comorbidities, such as diabetes, high cholesterol or high blood pressure. The primary endpoint will be the proportion of patients who lose at least 5 percent of their body weight.
"We have no plans to partner Qnexa," Morris said. "We think the proceeds from the Evamist milestone are more than sufficient to pay for the Phase III development program," which the company estimated at $90 million.
Vivus had about $55.6 million in cash as of March 31, with a net loss of $7.4 million in the first quarter. The company had about 58.2 million shares outstanding, meaning its approximately $340 million market cap is not even twice its cash position. Vivus' shares (NASDAQ:VVUS) gained 25 cents Monday to close at $5.75.
The company has two other products that have completed Phase II testing, and the applicator-delivered MUSE (alprostadil) product for erectile dysfunction, which was approved in 1997 and brought in $130 million in its first year. Soon after, however, sales went way down following approval of the more convenient Viagra and other oral agents.
One of Vivus' products, Avanafil, is from the PDE5 inhibitor class like other oral ED drugs. It is designed to have a shorter half-life of only 90 minutes, offering potential safety benefits for some patients. Morris said Vivus plans to take that program forward, but only with a partner.
The company also plans to find a partner for its testosterone-based spray product for treating hypoactive sexual desire disorder, or low sexual desire in women. That product uses the same Metered Dose Transdermal Spray, or MDTS, technology used in Evamist. Morris said Vivus expects to be in position by the end of the year to finalize protocols for Phase III trials of testosterone MDTS.
Vivus got U.S. rights to use the MDTS technology for the Evamist and testosterone products from Acrux Ltd., a Melbourne, Australia-based drug delivery company.
The MDTS technology is designed to provide sustained release of Evamist over 24 hours. Evamist, Morris said, dries very quickly after application, does not need to be rubbed in and requires a very small surface area, all of which could be viewed as preferable to gel and lotion estrogen products.