Pfizer Inc.'s approval by the FDA of Lyrica (pregabalin) for fibromyalgia turned more investor eyes to Cypress Bioscience Inc., which lately reaped the benefits of positive Phase III news with its compound for the condition, milnacipran.

But much of Wall Street was already watching Cypress with rapt attention, after the firm's stock skyrocketed more than 93 percent in late May (closing at a 52-week high of $16.37) on news that the firm's second Phase III study with milnacipran - unlike the first - hit statistical significance in both doses tested.

"When we bet the company on [milnacipran in the summer of 2001], there wasn't much to bet," noted CEO Jay Kranzler. With about $8 million in cash, and facing the threat of delisting by Nasdaq, Cypress licensed the serotonin and noradrenaline reuptake inhibitor from Pierre Fabre Medicament, the pharmaceutical division of bioMerieux Pierre Fabre.

Still, it was a risk, and "we continue to have that mindset," Kranzler said. Now, Cypress - which raised $72.9 million through a public stock offering within weeks of the positive Phase III data - is shopping for another compound to license. "We keep looking," he said.

Not everyone is pleased. Dale Chappell, managing member and director of the hedge fund Black Horse Capital Advisors LLC, which owns 1.2 million shares of Cypress, wrote a letter to the firm opposing the stock sale and urging a stock buyback plan instead.

"Your failure with mirtazapine should be a reminder that finding and developing an effective drug in a large indication is full of pitfalls and is often serendipitous," Chappell wrote. In June 2006, Cypress and partner Organon Ltd. said results from Phase IIa trials do not support going ahead with mirtazapine combined with another approved drug for obstructive sleep apnea, although an earlier pilot trial had yielded encouraging results.

"You currently are in possession of a drug that appears very effective in a large patient population," continued Chappell, referring to milnacipran. "I cannot understand why you would role the dice on another indication, and spend what must be over $100 million on another compound, rather than take the bird you have right in your hand."

Kranzler took the scolding in stride. "It's part of the game when you start to become higher profile," he told BioWorld Financial Watch. "All you can do is listen, and if you agree, then you may change the way you go about it."

With milnacipran partner Forest Laboratories Inc., the firm achieved success by changing the way it went about Phase III trials. The companies boosted the number of patients in the second study from 888 to 1,196, decreased the evaluation period from six months to three months, and included Baseline Observation Carry-forward (BOCF) as a pre-defined analysis, rather than only Last Observation Carry-forward (LOCF) analysis, as used previously.

Under the BOCF analysis, milnacipran lessened pain at the 200 mg dose (p=0.004) and at the 100 mg dose (p=0.025). Pain response was defined as a "much" or "very much" improved self-assessment using the Patient Experience Diary and a 30 percent or greater reduction in pain as measured by a visual analog scale, deploying what's called the Patient Global Impression of Change.

The drug also improved fibromyalgia syndrome at the 200 mg dose (p=0.015) and at the 100 mg dose (p=0.011) using the BOCF analysis, although results came out statistically significant using the LOCF method as well. Responders were defined as those who achieved the pain response criteria and also demonstrated an improvement in physical function as assessed by the SF-36 Physical Component Summary.

Data from a third Phase III trial with milnacipran are expected in the first half of 2008, along with results from a European trial conducted by Pierre Fabre. Milnacipran has been marketed outside the U.S. for depression since 1997, but Cypress holds patents in fibromyalgia through 2021.

Now that Cypress has favorable Phase III data, the company will get reimbursed for certain clinical trial costs as well as the first milestone payment from Forest under the companies' potential $250 million partnership. Cypress retained the option to co-promote the drug.

Pfizer's Lyrica - just cleared for fibromyalgia - was first approved in 2004 for nerve pain associated with diabetes and shingles, but not launched until the fall of the following year. Others on the horizon for the indication include Eli Lilly and Co.'s antidepressant Cymbalta (duloxetine), which also could seek a label expansion into fibromyalgia. Wyeth Pharmaceuticals Inc. has Effexor (venlafaxine), also an anti-depressant, and Jazz Pharmaceuticals Inc., has JZP-6 (liquid Xyrem, sodium oxybate oral solution). Xyrem is marketed for cataplexy and daytime sleepiness in narcolepsy patients.

Lilly plans a supplemental new drug application filing for Cymbalta by the end of the year, Wyeth is in Phase III trials with Effexor for fibromyalgia, and Jazz could report Phase III data with Xyrem by the first half of next year.

Lyrica, though, is the first drug specifically approved for fibromyalgia - muscle pain, fatigue and exhaustion, with no discernible cause - and the way the compound won its expanded label could bode well for milnacipran, for which the firms intend to submit an NDA by the end of this year.

Pfizer proved Lyrica works against the disease in a pair of pivotal trials, one of which was intended to show durability of response. In that trial, those for whom Lyrica worked were randomized to get the drug or placebo, and checked for waning response over a six-month period.

"It's a very unusual study," Kranzler said. "Clearly [the Pfizer NDA is] an unusual package. Ours as well as Lilly's will be slightly unusual packages, in that there aren't two large well controlled Phase III trials that definitively hit statistical significance."

The FDA granted a Lyrica label not just for pain related to fibromyalgia, but for management of the disease - which could mean the agency will be that much more open-minded about the NDA package for milnacipran, due to include results from a failed trial.

Lyrica for fibromyalgia beats the Cypress/Forest drug to market by more than a year, but the two compounds will be used together, Kranzler said. "They're completely different mechanisms and they happen to have opposite side effects," he said, noting that Lyrica tends to be given at night, whereas "our drug is an activating drug."

CIBC World Markets pointed to trial data suggesting that Lyrica patients end up with more side effects (up to 50 percent experience dizziness, 30 percent get sleepy), while fewer than 10 percent of milnacipran patients complained of nausea, dizziness or palpitations.

Pain relief scores may "slightly favor" Lyrica, CIBC noted in a research report, though none of the data used for comparison come from a head-to-head trial. Milnacipran also has some anti-depressant activity, which might provide a slight advantage. Meanwhile, there's buzz that, with all the cheery news lately, Forest could take over Cypress, whose stock was sliding late last week into the $13.50 range.

Kranzler said he had heard the same buzz - but nothing from Forest. "We intend to move ahead as an independent entity," he said. "It's not in Cypress' interest to sit and wait for Forest to come knocking at the door."

Analyst estimates aren't taking into account potential off-label use of the Cypress/Forest drug, or widening of the label into other pain categories. There's also the possibility for use of milnacipran in irritable bowel syndrome. Some estimates put peak sales for fibromyalgia as high as $600 million.

The condition strikes women more than men and is considered "psychosomatic," though that descriptor has fallen out of favor as politically incorrect. "This doesn't mean people are faking it," Kranzler said - only that the condition likely has both physical and mental origins.

"As someone who comes from the psychiatry world, I would say it's no murkier than depression," he said. "Nobody knows what causes depression, either, but we're very comfortable in the world of [central nervous system disorders] in general using drugs on the empirical observation that they work."

Given the type of disorder, Pfizer probably will undertake direct-to-consumer advertising for Lyrica. Cypress' partner Forest has opposed that approach with such drugs as the antidepressants Celexa and Lexapro, as well as Namenda for Alzheimer's disease, "but we've not had the discussions directly with them," Kranzler said. "The whole marketing world is changing pretty dramatically."