West Coast Editor

While awaiting the FDA's nod on the controlled-release tablet version of its marketed asthma drug Zyflo - to be jointly promoted with DEY LP, under the terms of a March deal - Critical Therapeutics Inc. will be helping DEY sell its lung therapy Perforomist, just cleared for marketing.

CTI's stock (NASDAQ:CRTX) soared 61.2 percent on news of Perforomist's approval, ending Monday at $2.66, up $1.01, helped by separate news disclosed over the weekend: Pittsburgh-based Mylan Laboratories Inc.'s plan to pay $6.6 billion in cash for the generic drug business owned by Merck KGaA, of which DEY is a division.

Wall Street bet that Mylan, paying high, would spur DEY to sell Perforomist at a price that challenges the main competitor, Sepracor Inc.'s Brovana (arformoterol), launched in April as the first-ever nebulized long-acting beta-agonist. Adding to the picture is a looming generic threat to the top-selling drug from Merck Generics and Napa, Calif.-based DEY, which is DuoNeb (albuterol and ipratropium).

DEY is Merck Generics' U.S. specialty pharmaceuticals business.

Ian Sanderson, analyst with Cowen & Co. in New York, modeled a launch of Perforomist in the third quarter, with sales of $10 million this year, $30 million next year and $80 million in 2011. He estimated that 5 percent of net sales would go to CTI, as part of its deal with DEY.

"Most of the [rise in CTI's stock price] was a forgotten company re-hitting the radar screens," combined with the Mylan background, Sanderson said. "A lot of people are taking a look, finally, at what DEY has going for them, because it's a major part of what Mylan acquired, and this is bringing visibility to Critical Therapeutics."

Perforomist, inhaled by nebulizer for long-term, twice-daily maintenance of bronchoconstriction in emphysema and chronic bronchitis (otherwise known as chronic obstructive pulmonary disease, or COPD), was approved under a 505(b)2 new drug application that cross-references Foradil, the formoterol product from Basel, Switzerland-based Novartis AG, in support of safety and efficacy.

CTI plans to expand its sales force from 18 to at least 40 reps for Perforomist as soon as the FDA gives the nod to twice-daily Zyflo CR (zileuton), which bears a PDUFA date of May 31. The currently sold form of Zyflo is given four times per day to patients age 12 and older, and the new tablet is made with London-based SkyePharma plc's Geomatrix technology - which separately Monday gained good results for Atlanta-based Sciele Pharma Inc., in a bioequivalence trial testing the Geomatrix version of the Sciele's calcium channel blocker Sular (nisoldipine) against the marketed version.

Perforomist, as a long-acting beta(2)-adrenergic agonist, bears some of the shadow of others approved earlier in the class. One LABA product, salmeterol (Serevent, GlaxoSmithKline plc), was found in some cases to worsen symptoms and even cause death, and last year the FDA approved label changes for a handful of LABAs. But Sanderson pointed out that Perforomist users are much less likely to overdose, since the product is nebulized and takes longer. The drug is not to be used for acutely deteriorating COPD or to treat acute symptoms in general, which are better attacked with fast-acting rescue inhalers.

Zyflo, for its part, works by inhibiting 5-lipoxygenase, an enzyme that catalyzes the formation of leukotrienes from arachidonic acid. CTI has an injectable form in the works for emergency rooms treating patients with acute exacerbations of asthma. Last summer, the firm disclosed positive Phase I/II data, and a Phase II trial is slated for the second half of this year.

Competition is stiff in the mild-to-moderate asthma space, with share taken by the likes of Singulair (montelukast, Merck & Co. Inc.) and Advair (fluticasone and salmeterol, GSK), as well as inhaled corticosteroids. For severe disease, the existing drugs often are combined. Xolair (omalizumab), which won approval for severe asthma and was developed in a three-way deal between Novartis, Genentech Inc. and Tanox Inc., won approval in 2004 and sold $427 million last year.

In July 2006, AstraZeneca won approval of Symbicort, a twice-daily asthma therapy that combines budesonide, an inhaled corticosteroid, and formoterol. Due for launch this year, Symbicort is expected to compete in the moderate and severe asthma markets.

Another firm to make news recently in the COPD space is Pharmaxis Ltd., of Sydney, Australia, which in March came up with mixed results from a Phase II trial. The company's Aridol, tested in 79 patients at 12 centers, showed positive response in 76.5 percent of cases, with no serious adverse events, but the inhaled corticosteroid did not improve lung function.

CTI and Gaithersburg, Md.-based MedImmune Inc. are collaborating on preclinical monoclonal antibodies directed toward a cytokine called high-mobility group box protein 1, or HMGB1, which could be important in the body's inflammatory response. AstraZeneca plc, of London, is taking over MedImmune for $15.2 billion, but that won't change the terms of the HMGB1 deal, CTI said. Since the start of the MedImmune pact in 2003, CTI has billed $17.8 million to the partner, consisting of the $12.5 million initial payment, a $1.3 million milestone payment and $4 million in development support. This month's issue of the journal Nature Immunology details the HMGB1 research, and CTI has a deal with Beckman Coulter Inc., of Fullerton, Calif., to develop a diagnostic test that could measure bloodstream levels of the cytokine. (See BioWorld Today, April 24, 2007.)

At the preclinical stage is CTI's small-molecule alpha-7 internal program, targeting the nicotinic alpha-7 cholinergic receptor, or alpha-7 receptor for acute inflammatory disease, which could yield an oral, anti-cytokine drug for such conditions as asthma and rheumatoid arthritis, though CTI will not move to the clinic without a partner.

CTI had about $45.3 million in cash and cash equivalents at the end of March.