While Wall Street frowned on Labopharm Inc.'s decision to conduct another Phase III trial of its once-daily formulation of tramadol, the company's president and CEO reiterated what one analyst said on a conference call Wednesday.

In six to nine months, the analyst said, Labopharm likely will have an approval of tramadol in France, launch preparations in all of Europe, a new U.S. partner and, possibly, positive results from the final Phase III trial.

"It's a nice way of encapsulating it," the company's president and CEO, James Howard-Tripp, told BioWorld Today. "And it explains what we're trying to do and why we're trying to do it."

What the Laval, Quebec-based company is trying to do is to make up for a previous Phase III trial that fell short, holding up a new drug application filing until Labopharm has the data necessary to gain approval with no caveats. It also intends to make its cash last as long as possible by discontinuing some programs and slowing the development of others. By refocusing its priorities, it will have enough cash to take it through the first quarter of 2006.

Investors viewed the news negatively. Labopharm's stock (TSE:DDS) dropped 26.4 percent Wednesday, or C$1.12, to close at C$3.13 (US$2.44).

In January, Labopharm reported data from two U.S.-based Phase III trials, one of which met its three co-primary endpoints and one that missed two of them.

"The design was challenging in that it was a fixed-dose, three co-primary endpoint study, and in addition to that, we got an abnormally high placebo response," Howard-Tripp said.

The company's tramadol formulation was being studied in patients with moderate to moderately severe pain that might be associated with osteoarthritis, lower-back spasm, cancer and other acute and chronic conditions. (See BioWorld Today, Jan. 30, 2004.)

The new Phase III trial, which is called MDT3-005, is a double-blind, randomized study that will compare the safety and efficacy of the once-daily tramadol to placebo over a 12-week period in patients with osteoarthritis of the knee. It will be conducted at more than 50 centers across the U.S. and Canada, enrolling more than 500 patients starting in the fourth quarter. The design will more closely resemble the pivotal European trial that had positive results in 450 patients than either of the U.S.-based trials.

Labopharm is negotiating with the FDA for a special protocol assessment, a binding agreement for the trial stating that the study design meets FDA requirements for an NDA submission.

That submission is expected in 2005. The company filed for approval in Europe in March 2003, and is expecting a decision from France shortly. It expects approvals throughout the rest of Europe to follow thereafter. A launch should occur in the middle of next year.

The European partners include Esteve SA, of Barcelona, Spain; Aventis SA, of Strasbourg, France; Gruppo Angelini, of Italy; and Hexal AG, of Holzkirchen, Germany.

Labopharm is searching for a U.S. partner for the product.

"We are very well advanced with respect to partnering the product in the U.S.," Howard-Tripp said. "Our prospective partners have been part of our decision-making going forward. They are comfortable with our approach."

Howard-Tripp said the tramadol data collected to date were sufficient for a U.S. regulatory filing, but he didn't believe the dossier was sufficient for Labopharm to gain approval to the full extent.

"The one thing we don't want is we don't want to be sent back in the NDA process to do additional work," he said. "We would think that would be a much slower process and not likely to give us the outcome we would like."

As it focuses its resources on the final Phase III trial, the company re-prioritized its product-development programs. It will continue to move forward aggressively with its programs for a once-daily formulation of trazadone for depression and a once-daily formulation of betahistine for vertigo. The company is slowing its development of a controlled-release formulation of the pain drug gabapentin and a once-daily formulation of oxybutynin for urinary incontinence.

The company decided to terminate its programs for a controlled-release formulation of the irritable bowel syndrome drug trimebutine maleate, which is partnered with Mont St.-Hilaire, Quebec-based Axcan Pharma Inc., and for implantable Contramid mini-tablets. Contramid is a drug delivery method being studied by the company.

"The programs that we chose to move forward vs. to slow were the programs that had the most direct path through to registration," Howard-Tripp said.

Labopharm also chose products that had a good commercial opportunity.

The market potential for a once-daily version of tramadol is substantial, Howard-Tripp said. Global sales of the product in 2003 were about $1.3 billion to $1.4 billion.

"Sales have doubled in the last five years," he said.

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