Breathing a sigh of satisfaction after years of hard work, officials at Indevus Pharmaceuticals Inc. reached a long-awaited milestone on Friday with the FDA approval of Sanctura.
The company moved into the Memorial Day weekend knowing its product would soon provide another option for patients with overactive bladder, and that soon it would receive a $120 million milestone payment from its co-marketing partner Pliva d.d., of Zagreb, Croatia.
"It will be the first new chemical entity for overactive bladder approved since 1998," said Glenn Cooper, the company's chairman, president and CEO, in a conference call.
With an expected launch in the third quarter, the drug will be used to treat patients with overactive bladder who exhibit symptoms of urge urinary incontinence, urgency and urinary frequency.
Indevus, of Lexington, Mass., filed for approval of Sanctura in April 2003, submitting additional data in February. Phase III data showed that the product hit endpoints of reduction in frequency of urination and reduction in number of urge-incontinent episodes.
The company formed the commercialization plan with Pliva in April, calling for a 500-person sales force split between the companies. Pliva paid Indevus $30 million up front in the deal, and will pay the company another $120 million for reaching the approval milestone. Indevus also could receive $45 million if it develops a once-a-day formulation of Sanctura. (See BioWorld Today, April 8, 2004.)
Indevus has been waiting for approval before building its sales force. It plans to hire 280 field representatives to market the product. They will work with 320 representatives of Pliva's U.S. subsidiary, Odyssey Pharmaceuticals Inc., to sell to urology specialists, obstetricians, gynecologists and certain primary-care physicians.
"We were hopeful that we'd have a positive action today, but we're quite a conservative organization, and waited for that [approval] to be the trigger point," Cooper said.
For the first six months of the agreement, Indevus will receive a commission based on net sales and it will fund its own sales force and promotional costs. After the six months, Indevus could opt to receive royalties instead, with no sales force-related costs. The royalty percentages are somewhere in the range of the mid-teens to mid-20s, said Michael Rogers, the company's chief financial officer.
Cooper said he was especially pleased that the labeling for Sanctura would include the one-week, four-week and 12-week data. The company submitted additional data to the FDA in February showing that Sanctura had no significant effect on the QT interval, a side effect associated with muscarinic receptor antagonists.
"We had significant results with all the key primary and secondary endpoints for overactive bladder at multiple time points," he said. "Just looking at package inserts [of competitors], we think we have a very compelling efficacy story."
Indevus is developing a once-daily formulation of Sanctura with Andover, UK-based Shire Pharmaceuticals Group plc. The companies are testing four of the most productive prototypes in a clinical trial and anticipate picking the best formulation by the end of the summer. That formulation could enter clinical trials by the end of this year and reach the market within a couple of years, Cooper said.
With 33 million people suffering from overactive bladder, the market potential for Sanctura is significant. Cooper said Indevus can gain a large market share for the product.
"The overall U.S. market in 2003 was $1.2 billion, up 20 percent over the previous year," Cooper said. "And most analysts who look at this market anticipate continued growth to the $2 billion to $3 billion range by the end of the decade."
With the added marketing costs within the first six months of approval, Indevus' burn rate is expected to rise from about $12 million to about $25 million per quarter. The burn rate should drop by the end of this year.
"Then we'll be on a straight royalty base where we won't have marketing costs for Sanctura," Cooper said, "so our burn rate should come down at that point."
After receiving the $120 million milestone payment from Pliva, the company will have about $200 million in cash, diminishing its need to conduct a near-term financing. The company believes its new sales force will add value to the company, making it more attractive as a potential partner to in-license drugs from other companies and move them through the clinic.
Sanctura (trospium chloride) is an oral quarternary ammonium compound belonging to a class of anticholinergic compounds known as muscarinic receptor antagonists. It relaxes smooth muscle tissue found in the bladder, decreasing bladder contractions, which are believed to cause overactive bladder.
The FDA approval was based on data from U.S. and European clinical studies involving about 3,000 patients. The drug was well tolerated with the most common side effects being dry mouth and constipation. It is a leading product in Europe for overactive bladder and urinary incontinence. Indevus licensed exclusive U.S. rights to Sanctura in late 1999 from the Koln, Germany-based Madaus AG.
Cooper expressed his pleasure on Friday that Sanctura received a straight approval, instead of an approvable letter.
"It's especially gratifying to receive an outright first cycle approval in just over a year of our FDA submission," Cooper said.
The company's stock (NASDAQ:IDEV) rose 9 cents, to close Friday at $8.33.