By Jennifer Van Brunt
The road to new drug approval is long, expensive and fraught with danger — especially for a young biotechnology company that is betting its future on the success of a single product candidate. So when the FDA finally gives its stamp of approval, there's ample reason to cheer. But this is not the end of the struggle, for having an approved drug does not equate with profitability. The biotech firm — and frequently its big pharma marketing partner — must still get the product into the hands of physicians and hospital pharmacies — and ultimately to the patients for which it was intended. This requires special skills in marketing, sales and distribution, especially when the end-users have more than one therapeutic product from which to choose for treating a particular disease or condition. And the process of launching a new product has its own schedule, which is actually set in motion long before the FDA finally approves the product for sale.
"To launch a product, a company has to start planning one to two years prior to approval," explained Philip Young, the vice president of sales and marketing at Neurex Corp. The company has to position the product appropriately, with a product indication that's not only salable but also reimbursable. That requires extensive market research, he said, to ascertain what qualities of the product are important to physicians and why.
Neurex's first commercial product is Corlopam, a dopamine receptor agonist for treating severe high blood pressure, in-licensed from London-based SmithKline Beecham plc in 1994. The Menlo Park, Calif., company (NASDAQ:NXCO) received a favorable recommendation for approval from an FDA advisory committee on June 26, 1997; it was thus anticipating final marketing clearance — if all things went smoothly from then on — by the end of the year. However, the FDA came through on Sept. 24, catching Neurex by surprise. Since the company had planned for a year-end launch, it stuck to that timetable, and didn't actually start shipping product until early January. According to Young, nothing is gained — and a good deal could be lost — by trying to alter the time lines once the product launch plan has been put into motion.
In the interim — between September and January — Neurex continued to hire a sales and marketing force, completed its territory targeting and development and initiated the "message training" process, Young said. This involves interacting with physicians, cardiologists in this case, to understand how they work and what they need from the new product — without impinging on the physicians' time or getting in their way. "We want to make sure the sales force understands the people they will be working with," he continued. "When you launch a new drug, you launch the company, also."
Since there was no pent-up demand for Corlopam, Neurex also had to convince physicians to choose its product over available therapies, including nitroprusside. (There are actually about eight established hypertensives in the U.S. market, Young said.) This was especially important since nitroprusside is less expensive: It generally costs $10 to $15 per 24-hour course of therapy, Young said, whereas Corlopam can run $200 per day (depending on the patient's weight). However, Corlopam offers significant safety features, especially in hypertensive patients with deteriorating function of the heart, kidneys, brain and retina. And it's the only vasodilator that can lower blood pressure and maintain renal perfusion, Young said.
Convincing physicians is one hurdle, of course, but an even higher one may be the hospital's Pharmacy and Therapeutics (P&T) committee. "Once you get into the hospital setting, you need to develop physician advocates, who sponsor your product to the P&T committee," Young explained. The approval of that committee is critical; without it, the product never gets onto the hospital's formulary. The P&T committee can take as little as one month to approve a new product for its formulary — but it can also drag out the process for as long as six months, he said.
By the time it reported its 1997 year-end financial results (on Feb, 12, 1998), Neurex had already completed the initial pharmaceutical wholesaler stocking of Corlopam. But the company also had been able to garner approval from the P&T committees of several dozen key hospitals, which had approved Corlopam for stocking and use by mid-February.
Although very early sales of a newly approved drug are not necessarily indicative of what the long-term demand for the product will be, they certainly reflect the company's efforts at creating a general awareness and demand for the product before it is actually available.
For Neurex, those early sales amount to recorded revenues of $2.1 million for the quarter ended March 31, 1998. The peak sales figures, according to San Francisco-based BancAmerica Robertson Stephens analyst Jay Silverman, could reach anywhere from $40 million to $100 million three years after launch.
There were a number of other new biotech therapeutics approved by the FDA in 1997, of course, and the early sales figures for those products are starting to roll in, as well. (See the chart on p. 3 for details of selected new products and early sales figures).
For some of those new products, the official launch has lagged months behind formal FDA approval. For others, however, the launch has been almost simultaneous.
Only two weeks after it received marketing approval from the FDA for its anti-clotting drug Integrilin, Cor Therapeutics Inc. is ready to start shipping the new product to hospital pharmacies. The South San Francisco-based biotechnology company (NASDAQ:CORR) and its marketing partner Schering-Plough Corp., of Madison, N.J., will begin supplying hospitals this week with the heart drug — the first of the class of GPIIb/IIIa inhibitors to be approved for treating both acute coronary syndrome and angioplasty.
Getting a product out the door this fast is a remarkable achievement, but Cor Therapeutics is not the only biotech company that is capable of moving so quickly. Agouron Pharmaceuticals Inc., of La Jolla, Calif., launched its AIDS drug Viracept within one week of FDA marketing approval. Idec Pharmaceuticals Corp., of San Diego, and Genentech Inc., of South San Francisco, started shipping Rituxan for treating non-Hodgkin's lymphoma about two weeks after approval. And Amgen Inc., of Thousand Oaks, Calif., was quick off the line with Infergen, its drug for treating hepatitis C virus infection, as well.