CADX 8.84 Bullish overview article.Pasted
OFIRMEV’s Europe Track Record, A Good Omen for US Market, Cadence Pharmaceuticals (CADX)) Written by Venkat Nukala
http://www.tapebeat.com/2010100611829/Companies-Profiles/ofirmevs-europe-track-record-a-good-omen-for-us-market-cadence-pharmaceuticals-cadx.html
Tuesday, 05 October 2010 21:59 Cadence Pharmaceuticals Inc’s (NASDAQ: CADX) drug OFIRMEV™ is currently under review at FDA with a new Prescription Drug User Fee Act(PDUFA) action date or FDA approval decision date of November 4, 2010. OFIRMEV™ is an intravenous formulation of acetaminophen that is currently marketed in Europe and approved in many other parts of the world for the treatment of acute pain and fever. OFIRMEV™ received a complete response letter from FDA in February 2010. Cadence stated that "In the Complete Response letter, the FDA only indicated that deficiencies were observed during the FDA's facility inspection of Cadence's third party manufacturer, which was completed on February 5, 2010. The FDA did not cite any safety or efficacy issues, nor did it request any additional studies to be conducted prior to approval. "
Cadence met with FDA on April 16, which was a Type A meeting held among the FDA, Cadence, and its third party manufacturer to discuss the deficiencies outlined in the Complete Response letter related to an inspection of the facility used to manufacture OFIRMEV. After the meeting Cadence stated "We believe that last week's meeting with FDA was an important step forward to address the observations from the FDA's inspection of our third party manufacturer's facility and move toward potential approval of OFIRMEV," stated Ted Schroeder, President and CEO. "Based upon our discussions with the agency, we believe that it is appropriate to promptly resubmit the NDA for OFIRMEV and intend do so within the next 30 days."
"At the meeting, the FDA did not request any additional information related to the NDA, including any new stability studies. The agency will determine the type of resubmission (Class 1 or Class 2) and resulting review timeline (two months or six months, respectively) after the NDA is resubmitted. Cadence will continue to work with its third party manufacturer to ensure that the observations from the FDA's inspection of the manufacturing facility for OFIRMEV are resolved in a timely manner." The NDA for OFIRMEV was resubmitted on May 4, 2010 and was assigned a new Prescription Drug User Fee Act(PDUFA) action date or FDA approval decision date of November 4, 2010.
Pain Management: Despite major improvements in surgical techniques and the introduction of novel drugs, the overall treatment of post-operative pain has not substantially improved over the last 20 years. According to the industry research group Datamonitor, up to 75% of patients report inadequate pain relief after surgery. Inadequate treatment of pain may lead to a variety of adverse health complications. Only two classes of injectable analgesics are available in the U.S. for the treatment of acute pain, opioids and non-steroidal anti-inflammatory drugs, or NSAIDs. Opioids have been used as analgesics for over 2,000 years and continue to be the mainstay of post-operative pain management. A range of naturally occurring, semi-synthetic and synthetic opioids are available for intravenous use, including morphine, fentanyl, hydromorphone, meperidine, sufentanil, and alfentanil.
Opioids, however, may also be associated with a variety of unwanted side effects when used to treat acute pain, including respiratory depression, excessive sedation, nausea, vomiting, constipation, urinary retention, itchiness, chest wall rigidity, cognitive impairment, and seizures. Respiratory depression may lead to death if not monitored closely. Side effects from opioids have been demonstrated to reduce patients’ quality of life. Opioid use may prolong a patient’s stay in the post-anesthesia care unit or ambulatory surgical facility, as well as a patient’s overall length of stay in the hospital, as a result of opioid side effects and the need to administer additional medications or treatments to resolve opioid side effects. Studies have demonstrated that surgical costs may be increased by opioid use, as a result of costs associated with treating opioid-related side effects, including the potential need for the patient to remain in the hospital for an extended period of time.
The only non-opioid intravenous analgesics currently available in the U.S. are the NSAIDs Toradol (ketorolac tromethamine), a generic form of which is also available in the U.S. from a number of manufacturers, and Caldolor (ibuprofen), which was approved by the FDA in mid-2009 for the treatment of mild to moderate pain in adults, and moderate to severe pain in adults as an adjunct to opioid therapy. Neither of these products are currently indicated for use in pediatric patients. Since NSAIDs do not produce respiratory depression or impair gastrointestinal motility, they are considered to be useful alternatives or adjuncts to opioids for the relief of acute pain. However, the use of NSAIDs is limited in the post-operative period due to their potential to cause increased bleeding. Non-specific NSAIDs, such as ketorolac, block both COX-1 and COX-2, which results in an anti-inflammatory effect but also reduces platelet aggregation and increases gastric irritation, creating the potential for gastric ulcers and bleeding. Additionally, renal toxicity and the potential for increased cardiovascular events further limit the post-operative use of NSAIDs. All NSAIDs carry a boxed warning for a number of side effects. A boxed warning is the strongest type of warning that the FDA can require for a drug and is generally reserved for situations where prescribers should be aware of the potential for adverse drug reactions that can cause serious injury or death.
Status outside of United States of America: Intravenous acetaminophen is marketed by BMS outside of the U.S. and Canada under the brand name Perfalgan. This product is currently approved in approximately 80 countries and is marketed throughout Europe and other parts of the world. Intravenous acetaminophen was launched on a country-by-country basis, beginning in France in 2002, followed by Germany and Spain in 2003, and Italy and the United Kingdom in 2004. Based on 2008 data from IMS Health, Inc., or IMS, an independent marketing research firm, Cadence estimated that more than 400 million doses of intravenous acetaminophen have been distributed since the introduction of this product in Europe, and it has become the market and unit share leader among injectable analgesics, with approximately 90 million units sold, or approximately $250 million in product sales, in 2008. This performance corresponds to an estimated market share in Europe in 2008 of 20% of all injectable analgesic units, and an estimated 45% market share of all injectable analgesic dollar sales. In some European Union, or E.U., countries, such as France and Belgium, intravenous acetaminophen has a unit market share greater than 40% based on 2008 data from IMS. The company believes these and other countries are utilizing intravenous acetaminophen as the foundation for multi-modal analgesia, particularly in the post-operative setting.
Status in United States of America: Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act permits the submission of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant, and for which the applicant has not obtained a right of reference. Supportive information may also include scientific literature and publicly available information contained in the labeling of other medications. Accordingly, the NDA Cadence submitted for Ofirmev in May 2009 included data from its own clinical trials in the U.S., trials of Ofirmev previously completed by BMS in the U.S. and Europe, and other studies published in the scientific and medical literature. A total of 1,020 adult patients and 355 pediatric patients, consisting of 47 neonates, 64 infants, 171 children and 73 adolescents, received Ofirmev in clinical trials. Cadence stated, it also believes that, prior to the receipt of the complete response letter in February 2010, it had substantially completed labeling discussions with the FDA for Ofirmev. Based upon these discussions, it plans to seek approval for the use of Ofirmev for the management of pain and reduction of fever in adults and children. In the complete response letter, the FDA did not indicate that any additional clinical trials were required in order to approve the NDA for Ofirmev and did not cite any safety or efficacy deficiencies.
The safety of acetaminophen has been well-established through decades of use in oral and suppository formulations. The primary safety concern with acetaminophen is hepatotoxicity, which is a well-understood and dose-dependent effect. Liver failure can occur in people who have taken a substantial overdose of acetaminophen, but it occurs only rarely when acetaminophen is dosed in accordance with the recommended guidelines. In addition, an effective antidote, N-acetylcysteine, is available to treat acetaminophen overdose.
In pharmacokinetic trials, the average peak plasma concentration of acetaminophen was briefly higher for Ofirmev when compared to the same dose of oral acetaminophen, but levels over time were not meaningfully different. These trials also demonstrated that Ofirmev does not accumulate over multiple doses after 12 hours and that urinary elimination of acetaminophen metabolites, including metabolites with potential to interact with the liver, was not meaningfully different for Ofirmev compared to oral acetaminophen at 12 and 24 hour measurements.
With the well established marketing track record throughout Europe(and many parts of the world) for many years and in addition to the pivotal clinical trials, Cadence said, data from the following clinical trials will be included in the re-submitted(May 2010) NDA:
1. Data from Clinical Trials Supporting Safety and the pharmacokinetic profile of Ofirmev in adults
2. Data from Clinical Trials Supporting Safety and Efficacy in Pediatric Patients
3. Data from Clinical trials to demonstrate comparable pharmacokinetics between children and adults
U.S. Market Opportunity: The Company believes that the U.S. market represents a potentially larger sales opportunity for intravenous acetaminophen than Europe with respect to potential unit market share and pricing. The Company estimated that the U.S. market is comparable to the European market when viewed from the perspective of the number of days of analgesic therapy administered to patients annually, which is calculated based on analgesic equivalent doses of the various therapeutic options. Based on sales reported to IMS in 2008, it estimated that analgesic equivalent doses represented approximately 90 million analgesic patient days in the E.U., compared to approximately 80 million patient days in the U.S. The E.U. analgesic therapy market consists of intravenous opioids, NSAIDs and acetaminophen. There are multiple intravenous NSAIDs available in Europe, as well as other intravenous opioids not available in the U.S. According to IMS, 287 million vials of injectable analgesics were sold in the U.S. in 2009. Morphine is the current market leader and accounted for more than 159 million vials sold in 2009. Approximately 90 million vials of other injectable opioids, such as meperidine, hydromorphone and fentanyl, which are all available in generic forms, were sold in 2009. Toradol (ketorolac tromethamine), an NSAID that is available as a generic drug, and Caldolor (ibuprofen), another NSAID, are the only non-opioid intravenous injectable analgesics available for treating acute pain in adults in the U.S. According to IMS, more than 38 million vials of injectable ketorolac were sold in the U.S. in 2009.
On average, pharmaceutical pricing continues to be higher in the U.S. than in Europe. According to IMS, the average selling price in Europe in 2008 was approximately $2.85 (U.S. dollars) per vial of Perfalgan, or intravenous acetaminophen. Cadence believes the unit price of Perfalgan in major European countries was largely driven by government-controlled reference pricing in those markets. In Scandinavian countries with less restrictive pricing controls, the average Perfalgan selling price is as high as $10.42 (U.S. dollars) per vial. The price of ketorolac in the U.S. in 1997, prior to the entry of generic competitors, was approximately $7.00 (U.S. dollars) per vial, according to the American Journal of Health-System Pharmacy. The price of Caldolor in the U.S. was $10.50 (U.S. dollars) per 800 mg vial at launch in 2009.
The Company believes that, upon the approval of OFIRMEV in the U.S., the key product attributes that will drive the adoption of this product candidate include the efficacy and safety profile of Ofirmev demonstrated in multiple clinical studies, the excellent safety profile and familiarity physicians have with oral acetaminophen, alone and in combination with opioids, the potential for reducing concomitant use of morphine and other opioids, the need for a more convenient dosage form for patients unable to take mediation orally, and a more rapid onset of action. In a market survey by IMS in 2007, 81% of the 126 U.S. physicians surveyed indicated readiness to use Ofirmev immediately following the product’s approval by the FDA.
Wedbush recently rated an Outperform on shares of Cadence Pharmaceuticals. The firm notes that "if approved, OFIRMEV would be the only injectable non-opioid, non-NSAID pain product available in the US." Wedbush points out that the current post-operative pain market in the US is dominated by injectable opioids, specifically morphine, and that these products obviously carry significant side effects. The firm believes that OFIRMEV could launch in Q1 of next year and reach full year profitability in 2013 with peak gross revs of $465 million in 2015.
Cadence Pharmaceuticals is among the companies in the Pharmaceuticals industry with the highest short interest ratio, which is 44.5 based on average daily volume of 193,000 shares and 8.6 million shares short. That equates to 17% of the 50.6 million shares outstanding. Insiders hold more than 50% of the shares, while Institutional & Mutual Fund Owners hold the major chunk of the remaining shares. With such a low float and high short interest the price can spike with momentum going close to the FDA decision date of November 4th 2010.
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Disclosure: Venkat Nukala has a long position
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