By: Jason Napodano, CFA August 04, 2010 | Comments: 0 Recommended this article (2) POZN Print Share With the approval of pain drug Vimovo in late April 2010, Pozen (POZN - Analyst Report) now has two approved products on the market. AstraZeneca, Pozen’s commercial partner on Vimovo, should be in position to launch the drug later in the third quarter 2010.
Pozen’s first commercial product, Treximet, for migraines, posted sales of roughly $24 million in the second quarter at partner GlaxoSmithKline. This resulted in a royalty payment from Glaxo to Pozen of approximately $4.1 million. Both products were developed in-house using Pozen’s proprietary technology.
But Pozen isn’t done yet. The company is currently in phase III trials with its next commercial candidate, PA. PA is a “safer aspirin” that incorporates an immediate-release formulation of omeprazole for gastro-protection surrounding a pH sensitive aspirin. The opportunity with PA is significant, in our view.
Over 50 million Americans use aspirin daily for cardiovascular disease prevention. In 1988, the U.S. FDA approved the use of aspirin for the prevention of recurrent myocardial infarction (MI). Since that time, data reported in The Lancet from the ISIS-2 (2nd International Study of Infract Survival of MI) demonstrates that daily use of high-dose aspirin reduces the potential for vascular mortality by 23% (p<0.00001) vs. placebo in the first five weeks following a heart attack. Long-term follow-up data suggest the benefit of daily aspirin use persists in the prevention of recurrent MI as long as 10 years post event.
However, despite these impressive statistics, daily aspirin therapy isn’t being used to the fullest potential given the risk of harmful gastrointestinal (GI) effects of high-dose aspirin, including GI bleeding and gastric ulcers. In fact, 20% of the people who take daily aspirin therapy are at high risk for serious GI complications. Roughly 25% discontinue therapy due to these GI side effects.
Both the American Heart Association (AHA) and the American College of Cardiology (ACC) recommend gastro-protective therapy in patients who take daily aspirin. However, only 50% of the patients comply. That means potentially 50% of patients that are at risk for developing GI-related complications due to aspirin therapy (ulcers / bleedings) are not taking a gastro-protective.
Instead of taking a standard dose (325mg) of aspirin, patients and physicians are migrating down to less-effective doses at 81mg. In fact, the AHA and ACC recommend daily aspirin use at 75mg to 162mg per day, about one-fourth to one-half of the standard dose. These guidelines were put into place to reduce the potential for GI-related bleeding events. Data published in the American Journal of Cardiology shows a 2-fold reduction in major bleeding events and a 3-fold reduction in total bleeding events on daily aspirin use <100mg when compared to use >200mg.
Pozen’s PA-325/40 (325mg aspirin + 40mg omeprazole-IR) is designed to provide the full dose of aspirin therapy for secondary prevention of cardiovascular events, along with gastro-protection, in one pill. This should greatly work to improve effectiveness and compliance. Pozen’s initial market research shows that high receptiveness by both physicians (>60%) and patients (>75%) to PA-325/40 if approved. And, we note that Pozen plans to price PA-325/40 close to the generic components (we assume roughly $1/day), meaning that tier-2 and tier-3 open access if achievable with insurance providers.
Pozen is current enrolling two phase III programs at roughly 500 patients each under a U.S. FDA special protocol assessment (SPA) for PA-325/40. These programs began enrollment in October 2009. Enrollment should continue into the second half of 2011. Management has recently completed enrollment in a 400-patient long-term safety study with PA-325/40 as well. We believe management should be in position to file a new drug application (NDA) on PA-325/40 in 2012, potentially putting U.S. FDA action in 2013.
Besides secondary prevention of cardiovascular events, aspirin is widely used for the treatment of chronic pain in patients with osteoarthritis (OA). Pozen believes that there is a point of differentiation between a safer aspirin concept and commonly used NSAID products in the arthritis space.
All NSAIDs have a black box warning for cardiovascular risk. As such, the FDA requires a bolded risk on the label for contraindication in patients at risk for cardiovascular thrombotic events, myocardial infarction and stroke, or for patients undergoing at coronary artery bypass graft (CABG) surgery. Pozen’s PA-650/20 product could offer significant differentiation for the treatment of OA or chronic pain in a patient population at risk for cardiovascular or gastrointestinal disease.
Accordingly, management is looking to develop an even higher-dose PA product, PA-650/20, for pain. Pozen plans to meet with the U.S. FDA shortly to discuss plans for PA-650/20. However, we suspect that management will begin several non-pivotal programs with PA-650/20 before the end of the year.
These programs would include two trails: 1) a long-term safety trial, similar to the one currently ongoing with PA-325/40, seeking to enroll 300 to 400 patients, and 2) a phase III efficacy program in roughly 250 patients with an OA endpoint (WOMAC pain). Then, once these two programs are underway, management would begin the PA-650/20 registration program, which we expect to mirror the PA-325/40 design -- two phase III programs (300 – 400 patients in each) with a primary endpoint of cumulative incidence in gastric ulcers. A NDA for PA-650/20 is on deck for 2013.
Pozen’s PA franchise represents an attractive opportunity for investors. The company currently owns full rights to the product and is funding development of PA with its current cash balance (>$50 million on hand at the end of the second quarter) and the milestone and royalty payments coming from Treximet and Vimovo. If approved, we believe PA has $500+ million potential.
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