The US Food and Drug Administration’s (FDA) Pulmonary-Allergy Drugs Advisory Committee will be meeting on Apr 7 to review the efficacy and safety of Forest Labs‘ (FRX) Daxas (roflumilast), which is currently under review for the treatment of chronic obstructive pulmonary disease (COPD).
Documents released by the FDA indicate that there could be some concerns regarding the efficacy of the drug. The FDA noted that while Daxas achieved statistical significance in the clinical studies, the improvements were modest.
The agency is also concerned about the safety profile of the candidate. In addition to the frequent and sometimes severe gastrointestinal toxicities observed with the use of PDE4 inhibitors like Daxas, the FDA is concerned about the occurrence of psychiatric adverse events like suicide. Three people with no previous history of depression committed suicide. Meanwhile, two patients who had prior psychiatric histories tried to commit suicide.
Other safety issues that will be reviewed are potential carcinogenicity, pancreatitis and weight loss. These concerns could lead to a delay in Daxas’ approval. The panel will be voting on these issues at the upcoming meeting. While the FDA is not required to follow the panel’s recommendation, it usually does so.
The approval of Daxas would be a major positive for Forest, which is working on expanding its product portfolio ahead of the looming patent expiration of Lexapro in 2012.
Given the huge unmet medical need in the COPD market, and an estimated 80 million people suffering from moderate to severe COPD worldwide, Daxas could generate several hundred million dollars in revenues once approved and commercialized.
Forest has a collaboration agreement with Nycomed for Daxas. Forest has already made an upfront payment of $100 million to Nycomed for Daxas and is liable to make future, undisclosed milestone payments. Nycomed is also entitled to receive royalties based on Daxas sales from Forest. Once launched, Daxas would be competing primarily with GlaxoSmithKline‘s (GSK) Advair and Pfizer‘s (PFE) Spiriva.
We currently have a Neutral recommendation on Forest. We are concerned about long-term growth at Forest, especially from 2012 when Lexapro is exposed to generic competition. That puts a lot of pressure on the pipeline to come through.
We expect near-term investor focus to remain on the outcome of the FDA advisory panel meeting.
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