Forest Laboratories, Inc. (FRX) recently gained US Food and Drug Administration (FDA) approval for its chronic obstructive pulmonary disease (COPD) drug, Daliresp (roflumilast). Daliresp received approval for the reduction of the risk of COPD exacerbations in patients with severe COPD associated with chronic bronchitis and a history of exacerbations.
Forest Labs had initially submitted a new drug application for Daliresp in July 2009. However, the company received a setback in April 2010 when the FDA’s Pulmonary-Allergy Drugs Advisory committee voted 10-5 against granting approval to Daliresp for the treatment of COPD.
At that time, concerns were raised regarding the risk-benefit profile of the drug. It was noted that while Daliresp achieved statistical significance in clinical studies, the improvements were modest. Moreover, concerns were raised regarding the safety profile of the candidate.
Not surprisingly, in May 2010, the FDA issued a complete response letter and asked the company to submit additional information and analyses.
While the product label contains warnings regarding psychiatric events including suicidality, weight decrease, drug interactions and other adverse events, we are pleased to note that Daliresp’s label does not contain a black box warning, which would have slowed down uptake.
Forest Labs has an agreement with Nycomed for the development and commercialization of Daliresp in the US. Under its 2009 license agreement with Nycomed, Forest Labs made an upfront payment of $100 million to Nycomed. Additional payments could be in the form of development and sales milestones and royalties on Daliresp sales.
Forest Labs intends to launch Daliresp in the second quarter of 2011. Daliresp is already available in the EU under the trade name Daxas. Nycomed has a co-promotion agreement with Merck & Co., Inc. (MRK) for the commercialization of Daxas in Canada and certain European countries.
We currently have a Neutral recommendation on Forest Labs, which is supported by a Zacks #3 Rank (short-term “Hold” rating). The company is working on strengthening its pipeline given the loss in sales that will come with the Lexapro (2012) and Namenda (2015) patent expirations. Daliresp represents a nice incremental opportunity for Forest Labs with COPD being the third leading cause of death in the US.
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