Cephalon, Inc. (CEPH) suffered a regulatory setback recently with its failure to receive outright approval from the US Food and Drug Administration (FDA) for its supplemental new drug application (sNDA) for Nuvigil.
Cephalon was seeking to get Nuvigil approved for the treatment of patients with excessive sleepiness associated with jet lag disorder resulting from eastbound travel. Cephalon had submitted data from a study that was conducted under the FDA’s special protocol assessment process.
The company had evaluated the efficacy of the drug based on two primary endpoints: an objective assessment (the Multiple Sleep Latency Test), and a subjective assessment (the Patient Global Impression of Severity).
Even though Nuvigil achieved statistical significance in both endpoints, the FDA has raised questions in its complete response letter regarding the strength of the subjective assessment data. Cephalon said that it intends to meet with the agency shortly so as to discuss the future regulatory path for this indication.
Nuvigil (armodafinil) is a follow-on version of Provigil (modafinil) which contributed about 48% to CEPH revenues in 2009. Cephalon received FDA approval for Nuvigil in June 2007 for the treatment of excessive sleepiness associated with obstructive sleep apnea/hypopnea syndrome (OSAHS), narcolepsy and shift work sleep disorder (SWSD).
Cephalon launched Nuvigil in June 2009 and is promoting the product aggressively. The company has taken several initiatives to ensure the smooth transition of users to Nuvigil, which has been priced at a significant discount to Provigil. 2009 sales came in at $79.4 million.
Cephalon is looking to maximize market penetration ahead of the entry of generic versions of Provigil in 2012. Several generic players including Mylan Labs (MYL) and Teva (TEVA) are seeking to launch generic versions of Provigil. Teva is also looking to market a generic version of Nuvigil.
The FDA’s response on the Nuvigil sNDA is disappointing, as approval for additional indications would help expand the market for the product and drive sales in the company’s sleep franchise. At present, there is limited visibility on the agency’s requirements for granting approval for the jet lag indication.
In addition to the jet lag disorder indication, Cephalon is evaluating Nuvigil’s effectiveness in the treatment of traumatic brain injury, major depressive disorder and schizophrenia.
We currently have a Neutral recommendation on Cephalon. We expect investor focus to remain on Cephalon’s emerging oncology pipeline, Amrix, and the conversion of patients to Nuvigil.
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