Arthritis represents a large medical need but it is served by several products that carry gastrointestinal risks. Arthritis treatment Vimovo, developed as an alternative that’s easier on the stomach, was intended to address that need. Backed by the marketing muscle of pharma giant AstraZeneca (NYSE:AZN), Pozen (NASDAQ:POZN), which developed the drug, had every expectation it would sell well.
It hasn’t.
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Sales to date — particularly in the United States — have fallen well below expectations, leading the company to take steps to research the matter. That underperformance unwittingly played a key role in determining Pozen’s course with a separate drug candidate, PA32540. That compound, developed for secondary prevention of cardiovascular disease, was supposed to be the first drug Pozen commercialized on its own. Rather than share drug revenue with a partner as Pozen had done with Vimovo, Pozen would be able to keep all of the revenue from a commercialized PA32540. But Vimovo’s slow sales, raised investor questions about tiny, Chapel Hill, North Carolina-based Pozen’s ability to market PA32540 on its own.
“We often heard that if AstraZeneca could not be successful, why did we think Pozen could be successful?” Pozen CEO John Plachetka said in a conference call to discuss fourth-quarter and full-year 2011 financial results.
Pozen disclosed last fall that it was changing course on PA32540’s plans and would seek a commercial partner rather than marketing the drug on its own, a course that the company had said would best position the compound for global commercial sales. But until now, the company had not said Vimovo’s slow sales played a role in that decision.
PA32540 is actually ahead of schedule. Top line phase 3 data are expected by the end of March, earlier than the company had expected. The compound is on track for a third-quarter new drug application (NDA) filing with the U.S. Food and Drug Administration. Pozen chief commercial officer Liz Cermak said the company is in talks with a number of potential partners of various sizes and focus who could take on either the PA32540 compound or the company’s entire PA drug technology platform. A large pharmaceutical company would be able to commercialize PA32540 worldwide. A smaller one might have more of a focus on particular therapeutic areas or certain geographic markets.
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Meanwhile, Pozen continues to monitor Vimovo sales, which are handled entirely by AstraZeneca. Pozen saw just $2.9 million in 2011 Vimovo royalties on AstraZeneca net sales of $21 million. Of that Vimovo sales total, $13 million came from the United States. But Plachetka expects that balance to shift. Vimovo has been submitted for regulatory approval in 71 countries. So far, the drug has received 45 approvals and has launched in 28 countries. But perhaps more important than the number of countries approving Vimovo, is the growth rate of the drug’s global sale. Vimovo’s sales growth was faster in the rest of the world than it was in the United States, the world’s largest pharmaceutical market. U.S. prescriptions have been flat.
Plachetka said Pozen hasn’t given up on Vimovo’s U.S. potential and sales may yet improve. More likely than not, Vimovo’s role in influencing PA32540’s fate is not yet done. Given the weight Vimovo has played in the company’s strategy changes for commercializing PA32540 so far, it’s likely that the performance of that partnered product will continue to have some bearing on the kind of partner and the kind of deal Pozen will seek for its new drug.