Specialty drug maker Avanir Pharmaceu-ticals Inc. is seeking new markets for its core product and boosting promotions for its use to treat the one condition for which it has been approved.
The Aliso Viejo-based company will hire sales representatives and launch a consumer advertising campaign for its Nuedexta drug, among other things, Chief Executive Keith Katkin said at last week’s Roth Capital Partners LLC’s annual conference in Dana Point.
Nuedexta combines a pair of fairly common medications: dextromethorphan and quinidine. It treats a rare neurological disorder known as pseudobulbar affect, which is marked by uncontrollable crying or laughing episodes.
Pseudobulbar affect is often found with other diseases such as multiple sclerosis, brain injuries or amyotrophic lateral sclerosis, or Lou Gehrig’s disease. It affects about 1.5 million to 2 million people in the U.S., and some observers argue that it’s underdiagnosed because doctors are unfamiliar with the disorder.
The Food and Drug Administra-tion last year approved Nuedexta for pseudobulbar affect.
Katkin gave details on what the drug maker has done since then to bring the drug to market in his presentation.
Goals Set
Goals set after the FDA approval included “expanding physician adoption, increasing diagnosis, motivating patients and maximizing patient access,” Katkin said of Avanir, which has a market value of about $420 million.
Nuedexta prescriptions grew from 5,600 to 6,100 in December and January, with another 1,600 during the first two weeks of February, the most recent data available, Katkin said.
Prescriptions cost about about $5,000 a year, according to company watchers.
Katkin said the recent increase in prescriptions puts Avanir on pace for annual revenue of $37 million.
Avanir has shifted around some members of its 113-person sales force because it found that demand was growing for Nuedexta in what Katkin called “institutional” settings such as long-term care facilities and nursing homes. That led the drug maker to reduce its specialty sales force and increase its institutional sales team.
Katkin said the push with institutional customers represents “risk diversification” on Nuedexta.
• Headquarters: Aliso Viejo
• Business: drug maker
• Founded: 1988
• Ticker symbol: AVNR (Nasdaq)
• Market value: about $420 million
• Notable: plans ad campaign, push for new uses of flagship drug
Promotion
A 10-day sampling program and a speakers’ bureau with doctors are part of the promotion effort for the drug.
Avanir’s advertising campaign will include print spots in magazines such as Better Homes & Gardens and advocacy group AARP’s publication.
“We want to motivate patients,” Katkin said.
Some industry observers have suggested that Avanir might face challenges in growing Nuedexta because pseudobulbar affect “is certainly embarrassing but doesn’t give doctors an incentive to get all their patients with the disease on the drug immediately,” according to an article on investor website Seeking Alpha.
There’s no incentive because pseudobulbar affect isn’t life-threatening, according to industry observers.
Katkin said that Avanir is performing “very solidly” on gaining insurance coverage and reimbursement. It’s now negotiating with several large health plans on coverage that he declined to identify.
Avanir applied for European regulatory approval for Nuedexta in October and is in contact with the European Medicines Agency.
New Versions in Pipeline
The company also has new versions of Nuedexta in the pipeline in hopes of expanding the market for the drug.
It is working on Nuedexta/AVP-923, which is being developed with an eye on treating conditions such as treating central neuropathic pain in multiple sclerosis patients, outbursts of agitation in patients with Alzheimer’s disease and neuropathic pain in diabetics. Each of those would represent considerably larger markets than pseudobulbar affect.
Avanir is in a second-phase clinical trial for AVP-923 for neuropathic multiple sclerosis pain. The trial will have 400 patients and four arms and will include stronger dosages of active ingredient dextromethorphan, which Katkin said shows a greater reduction in pain.
Avanir has a longer-term pipeline product with a recently signed licensing deal with Lexington, Mass.-based Concert Pharma-ceuticals Inc., which is working on deuterium-modified dextromethorphan, a key active ingredient in Nuedexta.
Deuterium-modified dextromethorphan me-tabolizes better in the body, Katkin said, and its use in Nuedexta could limit the required amount of quinidine—the other main ingredient in Nuedexta—or replace it completely. That would be seen as an improvement, because quinidine can cause heart problems as a side effect in some cases.
Avanir also gets some revenue from Abreva, a cold-sore treatment marketed by the consumer healthcare unit of U.K.-based GlaxoSmithKline PLC.
Katkin said Avanir finished 2011 with $75 million in cash as of Dec. 31.
“We get a lot of questions about our need to raise future capital and I think it’s important for everybody to note that we do not expect to do a large diluted financing any time in the future,” Katkin said.
Avanir didn’t give financial guidance for the 12-month period that will end Sept. 30 on a recent earnings conference call. Analysts expect the drug maker to post a net loss of $54.9 million on about $36 million in revenue for the year.
