There is life after Viramidine for Valeant Pharmaceuticals International.
The Costa Mesa-based drug maker plans one more trial of liver disease drug hopeful Viramidine, though its chief executive said Valeant can move ahead without it.
Regardless of how Viramidine fares in a final test, Valeant plans to continue focusing on drugs for neurology, infectious diseases and skin inflictions, Chief Executive Timothy Tyson said.
“We have some good products in the pipeline that we intend to develop,” he said, “and, depending on success, bring into the marketplace. We also expect to look for and acquire licenses for other compounds.”
Valeant drugs under development include Retigabine, an epilepsy drug, and Pradefovir, for hepatitis B.
Recently launched drugs include Cesamet, used to treat nausea in chemotherapy patients, and Zelapar, a treatment for Parkinson’s disease.
Meanwhile, Valeant is having one more go at Viramidine, a potential successor to the company’s fading flagship ribavirin for hepatitis C.
Two late stage trials this year showed Viramidine caused less anemia but wasn’t as effective as the standard treatment of ribavirin and pegylated interferon, a protein.
Valeant plans to do a short trial at a higher dose to see if Viramidine is any more effective.
“The trials clearly indicated that the product works, and that the product works based on the amount of exposure the person gets to the drug,” Tyson said. “It appears that the wrong dose was selected.”
After the 12-week dosage trial, Valeant faces a decision on whether to scrap work on the drug or pursue another late-stage trial in 2007.
Viramidine has a patent through 2020, something Tyson said gives Valeant a “good patent life” if the drug maker moves forward with development.
Wall Street is looking beyond Viramidine.
Valeant’s shares are up nearly 30% since July after plunging in March on the first disappointing Viramidine news.
Product acquisitions could help Valeant, according to Robert Uhl, an analyst with Friedman Billings Ramsey, an Alexandria, Va.-based investment bank.
“You really do want to acquire additional products that you can sell to the same customer where you have the relationship,” he said.
Valeant did that earlier this year when it paid $113.5 million to buy Infergen, a hepatitis C drug from Northern California’s InterMune Inc.
Walking away from Viramidine wouldn’t be bad, Uhl said, and would be in line with the company’s cost cutting of the past few years.
Valeant spends some 16% of its sales on research and development, Uhl said, about twice as much as other midsize drug makers.
The company spent $56.4 million, or 13% of sales, on research and development during the first half of the year.
“It’s really more of a cost-saving story,” Uhl said. “They really are much more aggressive about shifting away from the high-risk and very expensive R & D; projects.”
Valeant could spend some $50 million in the next couple of years if another third-phase Viramidine trial is needed, he said.
The company plans other changes.
Valeant is set to sell off its pre-clinical and discovery research and development unit, which Tyson said costs $20 million to $25 million a year. The move would leave Valeant to focus on more advanced drug projects, he said.
“It’s better to redeploy that investment on things closer to the marketplace,” Tyson said.
After a sale of the unit, Valeant plans to leave its campus on Hyland Avenue near the San Diego (I-405) Freeway. The drug maker plans to seek space elsewhere in Orange County, likely in South County.
And Valeant intends to sell off two more plants, in Switzerland and Puerto Rico, by the middle of next year, Tyson said.
If Valeant does pursue Viramidine, it could seek to do so with another drug maker, Tyson said.
A sale of Valeant is unlikely, he said.
“We’re not for sale,” Tyson said. “Most deals require the support of the other company, and of course, there’s always the possibility for somebody to be interested.”
Analyst Uhl called it “probably unlikely” that a suitor would emerge for Valeant.
