Market forces and business decisions that caused NitroMed's race-based cardiac drug BiDil to sell poorly in its first few months could be a lesson for drug makers working on future personalized therapies involving existing drugs.
Disappointing fourth-quarter sales of the heart-failure drug, indicated for black patients because they were found in clinical trials to respond better than non-blacks, caused two of NitroMed's executives to resign last week.
The company blamed the poor sales largely on difficulties securing reimbursement, but the existence of a less-expensive option not to mention thrifty patients and flexible physicians also played a role. So far, there is not another example of a situation just like BiDil's a drug composed of existing therapies repackaged to take advantage of a newly selectable patient population but as pharmacogenomics and companion diagnostics evolve, the pattern has a reasonable chance of repeating.
Michael Loberg and Lawrence Bloch, NitroMed's CEO and CFO/COO, respectively, resigned last week in mutual agreements with the company, NitroMed vice president of corporate communications, Jane Kramer, told Pharmacogenomics Reporter this week. Argelis Karabelas was appointed chairman and interim CEO, while Kenneth Bate was named CFO/COO.
So far, there is not another example of a situation just like BiDil's a drug composed of existing therapies repackaged to take advantage of a newly selectable patient population but as pharmacogenomics and companion diagnostics evolve, the pattern has a reasonable chance of repeating.
NitroMed's fourth-quarter and year-end revenues fell far below analyst expectations. For the three-month period ended Dec. 31, 2005, the company generated $3.74 million in revenue, though consensus estimates provided by Pacific Growth Equities were $4.35 million. Full-year 2005 revenues, meantime, amounted to $6.05 million, compared to a consensus estimate of $6.35 million. Consensus estimates were composed of projections made by Bloomberg, NitroMed, and Pacific Growth.
The drug's freshman market effort may prove to be a lesson to makers of personalized therapies: If a less-costly equivalent is available as it is in the case of BiDil it will take market share from a pharmacogenomic drug entering the market at a disadvantageous reimbursement tier.
The copayments required for the two separate drugs comprising BiDil hydralazine and isosorbide dinitrate, which are both available off-label by prescription on their own are currently less than BiDil, said Liana Moussatos, who covers NitroMed for Pacific Growth Equities. The company disclosed data during its 2005 year-end conference call showing that patients with copayments of $51 and higher were not filling prescriptions for BiDil and encouraging their doctors to fill scripts for the two individual compounds instead, she said.
"In previous reports that I've written, I noticed that the [prescribing] data for hydralazine prescriptions shot up in December and January," following flat sales after BiDil's July launch, Moussatos said. The data suggest that patients sought a cheaper copayment by asking their doctors for another option, she added.
When NitroMed launched BiDil, it was placed on all formularies at Tier 3, which requires a higher copayment than the less-expensive Tier-2 drugs hydralazine and isosorbide dinitrate, said Moussatos.
In trying to turn its fortunes around, NitroMed is focusing less on its sales force the company employs fewer than 200 sales people compared with thousands employed at a typical big pharma company and more on reimbursement. "We and the payors can do better with assigning BiDil a Tier-2, or preferred status, on their formularies. That is the priority of the company," Kramer said.
NitroMed is incorporating its contract sales force during the coming quarter in an effort to increase their incentives, but it will not add new representatives, said Kramer. "We think that the sales force size is adequate to the market," she said.
The company has been negotiating with payors using volume discounts and pharmacoeconomic data showing the drug's cost effectiveness, according to Moussatos. "My speculation [about] why the company is taking longer [than expected is that] NitroMed probably didn't want to go down to the level of discount that payors wanted, and the payors are in no hurry," she said. Incoming CEO Karabelas has emphasized his flexibility in discount levels.
Pharmacogenomics companies developing drugs for indications having no existing therapies will probably not have to bargain as hard. But neither of BiDil's components is approved for heart failure it was only NitroMed's research that established the combination as effective and physicians may be avoiding higher copayments by prescribing the drugs off-label.
Moussatos listed GlaxoSmithKline's drug Wellbutrin as an example of a brand that competes well against its generic rival, buproprion. Wellbutrin's advantage involves heavy marketing and once-a-day treatment, while buproprion requires administration twice a day, and, because it is a less-expensive generic whose manufacturers have shallower pockets, has less-aggressive marketing. "Marketing and differentiating the product a bit can work," she said.
NitroMed hopes to turn its product into a purely pharmacogenomic therapy eventually, a development that might have the effect of expanding the drug's market by adding non-black patients who carry particular genomic markers. However, the potential would still exist for doctors to prescribe hydralazine and isosorbide dinitrate off-label following a positive test with its companion diagnostic.
Two weeks ago, the company said in a statement that its Genetic Risk Assessment in Heart Failure study, which is based on data produced by the African American Heart Failure Trial, revealed that patients taking BiDil who carried a particular SNP in the aldosterone synthase gene showed statistically less likelihood of mortality, heart-failure related hospitalization, and changes in functional status at six months compared to patients taking placebo. Patients receiving BiDil who carried a separate SNP in the beta-1 adrenergic receptor gene also exhibited significantly better cardiac health according to the same metrics as patients receiving standard care, the company said.
Chris Womack ([email protected])