Novartis pain drug battles Vioxx stigma
Novartis' Prexige approved in EU, but similarities to Vioxx could present a hard time getting past the FDA.
NEW YORK (CNNMoney.com) -- Novartis plans to bring a new arthritis painkiller to the U.S. market, but analysts say its similarity to the disgraced drug Vioxx could kill its chances of becoming a billion-dollar blockbuster.
The Swiss drug giant Novartis AG (up $0.32 to $61.55, Charts) said Tuesday that its painkiller Prexige was given a green light in the European Union for the treatment of arthritis. Novartis plans to "resubmit" the drug to the Food and Drug Administration in 2007, following the agency's request for more information in 2003.
Compared to Vioxx from Merck & Co., Inc., (up $0.33 to $46.14, Charts) Prexige has a better profile with regard to heart attack and stroke risks. Nonetheless, the drug is a member of the Cox-2 inhibitor class of drugs -- the same as Vioxx -- and could have a hard time winning the approval of American doctors and patients, not to mention the FDA.
"Doctors will be afraid to use this drug and ultimately that's what limits its potential," said Gbola Amusa, analyst for Sanford C. Bernstein. "Even when it's approved, doctors will see a safety issue with the drug and not use it as much."
Novartis spokeswoman Sherry Pudloski said that clinical trials have shown that Prexige is 79 percent better in terms of gastric bleeding than the NSAIDs, with a "comparable level" of cardiovascular risk. In theory, this presents Prexige with an iron-clad profile, as it would have reduced risks of heart attacks, strokes and stomach bleeding.
But despite its solid safety profile, the Vioxx stigma could prevent Prexige from becoming a billion-dollar blockbuster, analysts said.
"By no means does it have blockbuster potential," said Amusa of Bernstein, estimating annual sales of less than $500 million.
"I think that blockbuster is an optimistic assessment," said Les Funtleyder, analyst for Miller Tabak. "In the right population, this is a good drug, except the right population isn't everybody with a pain. The right population is people with severe problems who also have stomach issues. Obviously, the [drug] class comes with some baggage."
Novartis originally submitted Prexige years ago, but the review process was stymied on Sept. 30, 2004. That is Merck's day of infamy, when the company pulled its arthritis painkiller Vioxx off the market after a study showed that the drug increased the risk of heart attacks and strokes. Not only did Merck bid adieu to $2.5 billion in annual sales, but more than 20,000 lawsuits have been filed against the No. 4 U.S. drugmaker since that time. Thousands of former Vioxx patients and their family members blame the drug for their heart attacks, fatal and non-fatal.
The Cox-2 scandal also affected Pfizer Inc (up $0.30 to $27.29, Charts)., the biggest drugmaker in the world. At the request of the FDA, Pfizer took its arthritis painkiller Bextra off the market, losing $1.3 billion in annual sales. But Pfizer's other arthritis painkiller, Celebrex, was never taken off the market.
Clock ticking for Celebrex's U.S. monopoly
Celebrex is the only Cox-2 inhibitor available to U.S. patients and Pfizer is on track to meet its blockbuster sales goal of $1 billion for the year. But that pales in comparison to the Celebrex sales tally of $3.3 billion in 2004. The drug's sales are affected by the Cox-2 stigma. In July of 2005, the FDA made Pfizer add a "black box" warning, the most severe type of warning, to its Celebrex label to reflect risks of heart attacks, strokes and gastrointestinal bleeding.
Vioxx, Celebrex, Bextra and Prexige are all Cox-2 inhibitors. These anti-inflammatories kill pain by reducing swelling in arthritic joints. They have been marketed and prescribed (until 2005, in the case with Celebrex) as easy-on-the-stomach alternatives to over-the-counter members of the non-steroidal anti-inflammatory drugs (NSAID), like ibuprofen and naproxen, which have been linked to stomach bleeding. This class includes Aleve from the German drugmaker Bayer (up $0.10 to $51.45, Charts).
A hard sell to the FDA
Amusa, the Bernstein analyst, said "if there's any other Cox-2 that's going to overcome the safety issues, it's going to be Prexige." But it will still be a hard sell with the FDA, he said, because the agency is trying to repair its reputation from approving Vioxx.
"The FDA is certainly more conservative now than [the European regulators,]" said Amusa. "Let's not forget that they're the ones that got blamed for Vioxx. They don't want to get embarrassed twice. Ultimately, the FDA is going to be very, very cautious here."