AstraZeneca can finally try to reap some returns from its $2.7 billion buyout of ZS Pharma. After back-to-back rejections over manufacturing problems, its potential blockbuster hyperkalemia drug Lokelma, formerly known as ZS-9, has finally been approved by the FDA.
Lokelma won the approval based on data from five clinical trials that showed the drug could start lowering abnormal potassium levels in the blood in an hour and restore levels to normal after a median 2.2 hours. The effect can last for up to a year on maintenance doses, the studies showed.
Most common in patients with poor kidney function and heart failure, hyperkalemia can be fatal, and until recently patients had few options for treatment. That's one reason AZ thought ZS Pharma would be worth its $2.7 billion purchase price. After the British pharma acquired ZS-9 in that 2015 buyout, the hope was that the drug could soon embark on a journey to $1 billion-plus in peak sales. But that plan was thwarted twice—in May 2016 and March 2017—both times because of shortfalls at a Texas plant that manufactures the drug.
Those delays gave a head start to a competitor, Vifor Pharma’s Veltassa, pushed to approval in October 2015 by its developer Relypsa, now a Vifor unit. Veltassa first came with an FDA black-box warning of interactions with other oral meds, which many analysts believed could play in AZ’s favor—if ZS-9 had come to market on time. Those two regulatory setbacks gave Veltassa more time as a sole player in the hyperkalemia market and offered the company a chance to persuade the FDA to lift that black-box restriction. The agency pulled the warning off Veltassa's label in 2016.
Even with sole control of the market, however, Veltassa only managed to grow to $52.7 million in 2017 sales. Though that marked a big leap from 2016's $12.5 million haul, it's still far from the company's blockbuster hopes. Aiming for a global boost, Vifor recently launched Veltassa in some European countries and expects a full EU rollout in 2018 and 2019 .
All that means Lokelma still has a chance at fending off Veltassa toward its own blockbuster goal. As Credit Suisse analyst Vamil Divan said after Veltassa’s initial approval, the AZ drug “has an overall stronger clinical profile than Veltassa, highlighted by ZS-9’s rapid and consistent efficacy along with more favorable tolerability.”
The U.S. approval comes two months after Lokelma's European nod, which was also delayed because of the production problems. It also comes at a time when AZ’s in much need of new blood, as its aging cardiovascular blockbuster Crestor suffers significantly from generic competition. For the first quarter, Crestor sales slid downhill by 42% to $389 million, and dragged down company-wide sales to a decline of 2%.