Valeant partner Cosmo turns wannabe IBS-D rival, and it could do some sales damage: analyst

Valeant's Xifaxan could see market share slip if Cosmo can successfully launch rifamycin SV in IBS-D, Wells Fargo analyst David Maris says.

Valeant partners with Cosmo Pharmaceuticals on ulcerative colitis med Uceris. But in the IBS arena, the teammates may soon be at odds—and one analyst thinks Wall Street is underestimating the toll that could take on the Canadian drugmaker.

Ireland-based Cosmo kicked off a phase 2 trial last month of candidate rifamycin SV, Wells Fargo’s David Maris wrote in a recent note to clients—and if that product can win approval, it’ll go head-to-head with key Valeant moneymaker Xifaxan. The company is testing regimens of three doses per day, on par with Xifaxan, as well as two doses per day, and if the less-frequent schedule is effective, it could give Cosmo a leg up.

Of course, that’s still a big “if,” and with the study only in phase 2, Cosmo has a long way to go before it can win an IBS-D indication. But Maris, for one, sees a way that Cosmo could begin poaching Xifaxan’s market share sooner.

The drugmaker is preparing to file rifamycin SV for an approval in traveler’s diarrhea “imminently,” Maris wrote, with a potential green light coming in the second half of this year and a launch early next. And the way he sees it, “[a] launch of Cosmo’s drug in traveler’s diarrhea would result in competition with Valeant’s Xifaxan both directly in traveler’s diarrhea and potentially indirectly with off-label use in IBS-D."

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“We believe the market has not considered the Cosmo rifamycin program as potential Xifaxan competition,” he added.

Extra competition is not what Valeant needs. It’s been working hard to revive struggling sales of Xifaxan for more than a year, in part by adding 250 primary care sales reps to its gastrointestinal salesforce. Thanks to that move, “trends have modestly improved,” Jefferies analyst David Steinberg wrote to clients last week, with sales annualizing at about $1.2 billion.

Meanwhile, Valeant—whose Salix unit almost bought Cosmo before selling itself to the Quebec-based pharma—are already in a tussle, Maris noted, though not of the sales variety. Cosmo wants its Uceris rights back from Valeant, and it’s currently waiting for a decision after an October liability hearing.