Valeant's Relistor a future blockbuster? With AZ in the game, analysts aren't buying it

With oral Relistor's approval, Valeant just got a new weapon in its battle with AstraZeneca for the opioid-induced constipation throne. Can that weapon reach the billion-dollar sales benchmark quoted by Valeant's GI unit, Salix? Don't count on it.

Last week, Valeant snagged an FDA OK in OIC for an oral version of Relistor, whose subcutaneous formula won FDA clearance in September 2014. Valeant and partner Progenics “expect the market to be receptive to a more convenient oral tablet formulation of Relistor's well-established subcutaneous preparation,” Progenics CEO Mark Baker said in a statement.

How receptive? Salix and Progenics have predicted more than $1 billion in peak sales for the pill version--money the struggling Valeant could certainly use as sales of its battered dermatology unit continue to come up short.

But if the Quebec-based drugmaker wants to get there, it’ll have to get by AstraZeneca’s Movantik. And AZ already knows a thing or two about oral OIC meds, as Movantik, a pill, won FDA approval days before subcutaneous Relistor did.

So far, AstraZeneca has made the most of its head start in the oral field. Last year, IMS Health data pegged Movantik at 116,663 total prescriptions, according to Evercore ISI analysts. The result? Just $48 million in Valeant-reported Relistor sales for 2015.

That’s a long way from $1 billion-plus--and it’s a gap Evercore’s Umer Raffat doesn’t see Valeant closing, even with the newcomer formulation. He’s modeling about $250 million in peak sales for the whole franchise, with the pill version of Relistor nabbing just $125 million at its peak.

Nomura analysts were more upbeat in a note to clients last December, pointing out that while Movantik may have the first-mover advantage, oral Relistor has a more rapid onset of action--a factor that could make it "a meaningful competitor" and help it steal market share. The OIC market is also a vast one with a high unmet need, they noted, with the condition affecting approximately 40% of the 8 million patients receiving long-term therapy for chronic pain. Still, though, they saw the approval adding between $500 million and $750 million to peak sales estimates.

Guggenheim's Louise Chen, on the other hand, does think there could be something to the blockbuster claim, Barron's says--but as she wrote to investors, Progenics hasn't seen Valeant's marketing plans yet.

"With all the changes at Valeant, Progenics has had a hard time getting senior management attention for the potential upcoming launch," she said earlier this month.

- read Valeant's release 

- get more from Barron's

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