Daiichi Sankyo pulls out of U.S. pain market amid oncology pivot, opioid scrutiny

Daiichi Sankyo
Daiichi Sankyo severs its ties to the U.S. pain drug market by ending deals with AstraZeneca and Inspirion. (Daiichi Sankyo)

Daiichi Sankyo’s short-lived interest in the U.S. pain management market has officially come to an end, as the company's new CEO continues shifting its focus to oncology and the industry reels from the nation’s opioid crisis.

The Japanese pharma handed the opioid-induced constipation treatment Movantik back to AstraZeneca as of October, and it told Inspirion Delivery Sciences to cancel their licensing agreement covering opioid drugs MorphaBond and RoxyBond, Daiichi Sankyo’s newly minted CEO Sunao Manabe told investors during a call Thursday.

“With these actions, [Daiichi Sankyo’s U.S. operation] exited the pain treatment business and focused on oncology and [the] injectable iron business,” he said.

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According to a WARN notice posted in August, Daiichi’s U.S. outfit had planned to cut 68 employees in New Jersey effective Oct. 7. A company spokesperson confirmed to FiercePharma that the cut is about removing the Daiichi-employed pain sales force.

The moves mark a change of course at Daiichi. In its annual report for the fiscal year ended in March, the company had said it would “seek growth” of both Movantik and MorphaBond and planned to work out a delayed launch of RoxyBond after a rival company challenged the FDA’s approval of the drug in a lawsuit.

As it slims down in the messy pain management market, Daiichi is doubling down on oncology. While Daiichi and AZ have cut ties on Movantik, they recently inked an oncology pact, with AZ betting $6.9 billion on Daiichi’s lead antibody drug conjugate (ADC), [fam-] trastuzumab deruxtecan (DS-8201), in HER2-expressing cancers. An application for the drug in metastatic breast cancer has just been put under FDA priority review, with a decision expected in the second quarter of 2020.

RELATED: AstraZeneca and Daiichi get Q2 2020 PDUFA date for breast cancer ADC

The deal is a huge endorsement for Daiichi’s ambition of becoming a “global pharma innovator with competitive advantage in oncology” by 2025. Under that project, Daiichi in February 2018 said it would reorganize its U.S. commercial organization in preparation for upcoming oncology launches. At that time, the company planned to reduce headcount by about 280 employees.

As the first project, Daiichi in August nabbed an FDA green light—its first U.S. cancer nod since 2011—for Turalio for adults with a rare joint cancer known as tenosynovial giant cell tumor.

On the manufacturing side, Manabe said the company plans to invest JPY 100 billion ($920 million) or more “to be prepared for the increase in demand of ADC franchise’s investigational drugs and products.”

RELATED: Daiichi Sankyo wades deeper into oncology with FDA go-ahead in rare joint cancer

Daiichi’s dabbling in the U.S. painkiller market can be traced back to 2014, when it agreed to pay up to $650 million for some hydrocodone combo medications from Charleston Laboratories. However, the alliance was cut short in 2017 after the FDA shot down the pair’s lead project, CL-108. Daiichi took a $250 million impairment charge for abandoning the deal.

Hoping to build its U.S. pain portfolio into a blockbuster franchise, the Japanese company had by that time licensed U.S. rights to Inspirion’s FDA-approved extended-release morphine formulation MorphaBond and what would later be branded as Roxybond, an immediate-release form of oxycodone hydrochloride. Both drugs feature a unique abuse-deterrent technology that resists passage through a syringe needle.

The Movantik pact with AZ was formed in 2015, with Daiichi paying $200 million upfront for co-marketing rights. But the drug hasn't exactly been a gold mine. In the first three quarters, its sales only reached $70 million in the U.S., down 14% over the prior year, according to AstraZeneca.

RELATED: J&J, Teva offer a whopping $48B combined to wrap opioid suits, but not all plaintiffs are on board

The news came as U.S. opioid players Johnson & Johnson, Teva and Purdue Pharma offered up multibillion-dollar settlements for their roles in the U.S. opioid epidemic.

Meanwhile, Daiichi is holding onto the pain business in its home country. In April, it launched Tarlige (mirogabalin) in Japan for peripheral neuropathic pain to challenge Pfizer’s blockbuster Lyrica. And in September, it rolled out in the country a new generic formulation of oxycodone hydrochloride for sustained cancer pain treatment.

Editor's Note: This story has been updated with a confirmation from Daiichi Sankyo for U.S. job cuts.

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