Allergan and Richter's antipsychotic gets FDA OK but faces stiff competition

On Thursday, Allergan snagged FDA approval for a sort-of-new antipsychotic, Vraylar, to treat schizophrenia and bipolar disorder in adults. But after about a two-year delay in which a raft of antipsychotics--both generic and branded--have made it to market, the question is where it will find a place of its own.

Allergan ($AGN) and partner Gedeon Richter said today that the FDA approved the atypical antipsychotic capsules for the acute treatment of manic or mixed episodes associated with bipolar I disorder and for treatment of schizophrenia in adults. The FDA said the approval was based on three 6-week clinical trials in 1,754 participants in which the drug reduced the symptoms of schizophrenia compared to a placebo.

The FDA pointed out that the drug will carry the same black-box warning that all other FDA-approved drugs used to treat schizophrenia and bipolar disorder have, which is that they are not approved to treat older patients with dementia-related psychosis, and have an increased risk of death if used for such patients.

Allergan's David Nicholson

"We are pleased with the FDA approval of Vraylar, which represents an important new treatment option for adults living with bipolar I disorder and schizophrenia to help address the unmet medical needs of people with these complex conditions," David Nicholson, president of global R&D brands for Allergan, said in a release.

New, perhaps, but the unmet needs part of Allergan's position is less clear. Nearly two years ago, the FDA sent Forest, now part of Allergan, and Gedeon Richter a complete response letter saying more work was needed on the dosing side to help avoid side effects, which sent the pair back to clinical trials. When the application was delayed in November 2013, popular antipsychotics Risperdal, Seroquel and Zyprexa had already gone generic. Just three months ago, the final legal hurdles to generics of Abilify were toppled, releasing the floodgates for copies of the Bristol-Myers Squibb ($BMY) and Otsuka drug, one that last year raked in more than $5.5 billion in sales.

And those are just the generics. Otsuka and partner Lundbeck got the agency's blessing in July for Rexulti (brexpiprazole), which is approved as an add-on therapy for depression and schizophrenia. It is pegged to generate about $1.4 billion in peak sales. There are also Sunovion's Latuda and Novartis' ($NVS) Fanapt. And Allergan also has Saphris, a drug developed by Merck ($MRK), the rights to which Forest bought weeks after the FDA shot down its first go-round with what is now Vraylar. 

When Forest was first seeking approval for what is now dubbed Vraylar, opinions were very mixed about what it could generate in sales. Some said it might surpass blockbuster sales, but others gave it also-ran status, saying sales might be expected to be more like $200 million. And those were projections made two years ago.

- here's the Allergan release
- here's the FDA announcement