Forest's antipsychotic ambitions thwarted by FDA delay

Forest Laboratories ($FRX) has a slate of new products meant to be its life raft. Swamped by generic competition for its top seller, the antidepressant Lexapro, the company promises that these new drugs will keep its head above water--and then grow fast enough to propel new growth.

But what happens when one of those new products--the antipsychotic drug cariprazine--gets a thumbs down from the FDA? And that thumbs down follows hard on the heels of another delay--on filing for approval of the respiratory drug aclidinium/formoterol? Analysts figure on cost cuts or M&A, or a combination of the two.

Thing is, Forest already faced rough waters on cariprazine. The antipsychotic pill would hit the market when a raft of competitors have already gone generic. As a treatment for schizophrenia and mania associated with bipolar disorder, the drug would miss out on the larger bipolar depression market, at least until studies could show an antidepressant effect. And though obviously effective as an antipsychotic, the drug also comes with an assortment of side effects. That, in fact, is why the FDA issued a complete response letter to Forest and its Budapest-based partner Gedeon Richter; the agency believes the cariprazine app needs more work on the dosing side to help avoid side effects.

The now-generic drugs Risperdal, Seroquel and Zyprexa have some serious side effects of their own, of course. But they are known side effects, and doctors might prefer to stick with the devil they know. Some experts believe that cariprazine might give patients a positive boost on the cognitive side--which could be important--but another relatively new entrant into the antipsychotic field, Sunovion's Latuda, has shown a hint of the same thing. And it's already on the market. Other recent entries to the antipsychotic market--including Merck's ($MRK) Saphris and Novartis' ($NVS) Fanapt--have delivered far-from-exciting sales.

With all these uncertainties, it's no wonder that sales projections for the drug have been all over the place. As FierceBiotech notes, Richter itself has pegged peak sales as high as $2 billion. Some U.S. analysts had figured on $200 million, with others talking more about a blockbuster range. On average, the latest estimates for 2017 sales ran at $250 million, Reuters says.

Seamus Fernandez at Leerink Swann had projected 2022 sales of about $400 million, but now, he's reconsidering. That figure could be cut in half, Fernandez said in an investor note this morning, assuming a two-year delay in U.S. approval, which he calls "realistic." Barclays analysts said to expect at least a year's delay.

Richter offered a rosier view. "This is likely to cause a delay," a Richter spokeswoman told the news service. "We will be able to tell (how much) after consultations with the FDA." But, she added, "[I]t is possible that the existing data will be sufficient."

Forest was more cautious, at least in its press release: "In the complete response letter, the FDA acknowledged that cariprazine clearly demonstrated effectiveness in the treatment of schizophrenia and mania associated with bipolar disorder. However, the Agency indicated more information, including additional clinical trial data, would be needed."

- get the release from Forest
- check out FierceBiotech's take
- read the Reuters story

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