Research Triangle Park, N.C. — If you only looked at Pozen‘s (Nasdaq: POZN) top and bottom lines from its third quarter earnings, you might have missed a key detail affecting the pharmaceutical company’s financial performance.
Although Chapel Hill-based Pozen’s revenue grew and its loss narrowed in the third quarter, the company insists results should be better and management pins those expectations on the under performance so far of its arthritis drug Vimovo.
Vimovo generated $9.7 million in third quarter sales, up from just over $6 million in the second quarter. Approved by the Food and Drug Administration last year, the pain reliever now has approval in 38 countries and has been launched in 25. By the end of June, Vimovo, marketed by drug partner AstraZeneca (NYSE: AZN) was commercially available only in nine countries. Despite the quarter to quarter growth, CEO John Platchetka is explicit in saying the numbers aren’t where Pozen wants them to be.
“Although last quarter’s U.S. net sales were up from the second quarter, the $13.4 million year to date total is well below what we think Vimovo is capable of selling so AstraZeneca has work to be done to make that better,” Platchetka told analysts on a conference call.
Pozen sees revenue from Vimovo in the form of royalty payments from AstraZeneca. Pozen reported $800,000 in third quarter Vimovo royalties, up from $400,000 a year ago. The drug pairs the delayed-release pain reliever naproxen with AstraZeneca’s heartburn and acid reflux drug Nexium. The combination is indicated for osteoarthritis pain relief with lower risk of gastric ulcers from naproxen alone.
While osteoarthritis offers Vimovo a large market, this is not the first time that Pozen has expressed disappointment with the drug’s sales. The company disclosed in July that it would seek a third party review of Vimovo and the firm contracted with L.E.K. Consulting. The firm’s study said Vimovo addresses an important medical need, supported by its research showing that 1.6 million U.S. users of non-steroidal anti-inflammatory drugs (NSAIDs) also take an acid suppressive agent. But Platchetka said that the research also turned up a problem: Health care payers and providers are unconvinced of the drug’s value.
What happens next is up to AstraZeneca. Under the partnership agreement, the pharma giant handles all of the sales and marketing. Pozen has shared the report with AstraZeneca and told them which of the report’s recommended actions the company supports.
“And we hope that they will consider some of the other suggestions we’ve made based on the L.E.K. report but to be clear, we have no power to make that happen,” Platchetka said.
Platchetka declined to elaborate on the report’s findings or or his conversations with AstraZeneca, reserving those details for a future conference call. “I think there are things that can be done,” he said. “I don’t think this is a hand that has to be played pat. And we’ve given them some suggestions.”
By next quarter, perhaps we’ll know whether AstraZeneca has taken them.
Sunday, November 06, 2011
Pozen CEO criticizes partner AstraZeneca for slow drug sales :L Tech Wire