Don't Get Stuck! Invest in Needle-Free Drugs

Maybe it's flashbacks from vaccinations at the pediatrician's office. Perhaps it's some innate desire to not be pierced by sharp objects. No matter what the reason, it seems most people have -- to varying degrees -- an underlying case of trypanophobia, the fear of needles.

Fortunately, most medication is taken orally, but there are a few diseases whose only treatments require drugs that need to be injected. Here's how to make some money off society's general disdain for needles through next-generation drugs.

What are you in for?
When figuring out what drugs might be able to supplant injected drugs, it's important to factor in the disease that the drug treats.

At one extreme, you have cancer drugs. Many chemotherapy drugs that have to be infused are still in wide use. That's because the chemotherapy drugs work, and no one is going to go for an oral drug just because they don't like needles when their life is on the line. The oral medications that are widely used are prescribed because they work, not because they're taken orally.

Multiple sclerosis is almost at that extreme. The disease isn't as immediately life-threatening, but the progressive nature of the disease means controlling the disease now is important.

Last week, the Food and Drug Administration signed off on the first oral treatment to stop the progression of multiple sclerosis, Novartis' Gilenya. All the other treatments from Bayer, Merck KGaA, Pfizer (NYSE: PFE  ) , Teva Pharmaceutical (Nasdaq: TEVA  ) , Biogen Idec, and Elan (NYSE: ELN  ) have to be injected or infused, but it's not clear exactly how well Gilenya will sell.

There are some patients whose disdain for needles is so strong they're unwilling to take any drug. Clearly, doctors will be more than willing to prescribe Gilenya to them; something is better than nothing. But Gilenya offers some unknowns, including a checkered side-effect profile, which might make doctors more likely to stick with the injectable drugs unless patients complain loud enough.

At the other extreme is rheumatoid arthritis. It's a painful disease for sure, but not exactly life threatening. Patients often start with a generic drug called methotrexate, but if that doesn't help, they have to progress to anti-inflammatories -- Abbott Labs' (NYSE: ABT  ) Humira, Merck (NYSE: MRK  ) and Johnson & Johnson's Remicade, and Pfizer and Amgen's Enbrel -- which have to be injected or infused. The market seems ripe to be picked off by an oral drug since, if the drug turns out not to work as well, the doctor can always switch back to the previous anti-inflammatory.

Pfizer and Rigel Pharmaceuticals (Nasdaq: RIGL  ) are both working on an oral medication for rheumatoid arthritis. If the drugs work as well as those that require a needle for delivery with about the same side effects, they shouldn't have any problem making a major dent in the multibillion-dollar market.

And then there are the diabetics
I've separated out the diabetics because I don't understand them. I'd think injecting insulin would be something to be avoided, but diabetics didn't seem all that interested in inhalable insulin the first time around. Pfizer's Exubera, which it licensed from Nektar Therapeutics, managed a paltry $12 million in the first nine months it was on the market. 

Maybe the gene that gives you a propensity to become diabetic is linked to the gene that makes you unafraid of needles. Maybe pricking their fingers to get blood glucose levels daily allows them to laugh in the face of needles. Whatever the case, one has to wonder how the next generation of inhaled insulin will fare.

MannKind's (Nasdaq: MNKD  ) Afrezza offers some clear advantages over Exubera; for instance, it's smaller -- Exubera looked like a water pipe while Afrezza looks more like an asthma inhaler -- but one has to wonder if diabetics just don't care about needles as much as companies think they should. We'll find out soon enough if Afrezza is approved in December.

Injecting uncertainty into the market
There's a commonly held belief that an oral drug with the same efficacy and side effects will always win against an injectable drug. In the long run, that's likely true, but the adoption rate will be determined by the patients' desire to not be stuck and doctors' willingness to switch from the entrenched drugs they have experience with. Investors should keep those two in mind when predicting the success of next-generation oral drugs.

Today's buy opportunity: make money off pack rats.

Pfizer is a Motley Fool Inside Value recommendation. Elan is a Motley Fool Rule Breakers choice. Novartis is a Motley Fool Global Gains recommendation. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson, which is a Motley Fool Income Investor pick. Try any of our Foolish newsletter services free for 30 days.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool owns shares of Johnson & Johnson and Teva Pharmaceutical and has a disclosure policy.


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  • Report this Comment On September 28, 2010, at 4:35 PM, tbone1929 wrote:

    Diabetics should care about better efficacy regardless of needle fear. After all, that's the most attractive thing about Afrezza, EFFICACY and pk profile. Seems everybody misses that point. Inhaling it is the icing on the cake!

  • Report this Comment On September 29, 2010, at 12:16 PM, granchipoo wrote:

    Your report neglected to mention Generex's needle-free option, Oral-Lyn. Oral-Lyn is a spray that is absorbed through the buccal lining of the mouth. It's currently available in a treatment trial (see GenerexTXIND.com) and in late Phase III trials, expected to conclude early next year. Afrezza is also expected to be reviewed by the FDA soon, but it is not currently available via a treatment study, to the best of my knowledge.

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