Sleep Easy, My Friend

There's no doubt that Merck's (NYSE: MRK  ) new insomnia drug is innovative. Whether that'll be enough to make it a game-changer remains to be seen.

Unlike current sleep medications that work by relaxing the insomniac, suvorexant works by turning off the receptors that control wakefulness. In two phase 3 trials, suvorexant hit 15 of 16 primary endpoints including reducing the time it took patients to fall asleep and increasing the time they stayed asleep compared with placebo.

But suvorexant won't be competing against placebo in the marketplace. Doctors already have plenty of options beyond sheep-counting to treat insomniacs: Dainippon Sumitomo Pharma's Lunesta, Sanofi's (NYSE: SNY  ) Ambien CR, and Takeda's Rozerem. And there are cheap generics of Pfizer's (NYSE: PFE  ) Halcion and the older version of Ambien to contend with as well.

This is not an easy market to push into; after getting its sleep aid Silenor approved two years ago, Somaxon Pharmaceuticals sold just $2.7 million worth of the drug in the first quarter.

Not every patient is helped with current medications, so suvorexant will certainly be able to fill that niche. Data dosing patients for an entire year could also help Merck capture patients that need longer-term help with sleeping.

But suvorexant will need to become the go-to drug, rather than a last-resort option, to become a big seller. Rather than comparing suvorexant with placebo, Merck will need to run head-to-head trials pitting it against the current offerings. Beating the competition would be great, but even proving that it works as well with less propensity to cause addiction would be a solid win.

With data in hand, certainly good enough to get suvorexant approved, Merck plans to file a marketing application with the FDA later this year. The pharma had better hurry, since it doesn't look like it'll have the innovative new class to itself for very long. GlaxoSmithKline (NYSE: GSK  ) is only a little further behind with a phase 2 drug in the same class.

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Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Pfizer. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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