Movember raised men's health awareness, and testosterone therapy continues to be a hot topic. Low testosterone and "andropause", the male equivalent menopause and hormonal decline, has been on the radar for over a decade, both as the alleged cause of nonspecific ailments such as lethargy and weight gain and as prescribed therapy for diagnosed hypogonadism.
While testosterone supplements and agents represent a $2 billion market , largely fueled by questionable marketing as a 'fountain of youth' or male rejuvenation, therapies are mostly offered only as topicals – among them, AndroGel by AbbVie (ABBV 1.07%), Axiron by Eli Lilly (LLY -2.70%), Androderm by Actavis (AGN) and Testim by Auxilium Pharmaceuticals (NASDAQ: AUXL), all of which are delivered as gels and associated with side effects that include accidentally dosing others through close contact, which can have significant detriment to women and children exposed.
While AbbVie has been enjoying dominance in the market with AndroGel, it is already combating significant competition from the 2011 launch of Eli Lilly's Axiron. Nonetheless, sales of both agents are thriving. Androgel is estimated to generate $1.14 billion in sales, up from $874 million two years ago. Axiron is estimated to $168 million this year, up from $24 million two years ago. Both giants have significant marketing budgets that have helped the entire industry as a whole develop, especially in the face of a new study in the Journal of American Medical Association looking into cardiovascular risk in men using testosterone replacement.
Repros: Small fish, big market
Testosterone use has been increasing globally for the past 10 years, and biotech companies are taking note. In particular, Repros Therapeutics (NASDAQ: RPRX), a small biotech with a market cap of only $400 million compared to AbbVie's $77 billion and Eli Lilly's $54 billion, has been prevalent in the headlines for testosterone therapy. Its oral testosterone agent Androxal was previously set for a new drug application in mid-2014, but met challenges with the FDA in late October when the agency requested additional studies on Androxal at its highest dosage, which lead to a more than 30% decline in shares for Repros, as well as an announcement that Androxal's NDA would be delayed until at least the fourth quarter of 2014.
However, Repros recently announced a face-to-face meeting with the FDA over these concerns. This could be a silver lining – the data for Androxal clearly demonstrated both safety and efficacy and it is unlikely that the new studies requested by the FDA will show anything different, which means that approval is still on the horizon albeit a few months later than expected. Nonetheless, the FDA's requests and subsequent share plummeting created a great entry point for investors with a few extra months of buildup and potential payoff as Repros continues to produce positive data and present them at prominent meetings.
Among these is Repros' report to the Men's Health World Congress in December on the clinical data that it presented to the FDA comparing Androxal to traditional testosterone replacement gels. Assuming the new studies reiterate previous data, Androxal should hit the market in early 2015. To sweeten the deal, the FDA also offered Repros a chance at priority review for Androxal if the new studies show superiority to the current testosterone treatments on the market.
Bandwagoning big pharma's marketing
As the only oral agent on the market, Androxal should easily take a significant amount of the market that AbbVie and Eli Lilly have worked so hard to build. Spending on branded advertising for testosterone agents account for $107 million, and leaders like AbbVie have spearheaded unbranded campaigns raising awareness on low testosterone.
Despite the fact that the science is still equivocal on if testosterone replacement is beneficial, especially for the "rejuvenating" effects that many seek it out for, the symptoms of actual deficiency are so non-specific that it's not unusual for men to inquire about testosterone replacement, which many physicians treat even without blood tests. So successful has AbbVie's campaigns been that their executives have been named All-Star Large Pharma Marketing Team of the Year
So while the big pharma giants continue to do the leg work on growing the market, Repros could easily sweep in to reap the benefits.
The bottom line
Repros is not the only small biotech positioning for an oral testosterone drug. Lipocine is currently raising funds for phase 3 trials of its agent LPCN 1021. Clarus Therapeutics also has an oral testosterone agent CLR-610 in active phase 3 trials.
Neither of those companies is trading on major exchanges, and Repros is then the only company on a major exchange currently advancing for a FDA approved oral testosterone agent. Big pharma has already taken on the marketing costs for the industry and defending testosterone replacement as a whole in light of studies such as the one in JAMA and inquiries into false advertising. The emotionally driven decline in Repros' share price from FDA concerns in October has presented an entry point for investors and no data so far indicate Androxal will have difficulty getting approval, and with it, a possibly great payoff for those willing to wait the extra few months.
