Another Angle for Fibromyalgia 

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For years, doctors had prescribed various drugs -- sleep medications, antidepressants, and pain relievers -- for fibromyalgia, with no clinical-trial proof that those worked. Now they have three Food and Drug Administration-approved choices to treat this elusive disorder characterized by sleep disturbances, fatigue, and chronic, widespread muscular aches. Kind of like what investors are feeling in today's market.

This month, Forest Laboratories (NYSE: FRX) and tiny Cypress Bioscience (Nasdaq: CYPB) announced that the FDA had approved Savella (milnacipran) for treating fibromyalgia. This is the third drug endorsed by the agency for fibromyalgia in 18 months. Pfizer (NYSE: PFE) won approval for Lyrica in June 2007 and Eli Lilly (NYSE: LLY) got the OK for Cymbalta a year later. Both were already approved for other indications.

However, off-label prescribing for fibromyalgia continues. If patients get more relief by taking generics or other brand-name drugs, Forest Labs' and Cypress' dreams for a big payday from Savella could be dashed.

Exactly how big is the market?
For one thing, trying to assess the market is like a baseball player swinging at a knuckleball. The National Fibromyalgia Association -- which combines education, research, and patient advocacy -- says there are 10 million U.S. patients. When the FDA approved Lyrica, it said there were 3 million to 6 million patients. A year later, an FDA publication cited the American College of Rheumatology's figure of 2% to 4% of the population, meaning 6 million to 12 million patients.

Forest Labs estimates that in the U.S., there are about 6 million patients, and the market is worth more than $1 billion. It estimates that off-label drugs and generics account for about half that, while Lyrica and Cymbalta split the rest. So it has its work cut out for itself in launching Savella into that competition.

"Looking forward, we think that market is going to grow," said Francis Perier Jr., Forest Laboratories' chief financial officer. For instance, some patients take more than one drug and they often change drugs.

A quick perusal of several sell-side analysts' reports indicates initial sales growth for Savella is expected to be slow, with peak annual sales reaching $400 million to $600 million about the middle of next decade. The toughest competition is expected against Cymbalta -- both have similar actions and, while Cymbalta is a once-a-day pill, Savella is taken twice a day.

Needed sales
For Forest Laboratories, which will handle most of the U.S. sales and marketing, Savella provides a chance to diversify its revenue. In its fiscal third quarter, ended Dec. 31, Forest Labs reported that antidepressant Lexapro accounted for 59% of its $998 million in revenue and Alzheimer's drug Namenda brought in 24%. That's pretty concentrated, Fools.

For Cypress Bioscience, which licenses the North American rights from French developer Pierre Fabre, Savella is its first commercial product. The drug is expected to launch by the end of this quarter.

Of course, any substantial sales will carry greater weight for Forest Labs and Cypress than for Pfizer or Lilly. Using Forest Labs' estimates, Lyrica and Cymbalta share $500 million annually from fibromyalgia use. That certainly doesn't do much to affect the tens of billions of dollars in revenue the two companies bring in each year. (Neither company identifies the impact of fibromyalgia on their drugs' sales.)

With Savella, the much smaller Forest Labs and Cypress will have no place to hide.

Related Foolishness:

• Is Pfizer doing the same thing all over again?
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• Patents are important, too.