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Uncontrolled Crying Over AVANIR's Prescription Data?

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The nice thing about developing a drug for a disease without any other treatment options: You've got no competition.

The bad thing about developing a drug for a disease without any other treatment options: You've got to find the patients.

AVANIR Pharmaceuticals's (Nasdaq: AVNR  )  Nuedexta is off to a slow start after being approved to treat patients with pseudobulbar affect, a disease in which patients with underlying neurological diseases have trouble controlling their emotions. The company sold just $505,000 worth of the drug during the first three months of the year.

Granted, it was only actively promoting the drug for eight weeks, but the ramp up doesn't seem all that steep. Prescription data for April only puts the run rate at about $5.5 million a year.

New orphan indications can be lucrative, but the problem for AVANIR is that pseudobulbar affect isn't life threatening. Uncontrolled crying or laughing is certainly embarrassing, but there's no immediate need to treat the patient like there is for the orphan diseases treated with drugs such as BioMarin Pharmaceuticals's (Nasdaq: BMRN  ) Naglazyme, Alexion Pharmaceutical's (Nasdaq: ALXN  ) Soliris, and Viropharma's (Nasdaq: VPHM  ) Cinryze.

Doctors are likely taking a wait-and-see approach: prescribing it to one patient, seeing how it works, and then prescribing it for additional patients if the drug works.

The important number to watch then is the number of prescriptions being refilled. In April, the prescription data showed about 300 repeat prescriptions compared with about 850 total prescriptions in March. Either there are a lot of patients getting more than a one-month supply, which is unlikely, or they're not refilling their prescriptions.

I wouldn't write off Nuedexta just yet -- third-party prescription data shouldn't be taken as exact, and it's only one data point -- but it's certainly a trend investors shouldn't be laughing about.

Interested in keeping track of AVANIR as it tries to grow sales of Nuedexta? Click here to add it to My Watchlist, which will help you keep track of all our Foolish analysis on AVANIR.

BioMarin Pharmaceutical is a Motley Fool Rule Breakers pick. The newsletter is always on the hunt for hot drug stocks and other cutting-edge picks. Click here to see all of our latest discoveries with a free 30-day trial subscription.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (6)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 11, 2011, at 9:54 AM, shlomobisker wrote:

    If you ever been to a specialist , you will probably understand how slow and frustrating prescription can be. I think Avanir are doing great with Neudexsa

  • Report this Comment On May 11, 2011, at 12:00 PM, 237 wrote:

    My husband has PBA from strokes.

    It cost $600 per month and it took me 3 levels of appeals to have it included in the formulary - it now costs $74 per month.

    The drug is fabulous, but will not be easy to obtain until the drug plans include it in their formularies.

  • Report this Comment On May 16, 2011, at 6:28 PM, longjon123 wrote:

    I am glad this article creates an awareness for what Avanir is doing. The company's marketing campaign has barely launched, so Neudexta sales data did not appear meaningful enough at the last earnings call May 9. I am of the opinion that all the drug needs expanded label use and much more awareness. Both are in the works. The condition Neudexta treats is very real--sudden and uncontrollable laughing or crying--just ask House Speaker John Boenher.

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