Pfizer (NYSE:PFE) and Eli Lilly's (NYSE:LLY) partnership on high-risk anti-nerve growth factor, or anti-NGF, pain medication tanezumab reached terms as Eli Lilly outlined a $1.8 billion deal in its third-quarter report.
Tanezumab is of a high-risk class of drugs known as anti-NGF agents, which operate by inhibiting nerve growth factor, thought to be an essential protein in feeling pain. Studies were under way in 2009/2010 for use in osteoarthritis, diabetic peripheral neuropathy, chronic low back pain, and cancer pain, but halted for the entire class for all indications except cancer pain.
This hold affected not only leader Pfizer but also Johnson & Johnson's (NYSE:JNJ) fulranumab, AstraZeneca's MEDI578, and Regeneron and Sanofi-Aventis' partnership on REGN475/SAR164877. All trials were halted, either as ordered by the Food and Drug Administration or voluntarily, and the pharmaceutical giants yielded a potential $11 billion market.
While studies were showing promising results in treating pain, as well as a novel mechanism of action, the anti-NGF agents also resulted in many patients requiring complete joint replacements. Scientists suggested this was either due to bone tissue death caused by the drugs -- a serious concern when used to treat a disease of joint destruction like osteoarthritis -- or possibly from the drug being too effective. It was suggested that patients were feeling so pain-free that without the signal from their body indicating the fragility of their joints, they were overworking their joints and blowing them out.
In the studies of tanezumab, 16 of the 6,800 patients required joint replacements; overall nearly 500 patients in all studies of anti-NGF agents had to undergo joint replacements, although it should be noted these replacements could be a result of the agents or as a natural progression of their original disease.
Pfizer, however, is attempting to restart trials and overcome the safety hurdle in the first half of 2014 with submission of new non-clinical data. In spring 2012, an FDA advisory panel recommended lifting the hold on the class of drug, stating unanimously that benefits outweighed the risks. Doing so would place tanezumab back into its late-stage pipeline for Pfizer, as well as allow for J&J, AstraZeneca and Regeneron to restart their trials.
It has been over a year since the outside panel recommended the FDA lift the hold, and while the FDA is not obligated to that panel, it seems that it may take the recommendation. The panel also made the recommendation to carefully select patients who would yield the greatest benefit, and coupled with the promising clinical data in studies prior to the hold, the FDA could reasonably allow trials to restart, albeit very likely with restrictions. Lifting the hold would be the first step, and for Pfizer, one that means a $200 million upfront payout from Eli Lilly.
However, the $350 million in regulatory milestones and $1.23 billion in sales milestones from Eli Lilly may come a little later. That same FDA panel that recommended lifting the hold also recommended a step back in trials, suggesting that earlier-stage trials should be conducted in light of the data on joint destruction in patients.
The anti-NGF class has long been thought of as possible the next generation for pain management. Development would be conveniently timed as the FDA proposes tighter regulations on prescribing common narcotic painkillers, which are commonly taken by the many chronic pain, cancer pain and osteoarthritis patients that would benefit from an anti-NGF agent.
If the hold were to be lifted, Pfizer could use certainly use the boost of a potential blockbuster returning to its pipeline. Third quarter earnings were improved for Pfizer, but only modestly so, especially as compared to the consistently stable J&J. Meanwhile, the partnership between Eli Lilly and Pfizer is somewhat out of the norm, as Eli Lilly rarely partners with other companies and has recently been fielding its own critics of its own risky endeavors into late-stage Alzheimer's therapies.
Fool contributor Amy Ho has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. 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.