In a press release two days ago, privately held drug developer Orphan Therapeutics revealed that Motley Fool Rule Breakers pick PDL BioPharma
Normally, a failed drug commercialization deal invites scorn upon a drugmaker, and with numerous delays for its other top drugs, PDL is ripe for criticism. But several mitigating factors with terlipressin make this particular failed partnership a non-event for PDL.
PDL received the U.S. marketing rights to terlipressin back in March 2005, when it acquired ESP Pharma for nearly $500 million in cash and stock. The drug was in phase 3 testing at the time, and PDL and Orphan announced that it failed to meet its primary endpoint in that trial in August of this year.
The market size for terlipressin as a treatment for hepatorenal syndrome in the U.S. is between 10,000 and 13,000 patients. With an estimated course of treatment for the drug costing somewhere between $2,000 to $4,000 (by my estimates), the market opportunity for terlipressin should be approximately $20 million-$50 million. That's not exactly a blockbuster drug.
Either way, the phase 3 trial's failure to hit its primary endpoint effectively killed terlipressin's chances of U.S. approval any time soon. Interestingly enough, Orphan is still planning to file a New Drug Application with the FDA in the second quarter of 2007, but the odds of its drug gaining approval are slim at best.
Even though terlipressin is not approved for marketing in the U.S., it has been sold in Europe and Asia for many years. Had it been approved, PDL would have had a limited period of marketing exclusivity at best. When you combine that with such a small market opportunity, it makes sense for PDL to focus its limited resources on its other programs.
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