With all the delays to bring hypertension drug Thelin to market in the U.S., the past couple of quarters have been rough for Rule Breakers pick Encysive Pharmaceuticals
Sales of Thelin came in light at $1 million for the quarter, but Encysive had only fully negotiated reimbursement of the drug in Germany and the U.K. Getting reimbursement for the drug from the national governments is just as essential for starting sales of the drug, since the European countries have mostly socialized health care systems.
Although no guidance for Thelin sales was given in the conference call, reimbursement of the drug is expected in more of the big EU countries like France and Spain later this year. A decision on Thelin's approval in Canada is expected this quarter as well, which should help contribute to sales later in 2007.
The quarter's $1 million in Thelin sales makes Encysive's future sound bleak when juxtaposed against the company's $30 million loss. But in the conference call, Encysive's management stated that the compound was capturing 40% of prescriptions in the U.K. and Germany for new patients and those returning to therapy with endothelin receptor antagonists. It's important that Thelin has carved out a solid piece of market share against Actelion's Tracleer so soon in this patient group. This also improves the outlook for Encysive's future, if it can gain marketing approval and a fair label in the United States when its PDUFA date for Thelin approaches on June 15.
What is becoming clear, though, is that Encysive will have to take drastic steps to reduce its R&D spending if it wants to become profitable in the next couple of years (or else it will need U.S. approval of Thelin). If no progress on the approvable letter comes in June, expect the abolition of the U.S. sales force (which has been idle for over a year) and "pretty major action to try to control costs" as CEO Bruce Givens stated on the first-quarter conference call yesterday.
Shares of Encysive are not expensive if you think U.S. approval is right around the corner and if you believe Encysive can do well against the potential competition from Gilead's
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