King Pharmaceuticals Faces Setbacks With 'Abuse-Resistant' Pain Medicines

Last Updated Jan 18, 2010 11:02 AM EST


Brian Markison, chairman and chief executive of King Pharmaceuticals, told investors at JPMorgan's 28th Annual Health Conference in San Francisco that growth prospects for its pain management franchise remained robust, despite uncertainty from ongoing patent challenges and regulatory setbacks. Markinson's presentation did little to inspire confidence, as he provided little clarity on how the company's abuse-resistant opioid reformulations would secure FDA approval -- and usher in this heralded new phase of commercial prosperity.

King Pharmaceuticals (NYSE:KG) derived approximately 65 percent, or about $184.5 million, of total branded prescription sales from its portfolio of pain management drugs in the third quarter of 2009, according to its quarterly earnings filing with the SEC. Net sales for category leader Skelaxin (metaxalone) declined 7.2 percent from the year-ago quarter to $102.1 million, as total prescriptions fell 22 percent due to intense competition from other muscle relaxants -- especially Cephalon's popular Amrix. This extended-release version of cyclobenzaprine offers patients a more convenient once-daily dosing (compared to a recommended dosing of three or four times daily with Skelaxin).

Generic intrusion (likely by 2012) will depress demand for Skelaxin, too, in coming quarters. With little visible success in the development of a longer-acting formulation, King has shifted promotional efforts of its 610 person sales force to pain-relief products with more promising growth prospects, such as the non-steroidal anti-inflammatory (NSAID) Flector Patch and Embeda, the first of the new abuse-deterrent opioids to reach the U.S. market (so-called because the medication incorporates physical and pharmacological barriers to obtaining the euphoric effects of opioids).

The Flector Patch is a noticeable bright spot in an otherwise troubled pain management franchise. Indicated for the topical treatment of acute pain due to minor sprains, strains, and contusions, the patch conveniently delivers prescription-strength NSAID analgesic relief (diclofenac) with a reduced incidence of GI distress oft-seen with oral NSAIDs, like ibuprofen (Motrin) and naproxen (Naprosyn). For the first nine months of 2009, sales totaled an impressive $95.8 million. Monthly (total) new prescriptions rose almost 58 percent from a reported 60,000 in the prior year period, according to chief executive Markison.

Morphine, oxycodone, and oxymorphone -- different chemical compounds that all share a common mechanism of action -- the binding to opioid receptors to decrease the perception of pain. Notwithstanding dosage forms, frequency of dosing, or method of delivery, these long-acting opioids (LAO) have become the standard of care for managing moderate-to-severe chronic pain. Although U.S. doctors wrote about 21.6 million LAO prescriptions, totaling some $4.7 billion in sales for the 12-months ending November 2008 (according to IMS Health data) brand loyalty is negligible -- as all are largely available as inexpensive generic products.

Primary care physicians and pain experts interviewed by industry researcher Decision Resources affirmed that an important unmet clinical need in the treatment of chronic pain was for effective therapies that carried a lower risk of tolerance and dependence than opioid analgesics. Ergo, abuse-deterrence could be the important factor that influences physician prescribing behavior - irrespective of the higher cost.

In September 2009, King claimed first-mover advantage with the launch of Embeda, which combines the efficacy of extended-release morphine pellets and naltrexone hydrochloride (HCl), an opioid receptor antagonist (found within the core of each pellet). Of interest, the launch mission had been scrubbed several times prior, due to agency concerns that determined addicts could disarm the abuse-deterrent mechanism by crushing the drug and then injecting it directly into the blood.

The troubled narrative of Embeda is the same story being told by the FDA to King for its two other abuse-deterrent candidates:

CEO Markison informed investors at the JPMorgan conference that the company remained on schedule for (i) a mid-year 2010 resubmission of Remoxy's new drug application, strengthened by a likeability study and a pharmacokinetic trial in volunteers to assess the drug's abuse potential; and (b) an anticipated spring 2010 review by the FDA Advisory Committee of the evidence to support the potential opioid abuse deterrent effects of Acurox Tablets.

In my opinion, the efficacy of these abuse-deterrent drugs in reducing sensation of pain is not the impediment to regulatory approval. Rather, the clinical challenge remains the same: to find a balanced interface between the benefit of analgesia and a 'labeled' reduced risk of abuse and misuse. Even if approved by the agency, questions over the extent to which these drugs actually reduce the risk(s) of "drug liking and euphoria" will persist. With sales reps exercising supervised restraint on detailing activities, more certainty than not exists that physician-prescribing behaviors could prove tamper resistant to the company's sales charms, too.

  • David Phillips

    David Phillips has more than 25 years' experience on Wall Street, first as a financial consultant and then as an equity analyst for several investment banking firms. He sifts through SEC filings for his blog The 10Q Detective, looking for financial statement soft spots, such as depreciation policies, warranty reserves and restructuring charges. He has been widely quoted in outlets such as BusinessWeek, The International Herald Tribune, Investor's Business Daily, Kiplinger's Personal Finance, and The Wall Street Journal.