Novartis and Vanda Pharma's Schizophrenia Treatment May Be DOA

Vanda Pharmaceuticals (VNDA) is hoping to convince psychiatrists that its new schizophrenia treatment Fanapt is more than just another "me-too" antipsychotic. Even a licensing deal with Novartis (NVS), however, is unlikely to dramatically alter doctors' prescribing habits.

Fanapt (iloperidone) doesn't offer any unique chemical properties that separate it from the other second-generation atypical antipsychotics (so-named because of a lower risk of movement disorders side effects). Like other second-generation atypicals (SGAs), Fanapt is proposed to produce its therapeutic effects via mixed affinity and receptor blockade of dopamine and serotonin, two neurotransmitters involved in regulating brain function. Clinical differences among SGAs in the ability to diminish psychotic symptoms of schizophrenia, such as auditory hallucinations and delusions, are thought related to extent (and duration) of receptor selectivity and affinity (in addition to a postulated genomic factors).

Pharmacology evidence suggests Fanapt more closely resembles Pfizer's SGA Geodon (ziprasidone) -- both drugs even carry warnings in their package insert discussing the risk of heart arrhythmias.

Novartis launched Fanapt in the US in January 2010, per its previously announced drug pact with Vanda (worth up to $465 million). Vanda has retained rights outside North America (since it has no sales infrastructure, look for the company to license drug rights ex-stateside, too).

A needs assessment suggests a bumpy launch ahead for Fanapt:

• The drug is the ninth SGA to hit the market and offers few efficacy advantages over existing therapies;
• Unlike most competitive alternatives, titration to the therapeutic dose must be done slowly (delaying desired control of schizophrenia symptoms), as the drug is an alpha-adrenergic blocker -- which means an unsuspecting patient carelessly dosed could keel over from a dramatic drop in blood pressure; and,
• The drug - unlike other SGAs - is not indicated for treatment of co-morbid conditions common to schizophrenia, such as anxiety or bipolar disorder, limiting its utlity.

"Judge not the horse by his saddle," advises a Chinese proverb. In my opinion, chief executive Mihael Polymeropoulos has not only ignored the adage, but has mistaken a donkey for a horse, too. Vanda likely assumes the global reach and solid competitive footing of its Swiss-based partner will improve opportunity for commercial success in the lucrative stateside market for schizophrenia; and, Novartis' breadth and scope of drug development experience -- an impressive $5.8 billion spent on pharmaceutical R&D (20.5 percent of the division's net sales) in 2009 -- will quicken the regulatory road to registration and approval for the follow-on, depot (long-acting) formulation of Fanapt (currently in early-stage, dose-response trials).

Novartis does have extensive sales and marketing experience in neuroscience. However, the patent expired on the company's anti-psychotic Clozaril (clozapine) back in 1998. In recent years, detailing efforts swung from psychiatry to neurology, mainly due to shifts in franchise products prescribed more by the latter profession, such as Comtan/ Stalevo (treatment for Parkinson's disease) and Exelon patch (slow-release, transdermal dosing for Alzheimer's). I am also hearing that Novartis is behind schedule in fielding a planned 200 (+) specialty sales force. Sources tell me that as of mid-February, only about 115 trained reps were in specialty offices detailing key opinion leaders (with only the less-than glitzy drug package insert in hand).

The "no one size fits all" strategy that worked well for Geodon earlier in the decade -- helping it grab a 5 percent market share (as a second or third-line alternative) and $1 billion (plus) in sales the last two fiscal years is less likely to work for Fanapt this go-around. Although Fanapt is thought to cause less weight gain than the more established SGAs, psychiatrists and key opinion leaders are more likely to embrace the uptake of generics being readied for launch in the next 12 - 18 months: Zyprexa (olanzapine) by Eli Lilly and Seroquel (quetiapine) from AstraZeneca -- the two top-selling atypicals in the world -- are scheduled to lose patent protection come 2011 and 2012.

The global growth of Novartis' and Vanda's twice-a-day oral Fanapt therapy will likely stall, too, as providers and patients embrace the ease of administration and compliance advantage of J&J's once-monthly injectable atypical Invega Sustenna (paliperidone), Lilly's injectable Zypadhedra (depot formulation of olanzapine), and other intramuscular, extended-release SGAs lining up for FDA marketing approval.

A new drug's uptake by targeted doctors is won or lost in the first nine-months after launch, according to academics. In my opinion, the shifting landscape for atypicals and Novartis' apparent misread of this change -- combined with a once-monthly depot dosage still three years off into the future -- is good reason to call Fanapt's franchise sunk before it ever left U.S. shores.