Lots Of Activity In Forest Pipeline, But Can The Specialty Pharma Ever Put Lexapro Behind It?

Forest Laboratories, Inc. has late-stage products lined up in its pipeline to help fill the gap left when Lexapro and Namenda go generic, but the burden on a specialty pharma to differentiate its products is a heavy one these days, and it will be a struggle to the finish to convince investors the cup is half full.

Blockbuster antidepressant Lexapro (escitalopram) loses patent protection in 2012 and the Alzheimer's treatment Namenda (memantine) in 2015.

To counter the worst of the earnings loss Forest anticipates in 2013, the first year without Lexapro, the company is on a push to launch two products approved earlier this year and to submit NDAs for two others. Additional Phase III results will be coming out on another two candidates in coming months, and the company has just undertaken remediation of a promising Phase III product that has an old FDA "approvable" letter hanging over it.

Forest plans two NDA filings in 2011 and two in 2012.

The launches are for the chronic obstructive pulmonary disease treatment Daliresp (roflumilast), approved Feb. 28, and the antidepressant Viibryd (vilazodone), approved Jan. 21. While sales of new drugs the company is actively marketing won't immediately make up for the lost income, together they will help Forest stay profitable (Also see "Forest Launching Two New Drugs Before Life After Lexapro" - Pink Sheet, 19 Apr, 2011.).

The company certainly thinks so. During its fourth quarter 2011 earnings call April 19, Forest "put its first stake in the ground for life after Lexapro," by guiding earnings per share at $1.20 versus the consensus of $1.09, Robert W. Baird & Co. analyst Thomas Russo observed in a same-day research note.

In addition to successful launch of the two approved products, key assumptions underlying the guidance include the approval of aclidinium for COPD and linaclotide for chronic constipation and irritable bowel syndrome with constipation, the two planned 2011 submissions .

As well, Forest Research Institute, Inc., the New York firm's R&D subsidiary, is working through a lineup of in-licensed and acquired clinical candidates to keep the NDA flow going (Also see "For Forest, No Single Silver Bullet But Many Opportunities" - Pink Sheet, 11 Jan, 2010.).

For Baird's Russo, that pipeline is a concern because not enough is known publicly about those candidates. "The Forest story has been relatively unchanged over the past few years," says Russo. Investors are looking for a pipeline to replace those two mainstays, and they are "not yet convinced they see it."

Looking ahead, Forest has great acumen in introducing new products into mature markets, but the health care paradigm is changing, and the company now must meet unmet medical needs or differentiate products in a very compelling way, Russo points out.

Irina Rivkind, from Duncan-Williams, Inc., was more upbeat. While there might be "some lumpiness" in earnings during the 2013-2016 period, the company has plenty of cash (over $4 billion) and no debt, and "we give Forest credit for late-stage pipeline assets," she wrote on April 20.

One new product opportunity that would fill an unmet need is azimilide, the antiarrhythmic the company just in-licensed from Blue Ash Therapeutics LLC. In 2006, Procter & Gamble Co. received an FDA "approvable" letter – a predecessor to "complete response" letters – on the drug, which works with implantable cardioverter defibrillators to help patients maintain a regular heart rhythm. P&G subsequently sold off its pharmaceuticals business to Warner Chilcott PLC, which licensed the drug back to a group of former P&G pharmaceutical scientists through their start-up, Blue Ash.

The antiarrhythmic azimilide newly acquired from Blue Ash needs another trial, per an earlier FDA "approvable" letter, but an agreement on trial design has already been reached with the agency.

Azimilide, an NME with no approved competition, comes with an FDA Special Protocol Assessment that Blue Ash had negotiated for the additional Phase III study the agency requested. Forest plans to launch that trial in the second half of 2011, Marco Taglietti, head of Forest Research Institute, reported during the call.

While the product has been in development for a long time, making it probably a five-year opportunity in the U.S., in terms of intellectual property, azimilide presents a "vary unique tuck-in opportunity" within the cardiovascular portfolio that can deliver "some nice incremental sales opportunities" in return for relatively modest development costs, CFO Francis Perier added.

In the U.S., Forest plans to pursue an indication for reduction of hospitalization and cardiovascular deaths in patients with an ICD. And the company is exploring opportunities in Europe, where the product would garner 10 years of exclusivity.

New First-In-Class Pipeline Possibilities

Taglietti updated investors on the company's pipeline, including the two newest candidates, both novel compounds that represent first-in-class opportunities.

The first is in diabetes. In June 2010, Forest announced a licensing deal with TransTech Pharma Inc. for rights to several drugs targeting glucokinase, an enzyme found in the liver and pancreas that helps regulate glucose levels. TransTech's compounds are liver-selective, thus avoiding the pancreas and the problem of hypoglycemia associated with dual-acting glucokinase activators (Also see "Forest Jumps Back Into Diabetes In Deal With TransTech For Glucokinase Activators" - Pink Sheet, 8 Jun, 2010.).

The most advanced GKA is TTP399, which Taglietti said is headed into Phase II studies during the first half of 2011.

Forest has new, first-in-class possibilities in diabetes and in pain.

The other is an addition to Forest's portfolio of pain-related drugs. In December, Forest entered its second licensing agreement with Grunenthal GmbH, this one for pain compounds GRT6005 and GRT6006 ([See Deal]).

Both analgesic compounds are opioid receptor-like-1 (ORL-1)/mu opioid agonists for treatment of moderate to severe chronic pain, Taglietti said. GRT6005 has completed proof of concept studies in nociceptive and neuropathic pain, and further Phase II studies are planned.

Another new addition, Stedivaze, a Phase III myocardial profusion imaging agent, came to Forest via the January Clinical Data acquisition that brought in Viibryd (Also see "Forest Buys Clinical Data And Extends Its Antidepressant Portfolio" - Pink Sheet, 22 Feb, 2011.). It is very selective for the adenosine A2A receptor, giving it tolerability advantages over Astellas Pharma, Inc.'s Adenoscan (adenosine) and Lexiscan (regadenoson), Taglietti said. Based on data from Phase II head-to-head studies with Adenoscan, "we do believe this product has significant potential," he said.

In the anti-infectives folder, with Teflaro (ceftaroline) now approved for acute bacterial skin and skin structure infections, as well as community-acquired bacterial pneumonia and methicillin-resistant Staphylococcus aureus, Forest's next goal is to create a suite of antibiotics that are effective against both Gram positive and Gram negative pathogens, Taglietti said.

Forest is studying both ceftaroline and ceftazidime – an older cephalosporin antibiotic that is effective against Gram negative pathogens – in combination with NXL-104, a beta lactamase inhibitor effective against several classes of beta lactamases, included extended-spectrum beta-lactamase. In fact, "It is perhaps the broadest beta-lactamase inhibitor now in development in clinical trials," Taglietti emphasized.

Beta lactamases are key to antibiotic resistance. They are enzymes that break down beta-lactam antibiotics, a class that includes cephalosporins and penicillins, making the pathogens producing the enzymes resistant. According to Taglietti, NXL-104 potentially could be combined with any number of beta-lactam antibiotics to enhance their spectrum of activity and to counteract resistance. As it is, the two combinations being tested by Forest "address virtually the entire spectrum of clinically relevant material pathogens," he asserted.

"In the coming months" top-line data will be available from Phase II studies testing the ceftazidime/104 combination in patients with complicated intra-abdominal infections and complicated urinary tract infections. According to the Forest website, the ceftaroline/104 combination is in Phase I studies.

For the planned near-term NDA filings for linaclotide and aclidinium, top-line data released over the past few months soon will be followed by release of further Phase III results presented at scientific meetings. New IBS-C data for linaclotide will be presented at the Digestive Disease Week meeting in Chicago May 7-10, and new COPD data for aclidinium will be presented at the American Thoracic Society meeting in Denver May 13-18.

Meanwhile, a Phase III study testing a fixed-dose combination of aclidinium and formoterol in patients with moderate to severe COPD is set to launch during the first half of this year.

For 2012, Forest is planning NDA submissions for levomilnacipran (F2695), an enantiomer of the firm's antidepressant Savella (milnacipran) in major depressive disorder, and cariprazine in schizophrenia and acute bipolar mania. Clinical trial results for cariprazine will be reported during the second half of 2011 and first half of 2012.

Though levomilnacipran didn't meet the primary endpoint in a trial released in January, Taglietti said the drug was consistently better than placebo, it was well-tolerated and there were few discontinuations – and he noted that the negative result was not consistent with the Phase II findings. Additional Phase III results are expected "in coming months" and an NDA is still planned for 2012.

By Shirley Haley