Waiting For Blockbusters: Osteoporosis Market Burdened With Black Box Warnings, Reimbursement Woes, And Spare Pipelines

It’s laden with unmet need and potentially one of the largest and fastest-growing pharmaceutical markets in the world. Unfortunately pharmaceutical manufacturers have found osteoporosis a very difficult disease to treat satisfactorily. After years of mostly “me toos” and slightly tweaked versions of old standbys, a few highly promising compounds are finally in the wings. Will they revitalize the market or just bring their own baggage with them?

The cost of fractures in the U.S. alone is approximately $15 billion to $20 billion, according to OptumInsight VP Steve Clark. The International Osteoporosis Foundation, meanwhile, says an estimated 200 million people are affected by the disease globally. IMS values the U.S. market for the top bone density prescription products at just over $3 billion dollars. The world market is worth between $6 billion and $9 billion, according to published estimates.

But with more than 75 million prospective patients in the developed world alone, and a growing aged population, that figure could double if the right products come along. A few bright hopefuls are expected beyond 2013, including a first-in-class cathepsin K inhibitor from Merck & Co.Inc., a powerhouse in the field. But will they overcome hurdles that have stumped the current crop of osteoporosis drugs?

A Saturated Anti-Resorptive Market

The range of drug mechanisms has been narrow for a long time. Experts agree the key is to launch more bone-building, rather than anti-resorptive, products that are affordable, safe and convenient, but new entrants seem to always come with some kind of caveat.

The current market is dominated by the bisphosphonates and two products from Eli Lilly & Co. – its selective estrogen receptor modulator (SERM) Evista (raloxifene) and its parathyroid hormone analogue Forteo (teriparatide), the only bone builder in the pack. Amgen Inc.’s Prolia (denosumab) is a recent entrant that hasn’t made as much of a splash as anticipated.

Doctors like the oral bisphosphonates because they are easy to administer, relatively effective, pretty safe and now extremely affordable: the most popular treatment is alendronate (generic Fosomax from Merck), which costs about $50 per year.

Other popular bisphosphonates are Warner Chilcott PLC’s Actonel (risedronate), which is still branded in the U.S. but is generic in the European Union, Roche’s Boniva (ibandronate) and Novartis AG’s Reclast (zoledronic acid). Boniva and Reclast are both administered by IV, the former every three months and the later once yearly.Reclast is also marketed under the brand name Zometa for bone metastases from solid tumors.

According to Waltham, Mass-based Decision Resources, Actonel leads sales with about $1.4 billion in the major markets (U.S., Western Europe, Japan), with Evista next at under $1 billion. IMS has Evista on track to slightly surpass Actonel this year, but those two drugs are in a tight pack with Zometa and Boniva. Alendronate brings in a modest $700 million. Atelvia, a delayed-release version of Actonel launched in January 2011 in the US isn’t even on the radar, bringing great disappointment to Warner Chilcott (Also see "Warner Chilcott’s Launch Of Atelvia Hits Headwinds" - Pink Sheet, 27 Jun, 2011.).

Payers’ push to generics, along with toxicity concerns, has been steadily shrinking the bisphosphonate market by about 20% to 25% a year in units, according to some estimates. Clearly, just improving these drugs is not going to revive that market. Atelvia is taken weekly, rather than daily, and has none of the food or drink intake restrictions of the other bisphosphonates: patients must take those drugs as soon as they wake up and then must wait at least 30 minutes before eating, drinking or lying down.

Getting patients to take these drugs before they have experienced a fracture is especially difficult. Because osteoporosis is asymptomatic for so long, patients aren’t highly motivated to seek treatment. Facing tough choices about patients’ fears around even rare side effects (e.g., atypical fractures and osteonecrosis, certain cancers, and thromboembolic events), costs and administration issues, doctors are frustrated. “Typically, only about 50% of patients who are prescribed a medication for osteoporosis are taking it at the end of the year,” says E. Michael Lewiecki, Osteoporosis Director at the New Mexico Clinical Research & Osteoporosis Center in Albuquerque.

Yet, “despite the press they’ve received, the bisphosphonates are good drugs,” says Clifford Rosen, MD, of the Maine Center for Osteoporosis in Bangor.

Just A Shot Away?

Treatments available by IV or injection also have their downsides. An IV formulation for patients who can’t take oral Boniva is available, but must be administered every three months. Reclast is solely available as an infusion and is given once yearly. But primary care physicians may not have the facilities to provide IV drugs.

Eli Lilly’s Forteo, with its superior efficacy, has performed better than some expected despite a very high price point, but it requires a daily injection, carries a black box warning because of osteosarcomas found in rats during preclinical trials, and is difficult to reimburse. “I’ve heard doctors say the patient needs to have had at least two fractures, be a poor candidate for anything else, and even then you may have to send them to a particular facility where there’s a doctor who’s able to get the reimbursement approved,” says Decision Resources analyst Matthew Scutcher.

Prolia (Amgen’s denosumab, which is marketed as oncology drug Xgeva) hasn’t done as well as expected. An anti-resorptive, like the bisphosphonates, Prolia maintains bone density by preventing osteoclasts from breaking bone down. It is a first-in-class monoclonal antibody that binds the RANK ligand. According to the drug’s label, Prolia reduces the incidence of vertebral, non-vertebral and hip fractures with efficacy that matches that of alendronate and Reclast. The label also claims the drug is more effective than Actonel and Boniva.

Prolia was approved in June 2010 and costs approximately $1,650 per year: That’s $825 for each of the two prescribed injections. That puts the drug at a few hundred dollars more than the market leading bisphosphonates. But in pricing Prolia, Amgen seems to have kept its eye on the more forgiving oncology market, where the drug is approved to prevent skeletal-related events (SRE’s) in patients with solid tumors (Also see "Prolia Pricing: Straddling Osteoporosis And Oncology" - Pink Sheet, 7 Jun, 2010.).

While Prolia appears to be safer than bisphosphonates for now, some physicians want to see the long-term data before they start prescribing it more often.

Pricing drugs for multiple indications has become increasingly challenging as scrutiny from payers has risen, and in this case Amgen appears to have decided to risk losing some market share in osteoporosis to raise profits in the oncology arena, which could be a multi-billion dollar opportunity, especially if the company can demonstrate that the drug prevents metastases in prostate cancer. In the meantime, Amgen seems to have sacrificed the drug’s chances of becoming a mainstay of both first- and second-line use in osteoporosis.

Doctors, particularly primary care physicians, are also cautious about new drugs, particularly biologics. While Prolia appears to be safer than bisphosphonates for now, some physicians want to see the long-term data before they start prescribing it more often.

In addition, says Scutcher, physicians are much more impressed by data about fracture prevention than bone remineralization, which is the type of data Amgen has for Prolia. “Preventing fractures is the real driver in this market,” he says. Scutcher also points out that Amgen has never sold a drug to the primary care market before.“They’ve had to assemble all that,” he says. It may be that in retrospect, the company isn’t even sure if that effort is worth it.

A notable difference between Prolia and the bisphosphonates, says Weston, Mass.-based Health Advances’ Kimberly Howard, is that the benefits of Amgen’s drug quickly wear off. “Most physicians currently perceive it as safer,” she says, “And they know that patients will do better with some treatment than without.” But it’s clear, she adds, that some physicians are waiting to see the longer-term data before they embrace the drug.

Hope In The Pipeline

For such a huge market, the pipeline has offered relatively little relief. The FDA has held up two SERMS in development targeted at this market – Pfizer Inc. /Ligand Pharmaceuticals Inc.’s bazedoxifene (Vivant) and Pfizer Inc.’s lasofoxifene (Fablyn). Side effects, including increased risk of blood clots, stroke and cancer, were factors that led these drugs to stumble, although Fablyn was later approved in the European Union (EU).

Now, however, hope seems to be on the horizon in the form of several promising compounds.

The race to create a more convenient version of Forteo is one of the most hotly contested, with California-based Zosano Pharma Corp. and Israel’s TransPharma Medical Ltd. competing to get transdermal delivery systems for PTH approved. Both had plans to seek shortcut approval via the 505(b)(2) pathway, so the distinctions between their technologies – and how well they work – will be crucial in the long run. Zosano recently secured an Asian partner to market their drug and is preparing for a phase III trial (see chart). TransPharma, however, suffered a setback in December, when Lilly, its partner since 2008, ended the joint development program after the drug failed to meet the primary endpoint in a Phase II trial. Transpharma hasn’t disclosed its next steps for the product. Lilly is separately continuing work on a nasal spray formulation of the drug.

Radius Health Inc., of Cambridge, Mass., is developing a human parathyroid hormone-related protein (hPTHrP) analog, which Phase II data suggests could be even more effective at rebuilding bone than Forteo. An injectable version of the drug is in Phase III, while a microneedle patch version is in Phase 1B. Investors have been enthusiastic and the company has so far raised $57.3 million of a planned $91 million (Also see "Second Tranche Of $91 Million Venture Round Will Help Advance Two Formulations Of Radius’ Osteoporosis Drug" - Pink Sheet, 23 Nov, 2011.).

Another anabolic pathway that’s drawn a lot of investment involves sclerostin – a protein long-identified as an important regulator of bone homeostasis. Individuals who suffer from specific mutations in the sclerostin gene have thick bones and experience almost no fractures.

Several companies are pursuing antisclerostin antibodies or small molecules targeting the protein, and one of the most advanced is Amgen’s AMG 785, a MAB in development with UCB SA for bone-related conditions. In April of this year, the two companies reported positive top-line Phase II results. Patients receiving AMG 785 demonstrated significant increases in lumbar spine bone mineral density, versus placebo. The drug also did better compared to teriparatide and alendronate.

Cedar Knolls, N.J.–based Emisphere Technologies Inc. recently suffered a set back in its Phase III study of an oral formulation of synthetic salmon calcitonin, SMC021, to treat postmenopausal osteoporosis. The drug did not significantly reduce the occurrence of new vertebral factures verses placebo in a three year study. The company’s partner, Novartis AG, is reviewing the data before deciding how to proceed.

Perhaps the brightest hope so far is Merck’s odanacatib, a selective cathepsin K inhibitor, which demonstrated increased bone mineral density and reduced bone resorption markers in a Phase IIb clinical study that lasted five years. Cathepsin K is believed to be a major enzyme responsible for the breakdown of existing bone tissue. Odanacatib decreases bone resorption, but doesn’t stop bone formation, and is being studied in a large-scale (16,000 patient) phase III clinical program to evaluate its efficacy in hip, vertebral and non-vertebral fractures.

“Odanacatib doesn’t appear to have the side effects of bisphosphonates,” says Barbara Ryan, a research analyst with Deutsche Bank. “The data has been quite good.” Although the company needs to deliver the “three year fracture data,” as Ryan says, “so far there have been no safety issues.” Merck is expected to file for submission in 2013. A key issue will be whether Merck can get a “fracture prevention” label.

Notably, both Novartis and GlaxoSmithKline Inc. stopped development of cathepsin K inhibitors for osteoporosis. Novartis’s balicatib appeared to increase bone density, but was associated with adverse effects on the skin. Little information is available about the fate of GlaxoSmithKline’s relacatib, but these compounds have distinctive biological differences.

New Questions?

Beyond these emerging products there are also new questions. For example, as OptumInsight’s Clark asks, is a hip fracture different from a wrist or vertebral fracture, or should the same drug be able to address all three equally? And what about co-morbidities? Are patients with diabetes and osteoporosis the same as those with congestive heart failure and bone loss? Another important question is whether we should be waiting for fractures to occur or trying to prevent the first fracture?

Given the range of treatment options for osteoporosis, their drawbacks and the emphasis on cost-control among payers, this could also be a market where pay-for-performance plays a big role. Sanofi and Warner Chilcott have tried such an arrangement with Health Alliance, a small plan in Illinois. The pharmaceutical companies pledged to reimburse up to $30,000 in treatment costs for patients who took risedronate (Actonel) and sustained non-spinal fractures (Also see "Pay-for-Performance in the US: What Could Work, What Won't" - In Vivo, 1 Jan, 2010.). The program began in the fourth quarter of 2008 and based on positive early data, Warner Chilcott endorsed its continuation through Dec. 2010. As the competition heats up in this arena, it is possible that other companies will follow suit.

Some physicians are also concerned that Medicare is cutting back on reimbursement for bone density testing. “Some of these facilities are shutting down, so there is less accessibility and possibly fewer diagnoses,” says Lewiecki.

Finally, there is also a fast-growing and increasingly dynamic market for drugs to treat bone loss, and potentially metastases, in cancer. How many more companies will follow Amgen’s lead with Prolia, and focus on this indication rather than the broader osteoporosis market?

These are the questions that will separate the winners from the losers in the next round.

Osteoporosis Treatments, Selected Transactions In 2011

Transaction Category/Date	Therapeutic Approach	Companies	Deal Terms
Joint development collaboration (06/2011)	Bone healing	Eli Lilly & Synthes (medical devices)	Partners will jointly fund and evaluate additional orthopedic uses for Forteo. Also, Lilly will license early-stage compounds to Synthes for joint development for use in orthopedic trauma, spine craniomaxillofacila, and reconstructive areas.
Second portion of a three-tranche venture financing (11/2011)	Novel human parathyroid hormone-related protein (hPTHrP) in an injectable formulation that aims to build bone	Radius Health/ MPM Acquisition Corp.	Radius brought in $27.65 million to advance two formulations of BA058, a bone anabolic for osteoporosis.
Marketing partnership expanded (10/2011)	Fablyn (lasofoxifene), a second generation tissue-selective estrogen receptor modulator	Chiva Pharmaceuticals/Ligand Pharmaceuticals	Chiva gets worldwide rights to Ligand’s osteoporosis drug Fablyn, and Ligand stands to receive $4 million in licensing payments as well as milestones and sales royalties.
Joint venture (10/2011)	Calcitonin analogs	Unigene Laboratories Inc. and Nordic Bioscience AS	50/50 joint venture to develop up to three of Unigene’s calcitonin analogs through Phase II trials in Type II diabetes, osteoarthritis and osteoporosis.
Asian market rights granted (03/2011)	ZPPTH (Teriparatide, parathyroid hormone)	Zosano Pharma Inc. and Asahi Kasei Pharma Corp.	Zosano receives $7.5 million up front, and $25 million in development, regulatory, and launch milestones. Preparation underway for a Phase III trial.

Source: Elsevier’s Strategic Transactions Database