Eisai Prepares For Belviq Launch: An Interview With CEO Lonnel Coats

Eisai Inc.’s President and CEO Lonnel Coats discussed his approach to the U.S. obesity market and how he plans to position Belviq. The company needs to replace lost revenue from its off-patent blockbuster Aricept but Coats thinks he has the right mix of label, product and experience to win.

The elements of the U.S. launch of Eisai Inc.’s Belviq (lorcaserin) are coming into focus. Pricing, sales force size and the label have been made public. In an interview with “The Pink Sheet” DAILY at the New York Pharma Forum on March 27, Lonnel Coats, president and CEO of Eisai, delves into sales force strategy, how Eisai plans to position the label for payers, and the basic value propositions that will support Belviq in what’s shaping up to be a three-drug market.

The long-dormant U.S. obesity market soon may have three new agents jostling for a share. Vivus Inc. launched Qsymia, a fixed-dose combination of phentermine and topiramate, last September. And Takeda Pharmaceutical Co. Ltd. hopes to introduce its partner Orexigen Therapeutics Inc.’s Contrave (naltrexone SR/bupropion SR) into the U.S. market soon after Orexigen resubmits its NDA, perhaps in the second half of 2013, which will include interim data from its ongoing cardiovascular outcomes trial .

Eisai was first to win FDA approval for its contender, Belviq – that happened last June. Eisai will market Belviq in the U.S., Canada, Mexico and Brazil under an agreement with the originator Arena Pharmaceuticals Inc.[See Deal]. The drug, a novel-acting 5HT-2C agonist, currently is held up at the Drug Enforcement Agency (DEA) for scheduling as a controlled substance, a delay to market that neither Qsymia nor Contrave experienced as combinations of already-approved generic drugs.

Eisai Inc. is the U.S. arm of Eisai Co. Ltd., the Japanese pharma. Both parent and affiliate have experienced declining revenues over the past three years with the loss of exclusivity on key franchises Aricept (donepezil) for Alzheimer’s disease and Aciphex (rabeprazole) for gastroesophageal reflux disease, or GERD. Beginning in 2006, Eisai embarked on a business development spree. The licensing of rights to lorcaserin in 2010 was a bold bid to bridge its impending patent cliff and help fund its late-stage pipeline.

The company is investing heavily in Belviq and the costs to launch and maintain it will be considerable (Also see "Vivus’ Qsymia Sales Still Slim, Even As Costs Bulge" - Pink Sheet, 26 Feb, 2013.). Eisai will owe its partner Arena $65 million on scheduling of the drug and a manufacturing-related fee of 31.5%-36.5% on sales above a pre-agreed threshold. But the biggest cost will be its share of the cardiovascular outcomes trial which FDA is requiring post-market, and which EMA appears to require pre-market judging from its recent second rejection of Qsiva (European name for Qsymia) last October (Also see "EMA’s CHMP Sets Back Vivus’ Qsiva For At Least Two Years In Europe" - Pink Sheet, 22 Feb, 2013.).

But Coats claims Eisai’s experience – it built the Alzheimer’s market in the U.S., and it has extensive primary care experience with Aciphex – will be its greatest asset.

Cowen and Co. biotech analyst Simos Simeonidis thinks that Belviq will be off to a strong launch, even though its weight-loss efficacy is inferior to that of Qsymia. Qsymia’s launch (Cowen covers Vivus) is not necessarily a harbinger for the performance of future obesity drugs. He says it has been hobbled so far because of a flawed sales strategy with too small a sales force, no experienced partner and too narrow a channel bandwidth. He said an impending change in Qsymia’s risk evaluation and mitigation strategy (REMS), which would open the retail pharmacy channel to Qsymia, likely would not have an impact until the fourth quarter of this year in view of the need to certify compliant pharmacies and initiate education and training campaigns (Also see "REMS For Qsymia Limits Distribution, But Vivus To Explore Expanding Access" - Pink Sheet, 23 Jul, 2012.).

Belviq, by contrast, does not face any significant safety issues. Simeonidis believes that Vivus’ only hope for a turnaround is a change in commercial strategy. He noted that an activist shareholder group, First Manhattan Co., is trying to put its slate of directors in place with the object of replacing current management and establishing the right strategy.

Coats started at Eisai Inc. in 1996, the year after its founding. He rose quickly, creating the managed care organization, becoming VP of sales and marketing in 2003, and in 2004 president and chief operating officer. He was appointed CEO in 2010.

“The Pink Sheet” DAILY: Can you give us an update on when DEA will release Belviq?

Lonnel Coats: We have a transparent process with FDA – you have timelines, expectations are well set – it’s very transparent in how it operates, and you learn to appreciate that. But the DEA process is a black hole, and we have very little insight into that hole. We now have two drugs at DEA, Belviq and Fycompa (perampanel, for partial-onset seizures).

“The Pink Sheet” DAILY: Takeda and Orexigen will field a sales force of 600 or more for Contrave, yet Eisai has announced that it will go with only 200 reps. Why so little firepower out of the gate?

Lonnel Coats: You won’t get reimbursement right away – it takes time. Having lots of reps on the street early on is a waste of money. Instead, we’re focusing on managed care accounts. I think payer interests are the same as most pharma company interests, and the same, again, as patient interests. If they get a health-outcomes improvement, it solves all of their interests, as well as their financial concerns. So we have to make the argument to payers that Belviq will allow them to find ways to reduce their costs.

“The Pink Sheet” DAILY: Tell me about your label. That will be the basis of your conversations with payers. Arena’s SVP clinical development said that some patients in the clinical trials of Belviq were coming off their diabetes and hypertension meds.

Lonnel Coats: It says on the label that there are co-morbidities that improved while patients were on Belviq. It’s not to say that Belviq caused the co-morbidities to improve, but weight reduction led to improvements in those co-morbidities. So by extension of that, one would say if you have an effective product, a new chemical entity, which we have with Belviq, that allows patients to appropriately reduce their body weight, ultimately it could lead to improvements in other parts of their health. When we get to payers, they’ll see the data as we see the data. They’re already looking at the Phase III data, because they are published in The New England Journal of Medicine.

“The Pink Sheet” DAILY: And what about the recommendation to physicians that they take patients off of Belviq who haven’t achieved 5% weight loss in 12 weeks?

Lonnel Coats: I believe that will help us with payers because they have an insurance policy baked into our label. We’re not fighting it, we’re encouraging it, because the last thing I want is a patient 20 weeks out saying this drug doesn’t work.

“The Pink Sheet” DAILY: Regarding reimbursement, I think employers understand how weight problems lead to lost productivity. And there are signs that commercial payers are falling in line (Also see "Qsymia, Belviq Make Progress With Aetna, But Coverage Remains Long-Term Challenge" - Pink Sheet, 10 Dec, 2012.). When do you think that government programs will broadly reimburse for obesity meds?

Lonnel Coats: I think that politicians generally see the issue the same, that the way we looked at obesity in the past, the medicines for it, didn’t meet the standard. Today, FDA has set the standard around safety and risk with these drugs, and the hurdle for drug companies to overcome. I believe very strongly over the next 36 months we’ll see a change in government as well.

“The Pink Sheet” DAILY: Can you provide any detail on the projected size, duration and cost to conduct a cardiovascular outcomes study?

Lonnel Coats: We have a partner, and we’re currently negotiating on that. I can say that it’s a 90/10 cost split, 90% us, 10% our partner. We’ve met with the agency, and it’s becoming clear what it will take to do this work. It will probably take four years to complete.

“The Pink Sheet” DAILY: Belviq came out of second cycle review pretty clean. There were some earlier concerns about whether the drug was acting at receptors other than the 2C receptors, and whether that might lead to the valvular problems that plagued Redux . But I’m wondering about perception. Do you think physicians who remember the withdrawal of Redux (dexflenfuramine, Wyeth) from the market might be wary of another serotinergic drug?

Lonnel Coats: There’s no question. If there are physicians who are not comfortable using Belviq, we don’t want them to use Belviq. Our job is to make sure there is an appropriate patient who is committed to diet and exercise and improvement in his or her overall health. That’s the key. If you sell these drugs as magic pills, that’s where the danger lies.

There is a long patent on this drug, well beyond the 2021-2022 period. Why would I be irresponsible when I’ve got a long timeframe? The key is to build this market, to build peoples’ confidence. If there are those who won’t use it because they’re looking at history, looking at a different set of scientific principles, I’m OK with that.

“The Pink Sheet” DAILY: Have you ever seen a situation where three drugs enter the market in the same timeframe? Do you expect to see a lot of switching activity?

Lonnel Coats: This market is of such a size that you could have multiple players be remarkably successful in it. The proton pump inhibitor market was quite crowded with five or six players, yet we found a way to be very successful with Aciphex.

“The Pink Sheet” DAILY: We’ve seen how Vivus has faced some reimbursement challenges with respect to getting payers on board. Do you think you’ll fare differently with payers?

Lonnel Coats: Our long period of exclusivity gives us the time to build the market appropriately. When we look at the obesity market, we think of the market we built for Aricept. When we launched it around 1996, there was only one competitor, tacrine. Fewer than 35,000 patients were getting any pharmaceutical benefit when we entered the market. Through education and awareness campaigns, through supporting new testing methodologies such as MMSE or the clock-drawing test – we had to take the time, patience and care to build it. But one thing we learned was not to set expectations to a point where patients could not achieve success.

[Editor's note: The MMSE, or mini-mental state exam, is a commonly used test that measures cognitive impairment in adults on a scale from 0-30. The clock-drawing test, in which a patient draws a clock and a specified time, screens adults for neurological problems such as Alzheimer’s or other dementias.]