Pubdate: Mon, 11 Mar 2002 Source: Journal News, The (NY) Copyright: 2002 The Gannett Company, Inc. Contact: http://www.nyjournalnews.com/ Details: http://www.mapinc.org/media/1205 Author: Christopher Mele PENWEST HOPES TO PROFIT FROM PAINKILLER Patterson-Based Pharmaceuticals Hopes to Gain Approvals for a Painkiller That Would Be an Alternative to OxyContin PATTERSON -- Penwest Pharmaceuticals Co. is fundamentally shifting its business strategy in the hopes of turning a profit and tapping into a $1 billion painkiller market. Penwest has been known for five decades as a manufacturer of excipients, the non-active filler used in drugs. In 2000, its $35 million excipient business saw sales to more than 250 customers in 40-plus countries. Penwest also has a drug-delivery business centered on a time-release technology it pioneered called TIMERx. Although it enjoys royalties from licensing its technology to other drug-makers, it is working to expand beyond its two core businesses. By beefing up its research-and-development efforts and pumping up its pipeline, Penwest hopes to capture up to 50 percent of a product's potential return versus the 5 percent to 15 percent it now gets with royalties. Penwest has nine drugs in development, some in concert with a partner and some on its own. The drug getting the most attention is Oxymorphone ER (extended release), an opioid analgesic that relies on Penwest's TIMERx technology. The company is touting it as an alternative to the popular but much-maligned pain-killer OxyContin. Penwest expects to file a new drug application with federal regulators by the third quarter of this year for Oxymorphone, a morphine derivative that's stronger than OxyContin and 10 times more potent than morphine. The twice-daily dosing is being developed in partnership with Endo Pharmaceuticals for the treatment of moderate to severe pain. Under the agreement, the two companies share development and manufacturing costs as well as net sales. OxyContin, made by Stamford, Conn.-based Purdue Pharma, has gained a public relations black eye for being easily abused and too readily prescribed. Doctors have been warned about prescribing the drug and media accounts are replete with accounts of misuse. Abusers of OxyContin have been know to crush and snort, inject or chew the drug. In Penwest's TIMERx technology, Oxymorphone's active ingredients are combined with locust bean gum and dextrose. When the tablet meets with water in the gastrointestinal tract, the gum matrix expands into a tightly bound gel that releases the drug at a predetermined rate. That matrix is expected to minimize abuse of Oxymorphone by injection (since the gum would make any kind of solution too gooey to use in a syringe) and inhaling the drug would not produce the immediate high that abusers want. Since chewing still poses a potential form of abuse, it's unlikely that Oxymorphone will win a label from the FDA saying it's less abusable, according to a research report by Leerink Swann & Company. "However, we believe an aggressive marketing campaign championed by Endo's sales force could influence the prescribing practices of physicians attempting to reduce the use of the most abusable opioid pain therapies," the report reads. Michael J. Hearle, a senior analyst at Leerink Swann, said the new drug, if approved, would erode OxyContin's $1 billion market. "There is a huge opportunity for Penwest and their partner, Endo," he said. "The most poignant marketing message is doctors are afraid of losing their license if they write a prescription for OxyContin." Penwest officials take a slightly different view of Oxymorphone's potential market. The introduction of Oxymorphone may erode some of the OxyContin share but it will likely cause the whole pain-management market to expand, said Penwest's chief financial officer, Jennifer L. Good. She said the market is currently underserved, but that doctors are paying more attention to aggressively addressing pain management. Penwest, which allied with Endo in 1997, is ahead of competitors, who are only in the early stages of developing their own pain-management medicines, Good said. Currently Oxymorphone is available only by injection or suppository. It recorded $1 million in sales in 2000 due to less-than-ideal delivery methods. Doctors are looking for alternatives to OxyContin because pain management drugs can lose their effectiveness over time and can produce unwanted side effects in higher dosages. The introduction of an alternative drug would allow doctors to use a painkiller at lower dosages and still be effective. "The more that are available the better it is for the patients," said Dr. June Dahl, professor of pharmacology at the University of Wisconsin Medical School and a collaborator with the university's Pain and Policy Study Group. "Each patient is a pharmacological experiment." Penwest, once a subsidiary of Penford Corp., was spun off and became a public company on Sept. 1, 1998. The company expects to reach profitability in 2004 and in the meantime to invest heavily in research-and-development. Spending for research climbed to $18 million and $20 million in 2001 and 2002, respectively, compared with $12.8 million in 2000 and $7.4 million in 1999. To meet its higher costs, Penwest wants to raise money each year through 2004. Last year it sold stock at a fixed price to a hand-picked group of investors to raise $30 million. The company lost its president and chief operating officer, Michael J. Fox, after less than a year. Fox, who had been a Penwest consultant, found his commute from Boston too much of a grind and wanted to spend more time with his family. Good said Penwest is now looking to hire a senior vice president of drug development who can grow into the president's slot. - --- MAP posted-by: Keith Brilhart