MORRISVILLE — Like a marriage with children, the Triangles newest health care company is out of the starting gate with two market-ready cancer drugs and a third on the way.
Vestiq Pharmaceuticals made its public debut this month with a risk-aversive business model designed to eliminate the lottery factor in the pharmaceutical field.
Rather than assign scientists to toil in laboratories and lawyers to grind it out in regulatory proceedings, the Morrisville company essentially functions as a marketing and lobbying organization for new niche drugs.
Vestiq gets involved only at the point when a drug is approved for safe use by the U.S. Food and Drug Administration, but yet not widely accepted by doctors, pharmacies and insurance companies. Getting approved meds into circulation can be labor intensive, requiring scores of sales pitches and clinical presentations across the country.
We dont develop, we dont manufacture, said Vestiq CEO Marty Baum. As a newer entity, a self-funded company, we cant afford a product thats not a 95 percent probability.
Betting on overlooked or obscure medications is an option for smaller, underfunded companies to establish themselves. "I would not call it a dominant model but an emerging model, said Steve Stefano, managing partner at Cary-based Synopia Rx, one of Vestiqs partners. If a company like Vestiq can put 50 or 100 sales reps behind a product, it can reflect the sales curve upwards.
Earlier this month Vestiq announced its formation, after Baum and other pharmaceutical veterans spent more than a year lining up all the pieces.
The terms of Vestiqs business deals are confidential except a marketing alliance in which Vestiq will pay $44 million over four years to market Oravig, an oral tablet placed under the lip to treat mouth sores caused by radiation therapy.
Vestiqs other product, Zuplenz, is a dissolvable tongue strip that treats nausea and vomiting caused by radiation, chemotherapy and surgery.
Both are known treatments in pill form, but Vestiqs versions have new delivery mechanisms.
In addition to its two drugs Vestiqs components include the stock acquisition of Cary-based Praelia Pharmaceuticals for its regulatory registrations and established processes. Vestiq also has marketing and contracting deals with Synopia Rx and Vanguard Pharmaceuticals in New Jersey.
Vanguard supplies the national 44-member sales team to get Vestiqs drugs into doctors offices.
Synopia Rx specializes in securing insurance coverage for drugs. Stefano said Vestiqs products are typically covered by insurers as Tier III medications with higher co-pays, ranging from $40 to $70 per vial or package. Synopia Rx tries to get the insurers to reclassify the meds under Tier II, which have lower co-pays, typically around $15, making them more likely to be prescribed to patients.
Synopia Rx works with about 50 insurance companies that collectively represent about 80 percent of patients who have insurance, Stefano said. Promoting a drug with those insurers can take about 9 months per medication, he said.
Baum said every new drug faces this challenge: If its a new product, doctors ask two questions: Is it stocked in my local pharmacies? And is it reimbursed by insurance companies in my area?
Blue Cross and Blue Shield of North Carolina, the states biggest insurer, has covered Oravig and Zuplenz since the were approved by the FDA in 2010. Blue Cross classifies the medications as Tier III, said spokesman Lew Borman.
As a policy, Blue Cross and Blue Shield classifies drugs as Tier III if they do not significantly differ from other available drugs. Tier II is reserved for preferred, brand-name drugs, while Tier I is for cheap generics.
Baum said he expects Synopia Rx to meet with Blue Cross and other insurers this year to press the case that Oravig and Zuplenz are substantially different from comparable treatments and should be considered Tier II drugs.
Baum said that the company is funded by its principals and angel investors, but is looking for additional sources of capital. Baum is a Triangle pharmaceutical veteran who paid his dues at Merrell Dow Pharmaceuticals and GlaxoSmithKline before helping start three smaller companies.
Were rifle-focused, lets put it that way, Baum said. We will not stray from our strategy.