Tears, beers as Pozen gets OK

Migraine pill's fate kept workers late

Pozen co-founder and CEO John Plachetka was working in his office at 7:30 Tuesday night when he learned that the Food and Drug Administration had e-mailed its decision on the Chapel Hill company's migraine medicine.

He entered the office of Paul Ossi, Pozen's senior vice president for regulatory and project management. About 20 Pozen employees had gathered around the computer. "It was a little crowded," Plachetka said.

The FDA had promised the eagerly awaited ruling that day, and nobody wanted to go home, he said. The drug, Treximet, had been delayed by regulators for nearly two years amid safety concerns.

People cheered and congratulated one another when it became clear Treximet had been approved. A few cried.

After sharing two bottles of chilled champagne, Plachetka said, "we all went out for pizza and beer."

Now comes the next challenge: Persuading patients and physicians that the drug is better than existing medicines. And it's largely out of Pozen's hands.

Pozen's partner, British drug maker GlaxoSmithKline, will market and promote the drug. GSK needs to move quickly: It has only about six months to establish Treximet as the prescribed migraine medicine of choice.

"They've got deadlines coming up," said analyst Robert Hazlett, of BMO Capital Markets.

Treximet is expected to appear on pharmacy shelves in mid-May. By the end of the year, the drug is slated to replace GSK's Imitrex, which, with $1.37 billion in annual sales last year, was the best-selling migraine medicine. But Imitrex will lose patent protection this year and face competition from at least two cheaper generic versions soon after.

GSK wants to offset slowing sales of other drugs, and it is going to market Treximet heavily to physicians and consumers, analysts predicted.

Clinical studies have shown that Treximet works better than existing migraine drugs. Dr. Jim Adelman of the Headache Wellness Center in Greensboro heralded the pill's approval. "Finally," Adelman said Wednesday.

Plachetka is confident that GSK's sales employees will make up for lost time and turn Treximet into a blockbuster seller, meaning more than $1 billion a year in sales. A former executive at Glaxo, a GSK predecessor company, Plachetka helped develop Imitrex.

GSK plans to sell Treximet for 10 percent less than Imitrex, which costs $16 to $20 per pill, said analyst Ken Trbovich of RBC Capital Markets. That could help persuade health insurers to reimburse Treximet prescriptions in the face of cheaper treatment alternatives.

Ads on the horizon

Trbovich also expects GSK to promote Treximet in direct-to-consumer advertisements. GSK, which has a U.S. headquarters in Research Triangle Park, plans to package Treximet at its plant in Zebulon.

"It's still not a cheap product," Trbovich said. GSK and Pozen are betting that patients are willing to pay the price for a superior product, he said.

It's a tactic that has a good chance of succeeding, said Adelman, the Greensboro headache doctor. "Patients want one pill and be done," Adelman said.

Treximet is a combination of two proven medicines, a migraine drug and an anti-inflammatory painkiller. The medicines seem to complement one another and are more effective at keeping migraines from coming back than other medicines, Adelman said.

He expects to prescribe Treximet to patients just beginning treatment and about 30 percent of patients for whom older migraine medicines don't work.

Analysts project that Treximet will generate about $150,000 in sales this year and reach $800 million to $1 billion within four to five years.

Investors also celebrated the FDA approval Wednesday. Pozen made news of the approval public late Tuesday, long after stock markets had closed.

Shares rose $2.97, or 28 percent, Wednesday to $13.50.

The long regulatory delay cost Pozen employees and executives cash bonuses and stock options, but getting the drug approved will be a boon for the company, which employs 35.

"It's a financially life-changing moment for Pozen," Plachetka said.

FDA approval triggers a $20 million payment from GSK, he said, and the royalties on Treximet sales could keep Pozen profitable for years.

Treximet, which will be the company's first product on the market, is proof that Pozen's business model works, Plachetka said.

"Thirty-five people can make a drug," he said, "and they did."