Wednesday, April 11, 2007

Calls of Note Part 3

JMP Securities notes that FDA documents recommend new CNS side-effect warning on Ditropan for overactive bladder (OAB). OAB is a $1.4B market with Detrol and Ditropan as market leaders. Indevus' (NASDAQ:IDEV) Sanctura currently has 2-3% market share which firm anticipates will grow with the launch of once daily Sanctura XR. The FDA detailed concern on CNS side effects of J&J's Ditropan in pediatric and elderly populations in advance of tomorrow's advisory committee meeting reviewing pediatric post-marketing data for multiple drugs including Ditropan. The FDA recommends a warning of potential CNS events specific to pediatric and geriatric populations and discontinuation if adverse events (AEs) are seen. The current label doesn't include age-specific AEs or recommend discontinuation.

Sanctura's active ingredient does not enter the CNS unlike other OAB drugs. Ditropan crosses the blood-brain barrier (BBB) leading to CNS AEs. Pfizer's Detrol also crosses the BBB and was the subject of a 1994 recommendation to add a pediatric CNS stimulation label warning. Sanctura does not cross the BBB and has shown the lowest rates of CNS side effects of the entire drug class, often lower than placebo rates.

CNS AE scrutiny will further differentiate Sanctura XR further before approval. Sanctura also has the lowest overall side effect rate of OAB therapies. IDEV has a commercialization partnership with Esprit Pharma for Sanctura. Sanctura XR is currently under FDA review with an August
PDUFA date. Firm believes IDEV and Esprit are looking for a primary care co-promotion partnership. This competitor speed bump may make the commercial opportunity more compelling for possible partners and improve economics for IDEV.

Notablecalls: Indevus is relatively uknown as only few analysts follow the company. As such, this call may go unnoticed despite being quite interesting.

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