It’s been a big week so far for Valeant Pharmaceuticals Intl Inc (NYSE:VRX), and things might still get better. The company is up close to 4% early trading in the US. If there was ever a company that needed a bit of a sentiment boost, it’s Valeant this year. With the shift in sentiment could come a closing of the gap on the company’s 2015/2016 collapse, and by proxy, an opportunity to pick up some upside exposure as a Valeant holder.
Here’s a look at the two latest developments, and the one still to come, and what all three mean for the company going forward.
First, then, Brodalumab. This one’s a psoriasis treatment we’ve covered a few times during its development pathway here at Market Exclusive. It’s a novel human monoclonal antibody, and it works by binding to the interleukin-17 (IL-17) receptor and – in doing so – inhibiting inflammation. Without the binding, IL-17s (which are a type of cytokine) would activate the receptors and stimulate inflammation. This inflammation is what leads to the scaly plaques associated with the condition. The drug performed well in trials, but there were some safety concerns surrounding a possible tendency to induce suicidal thoughts in patients who took part in its phase II and pivotal trials. Suicidal thoughts is pretty common for psoriasis sufferers anyway (reports suggest its as high as a one in five occurrence), so there was always the chance that the recording of this as an AE associated with the drug was mistaken association, and that the patients in question would have had suicidal thoughts with or without administration. A weighting towards the active arm meant it warranted consideration, however, so this is what markets were looking at as being a major part of the NDA. Anyway, the application was put in front an advisory panel this week, and they voted in favor of approving Brodalumab, so long as the label reflected the suicidal concerns. That’s a win for Valeant, who won’t worry too much about the label restricting its potential target population. Analysts reckon the drug could pick up $880 million annually in peak sales on an approval.
Moving on, let’s look at Relistor. This one is a Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) drug that Valeant licensed from the former, and its an opioid-induced constipation (OIC) indication. Before this approval, the only real treatment for OIC was a regular injection, and this has obvious drawbacks. OIC is a very common condition in the US, and with opioid use growing fast, the market for an alternative to the current inconvenient SOC is large and growing. It probably won’t be able to command too high a price, but with plenty of potential suitors, there’s plenty of revenues to be had going forward. Analysts think this one can pick up somewhere in the region of $400 million in peak sales.
Finally, VESNEO. This one is a candidate developed by Valeant owned Bausch + Lomb, and it’s what’s called a nitric oxide donating prostaglandin receptor agonist. It’s an open angle glaucoma target, and it works by affecting nitric oxide levels in the eye, which is a key regulator of intra ocular pressure (IOP). IOP is a mediator in open angle glaucoma, and Valeant is hoping the FDA will give it the green light come PDUFA, which is tomorrow – July 21. Analysts put the peak sales potential for this one at anywhere between $500 million to $1 billion annually.
So to sum up, Valeant just had an agency green light for commercialization on a drug that could bring in $400 million revenues, an advisory panel approval for a circa $900 million seller, and is waiting on a PDUFA decision for a blockbuster tomorrow.
If all three go through as positive, we expect a very strong end to the week for the company, and going forward, an overarching (albeit slow) reversal in sentiment.
All eyes on PDUFA.