Daiichi Sankyo and Biota Bring Next-gen Flu Drug To Japan; Continue Search For Western Partner

TOKYO - Daiichi Sankyo has received marketing and manufacturing approval in Japan for its second-generation long-acting neuraminidase inhibitor Inavir (laninamivir), bringing encouraging news to Daiichi Sankyo and Australian partner Biota, which have faced delays in snagging an ex-Japan partner for the drug.

The Japanese approval is the first for the drug, and the first approval of a single-dose flu therapy inhalant.

Analysts are optimistic about the approval, but noted that the drug's greatest potential is dependent on the companies' ability to secure a partner to progress development of the drug in Western markets. Wilson HTM analyst Shane Storey and RBS Morgans analyst Scott Power forecast that the companies will gain a global (ex-Japan) deal by the end of fiscal year 2010.

New Class Of LANI Provides One-shot Advantage

Inavir is the first drug of a new class of LANIs "to address the limitation of the current products, which require daily or more frequent dosing," Power wrote in a Sept. 13 analyst note. "This new class provides the opportunity to medicate patients on a 'one and done' basis. The potential benefits are that the patient is more likely to use the product properly and as intended, and the need for one dose also offers a reduced cost of storage and transport per course."

Laninamivir has completed Phase I trials in the UK, but the companies will not continue development in the U.S. and Europe until they find a licensing partner. The two companies would share licensing fees, royalties and milestone payments from a licensee.

Unless there is a new spike in flu cases, the companies may have trouble stirring excitement for their compound. National governments are already dealing with unused flu stockpiles from the last flu season. In South Korea, lawmakers have begun to criticize the government for fiscal waste for miscalculating the country's flu vaccine needs (Also see "Korea Dumps 2.54 Million Doses Of Flu Vaccine, Losing $24.68 Million, Drawing Ire From Lawmakers" - Scrip, 13 Sep, 2010.).

Inavir is a follow-on LANI to Relenza (zanamivir), which was developed by Biota and marketed by GlaxoSmithKline. Daiichi Sankyo and Biota joined forces to develop the drug in 2003 when they discovered they were developing similar programs (Also see "Daiichi Sankyo Lifts FY2009 Profit Forecasts, Submits NDA For Flu Inhaler Laninamivir" - Scrip, 2 Feb, 2010.).

Daiichi Sankyo largely funded Japanese development for the drug, so Biota will receive single digit royalties in Japan. Analysts modeled royalties around 4-5 percent for Biota, expected to result in payment of up to $4 million by FY2013.

In 2009 Phase III trials in Japan, Taiwan, Hong Kong and South Korea, laninamivir met primary and secondary endpoints compared to Tamiflu (oseltamivir). Exercising its option for Japanese rights in March 2009, Daiichi Sankyo has gained an indication for treatment of influenza in both adult and pediatric patients.

The drug is currently undergoing a Phase III trial to assess the drug's ability to prevent influenza infection, but in a Sept. 13 analyst report, Wilson analyst Storey noted that the drug's initial approval for treatment accounts for the majority of influenza sales in Japan.

Daiichi Sankyo expects to manufacture and sell 2.5 million doses of the drug by year's end, according to Biota. National Health Insurance pricing has yet to be established, but Storey forecasts the drug's pricing will be in the $20-30 range.

- Daniel Poppy ([email protected])