Pain Therapeutics

Pain seems as close to a sure bet as the pharmaceutical industry has to offer. Forecasts call for the worldwide analgesic market, already $38 billion in 2002, to grow at a 20% annual clip, nearly doubling to $75 billion by the year 2010. For new drug developers, pain also has the advantage of offering clearly definable endpoints-less pain-and a relatively short duration for clinical trials. No surprise then that more than 200 companies have a hand in developing or marketing pain therapeutics. Among them, the three young companies profiled here-AlgoRx Pharmaceuticals Inc., Algos Therapeutics Inc., and TheraQuest Biosciences LLC.

Success may not come painlessly for young companies in this complex, fast-growing market.

At first glance, pain seems as close to a sure bet as the pharmaceutical industry has to offer. Forecasts call for the worldwide analgesic market, already $38 billion in 2002, to grow at a 20% annual clip, nearly doubling to $75 billion by the year 2010. For new drug developers, pain also has the advantage of offering clearly definable endpoints—less pain—and a relatively short duration for clinical trials. No surprise then that more than 200 companies have a hand in developing or marketing pain therapeutics. (See "Pain Therapeutics: A Market Rich in Unmet Medical Need and Competition," START-UP, July 2002 (Also see "Pain Therapeutics: A Market Rich in Unmet Medical Need and Competition" - Scrip, 1 Jul, 2002.).) Among them, the three young companies profiled here—AlgoRx Pharmaceuticals Inc. [A#2004900150], Algos Therapeutics Inc. [A#2004900151], and TheraQuest Biosciences LLC --have emerged from a pain management industry that, until recently, had good reason to believe pain products represented a comparatively easy pathway to a vast, fast-growing market. Some major growing pains in the industry, though, should make them take notice: succeeding in pain won't be painless.

"Pain drug development," says a former medical research and development executive at pain company Purdue Pharma LP , "is deceptively simple and it's deceptively complicated." Pain seems simple enough: it hurts and an effective painkiller stops or reduces the pain, and we all know pain and its relief in one form or another. However, pain is a complex, multifaceted physiologic response involving still poorly understood feedback loops from sensation to spinal cord and brain. The different pain syndromes—most broadly acute, chronic and cancer-related pain but also those defined by specific pathways, local sites and severity of pain—require different approaches in their management. "Pain mechanisms," says the executive, "are multifactorial. It's difficult to assess what the origin of pain is. If you don't know the origin, then you don't know what the best treatment is."

Those mechanistic complexities have made it extremely difficult to discover novel treatments that actually prevent pain at its source as opposed to blocking communication to the central nervous system. Most pain companies focus on blocking agents. Among the very few truly new pain treatments developed over the last several decades, only Cox-2 inhibitors actually treat the biological source of the pain. As evidenced in the accompanying chart and in the companies profiled here, most investment in pain management goes to new delivery systems or reformulations of existing, decades-old drugs. (See Exhibit 1.) Discovery of new pain drugs has largely been a bust. With so little understood about the neurological basis of pain, few companies are willing to invest in the search for new pain drugs.

Because knowledge about pain mechanisms remains limited, clinical development has also been tough. Most painkillers in development treat the expression of pain, not the causal mechanism, making their biological targets difficult to determine. Studies require very large numbers of subjects and can cost as much as $900 million for a Phase III study, according to Ronald Burch, MD, PhD, a past Purdue pain program director and now president and CEO of AlgoRx. Drugs that seem effective in early studies frequently fail as the subject population grows, at great expense.

A big part of the problem is that clinical trials for painkillers rely on the fuzziest of data: patient self-reporting both for effectiveness and side effects. "You get highly variable output," says the unnamed former Purdue executive. "You look at the data and, with an anecdotal analysis, many people seem to look better, but then the statistics don't bear that out."

Also, effectiveness and side effects for opiate derivatives tend to be dose-related because their potency relates directly to their binding affinity for widely distributed mu receptors. If you take an opioid for back pain, you'll reduce the pain, but if you cut your finger while treating your back pain, it will hurt less, too. A wide variety of other, well-documented problems, from constipation to addiction, could also emerge.

For those companies hoping to find novel opioids, the opportunities are limited. They are among the oldest, most studied and widely used pharmaceuticals. Further study is unlikely to yield new treatments. "There's nothing else to know," says the ex-Purdue executive.

The combination of limited knowledge about pain and the few opportunities left for discovering novel painkillers keeps the door to truly new pain therapies barely open. Not surprisingly, says Najib Babul, DPharm, founder, CEO and CSO of TheraQuest, "most new and mechanistically novel targets in pain have failed." Having worked as a director of clinical research at Purdue on a variety of opioid-derived drugs in novel formulations, including Oxycontin, he says, "Growth has been in delivery and formulation."

That jumpstart pathway to products brought Purdue great fame and enormous revenue growth for nearly a decade—and, very recently, much pain. Played out in the headlines, the privately held Purdue's good and bad experiences with pain illustrate the difficult state of affairs in pain management today. Three years after its 1996 launch, Purdue's Oxycontin, an extended-release version of the 50-year-old synthetic opioid oxycodone, achieved blockbuster status. Annual sales reached nearly $2 billion last year, funding an expanded discovery program to develop improved versions of the drug and other painkillers before Oxycontin's anticipated patent expiration in 2009.

The first dose-reliable, sustained-release oxycodone formulation, Oxycontin provides enormous relief that has literally transformed the lives of millions of pain sufferers. People who could not function previously due to pain could return to normal activities. As sales took off, the longstanding taboo against prescribing potentially addictive opioids began to fall away. Recognition of the extensive under-treatment of pain also grew. Physicians boosted their efforts to monitor and manage pain, the so-called "fifth vital sign."

Then the troubles began. Abusers discovered that crushing Oxycontin pills and snorting their contents gave them a powerful high. Soon Oxycontin abuse, addiction and related crimes and overdose deaths were making national news. Charges that Purdue failed to take adequate measures to prevent the drug's abuse brought investigations and a welter of lawsuits against the maker, most of which have now been dismissed but still cost the company millions of dollars to defend against. The FDA responded by requiring Purdue to develop special handling procedures for the painkiller. The agency now demands that pain drug developers establish similar, costly procedures for future Class II narcotic drugs as part of their development process.

Many companies saw what was happening to Purdue. Several opted not to risk entry into such a potentially fraught market. "The media hammered Purdue," says the former company executive. "What company wants to embrace that?" Hoping to counter the safety issues and perhaps capture an even bigger market, Purdue and other companies began to develop abuse-resistant forms of oxycodone.

And then, early this year, a court wiped out Purdue's patent protection for Oxycontin, a devastating blow to the company. With Endo Pharmaceuticals Holdings Inc. and Teva Pharmaceutical Industries Ltd. preparing to bring generic versions to the market, Purdue announced hundreds of layoffs and sold off its discovery arm in anticipation of a huge plunge in revenues as soon as the generics hit the market. Even if Purdue or competitors succeed in bringing an abuse-resistant version of the drug to market, it will have trouble competing against the much cheaper generics.

Patent pain has struck other pain companies. In June, the FDA ruled that Johnson & Johnson 's Alza Corp. subsidiary could have a six-month patent extension, until January, for its transdermal patch formulation of the 40-year-old fentanyl, sold as Duragesic, which had sales last year topping $1.6 billion. Mylan Laboratories Inc. , which had been planning to launch its own generic transdermal patch fentanyl this summer, saw its stock price dive. Noven Pharmaceuticals Inc. in alliance with Endo also has an ANDA pending for their version of the fentanyl patch. [See Deal] Whatever the outcome, Duragesic's large revenue days are numbered. And all of this pain comes for drugs that have been around in their original formulations for decades.

Patent issues can of course plague any company seeking to build new products out of older drugs. (See "The Search for Defensible IP in Older Drugs," START-UP, May 2004 (Also see "The Search for Defensible IP in Older Drugs" - Scrip, 1 May, 2004.).) Nonetheless, pain companies recognize that reformulation and delivery systems can significantly improve benefits for the existing drugs and, despite Purdue's and Alza's struggles, quickly become blockbusters. Thus, many stick to that path to products.

Investors have certainly encouraged the approach. Impressive follow-on rounds raised earlier this year include NeurogesX Inc. ($35 million [See Deal]) and AlgoRx ($65 million [See Deal]), both of which have development-stage pain products.Now in Phase III with a sustained-release form of oxycodone combined with the opioid antagonist naltrexone (Oxytrex) to discourage abuse, Pain Therapeutics Inc. raised $46.3 million in a follow-on public offering last fall. [See Deal] Most of that money has gone toward generating new products out of drugs with demonstrated clinical efficacy and safety.

With money from an earlier round, AlgoRx acquired a device and know-how from PowderJect Technologies Ltd. (now a division of PowderMed Ltd. ) to formulate and manufacture needle-free, pain-free dry powder injection systems. [See Deal] The company continued PowderJect's development of a dry powder form of lidocaine for use as a fast-acting, localized, skin-numbing agent. Now in Phase II trials in children and adults, the system is designed to prevent pain associated with needle insertion, intravenous cannulation, and superficial surgery on skin and genital mucous membranes.

AlgoRx alone among the companies profiled here does have a novel drug in development. However, humans have been consuming it daily for millennia. The drug, a synthetic form of capsaicin, is derived from the source of the mouth burn in chili peppers. In an injectable form, capsaicin works at the site of the pain where it binds selectively, causing pain fibers to degenerate, numbing the pain, so far without the addictive and other side effects of opioids.

Pursuing a 505(b)(2) drug-approval route, TheraQuest has identified three drugs it is moving rapidly into clinical testing using new formulations and/or delivery methods. The company's central focus is on sustained-release opioid analgesics for chronic pain to compete with as Oxycontin and its generic followers, as well as Duragesic. TheraQuest's Babul has no interest in discovering new pain drugs. "Old drugs with new delivery systems," he says, "enable you to tap into new markets and gain market share. We can bring products to market in a cost effective manner with a better return on investment."

Algos, the other company profiled in this section, grew out of the remains of Neuromics Inc., a genomics-based pain drug discovery and service company that folded in 2002. Perhaps proving the rule, while a number of start-ups in the pain field are attempting to accelerate the path to revenues by developing next-generation versions of off-patent analgesics or in-licensed technology, Algos is pursuing a service model to achieve that goal. And so far, that approach has yielded some income from other groups seeking access to the company's proprietary animal models of pain. CEO Susanne Dvorak hopes to use the revenues to help fund the company's in-house pain drug discovery program, which is just being set up.

Unlike so many other pain companies, she has no plans to leap over discovery by reformulating existing drugs. Instead, she will use the company's novel ion channel targets demonstrated in earlier studies to be part of pain pathways to begin screening compounds. That's a road that many other companies have gone down. Although recent advances in ion channel study techniques could improve outcomes, no new ion channel drug of any kind—pain or not—has been approved since 1997. (See "The Re-Emergence of Ion channel Drug Discovery," START-UP, May 2003 (Also see "The Re-Emergence of Ion Channel Drug Discovery" - Scrip, 1 May, 2003.).)—Marc Wortman