Pozen’s drug pipeline yielded two products that successfully reached the market. For the third, it is changing up its business strategy to try something it has never done before—take a drug into the market on its own.
Partnerships had enabled Pozen (NASDAQ: POZN) to leverage the sales forces of larger pharma companies to commercialize a migraine drug and an arthritis drug. In the last two weeks, the Chapel Hill, NC-based company has ushered in a series of changes stripping away the partnership strategy. On June 1, Pozen brought on Adrian Adams, the former CEO of Auxilium Pharmaceuticals, as its new chief executive. A week later, Pozen announced an agreement to acquire Canada-based Tribute Pharmaceuticals (TSXV: TRX) in a stock deal valued at $146 million.
When the Tribute acquisition closes, the combined company will be called Aralez Pharmaceuticals, operating as an Ireland-based company positioned to sell a portfolio of its own products globally. Tiny Pozen owes its new circumstances, in part, to a manufacturing issue it had no control over, a mega-pharma acquisition it had no part in, and an eventful Thanksgiving weekend that ended with the unraveling of the deal that had positioned a yet-to-be approved Pozen heart drug as the successor to a blockbuster.
The new Pozen drug in question is really a combination of two old drugs. Yosprala pairs aspirin with the stomach acid-reducer omeprazole. In the Pozen drug, omeprazole surrounds an aspirin core, which results in a timed release of the aspirin. Pozen describes its drug as “safer aspirin,” delivering the heart-protecting benefits of aspirin in a manner that avoids the stomach ulcer risks of aspirin taken alone. Pozen sought the FDA’s approval for Yosprala for secondary prevention of cardiovascular disease; essentially, a measure to protect people who have already had a cardiac event from having another one.
The market potential for the Pozen drug attracted Sanofi (NYSE: SNY), whose own cardiovascular drug, clopidogrel (Plavix), partnered with Bristol-Myers Squibb (NYSE: BMY), peaked at more than $7 billion in 2011 revenue before patent expirations and generic competition eroded sales. In September 2013, Sanofi licensed U.S. rights to Pozen’s aspirin/omeprazole combo drug, which faced an FDA approval decision the following January. Sanofi planned to slide the Pozen drug into its existing cardiovascular drug portfolio, hoping it would recoup some of clopidogrel’s lost revenue.
Yosprala still awaits FDA approval, despite positive data from clinical trials. Pozen attributes the holdup to manufacturing problems the FDA found at the site of the company’s third-party manufacturer. The delays tried Sanofi’s patience. Last fall, around Thanksgiving, Sanofi abruptly ended the partnership and returned the rights to the drug. During a conference call held the Monday morning following Thanksgiving, then CEO John Plachetka said the regulatory timeline was “longer than any of us expected, and that timing no longer works for Sanofi.” But Plachetka reinforced the company’s confidence in the drug, telling analysts Pozen would keep all options open, including going to market alone.
Adams says Pozen reached out to him early this year about taking over as CEO, given his experience launching products and running public companies. He was available because … Next Page »