Claritin+Singulair=There is No Such Thing as Low-Risk

The way things have been going for the Merck/Schering-Plough joint venture, it really shouldn't surprise anyone that their pending application for a fixed-dose combination of Merck's blockbuster asthma/allergy pill Singulair and Schering's off-patent Claritin received a "not approvable" letter from the Food & Drug Administration.

But the outcome must still be a surprise to investors who reacted with excitement to the companies' announcement at the end of August that it was filing an NDA for the product. (Yes, it really was only 8 months ago that drug stocks could move up on unexpected news.)

The combination was all but forgotten after the companies announced in 2002 that they couldn't demonstrate significant efficacy improvements when Claritin was added to Singulair. So everyone assumed MSP was a one a trick pony, albeit one with a nice trick--Vytorin. (Merck points out that the allergy combo is part of a separate partnership from Vytorin.)

Its hard to remember, but back in August no one was worried about Vytorin. And it doesn't take a rocket scientist to imagine the potential for even modest improvements on Singulair to generate big revenues: after all, the brand is now Merck's biggest at over $4.5 billion per year. So Wall Street cheerfully assumed that the companies had found a way to prove efficacy to FDA's satsifaction and took out their calculators to figure out how to adjust EPS models for the two joint venture partners.

Well, not everyone felt that way. Not to appear immodest, but (ahem) we highlighted the reaction to the NDA filing way back in September as an example of an apparent misreading of regulatory risk.

In the "Safety First" climate dominating FDA, companies and their investors can be forgiven for looking for low-risk development strategies. Just one problem: in the current regulatory climate, there is no such thing as a low risk drug development strategy. That's why, in a presentation to Windhover's Pharmaceutical Strategic Alliances conference, we cited the Singulair/Claritin combo as an example of a drug development program that was probably higher risk than it looked. (Don't believe us? Listen to the audio and see the slides here.)

Did we have some secret source telling us details about the NDA that no one else knew? Alas, no. We tied our observation to the recent travails of some other line extensions that seemed hung up at FDA based on what can only be described as unexpected safety issues. Our example: GlaxoSmithKline/Pozen's naproxen/Imitrex combo for migraines, which had been made "approvable" twice at FDA pending more safety data.

Given the many thousands of people who use those drugs in tandem already, it seemed odd that the agency needed more safety information about the fixed-dose combination--especially since it didn't accompany the "approvable" letters with any kind of warnings about the marketed products. That struck us as a clear indication that plans to market new combinations of already marketed ingredients are probably better considered low priorities for FDA, rather than low-risk development projects. And even a hint of a safety issue is sure to stall the NDA, since the reviewers know that they aren't denying anyone access to the medicine if they ask the sponsor for more data.

Merck and Schering didn't say what issues FDA raised with this combo. The Pink Sheet DAILY, however, logically connects the "not approvable" letter to a recent "early communication" issued by FDA warning of a possible association of use of the drug with suicidality. That regulatory landmine has claimed plenty of innovative products, so it is probably safe to assume it is a big factor in the setback for this combo. (We'll have much more on that theme in the next issue of The RPM Report.)

UPDATE: Logic only gets you so far. According to Merck, safety was not the issue with the Singulair/Claritin combo.

Still, the outcome is odd at best. Take Claritin, one of the safest drugs ever marketed as a prescription-only product. Add it to Singulair, one of the most widely prescribed brands today. And you get a drug that somehow can't get to market.

We'll say it again. There is no such thing as a low-risk drug development strategy.

One other thing: regulatory risk may never be low, but it also isn't infinite. That GSK/Pozen migraine drug? It was approved by FDA on the third go-around. GSK still sounds excited about its potential.