Global Insight Perspective | |
Significance | The new combination treatment will target the reduction of "bad" LDL cholesterol and an increase in the heart-protective "good" HDL cholesterol in patients. |
Implications | The planned combination treatment will significantly sharpen both firms' competitive edge in this fast-growing market segment. The new product, which Abbott and AstraZeneca hope will be ready for FDA filings by 2009, will go head-to-head with Merck & Co and Schering-Plough’s (both U.S.) double-fixed-dose combination cholesterol treatment Vytorin (simvastatin/ezetimibe). |
Outlook | The co-development deal will significantly broaden the commercial appeal and revenue-generation potential of Crestor and TriCor in the vast cholesterol-reducing market, at a time when patent expirations are eroding prices - particularly in the statins segment. |
Development Deal has Transatlantic Accent
Drug-makers Abbott Laboratories (U.S.) and AstraZeneca (U.K.) have joined forces to co-develop a new cholesterol treatment that is likely to improve treatment outcomes by simultaneously reducing "bad" LDL cholesterol and raising "good" HDL cholesterol. AstraZeneca's Crestor (rosuvastatin), from the top-selling statins class of cholesterol drugs, will work to reduce LDL, while either Abbott’s existing TriCor (fenofibrate) or a new-generation successor currently in the pipeline - ABT-335 – will work to raise HDL. The two firms hope to make submissions to the U.S. FDA for approval of the treatment by 2009. Under the terms of the agreement, Abbott and AstraZeneca will share development and commercialisation costs.
The development is set to buoy revenue yields for both of these companies in the cholesterol-lowering market, which was worth US$29 billion last year (IMS Health). Crestor clocked global sales of just under US$1.3 billion in 2005, marking a year-on-year (y/y) rise of 38% (see United Kingdom: 3 February 2006: AstraZeneca's Full-Year Revenue Climbs 10%; Pledges to Boost Pipeline). However, the drug’s performance will be increasingly impeded due to falling prices in the statins market, as older products – such as U.S. pharma Merck & Co's Zocor (simvastatin) - lose patent protection and generic erosion is unleashed upon this class. Furthermore, although Crestor was initially touted as a major blockbuster, the statin has failed to win over a significant share of patients from U.S. giant Pfizer’s rival statin Lipitor (atorvastatin), following a period of controversy over the drug’s safety profile. Crucially, Crestor has been held back by fierce competition from Merck & Co and Schering-Plough’s cholesterol combination pill Vytorin (simvastatin/ezetimibe; see United States: 19 June 2006: Vytorin Beats Off More Statin Competition in Head-to-Head Trial with Crestor).
For Abbott, the deal will help to buoy TriCor, as this product faces a more direct threat from generics; the company is currently locked in a bitter legal battle with a group of generic drug-makers who claim that it manipulated anti-trust legislation in order to prevent the generic manufacture of its top-selling cholesterol drug. The new-generation version of TriCor - ABT-335 - is currently in late-stage trials, and has already been tested in combined use with Crestor, Lipitor and Zocor. Abbott’s decision to pursue a partnership with Crestor suggests that the company is confident of high efficacy levels from a two-in-one combination pill containing AstraZeneca's drug.
Outlook and Implications
The deal with Abbott will serve to sharpen AstraZeneca's competitive edge in this lynchpin market, and will boost Crestor’s profit yields. It will also help to either maximise profits from Abbott’s in-development ABT-335 or extend the life cycle of TriCor, as it comes face-to-face with generic competition. The Abbott/AstraZeneca drug will go head-to-head in competition with Vytorin, and is likely to stir prescription patterns in a market segment that is becoming increasingly dominated by combination drugs. The development also signals market challengers for Pfizer’s Caduet (amlodipine/atorvastatin) combination pill and other pipeline combination cholesterol drugs from Pfizer and Merck & Co. The Abbott/AstraZeneca partnership represents a crucial lifeline for maintaining each of the companies’ market share in the cholesterol drug market, with generic erosion demanding added efficacy benefits to justify premium prices.