NuPathe - On A New Route?

NuPathe PATH 071711

A splitting headache or migraine can ruin our day. Analgesics like Ibuprofen and Paracetamol, Triptans such as Sumatriptan, Ergotamines like Dihydroergotamine, and Corticosteroids like Dexamethasone are used to treat migraine. But the oral marketed migraine therapies are often associated with nausea, vomiting, poor or inconsistent relief and other adverse events.

Working on a new treatment that is believed to overcome the limitations of the currently marketed migraine medications is specialty pharmaceutical company NuPathe Inc. (PATH).

Zelrix, the company's most advanced product candidate is an active, single-use transdermal system that delivers Sumatriptan for the treatment of migraine. Sumatriptan is the most prescribed migraine medication. The anti-migraine patch Zelrix, which can be worn on the arm or thigh, delivers Sumatriptan through the skin using a process called iontophoresis. Zelrix is powered by SmartRelief, NuPathe's proprietary transdermal delivery technology.

NuPathe submitted the NDA for Zelrix in October 2010 under the 505(b)(2) regulatory pathway and has a FDA decision date on August 29, 2011. The 505(b)(2) regulatory pathway allows a company to rely, at least in part, on the FDA's findings of safety and/or effectiveness for a previously approved drug (the "reference drug").

The NDA submission was based on a comprehensive development program, including data from a pivotal phase III trial conducted in 530 migraine patients, where the efficacy and tolerability of Zelrix were compared with a matching placebo patch. In the trial, Zelrix met the pre-defined efficacy endpoints of a statistically significant improvement compared to placebo at two hours after patch application for pain free, pain relief, nausea free, photophobia free, phonophobia free and migraine free.

Zelrix is the first ever submission to the FDA of a transdermal patch for the treatment of migraine. The first ever transdermal patch to be approved by the FDA was for the treatment of motion sickness in the year 1979. Since then, a number of transdermal patch products have entered the market for various indications.

According to statistics, 28 million Americans suffer from recurrent migraines and it is estimated that migraines cost the taxpayers $13 billion in missed work or reduced productivity annually.

Triptans are the most commonly used medications for the acute treatment of migraine. The most prescribed Triptan - branded and generic Sumatriptan, in all dosage forms, had sales of about $2.08 billion in 2010. However, these drugs are known to be associated with too many side effects.

NuPathe claims that Zelrix will overcome the limitations of current migraine treatments since its transdermal patch not only allows for a more consistent and controlled delivery of Sumatriptan, but it also circumvents the nausea and vomiting that can occur when taking the drug orally.

If everything goes according to plan and Zelrix gets approved by the FDA, the product is expected to be launched in the first half of 2012. Needham analysts estimate that Zelrix, if approved, could bring in annual revenue of about $250 million by 2017.

In addition to Zelrix, NuPathe has two other products, which are in pre-clinical testing - NP201 ropinirole implant for the continuous symptomatic treatment of Parkinson's disease, and NP202 atypical, antipsychotic implant for the long-term treatment of schizophrenia and bipolar disorder.

A quick look at NuPathe's balance sheet...

Since its inception in January 2005, the company has incurred losses and negative cash flows from operations, and had an accumulated deficit of $83.52 million as of March 31, 2011. The company is yet to market a drug.

As of March 31, 2011, the company had cash of $32.77 million, sufficient to sustain operations into the first half of 2012. The company further strengthened its balance sheet last month by receiving an additional $10 million term loan under its secured credit facility.

NuPathe went public on August 6, 2010, offering its shares at $10 each. Since its IPO, the shares have traded in a price range of $5.06 to $10.22. The stock closed Friday's trading at $7.32, down 1.22%.

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