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Neurocrine Biosciences Inc. Message Board

  • DewDiligence DewDiligence Feb 10, 2004 4:11 PM Flag

    New competition from Merck:



    UPDATE - Merck licenses late-stage sleep drug from Lundbeck

    Tuesday February 10, 3:53 pm ET
    By Jed Seltzer and Toni Clarke

    NEW YORK, Feb 10 (Reuters) - Merck & Co. Inc. on Tuesday said it plans to license a sleep disorder drug from H. Lundbeck (Copenhagen:LUN.CO - News), in a bid to enter an increasingly congested but lucrative market. Merck, which is anxious to acquire new drugs to offset declining sales from those losing patent protection, said it will pay an initial $70 million for U.S. rights to gaboxadol and up to $200 million in further payments as certain development goals are met.

    The $2 billion market for sleep disorder drugs, currently dominated by Sanofi-Synthelabo's Ambien and King Pharmaceuticals' Sonata , could eventually rise to $3 billion, according to Bob Parente, an analyst at Leerink Swann.

    Merck's drug is in Phase III, or late-stage, clinical trials, but not expected to be filed with regulators until late 2006 or early 2007. "Our consultants say this market could be impacted significantly by the power of Merck's sales force," said Parente, even though he said it is unclear whether Merck's drug is as effective as Ambien or newer drugs in development.

    In the meantime, rival drug Indiplon, which is being developed by Neurocrine Biosciences and Pfizer Inc., is expected to reach the market in early 2005, and a drug from Sepracor Inc. called Estorra could be approved later this year.

    Merck hopes to differentiate its drug by arguing that it works differently and does not have the potential dangers of the benzodiazepine class of drugs, which can cause withdrawal or abuse. Merck argues that newer drugs, such as Indiplon and Estorra, may have similar side effects. Unlike the old benzodiazepines such as Valium, the new class of drugs are not chemically benzodiazepines. Even so, they bind to the benzodiazepine site of the receptor, said Dennis Choi, executive vice president of Merck's neurosciences research unit. That makes the drugs vulnerable to the same problems benzodiazepines traditionally have, he said. Merck said its drug is neither a benzodiazepine chemically nor does it bind to the benzodiazepine site of the receptor.

    Gary Lyons, chief executive of Neurocrine Biosciences, dismissed Choi's comments. "It's not whether the drug binds to the benzodiazepine site. It's a question of whether the drugs are benzodiazepines, and these are not," he said. "We've treated over 7,000 patients in clinical trials and have specifically looked for any benzodiazepine effects. And patients on Indiplon don't need to increase their dose to maintain the effect, and there are no withdrawal effects."

    Sepracor officials were not available for comment.

    In teaming up with Merck, Lundbeck, of Denmark, gains a strong U.S. marketing partner. "This is a very nice deal. They've been looking to get access to the U.S. market and this way they get access at a lower risk than would normally be the case, because they can build up their sales force behind a Merck product before gaboxadol gets to market," said Max Hermann, an industry analyst with ING in London.

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