s we get closer to the authorities hopefully giving us a green light, I thought tonight it's a good chance to write about a product in our field, a little on it's history and how it has performed. It's in our field yes, but certainly not in our league.
Please now enjoy.
INTRO
Nope, not what you think, it's not a Humira re-hash.
Flexion Pharma has a product called Zilleta. Their product comprises of microspheres that contain corticosteroids that are slowly released over time infused directly via intra articular shots.
Corticosteroids is an effective way of temporarily bringing down typical pain from joints. A Mozz note here, Cortisone is a type of corticosteroid.
Let's explore this a fraction more:
Being quite specifically targeting, corticosteroids can be quite effective in some inflammatory indications but also ineffective in others such as COPD. One of the pathways that our own iPPS molecule helps to downregulate is the transcription factor known as NFkB. Corticosteroids, primarily suppress inflammatory proteins, specifically, liganded glucocorticoid receptors (GR) to coactivators and recruitment of histone deacetylase-2 (HDAC2).1
SO WHAT'S THE PROBLEM?
Short term, it seems the side effects aren't too serious, the usual:
Actually hold up, there are some pretty serious possible effects there!
Joint damage?
So what, I'm going to take Zilretta to predominantly stop or reduce my knee pain but I could elicit Joint Damage?
Does that sound like a win win to you?
They mention Weakening of bones?
Bones weakening? PASS!
They mention back pain, heck they mention eye pressure.
I'm a pretend pirate at best of times but I don't actually want to have to wear an eye patch!!
All of that above is from their own website!!! 2 (See the big red arrow above).
Let me just interject here for a sec and tell you that we (iPPS) haven't ever had ANY of those symptoms. That would've been a crazy stand out for the ol' Mozz...IF we are taking Zilosul for pain and we were causing further damage to the very joint! I don't think I'd be proclaiming Zilosul from any rooftops if that were the case!!
Knee pain bad...but joint destruction? No way.
But even more sadly for them, it's not so much the shorter term side effects that I'd be worried about, it's the longer termed ones! Whether it be immediate release or this extended release, at the end of the day the patient on one hand is getting good short pain relief and early function improvement but it's coming at a longer term cost.
"Limits on the number of cortisone shots - There's concern that repeated cortisone shots might damage the cartilage within a joint. So doctors typically limit the number of cortisone shots into a joint. The number can depend on the joint, the diagnosis and other factors".3
...and this from the US. Arthritis Foundation: 4
"Repeated cortisone shots can cause the cartilage to deteriorate and weaken tendons and ligaments around the joint".
As well as that, cortisone shots can spike glucose levels. Remember this point, we'll come back to it soon.
Listen to this one, it's a well established fact that corticosteroids can damage your tissues around the joint and indeed cartilage. Flexion argued that their extended release tech results in " ...plasma levels are 10 times lower than what a standard cortisone shot generates, so patients do not experience the sudden spike in blood glucose levels that occur with cortisone. 5
The company estimates that some circa 20% that suffer from OA of the knee are diabetic as well.
The above isn't just some random quote, it's from the Harvard Medical Medical School.5.5 IPPS's major claim to fame is that it materially reduces inflammation, allowing the body to finally fight back. But I digress with my future optimistic indications!
Flexion also knew about side effects involving immediate release cortisone shots which "... include the acceleration of cartilage degeneration in the knee as well as joint damage". In response they suggested that "...those suffering from a chronic condition such as osteoarthritis will have significantly reduced complications than the side effects associated with high-dose cortisone shots given the extended-release nature of Zilretta. In addition, there should be less damage to cartilage and joints over time than with cortisone shots, which is a serious concern given OA is a chronic condition with no cure".
Initially Zilretta was only approved for a single use and in fact their label carried the statement:
“not intended for repeat administration”.
However in 2019 they successfully lobbied the FDA to change the label to:
"...the efficacy and safety of repeat administration” of the drug “have not been demonstrated”.
Is this a case of laxed rules back then and they got away with such statements without having to do further comprehensive testing as their drug had already been approved? Maybe.
MODEL?
Yes all very good Mozz, understand about the corticosteroids...but wouldn't it be good to see actual sales of such a drug and how it increased over time, what was the acceleration? Can we expect anything like this?
Well, let's do that, let's take a look.
It was back in 2017 they got approval by the FDA.
I'll have to present this on two parts, the first few years by quarter, and then the last couple of years by year.
Some nice acceleration there. I sometimes say, the first quarter or two might be anemic and we will question PAR; Gosh, we finally get licensed, we finally make it to the sales platform and we get how many dollars of sales? What am I missing?
But look at Zilretta...such a slow start...but look at the acceleration thereafter. And I've already pointed out how this drug isn't a superstar when it comes to side effects and potential long term damage.
Sales from there were approx 105.5 Million in 2022 and $111.1 in 2023 6, fairly flat in the last three to four or so years, Covid may account for some of that and the company (Flexion got taken over by Pacira for $430 Mil back in 2021) suggests that due to the label change it should start seeing better increases in sales as Docs get more comfortable with the extended release -v- other corticosteroid solutions.
---- STOP PRESS ----
This just in...here are the 2024 First Quarter sales. 6.5:
Looks like sales have hit a ceiling? 25.8 x 4 is still roughly 100 mil. per annum.
What then is the patient satisfaction for this drug?
"Zilretta has an average rating of 5.8 out of 10 from a total of 53 reviews for the treatment of Osteoarthritis. 43% of reviewers reported a positive experience, while 43% reported a negative experience".7
Wouldn't it be good to compare us with them from a user satisfaction point of view. We can't do that from an iPPS view but how about pill format?
Here you go:
"Pentosan polysulfate sodium has an average rating of 7.5 out of 10 from a total of 93 reviews for the treatment of Interstitial Cystitis. 68% of reviewers reported a positive experience, while 22% reported a negative experience".8
Indeed that's a much better satisfaction rate for PPS...but you know what, that was for the pill format of Pentosan. We would have to wait for a number of patients to go through once we are licenced before we could get a sense of what the patients are saying, right? Well how about SAS? 9
I've shaded it above in green but PAR also alluded to it too (red box above). That's a very high satisfaction rating and in fact PGIC measures have always been consistently high in the stats over the years where iPPS is concerned.
WRAP
My point of all this is, look at the potential for iPPS, despite the drug Zilretta being vastly inferior to ours.
We don't have the safety issues, we aren't intra articular, we won't need repeats for many, at least for a year and even more than a year for some. We aren't single targeting., we are systemic, multimodal. We have both the symptomatic relief but we have the golden key - potential halting of the disease and one even better than that, regression. To be able to rescind the osteophytes, to be able to materially accelerate the regression of the BML's...to reduce the very essence of OA, synovial inflammation...that's something special and indeed never before witnessed and executed safely.
Zilretta sells for around $600 USD per dose and patients typically needs around 2 or 3 doses per year, it works out to be $1800 per annum for 3 doses. Our pricing is supposed to be around the $2500 to $3000 USD mark which would sound highly reasonable considering the benefits of both symptomatic relief and DMOAD prospects.
There is a statement that says that the owners of Zilretta are targeting some 7.4 million patients that would consider intra-articular injections, be it corticosteroids or HA. It's kinda fun to dream but imagine we manage to take just 10% of that market in say a handful of years after we are approved.
Well that's a hefty 740,000 x $2500 USD x 20% which is a fairly conservative royalty specially if we are showing signs of DMOAD.
That computes out to $370,000,000....not bad...then you need to convert it back to AUD and slap a reasonable PE ratio on it. I've convinced my mate to the east to not use the big 50, he is using 30...I use 20 but don't tell him that, let him dream way with his 30.
I get 2.8 Billion.
Now the fun part of that is divvying it out against our current shares on issue. We currently have 349.5 million on our books, it sounds like a lot...but is it?
Merck 2.5423 Billion shares Pfizer 5.66 Billion Lilly 909.4 Million
Let's say there is a little more dilution and we get to 400 million shares and our Paul Rennie pulls a Rabbit outta the hat and we have little to no further on-market dilution and we all celebrate that at the nearest pub.
Hot Copper pals, $2.8 Billion divided by a paltry 400 million gets us to $7.
That's pretty conservative. No @Babbanap, that's not tomorrow....but maybe it's quicker than we all realise.
Don't forget the market is forward looking...you get a commercial deal out of this maybe in a few months time, maybe by the end of the year and it's all going to pivot fairly da*n quickly.
For much lessor drugs that do a whole lot of damage and yet are chalkind up good sales, it does look promising for us. FDA and TGA results may only be a matter of weeks away.
A green light here will start to turm many gears...
Keep the faith. ..and what's that saying that@Huts7 always says?
s we get closer to the authorities hopefully giving us a green light, I thought tonight it's a good chance to write about a product in our field, a little on it's history and how it has performed. It's in our field yes, but certainly not in our league.
(20min delay)