The ink is barely dry on the deal Pozen (NASDAQ:POZN) signed with Sanofi to market its cardiovascular drug but the company isn’t waiting around to pursue its next drug target – cancer.
Chapel Hill-based Pozen licensed the two dosages of its PA drug to Sanofi in September, a deal that pays Pozen $15 million up front with the potential for another $20 million in pre-commercialization milestones. Pozen also stands to gain sales milestones and future royalties on Sanofi’s sales of PA, an aspirin combination drug developed to deliver the heart-protective benefits of aspirin in a pill that’s safer on the stomach.
But the Sanofi deal covers only the U.S. market and Pozen is still looking for partners who could sell PA in other markets around the world. While Pozen looks for those cardiovascular partners, CEO John Plachetka said the company is also searching for someone interested in the drug’s potential in cancer.
“If we can produce a medicine that has not only a cardiovascular secondary prevention claim but maybe also a cancer secondary prevention, we just think that’s a wonderful public health benefit and one we’d like to bring to market with a partner,” Plachetka said on a conference call with analysts to discuss third quarter financial results.
Plachetka notes that there is a growing amount of scientific literature documenting aspirin’s role in preventing cancer. What holds aspirin therapy back are the gastrointestinal risks associated with the drug and the fact that as a generic, aspirin doesn’t offer a company a way to make much money.
PA technology’s advantages
Pozen overcomes both hurdles. The company’s delayed-release PA technology delivers aspirin in a way that the company has showed in clinical trials is safer on the GI tract compared to aspirin alone. As a generic, aspirin won’t be very expensive. But as a patented technology, Pozen’s PA could prove attractive for a larger partner looking to add a cancer treatment to its drug portfolio. Plachetka said Pozen is looking specifically at Europe because many of the epidemiologic trials showing aspirin’s cancer benefit are being done in Europe.
“It could do the same thing as these relatively new biologic therapies that are costing tens of thousands of dollars a year at a much, much lower rate,” Plachetka said on a conference call with analysts to discuss third quarter financial results. “We think that there’s a cost benefit for many of the countries there. We think that the approval process in Europe is expert driven. Many of these wonderful groundbreaking studies are happening in Europe.”
Plachetka said Pozen will seek scientific advice on its cancer strategy in the first half of next year. He emphasized that Pozen has no intention of pursuing lengthy and expensive studies of aspirin in clinical trials. Pozen plans to use the aspirin therapy information that has been published or will be published from clinical trials conducted by others.
Pozen reported $2.6 million in third quarter revenue compared to just $900,000 in revenue for the third quarter in 2012. The revenue in the period last year came from royalties for osteoarthritis drug Vimovo, which is marketed by AstraZeneca. Third quarter 2013 Vimovo revenue was $1.6 million; an additional $1 million in revenue came from the amortized upfront payment Pozen received from Sanofi in the PA licensing deal.
Pozen still reported a net loss in the third quarter of $4.8 million, down from $5.7 million in the year ago period. But the company has plenty of cash on hand. In fact, it has far more than it needs – nearly $90 million.
Cash back?
A Food and Drug Administration approval decision on PA is expected in January. As Sanofi takes on the role of commercializing PA, that drug program will require fewer resources. Plachetka said Pozen would spend what’s necessary to meet the requirements for filing for marketing authorization in Europe. What’s left could be returned to shareholders. Plachetka said that the company has evaluated its finances and determined it has more than enough for its operations.
“We know what we’re going to spend and there is literally tens of millions of dollars that we’re not going to spend,” Plachetka said. “And so some of that could find its way to shareholders sooner rather than later and I would not even rule out still in 2013.”
As Pozen pursues partnering opportunities for PA, it will do so without the executive who has spearheaded those efforts for the last four years. Liz Cermak joined Pozen in 2009 after 25 years in various sales and marketing roles for Johnson & Johnson. Cermak, who became Pozen’s first chief commercial officer, will retire from the company at the end of the year. Cermark’s responsibilities will then shift to Dennis McNamara, Pozen’s vice president of business development.
