Saturday, October 07, 2006

New River Pharma Drug Approved

More great news for Virginia biotech companies. This is from the Roanoke Times:

Will a new ADHD treatment make or break New River Pharmaceuticals?
A Radford company gets the go-ahead by the FDA to produce its first drug, NRP104
By Jeff Sturgeon | | 981-3251

A green light glowed Friday for a clutch of Radford drug executives who received tentative approval to sell a potentially lucrative treatment for attention deficit hyperactivity disorder.

New River Pharmaceuticals Inc. said the approval "is contingent upon final scheduling by the U.S. Drug Enforcement Administration."

The company predicted sales will begin during the April-June quarter of 2007. New River previously hired Organichem Corp. of Rensselaer, N.Y., to produce the pills. Officials don't envision filling any new manufacturing jobs.

But the Food and Drug Administration gave Western Virginia a regional business milestone: a homegrown biotechnology company taking a prescription medicine to market.

Success seems to be all the more remarkable because 10-year-old New River Pharmaceuticals employs only about 35 people (though it received help from a partner company that is larger).

The stock closed Friday before the news was released at $26.21, down $1.08, on a slightly higher-than-average trading volume of 567,949 shares.

ADHD is a psychiatric condition responsible for classroom fidgetiness and general unruliness seen in some children. Researchers have estimated that nearly 8 percent of school-age children had ADHD in 2003 based on information from parents, according to the Centers for Disease Control and Prevention. That adds up to millions of potential customers for New River, which sought approval to initially market its drug to children ages 6 through 12.

Drugs are already on the market for this condition and selling quite well. New River's treatment is designed to be as effective as these drugs but comes with a bonus. It's designed to produce little or no recreational high for those inclined to exceed the therapeutic dose or ingest it by unconventional means, such as snorting.

If regulators think the proof is adequate, they could grant doctors leeway to prescribe refills, saving patients the trouble of visiting the doctor monthly. That, in turn, could boost the drug's popularity beyond that of more tightly controlled ADHD stimulants, such as market leader Adderall XR. Friday's announcement left the classification question unresolved, however.

The most bullish backers say New River's drug could succeed Adderall XR as the market leader. This would be in keeping with New River's stated mission to create improved versions of widely prescribed drugs.

Earlier in the process, New River formed a strategic partnership with Adderall's manufacturer, English drugmaker Shire, in return for assistance. And Shire is planning to help market New River's drug as a next-generation improvement over its own in exchange for a share of the wealth it generates.

Andrew Forman, an analyst with W.R. Hambrecht+Co., whose firm helped take New River public two years ago, predicted before the announcement that sales could total $244 million in 2007 and rise to nearly $1.2 billion in 2010. By that time, New River would like to have approval to market to adults as well.

For perspective, the top-selling drug in the United States last year, cholesterol-lowering Lipitor, generated revenue of $8.4 billion for its owner, said data tracker IMS Health.

If Forman is correct, New River's drug would climb to the status of a blockbuster, an industry term for any preparation that brings in $1 billion or more for its owner.

That's not $1 billion in profit, mind you. Forman predicts New River's share of the profit will be closer to $200 million in 2010 and $5 million next year.

"This is the most important day in the company's history," Forman said Friday before the announcement. "You can't do anything in the pharmaceutical industry unless the FDA approves your product. This is the first time the FDA has responded to this company doing anything since they started."

A green light would "validate" the company's drugmaking technology and, by extension, drugs in its pipeline of future products, Forman said.

Less clear is what kind of impact a favorable announcement might have on the company's hometown of Radford. New River Pharmaceuticals is not a highly visible corporate citizen amid the city's small business community. Chief Executive Officer R.J. Kirk, who lives in rural Belspring, is perhaps better known in Radford than his business because of his vocal participation on the board of visitors of Radford University.

Michelle Linkous, executive director of the Radford Chamber of Commerce, was not aware that Friday was an important day for the company, nor was the chamber president Robert Roy.

But many local eyes are watching. Joe Meredith, president of the Virginia Tech Corporate Research Center in Blacksburg, where the company's main research and development laboratory is located, said by e-mail:

"I would suggest that FDA approval continues to reinforce the notion that great science and great businesses are continuing to grow at the CRC."

Still ahead would be such decisions as the drug's name and appearance. The compound still goes by its laboratory name of NRP104. Chemically, it's lisdexamfetamine dimesylate (pronounced liz-DEX-am-feta-meen die-MEZ-il-late).

Though a mouthful, it's a term that might be well worth learning to say.

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