Tris Pharma Benefits from Pfizer/NextWave Deal
Who’d have thought a 60 year old off-patent drug for attention deficit hyperactivity disorder would lead to a $700 million payday? That’s how much New York-based Pfizer (NYSE: PFE) agreed to pay for NextWave Pharmaceuticals of Cupertino, CA, last week. NextWave can credit at least part of that windfall to its development and manufacturing partner, Tris Pharma, for figuring out a way to make long-acting, liquid versions of older drugs.
“When we started working on the concept of a long-acting liquid that was consistent, reliable, and acceptable to the FDA, no one else in the industry was doing this,” Tris CEO and founder Ketan Mehta told me in an interview. “Pfizer’s investment is a huge validation for our technology platform and intellectual property.”
Mehta worked as a pharmaceutical scientist for a number of companies before starting Tris, based in Monmouth Junction, NJ, in 2000. His aim was to solve a long-standing problem in medicine—the inability of many people to swallow pills. Though there are no hard and fast numbers on how many people can’t, or won’t, swallow pills, it is a well-recognized problem. It can stem from an overall difficulty in swallowing, a condition called dysphagia that often afflicts the elderly, or a dislike or fear of pills (just ask a parent with small children how common that is).
“This is a huge unmet need in the pharmaceutical industry,” said Mehta. He saw an opportunity to come up with a manufacturing process that could add significant value to existing drugs, without necessarily having to create new ones.
The technical challenges of turning a pill into a liquid without diluting its efficacy are greater that one might assume, however. Tris’s approach is to first bind the drug molecules to a polymer that remains stable in liquid. Then, in order to create a long-acting version that can stay in the blood stream up to 24 hours without multiple doses, Tris developed a tough but flexible coating for the drug molecules that releases the medication in controlled amounts over time. Finally, the company had to create a way to incorporate the coated molecules into a liquid that is pleasant to the taste and could be consistently reproduced, so that the dosage is always stable. And its reformulated drugs have to go through clinical trials, just like a new drug.
Tris licensed its technology to NextWave and the two companies worked together to develop a liquid version of methylphenidate hydrochloride, the active ingredient in the off-patent drug Ritalin, first patented in 1948. The resulting drug, Quillivant XR, won approval from the Food & Drug Administration on September 27, and within two weeks Pfizer exercised its option to buy NextWave. Tris will continue to make the drug, and receive royalties. It is also working with NextWave, and now Pfizer, to develop a chewable version of the ADHD drug, which it expects to submit to the FDA for approval in 2013.
The Tris technology has not been a slam dunk. Its first product to reach the market, a liquid long-acting version of clonidine for high blood pressure, was approved in 2011 but has not been commercially successful, Mehta said. This year marked a turnaround, however, with the success of Quillivant XD the latest in a string of successes. In May Tris and Allegan, MI-based partner Perrigo (NASDAQ: PRGO) won FDA approval of dextromethorphan polistirex, an extended release liquid version of the over-the-counter drug Delsym for coughs. The drug reached store shelves in August. And in February Tris announced an agreement with Vernalis (LSE: VER), based in Winnersh, England, to develop at least six liquid versions of cough and cold medicines. Mehta said the company has several other development partners and is in talks with more.
Looking out, he is particularly enthusiastic about the possibility of developing liquid versions of morphine or oxycodone because they would be harder to abuse. “You can’t crush it and snort it…and that makes it difficult for addicts to abuse” the medication, he said.
As for working with its first Big Pharma partner, Mehta said his company had to clear a lot of hurdles to make Pfizer comfortable. To keep up with the expected demand for the ADHD drug now that Pfizer will be marketing it, Tris is expanding its manufacturing and laboratory capacity from 90,000 square feet to 200,000 square feet with the purchase of a building a few miles from its headquarters.
As for finances, “we are right now well positioned because of the good cash flow from these products,” he said. Mehta hasn’t ruled out an IPO, but nothing is in the works. “We have enough cash to finance our good work.” That’s not hard to swallow.