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FROM THE ANAlySTS COUCH

Allergic rhinitis: market evolution

Matthew J. Clark and Ryan P. Million
During the past decade, the market for branded products for allergic rhinitis has come under intense pressure, owing to a combination of over-the-counter (OTC) switches, patent expirations, poorer insurance tiering in the United States and exclusivity challenges. Consequently, this therapeutic area is no longer a priority for many companies (timeline). Nevertheless, recent market events suggest that allergic rhinitis should still be monitored by drug developers, especially as companies diversify their business models into generics and OTC businesses. For example, for both major drug classes for allergic rhinitis antihistamines and intranasal steroids (INS) new products have been launched, major deals have been made and OTC sales have been strong. In addition, the INS class has shown considerable resilience to generic competition and health insurance pressure. This article discusses these market events, highlighting the future potential of the area. Intranasal steroids In the INS class, fluticasone propionate (Flonase; GlaxoSmithKline (GSK)) reached blockbuster status, but was largely replaced by generic entrants after its loss of exclusivity in 2006. However, the remaining products in this class have proven surprisingly resilient. Unlike the antihistamine class, INS products remain well covered by the majority of US health insurance plans, generally with second-tier status. In addition, insurance companies have not required prior treatment with generic fluticasone as a basis to reimburse branded products. As an example, both market share and sales of mometasone furoate (Nasonex; ScheringPlough) increased after the entry of generic fluticasone in the United States, according to the 2007 company annual report. Two new product launches are notable in this class. First, in June 2007, GSK launched its fluticasone follow-on product, Veramyst, in the United States. This product has a broader label than other INS products: the package insert indication specifies treatment of symptoms of seasonal and perennial allergic rhinitis, rather than focusing specifically on nasal symptoms. The ability to market the additional relief of eye symptoms may offer an important point of differentiation from existing INS products, both branded and generic. GSK reported 2008 worldwide sales of Veramyst of US$134 millon, of which $104 million came from the United States. The second addition was the US launch of ciclesonide (Omnaris) by Sepracor in January 2008. Sepracor acquired the US
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rights to Omnaris and Alvesco (an inhaled formulation of ciclesonide for asthma) from Nycomed in a deal involving $150 million up front plus a potential $280 million in milestone payments and royalties1. Antihistamines Antihistamines for allergic rhinitis have experienced major commercial pressure in recent years. Starting with Wellpoints challenge to the FDA to convert the existing antihistamine products, including the highly successful loratadine (Claritin; ScheringPlough), to OTC products, this market has faced a series of setbacks to the original developers of second-generation antihistamines (timeline). However, one notable product launch in this class has occurred since the expiration of loratadines US patent in 2002. In late 2007, levocetirizine (Xyzal), which has been available in European countries since 2001, was launched in the United States by UCB and SanofiAventis. The product offers 24-hour symptom control and rapid onset of relief. Sales of Xyzal in the first half of 2008 were $227 million worldwide and $68 million in the United States, according to UCBs half-year report. Although these figures are far from the multi-billion dollar sales of Claritin in its heyday, Xyzal will continue to challenge desloratadine (Clarinex), ScheringPloughs follow-on to Claritin, for branded antihistamine prescriptions. Over-the-counter market The OTC market is an important channel for the distribution of allergic rhinitis products. Patients are both capable of identifying their condition as well as properly and safely administering the oral antihistamine treatments. In the United States, loratadine (Claritin and Alavert) and cetirizine (Zyrtec) have been the major antihistamine entrants into the OTC market. Importantly, these brands have been well received by consumers; Claritin has become one of the most successful OTC products, and its 2007 US sales were more than $400 million. Johnson and Johnsons introduction of OTC Zyrtec, part of the $16.6 billion purchase of Pfizers consumer health business, has also had a good start commercially.
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Timeline | Selected recent events in the allergic rhinitis market

Pseudoephedrine manufacturers voluntarily offer phenylephrine decongestant combination OTC products The Combat Methamphetamine Epidemic Act is passed in the US, limiting consumer transactions and moves pseudoephedrine products behind the counter SanofiAventis partners with Prasco Laboratories to launch an authorized fexofenadine generic and eliminates the 6-month exclusivity window for Teva and Barr

WellPoint Health Networks petitions the FDA for the mandatory switch of Claritin (loratadine), Allegra (fexofenadine) and Zyrtec (cetirizine) to OTC status

US launch of Xyzal (levocetirizine) US launch of Veramyst (fluticasone furoate)

1998

2002

2005

2006

2007

2008

US launch of Clarinex (desloratadine) US launch of generic Rx loratadine Alavert (loratadine) launches OTC Claritin launches OTC

Teva and Barr launch an at-risk fexofenadine generic

Generic fluticasone launches in the US Johnson & Johnson purchases Pfizers Consumer Products Division, including rights to OTC Zyrtec

Launch of OTC Zyrtec US launch of Omnaris (ciclesonide) FDA issues non-approvable letter for loratadinemontelukast combination; NDA was subsequently withdrawn

NDA, new drug application; OTC, over the counter.

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N e w s & a N a ly s i s
AllERgiC RHiNiTiS | mArket IndIcAtOrS

The INS class of allergic rhinitis treatments is less suited to being converted to OTC products in the United States, although several INS brands are available OTC in Europe. GSK investigated introducing OTC Flonase in the United States as far back as 2003, but abandoned the idea following speculation that the FDA would be reluctant to approve a steroid-based spray. Additionally, the incorrect use of the intranasal delivery device led to adverse events, such as nose bleeds, when tested with US patients, representing an additional barrier to OTC classification. With GSKs abandonment of OTC Flonase development, it seems unlikely that OTC INS products will be launched in the United States. combinations and biologics ScheringPlough and merck partnered to develop a pill combining loratadine (Claritin) and montelukast (Singulair), with the expectation of providing improved relief of nasal congestion. Combination products have been extremely successful in several therapeutic categories, including asthma, and this strategy targets the strong co-morbidity between asthma and allergy, particularly in children. However, an FDA submission in August 2007 based on new clinical trial data was withdrawn after the FDA issued a non-approvable letter. The allergic rhinitis market has not yet seen the launch of a biologic, but the success of omalizumab (Xolair; Genentech/ Novartis) in severe asthma suggests that an opportunity may exist in the hardest-to-treat patients. Although allergic rhinitis is not a life-threatening condition, quality of life can be severely affected and patients who are willing to undergo regular immunotherapy injections may also be willing to undergo periodic administrations of an effective biologic therapy. market indicators Despite the entrance of generics and other challenging events (timeline), the allergic rhinitis market has seen substantial activity in recent years, indicating that the field should still be monitored by major companies. The market potential is considerable, given that allergic rhinitis affects a large number of people in both developed and emerging markets, comparable to other major chronic conditions, such as diabetes, high cholesterol and hypertension (FiG. 1). There are 820 million drug-treated patients in the United States alone, and worldwide sales of allergic rhinitis products have reached $6 billion
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a
61.5 million 62.0 million 29.5 million

b
US prevalence (millions)

80 60 40 20 0

United States

Europe

Japan

Allergic rhinitis Hypertension

Diabetes

High cholesterol (240 mg per dl)

Figure 1 | The prevalence of allergic rhinitis is comparable to other major chronic diseases. Nature Reviews | conditions14. a | Global prevalence of allergic rhinitis2. b | Estimated US prevalence of various chronicDrug Discovery

Table 1 | Selected agents in late-stage development for allergic rhinitis*

Drug Bilastine company Properties (delivery route) Phase FAES Non-sedating histamine H1 III Farma SA receptor antagonist (oral) Additional comments In January 2008 Inspire terminated its North American license; in July 2008 FAES reported that the European submission for regulatory approval is scheduled for February 2009 Two Phase III trials initiated since December 2007

Azelastine Meda AB and fluticasone (MP29-02) COL-118 Collegium

OX-NLA

Meda (Orexo)

V-0114

Pierre Fabre

Fixed-dose combination III of a histamine H1 receptor antagonist and a corticosteroid agonist (nasal) Combination of a sedating Planned The therapy is a modified and a non-sedating histamine III release formulation that H1 receptor antagonist (oral) combines a short-acting sedating antihistamine with a longer acting, non-sedating antihistamine, intended to be taken at bedtime Liposomal nitric Planned The unique formulation may oxide-donating derivative III decrease cetirizines local of cetirizine (nasal) irritating properties and allow on demand use owing to rapid onset of action Antihistamine (oral) III None

*Sources: Investigational Drugs Database; ClinicalTrials.gov; Adis Insight; websites of the companies listed.

per year1,2. Selected products in late-stage development are shown in tABle 1. In addition, a drug development presence in allergic rhinitis has strategic value owing to the strong link with asthma as a co-morbidity and the crossover in effective treatments, such as corticosteroids. Perhaps most importantly, the allergic rhinitis market represents an opportunity for pharmaceutical companies to continue to diversify and evolve their business models by incorporating new OTC and generics businesses, as Johnson & Johnson have done with their recent acquisition of Pfizers consumer unit.

Matthew J. Clark and Ryan P. Million are at Trinity Partners, 100 Park Avenue, Suite 1600, New York, New York 10017, USA. emails: rmillion@trinitypartners.com; mclark@trinitypartners.com doi:10.1038/nrd2762
1. Therapeutic Categories Outlook. Cowen and Company (September 2008). 2. Decision Resources, Inc. Immune and Inflammatory Disorders Study #55: Allergic Rhinitis. (Decision Resources, Inc., Waltham, Massachusetts, 2005). 3. Statistical Fact Sheet Risk Factors. American Heart Association [online], http://www.americanheart.org/ downloadable/heart/1045754065601FS13CHO3.pdf 4. High Blood Pressure, Whos at Risk? National Heart Lung and Blood Institute (National Institutes of Health) [online], http://www.nhlbi.nih.gov/health/dci/Diseases/ Hbp/HBP_WhoIsAtRisk.html

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