June 4, 2012 / 7:05 PM / 7 years ago

Auxilium penile curvature drug meets study goal

(Reuters) - Auxilium Pharmaceuticals Inc said its drug to treat penile curvature fared better than a placebo in late-stage studies, raising hopes that Pfizer Inc will pick up rights for the indication.

Shares of Auxilium rose as much as 17 percent on Monday.

The drug, Xiaflex, reduced curvature of the penis by more than 30 percent in two late-stage trials on men suffering from Peyronie’s Disease, a condition caused by the build-up of protein collagen.

Xiaflex is already marketed as a treatment for Dupuytren’s Contracture, a condition that results in the tightening of hand muscles, and is also being tested as a treatment for frozen shoulder syndrome. Both diseases are caused from the accumulation of collagen.

Pfizer Inc, which markets Xiaflex for the hand-disease in Europe, has the right to negotiate for exclusive rights to all of the drug’s indications in the continent.

The latest data may prompt the viagra-maker to pick up the right for the penile curvature indication.

“Our assumption is that (Pfizer) is going to exercise that option,” Auxilium Chief Executive Adrian Adams said.

“They are obviously aware of the data and I am sure that in the not too distant future, we will be having discussions with them,” he said.

Auxilium said Xiaflex was well tolerated in late-stage Peyronie’s Disease studies, and it plans to file for marketing approval of the drug by the end of the year.

Peyronie’s Disease makes the penis bend in an abnormal angle. The condition, which affects men between 40 and 60 year of age and older, could cause problems such as narrowing of the penis, shortening of the penis and pain during intercourse.

BIG GAIN

“We think the longer-term U.S. market is probably $100 million plus, as the market would grow from the 5,000 to 6,000 patients currently receiving injections/surgery,” said RBC Capital analyst Michael Yee, who expects Xiaflex to win approval for treatment of the penile condition.

Auxilium estimates that between 65,000 and 120,000 Peyronie’s patients are diagnosed every year in the United States, based on historical data.

RBC’s Yee said he expects the new Xiaflex data and sales of the company’s testosterone gel testim to push up the stock and didn’t rule out a bid for the company.

CEO Adams said any deal would be considered at the time it’s offered, and his focus was on building the business.

“I’ve sold three companies in my career. And in each one of those situations, the intention is never to sell the company itself.

“What I have learnt with Auxilium is that we can nicely flourish from a business perspective and we intend to grow in the future.”

Adams said he expects the company to achieve profitability in 2013, which is in line with Wall Street expectations.

The Pennsylvania-based company’s shares, which have lost about 6 percent of their value in the last three months, were up 14 percent at $21.51 on Monday on the Nasdaq. They rose to a high of $21.99 earlier in the session.

Reporting by Vidya P L Nathan in Bangalore; Editing by Roshni Menon and Joyjeet Das

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