(Reuters) - A first-of-its-kind drug for patients who face difficulty in going back to sleep after abruptly waking up in the middle of the night is expected to hit market next year, with the U.S. approval Wednesday of Transcept Pharmaceuticals’ Intermezzo.
Transcept, which specializes in developing therapies in the field of neuroscience, said its marketing partner Purdue Pharmaceutical Ltd had until December 8 to notify if it would proceed with the commercialization.
“Assuming that they do so before December 8, we would expect to launch some time in the second quarter,” Transcept Chief Executive Glenn Oclassen told Reuters.
Oclassen said the company had already received an upfront payment of $25 million, and was eligible to receive another $90 million as and when certain milestones tied to patents or sales of the drug were met.
He added that Transcept would also receive royalty ranging from mid-teen to mid-twenty percent on sales of the drug.
Purdue would be responsible for all the marketing expenses related to the drug under deal.
Intermezzo targets a type of insomnia that Transcept estimates affects about 22 million people in the United States.
“Now, about 3-4 million of that group actually go to the doctor and say, ‘Can you help me with this problem?’ ... (and) that is our core initial market,” Oclassen said.
That kind of patient population, Oclassen estimates, would translate to sales of about $2 billion a year.
“I hasten to say, that is not our sales forecast, but that is a kind of a gross potential sales target,” the CEO added.
Zacks analyst Jason Napodano expects a more modest number — sales of about $250 million annually.
Intermezzo, chemically known as zolpidem tartrate sublingual, is a lower dose formulation of zolpidem tartrate that was approved by FDA in 1992 as Sanofi’s widely-used sleeping pill Ambien.
The drug has to be placed under the tongue to let it disintegrate completely before swallowing, and is designed to be taken only in the middle of the night.
Patients must have at least four hours of bedtime remaining after its intake, Transcept said in a statement.
“You only take it when you actually need it,” Oclassen said.
“We think that general approach will have some appeal to people who might not otherwise ask their doctor for help.”
The recommended and maximum dose of the drug is 1.75 mg for women and 3.5 mg for men, taken once per night.
“With this lower dose, there is less risk of a person having too much drug in the body upon waking,” Robert Temple of the U.S. Food and Drug Administration’s Center for Drug Evaluation and Research said.
The company, which had been trying to get the drug approved for the past two years, has faced rejection twice on lingering safety issues related to possible impairment of driving ability.
The stock had lost about a quarter of its value since July, when it warned of a second rejection for Intermezzo.
The approval on Wednesday, four days before the review date set by the FDA, sent the company’s stock up as much as 37 percent on Nasdaq. It later pared much of those gains to close up 11 percent at $7.34.
Reporting by Zeba Siddiqui in Bangalore; Editing by Joyjeet Das, Anthony Kurian