Market Dynamics and Financial Trajectory for Entocort EC
Introduction
Entocort EC, a formulation of budesonide, is a gastroenterology medicine used for the treatment and maintenance of mild to moderate Crohn’s disease involving the ileum and/or the ascending colon. Here, we delve into the market dynamics and financial trajectory of this drug, highlighting key events, strategic moves, and financial impacts.
Market Position and Indications
Entocort EC is specifically indicated for the treatment of mild to moderate active Crohn’s disease and the maintenance of clinical remission for up to 3 months. The drug has shown efficacy in clinical trials, particularly in reducing the time to relapse and maintaining symptom control compared to placebo[4].
Historical Sales Performance
The sales performance of Entocort EC has been significant, especially after strategic marketing and diagnostic initiatives. When Prometheus Labs started detailing the drug, Entocort EC sales in the US grew by 59% annually, reaching $125 million annually. This growth was facilitated by a 170-person specialty sales force that helped identify patients who would benefit from the therapeutic agent, thereby improving its efficacy and justifying price increases[3].
Pricing Strategy
Prometheus Labs implemented a successful pricing strategy for Entocort EC. Upon acquiring the rights in 2005, the company raised the average wholesale price by 66%, followed by annual increases of 10%. This pricing strategy reflected the increased value to patients, physicians, and payers, resulting in a current price that is 120% of the original price when Prometheus started marketing it[3].
Divestment and Strategic Focus
AstraZeneca, the original developer of Entocort EC, divested the US rights to Perrigo Company plc in 2015. This move was part of AstraZeneca’s strategy to focus on three main therapy areas: Oncology, Cardiovascular, Renal & Metabolism (CVRM), and Respiratory & Immunology. The divestment included the rights to sell Entocort capsules and the authorized generic version, with Perrigo paying $380 million upon completion of the transaction[1].
Financial Impact of Divestment
The divestment of Entocort EC had a notable financial impact on AstraZeneca. The upfront payment of $380 million was reported in Other Operating Income in AstraZeneca’s financial statements. This transaction did not affect AstraZeneca’s 2015 Core Earnings Per Share guidance, which was maintained in the range of mid to high single-digit percentage increase versus the prior year at constant exchange rates[1].
Market Competition and Patient Access
The gastroenterology market, particularly for Crohn’s disease treatments, is competitive. However, Entocort EC has maintained its market presence due to its efficacy and the strategic efforts of its marketers. For instance, Prometheus Labs’ ability to work in both diagnostic and therapeutic areas helped in identifying the right patient subset, thereby improving the drug’s efficacy and market value[3].
Clinical Efficacy and Safety
Entocort EC has been evaluated in several clinical trials, demonstrating its efficacy in treating and maintaining remission in Crohn’s disease. The drug has shown better clinical improvement rates compared to placebo and has been found to have a favorable safety profile, particularly in maintaining normal plasma cortisol levels compared to prednisolone[4].
Regulatory Environment
The regulatory environment plays a crucial role in the market dynamics of pharmaceuticals. Entocort EC has been approved by the FDA for its specified indications, and any changes in regulatory policies or inclusion in national reimbursement drug lists can impact its market performance. For example, inclusion in such lists can initially affect pricing but may lead to increased volumes and overall market presence[5].
Global Market Perspective
While the focus here is on the US market, the global market for Entocort EC is also significant. AstraZeneca’s divestment of global rights outside the US to Tillotts Pharma AG in 2015 completed the global divestment of Entocort EC. This move allowed AstraZeneca to sharpen its focus on its core therapy areas while ensuring continued patient access to the drug worldwide[1].
Financial Statistics
- US Sales: Entocort EC sales in the US were $89 million in the year-to-date (nine months) of 2015[1].
- Annual Growth: Sales grew by 59% annually since Prometheus started detailing the drug, reaching $125 million annually[3].
- Pricing: The current pricing is 120% of the original price when Prometheus started marketing it[3].
- Divestment Payment: Perrigo paid $380 million to acquire the US rights to Entocort EC[1].
Key Takeaways
- Strategic Focus: AstraZeneca’s divestment of Entocort EC aligns with its strategic focus on core therapy areas.
- Market Growth: Entocort EC has shown significant sales growth, particularly after targeted marketing efforts.
- Pricing Strategy: Successful pricing strategies have increased the drug’s value and market presence.
- Clinical Efficacy: The drug has demonstrated efficacy in clinical trials and maintains a favorable safety profile.
- Regulatory Impact: Regulatory approvals and inclusion in reimbursement lists can significantly impact market performance.
FAQs
Q: What is Entocort EC used for?
A: Entocort EC is used for the treatment of mild to moderate active Crohn’s disease involving the ileum and/or the ascending colon and for the maintenance of clinical remission.
Q: Who acquired the US rights to Entocort EC from AstraZeneca?
A: Perrigo Company plc acquired the US rights to Entocort EC from AstraZeneca in 2015.
Q: How much did Perrigo pay for the US rights to Entocort EC?
A: Perrigo paid $380 million to acquire the US rights to Entocort EC.
Q: What was the impact of Prometheus Labs' marketing efforts on Entocort EC sales?
A: Prometheus Labs' marketing efforts led to a 59% annual growth in Entocort EC sales in the US, reaching $125 million annually.
Q: How does Entocort EC compare to other treatments like prednisolone in clinical trials?
A: Entocort EC has shown equal or comparable clinical improvement rates to prednisolone in some trials, with a better safety profile in maintaining normal plasma cortisol levels.
Sources
- AstraZeneca Press Release: AstraZeneca enters into agreement with Perrigo for rights to Entocort in the US.
- AbbVie Financial Results: AbbVie Reports Full-Year and Fourth-Quarter 2023 Financial Results.
- Pharmaceutical Executive: Overlooked Opportunities.
- FDA Label: Entocort® EC.
- AstraZeneca Full-Year 2020 Results: Full-year 2020 results announcement.