After reinventing itself in 2011, Elite Pharmaceuticals (OTCBB:ELTP) has bounced back with a line of generic drugs and is banking on the development of abuse-resistant opioids and once-daily opioid products to fuel its future growth.
“That’s the home run,” chairman and CEO Jerry Treppel says in an interview with BioTuesdays.com, referring to the company’s proprietary pharmacological abuse-resistant technology, which combines an opioid with naltrexone, an opioid antagonist. The antagonist prevents euphoria if the opioid is crushed or dissolved for snorting or injection.
“If the drug is taken as intended, the naltrexone passes through the body and is not released,” he adds. “If you try to abuse our drug, the presence of the naltrexone acts as an antagonist and binds to the same receptors in the brain as the opioid, thus preventing euphoria.”
Yesterday, Elite announced the appointment Nasrat Hakim as president and CEO, with Mr. Treppel continuing as chairman. Mr. Hakim has more than 30 years of pharmaceutical and medical industry experience in quality assurance, analytical R&D, technical services and regulatory compliance.
Elite’s lead product is a twice-daily, two-bead formulation of oxycodone and naltrexone. The company intends to begin a small human study with its drug candidate later this year. “The more we look at the lab data though, the more we think that maybe we should go straight into a larger, bioequivalency study,” Mr. Treppel suggests. “But we haven’t made a final decision yet.”
The goal of the clinical program would be to show that Elite’s formulation is bioequivalent to Purdue Pharma’s twice-daily OxyContin, which has annual sales approaching $3-billion. “This would be a pivotal point for the company because once you complete a successful bioequivalency study, you are well on your way to having a commercial product,” he adds.
Abuse of OxyContin represents a huge problem. In the U.S., deaths from prescription painkillers have exceeded those from heroin and cocaine combined. In 2010, the FDA approved Purdue’s reformulated version of OxyContin that is harder to crush into a fine powder, thus making it more difficult to abuse.
When Purdue’s key patent expired in April of this year, the FDA ruled against approving any generic forms of OxyContin that rely on approval of the original, non-abuse resistant formulation. As a result, generic competition will be limited. Purdue’s patent on the new formulation expires in 2025. Generic versions of the twice-daily oxycodone with the so-called “hard-shell” technology are likely to face potential patent litigation.
Like Purdue, Endo Health Solutions also introduced a reformulated OPANA ER that is more difficult to crush than the original formulation. Endo tried a similar argument with the agency to limit generic competition for its product, but Endo’s Citizen Petition was denied because the FDA ruled that the reformulation of Opana can still be prepared in insufflation, or snorting, using commonly available tools and methods.
The FDA is clearly looking at the science behind products alleged to be abuse-deterrent formulations. It seems highly likely that the issue will arise again. It may arise when a non-abuse-deterrent version of a drug is replaced with a reformulated version claimed to be abuse-deterrent or perhaps where an abuse-deterrent version of a drug is replaced with a new and improved abuse-deterrent version.
Mr. Treppel says Purdue has used a physical approach to prevent abuse of OxyContin by making its pills harder to crush. “We’ve taken a pharmacological approach. You can crush our product, but because of the naltrexone, you won’t get high. We think that’s a better approach.”
Elite’s pharmacological approach is similar to Pfizer’s Embeda, but Embeda consists of a one-bead system with a naltrexone core surrounded by morphine coated on the single bead. Elite believes that its two-bead system is inherently more flexible and easier to manufacture. Pfizer removed Embeda from the market in 2011 because of manufacturing issues. Earlier this year, Pfizer also announced that it remains undecided regarding whether to pursue approval from the FDA for its Remoxy gel capsules, which contains oxycodone, in the wake of two Complete Response Letters from the FDA.
Elite’s abuse-resistant program took a big step forward in April, when the company inked a $10-million common stock purchase agreement with Lincoln Park Capital Fund. “It gives us the critical mass of financing to pursue abuse-resistant opioids that has been so lacking until now,” Mr. Treppel contends.
Elite also has commercially scaled up a once-daily formulation of oxycodone, which currently doesn’t exist on the U.S. market. “I don’t think it takes a whole lot of imagination to realize that once we’ve demonstrated that we can develop an abuse-resistant formulation that’s twice-a-day, it’s not that hard to combine the once-a-day oxycodone bead with a naltrexone bead and hence you also have a once-a-day abuse-resistant formulation. So, oxycodone actually represents three products for us.”
Mr. Treppel recalls that Elite previously tried to license the once-a-day formulation in the European market and had found a partner. “At that time, we didn’t have the financial wherewithal to pursue that opportunity. It’s fair to say that that opportunity may get looked at again because there are opportunities overseas, especially the European and Asian markets for opioids.”
In addition, he says Elite is working on an abuse-resistant morphine molecule. “A non-abuse formulation and an abuse formulation are currently on the market, so that one molecule represents two product opportunities for us,” he adds.
“We’re not reinventing the wheel with every product, which is really the position that our competitors are in,” he contends. “Every time they try and develop one of these abuse-resistant opioid products, each one is unique and requires a unique approach. We don’t see it that way. We think we have a platform. We take a particular opioid molecule and develop an extended release formulation. We already have the naltrexone bead, so we put them in a capsule and we have a potential product.”
Elite has made great strides since March of 2011, when the FDA announced plans to remove some 500 cough/cold and allergy-related products from the U.S. market. The once-daily allergy products manufactured by Elite – Lodrane 24 and the extended-release Lodrane 24D – were included in the FDA sweep of 500 products. The FDA move took effect in the fall that year and slashed Elite’s revenue by 98%.
“We had to start over from scratch,” Mr. Treppel recalls. “In less than two years, we’ve launched seven new products, and an eighth is going into production for a launch in a few months. These products have gained market share and are growing.”
For the fourth quarter of the fiscal year that ended on March 31, 2013, Elite generated revenue of $1.5-million, a record quarterly performance.
Of the eight products in its line, five are approved abbreviated new drug applications (ANDAs) owned by Elite, two are products that Elite manufactures on a contract basis and one is an over-the-counter product, which is distributed by ECR Pharmaceuticals, a division of Hi-Tech Pharmacal.
“When looking at our product line, it’s important to remember that the oldest product, Phentermine tablets 37.5 mg, was launched barely two years ago,” Mr. Treppel points out. “Three products made no contribution to revenue in fiscal 2013, and four products were launched either during the year or at the tail end of the last fiscal year. So, our product line is new with respect to time in the market.”
Elite’s line consists of analgesics, allergy, drug addiction and bariatric products to aid in weight loss. In the bariatric line, Elite manufactures four products – Phentermine tablets, two strengths of Phentermine capsules and Phendimetrazine.
“Our goal is to break even from operations before expenses related to our abuse-resistant technology,” Mr. Treppel says. “We’re not there yet, and we’re probably going to have to bring in more products to get there.”
Yesterday, Elite took a big step towards that goal by acquiring 13 ANDAs for generic pharmaceutical products from Mikah Pharma, a company founded by Mr. Hakim. Of the 13 products, which represent six different chemical entities, 12 are already FDA-approved ANDAs, with one already on the market, and one ANDA under active review by the FDA. Of the 13 products, two are in markets where there is only one other generic competitor.
