Takeda Tries to Counter Concern for New Sleeping Pill
[The IHT story mentioned by Jon, also being authored by Bloomberg, is more or less the same as this one]
June 5 (Bloomberg) -- Takeda Chemical Industries Ltd., Japan's biggest drugmaker, is trying to counter analysts' concerns that its new sleeping pill will struggle to win a share of the $1.4 billion U.S. market for such remedies.
``We expect a clear difference'' in effectiveness for the treatment, which is still in trials, said Takashi Sugimoto, senior product planning manager, in an interview in Osaka. ``Or else you face the question: Who'd bother prescribing the drug?''
Toshihide Yoda of Lehman Brothers Inc. and other analysts say the low cost of sleep-inducing melatonin supplements and satisfaction among some users with existing drugs, such as Sanofi Synthelabo SA's Stilnox, may make it a hard market to crack. They are expecting the drug, called TAK-375, to go on sale in 2005, ahead of similar offerings by rivals such as Eli Lilly & Co.
``There are good insomnia treatments already and melatonin is sold as health food in the U.S.,'' said Lehman's Yoda, who rates the shares ``overweight/neutral.'' ``It will be pretty hard.''
Osaka-based Takeda is counting on TAK-375 to help expand sales as revenue growth from its best-selling Prevacid ulcer treatment and Lupron prostate cancer drug slows. Nine other drug candidates, including a heart-failure treatment and three diabetes- related drugs, are in their second phase of clinical tests, meaning they are at least four years from going on sale.
Attractive Pipeline
Takeda shares fell 15 percent in the last 12 months, triple the 5.1 percent drop in the FT Global Pharmaceutical Index. Takeda shares fell to a four-year low of 3,920 yen April 11 and traded at 4,560 on the Tokyo Stock Exchange at 10:18 a.m. Japan time today.
President-designate Yasuchika Hasegawa last month said he expects profit growth will slow for two to three years as Lupron and Prevacid mature in major markets. Some investors say they are prepared to give the new drugs the benefit of the doubt after the stock's recent slide.
``In terms of combination of growth and their drug pipeline's value, Takeda's actually very attractive,'' said John Wilson, who helps manage about $2 billion in Japanese equities at HSBC Asset Management Japan, including Takeda shares. ``The new diabetes drug is promising, and there are three or four others with good potential.''
Prescription Choice
The company says it expects the trials to show that TAK-375 is non-addictive, reliable and has few side effects. Takeda's TAK-375 is a synthetic compound that works the same way as melatonin, the hormone released from the pineal gland to regulate sleep and wake cycles. The drug, now in its third and final phase of clinical trials, strengthens the effects of the body's melatonin and is thought to induce sleep in a natural manner, Sugimoto said.
Given adequate marketing, the drug may generate as much as 40 billion yen ($340 million) in global annual sales, said Takumi Yamagishi, an analyst at Shinko Securities Co. That figure is at the lower end of analyst estimates of as much as 100 billion yen.
That the drug may be non-addictive gives it ``rare functionality,'' he said. ``However, the sleep disorder market isn't easy.''
About 60 percent of American adults have sleep problems, according to the Web site of the National Sleep Foundation. TAK- 375 will compete with pills such as Stilnox, which had $1.2 billion in U.S. sales, about nine-tenths of the prescription sleeping pill market, in 2002.
TAK-375's main selling point is that it may be the first prescription sleeping pill that is not habit-forming, said Sugimoto. All currently prescribed sleeping pills are categorized as scheduled drugs in the U.S., meaning doctors usually don't prescribe them for longer than four weeks.
Supplements
TAK-375's other major market challenger comes cheaper. Consumers without a prescription can buy 60 melatonin tablets from retail outlets such as Drugstore.com Inc.'s Web site for $2.50, the same price as a single tablet of Stilnox, also known as Ambien.
Early trials with TAK-375 show it to be more effective in inducing sleepiness and for a longer period than melatonin supplements, said Kazuhiko Kume, assistant professor at Kumamoto University's Institute of Molecular Embryology and Genetics.
TAK-375 also appears to induce sleep without notable side effects, Kume said. TAK-375 probably won't cause side effects such as morning-after drowsiness, a condition found in older treatments called benzodiazepines. Muscle relaxation, which prevents older people and those with respiratory complaints from being treated, may also be avoided, he said.
Unstable Melatonin
``Melatonin itself is very unstable and it disappears from the body in one to two hours even if you take it in a large dose,'' Kume said. ``TAK-375 seems to remain through the night in a form close to physiologic melatonin.''
Takeda's Takeda Pharmaceuticals North America Inc. unit is conducting the last-stage trials for TAK-375. The unit, which currently sells the Actos diabetes treatment with help from Eli Lilly & Co.'s marketing force, will also market the insomnia treatment, Takeda's Sugimoto said in an interview two months ago.
``The market for this drug will become big if people start taking it as consistently as they take melatonin tablets,'' Sugimoto said.
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