King Pharma Finds A ‘Revenue Deterrent’
16 CommentsBy Ed Silverman // August 7th, 2008 // 9:54 am
For a company trying to build a franchise in pain meds, you may wonder about King Pharmaceuticals’ decision to invest in Acurox, at least after reading one of the more amusing investment reports we have seen in some time. After perusing the remarks, one could get the impression that Acurox may actually cause King investors some pain.
Acurox contains the same active ingredient as the notorious OxyContin, a Schedule II narcotic that is highly addictive and widely abused. You may recall Purdue Pharma, and three present and former execs, paid $634.5 million to settle charges of deceiving docs about the potential for abusing the pill. More recently, Purdue struggled to win approval for a tamper-resistant version. This is where King enters the picture.
Last fall, King struck a $30 million licensing deal with Acura Pharmaceuticals, not including additional payments based on milestones and royalties. Why? Acura is developing an ‘abuse deterrent’ version with two features the drugmakers hope will set the pill apart from others being developed - an immediate release formulation and niacin, which causes facial flushing. But the report from BioLogic Investment Research raises questions about whether this approach can work. For instance, the firm writes…
Study data showed flushing effects occurred in Acurox patients at a higher rate compared to those given placebo, and at recommended doses, suggesting a painkiller “that might induce more pain or discomfort is unthinkable for most physicians.” And since Acurox may be priced at branded pharmaceutical levels, BioLogic posits, third-party payors may be deterred from reimbursement.
Meanwhile, the report also points out that niacin’s flushing side effects may be mitigated by prostaglandin, and since aspirin inhibits prostaglandin, a big dose of aspirin may get around the problem. Another possibility is food. “Acura’s studies show that a high-fat meal blocks the effects of niacin even at doses 20 times than the amount in one Acurox tablet,” BioLogic writes. So “if avoidance of niacin effects with aspirin doesn’t work, patients can pretreat themselves with a cheeseburger.”
A couple of other points - BioLogic claims Acura relies on “never-before heard of niacin-aversion scales that are apparently unvalidated and proprietary to Acura,” which are “uninterpretable.” The report also maintains Acura says Acurox has three mechanisms designed to deter snorting, but Acura “has never run a snorting study in humans,” suggesting the claim is unproven. “Based on our research,” the firm writes, “our opinion is that there is not a shred of rigorous data related Acurox’s abuse-deterrence features.”
The report also notes that extended release, or ER, versions of Oxycodone are the “formulation of choice” for abusers because these contain a longer-lasting supply than an IR version, such as what Acura is developing. And BioLogic cited government data indicating the abuse rate of ER versions is three times greater than an IR version, and government data showing emergency room visits associated with ER formulations are three times greater than IR formulations. In other words, the need for an abuse-deterrent ER version is presumably greater, implying Acurox would meet a more limited market. UPDATE: A reader notes that one database cited by BioLogic was developed by Purdue.
In response, Peter Clemens, Acura’s cfo, wrote us to say this: “I’m not sure who BioLogic is and I know the company has never spoken to them. Clearly, they have a contrarian view. As a counter balance, I attach an article issued…independently of Acura.” The article appeared recently on SmallCapInvestor.com, which you can read here.
We reached out to Jim Green, King’s executive vp for corporate affairs, whose name regularly appears on the drugmaker’s press releases, but he regularly fails to respond to requests for comment. He did not respond on this occasion either.
Joe Smith
Ed Silverman - You need to complete a little more research before you post hear-say from a make believe website such as Biologic, which was put in place for the sole purpose of bashing Acura Pharmaceuticals. Biologic initially posted this inaccurate report on their homemade website, and the funny thing is that the single link on their site was to this Acura bashing attempt. Once confronted on the topic they immediately posted links to a few other articles. Why don’t you go some investigative journalism and find credible sources with accurate facts, versus posting nonsense such as Biologic - which by the way, none of the big pharma companies have even heard of. You, are a pinhead.
Ed Silverman
Dear Joe,
Thanks for the kind words. I posted about this report because it raised interesting questions. And as I noted, I spoke with an Acura exec, who chose not to discuss the report or the issues it raised. Instead, he sent me an investor column, which doesn’t quote anyone, but notes the company doesn’t have any Wall Street analyst coverage right now.
Granted, I don’t claim to be qualified to analyze the technical nuances of Acurox, but like many journalists, I will reference, if not rely on, reports from firms that follow a stock, for whatever reason. As Clemens indicated, BioLogic appears to be ‘contrarian,’ which I duly reported and it may be his codeword for short selling. I don’t know. You use the word ‘bash.’ But he didn’t pursue the topic.
Meanwhile, if you have more information that you can share about Acurox, please do so. So far, you’ve only attacked me, but not offered evidence as to why the questions raised by the report are inaccurate. In other words, if you want to continue the dialogue, this is your invitation (but try to refrain from the name calling if you really are serious about having an informed discussion).
Cheers
ed
Joe Smith
Most pharma execs won’t quote on hearsay delivered from a homemade website, which is probably why he didn’t want to comment. This biologic company raises issues about niacin which will be included but only in subtherapeutic amounts and proven through testing to date, so it’s worthless to argue about a topic that the company is already past. Most importantly if you research where the biologic “facts” come from, you’ll see that they quote “RADARS” data which after a little more research comes from Purdue Pharma, A COMPETITOR. They just so happen to not state this, and they just so happen to not use government data, which is readily available to anyone with a computer. Biologic is being fed by a competitor who apparently wants to see how many websites it can get to published its erroneous statements. The icing on the cake is the way they present the data, along with the bash, or, let’s see, contrarian viewpoint, stressed in the main heading of the “research”. It’s apparent that the biologic crew isn’t out to forewarn the public just because they’re a group of nice guys. It IS apparent they have a motive to deceive the public about is true and what’s not, because clearly they don’t want acura to succeed.
Ed Silverman
Hi Joe,
Thanks for getting back to me. I can understand the decision not to comment, but only up to a point, in so far as that kind of position creates a vacuum.
Anyway, the reference to government data was my mistake. RADARS was, indeed, developed by Purdue. The same graph in the report also refers to DAWN, or Drug Abuse Warning Network, which is a government database. I meant to refer to both in the post, but only referred to the RADARS data initially. I’ve now corrected the sentence and hopefully it is clear that there are two data points. Thanks for mentioning this.
Finally, I understand your point, although I didn’t post this because any one is a nice guy or not-so-nice guy. I simply found the issues interesting. If BioLogic is incorrect, I would like to hear it from Acura or King or another analyst or firm, should one follow the firm closely. I’m happy to follow this with updates.
ed
Kevin McNamara
Joe,
Your conspiracy theories are amusing and quite bizarre. I’ll tell you what - spare me the rants and address the facts expressed in our report and I will respond to them publicly on my website.
And for the record, RADARS was funded by Purdue but Purdue has no influence over the collection of the data, which is relied upon widely by government agencies (most notably, the FDA). The source of the data is poison control, opioid treatment centers, and key informant and drug diversion sources, including law enforcement). Regardless, the RADARS data is entirely irrelevant to the clinical profile of Acurox, a profile you fail to address other than remarking that the niacin issue “is past”, whatever that means.
Finally, Mr. Smith, you can rest quietly knowing that “big pharma” may not know who I am but I assure you that bad pharma, fraud pharma, bogus pharma and otherwise waste-of-investor-money pharma that I write about do. Keep up the detective work and buy some more Acura stock if your conviction is as strong as your paranoia.
Regards,
Kevin McNamara
Dan
I’d like to read a comment from a clinician or pain specialist, for thier interpretation. It is a complex symptom to treat. Presuming I have not read a comment from a clinician or pain specialist….
Tuan Hgyuen
hello so you claim the acurox is a fraud, i curious to how you think is a fraud and bogus pharma and bad pharma. many companies work on develop abuse issue with major addiction problems everywhere, what company do you think has the answer to the problems? i think not one single answer but many and we see if fda approval
I. C. Clearly
This could be the most ridiculous discussion to date. Folks, BioLogic is a fraud. I know the people will fix this immediately after I mention it, but click on every article and tell me what you see in the banner heading. Bush league.
viking trader
sounds like mr. silverman took a page out of carl rowe’s game book.
cmerx
Looks like the only paranoid one is the writer of this garbage, who immediately jumped on the comments made. Probably nothing better to do. Nice try paranoid guy, and best of luck with those short positions.
seek_eternal
Hey McNamara -
Explain to the world why your teeny website, here to serve the world, had only one single link the date you (or your counterparts) posted the link online about Acura. Your site had only one link on the ENTIRE site, and it was to the rant about Acura.
Once you were confronted on it suddenly 24 hours later there were other articles that were linked as well.
Coincidence? That alone clearly indicated a sole mission to bash Acura, and you guys should have thought about that before you and Castanza posted links to your informative research.
WEL
MAXIDEX WARNING
I had eye surgery and in the post-op pack was MAXIDEX(dexamethasone) drops by ALCON LABS.
Two days later I was BLIND
Use Google and enter EPOCRATES MAXIDEDX to verify
WEL WHAT
So you cut and paste your post to various sites to which have no relevancy whatsoever. What’s your point? Not buying it Stevie.
PS
How did you type your message so accurately?
…”Isn’t she lovely, isn’t she won-der-ful….”
Clemens62
Regarding the niacin issue which this so called “report” makes light of:
In Acura’s 7/06 PR it took an indep lab 1-2 mins to extract 70-90% of the active, abuseable ingredient from Oxycontin, and approx 12 mins to extract 75% or so from Percocet. Then it took the same lab 355 mins (6 hours) to extract a TRACE of the active abuseable ingred from OxyADF.
Niacin doesnt do THAT. This is way beyond niacin.
Think the word “patent” because you’ll be reminded of that word in global proportions once it’s FDA approved and is being prescribed. Keep trying, but the truth that Acura will succeed is going to slap you in the faces.
Ghost in the Machine
Aversive addition (that includes antagonists Alpharama) is a losing product proposition. It assumes all of your patients are abusers first as opposed to patients first. The only purpose to use these techniques is to extend product lifecycle. That is all. All of the products currently work as intended if taken as directed. Therefore I think Remoxy is on the right track. It essentially will be the first approved “generic” to OxyContin. It will do the same thing-reduce pain and be dosed the same-2x per day but be able to tell a better story about a certain problem and possibly take market share before Purdue’s reformulation is approved.
Also, show me any study that shows a difference in endpoints on immediate vs. sustained release oxycodone. THEY DO THE SAME THING. So an immediate release tamper resistant would have good uptake because it would be able to take market share away from sustained release oxycodone. Just don’t put a poison in it that doesn’t work.
WEL
MAXIDEX WARNING
I had eye surgery and in the post-op pack was MAXIDEX(dexamethasone) drops by ALCON LABS.
Two days later I was BLIND
Use Google and enter EPOCRATES MAXIDEX to verify