For the second time this year, the FDA has issued a complete response letter for Cephalon’s Nuvigil sleep disorder pill, which the drugmaker hoped to market as a treatment for jet lag resulting from eastbound travel. However, the agency had concerns about efficacy and certain patient data that effected statistical significance.

Consequently, the drugmaker is no longer pursuing this indication (see the statement). This is not terribly surprising, given that Wall Street was told recently that total revenue for treating jet lag may not exceed $100 million. But this clearly adds pressure on Cephalon, which recently lost its ceo due to an untimely death (see here), because it must find ways to differentiate Nuvigial as a follow-up to Provigil, which faces generics in April 2012.

As RW Baird analyst Tom Russo notes, Cephalon is “now batting 0-for-3 on (its) strategy to differentiate Nuvigil from Provigil,” which is approved to treat sleep apnea, narcolepsy and shift work sleep disorder. The other flops: Nuvigil trials previously failed or were discontinued in schizophrenia (look here) and traumatic brain injury. That leaves only bipolar depression as another possible indication, but approval may not come until 2013 and a third trial was added recently in hopes of increasing the odds. Meanwhile, third-party payers are likely to favor generics once the Provigil patent expires.

Although Russo acknowledges the Nuvigil launch has succeeded by some measures - between 55 percent and 60 percent of new prescriptions are written for the Provigil/Nuvigil franchise are now for Nuvigial specifically - there are also lower net revenues per patient. That’s because the Provigil wholeale price was raised to the point where Nuvigil is less expensive.

Presumably, Cephalon hoped to compensate by promoting jet-lag disorder to a broad array of docs, increasing the potential for prescriptions. This possibility, however, prompted speculation about aggressive marketing. You may recall the drugmaker pleaded guilty in 2008 to a misdemeanor and paid $443 million to settle federal and state charges for promoting Provigil and two other drugs for unapproved uses (back story). Ironically, Cephalon execs will probably not need a dose of their own medicine - they are likely to lie awake at night anyway, mulling over ways to replenish their pipeline.