Where Einstein Meets Edison

The Canary in the Coal Mine — Migraine: A Model for the Small Molecule’s Last Hope

The Canary in the Coal Mine — Migraine: A Model for the Small Molecule’s Last Hope

Apr 3, 2010

By Jason Bowers and Carlos Dedesma.

The pharmaceutical business is facing a critical crossroads. Gone are the watershed years of the 80s and 90s, when companies could successfully develop and market multiple “blockbuster” (i.e., annual sales over $1 billion) small-molecule therapies to treat prevalent chronic conditions such as high cholesterol, hypertension, depression, and heartburn.  Indeed, the industry is now facing a myriad of patent expiries, which collectively will serve as a revenue cliff over which billions of dollars in annual revenue will be lost.

To make matters worse, the cost of novel drug development has skyrocketed while the effectiveness of these former blockbuster brands has left many patient populations largely satisfied.  As generics become more widely used and accepted, drug candidates will have to demonstrate efficacy over the current standard of therapy (in addition to placebo) in order to command premium pricing, and most importantly, reimbursement from payers.  This means that upon launch, new drugs will face even greater competition than did the drugs that launched in the last two decades.

The combination of these factors has made the task of supplanting the generic versions with premium priced, patent-protected therapies very difficult for innovative drug manufacturers.  In terms of economic impact, the cost of treating most of these chronic conditions will fall, with patients and insurers reaping the benefits. In addition to price erosion from effective low-cost competition, the industry faces additional obstacles, such as pending healthcare reform and increasingly conservative regulatory bodies (e.g., the FDA) whose actions are difficult to predict.

So, what is a drug developer to do? Many have shifted their focus towards specialty indications, which require development of large-molecule (i.e., biologic) programmes.  Still, some companies have continued to pursue novel small-molecule candidates, choosing to face the difficult regulatory and financial hurdles.

The question now is, given today’s new reality, could a novel small molecule garner regulatory approval and generate the level of success seen by its predecessors? For example, what are the chances that new drugs will attain the “first tier” formulary placement, a distinction that allows physicians to prescribe the drug as the first line of therapy? Similarly, will patients remain loyal to these new drugs, which are priced at several dollars per day, when generics are a fraction of the out of pocket cost? While a survey has yet to be conducted, it is believed that this is a question that haunts every pharmaceutical industry investor and employee.

Migraine as an Ideal Test Case

Migraines afflicted 30 million Americans last year1. First-line treatment for acute migraines is currently the triptan class of molecules (e.g., Merck’s Maxalt or Pfizer’s Relpax). These agents are 5-HT(1B/1D) agonists2 and are believed to increase cranial vasoconstriction and prevent the subsequent release of select neuropeptides3. Altogether, eight different branded triptans generated approximately $3 billion globally in 2008.

Due to its prior financial success and the largely satisfied nature of this patient population, the migraine market is primed for change. First, nearly all of the triptans are expected to see patent expirations in the major pharmaceutical markets (USA, Europe, Japan) by 2015. Second, triptans are contraindicated in patients with several cardiovascular conditions, such as untreated hypertension, leaving some room for improvement. Lastly, migraine is largely treated acutely, with only a few products approved for prophylactic treatment as most patients are unable to tolerate chronic administration of migraine preventing drugs.

In other words, this is a disease market where

  • the market is largely satisfied – patients take a only a few pills a year to treat infrequent episodes. Moreover, increased dosing is not associated with serious adverse effects. (The patient just increases the dose after another lousy hour of incomplete symptomatic relief.)
  • the cost of treatment is falling – most of the major drugs, including the leading brand, will face generic equivalents in the next few years.
  • it will be difficult for new products to enter and gain market share – physicians are familiar with the many established treatments and are comfortable prescribing them without advice from specialists or extensive follow-up patient examinations.

Given these parameters, the migraine market appears to be an ideal setting for a natural experiment about the future of drug sales in the US. More specifically, if a new drug launches, the price premium that such a drug is able to garner over generics is a measure of its value and degree of innovation. In this case, however, the broad and accepted use of the generic drug sets a very high bar. The new drug will have to be really impressive in some way in order to compete.

In this natural experiment, we will watch to see how private insurance companies perceive the new drug. The same could be said of government-sponsored insurance programs. Lastly, we will learn if consumers will be willing to pay for a superior drug themselves. Or, will novel drugs be perceived as higher-priced, undifferentiated versions of their generic predecessors?

Going Downstream — telcagepant

As noted earlier, migraine is associated with cranial vasodilation and subsequent release of neuropeptides, a kind of short-range signalling molecule. One neuropeptide in particular, called calcitonin gene related peptide (CGRP), has been implicated in migraine and is a potentially useful drug target. Several drug developers have pursued CGRP antagonists as potential migraine treatments. For example, Merck has advanced telcagepant into Phase III. In clinical trials, telcagepant has reduced patient symptoms in two hours and sustained that relief for up to twenty-four hours.

Most recently, the project seemed to stumble in April 2009, when hepatic safety concerns (in the form of elevated liver transanimase levels) arose out of a Phase II study examining chronic administration. Although pausing for safety’s sake is reasonable, it is worth remembering that most blockbuster drugs failed at least one trial.

If Merck can marshal the strength to continue its development program, then perhaps we can observe the market’s reaction to telcagepant by 2011 (pending approval and launch). The outcome will be either a cautionary tale or an encouraging reminder to pharmaceutical executives, life science entrepreneurs, and biomedical investors everywhere that small-molecule drugs are still a viable endeavour for the pharmaceutical industry.

Jason Bowers is a Senior Analyst for the Pharmaview group at Decision Resources Inc.  He received a B.S. in Biomedical Engineering from Rensselaer Polytechnic Institute in 2004. Carlos Dedesma is a life sciences editor for MITER.


  1. http://www.neurology.org/cgi/content/abstract/58/6/885
  2. Tfelt-Hansen P, De Vries P, Saxena PR. Triptans in migraine: a comparative review of pharmacology, pharmacokinetics and efficacy. Drugs. 2000 Dec;60(6):1259-87.
  3. Bigal ME, Lipton RB. Excessive acute migraine medication use and migraine progression. Neurology. 2008 Nov 25;71(22):1821-8.