Stakeholder Opinions: Narcolepsy - Entry-point to a lucrative fatigue-associated market

ABOUT DATAMONITOR HEALTHCARE 2

About the Central Nervous System pharmaceutical analysis team 2

CHAPTER 1 EXECUTIVE SUMMARY 3

Scope of analysis 3

Datamonitor insight into the narcolepsy market 4

Contributing experts 5

Related reports 5

CHAPTER 2 MARKET DEFINITION AND OVERVIEW 7

Definitions 8

Narcolepsy - a chronic sleep disorder 8

Market definition 8

Market overview 8

Narcolepsy market has recorded substantial growth since 2004 8

Significant value growth of the narcolepsy market driven by Provigil and Xyrem 8

Market volume growth is attributed to an improved recognition of the disorder 9

Sales value in the US dominates the narcolepsy market 10

Disparity between sales and narcolepsy population distributions across the seven major markets 11

Sales in Japan are affected by the lack of recognition of the disorder and the low price of drugs 12

The low market value in the 5EU is linked to lower drug prices and the absence of direct-to-consumer advertising 13

CHAPTER 3 DISEASE OVERVIEW 15

Characteristics of narcolepsy 16

Features and symptoms of narcolepsy 16

Symptoms of narcolepsy 16

Associated features of narcolepsy 16

Severity of narcolepsy 17

Mild narcolepsy - mild sleepiness or rare cataplexy 18

Moderate narcolepsy - moderate sleepiness and infrequent cataplexy 18

Severe narcolepsy - severe sleepiness and daily cataplexy 18

Duration criteria also used to define narcolepsy severity 18

Prevalence of narcolepsy 19

Narcolepsy affects fewer than 500,000 sufferers across the seven major markets 19

Disparity among prevalence rates could result from genetic or methodological variations 19

Cataplexy and narcolepsy 22

Cataplexy occurs in the majority of patients with narcolepsy 22

Course of narcolepsy 24

Narcolepsy is a non-progressive disorder that begins mostly during adolescence 24

Etiology of narcolepsy 25

Causes of narcolepsy 25

Similarity between rapid eye movement sleep atonia and cataplexy in narcolepsy 25

Strong association between the HLA complex and narcolepsy 26

Hypocretin deficiency identified in more than 85% of patients with narcolepsy 26

Environmental factors may also play a significant role in the development of narcolepsy 28

Diagnosis of narcolepsy 28

Diagnosis criteria and tools 28

Diagnostic criteria of narcolepsy 28

Polysomnography and Multiple Sleep Latency Test 29

Excessive daytime sleepiness diagnosed using specific tools 30

Blood and cerebrospinal fluid testing assessing hypocretin levels 30

Differential diagnosis required to avoid misdiagnosis of narcolepsy 30

Diagnosis rate of narcolepsy 31

Less than 50% of patients with narcolepsy are correctly diagnosed 31

Population unfamiliarity with the disorder induces late presentation to a physician 32

A significant proportion of patients appear to be misdiagnosed 32

Management of narcolepsy and guidelines 33

Behavioral approaches 33

Pharmacological management of narcolepsy and guidelines 34

Provigil and Xyrem are first-line treatment options for narcolepsy 34

Treatment for excessive daytime sleepiness 35

Treatments for cataplexy 38

CHAPTER 4 UNMET NEEDS 40

Overview of the key unmet needs 41

Description of key unmet needs 41

Greater efficacy 41

Full restoration of alertness in patients with narcolepsy still remains a challenge 41

More widely available cataplexy treatments 42

Restrictions on the distribution of Xyrem provide an opportunity for alternative treatments 42

Improved side-effect profile 43

Products with a well-tolerated side-effect profile would provide a greater range of accepted treatment options 43

Longer duration of action 44

First-line treatments with a longer duration of action will improve patients' quality of life 44

Broader clinical trials 45

Clinical evidence will help to position alternative drugs in the treatment pathway 45

CHAPTER 5 BRAND DYNAMICS 47

Current therapies 49

Provigil is the clear sales value leader in the narcolepsy market 49

Provigil (modafinil, Cephalon) 51

Drug overview 51

Narcolepsy-specific sales analysis 54

Summary of Provigil's clinical trial data in narcolepsy 56

Future outlook 58

Xyrem (sodium oxybate, Jazz Pharmaceuticals) 59

Drug overview 59

Narcolepsy-specific sales analysis 64

Summary of Xyrem's clinical trial data in narcolepsy 66

Future outlook 68

Label expansion as a lifecycle management strategy for narcolepsy drugs 69

Narcolepsy as a strategic point of entry into the sleepiness- and fatigue-associated market 70

Expanding drug label to other intrinsic sleep disorders 70

Hypersomnia 70

Obstructive sleep apnea/hypopnea syndrome 71

Targeting circadian rhythm sleep disorders 71

Jet lag - a significant patient population 71

Shift work sleep disorder 72

Treatments for circadian rhythm sleep disorders 72

Datamonitor insight 74

CHAPTER 6 PIPELINE ANALYSIS 75

Narcolepsy pipeline overview in 2008 76

Current narcolepsy pipeline shows a distinct lack of investment 76

Registered pipeline drugs 77

Nuvigil (armodafinil, Cephalon) 77

Nuvigil - longer acting single isomer formulation of modafinil (Provigil) 77

Phase III clinical trial lacks active comparator to demonstrate the efficacy and safety of Nuvigil in narcolepsy patients over Provigil 78

Development of Nuvigil as a lifecycle management strategy to offset generic modafinil competition 79

Phase II histamine H3 antagonists 84

GSK-189254 (GlaxoSmithKline) 84

Recent Phase II trial termination casts doubt over the drug's development status 84

Phase II clinical trial was initiated in November 2006 84

JNJ-17216498 (Johnson & Johnson) 85

Product's development status uncertain after completing Phase II study in December 2007 85

Bold Phase II clinical trial employed Provigil as a comparator 86

Potential of histamine H3 antagonists in narcolepsy and sleep disorders 86

Hypocretin deficiency in narcolepsy potentially linked to histaminergic system 87

Centrally acting H3 histamine antagonists do not induce peripheral effects such as allergic reactions 87

Potential activity on excessive daytime sleepiness and cataplexy in narcolepsy 88

Side effects of Histamine H3 antagonists limited in animal studies 89

Potential to also work in other sleep disorders 89

BIBLIOGRAPHY 91

Journals 91

Websites 96

Annual reports 101

Datamonitor reports 101

APPENDIX 102

Data definitions, limitations and assumptions 102

Standard units 102

Japanese market data 102

About Datamonitor 102

About Datamonitor Healthcare 103

About the Central Nervous System analysis team 104

Disclaimer 105

List of Tables

Table 1: Prevalence of narcolepsy in the US, Japan and 5EU, 2008 19

Table 2: Studies estimating the prevalence of narcolepsy 22

Table 3: Narcolepsy-specific sales ($000s) of the current prescribed therapies across the seven major markets, 2004-07 49

Table 4: Provigil (modafinil, Cephalon) - key facts, 2008 51

Table 5: Clinical trial results for Provigil in narcolepsy patients 57

Table 6: Xyrem (sodium oxybate, Jazz Pharmaceuticals) - key facts, 2008 60

Table 7: Summary of outcomes in clinical trials supporting the efficacy of Xyrem in the treatment of cataplexy attacks 66

Table 8: Clinical trials results for the assessment of the Xyrem efficacy in excessive daytime sleepiness in narcolepsy patients 67

Table 9: Clinical Global Impression of Change in day and nighttime symptoms for Xyrem 67

Table 10: Pipeline drugs for narcolepsy, 2008 76

Table 11: Clinical trial results for Nuvigil in narcolepsy patients 79

Table 12: Ongoing clinical trials for Nuvigil (armodafinil), sponsored by Cephalon, 2008 83

Table 13: Clinical trial summary for GlaxoSmithKline's GSK-189254 in narcolepsy, 2008 85

Table 14: Clinical trial summary for Johnson & Johnson's JNJ-17216498 in narcolepsy, 2008 86

List of Figures

Figure 1: Narcolepsy-specific sales value ($m) across the seven major markets, 2004-07 9

Figure 2: Narcolepsy-specific sales volume (standard units) across the seven major markets, 2004-07 10

Figure 3: Narcolepsy-specific sales revenue ($m) in the US, Japan and 5EU, 2007 11

Figure 4: Narcolepsy population and distribution of value ($) and volume (standard unit) sales across the seven major markets, 2007 12

Figure 5: Age at onset of narcolepsy in 50 patients as reported by Guilleminault et al., 1976 24

Figure 6: Treatment guidelines for narcolepsy developed by the American Academy of Sleep Medicine, 2007 34

Figure 7: Treatment guidelines for narcolepsy as recommended by the European Federation of Neurological Societies, 2006 35

Figure 8: Key unmet needs in narcolepsy treatment, 2008 41

Figure 9: Narcolepsy-specific sales revenue ($m) by brands and classes across the seven major markets, 2007 50

Figure 10: Provigil (modafinil, Cephalon) sales ($m) distribution by diagnostic value in the US, 2007 54

Figure 11: Provigil (modafinil, Cephalon) narcolepsy-specific sales ($000s) across the seven major markets, 2004-07 55

Figure 12: Provigil's (modafinil, Cephalon) narcolepsy-specific sales and non-DTC promotional spend in the US and 5EU, 2007 56

Figure 13: Xyrem (sodium oxybate, Jazz Pharmaceuticals and UCB) narcolepsy-specific sales ($000s) across the seven major markets, 2005-07 64

Figure 14: Xyrem's (sodium oxybate, Jazz Pharmaceuticals and UCB) narcolepsy-specific sales and non-DTC promotional spend in the US and 5EU, 2007 65

Figure 15: Market potential of treatment for excessive sleepiness beyond narcolepsy 69

Figure 16: Cephalon's pricing strategy with Actiq and its follow-on product, Fentora, Q3 2003-Q2 2008. 82

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