When Cephalon Inc. bought Anesta Corp. in 2000 for $444 million in stock, the main driver of the deal was Actiq transmucosal fentanyl for breakthrough cancer pain. The acquisition didn't take long to pay dividends, as Actiq sales leaped from $15 million in 2000 to $577.6 million last year. Generic versions of Actiq entered the market last year, but CEPH was ready with Fentora, a buccal fentanyl tablet that it gained via the 2004 acquisition of Cima Laboratories for $515 million in cash.
CEPH also launched its own generic version of Actiq - the company's generic OTFC is sold through Watson Pharmaceuticals Inc. Nevertheless, in its 2Q07 earnings, CEPH reported sales of pain products (Actiq, generic OTFC and Fentora) dropped 24% from the 2006 period, to $131.2 million, which the company attributed to generic competition for Actiq. For the first six months, sales of CEPH's pain drugs slipped 9% to $262.7 million from $289.7 million in 1H06.
The competitive crunch doesn't look to be letting up. Waiting in the wings is a growing group of companies with innovative fentanyl products in late-stage testing. As a marketing war looms, all the upstarts think their products have advantages over CEPH's drugs, particularly faster onset of action - a feature of paramount importance in the breakthrough cancer pain setting(see "Speedy Delivery").
While the host of fentanyl formulations progresses through the clinic, CEPH remains the lone non-generic player in the rapid-acting fentanyl market. The company's current competition is short-acting opioids, such as Vicodin hydrocodone/acetaminophen.
Compared with those drugs, Actiq and Fentora have the advantage of speed. Short-acting opioids typically take 30-60 minutes before a patient feels any effect. That's a big problem, according to CEPH spokesperson Stacey Beckhardt, because a typical breakthrough cancer pain episode