Asthma treatments have plenty of puff

Asthma treatment is a $33 billion market in the US and EU, without even a drug to cure this debilitating disease. Over 41.5 million people, equivalent to the population of Spain, have the condition, including 9.5 million children, 24.5 million adults and 7.5 million older people, according to the US National Heart, Lung, and Blood Institute and the European Respiratory Society. Nearly 9,000 people in Europe die from the condition every year - that's one every hour - of which around 1,200 deaths are in the UK.

Asthma treatments are one of the most difficult groups of drugs for investors to get to grips with, notorious for wrong-footing even medical students with the sheer number of compounds and trade names in use, which also vary between the UK and US.

The first line of treatment is the blue inhalers, commonly known as Ventolin inhalers, containing salbutamol (albuterol), a bronchodilator to help with difficulty breathing. Then there are the brown inhalers, containing corticosteroids, which help prevent attacks by reducing the level

of inflammation in the airways. Both are now both off-patent. Salbutamol, for example, is made by an array of generic drug companies including APS Ltd, a part of Nasdaq-listed Teva (TEVA), and AAH Pharmaceuticals, a subsidiary of German-based Celesio, which also owns Lloyds Pharmacy.

In recent years, the focus in asthma management has been on fixed-dose combinations (FDCs) which provide both a bronchodilator and corticosteroids in one drug. The big one is GlaxoSmithKline's (GSK) $5.5 billion blockbuster Advair/Seretide (fluticasone/salmeterol), which currently accounts for 15% of the company's sales, followed by AstraZeneca's (AZN) Symbicort (budesonide/formoterol). One attraction of these combination products is the simplification of disease management via high patient compliance, boosting the certainty that long-acting bronchodilators are always prescribed, and taken, with inhaled corticosteroids.

One big issue in the marketplace concerns the safety of long acting beta-agonist drugs (LAMAs), such as salmeterol used in Advair, which may occasionally increase the severity of future asthma attacks. The long acting beta-agonist drug formoterol in Symbicort seems to have escaped most of the bad press, with the results of a 52-week study on 700 patients released in August revealing a safety profile similar to its other component, budesonide.

The scare does not seem to have impacted revenues, however. Global Advair sales are likely to top £4 billion, compared with £3.5 billion in 2007, and to continue to dominate the market over the next 10 years.

'Looming patent expiries'

The commercial concern is looming patent expiries. Advair expires in 2010 and Symbicort in 2012 and their pivotal role not only in asthma, but in chronic obstructive pulmonary disease (COPD) too, has spurred intense activity in R&D. While both GSK and AstraZeneca are developing novel agents for maintaining market share in the long-term, GSK is also attempting to protect market share in the short-term with next-generation combination drugs.

Its shares recently bounced on the announcement it had started large scale 'Phase 2b' testing of a successor to Seretide, as part of its Horizon next-generation programme. The trials involve 2,400 people and should be completed by the end of the year, paving the way for phase three development.

In monoclonal antibody preventative treatment, there is currently only one drug for asthma, Omalizumab, marketed under the name Xolair, and made by Genentech/Novartis. This works by attaching itself to the immunoglobulin E or IgE, the antibody over-produced by asthma sufferers when they encounter a substance they are sensitive to, such as house dust mites or animal fur. An excess of IgE triggers shortness of breath, wheezing and coughing, but by reducing the availability of IgE, Xolair targets a root cause of allergic asthma attacks.

Xolair is more expensive than other asthma drugs, at around $30,000 per patient per year, and only usually prescribed for sufferers who have difficulty controlling their asthma after they have tried a full dosage of inhaled corticosteroids and long-acting beta agonists. This medicine is given by injection in a doctor's office every two to four weeks because it may cause a severe allergic reaction (anaphylaxis) which curtails its widespread use.

But the highest hopes are for the New York-listed pair of Swiss pharma Novartis (NVS) and Schering-Plough (SGP) and their once-daily inhaled corticosteroids/long acting beta-agonist product as the top-selling single brand globally in 2017. The new treatment will combine Schering-Plough's Asmanex corticosteroid mometasone with Novartis' fast acting beta-agonist indacaterol, an ultra-long acting beta agonist that needs only be taken once a day, unlike Formoterol and Salmeterol. An inhaled bronchodilator-corticosteroid combination with true 24-hour efficacy and rapid onset of action will be an important new treatment option.

The phasing out of CFC-containing inhalers in the US after this year will also have a big impact on the market for the traditional short-acting beta-agonist (SABAs) such as Salbutamol and the main beneficiary is expected to be Teva/UCB's Salamol/ProAir owing to its favourable price compared with other marketed HFA treatments.

The over-the-counter allergy market is also very crowded and largely populated by generics. The most prescribed allergy drug in the US is New York-listed Merck's (MRK) once-a-day tablet Singulair (Montelukast) which last year made the list of the top 10 best-selling prescription drugs in the world and works by blocking the effects of leukotrienes, substances that cause the airways in the lungs to become swollen and red and the muscles around the airways to tighten. This year, however, sales have been hurt by a light allergy season, safety concerns over a potential link with suicidal behaviour and competition from anti-histamines such as Pfizer's (PFE) Zyrtec, now sold over-the-counter by New York-listed Johnson & Johnson (JNJ). Singulair's US patent expires in 2012 and there is also potential for a generic challenger before then.

While asthma is said to affect up to one in four urban children, and is the biggest cause of childhood death, it is changing demographics rather than increasing prevalence that is likely to exert the greatest influence on the market in coming years. By 2015, the proportion of elderly asthmatics will increase by 18%, with the US and Japan affected most, according to researchers at Lead Discovery. Five million adult asthmatics may have a diminished or suboptimal sensitivity to corticosteroids, and alternative anti-inflammatory agents will be required.