Specialty Pharma Focus: Reckitt Benckiser Plans to Spin Off Pharma Business

Reckitt Benckiser has announced plans to spin off its pharmaceutical business with its shareholders voting on the plan at a meeting scheduled for December 11, 2014. If approved, the newly formed company, Indivior, will create a specialty pharmaceutical company with sales in excess of $1 billion.

A new entry is in the making for the specialty pharmaceutical market as the Reckitt Benckiser Group (RB), the consumer healthcare and hygiene company, plans to spin off its pharmaceutical business pending shareholder approval later this month. The new company, to be called Indivior, will create a specialty pharmaceutical company with a focus on pain management with sales in excess of $1 billion. A look at the commercial portfolio and pipeline of Indivior and its proposed management team.

Examining the demerger
RB announced in July 2014 that it was pursuing a demerger of its RB Pharmaceuticals (RBP) business with a separate UK listing, and this week, the company detailed a proposed timetable for the demerger.

The new demerged RBP company, to be called Indivior PLC, will be UK domiciled and listed on the  London Stock Exchange. A RB General Meeting to approve the demerger will be held on December 11, 2014. If the demerger proceeds, RB shareholders who are registered on the RB share register at the demerger record date will receive one Indivior ordinary share for each RB ordinary share held. If the demerger proceeds, it is expected that Indivior shares will begin trading on December 23, 2014.

In a statement, RB said that the board of RB feels that the demerger is in the best interests of both RB and Indivior, will result in a stronger future for both companies, and that the former RBP business would be better served as a stand-alone specialty pharmaceutical company as Indivior. RB cited several reasons for the demerger. First is the significant share of the US buprenorphine-based opioid addiction treatment market captured by Suboxone Film, RBP’s key product. Suboxone is a partial-opioid agonist indicated for the treatment of opioid dependence, consisting of buprenorphine hydrochloride and naloxone hydrochloride. The patent for Suboxone expired in the US in 2010 and has since faced increased generic-drug competition. The company discontinued the tablet form of the drug in March 2013 and subsequently introduced a sublingual film. RB said the demerger would also address the potential volatility of Suboxone’s market share following the launches by generic tablet competitors, with three currently in the market and a fourth approved in September 2014, which has yet to launch. Another reason cited for the demerger was investment in a pipeline of new and developed products, most of which are planned for launch over the next five years as well as opportunities for continued expansion in the US and globally. As a result of these factors, the RB board concluded that the RBP business is at a point where it has good long-term prospects as a global, independent, specialty pharmaceuticals business.

Howard Pien has been appointed chairman of Indivior. He has a 30-year history in pharmaceuticals. His early executive career was in large pharmaceutical companies (Abbott and GlaxoSmithKline) and later in Chiron and Medarex. He is on the board of five specialty pharma/life sciences companies, including as chairman of Vanda Inc.  Shaun Thaxter, will be chief executive officer; he has more than 15 years of experience in the pharmaceutical sector. 

In planning to spin off its pharmaceutical business, RB will continue its focus as a consumer healthcare and hygiene company. In late April 2014, RB, which had been in discussion with Merck & Co. for acquiring Merck’s consumer healthcare business, dropped out of consideration for the business, which eventually was acquired by Bayer HealthCare for $14.2 billion, in a deal that closed in October 2014.  RB’s most recent large-scale acquisition in the consumer healthcare space was the $1.4-billion acquisition of Schiff Nutrition International, a provider of branded vitamins, nutrition supplements and nutrition bars, in 2012. In 2013, Reckitt had two important deals: a $482-million three-year collaboration with Bristol-Myers Squibb (BMS) for the exclusive rights to sell, distribute, and market specified BMS over-the-country brands in Latin America, with an option to buy at the end of the collaboration and the acquisition of Guilong Pharmaceuticals to expand into the market for traditional medicines in China.

Indivior: A new specialty player
If the demerger proceeds as planned, Indivior will be a specialty pharmaceutical company focused on the treatment of addiction and closely related mental health disorders. Indivior will be domiciled in the UK, initially with a head office in Slough. For 2013, the RBP business posted net revenues of $1.2 billion and net income of $489 million. Led by Suboxone, 80% of RBP’s net revenues were in the United States. Overall, Indivior’s core products, which are currently sold in up to 44 countries, consist of Suboxone Film (buprenorphine and naloxone sublingual film), Suboxone Tablet

Indivior’s key product is Suboxone, a combination of buprenorphine and naloxone, for treating opioid dependence. 

(buprenorphine and naloxone sublingual tablets), and Subutex Tablet (buprenorphine sublingual tablets), all of which are treatments for opioid dependence. Suboxone Film, initially launched in the US in 2010, maintains a share of 60% in the US market for buprenorphine-based opioid dependence treatment (based on volume of prescribed milligrams) despite market entry of generic tablets and branded competitors, according to the prospectus of Indivior. The company anticipates that the recent approval of two additional generic competitors (one of which has already entered the US market) and the entry of an additional branded competitor in the US in the last quarter of 2014 will result in downward pressure on its business as it waits for expected benefits from pipeline launches, which include new formats for Suboxone.

With respect to Indivior’s intellectual property protection for Suboxone Film, Indivior has a patent portfolio consisting of formulation patents, process patents, and pending patent applications relating to the product. In the US, Indivior has three listed patents included in the US Food and Drug Administration’s (FDA) Approved Drug Products with Therapeutic Equivalence Evaluations (which lists drug products approved on the basis of safety and effectiveness by the FDA) covering Suboxone Film, with the latest expiring patent providing protection until March 2030. In the European Union (EU), where the launch of Suboxone Film is expected in 2016, Indivior has patent protection for the product until October 2022.

Indivior also sells two legacy products: Temgesic sublingual tablets and injections outside the US for the treatment of moderate-to- severe pain and Buprenex injection in the US for the relief of moderate-to-severe pain. Temgesic is buprenorphine hydrochloride in sublingual tablet form or in injection, and Buprenex is buprenorphine hydrochloride for injection. They comprise less than 4% of total net revenues for Indivior.  

Pipeline potential
Indivior’s pipeline consists of products for the treatment of opioid addiction with new formats designed to improve patient and physician outcomes and reduce abuse and diversion, including a monthly depot injection and a swallowable tablet. Indivior also has a pipeline of products in closely related areas, including treatments for opioid overdose, cocaine overdose, and alcohol dependence as well as a monthly depot treatment for schizophrenia.

With respect to product extensions, Indivior is developing Suboxone Film for the EU. The US formulation of Suboxone Film was developed with a product quality reference target that met US FDA shelf-life specifications. The shelf-life specifications in the EU are more restrictive with respect to buprenorphine assay, naloxone assay, and naloxone-related impurities. Indivior has initiated further development work on Suboxone Film to establish shelf-life specifications that are aligned with the current Suboxone Tablet specifications in the EU. This additional development work is being pursued with the aim of improving the physical and chemical stability profile of Suboxone Film and obtaining regulatory approval in the EU within the next three years, according to the company’s prospectus.

Indivior also is developing a Suboxone tablet in higher dosages of buprenorphine using existing technology to extend the available dosage range in the EU. The new tablets, which will be packaged in child-resistant packaging, will use existing ingredients but will contain higher dosages to provide additional forms for therapeutic dosing. It is also developing RBP-6000, a monthly depot of buprenorphine, using the Atrigel delivery system, which consists of a polymeric solution of a biodegradable poly (DL-lactide-co-glycolide) co-polymer, dissolved in N-methyl pyrrolidone (NMP), a water-miscible biocompatible solvent. Upon subcutaneous injection, NMP interacts with body fluids, which replace the NMP as it diffuses out of the polymer matrix. This precipitates the polymer, trapping the drug inside and forming an amorphous solid implant in situ. The solid implant releases buprenorphine over a minimum of 28 days by diffusion from the polymer as the polymer biodegrades. Phase III trials of RBP-600 are expected to begin in the first quarter of 2015. Indivior currently plans to launch the product in the US in 2017 and in the EU in 2018, if approved.

The company also is developing RBP-6300, a swallowable capsule with abuse-deterrent potential. Sublingual delivery of Suboxone was originally used to bypass the first-pass metabolism of buprenorphine in the stomach and liver. Indivior is developing buprenorphine hemiadipate HCl, an ester of buprenorphine and adipic acid, as a pro-drug to improve the oral bioavailability of buprenorphine for the treatment of opioid dependence. This new oral capsule also provides a naloxone-free formulation that acts as a physical barrier (cutting or pulverizing) to avoid dose-dumping and dissolution. The related technology, RBPCapsugel, aims to achieve physical abuse deterrence by using a gel-like formulation that prevents extraction of the drug for abuse. RBP-Capsugel is currently at the technical proof-of-concept stage, and Indivior currently expects US and EU approval in 2018 (assuming successful completion of clinical trials). 

In other pipeline developments, earlier this year, RBP formed an agreement with AntiOp, Inc, a specialty pharmaceutical company based in Lexington Kentucky, to co-develop a naloxone nasal spray to aid in the reversal of opioid overdose with the option to acquire all rights to the product upon receipt of regulatory and marketing approval. The product has the potential to be the first of its kind to treat overdose from opioid prescription painkillers and heroin. Currently, the standard medical protocol for treating opioid overdose is to administer an injectable form of naloxone. It must be administered intravenously or as a shot into muscle or under the skin. The nasal alternative product using AntiOp’s drug nasal formulation uses a prefilled, unit-dose, disposable delivery system designed for insertion into the nose of an overdose victim to administer naloxone across the nasal mucosal membrane for absorption.  

In May 2014, RBP entered into an exclusive worldwide licensing agreement with XenoPort, Inc. for the development and commercialization of a clinical-stage oral product candidate, arbaclofen placarbil. Arbaclofen placarbil is a new patent-protected chemical entity that Indivior intends to advance into a Phase IIB proof-of-concept study for the treatment of alcohol use disorder.

Since the approval of disulfiram by the FDA 1951, three additional treatments have been approved for the treatment of alcohol dependence: oral naltrexone (1994), acamprosate (2004), and intramuscular naltrexone (2006). Recently, nalmefene has also been approved in the EU (2013) under an “on demand” treatment schedule. The pharmacological properties of baclofen have led to the investigation of its benefit for the treatment of alcohol dependence. Baclofen was originally approved by the FDA in 1977 for use in spasticity associated with neurologic conditions, such as multiple sclerosis and as a therapeutic agent for treatment of cocaine abuse. Unlike racemic baclofen, arbaclofen placarbil is well absorbed from the large intestine, allowing the drug to be successfully formulated in a sustained-release formulation that may allow for less frequent dosing and reduced fluctuations in plasma exposure as a means to treat alcohol use disorders. Indivior is currently targeting US and EU approval in 2020.

Invidior is also developing, RBP-8000, a cocaine esterase for treating cocaine intoxication to be administered as a single-dose, intravenous therapy. The company believes that RBP-8000 has the potential to transform the management of cocaine intoxication in emergency departments, including faster symptom resolution and shorter emergency department visit times, fewer hospitalizations, possibly fewer deaths and overall reduced cost to the medical-care system. The drug was granted a Breakthrough Therapy Designation by the FDA in the last quarter of 2014, and the company currently expects to launch the product in the US in 2019.

It is also developing RBP-7000, a monthly risperidone depot as a sustained-release product using the Atrigel delivery system. RBP-7000 is currently in a pivotal Phase III study to assess its efficacy, safety and tolerability as a treatment for subjects with acute schizophrenia, and Indivior currently expects US approval in 2017. 

The active pharmaceutical ingredients (APIs) used in Indivior products are manufactured at the company’s fine-chemical plant (FCP) located in Hull, UK, which is currently owned by RB Health, a member of the RB Group. The process of transferring ownership of the equipment within the FCP to Indivior is underway and is scheduled to be completed between the second quarter of 2015 and the second quarter of 2016, according to the company’s prospectus. In relation to the FCP, RB Pharmaceuticals Limited will enter into a long-term lease with RB Health for the building and the surrounding land. The employees working at the FCP will also transfer to Indivior.

The FCP manufactures the buprenorphine HCl API used in the formulation of Subutex Tablet, Suboxone Tablet, Suboxone Film, Temgesic, and Buprenex. The FCP has the capacity to produce all the Indivior’s current buprenorphine HCl requirements with approximately 35% available capacity. Upon transition of FCP control to Indivior, Indivior will produce buprenorphine HCl for use in the manufacture of Subutex Tablet, Suboxone Tablet, Suboxone Film, Temgesic, and Buprenex. Indivior is currently engaged in validating an alternate source of buprenorphine HCl supply for Suboxone Film, according to the company’s prospectus. The naloxone HCl API is procured mainly from two suppliers for both Suboxone Tablet and Suboxone Film. Supply of naloxone HCI for Suboxone Tablet is single-sourced while supply for Suboxone Film is dual-sourced.

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