It's not like Novartis is making any money selling the schizophrenia drug. Fanapt sales during the third quarter were so inconsequential that Novartis didn't even disclose a specific revenue figure. Instead, Fanapt was thrown into a catch-all "other" bucket.
In the second quarter, Novartis reported $7.4 million in Fanapt sales. If Novartis' disclosure policies remained consistent, it's reasonable to assume third-quarter Fanapt sales fell meaningfully below $7.4 million. If not, Novartis probably would have released the actual sales amount this week.
Novartis began selling Fanapt in January 2010 after paying Vanda $200 million upfront to license the drug for the U.S. schizophrenia market. Seven quarters of dismal sales later, it's probably dawning on Novartis that recouping its Fanapt investment won't happen any time soon, if ever. The drug is a money-loser at a time when Novartis is laying off employees and cutting costs.
A Vanda spokesperson told me its new chief commercial officer Bob Repella was hired to oversee launch preparation for tasimelton, an experimental sleep drug currently in phase III for patients with non-24-hour sleep wake disorder. Repella will also work to market Fanapt globally. The drug is currently under approval review by European regulators.Working on the launch of tasimelton, an old drug with a checkered past of disappointing clinical trial results, seems a bit optimistic given the risk involved with the ongoing phase III study. More likely, Repella was brought on to figure out how Vanda can best salvage Fanapt in the U.S. when Novartis bails. If Vanda chooses to sell Fanapt on its own, the company will receive 100% of the revenue (minus a small royalty paid to Titan Pharmaceuticals (TTNP).) Vanda's operating expenses will increase drastically, however, because the company will need to hire and maintain a sales force, something it doesn't do now. Add in marketing costs tied to selling a drug, too. Maybe Vanda will try to find a new marketing partner for Fanapta. Given Novartis' experience, that's going to be a tough job (made tougher by the U.S. approval this week of a generic version of the top-seling schizophrenia drug Zyprexa.) -- Written by Adam Feuerstein in Boston
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