FDA Approves Eurand Drug

On Friday, the U.S. Food and Drug Administration (FDA) approved Eurand N.V.’s (EURX) New Drug Application for its pancreatic enzyme product (PEP) Zenpep. The product targets a condition where insufficient secretion of enzymes by the pancreas hampers digestion of food. This phenomenon, known as exocrine pancreatic insufficiency (EPI), causes malnutrition, impaired growth in children, compromised immune response and shortened life expectancy.

EPI is very common in cystic fibrosis patients. Cystic fibrosis causes life-threatening lung infections and serious digestive complications. Zenpep, which improves digestion and absorption by replacing the missing enzymes, is the only FDA-approved PEP to be tested in adults and children below 12 years of age. The approval of Zenpep is a major milestone for EPI patients. The drug would enable doctors to fine tune treatment regimens to achieve optimal symptom control with improved dosing precision thereby reducing pill burden.

Previously, PEPs were not regulated and approved by the FDA, but safety and efficacy concerns have compelled the agency to ask all makers of EPI drug products to receive marketing approvals by April 2010 or halt sales. EPI drugs recorded sales of about $313 million in 2008 in the U.S.

According to IMS Health, the global market for PEPs was approximately $1.13 billion in 2008. We estimate peak sales of Zenpep to be around $250 million, with a 25% share of the EPI market.

The company intends to launch Zenpep in the U.S. in the fourth quarter. It will be available in four doses to meet the requirements of infants, toddlers, adolescents and adults. The first PEP approved by the U.S. agency was Solvay SA’s Creon (pancrelipase). The drug was approved in May.

The NDA approval caused Eurand’s shares to rise by 7.5%, closing Friday at $14.46.

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