Approval puts Bausch step closer to dermatology turnaround
- Bausch Health has won tentative approval for a plaque psoriasis lotion that the company sees as key for both turning around its dermatology business and for driving long-term growth.
- Branded as Bryhali, the lotion is a potent to superpotent corticosteroid containing the active ingredient halobetasol propionate, which has been found to reduce itching and inflammation. Bausch expects final approval next month, when a related product loses exclusivity, and to launch shortly thereafter.
- Ortho Dermatologics, Bausch's recently rebranded dermatology business, has seen declines as of late due to reimbursement challenges with third-party payers. Revenue from the unit totaled $283 million over the first six months of 2018, down 25% compared to the same period a year prior.
Monday's announcement is welcome news for Bausch and its dermatology portfolio, especially considering the Food and Drug Administration rejected another of the company's key psoriasis candidates in June. Bausch resubmitted that candidate, Duobrii (halobetasol propionate and tazarotene), in August and anticipates an approval decision by mid-February.
Duobrii and Bryhali are both part of Bausch's "significant seven," a group of products the company expects to provide long-term growth — and collectively bring in more than $1 billion in peak total revenue over the next five years.
In that same time period, Bausch executives want to double revenue from the company's dermatology business.
Valeant Pharmaceuticals rebranded itself for its Bausch subsidiary earlier this year, an attempt to shed any connection to controversies over drug price hikes and accounting irregularities. Management kicked off a turnaround plan last year, rebranding the dermatology business to Ortho Dermatologics and narrowing its focus to acne and psoriasis.
They also pumped money into R&D and commercialization efforts. In January 2018, for instance, the company grew its Ortho Dermatologics sales force more than 25%.
Those investments look like they might be starting to pay off. Bausch's Chief Financial Officer, Paul Herendeen, on a second quarter earnings call touted how the company's sales and marketing team were driving prescriptions for "more challenged brands" as well as net sales for brands in more favorable markets, like Elidel (pimecrolimus), Onexton (clindamycin phosphate/benzoyl peroxide) and Siliq (brodalumab).
Notably, Siliq is also one of Bausch's significant seven.
"Siliq is a slow build, but week to week to week we are seeing more physicians write the product, our script count grow," Herendeen said on the Aug. 7 earnings call.
The drug does, however, face stiff competition from rivals Cosentyx (secukinumab) and Taltz (ixekizumab), and carries a black box warning that's raised questions about its growth prospects.
As for Bryhali, Bausch suspects the potency it showed in the clinic, plus the fact that patients were able to take it for as long as eight weeks without experiencing increased epidermal atrophy, will help it standout from other topical plaque psoriasis treatments.
"Topical steroids are a cornerstone of psoriasis treatment, but the efficacy of a high-potency steroid often comes with an increased risk of adverse events and a duration of use limited to two to four weeks," said Lawrence Green, an associate clinical professor of dermatology at George Washington University School of Medicine, in an Oct. 8 statement issued by Bausch.
"In clinical trials Bryhali Lotion has demonstrated good local tolerability for up to eight weeks of treatment without sacrificing efficacy, making it an important new treatment option for psoriasis patients," he added.
Bausch stock was trading as high as $27.59 per share Monday morning, a nearly 5% jump from the per share value at Friday's market close.
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