Paris-based pharmaceutical company Sanofi-Synthelabo has virtually owned the insomnia market since 1993, when it first introduced its sleep aid, Ambien, to the U.S. market. Since then, the drug's annual sales have grown to more than $1.5 billion a year. But many rivals with new sleep treatments are about to try elbowing Sanofi (SNY) out of the top spot.
From Sanofi's U.S. headquarters in New York, Chief Medical Officer Russell Ellison and Marketing Vice-President Frank Musat recently spoke by phone with BusinessWeek's Arelene Weintraub about the company's plan for staying in the lead in the growing market for insomnia remedies. Edited excerpts from the discussion follow:
Q: What are the biggest challenges involved in developing good sleep remedies?
Ellison: The trick is to come up with a drug that induces sleep quickly, helps people stay asleep, and allows them to wake up refreshed and not groggy. It's a question of developing a molecule that has the right half-life.
It's also about preferential binding. Unlike barbiturates and other early drugs, Ambien targets specific receptors in the brain that only induce sleep. What you end up with is a pattern that's very similar to natural sleep.
Q: One major criticism of Ambien is that it wears off too quickly in some patients, causing them to wake up too early. In fact, Neurocrine Biosciences (NBIX) and Pfizer (PFE) are gearing up to introduce a competing drug with a time-release formulation, which is designed to help patients who find Ambien ineffective. Why does Ambien sometimes stop working, and are you doing anything to address the problem?
Ellison: As is the case with any drug, there are people who metabolize Ambien faster than normal. We're doing a lot of work on Ambien. And we're looking at a new formulation that could help those people stay asleep longer on the drug. We hope to complete Phase Three trials this year.
Q: Sepracor (SEPR) has released data from a trial in which patients took its experimental drug, Estorra, every night for six months in the hopes that the Food & Drug Administration will greenlight it for nightly long-term use. Ambien and other insomnia drugs are approved only for short-term use. How might Estorra's study affect the sleep market?
Ellison: There's a lot we still don't know about that study. It isn't entirely clear what all the residual effects were of taking the drug nightly. We're waiting to see how the FDA reviews the data and how it affects the label.
If the data is as positive as Sepracor says it is, that may have a positive effect on the entire class of sleep aids. We're also studying Ambien taken for long durations -- two and three months -- and we're currently analyzing the data.
Q: With many competitors on the horizon, can Sanofi continue to expand sales for Ambien?
Musat: We expect to continue to do very well. We achieved year-over-year dollar growth of 24% in the first half of 2003. But we believe a better measure is prescription growth. Ambien prescriptions grew 13.6% in 2002 over 2001, whereas the growth of the overall U.S. prescription market was in the low single digits.
Q: Many consumer-advocacy groups criticize pharma companies for pitching their products direct to consumers. TV and print advertising has been key to the growth of Ambien. Why do you feel direct-to-consumer marketing is important in the sleep category?
Musat: A huge number of patients suffer from sleep disorders but don't actually go to their physicians with sleep as the complaint. We need to let them know that sleep is a legitimate concern. We're working with consumer groups and physician groups to make people aware of the negative implications of not sleeping. But we also feel direct-to-consumer advertising is an appropriate arena for that message.
Q: Insomnia is only a $2 billion market today. What's its potential peak size?
Musat: It's hard to call. What we believe is that nearly 100 million Americans complain of sleep disorders, and only 10% of them are seeing their doctors about it. We want to get 100% of them into the market.
Q: What will life beyond Ambien look like for Sanofi, once the drug comes off patent in 2006?
Ellison: We're looking at a lot of new compounds in sleep. We have one drug with a completely different mechanism of action, which is now in phase two trials. We're exploring new paradigms in sleep. If we find a great new paradigm, we'll be all over it.