It sounds like the ultimate pick-me-up. Provigil, the alertness drug sold by Cephalon Inc. (CEPH) of West Chester, Pa., started out as a niche product to treat symptoms of narcolepsy. But since its launch in 1999, the drug has soared to more than $400 million in sales, almost half of Cephalon's revenues. Doctors now prescribe it to treat everything from attention deficit hyperactivity disorder (ADHD) to fatigue associated with multiple sclerosis and depression. And it may help the millions of clinically depressed people who take medications but continue to feel sluggish, says Dr. J. Alexander Bodkin, chief of the clinical psychopharmacology research program at McLean Hospital in Belmont, Mass. For Cephalon, he says, it could be "a complete bonanza."
The question is whether the company has crossed the line in chasing those riches. In September, Cephalon disclosed it had been subpoenaed by the U.S. Attorney's office in Philadelphia regarding its sales practices. The details of the inquiry haven't been revealed, but Wall Street analysts figure it focuses on whether Cephalon has promoted its drugs -- most notably Provigil -- for so called off-label uses. Doctors can use drugs to treat any condition they want. But companies can only promote their products for uses the Food & Drug Administration has approved -- those listed on the drug's label. Cephalon executives declined to comment for this story, but corporate spokesman Robert W. Grupp says the company has complied with the law.
Cephalon is hardly the only drugmaker in the spotlight. Giants such as Johnson & Johnson (JNJ) and Genentech Inc. (DNA) have disclosed that investigators are looking at whether they have improperly promoted their products. A 1999 court decision ruled that companies could give doctors certain kinds of information on unapproved uses, including papers from peer-reviewed medical journals. That has led drugmakers to become more aggressive about communicating such information -- in turn drawing the attention of investigators at the Justice Dept. and elsewhere.
COOL, CALM, ALERT
When it comes to off-label popularity, Provigil is a standout. While the drug is approved to treat conditions like narcolepsy and a sleep disorder suffered by many people who work night shifts, SG Cowen & Co. analyst Eric T. Schmidt figures more than 50% of the drug's sales are for unapproved uses.
Why would a narcolepsy drug help address such a wide variety of disorders? While it is unclear exactly how the drug works, Provigil appears to stimulate the hypothalamus, a part of the brain believed to be involved in regulating normal wakefulness. The compound is a stimulant, like amphetamines, but does not significantly increase activity in the central nervous system. So while amphetamine users may feel wired and jittery, Provigil users generally do not. "There are very few side effects," says Dr. Thomas Scammell, associate professor of neurology at Harvard Medical School. "People who take it say they are calmly awake."
While millions in our 24/7 society might crave an energizing elixir like Provigil, it seems much of the off-label use stems from people who suffer fatigue from diseases such as depression, Parkinson's or MS. Some studies -- a number of which were paid for or conducted by Cephalon -- have shown the drug can reduce the lethargy or sleepiness associated with those ailments or their treatments. The U.S. Air Force has adopted Provigil as one of its official "go pills" for some pilots whose missions stretch out more than 12 hours. And in studies of children with ADHD, Provigil helped reduce symptoms, which may be caused by inadequate stimulation of parts of the brain.
Researchers are also studying Provigil as a treatment for debilitating lethargy and other effects of long-term cocaine use. They are finding that it actually dimmed the cocaine high, making the drug less appealing to users. Says Dr. Charles A. Dackis, chief of psychiatry at Presbyterian Medical Center in Philadelphia: "One patient even got into a fight with his dealer because he thought he sold him bad cocaine."
For a small company like Cephalon, these are all tantalizing opportunities. And while interviews with physicians and researchers did not reveal evidence that the company has improperly marketed the drug, it is clear Cephalon has tried to get as much information as possible out to prescribing doctors around the country.
Take the use of Provigil to treat children with ADHD -- a $1 billion-plus market. In August, Cephalon announced that in three separate trials the drug significantly reduced symptoms. The company hopes to file with the FDA by the end of the year to make ADHD an approved use for Provigil.
A DELICATE DANCE
But in the meantime, Cephalon on several occasions has paid Dr. Fletcher B. Taylor, a physician in Tacoma, Wash., to meet with small groups of doctors to give talks on Provigil. Taylor did an early study on his own looking at the use of Provigil in ADHD, and got positive results. He says he does not bring up the use of Provigil for ADHD in his talks, but he answers questions -- as he is permitted to do -- if one of the doctors in the group brings it up. "Usually people do ask," Taylor says. Cephalon says it never instructs doctors on what to say at such meetings.
There are other forums to get the word out on Provigil. Doctors attend sessions called "continuing medical education" aimed at providing them with the latest information on certain diseases and treatments. These CMEs are often paid for by drug manufacturers and run by independent companies that select the speakers and curriculum without the input of the drugmaker. Still, by funding CMEs on certain topics, drugmakers have a good shot at spreading news on their products to a broad audience.
Cephalon has funded CMEs that touch on unapproved uses for Provigil. One recent program focused on treating excessive daytime sleepiness in patients with Parkinson's disease. Given the limited options for treating that sleepiness, the program detailed how Provigil might be a useful therapy. The sponsor of the program, a firm called Projects in Knowledge Inc., said that Cephalon paid for the program but had no input on the material discussed.
If Cephalon investors are concerned about the Justice Dept. probe into the company's marketing, they have an even bigger worry. In mid-2006, analysts expect generic versions of Provigil to hit the market, despite a court battle by Cephalon to hold such drugs at bay. It won't be a problem in the ADHD arena: Cephalon is seeking approval for a unique dosage form, which rivals will be barred from marketing. But for all other conditions, a generic Provigil could sap Cephalon's revenues.
That's why Cephalon is developing a follow-on version of the drug, called Nuvigil. Provigil is a molecule made up of two pieces, or isomers. Nuvigil is a drug based on just one of those isomers. In theory, it should last longer in the body than Provigil and may have less of an interaction with birth control pills, which Provigil can render less effective. Analysts expect Cephalon to launch Nuvigil, if it gets approved, in early 2006 and to move aggressively to switch patients away from Provigil before it goes generic.
If that works, Nuvigil may be a profitable sequel to Provigil -- with the same ever-expanding list of possible uses. It's unlikely the controversy surrounding Cephalon and its "go pill" will be laid to rest anytime soon.
By Amy Barrett in Philadelphia