There's a range of insomnia drugs on the market, and more are on the way. That may come as good news for the tens of millions of people who suffer from sleeplessness. But maybe not for Sanofi-Aventis (SNY), maker of Ambien, the most prescribed insomnia drug.
Good news has been in short supply for the French pharmaceutical company of late. A raft of media reports recently highlighted links between Ambien and sleepwalking, binge eating, and even dangerous nighttime driving (see BW Online, 3/27/06, "Sleepless Nights for Drugmakers"). The side effects aren't new, but they're attracting increased attention as analysts, consumers, and the media try to draw distinctions between existing remedies and those coming down the pike.
For starters, Sanofi-Aventis loses its Ambien patent in October. That means it's just a matter of time before cheaper generic versions hit the market. Sanofi-Aventis is hoping to withstand some of the threat with the controlled-release version of Ambien, available in the U.S. since October, 2005.
Ambien has the lion's share of the $2 billion prescription insomnia drug market. Sepracor's (SEPR) Lunesta, available since last April, accounts for about 10%. The drug raked in $329.2 million in its first few months and in 2005 handed Sepracor its first profitable year since the company was founded 21 years ago.
And there's plenty of room for growth, analysts say. According to National Sleep Foundation (NSF) polls, nearly 6 out of l0 -- 126 million people -- experience at least one symptom of insomnia a few nights a week. Ian Anderson, an analyst at Cowen & Co., says only 16% of the target patient population is being treated with drug therapy, and he predicts market growth of up to 30% this year. Prescription insomnia drugs may generate $5 billion in sales by 2010.
Other pharmaceutical companies are eager for a slice. Indiplon, created by Pfizer (PFE) and Neurocrine Biosciences (NBIX), is expected this autumn, pending approval by the Food & Drug Administration. It too will come in two forms. The short-acting version is meant to help treat jetlag and other short-term sleep needs, such as waking up in the middle of the night.
And Indiplon's relatively short half-life reduces the likelihood of a hangover-like effect, particularly for people who use the drug in the middle of the night, according to its makers. Ambien and Lunesta both have longer half-lives, so they are typically not used as middle-of-the-night solutions, according to analysis by Goldman Sachs.
The marketing blitz likely to accompany Indiplon could benefit competitors by causing the overall demand for sleep aids to grow. Still, it's likely to grab share at the expense of Ambien while slamming the brakes on growth for Lunesta, says David Steinberg, an analyst at Deutsche Bank.
What's unclear is how Indiplon will be affected by Pfizer's new marketing policy. The company recently vowed not to begin TV and print advertising of new prescription medicine until physicians have had at least six months to learn more about them.
While ads would generate more immediate interest in a drug, the waiting period is aimed at fostering dialogue between patients and their physicians. It could mean patients will make more informed choices about prescription sleep aids -- and not get caught off guard by the side effects.