Migraine Drug May Be Chapel Hill, N.C., Drug Maker's 'Billion Dollar Baby'

Trexima, an experimental migraine drug with blockbuster potential, is curing the headaches of Pozen's investors - at least for now.

The Chapel Hill drug-development company struck out in two previous attempts to get a migraine drug approved by federal regulators. On Friday, the company disclosed in a regulatory filing that it's considering selling the rights to one of the two failed drugs.

But Pozen stock has nearly tripled since mid-April, when the company announced test results that showed Trexima works well.

"Trexima is Pozen's billion-dollar baby," RBC Capital Markets analyst Ken Trbovich wrote in a research report.

If the drug passes regulatory muster and is brought to market, Trbovich projects that Pozen could receive $1 billion in royalty payments over 10 years.

"There's still some hangover from the past failures," he acknowledged, and a third failure remains a possibility. But Pozen's stock has recovered from a year ago and continues to rise, which indicates that investors' confidence in the company is building, he said.

Pozen's shares closed at $10.89 Monday, up 16 cents.

Positive test results for Trexima are one reason, especially since earlier results had raised some questions about the drug's effectiveness. But another reason is GlaxoSmithKline's involvement in getting Trexima to market, Trbovich said.

In June 2003, GSK signed on to help Pozen develop and market Trexima. The deal promised Pozen $160 million in upfront and milestone payments. Following regulatory approval of the drug, GSK agreed to pay Pozen royalties on sales.

The deal made sense to GSK, the British drug maker that operates one of its U.S. headquarters in Research Triangle Park and employs about 6,000 in the Triangle.

Trexima is a combination of naproxen, a painkiller found in over-the-counter drugs, and Imitrex, GSK's blockbuster migraine drug. The Pozen deal would allow GSK to protect its 60 percent share of the U.S. migraine drug market when Imitrex loses patent protection in 2009.

"Buying Pozen's stock is buying an option on Glaxo's Imitrex business," Trbovich said.

Imitrex generated U.S. sales of about $1.1 billion last year. GSK declined to say when it would stop promoting Imitrex and switch to Trexima.

IMITREX ® is used to treat migraine headaches once they occur. It is not designed to prevent migraines. However, it should be taken at the onset of the first symptoms of a migraine. Imitrex is the most widely prescribed acute migraine medication in the U.S.
For more information check Imitrex
On Aug. 8, Pozen filed a request with the Food and Drug Administration to review Trexima and approve it for sale. The FDA is expected to determine by mid-October whether the request is complete. But the agency isn't expected to rule on Trexima until at least June.