A n n u al R ep or t 2 0 0 7
content
Our cover photo captures the feeling shared by people suffering from asthma. Orexo is developing a number of products aimed at combating asthma and AOL. Read more about our products on page 14.
2007 in bRief fold-out
CeO’s RemARks 2
business mOdeL 6
dRiving fORCes 12
PROduCt PORtfOLiO 14
teChnOLOgy PLAtfORms 28
sCientifiC PLAtfORms 30
kibiOn 32
emPLOyees 36
CORPORAte gOveRnAnCe 38
bOARd Of diReCtORs’ RePORt
Highlights 41
2007 in brief 42
Orexo’s product portfolio 45
Financial developments during 2007 52
Shares and shareholders 55
Corporate governance 58
Financial information in brief 61
Definitions of key figures 65
finAnCiAL RePORts 2007 67
Consolidated balance sheets 68
Changes in consolidated shareholders’ equity 70
Consolidated statements of operations 71
Consolidated cash-flow statements 72
Parent company balance sheets 73
Changes in parent company’s shareholders’ equity 75
Parent company statements of operations 76
Parent company cash-flow statements 77
ACCOunting PRinCiPALs And nOtes 78
AuditORs’ RePORt 117
bOARd Of diReCtORs & exeCutive mAnAgement teAm 118
Key events during the year
Patent for OX17 is approved for Europe.
•
Orexo establishes salesforce for Nordic markets in joint venture
•
with ProStrakan.
EU registration process of Rapinyl™ is referred to EMEA´s
•
Committee for Medicinal Products for Human Use (CHMP).
Orexo reports favorable results for Clinical Phase III trials of
•
Sublinox™ (OX22).
Orexo reaches an agreement to acquire Biolipox AB,
•
creating an innovative specialty pharma company.
Biolipox completes acquisition from Inflazyme.
•
Orexo announces new Executive Management Team.
•
Orexo’s partner, Endo, announces positive results from interim
•
analysis of Rapinyl™ Clinical Phase III trial.
Key events after year-end
Orexo optimizes the product portfolio – focuses on
•
commercialization of prioritized projects.
Orexo discloses new mechanism for asthma and
•
COPD treatment.
Rapinyl™ receives Swedish Marketing Authorization.
•
VOLUME Volume
2007 in brief
Share price and trade volume
ABG Sundal Collier, Alexander Lindström
d. Carnegie AB, kristofer Liljeberg-svensson & Camilla Oxhamre Handelsbanken Markets, erik hultgård
Kaupthing Bank, benjamin nordin Redeye, björn Andersson
Analysts who monitor orexo
6 702 971 1 403 193 1 397 142 1 321 200 1 132 752 738 620 734 496 595 359 593 397 534 541 495 250 440 940 395 900 314 100 300 000 232 242 215 600 4 069 692
21 617 395
31.0 6.5 6.5 6.1 5.2 3.4 3.4 2.8 2.7 2.5 2.3 2.0 1.8 1.5 1.4 1.0 1.0 19.0
100.0 HealthCap
Apax
Sofinnova Capital AP4
SlS Venture Nordea fonder
Catella Kapitalförvaltning & fondförvaltning Carnegie funds
Credit Agricole Private Equity Pyrinox AB
lundqvist, thomas Auriga Ventures AP3
Rasjö, Staffan Nyström, Christer Claesson, Hans-Erik Gamla livförsäkringsbolaget Övriga
total
shareholder number of shares Percentage of
shares and votes
Share and shareholders as of December 31, 2007
Product portfolio
PRioRitizEd PRoduCtS iN wHiCH liCENSiNG AGREEMENtS HAVE BEEN SiGNEd
PRioRitizEd PRojECtS iN wHiCH liCENSiNG diSCuSSioNS HAVE BEEN iNitiAtEd Rapinyl™
indication: treatment of breakthrough pain Status: Registration phase/Clinical Phase Partners: endo, Prostrakan, kyowa hakko
oX-MPi
indication: treatment of pain, inflammation and rheumatoid arthritis Status: Preclinical phase
Partners: boehringer ingelheim
Sublinox™ (oX22)
indication: treatment of insomnia Status: Registration phase/Clinical phase
oX17
indication: geRd Status: Clinical phase ii/iii
oX-NlA
indication: Rhinitis Status: Clinical phase ii
oX914
indication: treatment of asthma and COPd Status: Clinical phase ii
oX2477
indication: treatment of asthma and COPd Status: Preclinical phase
oX-Cli
indication: treatment of asthma and COPd Status: Preclinical phase
We have a clear goal – to develop new pharmaceuticals with high medical and commercial potential. To achieve this, we have created a specialty pharmaceutical company that is focused on developing new, patented drugs by combining well-documented substances with innovative technologies.
We also apply our world-class research on arachidonic acid and its affect on inflammatory diseases to develop new treatments for respiratory and inflammatory diseases.
Today, Orexo has a number of strong global partnerships, with a combined
potential commercial value in excess of SEK 3.5 billion. Our primary goal
in 2008 is to support our existing collaborations and to sign additional
licensing and development agreements. This way, we can free up resources
to create value for our shareholders and partners, while simultaneously
reducing dependence on individual projects.
CEO’s rEmarks
CEO’s rEmarks
From the development of entirely new pharmaceuticals to the reform- ulation of existing substances, we are building a strong new Orexo.
Our broader product portfolio makes us an attractive cooperation part- ner for large, international pharmaceutical companies – increasing our long-term possibilities to become a profitable and successful company.
The highest priority during 2008 is to promote existing collaborations and to sign new cooperation agreements for a number of prioritized projects.
CommerCial Cooperation is the Central foCus for a new stronger orexo
the acquisition of Biolipox in the autumn of 2007 resulted in a strong company with an attractive product portfolio. it offered favorable potential to strengthen our positions within pain and inflammation – areas in which there are currently high levels of unmet medical needs.
orexo is a pharmaceutical company that specializes in utilizing its broad knowledge base in medicine and pharmaceutics to improve the medical treatment value in existing drugs. until the acquisition of Biolipox, development work focused on combining well-documented pharmaceutical substances with orexo’s patented drug-delivery methods and expertise in so-called dry formulations, such as tablets, to create new, patented drugs within such areas as acute pain and sleep disorders.
Biolipox was a research-intensive pharmaceutical company that developed entirely new drugs for inflammatory diseases, such as the widespread diseases asthma, CopD, rhinitis, pain and arthritis. the scientific leading-edge gained through Biolipox in research is related to the bodily substance arachidonic acid and its transformation to biological mediators – including prostaglandins and leukotrienes, which are significant in the onset of many diffe r ent inflammatory diseases. Biolipox has its roots in research conducted at the Karolinska institute, where operations are based.
as a result of the acquisition of Biolipox, orexo now has a strong product portfolio in the primary product areas of pain and inflam- mation. these two product areas are being prioritized in 2008.
at the end of 2007, endo pharmaceuticals, which holds rights to rapinyl™ on the north american market, published positive
CEO’s rEmarks
ongoing phase iii study with rapinyl™. in addition, a distribution agreement was signed during the year with hospira, a specialty pharma company, giving hospira exclusive rights to market and sell rapinyl™ in southeast asia as well as australia and new Zealand. marketing rights were previously outlicensed in the us, eu and Japan. a distribution agreement was also signed for Cis (russia and countries in the former soviet union), Bulgaria and romania. moreover, the swedish medical products agency decided to approve rapinyl™ in sweden, based on the evaluation report that the agency submitted in its role as reference country in the eu regulatory process. in the event of a possible adverse decision, sales rights in sweden cease.
Prioritized Project Portfolio
altogether, the agreements signed for rapinyl™ and the agree- ment Biolipox signed in 2005 with Boehringer ingelheim for development of selective pgs2 inhibitors, represent a combined value in excess of sek 3.5 billion. these agreements can be viewed as models for orexo’s strategy in the future.
we will prioritize existing collaborations while at the same time continuously seeking new partners for our attractive product candidates. accordingly, we have decided to gather our resources and prioritize those projects we consider to have the best commercial possibilities.
our long-term goal is to also build a proprietary sales and mar- keting organization. a first step in this direction was the nor- dic sales company formed during the year with the prostrakan group. the company has the nordic sales rights to both orexo’s and prostrakan’s portfolios, comprising future as well as the mar- keted products tostrex®, rectogesic® and Droperidol®, followed by rapinyl™ and prostrakan’s product sancuso® for nausea and vomiting caused by chemotherapy.
in addition, orexo’s wholly owned subsidiary Kibion continues to grow, with sales of msek 24.9 in 2007, compared with msek 17.3 in 2006 and msek 5.1 in 2005. the sharp rise in sales is due to the acquisition in 2006 of noster system aB, as well as favorable sales growth for Kibion’s two products – Diabact® uBt and heliprobe™ system. Currently, Kibion is active in some 40 countries and is assessed as having continued favorable growth in sales per market and number of markets.
within orexo and among the company’s employees there is a passion and strong belief in what we are doing. Combined with the company’s extensive know-how in our fields of activity, this represents orexo’s foremost strength and potential. at the same time, one of our challenges is to nurture and develop these characteristics in the new, united organization. accordingly, in parallel with securing new cooperation agreements, one of our foremost priorities is to continue to work with the integration of the two corporate cultures, brought together through orexo’s acquisition of Biolipox. our aim is to promote the conditions needed to achieve our goals.
orexo’s move in the autumn of 2007 to the former pharmacia’s (pfizer) premises in uppsala provides improved possibilities for us to conduct our operations and, when we have signed new cooperation agreements, orexo will have excellent possibilities to cope with future projects.
our ambition for 2008, however, is clear: orexo will focus on those projects assessed to be nearing commercialization and shall sign cooperation agreements before taking on additional projects.
torbjörn Bjerke, President and CEO
“We will prioritize existing collaborations, while at
the same time continuously seeking new part-
ners for our attractive product candidates.”
businEss mOdEl
a Business moDel with maJor CommerCial potential –
anD limiteD finanCial risK
New, PateNted drugs By comBiNiNg well-documeNted suBstaNces with iNNovative techNologies
we combine approved active substances with our drug-delivery technologies in such a manner that it increases their therapeutic value. for example, we develop drugs that are faster-acting or simpler to administer. the objective behind this business model is to bring products to market more quickly, with lower development risks and at lower costs.
orexo develops patented pharmaceuticals for areas in which there is a distinct medical need not being met by existing therapies.
this is accomplished through a step-by-step process. first, we analyze the areas in which these needs exist. this could involve that a patient cannot proceed with his or her drug treatment because the tablet is too large and difficult to swallow, or that injection is required so that the drug provides rapid pain relief. thereafter, we try to meet the need through combining existing substances with the company’s internally developed and patented technologies and our unique expertise within so-called dry formulations, for example, tablets. the basic principle is to adapt the medication and treatment to a patient’s specific needs or preferences.
an important competitive advantage for orexo is the ability to develop new drugs rapidly – at low cost and with limited development risk. to accomplish this, we work with well- documented substances that we refine with customized, patented technologies. as a result, compared to traditional drug development with new or unproven substances, the product candidates have more
favorable conditions to rapidly and successfully proceed through the clinical trial phases. orexo’s expertise in drug registration also contributes to shortening the documentation phases.
orexo’s strategy is to document the product candidates through clinical trials and thereafter to secure licensing agreements with the
“right” partner for any remaining documentation and registration as well as marketing and sales of the product. we define the “right”
partner as a pharmaceutical company with a product portfolio in which our product fits and is strong in markets we consider to be attractive.
orexo develops products with significant medical and com- mercial potential. as compensation for the market rights to a new product, we place strong demands on our cooperation partners.
they should have a proven ability to rapidly bring products to market, strong marketing and sales organizations and clearly show an interest and commitment to our products.
New treatmeNt forms for resPiratory aNd iNflammatory diseases
orexo’s development projects within respiratory and inflammatory diseases focus on widespread diseases in which existing treatments are inadequate, such as asthma, CopD and rhinitis. we develop new, potentially market-leading drugs and are world-leading in the arachidonic acid area. the product portfolio currently com- prises four prioritized products within this category, two of which are in the preclinical phase and two in clinical phases.
Orexo is a specialty pharmaceuticals company that focuses on the develop-
ment of patented new drugs by combining well-documented substances with
innovative technologies. It also develops new treatment forms for respiratory
and inflammatory diseases. In both cases, Orexo’s business model is based
on creating favorable commercial conditions – with limited financial risk.
businEss mOdEl
orexo strives to identify cooperation partners for its projects for further development and commercialization in favorable phases of the development process. the aim is to reduce the risks the company assumes in individual pharmaceutical projects and to increase the probability that the drug will be successful.
in strategic partnerships, orexo can contribute both the technological intangible rights as well as the expertise in a prioritized therapy area. the goal is to be recognized as an attractive partner to leading pharmaceutical companies within the fields of respiratory and other inflammatory diseases. the optimal time for outlicensing depends mainly on the nature of the project, as well as the market development.
two years ago it was apparent that the use of certain existing pain-relieving drugs, Cox-2-inhibitors, increased the risk for cardiovascular side-effects. as a result, a demand emerged for better and safer pharmaceuticals that set the stage for outlicensing of projects with the selective pge2-inhibitor. this shows that with a strategic mindset and a well-prepared project organization it is possible to capitalize on advantageous situations when they arise.
marketiNg aNd sales
By acquiring 50 percent of prostrakan aB through a directed cash issue, orexo has initiated the next phase in its growth strategy.
the company holds the nordic sales rights for both orexo’s and prostrakan’s products, comprising future as well as the marketed
rapinyl™ – orexo’s patented product for the treatment of break- through cancer pain, for which prostrakan has distribution rights in europe – and prostrakan’s product sancuso® for nausea and vomiting caused by chemotherapy.
“Orexo’s strategy is to document the
product candidates through clinical
trials and thereafter to secure licens-
ing agreements with the ‘right’ partner
for any remaining documentation and
registration as well as marketing and
sales of the product.”
businEss mOdEl
Currently, Orexo has signed license agreements valued at up to SEK 3.5 billion in milestone payments and additional sales royalties upon commercialization of the products. The two predominant agreements pertain to Rapinyl
™and OX-MPI. As regards Rapinyl
™, Orexo has outlicensed the exclusive rights to develop and market the product on the North American market to Endo Pharmaceuticals. In the case of OX-MPI, the company has a signed a worldwide exclusive research collaboration and development license agreement with Boehringer Ingelheim for the development of a new class of pharmaceuticals with a new effect mechanism for treatment of pain and inflammation.
OREXO’S BuSINESS MOdEl – TWO EXAMPlES
rapinyl™ – for treatment of
breakthrough pain in cancer patients
in the case of rapinyl™, orexo took the well-documented, power- ful substance fentanyl and based on its main technology – the sub- lingual dosage form, whereby a rapidly-dissolving tablet is placed under the tongue – developed an effective treatment for break- through cancer pain as a first indication. the sublingual dosage form combines rapid dissolution and fast onset of action with predictable effects – the cornerstones for effective relief of acute pain.
as a result of orexo’s drug-delivery technology, these “on-demand”
properties for a pain drug could be developed at a fraction of the cost of those based on traditional development of a new, patent- able drug. it also enabled orexo, just two years after initiating the development of rapinyl™, to sign a significant license agreement with endo pharmaceuticals, a specialty pharmaceutical company with a market-leading position in pain management.
“Breakthrough pain in cancer patients requires immediate treatment. The positive results from our interim analysis of the ongoing Phase III study for Rapinyl
™confirm that the product can offer effective pain treatment.”
Nils-otto ahnfelt, VP drug delivery Projects
businEss mOdEl
oX-mPi – for treatment of inflammatory pain
in the case of ox-mpi, the project is aimed at developing a phar- maceutical with a new mechanism of action in the arachidonic acid cascade. arachidonic acid is important for many normal bodily functions as well as in inflammatory processes, including transfor- mation to prostaglandins. Certain prostaglandins play an impor- tant role in, for example, blood coagulation, regulation of blood pressure and fertility, while other prostaglandins cause pain, such as prostaglandin e2 (pge2).
existing pain medications, for example so-called nsaiDs, inhibit the formation of all prostaglandins without taking into
account their respective “role”, which results in side-effects. a drug that specifically blocks the production of pge2, as in the case of ox-mpi, can make it possible to develop an effective pain medica- tion with fewer side-effects than those on the market today.
in 2005, when we concluded an exclusive worldwide research collaboration and license agreement with Boehringer ingelheim, ox-mpi was still in an early preclinical phase. But thanks to the high level of innovation and enormous market potential, one of the largest preclinical agreements of the year could be signed with one of the world’s leading pharmaceutical companies.
“Being able to selectively inhibit inflammatory pain without ’disturbing’ other important processes in the body would be a significant stride forward in the development of effective medication for pain relief.”
karin göhlin, VP nCE Projects
“ It feels like running up and down stairs while breathing through a straw.
The first time I suffered a major attack, I was certain I was going to suffocate.
Now I have learned to read the signals and – if I do it in time – sit down and breathe calmly to avoid the worst attacks.”
Asthma is a chronic inflammatory disease that affects 6–8 percent of the adult population and about 10 percent of children. In 2006, sales of pharmaceuticals for respiratory diseases, primarily asthma and COPd, amounted uSd 19 billon in seven of the largest markets.
(Source: IMS)
oX914
indication: Treatment of asthma and COPd read more on page 22
driVing fOrCEs
Today, many pharmaceutical companies face a dual challenge: their patents on high-volume drugs are expiring, and they’ve had limited success in developing effective drugs in certain disease areas. Both challenges make Orexo an attractive collaboration partner.
pharmaCeutiCal Companies’ Chal - l enge – orexo’s Business opportunity
the challeNge
During 2006–2008, patents for pharmaceuticals with expected sales during the period of about usd 20 billion will expire (source:
ims health 2008). the result is stronger competition from generic drugs and a risk for depressed prices, even after taking into account the added sales from emerging markets and an aging population. what’s more, to protect their positions, these compa- nies must also invest in marketing activities, leading to increased costs and further reduced margins.
Combined, these factors place high demands on pharma- ceutical companies and their ability to develop follow-on drugs.
through using, for example, drug-delivery technologies that make it possible to improve the effect of the active substance in the existing drug, a pharmaceutical company can develop a new, patentable drug.
at the same time, there are many disease areas today where no treatment exists or where the existing drugs are ineffective and carry high risks for potentially serious side-effects. at the large pharmaceutical companies, there are currently a number of on- going pharmaceutical projects, but despite enormous investments in research and development, there are extremely few projects that result in approved drugs.
By acquiring or in-licensing development projects and products from smaller, specialized companies that do not have the finan- cial resources required to conduct the project from basic research to registration, the large pharmaceutical companies can increase their chances of reaching new markets with new drugs.
oreXo’s BusiNess oPPortuNity
orexo has an internally developed, patented drug-delivery tech- nology based on the company’s unique know-how in so-called dry formulations, such as tablets. among other efforts, orexo has developed a fast-dissolving tablet that is placed under the tongue, facilitating fast, predictable and repeatable absorption of the active substance through the mucous membrane.
the company’s product for treatment of acute pain, rapinyl™, is based on this technology, while the main substance – fentanyl – is well-documented and is used in other market drugs. as a result of orexo’s drug-delivery technology, a new, patented drug was de- veloped, enabling orexo and its partners to compete on a market where there are existing drugs within the same area.
in addition, orexo has unique know-how about arachidonic acid metabolism and its effect on inflammatory processes, which is the basis for the company’s development project for treatment of inflammatory pain and respiratory diseases such as asthma and CopD, where there is a need today for new, effective drugs.
Because the medical, and consequently commercial, potential in orexo’s projects – based on its knowledge of arachidonic acid – is enormous, the company can seek research cooperation at an early stage. as a result, orexo’s financial risk is minimized while at the same time the company’s partners can broaden their portfolios in major disease areas and, in cooperation with orexo, increase their chances to reach the market with new pharmaceuticals.
driVing fOrCEs
“Combined, these factors place high demands
on pharmaceutical companies and their
abil i ty to develop follow-on drugs. Through
using, for example, drug-delivery technologies
that make it possible to improve the effect
of the active substance in the existing drug,
a pharmaceutical company can develop a
new, patentable drug.”
PrOduCT POrTfOliO
Prioritized Products iN which liceNsiNg agreemeNts have BeeN sigNed
Prioritized Projects iN which liceNsiNg discussioNs have BeeN iNitiated
other Projects with future PoteNtial for further develoPmeNt
rapinyl™
indication: Treatment of breakthrough pain status: registration phase/Clinical Phase Partners: Endo, Prostrakan, kyowa Hakko
oX-mPi
indication: Treatment of pain, inflammation and rheumatoid arthritis status: Preclinical phase
Partners: boehringer ingelheim
sublinox™ (oX22)
indication: Treatment of insomnia status: registration phase/Clinical Phase
oX17
indication: gErd status: Clinical phase ii/iii
oX-Nla
indication: rhinitis status: Clinical phase ii
oX-lsaid
indication: Treatment of asthma status: Clinical Phase ii
oX19
indication: urinary incontinence status: Clinical Phase i
oX40
indication: migraine status: formulation phase
oX30
indication: Treatment of chronic pain status: formulation phase
oX23
indication: Treatment of acute pain status: formulation phase
oX914
indication: Treatment of asthma and COPd status: Clinical phase ii
oX2477
indication: Treatment of asthma and COPd status: Preclinical phase
oX-cli
indication: Treatment of asthma and COPd status: Preclinical phase
Orexo is a specialty pharmaceutical company with leading-edge expertise in pain relief and inflammatory diseases as well as unique know-how in the reformulation of market pharmaceuticals. The company has a broad product portfolio, global partnerships with major financial potential, and established research channels, with a focus on commercialization of the following priori- tized projects:
OREXO’S PROduCT PORTFOlIO
PrOduCT POrTfOliO
PRIORITIzEd PROduCTS FOR WhICh
lICENSINg AgREEMENTS hAvE BEEN SIgNEd
rapinyl™
indication: Treatment of breakthrough pain in cancer patients status: registration phase in Europe and Clinical Phase iii in us
medical Need aNd market
approximately 30 percent of all critically ill cancer patients suffer periodically from acute pain (breakthrough pain) that requires immediate treatment. in 2006, total sales of pain medication amounted to usd 27 billion, of which drugs for the treatment of breakthrough pain accounted for about usd 1.3 billion, according to Datamonitor november 2006.
comPetitioN
treatment of acute cancer pain is currently dominated by conventional tablets and mixtures containing morphine. the dis- advantages of these are that they take a long time (30–45 minutes) to take effect, and that the effect is hard to predict. this is because the reduced intestinal function in these patients slows the absorption of the medicine. a fentanyl-containing “lollipop,” produced by Cephalon, among others, has also been available for a few years.
Cephalon also has a buccal tablet, fentora, that is administered by placing it inside the cheek. fentor is available in the us and was also approved in europe in January 2008.
comPetitive advaNtages
the rapinyl™ tablet is based on fentanyl and designed for fast dis- solution into ordered units of carriers that adhere to the sublingual mucosa as the active compound dissolves. this allows the drug to rapidly and effectively permeate the sublingual mucosa to enter
of effect than with products that must be ingested in order for the drug to enter the bloodstream by passing through the stomach.
other competitive advantages include the product’s ease of dos- age, convenient storage and handling routines as well as its strong patent protection.
the rights to register and market rapinyl™ have been licensed to prostrakan in europe, endo pharmaceuticals in the us and Kyowa hakko in Japan. in addition, an agreement has been signed with gedeon richter regarding distribution rights in the Cis (russia and other countries of the former soviet union), Bulgaria and romania, and with hospira, a specialty pharmaceuticals company, covering distribution rights in southeast asia, including australia and new Zealand.
Project status
endo pharmaceuticals initiated phase iii studies for rapinyl™
in December 2005. in December 2007, endo presented positive results from an interim analysis of the phase iii study. the results confirmed rapinyl’s rapid, pain-relieving effect. endo has previ- ously announced that it will submit a registration application in the first half of 2008 for rapinyl™ on the north american market.
rapinyl™ is undergoing registration for the european market.
the registration process for the eu countries has been trans- ferred to the emea’s Committee for medicinal products for human use (Chmp). a decision is expected during 2008.
in march 2008, prostrakan announced that rapinyl™ was approved for marketing in sweden. the product is expected to be launched in sweden under the name abstral during the third quarter of 2008 through orexo’s joint venture with prostrakan,
“It’s difficult to know which is the worst – the unbearable explosion of pain, or the knowledge that it will take time before pain-relief sets in.
The pain erases everything around me and drains me of all strength.”
This description is from a patient who – like 30 percent of all critically ill cancer patients – can experience breakthrough pain. In 2006, sales of pharmaceuticals to treat breakthrough pain in cancer patients amounted to uSd 1.3 billion.
(Source: datamonitor)
rapinyl™
indication: Treatment of breakthrough pain in cancer patients read more on page 15
PrOdukTPOrTfölj
oX-mPi
indication: Treatment of pain, inflammation and rheumatoid arthritis status: Preclinical phase
medical Need aNd market
arthritis is a painful condition caused by inflammation of the joints. the most common type of arthritis is osteoarthritis, which is highly painful in weight-bearing joints, such as the knees, hips and spine. rheumatoid arthritis, which involves inflammation in many joints simultaneously, is less common, but often more debilitating.
arthritis is one of the most widespread chronic health prob- lems. worldwide, it is estimated that 80–100 million people suffer from arthritis. nearly two thirds are women. the sales of nsaiDs and Cox-2 inhibitors amounted in 2006 to about usd 10 billion globally (ims).
comPetitioN
today, the standard treatment is conventional, non-steroid anti- inflammatory drugs (nsaiDs), such as Voltaren and naproxen.
nsaiDs are cyclooxygenase inhibitors (Cox inhibitors) that block the first step in the formation of prostaglandins. Dur- ing an inflammatory process, increased amounts of Cox-2 are formed, leading to increased production of prostaglandins – especially prostaglandin e2 (pge2). traditional nsaiDs unselectively block both Cox-1 and Cox-2. this broad effect results in side-effects, particularly stomach bleeding, since prostaglandins that are necessary for normal bodily functions are also blocked.
to solve the problem with side-effects, a second generation of nsaiDs was developed, so-called Cox-2 inhibitors, and both Celebrex and Vioxx rapidly captured market shares after their launch. the safety of Cox-2 inhibitors, however, is not as certain as initially believed. Clinical and epidemiological studies have shown that care is required in treating patients with existing gastrointestinal diseases.
in 2004, merck announced that it was withdrawing its Cox-2 inhibitor Vioxx from the market after a connection was shown with increased risk for cardiovascular side-effects (for example, heart at- tacks). indications that similar problems could exist with other se- lective Cox-2 inhibitors arose and the pharmaceutical authorities decided to act. Certain Cox-2 inhibitors were withdrawn from the market and others, including prescription nsaiDs, require a warning text on the label with a description of the increased risk for cardiovascular and well as serious gastrointestinal side-effects.
comPetitive advaNtages
several years ago, researchers discovered a new type of pro- inflammatory enzyme called membrane-associated pge synthase (mpges). this discovery could be the key to a better and safer treatment of inflammatory diseases. this enzyme is responsible for the second step in the formation of pge2 from arachidonic acid and builds up in large quantities in inflamed tissue. researchers at orexo quickly recognized that development of a drug aimed at this specific enzyme could result in more selective anti-inflammatory treatment. it would be effective against pain, inflammation and fever but due to its selectivity would have fewer side-effects than is the case with existing drugs.
Project status
in november 2005, Biolipox and Boehringer ingelheim agreed on a worldwide exclusive research collaboration and license agreement for development and commercialization of selective pge2 syn- thase inhibitors. the project has proceeded well and active inhibi- tors have been identified. several series of molecules are developed in parallel to optimize the structure -activity relationship as well as other properties that are important in developing a successful pharmaceutical. a patent portfolio with potential drug candidates has been established.
“Rapid and predictable effects without the ’day- after’ symptoms are some of the competitive advantages of Sublinox
™(OX22), Orexo’s prod- uct for treatment of insomnia, which is now pending submission of the registration applica- tion in the uS.”
lena Pereswetoff morath, VP Pharmaceutical innovation & development
sublinox™ (oX22)
indication: Treatment of insomnia status: Clinical phase
medical Need aNd market
our ever-increasing longevity and the growing population of seniors has resulted in an increased number of people who suffer from sleep disturbances. in 2006, the insomnia market in the us amounted to usd 3.3 billion, according to ims sales data. Dur- ing 2007, ambien® (zolpidem) lost its patent in the us, which has increased price pressures on the american market.
comPetitioN
when launched, sublinox™ (ox22) will compete with several products for the treatment of sleep disturbances. sanofi-aventis is currently market-leading in this area. other major players in the market are King pharmaceuticals and sepracor.
comPetitive advaNtages
sublinox™ (ox22) offers on-demand treatment of temporary insomnia, and helps the patient fall asleep quickly and remain asleep throughout the night. it is based on the well-documented substance zolpidem and orexo’s sublingual technology, involving placing a tablet under the tongue for fast and effective absorp- tion of the active substance. its primary competitive advantages include its faster onset action and simple administering. in addi- tion, sublinox™ (ox22) has the same safety profile as ambien®.
sublinox™ (ox22) is protected by strong patents.
Project status
in october 2007, orexo completed with positive results the clinical registration program by conducting efficacy and safety studies with
(ox22) renders a 30 percent faster onset of sleep aid compared to ambien® in patients suffering from sleep disturbances. the study also showed that patients sleep through the entire night. the study strengthens documentation that sublinox™ (ox22) is a safe and effective treatment for insomnia.
on January 15, 2008, a preparatory meeting was held with the fDa regarding registration application for sublinox™ (ox22) in the us. the meeting confirmed that orexo’s registration strategy and work with submitting a registration application in the first quarter of 2008 is proceeding as planned.
oX17
indication: Treatment of gastroesophageal reflux disease (gErd) status: Clinical phase
market aNd medical Need
gerD is a chronic disease that causes recurrent acid reflux, commonly known as “heart burn.” symptons occur when acid backs up into the esophagus from the stomach. about 15–20 percent of the adult population is believed to suffer from gerD. there is a need to achieve symptom relief faster with retained effect over time. the illness is currently treated primarily with acid-inhibiting products, some of which are histamine 2-receptor antagonists and some of which proton pump inhibitors. in 2006, the market for the former category was valued at usd 3 billion, and the latter category at over usd 25 billion, according to ims mat Q4 2006.
comPetitioN
when ox17 is commercialized, it will face competition from existing acid-inhibiting products as well as products currently under development. future competition will be from generic drugs, since many of the proton-pump inhibitors are losing their
PrOduCT POrTfOliO
PRIORITIzEd PROjECTS FOR WhICh
lICENSINg dISCuSSIONS hAvE BEEN INITIATEd
“I toss and turn, sweat, get heart palpitations and feel increasingly more wide awake. Although I know I shouldn’t, I can’t avoid looking at the clock regularly to see how little sleep I will get – if I succeed in falling asleep.”
This description is from one of the fast-growing number of people suffer- ing from insomnia. In 2006, sales of pharmaceuticals to treat insomnia amounted to uSd 6.1 billion on the seven largest markets.
(Source: IMS)
sublinox™ (oX22)
indication: Treatment of insomnia read more on page 19
comPetitive advaNtages
ox17 combines the two well-documented acid-inhibiting sub- stances histamine 2-receptor antagonists and proton pump inhibi- tors in a single tablet. this creates a unique profile with fast onset of action and efficacy that is also maintained over time.
Project status
a pharmacokinetic study on ox17 involving patients with reflux disease has been completed. analysis of the data is under way.
oX-Nla
indication: Treatment of allergic and non-allergic rhinitis (hay fever) status: Clinical phase
medical Need aNd market
allergic rhinitis, or hay fever, causes swelling of the mucous mem- branes in the nose, which results in nasal congestion, runny nose, itching and sneezing. the reaction can be triggered by contact with animals, dust or high pollen levels. allergic rhinitis has become much more prevalent in the past 20 years. rhinitis can also be non- allergic and triggered by odors, cold air and tobacco smoke.
about 25 percent of the population in the western world suf- fers from allergic rhinitis and the number is rising rapidly. air pol- lution and other environmental factors are believed to play a main role in this trend. in 2005, sales of drugs for rhinitis amounted to usd 6.7 billon (source: ims).
comPetitioN
antihistamines in tablet form are the most common treatment for hay fever. the disadvantages with such preparations are that the effect is limited, the time they take to achieve effect is relatively long and side-effects such as drowsiness are common.
comPetitive advaNtages
ox-nla nasal spray is being developed to offer rapid onset of action for treatment of allergic and non-allergic rhinitis. it contains the active ingredient cetirizine. orexo has developed a unique for- mulation, which reduced cetirizine’s local irritation properties.
Project status
results from the Clinical phase ii study have shown good efficacy and rapid onset of action, meaning that ox-nla would be suitable for “on demand” treatment. local treatment in the nose also reduces the risk of systemic side-effects, such as drowsiness. a final formu- lation has been chosen and was tested in a Clinical phase ii study concluded in December 2007. analysis of the data is under way.
oX914
indication: Treatment of asthma and COPd status: Clinical phase
medical Need aNd market
asthma is a chronic inflammatory disease that affects 6–8 percent of the adult population and about 10 percent of children. CopD (Chronic obstructive pulmonary Disease), often referred to as smoker’s disease, is a widespread permanent inflammation of the respiratory tract that results in reduced lung capacity. in sweden alone, there are an estimated 400,000 persons with CopD. in 2006, sales of pharmaceuticals for treatment of respiratory diseases, primar- ily asthma and CopD, amounted to usd 19 billion on the seven larg- est markets (source: ims).
comPetitioN
the most common treatment for rapid relief of asthma is inhaled bronchodilating ß2 agonists. for long-term treatment, the main
PrOduCT POrTfOliO
treatment in recent years has been inhaled corticosteroids, which have an anti-inflammatory effect. today, the use of inhaled com- bination products of long-acting ß2 agonists and steroids are also common. Corticosteroids, however, are perceived as causing side- effects, such as adversely affecting growth in children and skeletal decalcification. patients with CopD are usually treated with the same medications developed originally for asthma. another treat- ment is the use of anticholinergic bronchodilating drugs developed specifically for CopD.
comPetitive advaNtages
the aim with ox914 is to develop an orally active product that blocks the pDe4 (phosphodiesterase 4) enzyme present in many inflammatory cells. in clinical studies, many companies have shown positive treatment efficacy with various substances that inhibit pDe4 in CopD and asthma. however, no compound has reached the market, mainly due to side-effects, primarily nausea. the available drug candidate has shown good efficacy in preclinical models of CopD – and asthma and clinical studies have not demonstrated any increased frequency of nausea com- pared with placebo.
Project status Clinical phase ii.
oX2477
indication: Treatment of asthma and COPd status: Preclinical phase
medical Need aNd market
asthma is a chronic inflammatory disease that affects 6–8 percent of the adult population and about 10 percent of children. CopD
smoker’s disease, is a widespread permanent inflammation of the respiratory tract that results in reduced lung capacity. in sweden alone, there are an estimated 400,000 persons with CopD. in 2006, sales of pharmaceuticals for treatment of respiratory diseases, primar- ily asthma and CopD, amounted to usd 19 billion on the seven larg- est markets (source: ims).
comPetitioN
the most common treatment for rapid relief of asthma is inhaled bron- chodilating ß2 agonists. for long-term treatment, the main treatment in recent years has been inhaled corticosteroids, which have an anti- inflammatory effect. today, the use of inhaled combination products of long-acting ß2 agonists and steroids are also common. Corticoster- oids, however, are perceived as causing side-effects, such as adversely affecting growth in children and skeletal decalcification. patients with CopD are usually treated with the same medications developed originally for asthma. another treatment is the use of anticholinergic bronchodilating drugs developed specifically for CopD.
comPetitive advaNtages
orexo has discovered a new group of mediators, eoxins, that are produced primarily in the cells of the respiratory tract and that have shown strong proinflammatory effects. release of eoxins in the lung may, therefore, be important for the inflammation seen, for example, in asthma and CopD. the aim of the project is to develop an entirely new class of medication for asthma, CopD and other inflammatory diseases.
Project status
a first drug candidate is currently being tested in preclinical safety studies.
PrOdukTPOrTfölj
“Asthma is a widespread ailment that affects adults and children. Orexo’s discovery of eoxines increases the understanding of the mechanisms behind respiratory diseases and opens the way to a new type of pharmaceutical for treatment of asthma and COPd.”
charlotte edenius, CsO VP research & Preclinical development
“It started with my hands being so stiff in the morning that I could hardly hold a hairbrush. Today, it takes an extra hour each morning to soften up my joints and get going. I have learned to live with the pain, which creeps up on you through the day, but there are periods when the pain is so severe that I can’t get out of bed.”
Five years ago, Emma was diagnosed with rheumatoid arthritis, a chronic in- flammation of the joints. The inflammation has an incessant ability to break down cartilage and adjacent bone. The skin, eyes and inner organs can also become inflamed. Sales of NSAIds and COX-2 inhibitors amounted in 2006 to about uSd 10 billon globally.
(Source: IMS)
oX-mPi
indication: Treatment of pain, inflammation and rheumatoid arthritis read more on page 18
PrOduCT POrTfOliO
oX-cli
indication: Treatment of asthma and COPd status: Preclinical phase
medical Need aNd market
asthma is a chronic inflammatory disease that affects 6–8 percent of the adult population and about 10 percent of children. CopD (Chronic obstructive pulmonary Disease), often referred to as smoker’s disease, is a widespread permanent inflammation of the respiratory tract that results in reduced lung capacity. in sweden alone, there are an estimated 400,000 persons with CopD. in 2006, sales of pharmaceuticals for treatment of respiratory diseases, primar- ily asthma and CopD, amounted to usd 19 billion on the seven larg- est markets (source: ims).
comPetitioN
the most common treatment for rapid relief of asthma is inhaled bronchodilating ß2 agonists. for long-term treatment, the main treatment in recent years has been inhaled corticosteroids, which have an anti-inflammatory effect. today, the use of inhaled com- bination products of long-acting ß2 agonists and steroids are also common. Corticosteroids, however, are perceived as causing side- effects, such as adversely affecting growth in children and skeletal decalcification. patients with CopD are usually treated with the same medications developed originally for asthma. another treat- ment is the use of anticholinergic bronchodilating drugs developed specifically for CopD.
comPetitive advaNtages
orexo is developing an orally administered pharmaceutical with both bronchodilatory and anti-inflammatory effects. studies in
animals that do not have the relevant target protein have shown a significantly reduced inflammatory response in different asthma and CopD models.
Project status
orexo has identified proprietary molecules that have shown favor- able effects in various pharmacological models. a patent portfolio with potential product candidates has been established.
oX-lsaid
indication: Treatment of moderate to severe asthma status: Clinical Phase ii
the lsaiD-program contains non-steroid, anti-inflammatory substances that have shown favorable effects in preclinical asthma models. Clinical studies have shown effects on certain parameters in patients with asthma.
oX19
indication: Treatment of daytime and nocturnal urinary incontinence (nocturia)
status: Clinical Phase i
in addition to the treatment of nocturia, ox19 also focuses on the short-term, on-demand treatment of urinary incontinence in women suffering from an overactive bladder. a pharmacological study in healthy persons has been concluded. Data analysis is under way. the results will be the basis of outlicensing.
oX40
indication: acute treatment of moderate and severe migraine.
status: formulation phase
the objective of the project is to develop a candidate drug with a fast and predictable onset of effect, i.e. an essential characteristic for effective on-demand medication.
oX30
indication: Treatment of chronic pain status: formulation phase
this formulation offers low and controlled release of opioids for the treatment of chronic pain and with a potential to reduce the risk for abuse.
oX23
indication: Treatment of acute pain status: formulation phase
Based on orexo’s sublingual technology, the sublingual dos- age form allowing a rapid dissolution of a tablet placed under the tongue resulting in a promt onset of effect and predictable effects, typical “on demand” properties.
OThER PROjECTS WITh FuTuRE
POTENTIAl FOR FuRThER dEvElOPMENT
PrOduCT POrTfOliO
TECHnOlOgy PlaTfOrms
Orexo develops new, patented drugs by combining well-documented substances with innovative technologies. We also apply our world-class research on arachidonic acid and its affects on inflammatory diseases to develop new treatments for respiratory and inflammatory diseases.
orexo has several patented drug-delivery technologies as well as a number of new technologies for which patents are pending. many of these are based on dry formulations, an area in which orexo has leading expertise.
patented technologies include sublingual mucoadhesive tablet preparations in which a fast-dissolving tablet is placed under the tongue. other technologies include fast-dissolving tablets, prepa- rations of pharmaceutical substances with low solubility, powder preparations for administration of drugs via the nasal mucosa and methods for optimizing the dissolution of the active substance in small volumes of liquid.
suBliNgual mucoadhesive taBlet PreParatioN
orexo’s principal technology, the sublingual dosage form via a tablet under the tongue, was originally developed for the treat- ment of acute pain (rapinyl™). the sublingual tablet combines the properties of fast dissolution with rapid, site-specific uptake of the active substance via the mucous membranes of the mouth.
many of orexo’s product candidates are based on this tech- nology – rapinyl™, sublinox™ (ox22), ox19 and ox40. orexo continuously investigates the possibility of applying the technology to other substances.
how the suBliNgual taBlet works
the tablet is placed under the tongue where it quickly disintegrates into smaller units that adhere to the mucous membrane. the active substance dissolves and is absorbed through the mucous membrane.
oral fast-dissolviNg taBlet
orexo has extensive experience of dry formulations and of devel- oping tablets that instantaneously disintegrate. the objective is to
increase the bioavailability of the active substance by improving the dissolution of the substance in the stomach.
the technology is currently used in Diabact® uBt, orexo’s first marketed product, which is used for diagnosing Helicobacter pylori infections. ox17, orexo’s product for treatment of gerD (gastroesophageal reflux disease), is also based on this technology.
the oral, fast-dissolving tablet form can also be used for other substances.
advaNtages:
increased bioavailability – the technology increases the surface
•
exposed to liquids in the gastrointestinal tract, facilitating the dis- solving of the active substance, a condition for absorption through the intestinal mucous membrane.
rapid effect – the technology results in faster and more complete
•
absorption in the intestines and, consequently, fast onset of action.
comBiNatioN Products
today, many existing drugs do not meet certain medical treat- ment needs. a new combination of active substances can satisfy these unmet needs. one such example is ox17 for the treatment of gerD, which causes the symptons commonly known as “heart burn”. this product is a combination of active substances belong- ing to the pharmaceutical group histamine-2 receptor antagonists and proton pump inhibitors.
dRug dElIvERy
TECHnOlOgy PlaTfOrms
construction of a sublingual, mucoadhesive tablet
Carriers active substance mucoadhesives
mixing
Compression disintegration, dissolving,
and absorption process
disintegration into separate units.
The units adhere to the mucous membrane, beneath the tongue.
The active substance dissolves and is absorbed through the mucous membrane.
