GlaxoSmithKline's ($GSK) $820 million gamble on Valeant's ($VRX) epilepsy drug Potiga (ezogabine in the U.S. and retigabine elsewhere) has paid off with an FDA approval that could pave the way to annual sales of more than $700 million. While the approval had been expected following a solid endorsement from an expert committee last August, it also highlights a rare winning streak that puts the drug industry on track to a significant increase in new approvals this year.
There are strings attached. In clinical trials the drug was linked to urinary retention and the two companies will be required to develop a risk-evaluation and mitigation strategy for doctors to use. The drug is expected to be on the market before the end of the year for partial onset seizures that begin on one side of the brain. The treatment--which will be listed as a controlled substance in the U.S.--has also been approved in Europe.
"We are so pleased to reach such an important milestone with the U.S. approval of Potiga by the FDA," stated Susan Hall, Ph.D, head of research and development at Valeant. "We believe this product will play a needed role in the management of partial onset seizures in appropriate patients who are uncontrolled on their current medications."
Some analysts have pegged potential peak sales at close to $800 million with others have estimated only a fraction of that income. Glaxo paid $120 million upfront when it partnered on the program in 2008.