Physician Survey on the Market Opportunity for LJPC-501 in Treating Clinically-Refractory Hypotension (CRH)

We conducted a physician survey on the treatment of distributive shock in order to better understand the existing unmet needs and current treatment paradigms. We also asked about the potential for La Jolla Pharmaceutical Company’s (NasdaqCM: LJPC) LJPC-501 to be used in treating patients with clinically-refractory or catecholamine-resistant hypotension (CRH). We surveyed 33 intensivists who treat distributive shock, including 25 medical intensivists and 8 surgical intensivists. The survey results indicate the possibility for strong adoption of LJPC-501, particularly ahead of vasopressin and/or high-doses of catecholamines, and indicate a market opportunity for LJPC-501 exceeding $500 million.

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LJPC-501 in Development for CRH. On February 27th, La Jolla announced positive results from the pivotal ATHOS 3 Phase 3 trial, which evaluated LJPC-501 in 344 distributive shock patients with CRH. As many as 40% of shock patients do not achieve an adequate mean arterial blood pressure (MAP) with fluid resuscitation or well-tolerated doses of catecholamines. For these patients, either increasing the initial catecholamine dose or adding on a second vasopressor (catecholamine or vasopressin) exposes the patient to toxicity risks and a heightened mortality risk exceeding 80%. In light of the positive data, we decided to conduct a physician survey to better understand the market opportunity for LJPC-501.

Figure 1. Expected CRH Treatment Paradigm Based on Survey Results

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* This includes CRH patients who are given vasopressin and LJPC-501 concurrently as a next step.

Summary of Survey Results. The survey physicians noted that 45% of their distributive shock patients require high-dose catecholamines and expected high rates of LJPC-501 use in CRH patients. The physicians expected to use LJPC-501 in 85% of patients failing high-dose catecholamines and vasopressin and in 63% of patients failing high-dose catecholamines alone. The physicians also saw themselves using LJPC-501 in 24% of patients failing low-dose catecholamines, highlighting the potential for considerable use of the product ahead of vasopressin and/or catecholamine dose escalation. Overall, the results of the survey point to a market opportunity for La Jolla that exceeds $500 million.

Market Opportunity for LJPC-501. We estimate the LJPC-501 opportunity based on the survey responses, assessing three points in the treatment paradigm where the drug could be incorporated. We asked the surveyed physicians in what percentage of patients they would use LJPC-501 for patients failing high-dose catecholamines and vasopressin, high-dose catecholamines alone, or low-dose catecholamines alone. For the purposes of this survey, we defined the cut-off for high doses of catecholamines as greater than 0.2 µg/kg/min.

We expected for the highest rates of use to fall in later lines of therapy where there are fewer available options. Consistent with this assumption, we found that the surveyed physicians expected to use LJPC-501 in 85% of patients failing a combination of high-dose catecholamines and vasopressin. However, expected rates of use in earlier lines of therapy was considerably higher than our previous estimates. The surveyed physicians reported that they expected to use LJPC-501 in 63% of patients failing high-dose catecholamines alone and 24% of patients failing low-dose catecholamines. Our previous estimates, prior to seeing the Phase 3 data, had assumed use in 30% of patients failing high-dose catecholamines and 10% of patients failing low-dose catecholamines. This speaks to strong demand for a product like LJPC-501 among medical and surgical intensivists and a larger-than-expected market opportunity for novel treatments for CRH. In Figure 1, we sketch out the treatment paradigm for distributive shock patients that do not reach adequate MAP with fluid resuscitation, based on the following survey responses and assumptions:

  • Failure Rate for Low-Dose Catecholamines – The surveyed physicians described that they have to escalate doses of catecholamines over 0.2 µg/kg/min in 45% of patients receiving catecholamines.
  • Failure Rate for High-Dose Catecholamines – Surveyed physicians indicated that they add vasopressin to 64% of their patients receiving high-dose catecholamines.
  • Failure Rate for High-Dose Catecholamines and Vasopressin – We assume that 50% of CRH patients do not reach adequate MAP when treated with a combination of high-dose catecholamines and vasopressin.

Figure 2. Potential Market Opportunity for LJPC-501 in the US

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There are roughly 432,000 patients who experience distributive shock each year in the US and 92% of these patients, or 397,000 individuals, are treated with catecholamines. Based on our survey results, we expect for LJPC-501 to be used in roughly 104,000 distributive shock patients annually at peak market penetration. Most of the patients expected to receive LJPC-501 would have failed high-dose catecholamines and would then receive either LJPC-501 alone or in combination with vasopressin. We expect for this to account for 55% of the potential patients that would be treated with LJPC-501.

We estimate the potential market opportunity and peak sales for LJPC-501 in the treatment of distributive shock based on expectations for pricing and formulary access. As shown in Figure 2, at peak penetration, treating 103,000 distributive shock patients with LJPC-501 would likely translate into sales over $500 million. We consider the following assumptions in generating our estimate:

Figure 3. Most Pressing Unmet Needs in Treating Distributive Shock

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  • Pricing – For our estimate, we use prices of $4,500, $6,000, $7,500, and $9,000. These prices represent a substantial premium to Endo’s Vasostrict (vasopressin), but are still at the low end of the range of hospital-based drugs reimbursed under DRG reimbursement systems. This also represents a slight shift higher than our prior estimates in light of the positive Phase 3 data.
  • Formulary Access – Price will have an important effect on formulary access. When priced at the lower end of our pricing range, we assume formulary access covering 90% of patients. If priced at $9,000, we assume formulary access to 60% of patients.

If we assume a price for LJPC-501 in the range of $6,000 to $7,500, this would translate into peak sales for La Jolla between $498 million and $545 million. Since pricing and formulary access are inversely related, there is likely a ceiling on peak sales. Based on our estimates above, roughly $550 million may be the maximum sales that La Jolla can hope to achieve in the US. However, this could increase if secondary and exploratory endpoints show additional benefits of the drug and drive greater use at earlier points in the treatment paradigm.

Figure 4. Most Important Product Characteristics in Shaping Use of LJPC-501

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Biggest Unmet Needs in Treating Distributive Shock. As shown in Figure 3, the surveyed physicians cited the need for lower mortality rates and novel agents with less toxicity as the most pressing needs in the treatment of distributive shock. These needs were reported by 61% and 72% of the surveyed physicians, respectively.

Most Important Product Characteristics Expected to Shape Use of LJPC-501. The surveyed physicians were asked which product characteristics would be most important in driving their use of LJPC-501. The responses are highlighted in Figure 4. The most important feature driving potential use of LJPC-501 is the reduction in vasopressor toxicity. Reductions in acute respiratory distress syndrome (ARDS) and acute kidney injury (AKI), as well as reductions in hospital stays, were also considered to be particularly important in shaping future use of this product. Overall, formulary restrictions were not thought to be a meaningful impediment to use of LJPC-501, as only 21% of survey physicians thought this would play an important role in their use of the product.



Source: LifeSci Capital, LLC research report

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