Will Cequa turn the tide for Sun Pharma in US?

The focus of the company will be now on execution and ramp-up, where things have been so far a mixed bag due to competition, higher marketing and distribution expenses and gradual off-take in prescriptions of its products.

Sun Pharma has invested around $1 billion in the specialty business in the US. It built its speciality business through a series of acquisitions over the years. The specialty portfolio generated revenues of $94 million across all markets in Q1FY20.

Will Cequa turned the tide?

Cequa, analysts believe has the potential to turn the tide.

CLSA expects Cequa to generate $100-125 million in peak sales.

“Assuming 7-10% market share over a 3-4 year period, Cequa has the potential to generate peak sales potential of US$100-125 million despite potential competition from the Restasis generic,” CLSA said in its report.

Sun Pharma got hold of Cequa or the cyclosporine ophthalmic solution 0.09%, through acquisition of Ocular Technologies from global private equity firm Auven Therapeutics in 2016. Sun Pharma paid an an upfront payment of $40 million, in addition to milestone payments and royalties.

Dry eyes, scientifically called as keratoconjunctivitis sicca, is characterised with lack of tear production in eyes resulting in persistent irritation and affecting vision in the longer term. It’s a chronic disease, as the person diagnosed with dry eye will have to take the medication throughout life.

Around 34 million people in US are estimated to have dry eyes, of which only half are diagnosed, only 1.6 million are treated by prescription (Rx) drugs.

This is where Cequa comes in, the medication boosts the tear production in patients with dry eye.

While Cequa faces competition in form of Allergan’s Restasis with sales of $1.2 billion in 2018 and Novartis Xiidra $400 million, what could work in favour of Sun Pharma’s Cequa is that it offers higher concentration cyclosporine for ophthalmic use than competing drugs and is delivered with nanomicellar technology which results in improved ocular tissue penetration.

Sun Pharma is leaving no stone unturned for a successful launch. The sales force required for CEQUA's promotion is fully on board. The company also introduced Cequa Support, an access program designed to enable commercially insured patients to easily obtain Cequa. This program is structured to minimize out-of-pocket cost and provides free home delivery of the drug.

But CLSA says it all boils down to how Sun Pharma convinces eye specialists on the efficacy of the product, get it listed in formulary (particularly Medicare Part D) and come up with the right pricing.

Formularies are lists that have the insurance carriers preferred drugs.

“While an impending generic for Restasis can be a threat, we believe a superior product will see formulary acceptance if priced well. The next launch is likely 2-3 years away, as it is currently undergoing Phase-3 trials,” CLSA said.

According to Drugs.com 60 units of Cequa cost $538.81, which is 9 percent cheaper than rival Retasis which is priced at $591.6 per 60 units.

Sun Pharma drug is dosed twice daily and will be available as a single-use vial.

The success of Cequa in US would depend on how Sun Pharma would gain market share from well-entrenched rivals like Allergan and Novartis.