The Second Wave
The second wave of innovation was based on the realization that drug delivery not only brought convenience and patient compliance, but also optimized the therapeutic potential of the chemical entity. These innovations transformed the market for these compounds often exponentially.
For example, Procardia® was originally an immediate-release compound prescribed for angina that faced upcoming patent expirations. Through Alza’s technology, Pfizer introduced Procardia XL® as a once-a-day antihypertensive with superior efficacy. Tachycardia, associated with the immediate-release dosage form, was eliminated in the extended-release product. On the basis of clear patient benefits, Procardia XL became Pfizer’s first $1 billion drug.
Fentanyl was initially a roughly $20-million hospital room anesthetic; the development of Duragesic® (fentanyl in a controlled-release transdermal patch) took fentanyl out of the hospital and turned it into a $2-billion pain medicine for Johnson & Johnson.
The realization that a relatively modest investment, by pharmaceutical standards, could lead to significant products established drug delivery capability as a boon for specialty pharmaceutical companies.
With big pharma garnering the vast majority of the commercial value created by drug delivery technology, some companies have taken steps to transform from purely licensing business models to niche marketing companies. These firms find small-to-medium sized opportunities that fall below the radar screen of big pharma, tackling specialized markets such as urology and pain management.
Companies improving drug delivery system technologies have been a major, if not the sole, source of innovation in the last 30 years for the management of pain. Examples of that innovation are the development of twice-a-day pain medications such as Oxycontin™; three-day pain medication such as Duragesic; and seven-day pain medication such as Transdur™-Sufentanil. For those like Durect that grew out of this second wave of innovation, building a specialty pharma company on the basis of drug delivery technology is an attractive business model.