Market Opportunity

Chronic pain, defined as lasting six months or longer, is usually the result of an ongoing condition or significant problem associated with chronic diseases, including cancer, various neurological and skeletal disorders and other ailments such as severe arthritis or a debilitating back injury. As the condition gets worse, the pain often gets worse. Also, long-lasting pain can affect the nervous system to the point where pain persists even if the condition that originally caused the pain is stabilized or improved. This is one reason patients often need stronger pain medication even if their underlying condition has been treated. Chronic pain affects as many as 50 million Americans annually.

Product Concept

Our transdermal sufentanil patch (TRANSDUR-Sufentanil) under development is based on our proprietary TRANSDUR transdermal technology and is intended to provide continuous delivery of sufentanil for up to seven days from a single application, as compared to the two or three days of relief provided by currently available opioid patches. Sufentanil is a highly potent opioid that is currently used in hospitals as an analgesic for which the patent covering the chemical entity has expired. We anticipate that the small size of our sufentanil patch (potentially as small as 1/5th the size of currently marketed transdermal fentanyl patches for a therapeutically equivalent dose) and longer duration of delivery may offer meaningful patient benefits for chronic pain sufferers. We believe that the product profile of TRANSDUR-Sufentanil may allow such patches to compete effectively in the chronic pain market including both patches and oral opioids. Worldwide sales for Duragesic®, a leading transdermal fentanyl product, were approximately $1.0 billion in 2008. Sales of extended release opioids were approximately $4.7 billion in 2008.

We currently hold worldwide rights to this program.

Clinical Program

A Phase II program for TRANSDUR-Sufentanil was successfully completed by Endo Pharmaceuticals in which they evaluated the conversion of patients on oral and transdermal opioids to TRANSDUR-Sufentanil. The most recent Phase II study met its primary and secondary objectives of establishing a successful dose-titration regimen and dose potency relationships, demonstrating safety and tolerability at the therapeutic dose, and achieving effective analgesic pain control. The Phase II data, extensive non-clinical data that had been generated by Endo and detailed proposed protocols for Phase III were reviewed with the FDA at an end-of-Phase II meeting on February 19, 2009. As a result of that meeting, we believe we have a clear idea of the anticipated regulatory pathway for the Phase III program and approval, which will follow a 505(b)2 pathway as discussed with FDA.

Phase IIb Trial as reported in March, 2009

Objectives

• Primary objective: explore the minimally acceptable dose titration interval for transitioning opioid experienced patients to TRANSDUR-Sufentanil to achieve an acceptable analgesic and side effect profile.
• Secondary objectives:
• Evaluate the relative potency relationship for converting patients from current opioid therapy to TRANSDUR-Sufentanil;
• Evaluate the efficacy of TRANSDUR-Sufentanil administration; and
• Evaluate the safety and tolerability (including local effects) of continuous TRANSDUR-Sufentanil administration at a dose delivering adequate pain control.

Design

The TRANSDUR-Sufentanil Phase IIb clinical trial was an open label, two-stage study to explore the titration (conversion) schedule for transitioning opioid-experienced patients with non-malignant moderate to severe chronic pain from current oral (e.g., OxyContin) and transdermal opioid (e.g., Duragesic) therapies to TRANSDUR-Sufentanil. After screening and recording of baseline (before TRANSDUR-Sufentanil therapy) measurements with respect to average pain intensity and other matters, patients were randomized into multiple titration regimens. After achieving an endpoint of adequate, stable pain control and an acceptable safety profile on TRANSDUR-Sufentanil, patients entered a 28-day continuous treatment maintenance period, followed by a 7-day follow-up period to ensure that an adequate pain control regimen was re-established. In this study conducted at 11 sites in the U.S., a total of 74 patients entered screening, of which 36 entered the maintenance period.

Results

Dose Titration Interval

In this study, approximately half (36 out of 74) of the screened patients successfully entered the maintenance period, which is consistent with expectations for the study and with other chronic pain studies of a similar nature. After exploring multiple dose titration regimens, two acceptable dose titration intervals have achieved the desired analgesic effect and side-effect profile, and therefore are expected to be utilized in Phase III.

Relative Potency

As a result of converting screened patients to stable pain control and into the maintenance period (see above), the conversion ratios from oral morphine equivalents at baseline to TRANSDUR-Sufentanil dosage strengths were established and are expected to be utilized in the Phase III program.

Efficacy

Although not the main goal of the study, the mean pain score during the maintenance period of 3.88 (on a numerical ratings scale for pain intensity of 0-10, with 0 being no pain) represented a reduction of approximately 19% from the mean baseline pain score of 4.78. These pain scores represent the mean for the patients that had a maintenance pain value and a baseline pain value (n=36) and computations were based on the intention-to-treat patients set. Only 1 patient out of 36 (approximately 2.8%) dropped out of the study during the maintenance period for lack of efficacy.

Safety and Tolerability

The safety summary is consistent with commonly expected adverse events using transdermal therapy systems with opioids. Only 1 out of 74 patients (approximately 1.4%) dropped out of the study due to application site reaction (local pruritis) and that one instance occurred during the first visit. No patients dropped out of the study due to application site adverse events during the maintenance period. No patients' adverse events were rated as severe.

Phase II results are not necessarily predictive of the results of Phase III trials. There have been numerous drug candidates that have succeeded in Phase II clinical trials that have later failed in Phase III clinical trials.