Epirus Biopharmaceuticals Inc. (NASDAQ: EPRS) recently announced that it was backing down from developing copycats of mass market biologics to focus its attention and resources on copycat treatments for rare diseases. Issues of costs and regulatory maze led to the shift in drug development focus at the company. But the question investors are asking is whether Epirus will hit success with its pipeline reprioritization.
When you listen to management, you get a sense of confidence that the new approach would accelerate the company’s path to prosperity.
Epirus Biopharmaceuticals Inc. (NASDAQ: EPRS)’s Low-budget programs
According to the management, Epirus Biopharmaceuticals Inc. (NASDAQ: EPRS) will spend significantly less money to develop biosimilars for rare diseases compared to those targeted at the mass market. The company’s COO, Michael Wyand, noted that developing a small-molecule drug could cost just $5 million or less. But the cost of developing a large biosimilar could go up to $100 million. Therefore, management has determined that it is in the best interest of Epirus and its shareholders for the company to narrow its focus to small drugs that it can develop at just a tiny fraction of the cost of developing large ones.
Besides the matter of direct costs involved, obtaining regulatory approval for a large drug is also complicated and can delay introduction of a product to the market. Therefore, the need to cut costs and shorten the time to market led Epirus to reallocate its drug development priorities and resources.
In the new dispensation, Epirus Biopharmaceuticals Inc. (NASDAQ: EPRS) will allocate its resources to the development of biosimilars of Genentech’s Actemra and Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN)’s Soliris. Although Soliris will enjoy marketing exclusivity until 2020, Epirus is working to get its copycat of the drug ready for immediate launch when the exclusivity period comes to an end.
Demand for rare disease treatment
The management of Epirus Biopharmaceuticals Inc. (NASDAQ: EPRS) has also determined that the demand for biosimilars for rare diseases will continue to strengthen as payers and patients look for opportunities to pare treatment costs.
As part of driving operational efficiency, Epirus Biopharmaceuticals Inc. (NASDAQ: EPRS) said it was retrenching 40% of its workforce. The company also talked of the need to raise additional capital to bankroll its operations.