must be reformulated for use with the DosePro injector.
Hawley acknowledged, however, that the company’s imminent application for its long-acting version of hydrocodone doesn’t exactly align with its core drug-and-device device strategy, because Zogenix has developed Zohyrdo as an oral capsule.
As Hawley explains it, the company’s key strategists grew concerned in the startup’s early years (which is to say 2006) that their pursuit of a drug-and-device amounted to putting all the Zogenix eggs in one DosePro basket. So Hawley, who had worked for 23 years at Glaxo, GSK, Elan, and InterMune, began to look for a drug candidate that would essentially enable Zogenix to mitigate its risk by diversifying its portfolio.
The drug that came to mind was hydrocodone, a compound that also fit well with the company’s focus on the central nervous system. Hawley had helped develop the compound at Elan Pharmaceuticals with Cynthia Robinson, whom he had recruited to serve as chief development officer for Zogenix.
During a briefing for investors earlier this month, Robinson explained that Elan conceived the hydrocodone drug in 2001, and Elan’s drug development work continued into 2002.
“Following those initial studies that were done by Elan in the 2002 period,” Robinson said, “the program really was put on hold at Elan for a variety of financial reasons and different choices that the company was making. So when Zogenix came into being in 2007, both Roger and I had worked on this program at Elan and knew that the program was in existence there and that the product was really right for a partnering opportunity. So we were able actually in 2007 to obtain the rights for the product and then bring this product really back to development at that point in time.”
In some ways, though, the hydrocodone drug represents a more ambitious program with higher risk than the company’s initial launch of its single-dose sumatriptan injector, the Sumavel DosePro, for treating migraines.
While Zogenix has steadily increased the number of Sumavel DosePro prescriptions to an estimated 18,658 during the third quarter that ended Sept. 30, Hawley says the company’s annual sales account for less than 1 percent of the 12.2 million sumatriptan prescriptions written in the U.S. each year. If it could get 1 percent of the market share, Zogenix estimates the revenue would amount to $61 million a year.
In contrast, Zogenix estimates that more than 128 million prescriptions are written in the U.S. each year for hydrocodone drugs, a potential $7.5 billion market opportunity. Zogenix says a 1 percent share of that market—some 1.28 million prescriptions—would generate a projected $248 million a year.
For a company with a market valuation of roughly $129 million (and maybe $80 million in available capital), Zogenix has a lot riding on this new drug application.