The FDA’s August approval of Takeda’s Orzeyful for treating the full set of narcolepsy symptoms initiated a new era in the sleep market.
Takeda’s recently approved Orzeyful poses a potential threat to Jazz Pharmaceuticals’ blockbuster sleep franchise, as well as to products at companies including Alkermes and Harmony Biosciences. Yet Takeda faces threats as well, with multiple companies racing to burst through the door opened by the Orzeyful approval.
There is already fierce competition in the narcolepsy space. Jazz’s Xywav and Xyrem, Alkermes’ Lumryz and Harmony’s Wakix are all FDA approved for treating cataplexy or excessive daytime sleepiness (EDS) in adults and children with narcolepsy.
Revenues at Jazz’s rare sleep franchise exceeded $2 billion last year, while Wakix generated $868.5 million for Harmony. Alkermes, having acquired Lumryz in its takeover of Avadel Pharmaceuticals in February, has predicted sales of the drug could hit $335 million this year. These products face further competition from Axsome Therapeutics’ Sunosi, a former Jazz drug that generated sales of $124.8 million last year, as well as from Xyrem generics.
And now, Orzeyful poses a new threat to the incumbent medications. Xywav, Xyrem and Lumryz are all based on sodium oxybate, a central nervous system depressant that the FDA approved to treat narcolepsy symptoms in 2002. Wakix, which the FDA approved in 2019, has a different mechanism of action centered on histamine, but its authorization covers the same narcolepsy symptoms as the sodium oxybate products. Orzeyful offers patients something different.
How Orzeyful could disrupt the market
Orzeyful is the first therapy to address the underlying cause of narcolepsy type 1 (NT1), Jefferies analysts said in an Aug. 6 note to investors. As the first therapy to directly restore orexin signaling, the drug could tackle the cataplexy and EDS treated by existing drugs, as well as the sleep paralysis, hallucinations and disrupted nighttime sleep that also affect patients with NT1.
The FDA’s highlighting of Orzeyful’s effect on a spectrum of NT1 symptoms “sets up an orexin detailing message aimed squarely at the oxybate value [proposition],” Truist Securities analysts said Aug. 6 in a note to investors.
Orzeyful’s efficacy is the key differentiator, Jefferies analysts said. The analysts compared Orzeyful’s effect on wakefulness, sleepiness and cataplexy favorably to data on existing narcolepsy therapies, reinforcing their view that the “restoration of orexin signaling is likely to reshape the treatment paradigm.”
The FDA approved three Orzeyful doses, which Jefferies analysts said will give physicians more flexibility to tailor regimens to patients and enable dose reductions in people receiving moderate CYP3A inhibitors for other conditions. CYP3A inhibitors increase exposure to Orzeyful, which may raise the risk of adverse reactions. Use of the drug with strong CYP3A inhibitors, such as certain antifungal and HIV treatments, is contraindicated, but Jefferies analysts “see no evidence of restrictions that would materially limit prescribing.”
Orzeyful’s safety profile “appears manageable,” the analysts said. The label contains no boxed warning and the product’s abuse potential is similarly manageable, the analysts added.
The Drug Enforcement Administration (DEA) has yet to assign Orzeyful to a schedule. Jefferies analysts believe the data support a Schedule IV classification. Some existing narcolepsy therapies, such as Sunosi, are Schedule IV, but Xywav is in the more restrictive Schedule III. Securing a Schedule IV classification could “modestly support physician adoption and market access” for Orzeyful, Jefferies analysts said.
Takeda expects to receive DEA scheduling by November, the analysts added, and will disclose pricing at that time. The analysts model a gross annual price of $142,000 per patient, benchmarked to Xywav, but believe Orzeyful’s efficacy, convenience, favorable label and manageable abuse potential could justify “a meaningful premium” over Jazz’s drug.
Seeing “substantial switching potential if real-world efficacy matches clinical trial results,” the analysts assume 35% penetration of diagnosed narcolepsy patients over seven years and risk-adjusted peak sales of $1.8 billion. Truist analysts noted that Orzeyful’s label, which precludes use in narcolepsy type 2 (NT2) and children, limits “the immediate addressable overlap” to Xywav, but added that Takeda’s drug is “the leading edge of a longer-dated orexin wave of competitors” that could launch in the next few years.
The wave of competitors
The coming wave of orexin drug candidates includes assets in development at Alkermes, Eisai, Harmony, Kissei and Eli Lilly, the latter having recently entered the race by acquiring Centessa Pharmaceuticals for $6.3 billion upfront. Takeda is aiming to build on its early lead in the orexin field by developing TAK-360 and TAK-495 in indications including NT2 and idiopathic hypersomnia (IH), plus other conditions that cause EDS. Alkermes is among the companies studying orexin drug candidates in attention-deficit hyperactivity disorder.
Lilly has hailed Centessa’s orexin candidate cleminorexton as having best-in-class potential, a claim that Harmony and Kissei have also made about their own assets. Discussing the best-in-class bar in NT1 in a Feb. 3 note to investors, Guggenheim Securities analysts predicted “an emphasis beyond [the maintenance of wakefulness test] to measurements of whole-day efficacy,” such as the Epworth sleepiness scale and weekly cataplexy rate. On those metrics, cleminorexton is best in class, the analysts said.
Cleminorexton could also advance in NT2, where Guggenheim analysts noted the opportunity created by the failure of Alkermes’ alixorexton to reach the normative wakefulness threshold of 20 minutes. Sodium oxybates have set the best-in-class bar in IH, the analysts said, but have “high discontinuation rates and generally poor tolerability.” Alkermes, Lilly and Takeda are among the companies targeting IH, which Stifel analysts said in a July 19 note could be the “largest hypersomnia market opportunity for orexins.”
Amid the focus on orexin, companies continue to pursue other narcolepsy targets. Axsome Therapeutics’ AXS-12, a norepinephrine reuptake inhibitor and cortical dopamine modulator, could win FDA approval in NT1 patients with cataplexy by May 1, 2027. In a July 15 note, Jefferies analysts put the chances of approval at 70% to 80% and predicted peak sales north of $300 million.
