Medical solutions company Medical Developments International (ASX: MVP) has set out intentions to expand its market presence by signing an exclusive distribution and license agreement with Tokyo-listed Daiichi Sankyo for its Penthrox drug in China, Thailand and Vietnam.
According to the terms of the deal, Daiichi Sankyo will pay Medical Developments as much as US$32.5 million (A$45.8 million), including US$15 million in upfront and sales-based milestone payments, for the right to market the tried and tested pain relief drug in China, and to help make Penthrox “the mainstream analgesic of choice around the world”.
In the last financial year, Daiichi Sankyo recorded sales of A$11.7 billion – a significant figure that underlines the company’s size and market influence, expected to accelerate the development of Medical Developments’ flagship drug.
The duo has also agreed to enter into a master service agreement with Japan’s leading full clinical and regulatory service provider, EPS International Holdings to attain full sales approval for Penthrox in China.
Medical Developments will be responsible for funding the approval process that’s expected to set the company back around US$10 million, in exchange for owning the intellectual property generated from the program.
In addition, the company will also become the owner of the forthcoming drug import license, once Penthrox is approved.
What is Penthrox?
Penthrox is a fast-acting non-opioid analgesic used for pain relief in patients with trauma and those requiring pain relief in minor surgical procedures.
To date, Penthrox has been used safely and effectively for more than 40 years in Australia with over 5 million units sold.
The drug is currently registered in more than 30 countries and is expected to be sold into approximately 70 countries over the coming years, according to Medical Developments, although as it stands, the company derives around 73% of its Penthrox sales revenues from Australia.
One of the most popular applications has been to use the drug in patients undergoing investigatory and operational procedures such as colonoscopies, as well as dental and cosmetic surgeries.
In the past financial year, Medical Developments generated almost A$18 million in revenue and recorded a profit of A$243,000.
The story behind methoxyflurane
Penthrox’ technical name is ‘methoxyflurane’ – a prescription-only medicine extensively used since the 1970s in Australia as an emergency analgesic for short-term use.
It was first synthesised in the late 1940s by a team of chemists led by William Miller, the scientist famous for his involvement in the Manhattan Project – a research and development undertaking during World War II that produced the first nuclear weapon.
The drug was used extensively by Australian and New Zealand defence departments, administering it to military servicemen for the initial management of pain due to acute trauma, as well as for brief painful procedures such as changing of wound dressings or for patient transport.
Methoxyflurane is typically self-administered to children and adults using the Penthrox inhaler – a hand-held inhaler device, known as “the green whistle”.
Some of the drug’s prime advantages over alternatives is the fact that it is a non-opioid alternative to morphine and considered easier to use than nitrous oxide.
The main selling point is its superior safety profile and non-addictive nature, highlighted by recent developments in the US regarding opioid addiction and abuse which make the clinical need and market opportunity for non-opioid drugs like Penthrox more urgent.
Given the public and legislative bias expressed by the US government and the Food Drug Administration (FDA) against the use of opioids, non-opioid treatments such as Penthrox have taken centre stage alongside trailblazing cannabinoid-based drugs as the most compelling solutions for patients.
Asia, Europe and US bound
Medical Developments is already seeking ways to establish a market presence in the US and claims it has the clinical and non-clinical studies required to open an investigational new drug (IND) application which the company says is the “critical step” in the pathway to approval within the US.
The drug is currently patented to Medical Developments and provided on a prescription-only basis within Australia and 25 other countries worldwide.
To underline its work in extending the reach of its leading drug, the company recently began its European market expansion by rolling out Penthrox in over 20 European countries including the UK, France and Ireland.
However, the pharmaceutical company hopes to market the drug amidst areas of heightened demand and pitching at a much wider addressable audience – namely Asian countries such as China, Thailand and Vietnam.
“We are delighted to partner with Daiichi Sankyo, one of Japan’s biggest pharmaceutical companies. Daiichi Sankyo shares our vision for the potential of Penthrox in China, Thailand and Vietnam,” said Mr John Sharman, CEO of Medical Developments International.
Mr Sharman added that Penthrox takes up “an important place” in pain management in China considering the current status-quo whereby acute pain in trauma and minor surgical procedures are often under-treated in the Chinese healthcare system.
The news helped Medical Developments’ shares gain almost 15%, to trade at $5.59 per share in morning trade.