Market Report Source

Overview

Introduction
Launched in the US in 1999 as the only topical lidocaine patch, Lidoderm has demonstrated very strong growth year-on-year, with annual growth of 114% in 2003, 73% in 2004, and 36% in 2005. Lidoderm’s continued growth in both labeled and off-label indications is highly important to the company’s future success.

Scope
Analysis of current and future use of Lidoderm across several chronic pain conditions by the physician specialties that treat the bulk of patients

Datamonitor surveyed 31 physicians including pain specialists, neurologists, rheumatologists and general practitioners in the course of research

Report Highlights
Surveyed physicians expect to continue to increase their use of Lidoderm in post-herpetic neuralgia and a variety of off-label pain conditions with use varying by specialty.

The largest barriers to use of Lidoderm are price and reimbursement but some physicians believe the situation is improving.

Near-term competitive threats are not expected to substantially derail Lidoderm’s growth rate.

Reasons to Purchase
Understand the commercial potential for Endo Pharmaceutical’s Lidoderm based on a multi-specialty physician survey

Anticipate likely changes in the future market dynamics for pain therapies following the likely success of Lidoderm

Table of Contents

SUMMARY

Physician survey indicates increased use of Lidoderm likely to fuel above-consensus sales growth

ENDO PHARMACEUTICALS

Overview

LIDODERM

Lidoderm is the only topical lidocaine patch available in the US

Lidoderm is FDA-approved in post-herpetic neuralgia but has data in other pain indications

Five years post-launch, Lidoderm sales are still showing strong growth

PHYSICIAN SURVEY BACKGROUND

Pain specialists are the highest prescribers of Lidoderm

USE OF LIDODERM

Indication and specialty

Physicians report increasing use of Lidoderm on- and off-label

All surveyed physician types expect to prescribe greater volumes of Lidoderm

Lidoderm continues to penetrate approved indication and low back pain, its largest off-label condition

In PHN, pain specialists have leveled off use at 60% of patients, while other specialists predict increases

Lidoderm share of low back pain market expected to expand across all physician types

DRIVERS OF LIDODERM’S GROWTH

Survey results indicate Lidoderm growth fueled by both new and existing prescribers

Growing physician familiarity and appreciation of benign safety profile drive use

Increased marketing and publication of off-label data also spur growth

Lidoderm detailing has become more frequent, especially for neurologists

Price and reimbursement barriers exist, but some physicians report improvements

Pfizer’s Lyrica, a recent entrant to pain market poses little competitive threat

Efficacy results from ongoing low back pain trial likely to only be moderately important

LIDODERM FORECAST

We forecast sustainable growth, ahead-of-consensus sales

APPENDIX

Datamonitor Healthcare

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List of Tables

Table 1: Post-marketing data released on Lidoderm in chronic pain conditions

Table 2: Historic Lidoderm sales 1999-2005

Table 3: Breakdown of surveyed physicians by specialty

Figure 1: Average number of prescriptions per month of Lidoderm by indication

Figure 2: Average number of prescriptions per month of Lidoderm by physician specialty

Table 4: Average penetration of Lidoderm in PHN according to time and physician specialty

Table 5: Average penetration of Lidoderm in low back pain according to time and physician specialty

Figure 3: Impact of treatment settings on sales growth on a scale of 1 to 5, where 1 = no impact, 5= strong impact

Figure 4: Most commonly identified factors behind Lidoderm sales growth (percentage of physicians)

Figure 5: Physician expectation of the impact of Lyrica on Lidoderm use (percent of physicians)

Figure 6: Physician expectation of the impact that negative trial results from ongoing Phase II low back pain trial would have on Lidoderm use (percentage of physicians)

Table 6: US Lidoderm sales forecast 2006-2008 16