Neurocrine Biosciences Inc. kicked off its fifth Phase III trial of its insomnia product - but the first with the modified-release version - and said it was issued a patent for the chemical composition of the drug that would give the company patent exclusivity until 2020.

"It's significant," said Gary Lyons, Neurocrine's president and CEO. "We've been facing some scrutiny from others looking at our patent portfolio. People have questioned our exclusivity."

Not anymore. U.S. Patent No. 6,399,621 covers the chemical composition of indiplon for the treatment of insomnia for the next 18 years.

"This covers not only the compound, but the uses and the formulations," Lyons told BioWorld Today. "It's unusual in that we have 18 years of exclusivity in the U.S. - 16 at product launch, if we launch in 2004. That's about twice the product life cycle, on average, of other approved products."

In a research note, Dennis Harp, an analyst with Deutsche Bank Securities Inc., said, "This patent protection significantly enhances the value of indiplon to the company and to interested pharmaceutical marketing partners."

Neurocrine does not yet have a marketing partner for indiplon, although it is in discussions now. Lyons said the company expects to announce a partner early next year.

Formerly NBI-34060, indiplon is officially the product's U.S. adopted name - a brand name will be announced nearer commercialization. The product now is in four ongoing Phase III immediate-release (IR) trials and the just-initiated modified-release (MR) Phase III study. When it's all said and done, the drug will have been tested in five IR Phase III studies and three MR Phase III trials. The Phase III program overall is expected to enroll 3,500 patients, and by the time Neurocrine submits its new drug application, indiplon will have been tested in trials involving about 5,000 individuals.

The SLEEP Trial, as it is called, is a randomized, double-blind, outpatient, multicenter study to assess the long-term efficacy and safety of two dose levels of indiplon-MR relative to placebo in patients with chronic insomnia. Sleep maintenance and sleep latency will be evaluated along with sleep quality, next-day effects and quality of life. The trial will last six months.

"The endpoint is an increase in total sleep time," Lyons said, adding that the endpoint in the IR trials is time to sleep onset.

The IR formulation is given in a simple capsule formulation. The MR formulation has an equal amount of the drug sprayed on the outside of the product and in the core. Both versions will be encompassed in a single new drug application, filed electronically, expected to go to the FDA at the end of 2003.

"The idea is to have two dosage forms so you can customize the treatment to the patients' needs," Lyons said, speaking from New York, where he presented an update on the company at the Needham & Co. Biotechnology Conference. "The situation doctors face now is that there is only one drug and that has only one profile: Ambien. It's good to put people to sleep, but it isn't approved to keep them asleep and it isn't approved to be used on a long-term basis."

Ambien was developed by Sanofi-Synthelabo SA, of Paris. Neurocrine also said it completed enrollment in the first IR Phase III trial (500 patients), designed to assess the safety of long-term administration of two doses of indiplon-IR, and expects results to be released around mid-2003. Add that to the new six-month study and Neurocrine expects to have six-month efficacy data and 12-month safety data, therefore allowing patients to be on the drug for months and not just days, Lyons said.

Data from the rest of the trials will arrive in increments until filing. Lyons called the ongoing Phase IIIs "at or ahead of schedule so far."

Originally licensed in from what is now Wyeth, indiplon acts on the GABA-A receptor. It's similar to Ambien, but "that's good, because that is a proven mechanism," Lyons said. But indiplon is more potent than existing drugs, has a shorter half-life, and any side effects seen "have not been different from placebo," Lyons said.

Harp, whose firm rates Neurocrine a strong buy, has estimated peak indiplon sales of more than $1 billion. A blockbuster sits as an impressive feather in any biotechnology company's cap, but especially so in this case, Lyons said.

"It's a long journey," Lyons said. "It's certainly no trivial task running a 5,000-patient Phase III program."

Neurocrine's stock (NASDAQ:NBIX) rose 18 cents Tuesday to close at $30.33.