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from NI July/August 2010
1H:2010 Lowlights 1)Pfizer/Medivation's Dimebon bombed in its first real test of its benefit in Alzheimer's. The biggest divergence between groups was on the MMSE, where a p=.10 trend towards more improvement was seen--for placebo. Pfizer had pretended that this Medivation-run trial did not exist, one can now see why. It is impossible to salvage even a scrap of optimism from this Flurizan-scale debacle. Medivation has tried to preempt Pfizer's cancellation-option by terminating the remaining two monotherapy trials. Will adding Aricept make a difference, as is still being tested? In that scenario, one would have to hope for some type of totally unexpected biochemical synergy. This seems highly unlikely. 2) "He had been stuck for four days when his water ran out. On the sixth day, the 27-year-old mountain climber knew there was only one way he could survive. Using a pocketknife, Ralston cut off his own arm." --St. Petersberg Times, 5/3/2003 Big Pharma has apparently taken a page from The Survivalist's Handbook, and confused it with a Harvard Business School case study. Virtually every BP with a CNS program worth mentioning has amputated thousands of staff members. They began with the armies of sales reps rendered irrelevant in a de facto price-controlled environment, where access to physicians is being increasingly restricted. But now they are slicing off strategic development planners and R&D departments. Several companies (Lilly, Sanofi-Aventis) deleted CNS from their roster of business units; others deleted inhouse research on psychiatry (AstraZeneca) or shelved entire indications, like GSK's divestiture of depression and pain. We are very aware of the patent cliff, and the concept of shifting some R&D to an outsourcing model, utilizing small company efficiency and focus, is something NI has advocated for years. But this culling is draconian and ill-planned. Within the next two years, we expect that several of these companies will reverse course, reinstating programs and emphases deleted in the heat of panic, looking to rehire some of those now being treated as so much irrelevant flotsam. 3) Biovail Merger with Valeant Pharma: In theory, growing the company via this merger could fund development for Biovail's CNS pipeline. But given the fact that Valeant has been putting its own resources into other areas, like dermatology and emerging markets; exited CNS after its successfully licensed retigabine to GSK; and that it is the Valeant CEO, Michael Pearson, who will oversee daily operations as CEO of the merged company, there is reason to worry for Biovail's CNS pipeline strategy. We would not be surprised to see an inlicensed program dropped, cheering only the short-sighted denizens of Wall Street, who believe that addition is best achieved by subtraction. Through A Glass Darkly: Transparency II Last month, NI commented favorably upon the FDA task force recommendations for increased Agency transparency, which include the public release of such crucial communications as Complete Response and Nonapprovable letters. Our view was, and is, that the nondisclosure of such information permits companies to convince their investors, and sometimes themselves, that doomed projects deserve to be sustained. It also precludes companies from learning from each other's mistakes, and thus increases the likelihood that they will repeat them. Since that time, industry organizations like PhRMA and BIO have lined up squarely against the proposal, suggesting that public disclosure will provide a competitive advantage to straggler companies, allowing them to streamline and focus their development tactics by riding the coat-tails of the regulatory lessons learned by their forerunners. PhRMA had the chutzpah to argue that companies should not be compelled to reveal even the fact that they had filed for approval, and/or received a FDA response. BIO suggested that companies should have veto power over what is revealed, which would render the policy impotent. (from July/August 2010) Gilenia Set to Rock the MS World G ilenia is effective in reducing relapse: 25-0 Cortex Signs RD Deal with Biovail Cortex Pharmaceuticals and its AMPA-modulating platform have long been of interest due to their potential applicability to a range of psychiatric and neurological disorders--but the last few years have been extremely difficult due to chronic, dire fiscal straits. However, Cortex yesterday sold its respiratory depression program, and four related compounds (two of which are preclinical) to Biovail, which continues to be highly opportunistic and creative in its MAP activities. The $10 million ( there is another $15 million in potential milestones) will allow Cortex to finally conduct the Phase II ADHD trial using CX-1739 that has been their elusive goal for a couple of years. They can also complete their sleep apnea study, although that is much more of a wild card at this point. Cortex now has a degree of control over their destiny that has been missing since the FDA hamstrung their original ADHD program, which used a predecessor molecule. More importantly, this allows them to return to the psychiatric/neurological focus which has always been their inherent raison d'etre, while Biovail can explore the somewhat more arcane potential of the respiratory depression indication. We like the deal a lot, but it should be noted that NI Research played a role in initiating the discussions that eventually led to this successful resolution--so we are not completely objective on that score. Having said that--we doubt that even the most dispassionately objective observer could quarrel with the conclusion that this provides Cortex Pharmaceuticals with an opportunity for corporate resurrection that many had given up for lost.
There Is No Joy in Mudville--Mighty Dimebon has Struck Out Pfizer/Medivation's Dimebon bombed. Completely. In this first real test of its benefit in Alzheimer's, the biggest divergence between groups was on the Mini-Mental State Exam--where a p=.10 trend towards more improvement was seen--for placebo. Pfizer had kept this Medivation-run trial at arm's length (essentially pretending it did not exist), and now one can see why. It is impossible to salvage even a scrap of optimism from this Flurizan-scale debacle. Even if one could parse out some subgroup which obtained significant benefit from the drug, that must be offset by a subgroup which is made significantly worse. This would change the risk-benefit calculation dramatically, but we believe it is a moot point; Dimebon probably neither helped nor hurt any patient subgroup. Would adding Aricept make a difference, as is being currently tested? In that scenario, one would have to hope for some type of totally unexpected biochemical synergy. Which seems highly unlikely. Pfizer's neuroscience program is in flux, following the news that their new neuroscience head, who had came over from Wyeth, is now departing to run drug research at AstraZeneca--not reassuring for Pfizer observers. They will be searching for a permanent replacement, which could delay a decision on whether Dimebon is wheat, or chaff. There is a fair chance that Pfizer could decide that the potential for even bigger disappointment may outweigh the much attenuated hope that Dimebon can replace Aricept, and terminate the partnership. Indeed, the best chance the Dimebon partnership has for continuation could rest in the likelihood that there is no one currently in a position of sufficient power within Pfizer's neuroscience area to actually pull the plug. Post-Mortem Excerpt from NI December's Review of Neuroregeneration Whether cells from outside the 'neighborhood' can actually 'learn the language' enough to interwire is as yet unclear. Arrival is just the first step, for once in the right place, a cell must play its correct part in the cerebral symphony, the complex interplay between signalling factors in the 'external' brain environment and internal differentiation signals within the implanted cell itself. Sorting out how far the differentiation/'educating' process must be taken without taking it too far, is still an art in development. For one thing, we are still early in the stages of identifying the signals by which cells are guided into specific fates, functions, and maturational stages. Trying to replicate this process at this point is like using radio telescope data to assemble a language-immersion course. The complexity of the system is such that we have no certainty that the most important signals, their sequence and targets, have been elucidated. Which makes mimicking that system near-impossible, although considerable research efforts are going into the mapping process. Four recent papers provide some color, if not clarity, regarding the current state of the signalling art: These examples are not intended as anything approaching a comprehensive discussion of the signalling pathways involved in neuroregeneration, which would exceed NI's available space and comprehension. They are mentioned in the service of illustrating the complexity of the transcription language controlling cellular maturation, a degree of complexity which vastly exceeds any current capacity to modulate it. On the other end of the cell spectrum are cells which are function-specific, based on differentiation already carried out by maturation and/or manipulation (e.g. NeuralStem and ReNeuron's fetal source cells). Beyond functional differentiation is the amount of manipulation provided in the service of proliferation, growing these 'immortalized' cells to the number believed needed for a successful implantation. Given the risks associated with unchecked proliferation, further genetic manipulation can be added in order to ensure that cell division can be 'turned off' (ReNeuron). Each step of manipulation takes cells away from their native state, and it remains to be seen whether such training enhances and diminishes their eventual utility. Finally, enough of the new cells must survive to make headway against, and offset, whatever destructive process is at work. Adjunctive neurotrophic factors might be necessary for the protection of the new cells, lest they fall victim to the pathophysiology they are to confront. Testing of the neural cell implant model is underway for both NeuralStem (in ALS) and ReNeuron (in stroke). StemCells, which focuses upon the use of adult neural stem cells, has somewhat ironically focused initially upon the treatment of rare childhood genetic disorders, such as Batten Syndrome. Geron's use of relatively immature ES cells in spinal cord injury has been delayed by a FDA hold, triggered by the development of cysts in animals. That trial is unlikely to begin before 2H:10. Thus, to sum up: We do not yet know which cells; proliferated by what means, to what number; trained to what degree of maturation and specialization via which manipulations; accompanied by what adjunctive cells or factors; are optimal for which neuropathologies. Other than that, neural stem cell technology is good to go. Local Knowledge: The Case for Neurogenesis Most scientific observers have concluded there is a regenerative resource in the adult CNS, dormant neural stem cells yet to differentiate, and able to reproduce. The functional role of these cells has yet to be defined, though bird studies have shown that--at least in birds-- hippocampal neurogenesis is in fact essential to learning--in that case, of birdsong. There has been a corollary assumption that has been made but not proven in humans that this subpopulation may provide the substrate for synaptic circuits encoding new information. Gage and colleagues recently published a paper indicating that hippocampal neurogenesis is necessary for a form of spatial memory, at least in mice. Whether such cells may play a role elsewhere in the brain, and in other species, is still a matter of debate. Yale's Pasko Rakic has fought an increasingly lonely battle, arguing that neurogenesis becomes less salient as one moves up the chain of phylogenetic complexity, and that it plays virtually no role in humans. In his view, cortical stability becomes critical for more advanced cognition. To maintain that stability, he believes that functional brain circuits exclude new stem cells from entering in and interwiring. However, there is compelling evidence that human neural stem cells both exist and carry out some type of functional task(s). NSCs are relatively sparse, and given the course of CNS degenerative diseases, they would seem a to be insufficiently numerous to make much of an impact. But perhaps--and this is the hope of those who see them as potentially valuable therapeutic entities-- they are the ‘Sleeping Beauties’ of the Central Nervous System, waiting for the kiss of the right signal to awaken, be brought forth, and multiply. This hope further demands that, once multiplied, that they will either replace, or compensate for, those which have been lost. This may be partly true, but the reality is more complicated. In most types of neuropathology, the damage/degeneration may very temporarily spur an increase in neurogenesis, perhaps as a wired-in compensatory mechanism, but the neurogenic system is actually fragile, and its proliferative activity decreases in such situations. Thus, at a time that they may be needed most, their availability decreases. There is an important distinction that has to be made here, and that is between proliferation and meaningful proliferation. As the list on page 5 shows, there are many substances and experiences that appear to trigger neural stem cell proliferation. But that increase in sheer number means nothing functionally unless those cells differentiate into neurons (although arguably, glial cell production may be useful in some proportion), and then must interwire with other cells at their destination. In theory, newly interwired cells could serve as the seedlings for naturalistic repair of a defective system. The latter would require that the neural circuitry itself is 'intelligent' enough to train new cells regarding their needed location and function, and that imported cells are intelligent and flexible enough to respond accordingly. Furthermore, it would be necessary for these signals to be intact, even in a diseased or deficient system. However, the previous wisdom may have been off-target. Rather than actually replacing damaged cells, current thinking is shifting towards seeing the strategy as one of a more general promotion of neural health and function. These new neural cells may accomplish this via two means: First, they can functionally interwire, but not necessarily at the site of damage. Instead,they may interwire and enhance the function of other areas that have not been directly damaged. To the degree to which brain repair involves the engagement of plasticity, the ability to 'work around' damage, that is a dynamic to which these new cells are critical. Secondly, newly proliferated neural stem cells themselves produce a host of trophic factors, including NGF and BDNF. Rather than just being the product of such factors, they are the source. This may allow them to survive within the firestorm of neural disease, and may also allow them to extend their effect beyond the limits of their own synaptic interconnectivity. Their production of neurotrophic growth factors could have a salutary effect on the cells around them, which themselves become more resilient and robust within this enriched trophic context. Thus, whereas we once differentiated cell therapeutics on the basis of what they are, versus what they deliver, that is a false dichotomy. New neural cells achieve therapeutic benefit via both routes. The Limits of Local Knowledge It had once been thought that, in a context of degeneration, local instruction and trophic supplies may not allow for the new cells to survive and interwire. Perhaps neurotrophic factors might have to be coadministered as protectants, in order for neural cells to survive when produced in response to injury. This may not always be the case, neural cells bring along their own trophic defenses. But it has yet to be determined whether one can depend upon endogenous, purely naturalistic supportive mechanisms to take up the survival and integration of immigrant cells when it comes to neurodegenerative disorders. In those contexts--like Alzheimer's, Parkinson's, and Huntington's, the art of cell support may apply to neurogenesis, just as it does to cell implant techniques. NeuroInvestment sample issue (November 2008) Download pdf Commentary (lupdated 12/11/09) Introducing HOC (from NI November) NI Research has been carefully road testing a new addition to the neuro industry nomenclature. Audience response has been overwhelming, and after careful assessment of its validity and safety, it is now ready for unveiling: Subsidizing Sycophants for Saphris (Added 10/13/09) Saphris/asenapine appears to be on its way to completing its long journey to commercialization. It has not, from NI's viewpoint, distinguished itself during its clinical development. Pfizer originally partnered with Organon on the drug, but then exited after the first few pivotal studies, in schizophrenia and bipolar disorder, produced as much failure as success, portending less-than-robust efficacy. Yet, Schering-Plough saw asenapine as Organon's major asset when they acquired the Dutch company, and was able to complete an acceptable registration program. But this far from guarantees success in the very crowded antipsychotic field, particularly given the fact that a patient cannot swallow Saphris--it is a sublingual drug that must be held under the tongue to be absorbed. Given the information-processing problems and perseverative tendencies often encountered in both schizophreniform and bipolar populations, it will be interesting to see how easily patients trained to automatically swallow their meds can change that overlearned behavior. Saphris might be a boon for the small percentage of patients who, due to either paranoia or recalcitrance, 'tongue their meds', intending to spit them out later. Sublingual Saphris will be the ideal antipsychotic for those patients, so long as they are not given the correct instructions. So how to market an unappealing new entry? Schering-Plough has turned to the tried-and-true method of dispensing cash. Dr. Daniel Carlat, of the Carlat Psychiatry Report, reported that he received an invitation from Schering-Plough to become part of the Saphris 'Speaker's Bureau.' Payments for participation could include: $3000 to attend a training meeting; $1600 each time they present a 45 minute Saphris talk in person to colleagues, $1000 for each 45 minute web presentation. There were two catches: Psychiatrists who participate are not allowed to receive more than $170,000 per year for Saphris advocacy, and (this is the best part) they must promise to only use Schering-Plough information in these presentations. In other words, they will be paid, and paid quite well, so long as they only regurgitate corporate talking points. On his blog, Dr. Carlat referred to psychiatrists who sign up for this work as "whores." We think that is a bit harsh, since, so far as we are aware, no actual sexual services will be provided to Saphris prescribers. Confirming the lack of cortical activity on Schering-Pough's part is the fact that in 2007, a Massachusetts psychiatrist came to national attention with his thought-provoking mea culpa and indictment of the 'pay for play' scandal of pharma Speaker Bureaus, published in the New York Times. It was Daniel Carlat. Acadia's Pimavanserin Disappoints in First Phase III (posted 9/1/09) Acadia Pharma had been living a charmed life in 2009, given its partnership with Biovail on the North American development and commercialization of pimavanserin. However, they hit a speed bump on September 1 when they reported negative results for pimavanserin in its first Phase III for Parkinsonian psychosis. As expected, pimavanserin did not exacerbate Parkinsonian movement symptoms, but the dreaded 'unusually high' placebo-effect reared its head on the primary endpoint, effect on positive symptoms of schizophrenia. This narrowed the margin between pimavanserin and placebo (pimavanserin's high-dose numerical score was better than placebo) so that it did not reach statistical significance. A second Phase III is ongoing, but it is no longer potentially confirmatory. Acadia, unsurprisingly, emphasized its continued faith in pimavanserin, while the firstl PR from partner Biovail said they would review the data before deciding on their next move. Sunbsequently, Biovail's CEO said that pimavanserin continues to be of interest, for Alzheimer's psychosis, for example. There is a less compelling case to be made in AD, since the avoidance of motoric symptoms is less of a key concern than it is in PD, where motoric disturbance is already salient. Given that Biovail just partnered another PD drug, from Santhera, they were clearly bent on developing a Parkinson's franchise, which may incline them to stay the course, at least through the next Phase II results. But with a large-scale CNS agenda and the funding to accomplish it,Biovail's willingness to stay with a wounded project is going to be far from unlimited. BrainCells: Proof of Concept and More (from NI September) BrainCells' work on the stimulation of endogenous neurogenesis is a potential paradigm-shifter, beginning with the treatment of depression, for which neurogenesis has emerged as a likely key ingredient. BrainCells' screening technology has identified molecules with strong neurogenic effects: The lead NCE (BCI-540), is expected to produce Phase II results in depression (with anxiety features) late this year. But they also have a lower profile program which has been assessing the neurogenic synergy provided by the combination of well-characterized molecules. A group at MGH has reported Phase II data for such a combination, dubbed BCI-952, which consists of buspirone and melatonin. After six weeks of treatment, positive results were seen in a 142 patient depression trial. The 58% of the patients receiving BCI-952 showed treatment response on a global improvement scale, compared to 38% of patients on buspirone alone, and 36% receiving placebo. This was statistically significant, as were effects on two secondary endpoints, and the trend on another primary endpoint was similar, though it did not reach significance. Buspirone's lack of effect as a monotherapy was no surprise, but the benefit from combining it with melatonin, usually used as a sleep-inducing agent, was surprising. It buttresses the neurogenesis hypothesis for the treatment of depression, and indeed the 58% responder rate is higher than is generally found with SSRI or SNRI monotherapies. These results exceeded even BrainCells' expectations, to the point where this trial has now become something more than simple proof of concept. While it validates neurogenesis as a therapeutic target ( one which may have applicability well beyond depression), it also suggests that a proprietary formulation of BCI-952 could be a commercial product, one which would have a much better side effect profile than do SSRI and SNRI antidepressants. JNJ Buys Slice of Élan Elan off-loaded half of its most expensive and risk-laden program, the Alzheimer’s Immunotherapy Program. JNJ paid $1 billion for 18.4% of Elan, while taking the AIP program into a new JNJ subsidiary, of which Elan will own 49%. Bapineuzumab is the poster child for the fact that there is still a great deal no one knows about AD immunotherapy. JNJ has committed to investing another $500 million in bapineuzumab’s clinical development, which also spotlights the fact that these costs, which exceed our worst-case scenario, were far beyond Elan’s capabilities. Elan now has a significant amount of the cash that they will need to pay off/refinance their huge debt burden. We will see to what degree they use any of these resources to now broaden their drug development portfolio, which has been dangerously overweighted in amyloid-targeting therapeutics. It is also worth noting that Pfizer/Wyeth, whom we suspect had a right-of-first-refusal option for Elan’s share, apparently had no wish to own the whole program. The secondary but by no means unimportant subplot to the deal emerged subsequently, when it was revealed that the deal also includes a JNJ option to assist Elan in buying out Biogen-Idec's Tysabri stake, should that company be acquired. With this having an effect on Biogen-Idec's own strategic planning and valuation, the legal broadsides have begun to be fired. • Neuromed and CombinatoRx merger. Neuromed Pharmaceuticals has been one of the private CNS companies that NI has seen as having the most potential in the area. In the past few weeks, Neuromed completed the Phase III for its inlicensed analgesic, Exalgo; submitted the revised filing to the FDA for Exalgo’s ongoing NDA review; outlicensed Exalgo marketing rights to Covidien/Mallinckrodt; had the rights to its N-type CA channel modulators returned by Merck; and now has merged with publicly held CombinatoRx. It is a sequence of major events and accomplishments which, in its compressed timeline, is unrivaled in our fourteen years of watching the CNS sector. Neuromed’s very able CEO, Chris Gallen, will be the CEO of the new-and-improved CombinatoRx. Beyond the potential of the two pipelines, of which NI is primarily familiar with Neuromed’s N and T type calcium channel modulators; and the cash from the two companies; there is a very interesting and creative twist to this merger: The major valuation issue is whether Exalgo will indeed receive full FDA approval, the PDUFA date falls in this November. With such events difficult to pin down, even when they seem relatively certain, as is the case here, there is a formula which assigns proportional ownership of the merged company based on whether, and when, Exalgo is approved. If approved before year-end, Neuromed’s shareholders will own 70% of the company. There are other intermediate scenarios based on delayed approval, with the farthest extreme circumstance being one of nonapproval, in which case Neuromed shareholders would end up with just 30% of the merged entity. In any case, CombinatoRx will now be very much on NI’s ‘radar’ as a company to watch. Commentary Index Lilly Drug Doomed by Seizure Risk Rise of the Machines: A New Paradigm for Stroke The Future of CNS Therapeutics: The Road Ahead Lemming of the Month Club, April Signs of Intelligent Life in the Pharma Universe The Sound of One Hand Clapping: Lundbeck 'Those Who Fail to Learn from History....'(Pfizer) Elan in the Eye of the Beholder She Blinded Me With Science* 2008 The 2008 Donald Rumsfeld Award for Public Relations Excellence The Breathtaking Potential of Ampakines in Respiration The Subprime Grenade and Other Biopharm Reverberations BACE: A Case of Mistaken Identity? The World According to Amyloid The Search for Intelligent Life in Alzheimer's Trial Design and Analysis The Book of Bapineuzumab: Reading between the lines
(from NI June 2009) Catalyst Pharma's hope had been that a well-controlled trial in the US would provide Phase IIb confirmation of the surprisingly strong results from their earlier Phase II studies done in Mexico, and would establish vigabatrin as a major candidate for the treatment of severe cocaine addiction. Unfortunately, all of this is now moot. The topline results showed that they missed the primary endpoint, vigabatrin did not improve the percentage of patients drug-free three months later. A methamphetamine trial had already had its enrollment stopped to save money as a POC trial. Unfortunately, those prospects, and the prospects for vigabatrin in addiction overall, have now been crushed. Even though secondary endpoints have yet to be analyzed, the whole premise for the vigabatrin story boiled down to the hope that its effect size would be superior, that it would justify the visual defect risk in this very difficult population. With the much better designed and executed US study showing nothing on the primary endpoint, there can be no expectation that any secondary measure will provide enough magnitude of change to shift the risk-benefit equation back to vigabatrin’s favor. Nor can anything positive be expected from the methamphetamine trial. Catalyst says they are going to investigate why these data are so different from the Mexican results, but that is just post-mortem. It turns out that our initial skepticism was warranted: Those results were indeed too good to be true. Catalyst will have some difficult decisions ahead. Their cash is dwindling, and expending any more of it on vigabatrin is going to be fruitless. They either have to try to find another payload-for-development, and at their cash level, that would mean M&A, not licensing, or they will likely have to liquidate. It will be interesting to see what their BOD, and investors, have to say about this
To be honest, NI had never paid much attention to Biovail. We knew that they were involved in marketing Wellbutrin, and had some kind of reformulation business model, but this was pretty much of zero interest to us. The first glimmer that this was changing came to us last November, at the Windhover Partnering Conference. Biovail's COO was on a panel of specialty pharma companies, and described Biovail's intention to aggressively move into the CNS space because of their view, after a thorough strategic review, that it offers more potential than any other. This was in the context of Biovail watching its former business model being eroded away; specifically, Wellbutrin revenue cut by more than half, due to generic competition. This is the kind of threat to one's core identity and business that, for American pharma companies, tends to precipitate a search for more 'market-ready' products to toss in the sales bag; cruising the pharma M&A bars in hope of a quick merger with a peer of dubious-compatibility; and the packing of management parachutes. Instead, Biovail has done the following: 1) Cut its dividend 75%, saving $180 million per year, with which to fund their CNS expansion effort. This in spite of the fact that their former CEO (and their largest shareholder), was dead set against the plan to refocus their strategy. They have just headed off a proxy battle, agreeing to put someone of his choosing on the BOD. But the strategic transformation remains on track. With this radical transformation of corporate direction having already been implemented via a series of major transactions, our anticipation was that Biovail might now take a pause, to digest the changes already made. That is not the case. With Big Pharma shedding skilled drug development staff, and such a plethora of molecular candidates available, they see this as the optimal time to forge ahead. Thus, they are still looking for both licensing and acquisition opportunities, albeit not going head-to-head against Big Pharma in the areas of greatest profile, like Alzheimer's per se. Their goal is to find niches within those large indications, with pimavanserin's initial applicability to psychosis associated with Parkinson's, serving as a good example. The indications they have prioritized, with that caveat, are Parkinson's, Alzheimer's, epilepsy, and ALS. But they are willing to be opportunistic and stretch outside of these comfort zones, and they are open to biologics as well as small molecules. Where they are less prone to stretch is into programs that do not yet have some human POC. NI has always believed that the CNS area is ripe for a midsize company able to maximize their resources in a nimble and creative way. There was a time that we thought Cephalon might covet that mantle, but they took their opportunism and rode it into oncology and inflammation, leaving CNS behind. Biovail is now in excellent position to take on that role, and there may be no corporate story more compelling in the CNS area over the next couple of years, than what Biovail will do to reify this brand-new sense of mission. (added 5/7/09) Let's recap. A drug that has had four corporate sponsors; is barely distinguishable from a lesser-utilized existing drug other than by one of the lower profile side effects; was initially billed as being augmented by a genetic test which, it turns out, has no clinically relevant discriminatory power; appears to be less efficacious than the category leaders for the stated indication, for which many drugs are approved; generic competition has arrived and more is approaching; the NDA was responded to by the FDA with the request for an additional clinical study, which the Company then refused to do, instead resubmitting the NDA with more data from existing studies. The result: The drug is given approval by the FDA. Slam dunk. Was there ever any doubt? Well, yes, and many observers, including NI, will be reviewing their analyses to see where we went wrong. There are a few hypotheses currently floating around regarding the reason for this approval: A) The FDA loves the name Fanapt, they really love it. They'd approve mustard gas if it was called Fanapt. It remains to be seen whether this unexpected regulatory success will be followed by commercial success. The schizophrenia area has Saphris (asenapine) and the resurrected Serdolect in the regulatory hopper, and the roster of major companies which will see Fanapt as something more than damaged goods is not long. Of course it only takes one, but particularly with the generic onslaught growing, there may not be much willingness to invest heavily in a launch for a product whose competitiveness is debatable at best. This will give aid and comfort to those who believe that developing redundant drugs remains the most likely path to commercial payoff. Lilly Drug Doomed by Seizure Risk (From NI April 2009 )"LY2140023 monohydrate was generally well-tolerated, although convulsions were observed in three patients." The candor displayed by Lilly's CEO vis-a-vis merger mania has yet to percolate down to their clinical development decision-making. Their novel mGluR2/3 modulator LY2140023 had stirred interest back in 2007 when Phase IIa results indicated that it approached (albeit without equalling) olanzapine's efficacy, but without metabolic/weight gain effects. Now a second Phase II study has been reported, and none of the LY2140023 doses, nor the active comparator olanzapine, separated from the unusually strong placebo response. Lilly announced that they would run another Phase II trial to validate the POC. While the mechanism is not dead, Lilly did not state the obvious: LY2140023 is dead as a therapeutic candidate. It is not immediately apparent to us why 41% of patients who enrolled in this four week trial did not complete it, but it is clear that the lack of weight gain is not going to offset seizure risk. We do not know what percentage of completers were on LY2140023, but if--for the sake of discussion--premature termination was equally distributed, this would mean a 1.5% risk of seizures. Perhaps the FDA would consider approval had LY2140023 showed clear superiority on other critical efficacy measures, but such has not been the case in either Phase II. LY2140023 may go through another trial, so Lilly can make a go/no-go decision on the mechanism, but it will not proceed any further than that. Rise of the Machines: A New Paradigm for Stroke (From NI April 2009 ) In general, devices do not play a major role in CNS therapeutics, though device therapies serve niche populations in depression, epilepsy, and Parkinson's. But it is in stroke that the use of devices has become more mainstream and pervasive than in the treatment of any other CNS disorder--in spite of the fact that none of these devices has actually received FDA approval as a stroke therapeutic per se; their approvals are for 'clot removal' and revascularization, which is related, but not the same. The roster of devices currently available and in development is listed on page 8. The development of these therapeutic devices under the far looser standards set for devices compared to drugs, has a couple of major implications: First, that the face of stroke therapy has been transformed, at least at the tertiary stroke specialty units to which stroke patients are increasingly being referred. While IV tPA is the only treatment option at community hospitals in those (1-3%) rare instances that a patient arrives and has a CT scan within three hours, the picture is very different at a tertiary stroke center. There, the growing probability is that they will quickly have a CT scan to rule out hemorrhage, and an angiogram to assess the location of the clot. A combination treatment then follows, using tPA, either IV or via intra-arterial administration (IA), plus (if an accessible clot is identified) the use of a clot-busting device like 'Merci' from Concentric's, or the competing device from Penumbra Inc. This is done even if it is 5-7 hours after stroke onset, creating a de facto standard of care that only lacks data supporting its efficacy. This greatly expands the proportion of the stroke population who can receive treatment, even though this combination regimen has no efficacy data proving its worth. The stroke specialists who staff the centers and utilize this regimen believe that it is better than the alternative, and would be loath to not utilize something which gives them the opportunity to make a medical difference. However, this reduces the likelihood that an adequate patient population can be generated for novel stroke therapies. Choosing to randomize patients, thereby ensuring (in their view) undertreatment for 33-50% of the patients involved, approache some uncomfortable ethical boundaries if the alternative exists and seems (anecdotally) to be effective. This will likely make stroke trials for neuroprotectant drugs in the US, Europe, and Japan increasingly problematic, unless the trial is specifically designed to test a drug as an adjunct, which has its own design problems. Speaking of ethical issues, there is another dynamic at work here. The CMS (Centre for Medicare and Medicaid Services) sets the standard reimbursement rates (DRGs) utilized by Medicare and by many private insurors for hospital based care. Hospitals are thus paid package rates, and the package rates vary by the treatments involved. Those who fear government price controls for health care tend to be oblivious to the fact that the US government already sets prices for many inpatient procedures. When it comes to stroke, there are some fascinating disparities that could have at least an implicit effect upon treatment planning: In New England, a stroke patient receiving the 'Merci' device earns a DRG reimbursement of $26,000 for the hospital providing that service. If they receive IV tPA, the reimbursement falls to $12,000. For those who receive neither, the DRG price is set at $6000. Ethical physicians, and in NI's experience, this is the majority, are not going to choose treatment based on DRG reimbursement. But the 'culture' of a hospital is influenced by many factors, and there is no doubt that a hospital Administrator will be more thankful for a plethora of 'Merci's than a preponderance of standard medical care without special procedures. Setting aside for the moment the pharmacoeconomic distortion that this emphasis upon performing procedures can produce in healthcare delivery, this does set the stage for an interventionist culture which proceeds without data, and without making provision for trials that can actually provide data that could validate this therapy, or something else. There is a workaround potentially available, as noted to us by one of the stroke field's most eminent 'thought leaders.' Developing countries cannot offer routine access to IV therapies, let alone intra-arterial therapies and devices. They would benefit from the availability of oral drug alternatives, and would thus continue to offer settings for clinical trials wherein such drugs can prove themselves, though the logistics of trial execution might also be more challenging. This could create (another) first world vs. the rest of the world divergence in medical care availability, which constitutes a mega-topic of its own.
Lemming of the Month Club, April From NI April 2009) Merck offers $41.1 billion for Schering-Plough. What a sad substitute for strategic planning and investment. It remains to be seen whether JNJ will succumb to the tortured legal logic that a company named Merck, residing in Merck's headquarters, run by Merck's CEO, is Schering-Plough with a pseudonym. The real kicker came from the WSJ on 3/17/09, when they cited Thomson Reuters calculations for the mega-mergers done thus far: "It could all produce $500 million in advisory fees for investment banks..." $500 million. Money that could have been spent to keep alive some of the several hundred biotech companies running out of cash, and out of time. It's like letting fifty children starve to death while buying champagne for Paris Hilton8. These priorities are twisted at the most fundamental level. Signs of Intelligent Life in the Pharma Universe BVF and Community Service
The Future of CNS Therapeutics: The Road Ahead (from NI April) NI had the privilege in late March of participating in the annual meeting of the International Society for CNS Drug Development, a conclave of some of the brightest minds in Big Pharma CNS drug development (NI, we suspect, was invited for the sake of diversity). While our invitation was contingent upon maintaining confidentiality about specific companies and comments, there were some important themes that emerged with consistency, and are worth noting here, because every CNS company needs to consider these in strategizing for the years ahead. 1) Even though most of the participants work within Big Pharma, there seemed to be a general consensus that the risk-averse decision-making structure endemic to BP suppresses innovation and creativity, leaving those the province of "small biotechs." Even academia has to some degree lost its innovative edge, perhaps constrained by the necessity of hewing to the expectations of grant-funding sources which themselves suffer from bureaucracy and static thinking. These were not necessarily novel points of course, but it was striking that these Big Pharma scientists seemed to agree upon most of these supra-themes for CNS drugs. This particular professional organization is also taking a proactive role in designing improved trial protocols and measurement tools, so that the true value of a drug is less likely to be obscured by the flaws inherent to the observational tools currently employed. In the midst of the current industry angst, it was refreshing to see innovation being not just invoked, but put into action.
March of the Lemmings, 2009 Edition (from NI March) In the face of patent expirations, pricing pressure, unproductive pipelines, and more than a little antipathy from Congress and its constituents, Big Pharma companies have begun unveiling their various Strategic Visions for 2009 and beyond: The Sound of One Hand Clapping: Lundbeck (from NI April) Lundbeck is buying privately held Ovation Pharmaceuticals for $900 million ($300 million of this payable within a year depending on 'product regulatory milestones,' i.e. FDA approval for Sabril/vigabatrin). Ovation's product line has been generating $200 million in sales annually, with an estimated 2008 profit of $32 million, though none of the existing products have much growth potential. Indeed, assuming that Xenazine contributed little in 2008; 15 products, a mélange of mostly IV painkillers and oncology drugs, yielding just $200 million, means an average of just under $13 million each. Ovation is now going to be detailing Xenazine for Biovail, treating Huntington's choreiform symptoms, and given the aggressive pricing that is planned, that product has more revenue potential than we had initially thought, albeit not for Ovation/Lundbeck. Cambridge Laboratories and Biovail end up with the majority of the revenue, we would be surprised if Xenazine will provide more than $30 million in profit to Lundbeck. Assuming that the FDA goes along with its Advisory Committee on Sabril, those infantile spasm/complex partial seizure disorder indications for Sabril are difficult to assess, because Sabril is supposed to be a drug-of-last-resort due to its safety issues, and it remains to be seen if it will be utilized that way, and how it will be priced. Two questions come to mind: First of all, how much Sabril does Lundbeck think they can sell in the US? Lundbeck said "this will go a long way towards replacing Lexapro revenues.” Given that Forest pays Lundbeck around $500 million per year in Lexapro proceeds, our rough calculations are that Ovation's existing EBITDA of $32 million, plus $30 million from Xenazine, would require Sabril sales of close to a half billion dollars per year to "replace" Lexapro. Which is not what the FDA has in mind for a 'drug-of-last-resort'. Secondly, what other purpose may this currently small (72 sales reps) new US commerical presence serve for Lundbeck? Lundbeck is betting on the development of their own North American commercial operation as a key to future growth and maintaining their independence--rather than relying upon Forest, as they have with Celexa/Lexapro. This may also explain why they are keeping both bifeprunox and sertindole alive as antipsychotic candidates, in the hope that one or both will be a viable drug for their North American sales group (which would have to be grown considerably) to sell when Lexapro goes generic in 2012. As was discussed in last month's review of schizophrenia, neither drug strikes us as particularly promising, but Lundbeck does have an extensive pipeline of products in development, so they are not relying completely upon those tarnished candidates. But Lundbeck will have to consider inlicensing additonal programs, as they did in the ill-fated Flurizan transaction. The best news that we can glean from this development, given that spending this much on Ovation would not have been NI's preferred route, is that Lundbeck is positioning itself to remain independent, not as an acquisition target. The sector is better off for it, and at least to that degree, Lundbeck should be applauded.
'Those Who Fail to Learn from History....' Following years of indigestion after swallowing Warner-Lambert and Pharmacia, Pfizer has scampered down the wrong path in the maze yet again, acquiring Wyeth for $68 billion. If a lab rat made this many errors in a learning task, they'd be 'sacrificed' to test for toxicity. This decision (again) reflects shortterm thinking applied to a longterm problem, yet it will take years for Pfizer to digest and integrate Wyeth. Unfortunately, given the industry's tendency to imitate, this will only stir the other dinosaurs into thinking that they should also be mating. The relevant bankers and attorneys will keep their jumbo shrimp, but if/when this is all finished, 20,000 Pfizer and Wyeth employees will lose their jobs. A truly disgusting little footnote is that the banks lending Pfizer $22.5 billion for the acquisition have been major beneficiaries of the federal TARP 'bailout.' So Pfizer is essentially using taxpayer money to squeeze 20,000 people out of their jobs. This is not the change we have been waiting for. Elan in the Eye of the Beholder (Added 1/14/09) The scent of blood in the water at JP Morgan drew the sharks to Elan Pharma CEO Kelly Martin, after the announcement that Elan had hired Citigroup (some irony therein) to assist in assessing its strategic options. Elan has been under fire for underperformance of late, and Martin has floated the idea of selling assets in order to pay off the billion dollar debt coming due in the not-distant-enough future. Citigroup will undoubtedly be paid several hundred thousand dollars for their input, befitting Elan's less than penurious attitude towards cash-management. We could have saved them the money. Here are the three components of Elan's pipeline that could be considered: 1) Tysabri. Co-owned with Biogen-Idec, Tysabri has at least temporarily plateaued in its sales growth (at an annuaiized $680 million in 3Q) due to anxiety regarding PML--of which there have been a total of four cases worldwide. It is at present, the most effective disease-modifying therapeutic Multiple Sclerosis, though Novartis and Lilly/BioMS could produce competition in the next few years.With billion-dollar potential still in-the-cards, Tysabri is an eminently sellable asset--and when Biogen-Idec's CEO Jim Mullen was asked about his interest in acquiring Elan's half, he appeared to be trying to avoid the appearance of overt salivation at the prospect. Tysabri would pay off Elan's debt and then some. 2) Bapineuzumab. Co-owned with Wyeth, Bap was one of the feel-bad stories of 2008. The data was scattershot, and even when retrospectively spun, provided no solace for Elan, Wyeth, Alzheimer's patients, anti-amyloid adherents, or those who believe in straightforward, clear disclosure. Having already launched a 4100pt Phase III program (the first trial of which, in the APOE4 nonresponder group, has already been fully enrolled) that will cost north of $300 million, one might ask--who would like to purchase Elan's share of this asset which is sure to drain resources for the next few years, far less likely to ever produce them? We find it highly unlikely that Wyeth would want to own 100% of this disappointing project. No one else comes to mind, at least no one would pay anything upfront that would come remotely close to easing Elan's debt burden. 3) The rest of the pipeline. Another AD vaccine; beta-secretase and gamma-secretase inhibitors; the Transition Therapeutics aggregation inhibitor. A few other discovery and preclinical assets. Mainly Alzheimer's projects of solid scientific pedigree, uncertain commercial potential, with plenty of competition. Might someone ante up a few hundred million along with promises of future biobucks? Perhaps, but it still would not pay Elan's debt. The bottom line is that Elan either has to sell itself off entirely, or sell off Tysabri, in order to meet its obligations. And without Tysabri, they are a scientifically-gifted Alzheimer's play with a number of unproven, amyloid-oriented irons in the fire. The money from Tysabri could give them the resources to diversify via M&A or inlicensing, but we suspect that Elan's investors are not going to embrace the idea of entrusting the keys to the new high-risk kingdom to Mr. Martin.
She Blinded Me With Science* 2008 *Dolby, T. 1982 (Added 1/5/09) While there were no revolutionary scientific findings to shake the fundament during 2008, there were a number of scientific findings and reports which have the potential to shift neurotherapeutic paradigms in a significant way. Unfortunately, while some of the Alzheimer's findings could translate into viable, even improved therapeutic strategies, some of the other findings raise serious concerns about major approaches to pain and regenerative medicine.
The 2008 Donald Rumsfeld Award for Public Relations Excellence: Cephalon. It seems like there are daily state-by-state announcements of the millions each will receive from a $444 million dollar settlement for illegal marketing practices. Cephalon also admitted to the WSJ that they are ramping up Provigil pricing, price-gouging in anticipation of generic competition coming four years from now. This hardly helps the general perception of Big Pharma, which will thus continue to be tarred-and-feathered on C-SPAN, while clinical programs are Tasered by the FDA. There will be a deafening silence from the American public, even as the prospect of improved pharmacotherapies recedes farther into the future.
Nicotine Therapeutics (an excerpt from the NI November review of Addictions, which covered addictions to alcohol, nicotine, opioid, and stimulants--cocaine and methamphetamines)
Pfizer’s varenicline/Chantix: When it was in Phase III, this nicotinic alpha4beta2 receptor partial agonist produced abstinence in just under half of the patients taking it, albeit over just a three month period. 20-25% of those abstainers using Chantix were still abstinent after 12 months, compared to just 10% of patients on placebo who were able to abstain for 12 months. A study published this past summer reported that 26% of Chantix patients were tobacco-abstinent after 12 months, compared with 20.3% of those using the NicoDerm patch. This difference just missed statistical significance (p=.056). Chantix has been plagued with reports of increased depression and suicidality amongst users (and indeed 85% of Chantix users in that study reported side effects, compared with 70% of patch users) but it still reached $880 million in sales in 2007, and had been at a better-than billion-dollar per year run rate early in 2008. However, the warnings regarding the risk of depressive symptoms have turned that sales growth around in a hurry, with 3Q US sales almost halved, decreasing from $186 million to $96 million. The WSJ report that there were more adverse event reports for Chantix than any other drug during 1Q:08 (1001) is not going to slow the exodus. Pfizer has hoped to learn how to identify which patients may be more at risk of developing depressive symptoms from using Chantix. At the very least, we expect harsher warnings in the Chantix label, being pulled from the market entirely is not probable, but is beginning to look possible. Pursuing Chantix, Sanofi-Aventis had a nicotine receptor modulator of its own, dianicline (SSR591813), which reached Phase III. However, Sanofi-Aventis recently discontinued its development, perhaps in light of Chantix's problems. Yaupon Therapeutics is developing an enantiomer of nornicotine, a chemical relative of nicotine which stimulates dopamine release while also having a longer duration of action. They were expected to begin Phase I in 2007, but no news has been forthcoming (postscript--nornicotine development has been terminated). Targacept and its partner GSK are working on nicotinic modulators for smoking, a lead compound was identified for development earlier in 2008. Nicotine Blockers If one introduces nicotine to the system but no physiological reaction is experienced, that should ‘undo’ the reinforcement template previously developed, right? Easier said than done, based on the data obtained thus far from vaccines which break down nicotine before it reaches the brain. It could of course be based on incomplete effects, lower titers produced little benefit, perhaps the higher titers successfully-and fully, blocked the nicotinic effect in some patients, not in others. But the durability of the addictive template is also a factor here. Disassembling this addictive engram is a lot harder than putting it together in the first place. Thus someone who has quit smoking for years may encounter a stress or a disappointment, something which for them is a trigger for that craving template, and they relapse into smoking, even though one might think that the longterm lack of reinforcement would have rendered that circuit inoperative. It is seemingly more a case of dormancy, from which craving can be awakened by environmental and/or physiological events. This is one of the reasons that, for most patients, reducing substance use is not a viable therapeutic option: ’cutting down’ does not last. Negating Reward: Vaccines NABI‘s vaccine, NicVax, uses a nicotine antibody, historically injected four times in the first four months. It binds to nicotine and prevents BBB entry, and thus attenuates the CNS effects of nicotine. In a 301 pt Phase IIb completed in 2007, NicVax produced a 24.6% abstinence rate at six months, compared to 13% of those on placebo. This was correlated with antibody titer, with low titers not exceeding placebo levels of abstinence. At twelve months, 16% of the patients on the higher dose were abstinent, compared to 6% of patients on placebo. This 6% figure for placebo patients is poorer than the 10% commonly reported, thus some of the divergence between groups was due to these placebo patients doing worse than expected. NABI has completed another immunogenicity study which used a six-dose protocol, and reported that it produced much higher antibody titers, and three months earlier than with the former protocol. NABI now plans to begin Phase III before year-end. It should be noted that CVT claims to have prevailed in a patent dispute pursued by Cytos, which had threatened their NicVax patent in the EU. Cytos’ CYT-002 nicotine vaccine missed its endpoint in its first Phase II trial, but Cytos claims that they have improved the formulation, increasing its efficacy (increasing antibody titers tenfold) and refining the side effect profile. This vaccine does not actually enter the brain, instead it acts on nicotine in the bloodstream before it passes through the BBB. Once weekly dosing also appears to be more efficacious, and higher titers are promising here, in that 57% of patients in that Phase II with high titers did maintain abstinence, whereas low titers and placebo groups showed a 31-32% abstinence level, 42% overall, compared to a placebo group rate of 21%. Novartis licensed CYT-002, paying $28.9 million upfront, and is taking the improved version into PhII. Celtic Pharma and TA-NIC: Xenova ran a couple of Phase I/II studies with this nicotine-targeting vaccine, wherein the antibody binds to nicotine, forming a combined ‘complex’ which does not cross the BBB, hence reducing the CNS reinforcing effects of the nicotine. Xenova reported that it was tolerated and claimed some ‘indications’ of efficacy. Having acquired Xenova and with it, TA-NIC, Celtic ran a 520pt Phase IIb in Europe. The six month duration trial was fully enrolled as of the end of October 2007, and Celtic announced the results would be available during 2Q:08, followed by an auction of the rights. Our question has been whether the level of triggered antibody release would be sufficient to bind enough nicotine to preclude even a moderately reinforcing effect. The silence from Celtic, and the apparent absence of an auction as of yet (keeping an auction secret would be a self-defeating tactic), raises some doubt as to the answer. Other Approaches Evotec brought EVT 302, a reversible MAO-inhibitor (a mechanism previously used in depression and Parkinson’s) into Phase II for smoking cessation, but the results showed no effect on nicotine craving, with or without concurrent nicotine patch therapy. Roche’s Tempium (lazabemide) was a reversible MAO-inhibitor which reached Phase III, where it failed and was discontinued. (end of excerpt) The Breathtaking Potential of Ampakines in Respiration (from NI November) Cortex Pharmaceuticals reported very solid efficacy data from their second trial of CX717 in respiratory depression (RD), showing that the drug both prevents RD and (unlike naloxone, the current treatment for opioid-induced RD) preserves analgesia. This means that anesthesiologists would not have to subject patients to completely unfettered post-surgical pain if respiratory depression occurs--and it occurs far more often than we had ever thought. The incidence varies by setting, and while Cortex has data indicating it may be as high as 17%, we more conservatively estimate it as being in the low double-digits. Certainly this is enough to constitute a safety, quality of care, and liability issue. Since it now appears that this risk can be completely avoided or alleviated via an Ampakine, we believe that once commercialized, an Ampakine will become the new standard-of-care: No anesthesiologist or hospital will want to explain why a patient was left exposed to either the risk of death or of physically traumatizing and dangerous levels of pain. Respiratory depression is not something with which NI was at all familiar when the concept of Ampakine usage therein was first floated last year, and initially our view was that this was at most, a very secondary niche indication. What transformed our view was an anecdotal experience, but one with some impact. At a professional meeting in late 2007, we serendipitously happened to encounter John Greer, who has pioneered the work in this area, at a poster session he was presenting on his preclinical work with Ampa modulation and RD. During the 30 minutes we conversed in front of his poster, three MDs came up at various points, and spontaneously expressed the wish that they had CX717 in their armamentarium--"We could really use something like this.' As it turns out, RD is indeed a familiar and troubling worry for front-line ER docs, surgeons, and anesthesiologists/anesthetists, a large market unhappy with having to choose between respiratory function and pain when RD occurs. After a rough calculation of the number of crash carts and surgical suites that would have to be equipped with an Ampakine for RD rescue or prophylaxis in the US, our estimate a few months back was that just this market alone would be worth $700-800 million annually in the US (due to expirations, restocking would be periodically necessary). Cortex and Greer are also looking at the possibility that CX717 might be the first drug to effectively address RD due to other agents, like Propofol or barbiturates, for which there is no current 'antidote.' The animal data indicates that it works with that type of RD, indeed it appears to be a potential remedy for RD due to many different causes. Perhaps most enticingly, Cortex is working to ascertain whether Ampakine modulation may address the respiratory issues in sleep apnea, which would jump the annual potential manyfold. The Ampakine/RD scenario has one additional, major area of commercial potential: producing a gold-plated market leader amongst the gold standard opioid analgesics. The company which licenses Ampakines for RD (and Cortex controls this IP for many years) could develop a combination opioid/Ampakine drug which, via any delivery modality, would be differentiated from all other opioid formulations by this safety margin; the impossibility of inducing respiratory depression. In a nociceptive pain market where opioids are almost indistinguishable from each other. Currently, major efforts are going into various permutations of altered duration of effect and vulnerability to abuse; this safety profile would represent a unique marketing advantage, one beyond the reach of generic competition for many years. At worst, the opioid RD rescue market alone is worth $700 million annually. The numbers climb steeply if one includes an opioid combo drug application, and would skyrocket if it turns out that Ampakines constitute the first direct (rather than treating secondary fatigue) pharmacotherapy for sleep apnea--since that taps a market that may reach eighteen million people in the US alone. The sleep apnea POC remains to be shown, but there are published studies wherein electrical stimulation of the hypoglossal nerve produced clear improvement in sleep apnea patients, due to the effect upon tone in the musculature of the tongue. If AMPA receptors in the dorsal medulla trigger similar activation of that nerve, it could be a straightforward route to correcting sleep apnea. While 5HT-4 and adenosine receptors have been suggested as targets for respiration control, the role of AMPA circuits may be uniquely suited to these indications, there is no competing MOA that has yet emerged. These strikingly clear data, and surprisingly large-scale prospects, should stimulate a very competitive bidding situation vis-a-vis a partnership for Cortex and RD.
The Subprime Grenade and Other Biopharm Reverberations (Excerpt from NI October) As we were going to press, American governance reached another nadir in its eight year slide. The US House of Representatives put on a stunning display of stubborn myopia on both sides of the aisle: Instead of sticking the pin back into the subprime grenade rolling on the floor, they debated the inane and irrelevant, distracted from the chilling reality of how close to the economic jugular the shrapnel would fly if it were to detonate full-force. But prior to this latest Festival of Microcephaly, NI had tapped into its network of VC and fund manager professionals to glean some informed opinions about how the macro-carnage might alter the financing environment for small biotech/biopharm firms. We heard back from most, but not all; apparently not every window ledge offers decent WiFi or Blackberry reception. The input we received can be boiled down into a not-very-surprising projection: An Already Tight Financing Noose Will Get Even Tighter for Early-Stage Companies: Fallout from the subprime panic will cause a flight away from risk, towards 'quality'. To the degree to which our sources defined it, quality is discerned in the time-honored tradition of earnings or nearterm prospects for same. If this turns out to be the case, there will be less money available for the earlier-stage companies working on novel mechanisms--the innovators. Early-stage companies were already having a difficult time getting money, and the subprime fallout exacerbates that situation. That refers to all sources of money: IPO and secondary offerings, PIPES, venture funding, hedge funds. Those in the VC industry anticipate that the effect will be primarily upon financings for very early-stage ventures: VC interest is going to be attenuated if they foresee a lack of exit potential, or not being able to share some of the risk down the road, if additional investors are not available for subsequent rounds. Debt financing is likely to shrink, and the advent of hedge funds as sources of funding is going to be at least partly aborted by their increased regulation. Without access to funding, companies must turn even more strongly to partnering, or being acquired. The Financial Times published an article suggesting that the subprime crisis will alter the dynamics of partnering and M&A in favor of Big Pharma, BP regaining some of the leverage lost in the past couple of years. Without available financing alternatives, small companies might have to be willing to take lower offers from Big Pharma, BP becoming the financing vehicle of last resort for small firms. But we believe that effect is likely to be situation-specific, not endemic to the entire industry. The pipeline depletion/generic competition conundrum continues to be a factor for all Big Pharmas, which does negate some of their leverage. The scenario is not completely bleak for small companies. There were some optimistic suggestions that, with the demolition and/or identity shifts of the largest investment banks, that the small, 'boutique' investment bank may make a comeback, preferable for a science-heavy sector like biotech. The obvious exceptions to the BP leverage paradigm are the handful of smaller companies whose products offer the prospect of nearterm commercialization and revenue-growth. Less obviously, companies with programs for which there is relatively less competition for first or best-in-class status are in a seller's market when dealing with Big Pharma companies who cannot afford to let a competitor 'get there first.' Whereas in crowded arenas featuring multiple mechanistic approaches, and here Alzheimer's comes to mind, the lack of financing alternatives does give large companies, who can choose from multiple 'horses', increased negotiating leverage. However, this is all taking place within a context of fundamental cost-cutting trends in Big Pharma, most recently evidenced in Pfizer's streamlined pipeline agenda, and GSK's decision to shed 850 R&D positions. It looks like the industry is gradually shifting towards an inlicensing model, with small companies producing the candidates; the larger firms complete development, and bring the products to the market. This brings us back to the moving target of what constitutes "quality." Some in the pharma field have turned to the superficial comfort of the drug development/repurposing/reformulation troika. A drug that didn't quite make it through clinical trials, or has a database from another indication, and/or one which can be tweaked via reformulation; these are perceived as lower-risk bets. Lundbeck's resurrection of sertindole and Teva's revival of pagoclone are of this ilk; these are NCEs, but well-characterized ones, with familiar MOAs. Academic labs are also performing resuscitation on remarkably venerable drugs: A well publicized study done at UNC reported that atypical antipsychotics performed no better than Moban in a pediatric population. Moban? Moban is so ancient that it is sold in corked bottles, the 1961 Chateau Moban is said to be drinking quite well now. But Moban had passed into the fog of time for a reason, and that is true for many, if not most, of these retreads. While there are some reformulations and repurposings which will have a clinical advantage, they are the exception. The assessment of the NRDO companies presented on p.12 documents the fact that, for all the claims of an easier path to commercialization, familiarity is no guarantee of quality, or of success. In a world where prescribers are increasingly required to justify the use of a non-generic drug, both pharmacy benefits managers and the FDA now collude in making the path for proprietary me-too drugs far less certain than it once appeared to be. Not all of the Street's best and brightest burned out their promise by creating Doomsday Derivatives, and those left seeking opportunities for big returns will find that opportunity, albeit with the risk that goes with it, in new drug mechanisms. Alliances and licensings will involve much more sharing of both risk and reward than was the case in the past, but 'novel' remains the avenue to the quality, the superiority, that will be demanded of new therapeutics. Now that the 'Street' can no longer revert to a business model predicated upon increasingly abstruse forms of paper transactions, the survivors will have to figure out how to make a living via the creation of something of tangible value. Having been cut off from the financial equivalent of Internet porn, they will have to figure out how to make real relationships work. In the long run, that may not be a bad outcome.
BACE: A Case of Mistaken Identity? (from NI September's Alzheimer's review) Two companies, American Life Sciences Partners and Probiodrug, believe that BACE-inhibition is a dead end based on a genetic fluke, and have proposed an alternative model of how AB is formed, and can be prevented. Researchers from the two firms recently co-published an article on this alternative AB pathway in Biological Chemistry. American Life Sciences Pharmaceuticals contends that the BACE hypothesis is an artifact from the Swedish AD mutation in mice, and is not the source of human AB. In their model, human AB is produced in the active secretory pathway, modified by Cathepsin-B, not BACE. This is beta-amyloid with a pyroglutamic alteration at the N-terminal, and they believe that the great bulk of the beta-amyloid at least partly responsible for Alzheimer's, is this form. They have identified a drug (E64d) which was developed in Japan for Muscular Dystrophy, and then dropped following Phase III failure. ALSP states that their preclinical experiments reduce both soluble and insoluble AB more than BACE inhibition does, and produces functional improvement in cognition. With ample clinical safety data already on the record, ALSP believes that Cathepsin-B inhibition is unlikely to be thwarted by some unexpected toxicity, and hopes that they can move quickly into Phase I/II. They are focused upon finalizing NIH grants that will allow them to do so. Germany's Probiodrug has also embraced the pyroglutamic AB model, seeing BACE as a misidentified culprit. They believe glutaminyl cyclase (QC) is the enzyme intrinsic to the pathological modification of amyloid. They have been developing QC inhibitors which, in animal studies, reduce all pathological forms of AB and produced functional improvement. This is early in development, and given the ubiquitous presence of QC, which provides 'durability' for many neuropeptides (necessary for many, pathological in the case of beta-amyloid), the risk of unexpected toxicity looms as a potential problem.
The World According to Amyloid Approximately 40% of the Alzheimer's therapeutics programs we reviewed involve amyloid as the main target. Second is tau--at just 6%. No other mechanism is pursued by more than 4% of these programs. How did this imbalance develop? There has been a closed loop in the exploration of Alzheimer's mechanisms. Alois Alzheimer found amyloid plaque and tau tangles in the brain of a demented patient, and from that posthoc, post-mortem finding, declared these to be the causal elements in the disease. The process by which beta-amyloid gradually moved into pre-eminence over tau may relate to the fact that transgenic models of amyloid pathology were easier to develop, and thus emerged first. Here is where the logic became circular: Animals genetically altered to overexpress amyloid showed evidence of cognitive dysfunction, and it was presumed that this mirrors the process of Alzheimer's as it occurs in humans. No doubt, immersing the brain in beta-amyloid is not a good thing, for animals or for people, but this does not set it atop the pathophysiological pyramid. To some degree, the model ended up driving the theory. This is beautifully exemplified by the questions raised about whether the Swedish mouse mutation, which birthed the beta-secretase concept, emulates the human condition at all. The model was accepted before proven. In forensics, investigators occasionally must establish the cause of death for individuals found in a burned-out building. Most of the time, Occam's Razor applies, and the cause of death is in fact the fire. But on occasion, they find that the individuals were first shot, bludgeoned, garroted, poisoned, or in some other way dispatched; the fire in fact obscured, rather than explained. In the case of Alzheimer's research, the wish for an explanation and a solution led to the first-in-class hypothesis being treated as if it were best-in-class, in spite of evidence to the contrary. To take it to the absurd extreme; igniting laboratory rats does not portend a positive outcome--'Induced Extreme Hyperpyrexia and Mortality in the Icelandic Flammable Rat'--but does not explain much in the way of mortality in wildtype rodents. In the Middle Ages, premature scientific closure was often based on Scripture. In today's environment, premature closure is often based on Funding. Scientists may pursue a path of fiscal less resistance based on the same survival instincts that exist in all of us. But this does raise troubling questions about the conservatism of peer review for grants, and the venture capital system as it has been applied to CNS therapeutics; neither system lends itself to the equitable treatment of divergent theories and their investigation.
The partnership agreement between Pfizer and Medivation provides some interesting information, albeit no certainty as to Dimebon's eventual value in the treatment of Alzheimer's. $225 million upfront, up to $500 million in potential milestones. US costs and profits to be divided 60/40 betwen Pfizer and Medivation, Medivation retaining some co-promotion rights, plus royalties on ex-US sales. The deal tells us:
The Search for Intelligent Life in Alzheimer's Trial Design and Analysis Bapineuzumab did not hit its endpoints for cognition, and from the point of view of a prospective study, it was an abject failure. However, given that Elan/Wyeth announced many months ago that they were going to initate a 4100pt Phase III trial, the companies conducted a intensive posthoc slicing and dicing of the data which has now produced a hodgepodge of contradictory findings. Their main conclusion was that there was a bifurcation amongst study patients based on whether or not they were 'carriers' of the pathognomonic APOE4 gene. The 65% of the patient population studied who were carriers showed no significant benefit from bapineuzumab, though if one only counted completers, they appeared to have a slightly (2.6 ADAS-cog points) better outcome than the placebo group. The non-carriers showed a difference of 5 ADAS-cog points, which did reach significance. However, this was in comparison to a placebo group whose rate of decline was essentially the same as the drug group until they reached the final third of the 18 month trial, and their late nosedive took them towards the extreme end of the expectable range for the slope of cognitive decline over the 18 month timespan. No dose-response pattern was seen, further adding to the impression that these data represented a 'random walk' which could only be made to look coherent via posthoc data manipulation in extreme form, and a disregard for the seemingly distinct possibility that the contrast was an artifact of the placebo group, not a result of drug effect. There was also a safety signal of note: the incidence of vasogenic edema which appeared related to high doses of the antibody in conjunction with the APOE4 genotype--though 25% of those with vasogenic edema were not APOE4 carriers. On the one hand, most of the patients were asymptomatic, the VE was only detected via MRI. A few patients were symptomatic and required treatment with steroids. It may well be true that asymptomatic VE is not in itself dangerous--but in a real world population of Alzheimer's patients, how reliably can they be monitored to be sure that what was asymptomatic is not worsening? The notion of hundreds of thousands of elderly patients receiving MRI's because of ambiguity around the VE diagnosis seems fiscally untenable. Elan/Wyeth have responded with a plan to give APOE4 patients only a low dose of bapineuzumab, a solution that may lack something in the eyes of a safety-conscious FDA. But no matter: two trials of 'carriers' and two trials of 'noncarriers', totalling 4100 patients, are still planned. This data, even when spun to the max, has gaping holes in terms of patient selection, efficacy, and dosing. It is data that cries out for a Phase IIb trial to answer these questions, not a premature $300 million expenditure on pivotal studies. Given the substantive questions about bapineuzumab, and the wisdom of moving from a very confused Phase II dataset to Phase III, Lilly's handling of Phase II data for its own monoclonal antibody, LY2062430, was surprising, to say the least. This was only a 12 week trial involving 52 patients, and Lilly dealt with those vexing efficacy issues by declaring that they neither expected nor found any cognitive effects in this shortterm study. They stated that this Phase II was intended only to show safety and tolerability, and has done so. That is an interesting twist on the usual nomenclature, given that safety trials in a patient population are generally called 'Phase Ib', Phase II generally implies some interest in efficacy signals, and not just biomarkers. What was even more striking, indeed shocking, was that, based on the biomarkers of beta-amyloid levels in blood and CSF, Lilly declared this antibody is ready for pivotal Phase III testing, to begin in 2009. This is mind-boggling. Having seen Myriad Genetics, Neurochem, Medivation, and now Elan/Wyeth move into Phase III without solid Phase II efficacy data, the first two crashing and burning in tragic style, one might think Lilly would have taken the hint and reconsidered this strategy. But instead, Lilly is dispensing with functional efficacy testing altogether in their haste to reach Phase III with this antibody. We are aware of the pressures upon small companies like Neuorchem and Medivation, pressing them to push the clinical envelope as they try to stretch limited resources and attract more funding. Elan and Wyeth are also making a mistake, but at least they tried to assess efficacy over an eighteen month timespan, even if they have tied themselves into knots trying to spin the data into something positive. But what is Lilly's excuse? It's like watching two teenage drivers who are playing a game of 'chicken': one car zooms off the cliff and bursts into flames, the second driver decides 'that looks pretty cool', and drives off the cliff as well. This pretty much puts to rest the whole concept of Intelligent Design, because there's none to be found here.
The Book of Bapineuzumab: Reading between the lines (On-line comment 7/8/08) There has been no biotech event more anticipated in 2008 than the unveiling of the Phase II trial for the amyloid antibody bapineuzumab (henceforth referred to as Bap), already launched into a huge Phase III program by Elan and Wyeth. They had promised some information before midyear, and that is what we got, some information, but not much. The details are scheduled to be presented at a conference in late July, so until then, everyone is trying to make sense of what was stated in the press release. Since it seems like everyone else in the bio-universe has offered some comment on this release, here are some comments: 1) The trial failed to show efficacy in the overall population of Bap patients compared to those who received placebo. Given that there were three dose levels, and just 240 enrollees, that in itself is not necessarily huge news. However, for those starry-eyed groupies who thought that the Phase II data might be sufficient for NDA submission—forget it , the data showed nowhere near the magnitude of effect that one would need for that kind of unprecedented submission and approval. 2) The trial sponsors did announce that there was evidence of efficacy in those patients who do not have the APOE4 mutation, long known to be associated with a more rapid and virulent disease course. Elan and Wyeth did not say how many of the trial participants fell into that category, roughly half of all Alzheimer’s patients have the APOE4 genotype. The APOE2 and APOE3 patients constituting the other cohort were reported to have displayed significant effects from Bap compared to placebo patients, in terms of their scores on the ADAS-cog, NTB, MMSE, CDR-SB, and a favorable trend on a Disability Scale. Additionally fMRI data suggested trends towards reduced loss of brain volume and decreased ventricular volume in Bap patients, but only among the non-APOE4 group. 3) In contrast, the APOE4 “carriers” showed no functional/cognitive effects from Bap, though there was a trend towards an increase in ventricular volume—which Elan/Wyeth here seemed to imply might be a potentially positive sign (“However, favorable directional changes were observed on a number of endpoints. Preliminary analyses suggest possible increase of ventricular volume in treated patients versus placebo patients.”) whereas in the non-APOE4 group, the decrease in ventricular volume was cited as possibly positive. In the legendary AN-1792 vaccine trial, Elan/Wyeth claimed that decreased brain volume and increased ventricular space was in fact positive, reflecting the clearance of amyloid plaque. We have not yet fully embraced the concept that this traditional sign of brain atrophy is now a harbinger of good tidings. 4) Both the drug and placebo group showed plenty of adverse events, but only the APOE4 group differed significantly between the drug group and placebo, with the drug group showing a significantly greater likelihood of severe adverse events, as well as increased, dose-related vasogenic edema. The possibility is thus raised, albeit not confirmed, given the tiny (60 patients) size of each dose cohort (32 of which received drug, 28 placebo) , that Bap may have worsened the condition of patients with the APOE4 mutation, or again about half (estimates range from 40-70%) of the Alzheimer’s population. 5) The APOE4 subgroup distinction, and direction of impact, does not easily fit with the mechanistic hypothesis utilized by Elan/Wyeth in this trial. Based on the amyloid model, and after all, this is a beta-amyloid antibody being used, one would think that APOE4 patients would have more beta-amyloid in situ, since they have a faster-moving variant of the disorder. So why would a beta-amyloid antibody make patients with less beta-amyloid better, patients with more beta-amyloid worse? One could hypothesize that patients with more beta-amyloid subject to antibody effect may be more vulnerable to some type of iatrogenic response, at least in terms of the negative physiological effects. not dissimilar to the inflammation that impacted 6% of the AN-1792 population, 6) IF this is so, that would mean that baseline beta-amyloid levels would have to be assayed before starting treatment with Bap, in order to be sure that more advanced cases (more likely with the APOE4 genotype, but not necessarily excluding advanced APOE2/3 patients) would not be given Bap if that might risk exacerbating rather than ameliorating their condition. Furthermore, periodic AB levels would have to be drawn (and obtaining intracerebral measures of both soluble and insoluble AB is not something your local PathLab could do) in order to be sure that the ‘tipping point’ of AB had not been reached. It is unclear, and we believe, unlikely, that simple APOE4 genotyping would be sufficient. Thus, with little of the data actually released to this point, there is more guesswork than we’d like regarding the interpretation of these data. We do know that Bap is unlikely to be useful, or usable, with the whole spectrum of Alzheimer’s patients. Whether the indications of effect (one would think that showing significance in cohorts of perhaps 30-40 patients must mean pretty salient divergences in scores) established by a post hoc review of the data can be replicated in a pre-specified genotype-distinguished group remains to be seen. The spin being put on the fMRI data, whether cortical shrinkage is bad or good, ventricular expansion bad or good, leaves the interpretation of the scan data completely up in the air. It might be bad, might be good, it’s unlikely to be neither. But this speaks to possible safety issues that are going to discomfit the FDA if this pattern continues in Phase III—because the sheer size of the patient population raises the stakes enormously when it comes to any safety risk. We can certainly make the argument that the risk might be acceptable given the dire course of the disease, but this runs counter to the current FDA climate around risk-reward, which is to focus on the former. Elan and Wyeth state that these data justify the decision to launch a $200 million Phase III program. What else are they going to say? Given the ambiguity, cognitive dissonance theory virtually requires them to rationalize that call. In late July we will know more, but at present, our reaction to these results is much more perplexed and concerned than that of the general market, where Elan’s share price rose 10% on the day of the data release. We suspect that Bapineuzumab is not going to be the disease-arresting paragon some had hoped for, and it remains to be seen whether its disease-modifying benefits will outweigh what appears to be some risk of disease-exacerbation in a substantial proportion, perhaps a majority, of the overall population of Alzheimer’s patients.
From NI April 2008 "So if you meet me It is time to acknowledge the underappreciated torment of the Food and Drug Administration. This oft-maligned (by NI, amongst many) bureaucracy has finally earned our sympathy, because it has been placed in an impossible quandary. While the FDA struggles to operate with 550 empty staff positions, unfilled because the federal bureaucracy is unwilling to accelerate its elephantine hiring process, and the salaries that the FDA pale by comparison to the private sector, Congress keeps adding to the mandates for which the FDA is accountable, with enhanced post-marketing surveillance now the new mantra. We agree with the concept, but there is a limit to which any entity can be stretched without breaking, and the FDA is nearing that point. The FDA will now not adhere to the timeliness requirements set by Congress in the PDUFA legislation (not that they ever did), delays will be permitted as strapped resources are shifted to post-market monitoring. Companies crawling through the regulatory minefield can anticipate this process becoming even slower and more convoluted, as the FDA obeys the edict to emphasize safety above all else. The nuances of weighing risk versus benefit will be shortchanged as the FDA tries to avoid further criticism. It is like watching an abusive family system. Familial abuse is passed down the generations, the children of abusive parents are more likely abuse their own offspring, the bullied learn to bully. Here, the abuse is perpetuated across institutional hierarchies, and the FDA, no stranger to the bully role, exhaustedly embraces it all the more. Congress implacably issues demands without providing the resources to meet them. The FDA in turn dishes out the same abuse that it receives, mistreating the companies coming before it, setting arbitrary, sometimes capricious standards, shifting requirements at the last moment and seemingly at whim, often leaving companies in the dark for months as to how they should or can proceed. The only hope that we take from this situation is this: If the FDA can develop a post-marketing surveillance mechanism in which they (and their Congressional masters) have confidence in terms of rooting out safety issues before they bloom in media coverage, that might permit them to reassess the grueling pre-approval process which at the very least delays, if not prevents, the emergence of improved, novel treatment options. If more certain that flaws will be uncovered, perhaps they will then modulate the current overemphasis upon a pre-marketing approval process which aspires to guarantee safety, but is doomed to fail because of the statistical impossibility of effectively identifying all possible rare events. Expecting the impossible from people, and then vilifying them for failing to deliver it, does not tend to bring out the best in them, or from the agencies that they comprise. For NI's part, we intend to lighten up just a bit in our criticism of the FDA (we'll see how long that lasts). Because no matter how stressful it may feel to be on the industry side of the moat, it's better than the Circle of Hell the FDA currently calls home.
From NI April 2008 The cost of running pivotal Phase III trials in a major disorder that will pass muster with the FDA is intimidating to say the least: It is not unusual for CNS Phase III programs to cost over $100 million, occasionally well over that mark. Thus a prudent company will prepare carefully for a Phase III program, sorting out dosing and population subgroup issues before embarking on pivotal trials. Or not. There is a curious, worrisome, and ultimately self-defeating trends towards miniaturization in the Phase II stage of clinical development. Companies are launching compounds into Phase III based on flimsy data from samples that once would have been thought suitable only for pilot Phase IIa studies. To paraphrase the Boomer motto "Fifty is the new Forty"--is Phase IIa the new Phase IIb? And if so, is this just as self-deceiving as the former? Alzheimer's has been a frequent venue for downsized trial refinement. Some recent examples: These mini-Phase II pseudo-vettings are not confined to Alzheimer's. For example: We could go on--there are several other vivid examples of paltry Phase II data enticing companies into catastrophic Phase III programs. One would think that this pattern would have been duly noted, and that this would dissuade companies from following suit. But, as noted above, not only has the trend not abated, if anything, it has worsened. The fact that relatively thorough Phase II trials do not guarantee Phase III success (e.g. Neurocrine's indiplon) does not in itself justify skipping that step almost entirely. It is akin to predicating game strategy in American football around the plan to heave a 'Hail Mary' pass at the last moment: It is a play that depends on luck more than anything else, is exciting to watch, but usually fails.
Commentary on Selected Companies (click on company name)
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