Empty Calories: Sugar Pops and Kool-Aid

NeuroPerspective and Neurogram+ readers know that we have been less than enamored with Alkermes and its handling of the ALKS 5461 program–indeed with their R&D bent in general, which tends to be derivative and incremental. It was striking and dismaying to read John LaMattina’s (usually insightful) Forbes column today, wherein he interviewed Alkermes’ CEO Richard Pops about the challenges inherent in developing new antidepressants. What was striking was Pop’s continued, unnuanced spin; what was dismaying to see was LaMattina’s willingness to partake of Pops’ ‘Kool-Aid’ without questioning a couple of the more specious assumptions:
<<So, where does this leave Alkermes and their breakthrough drug program? Pops is optimistic. First of all, FORWARD-4 showed a clear trend toward efficacy on the primary endpoint in the high dose group, and post hoc analyses achieved statistical significance for this same dose group on one endpoint (MADRS).  Then, there is the ongoing FORWARD-5 trial. As Pops said, “There’s no guarantee that FORWARD-5 will be positive.” But, if it is, he believes that the combination of this study, the data from FORWARD-4 which he described as a “near miss”, and the earlier clinical data, could prove sufficient to convince the FDA to approve ALKS 5461. As he said, “This drug has a great risk-benefit profile – it’s a benign agent”>>
Working backwards in this quote, the assertion that the drug has a ‘great risk-benefit’ profile–it’s a benign agent’ conveniently overlooks the side effects reported in Phase II (nausea (34%), vomiting (17%), and dizziness (19%)), which have been ignored by Alkermes itself, other than to state that the Phase III adverse event profile is similar to what was seen before. In other words, ALKS 5461 is no more–and indeed is less–’benign’ than the many drugs already available for depression.  Which means that predicating an unprecedented one-successful-Phase III-NDA on this risk-benefit profile is building on sand.
Pops also stated <<This is the most important depression medicine in 20 years>> No, not really. While ALKS 5461 may have some impact within days, rather than weeks, we would argue that other Rapid-Acting-Antidepressant candidates, including JNJ/Janssen’s esketamine and Allergan’s rapastinel/NRX-1074, constitute a potentially far more radical transformation of the antidepressant paradigm, offering symptom-relief within hours.
Perhaps it is not that surprising that Richard Pops offered the equivalent of biotech ‘fast food’ during the interview, hoping that the sugar and salt would obscure the lack of substance; it was more surprising that someone as experienced as LaMattina would snack on such empty calories.

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5HT-6 and Power

Axovant suffered (as of this morning) a 25% hit to its valuation in the wake of Pfizer having revealed that it terminated the Phase II trial for its 5HT-6 antagonist as an adjunct in Alzheimer’s due to a futility analysis–it was obvious that it had no chance of reaching whatever pre-specified benchmark for minimal viability they had defined. The knee-jerk reaction in the Market was to see this as being the harbinger of reduced expectations for RVT-101. But this seems off-the-mark. As NeuroPerspective and Neurogram+ have discussed at length in the past, the extensive history for RVT-101 when it was being developed by GSK suggests a consistent albeit mediocre signal in boosting cognition in AD–the efficacy data from GSK’s last Phase IIb trial showed a minuscule impact on rating scales used over a 48 week period (e.g. ADAS-cog decline altered by less than two points).
Lundbeck/Otsuka’s three current Phase III trials for idalopirdine are enrolling 720, 840, 930 patients each. Axovant is now enrolling a Phase III trial that aims for a total of 1150 patients. In other words, these two programs seek to achieve statistical significance through jamming large numbers of patients through, regardless of whether this represents a truly meaningful effect in terms of clinical function. The fact that the Alzheimer’s landscape has continued to be bleak leaves open the possibility–arguably the probability–that mediocrity will sell, for lack of anything else that can be offered as a new hope for patients and families.
The Pfizer trial was planned to enroll 186 patients–the question is begged as to why they bothered in the first place. They had the choice of either quadrupling the planned enrollment, in which case they would have been better off constructing it as a pivotal trial, or else pulling the plug on a futile enterprise. From a strategic point of view, Pfizer may have decided that arriving third, after Axovant and perhaps Lundbeck/Otsuka, was not an avenue to sufficient commercial success by their standard.
Had the Pfizer program been terminated due to an adverse event/safety issue, that would have been news. The bottom line is that this does not tell us anything about Axovant’s program that we did not already know. If anything, it reduces by one the number of companies seeking to scrape the bottom of the efficacy barrel.

Other Notes
In the January/February issue of NeuroPerspective, we had noted that the absence of news for two programs was a potential indicator of failure-yet-to-be revealed. As it turns out, while Methylation Science’s Phase II trial of Strada did not hit its endpoint, a post hoc analysis did show what they believe is a signal worth pursuing, details yet to be disclosed.  And the timeline for Neuren’s trial of NNZ-2566 in TBI extended beyond what we had expected, and simply has not been wrapped up yet–data is expected in early April.

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ALKS 5461 Hits an Iceberg, The Boston Pops Plays On

Not wanting to be left out of the early-2016 chaos, the neuroscience area chimed in today with the announcement that Alkermes’ first two Phase III trials of ALKS 5461 had failed in Major Depression. In one trial (FORWARD-4), the higher of the two doses used (2mg/2mg each of samidorphan and buprenorphine) showed a “clear trend” towards efficacy. In the other (FORWARD-3), which only used the 2mg/2mg dose, there was no mention of any trend, but the trial failure was attributed to a high placebo effect. Alkermes, which boasts one of biotech’s best spinmeisters as CEO (Richard Pops), stated that they will now increase the sample size for the other, ongoing Phase III (FORWARD-5), and suggested that success in that trial, along with the trend in FORWARD-4, and the results of the Phase II put together, “could provide substantial evidence of efficacy for ALKS 5461”: As if they could somehow cobble together an NDA filing from these cherry-picked datapoints. Right.
Some preliminary thoughts:
1) The Phase II data, which came from a 142pt trial, had achieved enough of an apparent treatment effect that we did expect a signal to emerge from the Phase III program. We had not anticipated what is not far from a complete failure in these first two Phase IIIs.
2) We had previously focused on the troubling side effect profile for ALKS 5461 as potentially off-setting modest therapeutic efficacy. After all, the PhII had revealed a high rate of nausea (34%), vomiting (17%), and dizziness (19%). Today’s press release noted that the “safety and tolerability profile of ALKS 5461 was consistent with that reported for the Phase 2 and FORWARD-1 studies.” That is not good news–it suggests that a marginal signal that they hope to bludgeon into significance with a larger trial population is accompanied by a much worse-than-standard tolerability profile.  Add in sublingual administration and probable Schedule III classification, and one has a nausea-prone drug with mediocre clinical benefit and poorer ease-of-use than its competitors.
3) Coming back to the regulatory path ahead if FORWARD-5 ekes out a better than p=.05 signal: Even hinting that the FDA might consider a single Phase III success sufficient for approval, when accompanied by a Phase III trend and a Phase II success (in a four week trial) is pure fantasy. One law firm has already announced that it is looking at Alkermes’ behavior, this the kind of legal quackery we usually dismiss out of hand. But if Alkermes continues to disseminate PR blarney, they could generate some genuine legal exposure for themselves.  Depression is not an untreated disorder, patients do have a multitude of alternatives, however imperfect, that they can try, thus we do not think that the FDA is going to twist itself into a regulatory pretzel in order to make way for ALKS 5461.
4) In terms of collateral damage: ALKS 5461 is thought to work primarily through a kappa opioid antagonist mechanism, and Cerecor had licensed such a compound from Lilly several months back. With these marginal-at-best ALKS 5461 results, doubt is cast on the viability of the mechanism–thus Cerecor shed 17% of its valuation today. It is not their lead program, but as their second-in-line, its perceived value has been shaken.
5) SPCD trial designs could be seen as taking a hit here, but that would be premature, perhaps completely incorrect. Alkermes had made much of their plan to use SPCD in the ALKS 5461 program, the premise being that one could thereby run smaller studies, with less risk of placebo effects arising and masking a signal of effect. But it is believed that Alkermes did not use SPCD with FORWARD-3, the two arm, 429pt trial for which the high placebo effect was reported by Alkermes. The much smaller treatment arm sizes for FORWARD-4 (385 patients, three arms) suggest that SPCD was used in this trial, and indeed the placebo effect was less salient, and this is where a ‘trend’ was seen. It is worth noting that FORWARD-5 appears to be structured like FORWARD-4, and thus may also be an SPCD protocol study. In sum, it is possible that what we see here is the kind of marginal, mediocre outcome that is not uncommon in antidepressant trials, and it was only in the conventional-design study that the placebo effect was problematic–which might actually lend support to the use of SPCD. Unless and until Alkermes confirms which trials utilized which protocol, this is all provisional.
6) Speed kills. FORWARD-3 was originally scaled to enroll 670 patients, and to finish mid-year, but only 429 patients were enrolled, and the results were revealed today. Rushing clinical trials is never a good thing, and it must be wondered why Alkermes accelerated this study, and cut enrollment off after just over 60% of the original target had been enrolled.
This does not necessarily eliminate ALKS 5461 completely as a novel antidepressant candidate, but it does mean that any efficacy that it could eventually demonstrate may not be commensurate with its tolerability issues. This also does not mean that SPCD does not work as a clinical trial protocol, in fact it may have done what it was intended to do in FORWARD-4. And it does not disenfranchise the kappa opioid receptor system as a potential antidepressant target–this combination pharmacotherapy may have been an indirect and inefficient vehicle for tapping that system. These results do raise questions about Alkermes’ self-promotion and its execution of this Phase III program. It also reduces ALKS 5461’s profile as a potential ‘new-generation’ alternative for the treatment of depression: JNJ’s esketamine and Allergan’s rapastinel/NRX-1074 are now at the front of that pack.

Other Notes
1) Acorda’s acquisition of BioTie further expands Acorda’s comprehensive Parkinson’s portfolio, and removes the pressure on BioTie to execute a Phase III program that would have strained its resources to the max.
2) The BIAL FAAH-inhibitor tragedy in France is a reminder of the risks courted in pharmaceutical development, but does not necessarily kill the mechanism. Pfizer and Vernalis have safely completed Phase II trials with their FAAH-inhibitors, and while JNJ suspended clinical testing for its compound, which reflects commendable caution, we suspect that this is not a class effect.

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Anything But Static: The Coming Era of Massive Paradigm Shifts

One of NIR’s favorite concepts–and one that almost invariably finds its way into our conference presentations and Innovation Reviews–is that of Treatment Paradigm Shifts. A TPS is a tangible and meaningful addition to the repertoire of what is available for the treatment of patients in the real world. In recent years, the roster of such Shifts in CNS has been sparse: The advent of oral immunomodulators for RRMS stands out, and there is the potential–not yet come to pass–for Belsomra and its orexin-targeting mechanism to become a TPS in insomnia. Acadia‘s Nuplazid/pimavanserin represents a probable TPS for the treatment of psychosis in patients with neurodegenerative disorders. The next few years are going to see a steadily increasing roster of efficacy trials that will validate–or invalidate–new Treatment Paradigm Shifts: Rapid Acting Antidepressants, procognitive adjuncts for CIAS, and IV CGRP-antagonists for migraine are just three such promising, potential Treatment Paradigm Shifts. Neuren‘s positive Phase IIb results for trofinetide in Fragile X (and encouraging data in Rett Syndrome) signal a potential TPS for these neurodevelopmental disorders.
It is not just in the treatment armamentarium that such transformation is accelerating: It is emerging in every facet of the neurotherapeutics industry. Both preclinical and clinical testing are moving towards full representation of female subjects, due to the obvious gender-based differences in response to many therapeutic interventions; the day of all or mostly male protocols, including mouse studies, is over. The paradigm for risk and cost-sharing in partnering is changing into something very different than the traditional model: Increasingly, larger companies now insist upon success-based terms, with payments to their partners contingent upon progression through clinical and regulatory development. Similarly, we expect that payor reimbursement in the marketplace will increasingly be tied to therapeutic impact, a healthier TPS in the US than the alternative of across-the-board price controls. One of these changes will eventually alter the commercial landscape of pharmaceuticals in the US; the status quo, which stands in stark contrast to the rest of the developed world, is not sustainable. This type of paradigm shift is less intrinsically appealing than adding novel treatment options, but it is no less inevitable.

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A Thanksgiving Message from Pfallergan

As the United States prepares to celebrate Thanksgiving, a holiday that traditionally mixes gratitude and gluttony in relatively even proportions, we at Pfallergan would like to say how grateful we are for the fortuitous conjoining of our two constituent companies. There are critics who claim that this merger epitomizes the worst of corporate gluttony, but we believe that it is a celebration of American ingenuity at its best, exploring and exploiting the legal path through and around the burdens otherwise unfairly imposed by outdated allegiances to patriotism, morality, and the Tax Code. We answer to a higher authority–our Shareholders, and the Analysts to whom they turn for guidance.
Those who have reported that Pfallergan will pay various advisors over $300 million to provide counsel regarding this joining of our two companies must surely recognize that, for this scale of remuneration, we have been guaranteed access to wisdom of Solomonic quality, albeit with a contemporary, pragmatic bent. Even though the payment of that remuneration depends upon the completion of this merger, we feel fairly certain that if there were any cogent reasons to not go ahead, legal or ethical, that someone would have mentioned them in passing, even if not in writing.
We are grateful that our legal counsel found a way to construct this transaction as one where Allergan could appear to be acquiring Pfizer, while Pfizer shareholders end up with the majority of Pfallergan, and I get to keep my job. What a country: America is a terrific place to do business, one which has made it possible for us to prosper, with the highest drug pricing in the world and occasionally aided by federally funded research. It is a shame that the United States would not cut us a better break on our tax rate, or made it less expensive for us to bring back the $95 billion that we have stashed offshore. We are grateful to Ireland for existing, and offering us a shore upon which to land our craft. And we are grateful to our scientists, to whom we will offer industry-standard severance packages as we gradually de-emphasize the research to which they have devoted themselves.
Thank you for your time and attention. Now let’s go gorge ourselves with turkey and football!

Ian Read
CEO
Pfallergan

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The Pfallergan Phallacy

(from NP Nov-Dec, released 10/31/15)

As this issue of NP is released, the business media world is all aflutter with news that Pfizer and Allergan are discussing a merger. The headlines emphasize the massive scale of the potential alliance and the hope that Allergan’s growth and tax rates will pump up Pfizer’s tepid numbers. This relies upon the premise that size matters in the pharma world, which it does, but not in a good way. For example: Regardless of the business school spin, we will never buy into the illusion that the neuroscience sector in specific, and the pharma environment in general, was enhanced by Pfizer’s merger with Wyeth. Similarly, this marriage would be driven largely by Euro-domicile tax inversion considerations, as was Pfizer’s previous overture to AstraZeneca, thankfully rebuffed. Astra Zeneca’s Pascal Soriot ‘got it’ when it came to the correlation of size with productivity: To the degree to which they are correlated, it is in a negative direction, and he fended off Pfizer’s entreaties. Pfizer has revitalized its neuroscience programming, albeit under an umbrella of fiscal nitpicking that makes us think that a merger would lead to the kind of culling of programs and talent that only makes street analysts happy. John LaMattina*, a former head of Pfizer R&D, today made the reasonable observation in Forbes that the two companies have little overlap in R&D capability at present, and that the greater risk would be if Allergan’s Brent Saunders were to eventually ascend to the Pfizer CEO role: Saunders is certainly no champion of internal research. We prefer to not find out. Allergan’s acquisition of Naurex, and their Forest legacy in CNS late-stage drug development, gives us some hope that, on their own, they may prove to be a healthy contributor to the neuroscience resurgence already underway. While Biogen has gone through a difficult period of late–no one is immune to setbacks–that company has demonstrated over time what we believe is the productivity benefit to be garnered from maintaining focus and some degree of organizational nimbleness, both of which suffer in the wake of mega-mergers. We just hope that Pfizer and Allergan do not create a business school case study for 2018; another example of a corporate marriage driven by the wrong priorities, and a vision of the future driven by girth rather than excellence.

*LaMattina wrote a followup piece published in Forbes today (11/11/15) that is well worth reading, focused on the lack-of-fit between Saunders’ lack of affinity with inhouse research and the Pfizer R&D culture.

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A Nest of Vipers

Context: Two months ago, in Neurogram, we wrote: <<This brings us to Valeant Pharmaceuticals. We despise Valeant, a company that routinely treats acquired companies like poachers who have machine-gunned an elephant in the veldt, stripping the tusks while leaving the carcass to rot in the tropical heat.>>

Since then, Valeant’s price-gouging (they say they don’t actually gouge, they raise the price astronomically, and then give discounts….right)  left them swimming in the same cesspool as Turing Pharma, and now today, an activist short seller, Citron Research,  issued a report that charges Valeant with operating two specialty pharmacies as a way of camouflaging their actual drug-sales activity flow. To which Bill Ackman, head of Pershing Capital, and formerly in league with Valeant in the attempt to bludgeon Allergan into accepting its hostile takeout bid, responded by buying around $200 million more of Valeant’s stock. Which, a cynic might suggest, is his attempt to shore up the value of Pershing’s already large-scale Valeant holding. But then again, Andrew Left of Citron, who has his own checkered past, admits to having a short position (someone bought two million put options), and thus has profited handsomely (on paper at least) from Valeant’s turmoil, and the dramatic price drop today in response to his own report.

To be fair–they’re all vipers. There isn’t a hero to be found in this motley but extremely overpaid crew. We do not know where the truth lies in the relationship between Valeant and its two specialty pharmacy progeny/prey, and we do not particularly care. It all adds up to more collateral damage to the reputation of the pharma industry, which does have its share of vipers, but nothing like this. This is a reality show from Hell: Lock the lot of them in an underground bunker, and let the cameras roll. We will not be watching.

 

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