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Idenix Stock Tumbles on Mixed Clinical Program Updates

BioWorld Today Contributing Writer

Idenix Pharmaceuticals Inc. provided updates to three key clinical development programs on Wednesday. Unfortunately for investors, two were disappointments, though one of those might ultimately have a silver lining for the Cambridge, Mass.-based company.

On the upside, the FDA removed its full clinical hold on IDX184, a liver-targeted nucleotide prodrug and the lead compound in the company's hepatitis C virus pipeline. Idenix simultaneously pulled its HCV protease inhibitor IDX320 – a retrenchment at face value, but ultimately a move that could allow the company to focus its HCV resources on IDX184, according to industry analysts.

On a more troubling note, the FDA placed a clinical hold on the HIV/AIDS non-nucleoside reverse transcriptase inhibitor GSK2248761 ('761, formerly IDX899), which Idenix licensed two years ago this week to GlaxoSmithKline plc. The compound is being developed by GSK affiliate ViiV Healthcare Co., a joint venture with New York-based Pfizer Inc. that is focused solely on developing medicines to treat HIV.

The clinical development updates, released after the market's close on Wednesday, sent company shares (NASDAQ:IDIX) into a tailspin. The stock lost more than 25 percent of its value overnight and finished Thursday at $3, down $1.01, on 15 times its average trading volume.

The FDA verbally informed Idenix that the full clinical hold for IDX184 had been removed. The clinical hold was issued in September 2010 following three cases of elevated liver function tests observed during a drug-drug interaction study of the combination of IDX184 and IDX320 in healthy volunteers. (See BioWorld Today, Sept. 8, 2010.)

However, in the Phase IIa study of IDX184, patients in cohorts of 100-mg, 150-mg and 200-mg daily doses in combination with pegylated interferon and ribavirin achieved undetectable virus levels at 14 days. The side effect profile of that three-drug combination was consistent with the known side-effect profile of PegIFN/RBV alone, with the most common adverse events including fatigue, myalgia, headache and nausea.

The company concluded that the observed toxicity in the combination study was likely caused solely by IDX320 and submitted a response to the clinical hold to the FDA in January, company spokesman Eric Hoffman told BioWorld Today. Idenix decided to yank IDX320 after reviewing available data, conducting additional preclinical studies and meeting with independent experts and an external safety committee, he added.

Although the FDA has placed the IDX184 program on partial clinical hold, the company expects to move forward with a plan originally proposed to the FDA: a small bioavailability/bioequivalence study to establish a new formulation of the drug followed by the Phase IIb 12-week trial of the compound in combination with PegIFN/RBV, expected to begin no later than the second half of 2011, according to Hoffman. The randomized, placebo-controlled trial will enroll 125 patients, testing two doses of IDX184.

Leerink Swann healthcare equity research analyst Howard Liang anticipates speedy progress for IDX184.

"The remaining 'partial clinical hold' does not appear to significantly restrict the near-term development program and primarily requires the completion of IDX184 dosing in the Phase IIb before combination studies with other HCV direct antiviral agents can be started," Liang wrote in a research note.

"We believe this is a good outcome," he added, "as untangling a toxicity observed from a combination trial is not necessarily straightforward and lifting the full clinical hold on IDX184 in a relatively short period of time allows the most important asset of IDIX to move forward."

Only three nucleoside polymerase inhibitors for HCV are currently in development. In addition to IDX184, the others are INX-189 by Inhibitex Inc. and RG7128 by Pharmasset Inc. and Roche AG. (See BioWorld Today, May 17, 2010.)

Despite the withdrawal of IDX320, Idenix already has next-generation protease inhibitors that may potentially avoid the observed hepatotoxicity in preclinical development.

"We think the [hepatotoxicity] was specific to that molecule and something we can engineer around in any future molecules," Hoffman said.

Although the company plans to focus early stage discovery efforts on nucleoside polymerase and non-nucleoside inhibitors, "we do have an NS5A program and a backup protease inhibitor program," he added. "Our intention is to advance one of each of those into the clinic, since we've essentially done a lot of the preclinical work. We're close to selecting a lead for each of these programs.

"We'll eventually take one NS5A and one PI into the clinic," Hoffman said. "If they work, excellent. If not, I don't think we're predicting we're going to do any additional work in those areas, and we'll focus our early preclinical work on the [nucleotides.]"

Idenix still views partnering as the route to develop IDX184 fully, Hoffman added.

"It is our intention to find a partner for '184," he said. "We think HCV is an area where you need significant resources to do a robust clinical development program."

ViiV, which has full responsibility for developing '761, informed Idenix of the FDA's clinical hold on the HIV compound. In 2009, Idenix licensed GSK worldwide rights to IDX899 in a deal potentially worth $450 million, including $34 million up front and up to $416 million for development, regulatory and sales milestones. (See BioWorld Today, Feb. 9, 2009.)

To date, Idenix has received $60.5 million in license fees, equity investment and milestone payments, while ViiV has assumed full responsibility for the development of '761, including regulatory interactions.

Hoffman referred questions about the clinical hold and next steps for '761 to officials at ViiV, who did not respond to requests for an interview. However, analysts were willing to speculate.

"The clinical hold placed on partnered IDX899 makes the story more dependent on IDX184," Liang wrote. "We are maintaining our $5 per share valuation, which reflects reducing the probability of success for IDX899 while increasing the probability for IDX184."

Oppenheimer equity research analyst Bret Holley was less enthusiastic, downgrading Idenix' stock to "perform." Although he described cancellation of IDX320 overall as "a positive outcome" for the company's HCV program, the clinical hold on the '761 program "for undisclosed safety reasons substantially increases this program's risk," Holley wrote. "On balance, we believe the negative '899 news offsets the positive '184 news."

The FDA hold also opens the door a bit wider for potential long-term competitor Gilead Sciences Inc., according to Brian Abrahams, senior analyst at Wells Fargo Securities.

"Although '761 was not necessarily a high-profile competitive threat and might still proceed in development if the clinical hold is eventually lifted, we believe this setback is incrementally positive for Gilead," he wrote in a research note.

Although Gilead received a refuse-to-file (RTF) letter in January for its new drug application for the HIV single-tablet regimen Truvada (emtricitabine/tenofovir disoproxil fumarate) plus Tibotec Pharmaceuticals Ltd.'s TMC278 (rilpivirine), analysts were generally encouraged by the company's fourth-quarter and full-year financial results and its plan to resolve the RTF issues. (See BioWorld Today, Jan. 27, 2011.)

Published: February 11, 2011