Washington Editor

Shares of XenoPort Inc. lost two-thirds of its value Thursday after the firm revealed that its partner GlaxoSmithKline plc had received a complete response letter from the FDA for its application for Horizant (gabapentin enacarbil), also known as GSK1838262 or XP13512, for moderate to severe primary restless legs syndrome (RLS).

Shares of Santa Clara, Calif.-based XenoPort (NASDAQ:XNPT) lost $12.93, or 66 percent, to close at $6.67.

Regulators had raised concerns about pancreatic acinar cell tumors in rats in preclinical data - findings already known about gabapentin products, the companies said.

But when the FDA initially approved Pfizer Inc.'s gabapentin product Neurontin, it was for refractory epilepsy, a condition whose seriousness and severity the agency concluded justified the drug's potential risks.

Shares of XenoPort competitor DepoMed Inc. (NASDAQ:DEPO), which is developing its own gabapentin product for menopausal hot flashes and post-herpetic neuralgia, also took a substantial hit Thursday, falling 19.7 percent, or 61 cents, to close at $2.49.

"This one came out of left field," said XenoPort CEO Ronald Barrett. "I want to make clear that neither GSK nor we were aware of this concern of the FDA with regard of carcinogenicity until receipt of the complete response letter," he told investors and analysts Thursday during a conference call.

GSK had submitted its initial application in September 2008 for Horizant in RLS, but withdrew it two months later after the FDA requested that the data in a single study be reformatted - an action that delayed a $23 million milestone payment to XenoPort.

GSK resubmitted the application in February 2009, with the expectations for an approval by Nov. 9. But the FDA extended the Prescription Drug User Fee Act action date to Feb. 9 after the company submitted a risk evaluation and mitigation strategy proposal at the agency's request.

Throughout that process, Barrett said, the FDA never hinted about its concerns of pancreatic acinar cell tumors in rats with Horizant, which GSK had initially planned to sell under the brand-name Solzira. The pharma giant announced the name change to Horizant during its Feb. 4 fourth-quarter earnings call.

The London-based company then also said it was proposing to cease discovery research in certain neuroscience areas, including depression and pain.

Horizant, a new chemical entity designed to provide dose proportional and sustained exposure of gabapentin by taking advantage of high-capacity transport mechanisms in the gastrointestinal tract, also has been in development as a therapy to manage post-herpetic neuralgia and painful diabetic neuropathy.

During Thursday's conference call, Barrett said nothing in the FDA's letter precluded the further development of Horizant for other indications, including migraines and neuropathic pain. Positive results from GSK's Phase IIb trial reported last fall demonstrated a significant reduction in neuropathic pain associated with post-herpetic neuralgia in adults treated with the drug. (See BioWorld Today, Sept. 18, 2009.)

GSK also has an ongoing Phase II trial of Horizant to prevent migraines. That study is fully enrolled, with data expected in the second half of this year, Barrett noted.

Before the companies were "surprised" Wednesday afternoon by the FDA's rejection, plans were being made for a pivotal trial of Horizant in neuropathic pain, he said.

"I think this news now has caused us to need to re-evaluate those plans," Barrett said. "Before we start new studies, we are going to want to understand the risk-benefit in those indications. It is likely that GSK and we will want to ensure that we understand the FDA's thinking on risk-benefit on other indications before determining a path forward for Horizant."

Barrett said the two-year carcinogenicity studies for Horizant were "mindful" of the gabapentin preclinical carcinogenicity data, and took care to ensure that the studies were conducted in the same strain of rodents as those used in the initial gabapentin carcinogenicity studies.

The strength of the signal of pancreatic acinar cell tumors in the rats receiving Horizant was "similar to the historical data for rats receiving comparable exposures of gabapentin," he noted.

But Barrett emphasized that the FDA acknowledged in its letter that findings in laboratory animals are not necessarily translatable to risk in humans.

Regulators also noted that gabapentin products have been available for more than 15 years and they do not appear to be associated with a clinical signal for pancreatic cancer based on analysis of spontaneous reports in the agency's adverse event reporting system, he added.

"Nevertheless, they have concluded that the absence of a finding in postmarketing reports is not a reliable indicator of the absence of risk," Barrett lamented, noting that the company was "pained" by the complete response letter.

On the bright side, he said, the FDA determined that GSK's application provided "substantial evidence of Horizant's effectiveness as a treatment for RLS."

Additionally, the complete response letter noted that the FDA had not identified a clinical safety concern that would prohibit the approval of the 600-mg dose, Barrett said.

XenoPort President William Rieflin acknowledged that there was the potential that GSK could decide to pull out of its 2007 deal for Horizant.

"It is fair to say that any license agreement of this type is going to have termination provisions, and without speaking to language that might be redacted, I think it is reasonable to expect that this agreement is no different and that GSK would have the ability to terminate," he told investors and analysts.

"I think people should understand that a termination by GSK is possible in the wake of this news and in the wake of other developments," Rieflin added.

Tokyo-based Astellas Pharma Inc. holds the rights to the drug in Japan and five Asian countries, with GSK holding the commercialization rights in the rest of the world.

Barrett said XenoPort management would be meeting with GSK to discuss the complete response letter and would be making plans to contact the FDA to determine a path forward for Horizant in RLS.

Published  February 19, 2010