Another billion-dollar-plus deal failed to play out as planned as the FDA dealt Teva Pharmaceutical Industries Ltd. a complete response letter (CRL) on its new drug application (NDA) for SD-809 (deutetrabenazine) to treat chorea – involuntary writhing movements – associated with Huntington disease (HD).
The Jerusalem-based pharma said the FDA asked the company to examine blood levels of certain metabolites in the candidate – the first deuterated product to come before the FDA – but did not request additional trials.
"These metabolites are not novel, and are the same seen in patients who take tetrabenazine or deutetrabenazine," Teva spokeswoman Doris Saltkill told BioWorld Today. "We believe it is a matter of reanalyzing data on metabolites which were included in the application to fully satisfy the questions raised by the FDA at the end of the review cycle."
Teva expects to respond to the FDA in the third quarter, but Saltkill said "it's too early to speculate on the timing beyond that." The company does not expect to receive guidance from the FDA on a review timeline until the agency sees the response package, she added.
SD-809 was the lynchpin in Teva's 2015 acquisition of orphan drug firm Auspex Pharmaceuticals Inc., for which it paid $101 per share, or roughly $3.2 billion. The oral, small-molecule inhibitor of vesicular monoamine 2 transporter (VMAT2) was developed using Auspex's deuterium technology, designed to provide a pharmacokinetic profile that allows for lower doses and, thus, a better safety profile. (See BioWorld Today, March 31, 2015.)
At the time of the transaction, Teva estimated that SD-809 could reach peak sales north of $2 billion. Thomson Reuters Cortellis projects 2021 sales of $638.96 million.
Teva's additional development programs for SD-809 to treat chorea in patients with tardive dyskinesia (TD) and Tourette syndrome (TS) are unaffected by the CRL, according to Saltkill. Teva is conducting the phase III efficacy and safety study, AIM-TD (Addressing Involuntary Movements in Tardive Dyskinesia), in patients with moderate to severe TD and expects to report additional data later this year, followed by regulatory submission. SD-809 received orphan drug designation to treat TS in the pediatric population up to age 16, and the company plans additional evaluation of SD-809 to treat tics associated with TS.
And Auspex wasn't a single-play deal. The La Jolla, Calif.-based company boasted more than 60 molecules in its patent portfolio, including deuterated versions of pirfenidone for idiopathic pulmonary fibrosis and levodopa for Parkinson's disease.
'LITTLE REASON TO QUESTION ULTIMATE APPROVABILITY'
Still, the CRL was a disappointment and, to some, a surprise. In a note issued last week, RBC Capital Markets analyst Randall Stanicky was "optimistic on both approval and peak potential" for SD-809 in HD, whose PDUFA date was May 27. We "continue to see upside to consensus expectations with SD-809 an important part of the growth 'reemergence' story we see for TEVA in 2017E and beyond."
However, Stanicky acknowledged concerns about "on-time" approval, given comments Teva made on its first-quarter earnings call. Specifically, Michael Hayden, Teva's head of R&D and chief scientific officer, said in response to a question that "the NDA is under active review, and we are working very closely with the agency to address the final questions that have arisen during the review process." When asked for clarity on those questions, Hayden added, "We do not want to comment on active discussions with the FDA at this time."
In an updated note Monday, Stanicky predicted approval still could come by year-end, with limited impact to Teva's 2016 model estimates. Nevertheless, "The pivot to re-emerging specialty branded growth is an important part of the bull thesis and this will modestly push out an important opportunity," he acknowledged.
In an email, Evercore ISI analyst Umer Raffat reported that, "based on prior data, we see little reason to question ultimate approvability or market profile of SD-809." The metabolites on Teva's candidate appear similar to those on standard-of-care Xenazine (tetrabenazine, H. Lundbeck A/S), he added, though blood levels could differ since SD-809 is deuterated. Raffat predicted a timely refiling in HD and potential approval in the first quarter of next year, with no impact on timing in the TD indication.
And Credit Suisse analyst Vamil Divan called the CRL "a modest negative" but added that "it does not help matters on a stock where we believe sentiment has been pretty mixed based on the conversations we have had with investors since our initiation of coverage earlier this month."
Teva's shares (NYSE:TEVA) closed Monday at $51.54 for a loss of 12 cents.
In much the same way that Astrazeneca plc's CRL last week on the NDA for sodium zirconium cyclosilicate (ZS-9) in hyperkalemia served to boost Relypsa Inc. and its approved drug, Veltassa (patiromer), the big benefactor of Teva's CRL was competitor Neurocrine Biosciences Inc., whose shares (NASDAQ:NBIX) gained $3.46, or 7.5 percent, to close at $49.65. (See BioWorld Today, May 31, 2016.)
Unlike Veltassa, NBI-98854 (valbenazine) – Neurocrine's VMAT2 inhibitor against TD – is not yet approved, but the CRL buys the company time and offers insight into the questions posed by the agency about the class.
"Valbenazine is one of the enantiomers of tetrabenazine and therefore we see little risk to the valbenazine filing," Jefferies Group LLC analyst Biren Amin wrote in a flash note. "Given NBIX has not filed yet, we think it could check all of its boxes and incorporate any additional information before it files its NDA."
Amin predicted the NBIX filing in TD could occur early in the third quarter, potentially placing the drug ahead of SD-809 in the indication, since a supplemental filing by Teva would have to wait until approval in HD.
Piper Jaffray analyst Charles Duncan agreed that "VMAT noise" should not impair valbenazine's value.
"Neurocrine has extensively studied the pharmacology and metabolites of its VMAT2 inhibitor, and has received FDA feedback during development," Duncan wrote in a hot comment. "We're also not worried that the FDA's request for metabolite data is indicative of a larger class-wide concern or clinical signal, and instead represents thoroughness in reviewing a deuterated compound. That said, recall valbenazine is a prodrug of a single isomer of tetrabenazine, and this mechanism could offer a cleaner metabolite profile and therefore fewer side effects vs. tetrabenazine/deutetrabenazine."
Leerink Partners LLC analyst Paul Matteis pointed out in his flash note that Neurocrine is not filing a 505(b)(2), as valbenazine is a new chemical entity, "thus, potential pharmacokinetic differences between valbenazine and tetrabenazine [with] its metabolites shouldn't represent a regulatory hurdle, we believe."
Despite missing a secondary endpoint in the phase III KINECT 3 trial last year, Neurocrine's asset hit the primary endpoint of change from baseline in the Abnormal Involuntary Movement Scale at the sixth week in the 80-mg once-daily dosing group compared to placebo. (See BioWorld Today, Oct. 9, 2015.)