West Coast Editor
The Phase III payoff by Clinical Data Inc.'s dual approach to depression, combining first-line and second-line mechanisms of action in the small-molecule drug vilazodone, puts the firm in strong position to partner - and could mean even bigger things, if efforts to find an efficacy biomarker yield a diagnostic that could be used with the compound.
Shares of Clinical Data (NASDAQ:CLDA) closed Tuesday at $26.05, up 5 cents.
Talks with the FDA will determine whether another Phase III trial is needed before the agency considers approval of vilazodone, which uniquely puts together in a single drug the effects of a selective serotonin reuptake inhibitor and a 5HT1A partial agonist.
Regulators "will certainly want long-term safety data, which we don't have to date," said Carol Reed, chief medical officer for the Newton, Mass.-based firm.
So far, the longest exposure to vilazodone is eight weeks, and the FDA requires a minimum of one year. Clinical Data expects to submit a new drug application in 2009.
The 410-patient study hit the primary endpoint of mean change from baseline in the Montgomery-Asberg Depression Rating Scale score compared to placebo (p=.001), and met a key secondary endpoint of the study, mean change from baseline on the Hamilton Depression Rating Scale (p=.022), with a safety profile similar to marketed SSRIs.
More details are due in about a week, during Clinical Data's presentation at the Bear Stearns Healthcare Conference in New York.
Earlier this summer, Clinical Data disclosed plans to raise $66 million for work with Vilazodone, selling 3 million shares priced at $22 each - most of them bought by Randal Kirk, the company's chairman and largest shareholder. Kirk agreed to buy, through one or more of his affiliates, 2.25 million shares, or $49.5 million worth of stock, giving him about a 48 percent stake in the firm. (See BioWorld Today, July 19, 2007.)
Kirk, chief executive of the private equity firm Third Security LLC, owned about half the shares of New River Pharmaceuticals Inc. when that company was bought this year for $2.6 billion in cash by partner Shire plc, which gained full ownership of the compound Vyvanse for attention deficit hyperactivity disorder. (See BioWorld Today, Feb. 21, 2007.)
A changed profit-sharing arrangement made the deal almost inevitable, and Basingstoke, UK-based Shire needed to acquire the ADHD drug to protect and eventually replace its strong-selling Adderall XR, which accounts for nearly half of Shire's revenue but faces generic competition within the next couple of years.
Vyvanse, cleared by the FDA in late February and launched several months later, seemed promising in nine-week prescription data, Citigroup reported, and the market share likely will improve as children (who make up most of the market) go back to school.
Could a similar play be in store for Clinical Data with vilazodone - that is, selling the drug or the company to a major pharma firm with a stake in the depression market?
Drew Fromkin, the firm's president and CEO, said Clinical Data is focused more on turning around the companies acquired in recent years - some of which were "not performing very well, and that's sort of an understatement," he said.
Many observers only began watching New River during the final third of its existence, Fromkin said, and didn't realize "how much [Kirk] went through over numerous years to fund that company and work it through aspects of its development. There was a long period of building value."
Rights to vilazodone came through Clinical Data's $56 million, all-stock merger in 2005 with New Haven, Conn.-based Genaissance Pharmaceuticals Inc., which less than a year earlier had licensed the compound from Merck KGaA, of Darmstadt, Germany. (See BioWorld Today, Sept. 24, 2004, and June 22, 2005.)
"Genaissance had burned quite a bit of capital, and when we acquired them, they were in a similar kind of mode," Fromkin said, adding that the push has been to aim the company at return-making investments.
"On the services side, [Clinical Data] could be profitable rather quickly," he said. "We're making great strides there."
Clinical Data's Cogenics division sells molecular and pharmacogenomics services to research and regulated environments, and its Vital Diagnostics branch offers in vitro diagnostics solutions for clinical laboratories.
In fall 2005, the firm bought Icoria Inc., of Research Triangle Park, N.C., and followed that with the acquisition of Genome Express, of Grenoble, France. Late last month, Clinical Data bought privately held Epidauros Biotechnologie AG of Bernried, Germany, in a cash deal valued at $11.84 million.
Reed said it's unlikely that another firm would prescribe an existing SSRI with a 5HT1A agonist to share vilazodone's success - something like the reverse of what happened with BiDil, NitroMed Inc.'s heart failure drug for African-Americans.
Physicians figured out they could prescribe the two generic drugs of which BiDil is made, isosorbide dinitrate and hydralazine hydrochloride, thus saving money for patients. Now, NitroMed is working on a once-daily pill (rather than three times daily), to give the branded drug an edge.
Vilazodone already is formulated as a single pill daily, Reed pointed out, and the drug couldn't be duplicated exactly anyway.
"You'd be rolling the dice a bit, that the response and side effects would be the same," she said. Vilazodone is a partial agonist, compared to full agonists such as Buspar (buspirone, Bristol-Myers Squibb Co.) "I think it would be a bad bet."
Tailoring a test for response to vilazodone could prove a tall hurdle, Reed acknowledged, but scientific literature over the past five years or so provides cause for encouragement for that project as well as personalized medicine overall.
"Some people still call it science fiction," she said. "I like to think it's science fact."