TransOral Pharmaceuticals Inc. reported positive data from a Phase III trial of its product for treating middle-of-the-night awakenings in insomnia patients.

The product, Intermezzo, is a low-dose, sublingual formulation of zolpidem, the active ingredient in the widely used insomnia drug Ambien.

TransOral is targeting a niche and potentially large market, as its product is designed to be used not before bedtime but when a patient wakes up prematurely and needs only a few more hours of sleep.

TransOral, of Point Richmond, Calif. - which this week is changing its name to Transcept Pharmaceuticals Inc. - said a sleep-laboratory Phase III trial demonstrated that both the 3.5-mg and 1.75-mg doses of Intermezzo demonstrated highly statistically significant results in nonelderly adult patients experiencing middle-of-the-night insomnia.

Until the recent approval of generic zolpidem, that agent had been available for adults in the U.S. only as the active agent in Ambien and Ambien CR, prescribed in nonelderly adults at 10- mg and 12.5-mg doses, respectively.

The 82-patient study's primary endpoint was latency to persistent sleep with the 3.5-mg dose following a prolonged middle-of-the-night awakening. Each patient in the double-blind, crossover-design study received both doses of drug and placebo on different nights, said Glenn Oclassen, president and CEO of TransOral.

Mean latency to persistent sleep was 14 minutes, and patients returned to sleep an average of 23 minutes faster than placebo (p=0.001), Oclassen said.

Patients on the 3.5-mg dose also experienced statistically significant improvements vs. placebo in total sleep time, sleep efficiency, number of awakenings, sleep quality, refreshing sleep and next-day ability to function, TransOral said. There also were no residual effects at either dose, while other adverse effects were similar to placebo, it said.

Intermezzo is a mint-flavored, sublingual lozenge formulated to dissolve under the tongue in about two minutes. A potential advantage is that the drug could be used less frequently - only when needed after awakening instead of prophylactically at bedtime. The lower dose means the drug is present at therapeutic levels in the body for only three to four hours, vs. eight for current medications sleep medications, it said.

Oclassen said study results were available late last year, but due to a larger number of patients than originally expected, TransOral wanted to consult with the FDA to see if the trial could be classified as part of a pivotal Phase III program.

The FDA agreed to that in writing in January, he said, but data were held again for presentation last week at the Associated Professional Sleep Societies meeting in Minneapolis.

The second Phase III trial already is under way. That 320-patient outpatient trial is evaluating patient-reported latency to sleep onset, a more subjective measure than was provided by EEGs and other equipment available in sleep labs.

Oclassen said the at-home study, which began in May, is already about 20 percent enrolled. Data from the study are expected around April, which could lead to a new drug application filing by the fourth quarter of 2008, he said.

In the sleep-lab study, the patients included only those who had been confirmed as having the problem of waking in the middle of the night, rather than those who had trouble getting to sleep in the first place. They were woken up in the middle of the night, then given either drug or placebo.

Oclassen said Intermezzo appeared to strike the right balance between helping put patients back to sleep quickly but also allowing them to stop sleeping heavily before it was time to wake up again. And, he said, "there were zero hangover effects."

Oclassen said there is no product in the U.S. indicated for middle-of-the-night awakenings, so a lot of patients are taking eight-hour drugs for a four-hour problem, and taking it on evenings when they might not need sleep help. "We feel with the low dose and the less-frequent use, we're going to be in a position to reduce overall patient use of hypnotic drugs in general."

TransOral cited estimates that about 35 percent of insomnia patients suffer primarily from the condition of having trouble falling asleep after awakening in the middle of the night.

Oclassen said the idea of the name change to Transcept was to move away from the notion that it is solely a drug-delivery company, but instead a specialty pharmaceutical company. Its second product candidate is a fixed-dose combination of olanzapine and ondansetron, which is in a Phase I/II proof-of-concept study in patients for the treatment of alcohol-related cravings.

TransOral, founded in 2002, has raised about $71 million in four rounds of financings, including a $40 million Series D round earlier this year. It also has brought in $10 million in a debt financing.

Oclassen previously founded Oclassen Pharmaceuticals Inc., a dermatologic drug development and marketing company. He was chairman of that company when it was acquired by Watson Pharmaceuticals in February 1997.

TransOral's chairman is Kirk Rabb, former CEO of Genentech Inc. and a longtime presence in the biotech and pharmaceuticals industries. The company was founded by Nikhilesh Singh, senior vice president and chief scientific officer, who previously had significant roles in product development while in the pharmaceutical industry.

Oclassen said the company eventually would like to build a sales force of 100 to 150 representatives calling on psychiatrists. It would want to bring on a marketing partner for the primary care market, though it is too early to say now whether that deal would be sooner or later in the development process, even perhaps after an NDA filing.

"We have plenty of money to file the NDA and run this business into 2009," Oclassen said, adding that an initial public offering may be an appropriate way to raise money as the company prepares to move into the commercialization phase.