West Coast Editor

The market woke to investor-pleasing news from Neurocrine Biosciences Inc., which plans to resubmit the new drug application for the immediate-release (IR) insomnia drug indiplon during the second quarter, with review likely taking about six months.

After trading ended Monday, Neurocrine disclosed that another safety and efficacy trial will not be done for the compound, a non-benzodiazepine agent that acts on a specific site of the GABA-A receptor that is designed for use as needed by patients, whether to fall asleep quickly or go back to sleep after waking in the night.

"[The FDA] never asked us to do it, so they were never aware we were planning on doing it," Gary Lyon, president and CEO of San Diego-based Neurocrine, told BioWorld Today. After talks with the agency, the odds of indiplon's approval "are so high that to spend $20 million on an insurance' study they didn't ask for would not be prudent," Lyon said. Instead, Neurocrine will spend the money on pre-commercial work and Phase IIIb/IV activities.

The company's shares (NASDAQ:NBIX) closed Tuesday at $13.88, up 93 cents.

As requested by the FDA, Neurocrine resubmitted more analyses and modifications of those done previously, and finished a supplemental pharmacokinetic/food effect profile of indiplon capsules with several meal types. The company also is investigating indiplon for traditional sleep maintenance.

Phil Nadeau, analyst with Cowen and Co. in New York, told BioWorld Today he was "a little surprised" that Neurocrine decided against the additional trial, since not long ago the company leaned in favor of the study. "Our opinion of the stock is unchanged," wrote Nadeau in a research report Tuesday, rating Neurocrine "neutral."

Indiplon's history includes the loss of a potential $400 million deal for commercialization with New York-based Pfizer Inc., which backed away after a pair of action letters from the FDA: an approvable letter for 5-mg and 10-mg immediate-release capsules and a non-approvable letter for a 15-mg modified-release tablet formulation. The news reduced Neurocrine's stock by more than half, from $54.63 to $20.76. (See BioWorld Today, May 17, 2006, June 26, 2006, and July 31, 2006.)

Partnered with DOV Pharmaceuticals Inc., of Somerset, N.J., indiplon would compete with the likes Marlborough, Mass.-based Sepracor Inc.'s Lunesta (eszopiclone), approved in December 2004, as well as Ambien (zolpidem), the blockbuster product from Paris-based Sanofi-Aventis Group, and Ambien's generic versions.

Neurocrine is seeking a sleep-initiation label with the NDA filing, and does not expect to try until 2009 for the sleep-maintenance claim that would help distinguish the compound from generic Ambien and allow a fairer fight in the marketplace with Lunesta and Ambien CR (the extended-release tablet), Nadeau pointed out.

An ever-crowded indication, insomnia is the partial focus of Vanda Pharmaceuticals Inc., of Rockville, Md., which this week grossed $103.7 million in a follow-on offering of 3.8 million shares at $27.29 each. Vanda's VEC-162, a melatonin agonist acquired from New York-based Bristol-Myers Squibb Co., met the primary endpoint of latency to persistent sleep in a Phase III trial in transient insomnia. At least one more Phase III trial in chronic sleep disorders is slated for the second half of 2007. (See BioWorld Today, Jan. 22, 2007.)

In December, insomnia player Neurogen Corp., of Branford, Conn., closed its common stock offering, raising $37.3 million in net proceeds for (among other projects) its lead program, NG2-73, a small-molecule GABA agonist in Phase II trials. Brian Lian, analyst with CIBC World Markets in New York, started coverage of Neurogen the same month, predicting that NG2-73's alpha-3 subunit preference "could lead to a best-in-class agent." (See BioWorld Today, Dec. 20, 2006.)

Neurocrine, for its part, has generated other favorable headlines lately, reporting this month positive data from a second Phase II trial with its gonadotropin-releasing hormone receptor antagonist for endometriosis. Nadeau called the compound Neurocrine's "most promising," behind indiplon.

In December, partner GlaxoSmithKline plc, of London, started Phase II proof-of-concept trials with another compound, a corticotropin releasing factor R1 receptor antagonist for social anxiety disorder and in irritable bowel syndrome. The move resulted in an $8 million milestone payment from GSK under the terms of their deal. (See BioWorld Today, July 25, 2001.)

"After the beating that we took in May [when the FDA delayed approval], people totally discounted indiplon," Lyon acknowledged, but he said analyst opinions are becoming more favorable as the time line for approval - now about a year ahead of previous guidance - improves.

CIBC's Lian wrote in a research report Tuesday that he expects Neurocrine to seek another partner for indiplon, with an agreement to include copromotion rights for the IR and modified-release formulations. "With the right partner and a differentiated profile, we believe IR product sales could exceed $125 million," Lian wrote. "While the IR product represents a smaller opportunity than the $500 million-plus potential of the MR formulation, forward progress will help ease pressure that has resulted from lack of clarity and continued delays."