West Coast Editor
Separate difficulties for two drugs sent their respective companies' stocks into tailspins, with the FDA putting Cortex Pharmaceuticals Inc.'s lead Ampakine compound, CX717, on clinical hold due to concerns over animal data, and Incyte Corp. voluntarily stopping development of its HIV compound, DFC, because of hyperlipasemia.
Cortex's stock (AMEX:COR) tumbled more than 50 percent Monday, closing at $2.58, down $2.67. Incyte's shares (NASDAQ:INCY) ended the day at $3.58, down $2.44, or 40.5 percent.
The FDA phoned Cortex on Friday to alert the company that a clinical hold will be placed on CX717, which in early March churned out positive data from a Phase IIa study against attention deficit hyperactivity disorder in adults. The agency is expected to formally notify Cortex in the next week or so, and the concerns are not related to any results gathered from human trials.
Beyond that, not much is known, Roger Stoll, president and CEO of Irvine, Calif.-based Cortex told BioWorld Today.
"We have some ideas about some areas," he said, declining to be more specific until he gets elaboration from the FDA. "We probably have clues, but we don't know what's in the letter. Obviously, there are things that honest people can differ on, in terms of results. We have to see what precisely [the agency] is concerned about and what it would take to resolve those concerns."
Ampakine drugs act on AMPA (amino-3-hydroxy-5-methyl-4-isoxazole propionic acid) receptors on neurons to increase the strength of signals at connections between the brain cells. One compound in the class, CX516, fizzled in a Phase IIb trial against mild cognitive impairment two years ago, but CX717 has been moving along well. (See BioWorld Today, Feb. 18, 2004.)
In the data reported in March from a study in 49 patients, the primary outcome measure was the ADHD Rating Scale (ADHD-RS), evaluating inattentiveness and hyperactivity symptoms. The overall score showed a positive trend in the 800-mg twice-daily dose group (n=22) with a statistically significant effect on the hyperactivity subscale (p=0.050) compared to placebo. CX717 was well tolerated in that trial, and there were no serious adverse events or other significant safety concerns (including rises in blood pressure or heart rate) with either dose.
Last summer, Cortex began enrolling patients in the ADHD trial, as well as a Phase IIa study in mild to moderate Alzheimer's disease, and one in wakefulness during simulated night-shift work. The preclinical data about which the FDA has questions were delivered at the end of December and in early January, Stoll said.
Potential Pancrease Trouble Stops Incyte Trial
Incyte, of Wilmington, Del., said the decision to stop Phase IIb development of the nucleoside reverse transcriptase inhibitor DFC (dexelvucitabine, formerly known as Reverset) came as a result of an increase in the frequency of grade 4 hyperlipasemia, which means an excess of the pancreatic enzyme amylase in the blood, in patients who got 200 mg DFC without 3TC or FTC. The problem was noted in Study 901, the long-term extension of Incyte's first Phase IIb trial, called Study 203. Hyperlipasemia is a marker of pancreatic inflammation.
London-based GlaxoSmithKline plc's 3TC and FTC, also known as Emtriva, from Foster City, Calif.-based Gilead Sciences Inc., are both used as first-line treatments against HIV. Study 901 included patients taking 100 mg or 200 mg of DFC, with or without 3TC or FTC. As in Study 203 itself, about 70 percent of patients in Study 901 were on regimens containing 3TC or FTC.
After the results of Study 203 became available demonstrating improved DFC efficacy in the absence of 3TC or FTC, over time, a fraction of Study 901 patients previously on 3TC or FTC were transitioned to regimens without either of those. As that part of the patient safety database has expanded, Incyte found disturbing levels of hyperlipasemia in patients taking 200 mg DFC without 3TC or FTC.
Specifically, Incyte said five more patients developed the adverse effect in that group, which increased the total incidence rate to 40 percent, far above the 5 percent to 6 percent most often seen in HIV-infected patients and "obviously, clearly, unacceptably high," Paul Friedman, Incyte's president and CEO, told investors during a conference call.
Levels in patients getting 3TC or FTC with the drug were "in contrast, very low - approximately 2 percent," Friedman said.
The firm is stopping enrollment of the recently begun Phase IIb trial, called Study 204, and plans to work with investigators and the FDA to determine what's next for patients getting DFC in Study 901, who may be showing benefit and have limited options.
Vinny Jindal, recently appointed co-head of San Francisco-based ThinkEquity Partners LLC's health care research group, said DFC was the key near-term driver for Incyte, and no major catalysts are on the horizon for the next year or so.
"As such, we believe that [Incyte's] shares will trade sideways until proof-of-concept data are presented from Incyte's other R&D programs, including the sheddase inhibitor and diabetes programs," Jindal wrote in a research note. When initiating coverage, he had speculated that "concerns about DFC's effect on hyperlipasemia and acute pancreatitis are likely overblown," and said the compound might be "no worse in this regard than the other commonly used NRTI drugs."
Incyte has revised its financial guidance for 2006 as a result of halting DFC work, reducing its cash burn estimate to a range of $88 million to $95 million from the range of $98 million to $105 million, and lowering its research and development expense estimate to a range of $82 million to $88 million from a range of $92 million to $98 million.
Jindal's firm reduced Incyte from a "buy" rating to an "accumulate" rating, and dropped the price target from $9 to $5.