Axovant Sciences Ltd (NASDAQ:AXGT) and PTC Therapeutics, Inc. (NASDAQ:PTCT) have drugs in late-stage development that could propel them to profitability over the next few years. Gilead Sciences, Inc. (NASDAQ:GILD) is already one of the most profitable companies on the planet, but a readout expected in the near future could be a big step toward addressing one of the largest unmet needs in medicine. Here's a rundown of upcoming events that will alter perceptions of their candidates' potential in the days and weeks ahead.
In Sarepta's footprints
Citing a lack of efficacy data, the U.S. Food and Drug Administration initially refused to file PTC Therapeutics Inc.'s application for Duchenne muscular dystrophy (DMD) drug Translarna, but the company knocked the dust off an old rule book and essentially forced the agency to review the submission. European regulators have been more accommodating and currently allow the company to market the drug, under the condition it succeeds in a post-marketing study currently underway.
Second-quarter Translarna sales nearly tripled this year over last to an annualized run rate of $183 million, and an approval in the U.S. could send them rocketing higher, along with PTC's stock price. Nearly all hope of a homecoming faded this summer when Translarna failed to show a significant clinical benefit over a placebo, but perked up again when the FDA announced it would hold an advisory committee meeting to discuss Translarna's application.
Just over a year ago, I'd have considered Translarna's FDA application doomed. That was before Sarepta's (NASDAQ:SRPT) Exondys 51 earned a controversial green light from the FDA to treat a tiny cross-section of people with DMD.
More recent clinical trial results supporting Translarna's FDA application aren't encouraging, but anything seems possible following the agency's approval of Exondys 51. We'll get a better idea of whether Translarna can slide through the same door that Sarepta opened on Sept. 28, when an independent panel of physicians convene to discuss Translarna's application package. The FDA doesn't need to follow the advice of the advisory committees it assembles, but it usually does. A positive vote later this month would send the stock soaring.
How to tackle Alzheimer's like a pro
A 99% fail rate makes development of Alzheimer's drugs a virtual black hole for research dollars, but Axovant Sciences Ltd. has something its peers don't: Lawrence Friedhoff in the executive suite. While at Eisai, Friedhoff led a team responsible for the most successful Alzheimer's drug to date, Aricept, and he's trying to catch lightning in a bottle again with Axovant's lead candidate, intepirdine.
Today Aricept is more commonly known by its generic name, donepezil. It hasn't been shown to reverse, or even slow the rate of, cognitive decline for Alzheimer's patients, but it temporarily improves memory and awareness by preventing the breakdown of an important neurotransmitter, acetylcholine.
Intepirdine boosts acetylcholine levels, and Axovant hopes the one-two punch of donepezil and intepirdine can actually slow the rate of cognitive decline among patients with mild to moderate Alzheimer's disease. If it can, intepirdine could easily become a blockbuster drug with billions in annual sales, driving the stock several times higher in the process.
We'll know if Axovant has a shot at the big time soon. The company is expected to announce data from a 1,315-patient trial designed to support an application for treatment of Alzheimer's with a combination of donepezil and intepirdine soon.
It's going to be a real nail biter. In a mid-stage study, adding 35 milligrams of intepirdine to donepezil led to a significant cognitive benefit, as measured by two common tests, at week 24. It's important to note that intepirdine on its own didn't appear effective, and neither did donepezil with a lower dosage of intepirdine.
Mid-stage data for intepirdine is spotty, and Alzheimer's is a tough nut to crack, but I think Axovant has a real shot at launching a potential blockbuster next year. The big pivotal trial has been designed to maximize chances of success based on previous observations. For example, patients will receive 35 milligrams of intepirdine with cognitive testing performed after 24 weeks.
Most underappreciated readout of the year?
Nonalcoholic steatohepatitis (NASH) might not get as much attention as Alzheimer's, but it's one of the largest unmet needs in medicine today. Between 30% and 40% of American adults have fatty livers, and an estimated 20% of these patients also suffer from the inflammation and liver cell damage that defines NASH. The disease puts so many people at an elevated risk of cirrhosis, liver cancer, and related ailments, that spending on medicines to treat NASH is expected to reach $40 billion by 2025.
Since there aren't any drugs available to treat NASH, the first to reach pharmacy shelves are almost certain to become megablockbusters. Gilead Sciences has four NASH candidates in clinical-stage development that attack the disease from different angles. One of these candidates, GS-0976, looks like it's pretty good at preventing liver cells from converting excess carbohydrates into fatty acids. In a previous study with just 10 patients, treatment with GS-0976 led to a 43% median decrease in liver fat content.
Gilead is expected to present data from a larger 125-patient study with GS-0976 soon. Unlike Axovant and PTC Therapeutics, repeating previous success in a larger trial probably won't lead to big overnight gains for this biotech stock. NASH development is still in its early days, and there isn't a standard way to measure efficacy for potential new drugs. That said, a substantial reduction in liver fat surely seems like a step in the right direction.