After securing Food and Drug Administration (FDA) and Drug Enforcement Agency (DEA) OKs, GW Pharmaceuticals (NASDAQ:GWPH) plans to launch its marijuana-derived epilepsy medication, Epidiolex, in six weeks. There's a huge unmet need for new treatment options for epilepsy patients who fail to respond to anti-epileptic medications, so optimism is high that Epidiolex could be a top seller. The drug's commercial success, however, could depend on whether regulators approve a rival drug from Zogenix (NASDAQ:ZGNX).
A win for marijuana in epilepsy
For years, marijuana strains that are high in cannabidiol, a chemical cannabinoid found in marijuana and hemp, have been used by patients to control epilepsy, but there weren't any scientifically controlled studies proving CBD's efficacy in epilepsy until GW Pharmaceuticals came along.
To secure an FDA OK for Epidiolex, GW Pharmaceuticals conducted four separate late-stage studies that proved Epidiolex can safely reduce seizures in patients with Dravet syndrome and Lennox-Gastaut syndrome, two rare types of childhood-onset epilepsy that respond poorly to existing treatment options.
In its trials, Epidiolex reduced monthly seizures by between 40% and 50%, which is remarkable because these patients typically suffer dozens of drop seizures every month, despite using existing anti-epileptic medications. For instance, the median Lennox-Gastaut patient in Epidiolex's trials had 71 drop seizures per month at baseline and was taking three anti-epileptic treatments.
The trial data and significant need for new treatment alternatives for these patients resulted in an FDA approval of Epidiolex in June and the DEA awarding Epidiolex with Schedule V classification, its least-restrictive prescribing category.
A looming threat
The approaching launch of Epidiolex is a significant milestone for GW Pharmaceuticals because Epidiolex will be its first commercial-stage product available in the United States. There are an estimated 30,000 patients with Dravet syndrome and Lennox-Gastaut syndrome, and Epidiolex is expected to cost $32,500 annually, so investors are modeling for it to produce hundreds of millions of dollars in sales per year.
Epidiolex's commercial success, however, might depend significantly on what happens with Zogenix's ZX008, a low-dose formulation of fenfluramine.
On July 12, Zogenix reported data from the second of two late-stage trials showing ZX008 reduced convulsive seizures by a median 62.7% in Dravet syndrome patients. The trial also showed a significant proportion of ZX008 patients achieved even larger-percentage reductions in seizures. Specifically, nearly 36% of patients saw their number of seizures fall by 75% or more.
Then results from a phase 2, long-term extension study of ZX008 in Lennox-Gastaut syndrome patients were published in an industry journal in September. In that trial, the median reduction in convulsive seizures was 58%, and 33% of patients saw a 75% or greater reduction in seizures.
Safety could be the difference
It's bad science to compare data from separate trials to determine if one drug is better than another, but it does appear that ZX008 matches up favorably to Epidiolex in these indications.
Zogenix's plan is to file for FDA approval in Dravet syndrome in Q4. If the FDA signs off on it, it could challenge Epidiolex for market share in 2019. A phase 3 study of ZX008 is ongoing, and if results back up phase 2 findings, then an application for approval in that indication will be filed too.
It remains to be seen which of these drugs captures the most share in the market for treatment-resistant seizures, but the winner could depend on safety data.
In Epidiolex's case, there was enough concern about elevated liver enzymes in its studies for the FDA to include a warning about the risk of liver damage in Epidiolex's label. As a result, Epidiolex patients will have to be tested for liver enzyme levels prior to using Epidiolex and then evaluated regularly during treatment to make sure levels don't spike. In its trials, alanine aminotransferase (ALT) and/or aspartate aminotransferase (AST) elevations that were three times the upper limit of normal happened in 13% of Epidiolex patients but in just 1% of placebo patients. Some Epidiolex patients were hospitalized for treatment because of those elevations.
ZX008's safety profile isn't necessarily pristine either, though. Fenfluramine is the "fen" part of the 1990s obesity drug fen-phen, which was shelved following the discovery it could cause cardiac problems in patients.
So far, there haven't been any cardiovascular problems witnessed with ZX008's use, though, and that could suggest Zogenix's low-dose approach found the sweet spot between safety and efficacy. In the Dravet syndrome trial, the "incidence of serious adverse events was similar in both the treatment and placebo groups."
Nevertheless, it wouldn't seem surprising if a potential FDA approval was contingent on cardiac monitoring.
What to watch for next
The Dravet syndrome patient population numbers in the thousands, so the Lennox-Gastaut indication is more commercially important to these companies. Therefore, investors will want to look closely at phase 3 Lennox-Gastaut data when it becomes available from Zogenix. If the percentage reductions don't decline meaningfully from phase 2 and safety remains solid, then it could present the biggest challenge to GW Pharmaceuticals' future sales in these indications.