A number of recent failures and mixed clinical trial results for Alzheimer's disease drug candidates doesn't seem to have dissuaded Pfizer (NYSE:PFE). On Wednesday, the pharma giant inked a deal worth potentially more than $725 million with development stage drugmaker Medivation (NASDAQ:MDVN) to market Medivation's Alzheimer's disease drug Dimebon -- if it can make it to market.
Dimebon is in a second phase 3 study as a treatment to help mild to moderate Alzheimer's disease patients with their cognitive functioning. By giving up partial Dimebon marketing rights to Pfizer, Medivation is getting a healthy $225 million in upfront cash, potential future milestone payments of $500 million or more, plus 40% of any profits on Dimebon if approved in the U.S. and royalties on its sales elsewhere in the world. Medivation will be responsible for 40% of the U.S. development and commercialization expenses.
Equally as important, the partnership deal only covers Dimebon. Medivation is free to create and develop any follow-up second-generation molecules that it may have in the works and that act similarly to Dimebon.
Medivation had previously guided for a potential 2010 marketing application filing for Dimebon in the U.S. and the European Union, but it also announced that its timeline for Dimebon was being put on hold pending discussions with Pfizer.
What convinced Pfizer to fork over so much cash for Dimebon? In clinical testing, Dimebon has performed extremely well relative to its potential competition.
One of the most commonly used measures to gauge the efficacy of an Alzheimer's disease drug is called the Alzheimer's Disease Assessment Scale-cognitive or ADAS-cog for short. As the name suggests, ADAS-cog measures patients' cognitive functioning over time to see if their Alzheimer's disease symptoms are worsening or getting better. Here is how Dimebon and some potential competition have performed in some of their pivotal studies in mild to moderate Alzheimer's disease suffers.
|
Drug |
ADAS-cog score improvement over placebo (higher is better) |
Sales data, last fiscal year |
|---|---|---|
|
Medivation and Pfizer's Dimebon |
4.0 mean improvement after 26 weeks |
Still in development |
|
Elan (NYSE:ELN) and Wyeth's (NYSE:WYE) bapineuzumab |
2.3 average improvement after 78 weeks |
Still in development |
|
Eisai's and Pfizer's Aricept |
Between 2.8 and 3.1 mean improvement after 24 weeks |
$2.7 billion |
|
Forest Labs' (NYSE:FRX) Namenda |
Between 1.5 and 2.0 mean improvement after 28 weeks |
$830 million |
|
Novartis' Exelon |
Between 0.2 and 4.9 mean improvement after 26 weeks |
$630 million |
|
Johnson & Johnson's (NYSE:JNJ) Razadyne |
Between 3.1 and 4.1 mean improvement after 26 weeks |
$225 million |
Sources: IMS Health, companies' most recent 10-K or 20-F, and study results (selected studies, not all studies included). Bapineuzumab study results for modified intent-to-treat population only; Razadyne study results for extended-release (ER) formulation.
Dimebon's six-month 4.0 ADAS-cog score improvement (versus the placebo) from its first phase 3 study compares very favorably to the marketed Alzheimer's disease drugs shown above.
Of course, efficacy is only half the equation -- safety is equally important. It's also important to remember that all of the above compounds were tested in at least slightly different patient groups, although all were tested in mild to moderate Alzheimer disease sufferers. Also, there are a variety of other Alzheimer's disease tests that some of these drugs can be compared with, like CIBIC-plus. Sometimes one Alzheimer's disease drug will perform particularly well in one cognitive test and poorly in another. The length of a study also matters, and many Alzheimer's disease drugs have shown decreasing efficacy the longer they are used.
To boil that down, one drug's 4.0 improvement is not necessarily better than another drug's 2.0. The point of the above table is just to show that Medivation's Dimebon is no joke and potentially could compete very strongly against the above drugs.
2007 and 2008 have not been favorable years for Alzheimer's disease treatment, as several compounds -- like Pfizer's Lipitor, Neurochem's Alzhemed, and Myriad Genetics' (NASDAQ:MYGN) Flurizan -- failed in phase 3 testing. The Alzheimer's drug market will also be taking multiple hits over the next four years as many of the drugs mentioned above will be facing increased competition.
Nonetheless, if Dimebon can continue to perform strongly in clinical testing, then Medivation and now Pfizer will have a very successful compound on their hands. Investors in both companies should be pleased with this deal.
