Event – XenoPort gets a second shot on goal with arbaclofen

Analysis

Having been disappointed by the performance of its first pill, Horizant, XenoPort is pushing ahead with a strategy to develop sustained-release prodrugs of widely used but off-patent products. Next up is a new version of the muscle relaxant baclofen, due to yield phase III data in the first half of the year in MS spasticity.

Successful readout of the trial will be a boost for XenoPort, which has suffered little but bad news since the launch of Horizant, capped by a divorce from partner GlaxoSmithKline. Analysts talk up the potential for a contract sales force detailing both drugs to a similar population of physicians. However, success in MS would also allow the California group to enter the partnership sweepstakes and perhaps secure a healthy licensing fee for arbaclofen placarbil.

Product Arbaclofen placarbil (XP19986)
Company XenoPort
Market cap $378m
Product NPV $95m
% of market cap 25%
Event type Phase III results
Date H1 2013

Old dog, new tricks

Baclofen is an old drug that lost market exclusivity for spasticity indications in 1999. It is dosed three times a day, but XenoPort reckons its prodrug can be dosed twice a day thanks to superior absorption. In theory, a reduced exposure to the active ingredient could reduce side effects that include sleepiness, fatigue and nausea.

Co-primary endpoints in its pivotal trial in 200 US patients are improvements on the Ashworth Scale, a measurement of joint flexibility, and the patient global impression of change. The study is covered by a special protocol assessment with the FDA, and thus success would almost ensure that the US regulator will consider the data sufficient for a new drug application.

The candidate twice failed to show efficacy in gastro-oesophageal reflux disease, prompting a change in focus to multiple sclerosis (XenoPort GERD data disappoints, December 3, 2008). Phase II data showed statistically significant improvements in spasticity for spinal cord injury patients, supporting the candidate’s advancement into phase III in multiple sclerosis.

Necessary

Showing efficacy against placebo is but one challenge for arbaclofen placarbil. Ultimately it will be judged against generic baclofen, and if it cannot differentiate itself it will be hard to achieve favourable insurance reimbursement terms except for patients who do not respond to the generic.

This is a difficulty that Horizant, a prodrug of the epilepsy treatment gabapentin, has experienced, and rather bullish sales estimates for that product have plummeted even as it has now been approved in two indications, restless legs syndrome and post-herpetic neuralgia (New Horizant approval not enough to build XenoPort's value, June 8, 2012).

The mutual agreement with GSK to withdraw from the Horizant partnership throws up another big question mark. As of May, there will be no commercialisation partner; although unwinding that profit-sharing agreement will allow XenoPort to keep more of the sales, it will also increase its marketing costs substantially.

When the breakup was announced, XenoPort said it would hire on a sales force, either in-house or on a contract basis, although it will never be able to command the presence of its erstwhile big pharma partner. A second drug in a CNS indication will allow the company to make use of that sales force.

With the stark landscape ahead of XenoPort, analysts from Morgan Stanley believe that positive spasticity data followed by approval will be necessary for the group to achieve profitability, as Horizant cannot achieve it alone. They conclude that a failure for arbaclofen placarbil would almost surely presage a share price collapse to cash levels.

Trial  Trial ID
Phase III trial of arbaclofen placarbil in
spasticity due to MS
NCT01359566

To contact the writer of this story email Jonathan Gardner at JonathanG@EPVantage.com or follow @JonEPVantage on Twitter.

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