Actelion and GSK say rest in peace to almorexant

Actelion knows the value of showmanship. After keeping investors waiting more than a year to hear whether insomnia drug almorexant will be filed for approval, the Swiss company’s announcement that it is putting the therapy to sleep resulted in a share rise of 2% to SFr 53 in intraday trading (Actelion’s lack of sleep safety information wakes up critics, December 21, 2009).

The stock boost was an expression of relief that the project will not go ahead, averting further expensive trials, and that Actelion may be in the process of improving its curb appeal in the event of a buyout offer (Actelion bid speculation persists but doubts linger over deal, November 24, 2010). However, confirmation of another pipeline failure underscores the company’s weaknesses as the patent expiry of its flagship drug Tracleer approaches in 2015 (Actelion can’t catch a break after another phase III failure, September 27, 2010).

Safety worries unresolved

Actelion and partner GlaxoSmithKline said the decision to pull the plug on almorexant followed an analysis of data gathered after still-undisclosed safety signals emerged in a phase III trial. An orexin antagonist, almorexant met its primary endpoint of improvements in time spent sleeping, but as the partners had raised safety concerns most analysts had already removed the drug from their forecasts; the decision to put the project to rest was widely anticipated.

Consensus forecasts for 2014 had fallen from $323m in December 2008 to just $6m today, according to EvaluatePharma data. Although the loss of a late-stage pipeline drug is never good for sentiment, investors appear happy at least that the saga is over and Actelion can turn its full attention to defending its franchise in pulmonary arterial hypertension.

High risk

The compound had carried with it the air of a high-risk venture. Penetration of a highly-genericised market was one of the challenges it faced, even if, as Actelion hoped, the use of an orexin antagonist promised more restful sleep than currently marketed products, giving it a competitive edge in a large market of chronic users.

The structure of the GSK partnership was an indication of its risky nature. The $3.2bn deal was heavily backloaded, earning the Swiss partner $131m upfront for a phase III drug, keeping GSK’s share of development to 40% and otherwise limiting the UK partner’s expenditures in the event of a clinical or commercial fizzle. Those terms make GSK’s business development team look prescient when it comes to almorexant (Actelion's top dollar deal leaves doubts, and little on the horizon, July 14, 2008).

Pipeline worries

As for Actelion, the failure of Tracleer in idiopathic pulmonary fibrosis (Actelion stopped in its tracks with negative Tracleer data, March 1, 2010) and clazosentan in subarachnoid haemorrhage make it absolutely crucial this year’s main catalyst is a positive one: a phase III readout of macitentan in pulmonary arterial hypertension.

To demonstrate that Actelion is more than just a PAH franchise, chief executive Jean-Paul Clozel has been talking up the company’s mid- and late-stage pipeline: macitentan in IPF undergoing phase II, ACT-129968 in allergic rhinitis and allergic asthma phase II trials, antibiotic ACT-179811 in phase II, autoimmune therapy ACT-128800 in phase II for MS and psoriasis, and amyotrophic lateral sclerosis treatment olesoxime in a phase III study.

Though all of those trials will report data in the next two years, none is perceived as important as the macitentan PAH trial. Macintentan is the only pipeline candidate reporting in the next two years to which analysts have ascribed any value; at a net present value of $590m, macintentan equals 9% of Actelion’s market capitalisation and is second in total value only to Tracleer, which at $3.78bn in net present value represents 56% of Actelion's market cap.

Another PAH drug, selexipag, is valued at $209m, but phase III trials for that candidate will not report until 2013. So, realistically, macitentan and selexipag are the only two pipeline products that can reach the market prior to Tracleer’s patent expiry in 2015 – meaning that it in the absence of an acquisition or in-licensing Actelion remains a PAH specialist.

Positive results for macitentan in IPF could change that view, of course, although for now observers are watching that phase II data due in the third quarter for safety signals. Thus, now that Actelion has at last put almorexant to sleep, its executives know macitentan needs to perform to fill the gap that will be left by Tracleer.