Avanir’s Alzheimer’s data prompt unchecked outburst of investor enthusiasm
In terms of unmet medical needs, they do not come much bigger that Alzheimer’s disease. This fact is really the only plausible explanation for the $1bn surge in valuation enjoyed by Avanir Pharmaceuticals, which yesterday released positive results from a phase IIa trial of AVP-923 – aka Nuedexta – in Alzheimer's patients with agitation.
On the company’s track record alone this reaction is surprising. It took Avanir four years to convince the FDA to approve Nuedexta, and after another four on the market as a treatment for pseudobulbar affect payers remain very reluctant to reimburse it. The road ahead for the new indication is unlikely to be much shorter.
The trial announced yesterday was conducted in 200 patients with agitation associated with Alzheimer’s disease. The primary endpoint was improvement in the agitation/aggression domain score of the neuropsychiatric inventory (NPI) versus placebo over the 10-week study, which was duly met (p=0.00008).
Improvements were seen in the “majority” of secondary measures, the company said, including the clinical global impression of change-agitation and total NPI score. This latter endpoint appears to have previously been the trial's primary endpoint – it is still listed as such on clinicaltrials.gov – but seems to have been changed at some point; company commentary suggests that this happened sometime in 2013.
Full results will be presented at the American Neurological Association's meeting in October in Baltimore, and the numerical change in the score will be of interest. The company has said previously that baseline NPI-agitation scores for enrolled patients were around 7, and the study was 90% powered to detect a 2.5-point difference. The fact that the total NPI measure was hit is encouraging, but given that the press release hints that not all secondary endpoints were successful the full readout will be closely scrutinised.
Sceptics will note that it is not surprising that this drug has a sedative effect. It is a combination of the cough suppressant dextromethorphan and the anti-arrhythmic quinidine. Supporters, meanwhile, will point to the substantial need for treatments for Alzheimer’s patients.
The problem for Avanir will be convincing payers and physicians that the need that AVP-923 addresses is real, and that the drug can contribute to a real clinical improvement in the lives of these patients.
This is exactly the problem it has faced with Nuedexta in pseudobulbar affect – its high cost has prompted many payers to throw up roadblocks to reimbursement. Formulary coverage has continued to worsen – alongside quarterly results last month the company revealed that three of the largest Medicare Part D plans placed prior authorisations on Nuedexta use, and unrestricted Tier 2 access dropped from 58% to 34%, according to analysts from Jefferies.
Of course this does not mean that the same will happen in Alzheimer’s disease. But even if the full results of this small and early-stage study confirm that the finding is highly encouraging, the company will have to repeat them in at least two more large studies. These will take time and money.
Avanir ended June with $88m in cash and is not expected to start generating cash until at least 2016. Nuedexta sales are seen reaching $104m this year, according to EvaluatePharma consensus data.
It seems that the only really predictable outcome of investors' emotional outburst is that Avanir will ask them for some more money, in the not too distant future.