Ipsen follows woeful first half with sentiment-battering clinical hold

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Ipsen’s first half was not the stuff of legend: The French group was among the worst mid-cap pharma stock market performers after disappointing on guidance and failing to divest its domestic primary care business in a timely fashion. Now comes news of a clinical hold on IB1001, filed as a treatment for haemophilia B, which will do nothing to restore investor confidence as the group tries to focus its strategy around four franchises.

Shares fell 11% to €17.72 in late-afternoon trade following the announcement that the recombinant product IB1001 stimulated antibodies to the host cell proteins at an unexpectedly high rate, prompting the hold. Now approvals in the US and EU in late 2012 or early 2013 look to be in jeopardy as partner Inspiration Biopharmaceuticals, in which Ipsen holds a 44% stake, investigates the cause.

Biosimilar enough?

IB1001 is essentially a biosimilar version of Pfizer’s BeneFIX, the biggest seller in haemophilia B that sells around $800m a year. BeneFIX is one of three recombinant factor IX products on the market, the other two being manufactured by Baxter International; however, with a patent expiry in 2011 BeneFIX would seem to be ripe for competition.

Detailed sales forecasts for the Ipsen factor IX are not available, with analysts only willing to make peak sales forecasts in the $100-160m range. Today's share price reaction suggests that some investors had held higher hopes for the product.

But as with all drugs, IB1001 will have to show an acceptable safety and efficacy profile. The closely held Inspiration noted that while it was not unusual for some patients exposed to recombinant products to develop antibodies to the host proteins, patients injected with IB1001 did so to the host Chinese hamster ovary proteins at a higher rate than earlier trials had found. BeneFIX is also produced by genetically modified Chinese hamster ovary cells.

So far, 86 people have been treated with the drug in two trials - an adult study whose primary analysis period has concluded and a paediatric trial. None experienced an adverse event related to antibody development, nor have investigators observed any correlation between development of Chinese hamster ovary protein antibodies and antibodies to factor IX, the Massachusetts-based group said.

The company gave no signs of when its investigation or its discussions with regulators would conclude. As it stood before today’s announcement, IB1001 had the potential to gain approval in the EU first, perhaps by the end of 2012, based on a regulatory submission in October 2011. While no announcement has been made on acceptance in the US filing, based on an April submission a February PDUFA action date was possible. With a clinical hold both of those timelines have most likely been disrupted.

Strategic choices

Another setback is not what Ipsen needs. Shares have been under pressure for months – down by more than a quarter on the year – as investors await word on a partner or full sale of its domestic primary care business, part of a strategic plan the company outlined last year (Big pharma and biotech shares remain in demand over first half of year, July 3, 2012).

The primary care business is under pressure in a number of ways: Tha angiotensin II antagonist Nisis is facing generic pressure; anti-diarrhoeal Smecta also could fall to competition; and the anti-dementia drug Tanakan, a Ginkgo biloba extract, is no longer reimbursed by the French government.

Ipsen guided investors to a decrease of 15% in primary care sales in 2012, an announcement that caused shares to fall 9% in February; enthusiasm has continued to wane as months have passed with no announcement of a primary care transaction.

Thus shares are likely to remain depressed until at least one of these issues is resolved. With few growth drivers for investors to focus on, a snappy resolution to the clinical hold by Inspiration would also be welcome.

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