NeuroSearch redeems itself with impressive Huntington’s phase III data

Positive phase III trial data reported by NeuroSearch on its Huntington’s disease drug Huntexil, which has been shown to improve voluntary and involuntary motor function of patients with the degenerative disease, changes the game for the Danish company.

In a day, NeuroSearch has gone from a company notable for a destructive fundraising that sank its share prices in October to a very attractive licensing partner or M&A target ahead of regulatory approval, even after its share price doubled today on the news of the phase III data (Bankers predict pharma M&A acceleration, January 27, 2010). Meanwhile, Huntexil, which treats multiple symptoms of the disease, enters a market in which the only major competitor, Xenazine, treats only a single symptom.

Hugely significant

On a conference call today, NeuroSearch executives said their strategy was to proceed through the registration process without a partner. A North American phase III study remains ongoing, and the executives said they plan to await results before filing with regulatory agencies, although some preliminary discussions will begin.

The study of 437 European Huntington’s disease patients, called MermaiHD, found statistically significant improvements in measures of both voluntary motor function and combined voluntary and involuntary motor function. It failed to improve chorea, cognitive skills and behavioural markers, although trends towards efficacy were seen on the latter two measures.

By late in the afternoon, Neurosearch's Copenhagen-listed shares had nearly doubled from a close yesterday of DKr85 to DKr169.50, re-valuing the company at DKr4bn ($748m), illustrating the signficance of these results

Valuable niche

With a prevalence of only three to seven per 100,000 in European-descended populations, Huntington’s disease affects only about an estimated 100,000 people worldwide. However, as an orphan drug the manufacturers can expect pricing from $25,000 upward annually, making it a valuable product in any pipeline. Neurosearch executives would not discuss pricing today, however.

Xenazine, sold by Lundbeck and Biovail and which hit the market in 2008, is forecast to reach $381m in sales in 2014, according to EvaluatePharma’sconsensus forecast.

Should Huntexil reach the market, it should have clear differentiation from Xenazine. The latter drug treats only a single symptom, chorea, and the product information emphasises that it does not treat the causes of the chorea, while the former has shown itself in the phase III studies to improve motor skill.

In the pipeline

As could be expected for such a niche indication, there are few other candidates in the pipeline for this disease. The only other late stage candidate is Dimebon, which developers Pfizer and Medivation are testing primarily in Alzheimer’s. The phase III study for Dimebon in Huntington's measures cognition as a primary endpoint, rather than the motor skills tests that the Huntexil study tested.

AMR101 is also reported to be in phase III trials for Huntington's disease, but Amarin, its owner, submitted and then withdrew a European marketing application for that indication because regulators asked for a further study of its efficacy.

As such, Huntexil potentially represents a significant breakthrough for Huntington's patients. Whether it can be used in combination with Xenazine, to address a wider range of symptoms, NeuroSearch declined to speculate.

Either way, NeuroSearch now has an asset with considerable value. The company is playing a cagey game on its partnership strategy and could theoretically go it alone in such a niche indication, however, they may now receive an offer they cannot refuse.

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