Phase III bapi failure opens up Russian roulette opportunity

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The 15% fall in early trade today of Elan ADRs following the release of negative phase III Alzheimer’s disease data for bapineuzumab is far more surprising than the fact the drug failed.

The results came from a study in patients who are carriers of the ApoE4 gene – a population in which bapineuzumab had been widely expected to fail. Far more important will be the data in ApoE4 non-carriers, in whom there is some hope that it will work, due out within the next two months. Although to suggest that Elan is now vulnerable to a takeover would be to overegg the pudding hugely, there is no doubt that an opportunity has opened up for those willing to place a high-risk bet on success in bapineuzumab’s preferred patient population.

Also keenly watched will be Lilly, whose own disease-modifying Alzheimer’s antibody, solanezumab, should report phase III results this summer (Event – Amyloid-targeting Alzheimer’s therapies seek crumbs of comfort, June 26, 2012). This drug is thought less likely to work in the ApoE4 non-carrier subgroup, and as such any signs of bapineuzumab’s effect in the overall population might have been positive for the class as a whole; Lilly stock fell 3% early this morning.

Tough target

Bapineuzumab is being developed by Pfizer and Janssen Alzheimer Immunotherapy, a joint venture with Johnson & Johnson in which Elan holds a 49.9% stake. According to EvaluatePharma the drug’s risk-adjusted NPV is worth $2.4bn to Elan.

ApoE4 is a genotype present in 45-50% of Alzheimer’s patients, and represents a tough target partly because of its association with higher risk of cognitive function impairment. Bapineuzumab had already failed in the general population at phase II, but in the non-ApoE4 subgroup signs of efficacy were seen, albeit with no dose-response correlation.

It is largely because of the efficacy hints that development has continued; although both bapineuzumab and solanezumab are highly likely to fail, the reward should they succeed could be huge. Last December Bernstein analysts suggested that monoclonal antibodies for treating Alzheimer’s “could be the next Lipitors”, and saw a 50-100% share price upside in Lilly in the event of solanezumab’s success.

None of which explains the Elan share price reaction. It would have been logical to assume that bapineuzumab’s failure in the ApoE4 population had already largely been priced into the stock.

Lilly’s solanezumab continues in two phase III studies in the combined patient population that will be analysed for the two subgroups separately, although to what extent these are powered to detect a difference at the subgroup level is not clear. Topline data are due towards the end of the third quarter.

Study Study ID Sponsor Patients/type Geography Completion
302 NCT00575055 Janssen 1,121 ApoE4 carriers Mainly US April 2012
301 NCT00574132 Janssen 1,331 ApoE4 non-carriers Mainly US June 2012
3001 NCT00676143 Pfizer 1,100 ApoE4 carriers W/wide June 2013
3000 NCT00667810 Pfizer 1,000 ApoE4 non-carriers W/wide June 2014

Excluding extension studies, the phase III bapineuzumab trial just reported is the first of four to read out; the second study in ApoE4 carriers is now to undergo interim analysis early (see table). Data from the ApoE4 non-carrier trial will be reported in time for the European Federation of Neurological Societies meeting on September 8-11.

Even if these are positive it is not entirely clear what the hurdle for approval in this subgroup might be. But with Elan’s CEO, Kelly Martin, due to leave after the Janssen-sponsored bapineuzumab studies read out, rumours of an Elan takeover could again start to circulate.

While buyers would probably be foolish to pull the trigger before September, any signs that the drug works in ApoE4 non-carriers at phase III could spell an opportunity missed.

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com

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