Zogenix’s pain is GW Pharma’s gain

A regulatory misstep puts Zogenix even further behind its epilepsy rival GW Pharma, which in turn is waiting for data that could give it another boost. 

A refuse-to-file letter for Zogenix’s epilepsy project Fintepla gave investors a nasty surprise last night. The setback was blamed partly on an embarrassing oversight, but the implications of a separate request for further toxicology data could be much more damaging. 

A delay to approval is inevitable, and Zogenix shares plunged 25% in early trade today, erasing $550m in market value. A 2% jump in GW Pharma’s share price this morning shows that Fintepla is considered a threat to that company’s Epidiolex, which is only five months into its US launch and approaching another crucial clinical readout.  

First to Zogenix, though, whose executives had to admit that an incorrect version of a clinical dataset had been sent to the FDA as part of Fintepla’s NDA. However, this should be easily remedied, the knock to management reputations notwithstanding.

It was the agency's request for additional preclinical toxicology data that really rattled investors. This is because Fintepla’s active ingredient is flenfluramine, half of the “fen-phen” diet pill that was found to cause serious heart problems. Zogenix has used much lower doses in its epilepsy trials, something the company believes circumvents the safety problems; longer-term studies are ongoing, and their results remain of interest. 

Exactly what new toxicology information the regulator requires is unclear at this stage, as Zogenix has yet to meet agency staff. Analysts estimate that if the company can rely on existing data any delay might be limited to a couple of months; a request for new studies would extend this to over a year. 

The company was expected to launch Fintepla, which has breakthrough designation, towards the end of the year. Fears of deeper FDA concerns could now set in, particularly if this issue rumbles on. 

The outlook for GW and Zogenix, before news of the Fintepla setback
    Global sales ($m)
Project Company 2019e 2020e 2022e 2024e
Epidiolex GW Pharmaceuticals 122 470 1,355 1,736
Fintepla Zogenix 3 102 479 817
Source: EvaluatePharma. 

Fintepla’s breakthrough status was granted because the project is being tested in rare and very hard to treat forms of childhood epilepsy. Its NDA was in Dravet syndrome, while a phase III trial in Lennox-Gastaut syndrome is due to read out in the first quarter of 2020.

Success here is crucial if Fintepla is to catch up with Epidiolex, which is approved in both conditions. GW’s cannabidiol-based product was launched last November, and indicators are pointing towards a successful launch. 

This momentum could be given a further boost in the coming weeks with data from a pivotal study in tuberous sclerosis complex, a rare genetic condition that causes benign tumours to develop; those in the brain cause very severe seizures. 

210 children and adults have been recruited into the trial, which tests Epidiolex dosed at 25mg/kg/day and 50mg/kg/day. This is notably higher than the maximum permitted dose under the drug's existing label, 20mg/kg/day, so safety and tolerability readings will be watched closely. The primary endpoint is change in seizure frequency. 

Tuberous sclerosis complex causes focal seizures, in which the electrical disturbances affect only a limited area of the brain, as opposed to a generalised seizure affecting the whole brain. The first approval for a type of focal seizure could be a helpful label expansion for Epidiolex; off-label use is widely expected given the many forms of refractory epilepsy, and validation in another subtype would presumably give physicians another reason to try the product.

Also expected this quarter is an initial regulatory decision in Europe, with GW expected to launch Epidiolex in countries like France and Germany before the end of the year. 

All of this means that GW could consolidate its first-mover advantage. The nature of these rare epilepsies means that this is far from a winner-takes-all situation, but Zogenix needs to get out of the blocks fast to ensure that investors continue to consider it a competitor worth worrying about. 

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