Yesterday was not a good day for small companies trying to get drugs to regulatory approval for tough diseases. You may well remember Axovant, a company that I’ve written about several times (most recently here). To recap, AXON was started by a fund manager, who bought a failed Alzheimer’s candidate off GSK, announced that they’d be taking into the clinic again for Alzheimer’s, and promptly went public, raising a bucket of money. The drug, a 5-HT6 ligand, did not appear promising from its earlier data, and it was hard to see why there was hope this time around. That feeling intensified, for those who were paying attention, when both Pfizer and Lundbeck stopped development of 5-HT6 Alzheimer’s candidates of their own. A year ago, I asked “Why, you have to wonder, would anyone hold Axovant’s stock in anticipation of their 5-HT6 results after two similar efforts have both failed?”
That stock, though, went on quite a run over the last couple of weeks, gaining over 25% as investors anticipated the trial results, which were due by the end of the month. I know this because I ended up putting my money where my mouth was on this company – I went short their stock at $19.6 in late August, just in time to watch (rolling my eyes) as it went up. I had to fight off the temptation to short even more of it. It never made it back to the high of its first day of the IPO ($29), but it was a good jump (if you were long!) Of course, if you were long, you probably didn’t take that as an opportunity to sell, either. This position is why I didn’t write about the company until now – although talking up your own positions is a glorious tradition in the stock-blogging world, I didn’t want to be accused of it.
But yesterday morning Axovant announced results, and it was exactly as you might have expected: a complete miss. Just like before on the two other drug of this type, just like before on the same exact drug, just like before on basically every Alzheimer’s compound that goes to the clinic. I covered my own position at $6.475. I am sorry for the people who bought into the hype, and I’m sorry for Alzheimer’s patients and families who had hopes for this compound. But frankly, I see the entire effort as a misuse of funds – Alzheimer’s research would have been better off if the same amount of money had been applied almost anywhere else in the field.
The second round of nasty news yesterday was for PTC Therapeutics (I last wrote about them here and here). They have a compound (PTC124, Ataluren) that they’ve been developing for several diseases, among them Duchenne muscular dystrophy. The problem is, it doesn’t do anything. It’s not just that there’s no evidence that it works, there is significant evidence that it doesn’t. The FDA has turned them down twice, and rightly so, but the company has asked for a panel review to present their case yet again. To the best of my knowledge, they have no new data to argue with, and the FDA’s review documents reflect this situation. To put it mildly.
Ultimately, no positive results from any prospectively planned analyses that are persuasive have been provided with this application. The applicant has presented only the results from numerous post hoc and exploratory analyses that are intended to mitigate two negative clinical trials. In 2011, the applicant claimed that the effectiveness of ataluren had been established based on the post hoc analyses of the ADP population in Study 007. However, when this conclusion was prospectively evaluated in Study 020, the results were clearly negative. This finding directly highlights the frequently misleading nature of exploratory analyses of negative trials. It is arguable that some trends observed in the applicant’s data may warrant further prospective investigation, which the Agency has consistently encouraged the applicant to consider.
Good. Overall, I’ve liked what Scott Gottleib has been doing at the FDA, but my nagging worry has been that he would be (for my tastes) too permissive. It’ll be reassuring to see that there’s a line to be drawn, and I have no problem seeing it drawn with PTC124. Because it doesn’t work. Having no evidence is bad enough, but solid evidence of failure? Not even the give-patients-hope advocates should be defending that one. The hearing is tomorrow, and it will not go well. It shouldn’t.
(As a side note, if you would like some headshaking evidence of the craziness of the stock-market field known as “technical analysis”, aka chart-reading, I refer you to these guys. They are here to tell you that PTC’s stock is about to head into the “Buy Zone”, based on their chart of its price movements. At no point in the entire thing do they mention any possible factors – like a drug that doesn’t work – that might be causing these wiggles and dips on their beloved charts. No, no – the wiggles and dips are the point. They’re everything. Sheesh).