The deadline for the FDA decision for Impax Laboratories' (IPXL) first foray into branded drugs is approaching with the date set for January 21. Impax is eagerly awaiting the FDA's response to the company's new drug application for Rytary for the treatment of idiopathic Parkinson's disease. The event is expected to have a significant impact on the stock with analysts seeing annual sales for Rytary climbing as high as $400 million, a sizeable figure for a company that recorded sales of about $500 million in 2011. Notably, margins for branded drugs are higher than generics, where most of the company's sales come from.
Impax Laboratories is a technology based specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of branded products. Impax markets its generic products through its Global Pharmaceuticals division and markets its branded products through the Impax Pharmaceuticals division.
The company has historically been focused on generics but in 2008 launched the branded products division in an effort to diversify its revenue base. Rytary is the first drug that Impax would take through the whole federal drug approval process, if approved. Rytary is an investigational extended release capsule formulation of carbidopa-levodopa for the treatment of idiopathic Parkinson's disease. Rytary has been licensed to GlaxoSmithKline (GSK) for countries outside the U.S. and Taiwan for development and marketing.
The new drug application for Rytary (IPX066) for idiopathic Parkinson's disease is based on two Phase 3 trials the company successfully completed. The first Phase III trial results were announced in November 2010 for the APEX-PD trial. The trial met its primary efficacy endpoint of change from baseline in the sum of Unified Parkinson's Disease Rating Scale (UPDRS) Parts II and III score at end of study. The UPDRS Part II measures the activities of daily living and the UPDRS Part III measures motor symptoms of PD. All three doses of IPX066 showed significant improvement compared to placebo (p<0.0001 for all treatments). The mean sum of Parts II and III UPDRS score on IPX066 treatment improved 13.2 units (36%) compared to an improvement of 0.6 units (2%) with placebo treatment, indicating a major improvement in PD symptom severity in early PD patients as a result of IPX066 treatment.
Consistent with the results observed in the UPDRS, IPX066 also demonstrated mean improvements of 72% in both Clinician Global Impression of change (CGI) and Patient Global Impression of change (PGI) compared to improvements of 27% and 34% for placebo in CGI and PGI, respectively (p<0.0001 for both measures at all three dose levels). In addition, IPX066 treatment resulted in an improvement over placebo in quality of life as measured by the Parkinson's Disease Questionnaire (PDQ-39) at week 30 (p<0.02).
The second Phase III trial is the ADVANCE-PD study of the safety and efficacy of IPX066 versus immediate-release (IR) carbidopa-levodopa (CD-LD) in advanced PD patients experiencing motor fluctuations. The ADVANCE-PD results demonstrated that IPX066 produced significantly improved control of motor symptoms as compared to IR CD-LD in multiple clinical measures in subjects with advanced PD.
The primary endpoint of this comparison study of IPX066 to IR CD-LD was the percentage of "off time" during waking hours. IPX066 demonstrated a 37% improvement from baseline for IPX066 vs. a 17% improvement from baseline for IR CD-LD (p<0.0001). "Off time" is the functional state when patients' medication effect has worn off and there is a return of Parkinson's symptoms.
The study enrolled 471 subjects on a stable regimen of IR CD-LD who were first entered into a dose-adjustment phase of their IR CD-LD, followed by a conversion to IPX066 after which they were then randomized to either IPX066 or IR CD-LD. Subjects converted to IPX066 experienced a reduction from baseline of more than 2 hours in total "off time" during waking hours, and this effect was maintained in the group then randomized to IPX066 during the blinded study portion. While the group treated with IR CD-LD achieved similar improvement during conversion to IPX066, "off time" worsened by 1.0 hours during double blind treatment with IR CD-LD (p<0.0001). In addition, during double-blind treatment, subjects experienced similar results in "on time" without troublesome dyskinesia with an increase of 1.9 hours for IPX066 compared to an increase of 0.8 hours for IR CD-LD as measured from study entry (p<0.001).
Additional clinical and patient-reported outcome measures in the study consistently demonstrate the improved IPX066 efficacy profile when compared to IR CD-LD. This includes the Unified Parkinson's Disease Rating Scale, Clinician Global Impression of Change and Patient Global Impression of Change , which also demonstrated significant improvements in treatment with IPX066 compared to IR CD-LD (p<0.0001 for all comparisons). In quality-of-life (QOL) measures, IPX066 demonstrated significant improvement over IR CD-LD as measured by PDQ-39 (p<0.035) and modified Rankin Test (p<0.006). In response to the announcement of the trial results, investors sent the shares up 15%.
The PDUFA for Rytary for idiopathic Parkinson's disease was originally set for October 21, 2012. However, the FDA extended the PDUFA date to January 21, 2013. The FDA said that it notified Impax that its September 28, 2012 submission of requested information on an excipient in the Rytary formulation to the FDA has been designated as a major amendment. Since the receipt date of this additional information is within three months of the PDUFA date, the FDA exercised its option to extend the PDUFA date to review the information. Despite the negative news, no new clinical trials or studies were requested by the FDA, in a sigh of relief.
Other positives the company has going for it is a strong balance sheet, with about $340 million in cash on the books. The company is profitable with analysts expecting EPS of $1.81 this year on sales of $569 million so in a case of an adverse decision by the FDA, the downside may be limited.
The upside on a positive decision by the FDA on Rytary could be significant. With the stock at $27, Barron's quoted a money manager saying that if Rytary gets approved and the launch goes well, the stock could be worth far more. Just reaching $27 a share, would provide gains of nearly 30% for investors.
The major obvious risk with IPXL is that the FDA reaches an outcome on the drug candidate that is unfavorable to IPXL. Other risks include the company continuing to have issues with its generic drugs manufacturing facilities, an elevated competitive environment in generics, and increased litigation in its generic drug segment.
With that said, there are a few other companies working on solutions for Parkinson's and related illnesses, here are two other ones.
Amarantus BioSciences (OTC:AMBS) is a development-stage biotech focusing on developing certain biologics surrounding the intellectual property and proprietary technologies it owns to treat and/or diagnose Parkinson's disease, Traumatic Brain Injury and other human diseases. The company owns the intellectual property rights to a therapeutic protein known as Mesencephalic-Astrocyte-derived Neurotrophic Factor ("MANF") and is developing MANF-based products as treatments for brain disorders. Recent news for the company includes one of Amgen's (AMGN) co-founders, Dr. Joseph Rubinfeld, joining the company's advisory board and issuing some very bullish commentary on MANF. Dr. Rubinfeld said, "I have reviewed a great number of technologies in my 45 year career in the biopharmaceutical field, and I believe that MANF could be one of the biggest successes that I have ever seen… MANF has the commercial potential to become a blockbuster drug."
ACADIA Pharmaceuticals (ACAD) is a biotech focused on innovative treatments that address unmet medical needs in neurological and related central nervous system disorders. Just two weeks ago, the company announced successful top-line results from its pivotal Phase III trial evaluating the efficacy, tolerability and safety of pimavanserin in patients with Parkinson's disease psychosis (PDP). Pimavanserin met the primary endpoint in the Phase III trial by demonstrating highly significant antipsychotic efficacy as measured using the 9-item SAPS-PD scale (p=0.001). Pimavanserin also met the key secondary endpoint for motoric tolerability as measured using Parts II and III of the Unified Parkinson's Disease Rating Scale, or UPDRS. Clinical benefits were observed in all exploratory efficacy measures with significant improvements in nighttime sleep, daytime wakefulness and caregiver burden. In response to the news, the stock jumped over 100%, although it has come down some since then.