11 Ache-Free Investment Opportunities in Neuropathic Pain

by: Michael Becker

Co-authored by Michael D. Becker, Jeffrey Martini, Ph.D., and Janet L. Dally

In the United States, up to 50 million people live with chronic pain, with the majority of these patients not satisfied with their current pain treatments. Pain is defined clinically as an unpleasant emotional experience resulting from real or potential tissue damage and is generally divided into two categories based on cause:

  1. Nociceptive pain, which is caused by physical activation of pain receptors due to tissue damage, such as breaking a bone; or
  2. Neuropathic Pain (NeP), which is caused by dysfunction of the somatosensory system resulting from abnormal nociceptive pathway signaling or nerve injury.

There are a number of disease states that lead to NeP including: diabetes, multiple sclerosis (MS), cancer, spinal cord injury, stroke, and HIV infection along with many others.

The NeP pain signal begins with sensory receptors [nociceptors] that are activated through pain stimulation. NeP results from traumatic, inflammatory, ischemic, or metabolic insults directly to the nerve, often causing the pain receptors to fire spontaneously [1]. NeP is characterized by both chronic and acute pain or sensitivity. The underlying pathophysiology of NeP is not completely understood and as a result pharmacotherapy is frequently unsatisfactory with only about 30% of Food and Drug Administration [FDA] approved pharmacological drugs meeting satisfactory endpoints [1,3]. NeP remains one of the most debilitating symptoms in the clinic and improvements, characterized by lessening pain and improving the overall quality of life, represent a large unmet medical need.

There are several FDA approved medications available today to treat NeP with a high variability of success [2]. Analgesics are often prescribed based on safety, tolerability, drug interaction, and cost and less on the efficacy of the drugs. Lidocaine, secondary amine tricyclic antidepressants [off label use], selective serotonin and norepinephrine reuptake inhibitors, calcium channel ligands [gabapentin and pregabalin], and tramadol are first line therapies [2].

Many of the aforementioned analgesics have limited success and physicians often turn to opioids as a treatment option for NeP. Opioid analgesics, including morphine and oxycodone can be very effective in treating patients with severe pain but have limited success in NeP. Opioid analgesics, which have a wide range of adverse side effects such as nausea, clinical constipation, and addiction, produce pain relief mainly by stimulating opioid receptors in the central nervous system.

Despite the limitations for NeP medications, the market for pain therapies is large. In 2007, the worldwide sales of prescription opioids surpassed $9.5 billion and they are expected to grow to $11.9 billion in 2018 [4]. In the US alone, over 200 million prescriptions were written for opioid medications. Yet there remains a large opportunity for new drugs with greater efficacy and reduced side effects to address the unmet need.

The development of drugs to treat patients with NeP is challenging with many pharmacotherapy development failures. For example, neurokinin antagonists demonstrated very strong preclinical efficacy yet proved to be a huge failure in clinical development. There are several reasons that finding a truly effective therapy for NeP has been elusive:

  • Clinical trials for pain drugs often have a high placebo rate, which makes it difficult to demonstrate efficacy and regulatory approval.
  • Abuse potential is a major factor for the opioids, especially oxycodone and the FDA is requiring drug companies to submit a risk management program.
  • Responses to single drugs are very rare. This is because of the complexity of NeP disease and the high inter-patient variation of disease mechanism*.
  • The mechanism may change based on the underlying disease course.
  • Difficulty in diagnosing and measuring pain for physicians.
  • Failure to understand conditions which influence pain response.
  • High drug-drug interactions, especially given that most patients are on medications to treat the underlying disease state.

The challenges and opportunities for NeP drug development create optimal conditions for large pharmaceutical companies to license compounds from smaller development-stage biopharma companies. Large pharmaceutical companies may be better equipped to design and implement the requisite clinical studies, while development-stage biotechnology companies may be more adept at drug discovery. In the text that follows, we highlight a few biopharmaceutical companies with promising technologies or products that are collaborating with large pharma, as well as a few companies that may be the next to partner:

Icagen, Inc. (NASDAQ:ICGN)

Icagen is a biotechnology company with scientific experts in ion channel discovery and ion channel drug development. Icagen has a collaboration with Pfizer, Inc. (NYSE:PFE) for some of its ion channel pain targets. Icagen has cloned over 300 ion channel genes and has developed a proprietary ion channel high-throughput screening and development technology allowing for the discovery of small molecules that modulate the state of each receptor.

One area of focus for Icagen are small molecules that activate potassium channels of the neurons. Icagen’s lead compound for NeP is ICA-105665, which specifically activates the KCNQ ion channel leading to increased neuron polarization thereby decreasing the excitability state of the nerve cells. By shifting the membrane potential to be more negative, ICA-105665 is most effective when the neurons are actively firing in response to painful stimuli making the mechanism of action very specific for active neurons. KCNQ channels are attractive drug targets because these ion channels are found at key areas of the peripheral and central nerve terminals as well as in the brain region involved in pain processing. ICA-105665 has completed its Phase I safety study and the company expects to begin a proof of mechanism study later in 2009.

Adolor Corporation (ADLR)

Adolor, also in collaboration with Pfizer, is developing novel, first in class, small molecule agonists that selectively stimulate the human delta opioid receptor, a key receptor in the modulation of pain. Adolor’s technology involves selecting novel agonists that specifically activate the delta opioid receptor without the side-effect profiles of other opioid receptor agonists including drug dependency. Adolor’s lead compound, ADL5859, is currently being developed for neuropathic pain with acceptable preclinical safety and toxicology profiles. ADL5859 is in Phase 2a clinical trials for patients with neuropathic pain associated with diabetic peripheral neuropathy. Adolor and Pfizer plan to re-formulate ADL5859 before commencing additional Phase 2a clinical trials.

Xenoport, Inc. (NASDAQ:XNPT)

Xenoport, in collaboration with GlaxoSmithKline plc (NYSE:GSK), recently presented its top-line results from its Phase IIb clinical trial of XP13512 for the treatment of NeP associated with Post-Herpetic Neuralgia or shingles. XP13512, also known as Solzira [gabapentin enacarbil], is being co-developed for restless leg syndrome. Solzira is a gabapentin pro-drug with several advantages over gabapentin such as dose proportional and sustained exposure through high-capacity transport mechanisms in the gastrointestinal tract. Gabapentin is a GABA analogue with actions on voltage gated Ca2+ ion channels that increase the synaptic and non-synaptic release of GABA. In the phase IIb study involving 376 patients, XP13512 showed a significant improvement in pain intensity score compared to placebo and was generally well tolerated with only minor adverse events.

Endo Pharmaceuticals (NASDAQ:ENDP)

Endo Pharmaceuticals is a specialty pharmaceutical company engaged in the research, development, sale and marketing of branded and generic prescription pharmaceuticals used primarily to treat and manage pain. The company is developing axomadol, a patented new chemical entity licensed from German analgesics and oral contraceptives producer Grunenthal, which is currently in Phase II development for the treatment of moderate to moderately severe chronic pain and diabetic peripheral neuropathic pain. Preclinical studies of axomadol demonstrated excellent efficacy in the treatment of pain in arthrosis and a reduced side-effect spectrum. Moreover, it has been found that in the chronic inflammation pain model, axomadol shows a better analgesic efficacy compared to conventional analgesics such as morphine, oxycodone and tramadol.

Allergan, Inc (NYSE:AGN)

Allergan, in collaboration with ExonHit Therapeutics (Alternext: ALEHT) is developing AGN 0001 for the treatment of NeP. Phase I studies have been completed and the compound is now being considered for Phase II development.

In a separate collaboration with ACADIA Pharmaceuticals, Inc. (NASDAQ:ACAD), Allergan is developing small molecules that activate the alpha adrenergic receptor as a novel pain therapy target including the lead molecule AGN XX/YY. Preclinical studies have demonstrated highly effective pain relief without the side effects of current pain therapies. Allergan has completed Phase I studies for AGN XX/YY and is currently conducting Phase II development. Allergan has reported preliminary data from its Phase II program, including positive proof-of-concept in a visceral pain trial in patients that had hypersensitivity of the esophagus, and efficacy signals in two chronic pain trials in the areas of fibromyalgia and irritable bowel syndrome.

Avigen, Inc. (AVGN)

AV411 is Avigen’s lead molecule for the treatment of neuropathic pain. AV411’s active ingredient is ibudilast, a drug found in Japanese markets for the treatment of asthma with a well-experienced safety profile. However, Avigen holds the patent for ibudilast for the treatment of NeP in the US and Europe.

Glial cells surround neurons and play an important role as mediators of NeP by enhancing the release of neurotransmitters and by increasing the excitability of neurons. Glial cells also release pro-inflammatory cytokines such as TNFa and IL-1, which are upregulated in NeP. AV411 blocks the release of several Glial cell derived cytokines through the inhibition of MIF and TLR-4. Preclincal studies by members of Avigen have demonstrated that blocking the activation of glial cells reduces pro-inflammatory cytokines and reverses pathological pain. AV411 is currently in a Phase 2a clinical trial.

Newron Pharmaceutics SPA (Swiss: NWRN.SW)

Newron is currently developing three compounds at various stages for the treatment of NeP. Newron’s lead compound is ralfinamide, a potential first in-class therapy for Neuropathic Low Back Pain [NLBP] with potential in other neuropathic pain conditions. Ralfinamide is an inhibitor of several ion channels including Nav 1.7, N-type Calcium channels and the NMDA receptor. Several models of NeP have indicated that these ion channels are overactive leading to hyperexcitability and increased pain sensation. NAV1.7 is an attractive target for pain inhibition due to its role in nerve excitability state and lack of cardiac side effects. Newron recently initiated a Phase IIb/III study [SERENA] with Ralfinamide in patients with NLBP. The market for NLBP is estimated at over 55 million patients.

Phosphagenics Limited (OTCQX:PPGNY)

Phosphagenics is investigating new ways to improve upon opioid therapies. Phosphagenics has developed a platform delivery technology called alpha tocopheryl phosphate mixtures [TPM] that allows for improved delivery and formulation control using Vitamin E phosphates. Applying TCM technology, Phosphagenics has demonstrated in their preclinical and Phase I studies that their reformulated oxycodone can be delivered non-invasively in a non-irritating patch. In addition, Phosphagenics is applying their TPM technology to the $750 million lidocaine market. Their human trial using the TPM technology has demonstrated significantly increased dermal [local] levels of TPM/lidocaine compared to lidocaine with no changes in systemic levels. Phosphagenics plans to file an IND and initiate a Phase I clinical trial early next year.

Aegera Therapeutics, Inc.

Privately held Aegera Therapeutics recently initiated a phase 2a clinical trial for AEG33773, an orally bio-available small molecule for diabetic NeP. AEG33773 is a first-in-class oral small molecule allosteric HSP90 modulator/JNK pathway inhibitor. It is efficacious in multiple preclinical models of neuropathic and inflammatory pain. Aegera recently completed a multiple dose Phase I trial. The Phase 2a study, entitled A Multicenter, Randomized, Double-Blind, Placebo-Controlled Study Comparing the Safety and Efficacy of AEG33773 versus Placebo in Patients with Painful Diabetic Peripheral Neuropathy will evaluate the efficacy, safety and tolerability of three dose levels of AEG33773 in diabetic patients suffering from significant neuropathic pain.

NsGene A/S

NsGene, which was founded in December 1999 as a spin-off from NeuroSearch A/S (OMX CPH: NEUR), recently initiated a 28 patient Phase 1 study in Australia for NeP. The company’s lead molecule, Neublastin, is a GDNF neurotrophic factor that has been shown to increase survival and function of peripheral sensory neurons. NsGene has a collaboration with Biogen Idec, Inc. (NASDAQ:BIIB) for Neublastin, but has retained rights to develop Neublastin for the treatment of other diseases of the central nervous system.

Nitec Pharma AG

Nitec Pharma, a spin-out of Merck KGaA , is developing TruNoc™, an NFk-B and AP-1 specific inhibitor for the treatment of NeP. Activation of NFk-B and AP-1 have both been shown to be critical pathways in the initiation of pain signaling. TruNoc’s parent compound is flurbiprofen, which has been marketed in the US since 1977; however TruNoc is the R enantiomer from this known analgesic. Unlike fluribiprofen, TruNoc does not possess COX I/II inhibition and the associated harmful side effects. TruNoc is currently in Phase 2 proof-of-concept studies.

NeP remains a large market with a huge unmet medical need, yet developing medicines to treat these patients has been difficult. This has created an environment where large pharma is de-risking the initial proof of concept phase by acquiring later stage products from companies that cannot afford the costly clinical trials. The small and development stage biotech/biopharmaceutical companies may retain rights to market their NeP compounds to physcian specialist niche markets and/or selective geographic territories as well as manufacturing rights. While several excellent collaborations already exist, we expect the number of acquisitions and licensing deals in the NeP segment to increase.

* There is growing scientific evidence that biological changes in neurons play an integral role in the progression of NeP. For example, NMDA receptor levels and Protein Kinase C [PKC] are elevated in several animal models of NeP. As more information is known about several of these pathobiological changes, new targets are being explored with the potential to alter the way NeP is treated.


  1. Finnerup NB et al., Algorithm for neuropathic pain treatment: an evidence based proposal. Pain 2005; 218 289-305
  2. McGreeney BE, Pharmacological Management of Neuropathic Pain in Older Adults: An update on Peripherally and Centrally Acting Agents
  3. Mizoguchi H et al., New Therapy for Neuropathic Pain. International Review of Neurobiology. 2009 Vol 85.
  4. March 2009 Data Monitor Report

Disclaimer: This article contains the author’s own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. To the extent any of the information contained in the article may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

Disclosure: No positions