Seeking Alpha
Newsletter provider, biotech, healthcare
Profile| Send Message|
( followers)

The failure of Actelion’s (OTCPK:ALIOF) clazosentan (Pivlaz) in a phase III trial for subarachnoid haemorrhage (SAH) is yet another setback for the Swiss company’s late stage pipeline as it seeks to diversify a one-dimensional product portfolio, and further disappointment for the therapeutic area in general (Therapeutic focus - Innovation lags in stroke treatment, June 1, 2010).

Despite being regarded as a high-risk project, clazosentan still represented an important growth driver for Actelion, consensus sales of $300m by 2016 ranked it as the company’s most valuable pipeline candidate. Although a second phase III is ongoing the 7% decline in Actelion’s shares today to SFr40, close to a three-year low, indicates little confidence in the drug’s future. With its flagship drug, Tracleer, losing patent protection in five years time, the company desperately needs its pipeline to deliver. This latest setback piles on yet more pressure.

Stroke's major killer

SAH accounts for around 5% of all strokes, but is acutely fatal in about half of cases. Poignantly though, it is responsible for about a quarter of stroke-related deaths.

It is caused by a ruptured aneurysm (when a weakened blood vessel wall balloons under its own pressure) on the subarachnoid membrane of the brain, just under the skull. Haemorrhaging from the rupture causes vasospasm, or over-contraction, of arteries at the base of the brain, stopping blood flow. These aneurysms can be congenital, or brought on by severe head injury or high blood pressure.

Classic treatment for SAH was surgical clipping – an emergency procedure where a surgeon would open a patient’s skull and clip off the faulty blood vessel. Nowadays, the preferred method is endovascular detachable-coil treatment (coiling); a detachable platinum coil is inserted through a cut in the skin in the groin area and guided by X-ray to the brain to block the perpetrating vessel. Clazosentan, an endothelin A antagonist, is being studied as a vasospasm-reducing therapy in both procedures.

Failed primary endpoint

Actelion’s candidate failed to meet its primary endpoint in the Conscious-2 trial – to reduce vasospasm in SAH patients that have undergone clipping – demonstrating a non-significant 17% relative risk reduction. The drug is still being studied in the Conscious-3 trial, involving patients that have undergone the more modern coiling technique. Conscious-3’s steering committee will likely re-evaluate its design in light of these latest results, as attention shifts towards this trial with data expected early in 2011.

Actelion will offer more clarity on the Conscious-2 results in its third-quarter statement next month. Nevertheless, failure in Conscious-2 has cast serious doubt over whether the drug will be approved, and puts another dent in Actelion’s development pipeline. The company hoped a clazosentan approval could be the first step to diversifying its portfolio; with Tracleer losing its patent in 2015, investor interest will only be reignited by a pipeline that produces results.

Triple dip this year

Unfortunately, the pipeline has suffered only mounting pressure this year. Actelion’s share price has been on a steady decline; it took a 16% dive in March when Tracleer, approved for pulmonary arterial hypertension (PAH), failed a phase III study in its alternative indication of idiopathic pulmonary fibrosis (IPF) (Actelion stopped in its tracks with negative Tracleer data, March 1, 2010).

Additionally, shares fell 3.4% last week after the Attorney's Office for the Northern District of California issued a subpoena to the company as part of a probe into the sales and marketing activities supporting Tracleer. While these probes are not unusual in the industry investors were clearly concerned given Actelion's over-reliance on Tracleer.

Pressure on PAH franchise

As expectations on phase III insomnia agent, almorexant, continue to fade, the pressure really is now on phase III PAH drug macitentan to deliver. The product is the heir apparent to the Tracleer crown and a long-term value driver - analysts estimate a launch in 2013 and sales of $240m by 2016.

For a company desperately trying to spread risk, but struggling to deliver on pipeline expectations, the hope for the company and its shareholders must be that this setback with clazosentan represents a low water mark and the successes start to flow once more.

Trial Name Conscious-2
Trial ID NCT00558311
Product clazosentan
Product Indication Subarachnoid haemorrhage
Phase III
Trial Name Conscious-3
Trial ID NCT00940095
Product clazosentan
Product Indication Subarachnoid haemorrhage
Phase III
Source: Actelion: No Rest for the Weary