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A somewhat rollercoaster few days for Eisai (OTCPK:ESALY) have culminated in the failure of sepsis drug eritoran (E5564). Relatively low expectations were held for such a notoriously tough indication, but with the drug previously having shown efficacy and being Eisai's most valuable pipeline candidate, this comes as a big disappointment (Event – Chemo keeps Eisai from cliff edge but pipeline must pull its weight, November 16, 2010).

This bad news was tempered somewhat by progress with two other products, but what could well be the end for eritoran only heightens concerns about Eisai's dwindling pipeline, and the tumble over its patent cliff.

Eisai was due to submit for US, European and Japanese approval of eritoran by March 31, a date now indefinitely postponed as it analyzes preliminary data from the Access trial.

Little detail has been revealed over the exact nature of eritoran’s failure, save to say it missed its primary endpoint of reducing 28-day all-cause mortality in 2,000 patients with severe sepsis.

Efficacy elusive

This is a disappointment for a disease of massive unmet need, affecting 18 million people worldwide, and killing around a third of patients.

An effective treatment for sepsis has long been elusive. Also known as blood poisoning, bacterial infections spread to the blood, inducing a systemic inflammatory and shock response that can cause organs to shut down.

Eritoran, a TLR4 (toll-like receptor 4) antagonist, targets the bacterial endotoxins that trigger the response. Similar drugs including Takeda's (OTCPK:TKPHF) TAK-242 have been abandoned in the past (Therapeutic focus - AstraZeneca makes rare advance with sepsis treatment, July 30, 2009).

Phase II studies showed eritoran reduced mortality but were designed to only detect a reduction rate above 5%. As such, a 6.4% reduction in the intent-to-treat analysis was considered a fine result. The mortality rate was in fact reduced by half in a small subset of patients at particularly high risk of death.

The drug was also well-tolerated, a big plus given current sepsis drugs like Eli Lilly’s (LLY) Xigris are associated with serious excessive bleeding.

Xigris, which loses patent protection in 2015, is still the most effective drug to date and lowers the risk of death by just 6%. Its side effect profile and high price limits its use to only the most serious of cases.

Agennix’s Talactoferrin, and AstraZeneca’s (AZN) CytoFab are the next-most-advanced pipeline candidates. A phase II/III trial of Talactoferrin is due to start in a couple of months, while phase IIb results of CytoFab will report in August.

Financial impact

Given the high-risk nature of eritoran, most analysts had already heavily risk-adjusted their forecasts for the drug, which before Tuesday sat at $477m by 2016. Decent revenues but not fully reflective of the potential market size - Eisai had estimated peak sales of $1bn while one Barclays analyst predicted sales of over $2bn in 2021 would be possible.

Assuming further trials are required, a minimum two-year delay to launch until 2014 can be expected which would significantly reduce current estimates. With a potential value of $1.33bn, according to 'EvaluatePharmas NPV Analyzer, representing up to 13% of Eisai's market capitalization, the stock could be in for a significant fall Wednesday. The news broke after the Tokyo stock exchange closed.

Either way the potential loss of eritoran is tough to take as Eisai grapples with the recent loss of US patent protection for its biggest drug, Aricept, the gold standard therapy for Alzheimer's disease which sold nearly $4bn last year – global sales are expected to halve by 2014.

Reprieve

Some reprieve for Eisai comes with a European advisory committee recommendation last week to approve Halaven, a second- or third-line breast cancer chemotherapy, and plans for US and European filings for perampanel, for partial onset seizures in epileptics.

Halaven received a green light from the FDA late last year, and with 2016 sales consensus of $519m is Eisai’s biggest growth driver. Meanwhile 2016 forecasts for perampanel have more than doubled since September following strong pivotal efficacy and tolerability data, although are still at a modest $74m.

As for eritoran’s future, more clarity on the drug's failings should be revealed in coming months. Even if the drug eventually reaches the market, it could suffer the same fate as Xigris, limited only to the most severe cases of sepsis. Efforts to bolster Eisai's late stage pipeline, as witnessed by its ill-fated looking deal with Arena for obesity candidate, Lorqess, seem to require greater vigour and precision.

Trial ID NCT00334828
Trial name Access
Source: Eisai's Rollercoaster: Sepsis Drug Failure Overshadows Eventful Few Days