While most biotech investors are more focused on Xenoport’s (XNPT) PDUFA date for Horizant (gabapentin enacarbil), a treatment for restless leg syndrome, there exists a reasonably significant catalyst prior to that event. That catalyst is the Phase IIb data for arbaclofen placarbil (AP), a prodrug of (R)-baclofen, for gastroesophageal reflux disease (GERD) in patients that respond to proton pump inhibitor (PPI) therapy – scheduled for release sometime in the first quarter of 2011.
I was first made aware of the importance of the event by looking through options pricing. I was astonished, frankly, that IV in the March series of puts and calls for Xenoport are well over 100. Make no mistake, Wall Street expects this to be a big event.
With that, I wanted to take readers through what is known about AP in this indication. The data should be especially appropriate for those wishing to play a run-up into the PDUFA date for Horizant on April 6.
Baclofen is basically an analog of GABA, or gamma-aminobutyric acid, one of the main inhibitory neurotransmitters in our central nervous system. As such, Baclofen works by serving as an agonist for GABA receptors within the body. As such, it has proven itself effective in the treatment of certain muscular disorders like spasticity and acute back spasms.
Baclofen has long been known as a potential treatment for GERD with studies first reported for this indication in 2003. In the longest lasting study of four published in 2003, conducted by Ciccaglione and Marzio, there was a statistically significant improvement in number of reflux episodes, time with esophageal pH <4, and symptoms scores in patients with GERD receiving 10mg of baclofen 4x daily (QID).Other studies also reported similar improvement in GERD symptoms.
While the results were promising, the QID dosing schedule along with limited patent protection caused the drug to be largely overlooked by the pharmaceutical industry. There was also a relatively high rate of certain adverse events including sedation, dizziness, nausea and fatigue.
Xenoport’s Arbaclofen Placarbil for GERD
Enter Xenoport’s arbaclofen placarbil. Arbaclofen placarbil is simply a prodrug of the active enantiomer of baclofen. Nonspecific esterases cleave the terminal ester of the placarbil group resulting in a reaction cascade that furnishes the active R-stereoisomer of baclofen, along with isobutyric acid, isobutyraldehyde, and carbon dioxide – the latter three products being largely inactive in the body.
The placarbil side chain, in addition to improving intestinal absorption, allowed the drug to be dosed less often while maintaining consistent blood levels of baclofen. GERD, then seemed like an ideal indication for AP given that it could eliminate the necessity of the QID dosing schedule and lessen side effects. The modification of the drug through the addition of the placarbil side chain also allowed Xenoport to pick up an all-important composition-of-matter patent. The rationale behind AP for the treatment of GERD seemed to be as solid as any going into the clinic.
As is often the case in the biotech industry, however, the larger patient population and more well-controlled clinical trial resulted in failure. In December of 2008, Xenoport stated that in its Phase II study of AP, the drug failed to reach statistical significant improvement of GERD symptoms over placebo. The stock cratered, losing 35% of its value that day. However, in a pre-defined subgroup analysis it was shown that AP was effective in reducing the number of heartburn episodes in those patients that were considered "PPI experienced" (p=0.04). As a result, Xenoport turned its attention to those patients that respond to PPIs (drugs like Prilosec, Prevacid, and Nexium) but whose symptoms were still poorly controlled.
In October of 2009, Xenoport announced that it had initiated a trial of AP in GERD patients currently on PPI therapy. Xenoport has enrolled approximately 425 patients for the study and will be comparing PPI therapy plus either 20 mg or 40 mg of AP dosed once daily, 20 mg or 30 mg of AP dosed twice daily or placebo. The primary endpoint is reduction of heartburn events, the same out come that Xenoport established a p value of 0.04 in the prior study.
Summary and Interpretation
It would appear to me that Xenoport has a solid chance of reporting positive Phase IIb data in arbaclofen placarbil. The concept that baclofen is an effective treatment for GERD is well established. In addition, the fact that the subgroup analysis that led to statistical significance in PPI experienced patients was pre-defined is a big deal. This shows the positive data was not simply developed, in a sense, out of a post-hoc data analysis (this approach has often been referred to as data dredging and can often lead to false-positive results). And again, the results were good in this patient population (p=0.04, compared to placebo) and one would expect to get even better results with the larger patient population (425 vs. 156).
As is always the case in biotech investing, however, nothing is ever certain. Therefore, I would not, by any means, suggest that positive results are assured in this case. However, those trying to play the run-up to Xenoport’s Horizant PDUFA date and are not particularly risk averse may get a pleasant surprise on the way to the more significant catalyst.