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On July 25, 2012, Cornerstone Therapeutics Inc. (CRTX) announced that the Cardiovascular and Renal Drugs Advisory Committee (CRDAC) of the U.S. Food and Drug Administration (FDA) has scheduled a review of the New Drug Application (NDA) for lixivaptan (CRTX 080). The CRDAC meeting is scheduled for September 13, 2012. The FDA has assigned a Prescription Drug User Fee Act (PDUFA) goal date of October 29, 2012.

Because Advisory Committee meeting recommendations to FDA have substantial impact on biotechnology companies with limited product pipelines and small market capitalizations, it is critical for the investor of such companies to review all the available evidence in order to understand what the Advisory Committee recommendations to FDA most likely will be. While it is impossible to predict the outcome prior to any Advisory Committee meeting with 100% certainty, it is possible to systematically review the available evidence, develop both the bull and bear perspectives from this evidence, compare the strength of the evidence for each perspective, and then conclude the more likely outcome.

As of market close on August 3, 2012, Cornerstone Therapeutics has a share price of $7.40 and a market capitalization of over $190 million.

In this article, I go through a systematic review of the available evidence for Cornerstone Therapeutics' lixivaptan using a Q&A approach, develop both the bull and bear perspectives, and conclude with what I feel is the more likely outcome for the CRDAC meeting scheduled for September 13, 2012.

What is hyponatremia?

Hyponatremia is defined as a serum sodium concentration of <135 mEq/L.

What indication is Cornerstone Therapeutics seeking with its current NDA?

The lixivaptan indication is for the treatment of symptomatic hypervolemic and euvolemic hyponatremia associated with heart failure (HF) and syndrome of inappropriate antidiuretic hormone (SIADH), respectively.

What is hypervolemic hyponatremia associated with HF?

Hypervolemic hyponatremia associated with HF is a very serious medical condition that is an independent and significant predictor of mortality, HF related morbidity, and hospital readmission. Based upon an analysis of 48,612 HF patients enrolled in the OPTIMIZE-HF registry, each 3 mEq/L decrease in serum sodium concentration below 140 mEq/L was associated with an increased risk of in-hospital mortality by 19.5%. During an acute decompensated HF event, a patient will experience volume overload which drives serum sodium concentrations down. In addition, the primary treatment for volume overload is loop diuretic therapy. A common side effect of loop diuretic therapy is the excretion of electrolytes including sodium in addition to decreased volume as a result of increased urine output. Therefore, even as a patient's volume decreases, so does their serum sodium level. The net result is minimal improvement in the patient's hyponatremia or, in many cases, further worsening of their hyponatremia.

What is euvolemic hyponatremia associated with SIADH?

SIADH is associated with excess vasopressin secretion that results in extracellular fluid volume expansion but does not result in fluid overload (hypervolemia). Therefore, these patients take on volume which causes there serum sodium level concentration to drop. Because they are still characterized as "normal" volume, this condition is called euvolemic hyponatremia associated with SIADH. While a similar increase in mortality and morbidity is observed in these patients, it is not as profound as it is with hypervolemic hyponatremia associated with HF.

How does vasopressin promote water retention?

Vasopressin promotes water retention by binding to vasopressin V2 receptors in the distal tubules of the nephron. This binding induces free water reabsorption by increasing the number of available aquaporin-2 water channels in the apical membrane of renal collecting duct cells.

What is lixivaptan?

Lixivaptan is a selective, orally active, nonpeptide V2 -receptor antagonist that prevents water reabsorption and increases solute-free water excretion (aquaresis).

What pivotal clinical trials are being used to support the Cornerstone Therapeutics lixivaptan NDA?

Component of Indication: treatment of symptomatic hypervolemic hyponatremia associated with HF

BALANCE Study - phase III study

Component of Indication: euvolemic hyponatremia associated with SIADH

LIBRA Study - phase III study

HARMONY Study - phase III study

What do we know about the BALANCE study?

THE BALANCE (Treatment of Hyponatremia Based on Lixivaptan in NYHA Class III/IV Cardiac Patient Evaluation) study is a multicenter, double-blind, placebo-controlled phase III trial of lixivaptan in patients hospitalized with HF and hyponatremia (clinicaltrials.gov identifier: NCT00578695). The trial was conducted internationally whereby 652 patients were enrolled at 285 clinical centers.

BALANCE Study

Key inclusion criteria: baseline serum sodium concentration <135 mEq/L, current hospitalization for worsening HF, and clinical evidence of volume overload.

Design: After 1:1 randomization to either lixivaptan or control, all patients were followed for 60 days, with post-treatment follow-up through day 90. Patients randomized were further stratified by serum sodium concentration at baseline (≥120 to <130 mEq/L vs. ≥130 to <135 mEq/L). In the treatment group, the starting does of lixivaptan was 50 mg once daily. Lixivaptan doses were titrated up to a maximum of 100 mg twice daily based on changes in serum sodium concentrations and volume status to achieve a slow correction of serum sodium over the first 3 days. Dose titration was allowed between days 4 and 60 at the discretion of the clinical investigator.

Primary Endpoint: The primary study endpoint is the change from baseline in serum sodium concentrations at day 7 of treatment.

Key Secondary Endpoint: Change from baseline in body weight at day 2.

Status: The BALANCE Study began enrollment in January 2007 and the primary endpoint follow-up for the last patient enrolled was completed in June 2010.

What clinical data are available from the BALANCE study?

The BALANCE Study Rationale and Design paper was published in October 2010 in Clinical and Translation Science, Volume 3, Issue 5, (pages 249-253) - Rationale and Design of the Treatment of Hyponatremia Based on Lixivaptan in NYHA Class III/IV Cardiac Patient Evaluation (THE BALANCE) Study.

BALANCE Study Rationale and Design Paper

Clinical data from the BALANCE Study have not been disclosed by Cornerstone Therapeutics, presented at any medical conference, nor published in any peer reviewed literature.

CRTX - SEC Filings

What do we know about the LIBRA study?

LIBRA, a multinational, double-blind, placebo-controlled, phase III study, assessed the effect of lixivaptan on serum sodium concentrations in 106 hospitalized patients with euvolemic hyponatremia (clinicaltrials.gov identifier: NCT00660959).

LIBRA Study

Key inclusion criteria: baseline serum sodium concentration <130 mEq/L and currently hospitalized

Design: After 1:1 randomization to either lixivaptan or control, all patients were followed for 30 days. The starting dose for lixivaptan was 50 mg once daily and then titrated to 25-100 mg once daily depending on serum sodium concentrations. Initial titration occurred in a monitored inpatient setting and then treated as outpatients for the remaining follow-up.

Primary Endpoint: The primary study endpoint is the change from baseline in serum sodium concentrations at day 7 of treatment.

Status: The LIBRA Study began enrollment in April 2008 and the primary endpoint follow-up for the last patient enrolled was completed in June 2010.

What clinical data are available from the LIBRA study?

The LIBRA Study Results were presented as an abstract poster during the Late-Breaking Clinical Trial session of the American Society of Nephrology's Kidney Week in 2010.

LIBRA Study Late-Breaking Clinical Trial Abstract

LIBRA Study Poster

According to Translational Neuroscience LLC, the clinical research organization contracted by Cornerstone Therapeutics for the LIBRA study, the LIBRA study clinical data will be published in Kidney International. Translational Neuroscience LLC does provide an abstract for this publication. In the abstract, the LIBRA Investigators state that the study met its primary endpoint. Specifically, lixivaptan increased serum sodium concentrations at Day 7 by 6.7 ± 0.7 mEq/L vs. 4.5 ± 0.8 mEq/L with placebo (p=0.034). The investigators conclude that lixivaptan safely and effectively corrects serum sodium concentrations in subjects with euvolemic hyponatremia.

LIBRA Study Clinical Data Abstract

What do we know about the HARMONY study?

HARMONY, a multicenter, double-blind, placebo-controlled, phase III study, assessed the effect of lixivaptan on serum sodium concentrations in 206 non-hospitalized patients with euvolemic hyponatremia (clinicaltrials.gov identifier: NCT00876798).

HARMONY Study

Key inclusion criteria: baseline serum sodium concentration <135 mEq/L. In contrast to the LIBRA study, HARMONY is initiated in the outpatient setting and does not require patients be hospitalized for initial titration.

Design: After 3:1 randomization to either lixivaptan or control, treatment patients were initiated with a starting dose of 25 mg once daily and then titrated to 25-100 mg once daily depending on serum sodium concentrations. All treatments were performed in the outpatient setting.

Primary Endpoint: The primary study endpoint is the change from baseline in serum sodium concentrations at day 7 of treatment.

Status: The HARMONY Study began enrollment in June 2009 and the primary endpoint follow-up for the last patient enrolled was completed in November 2010.

What clinical data are available from the HARMONY study?

According to Translational Neuroscience LLC, the clinical research organization contracted by Cornerstone Therapeutics for the HARMONY study, the HARMONY study clinical data will be published in Kidney International. Translational Neuroscience LLC does provide an abstract for this publication. In the abstract, the HARMONY Investigators state that the study met its primary endpoint. Specifically, lixivaptan increased serum sodium concentrations at Day 7 by 3.2 ± 0.5 mEq/L vs. 0.8 ± 0.6 mEq/L with placebo (p<0.001). The investigators conclude that lixivaptan can be safely initiated in the outpatient setting and effectively increases serum sodium concentrations in outpatients with euvolemic hyponatremia.

HARMONY Study Clinical Data Abstract

Data from the LIBRA and HARMONY studies have been disclosed. Why have data from the BALANCE Study not been disclosed?

Bullish Perspective: The BALANCE study is a larger, more complex clinical trial than either LIBRA or HARMONY. The data collected may have required additional time to perform the proper analyses. In addition, the market potential for lixivaptan in hypervolemic hyponatremia associated with HF is strategically and economically more important to Cornerstone Therapeutics than euvolemic hyponatremia associated with SIADH. Lixivaptan not only prevents water reabsorption, but increases solute-free water excretion (aquaresis). It is this aquaretic effect for the treatment of volume overload in HF that constitutes the other major clinical program for lixivaptan that has been evaluated in a large phase II trial. Because the stakes are higher for any data disclosure in the HF space, Cornerstone Therapeutics may be seeking publication in one of the more prestigious medical journals. This process also could have added to the delayed timeline. Because the primary endpoint is the same for BALANCE, LIBRA, and HARMONY, investors may be confident that BALANCE will meet its primary endpoint since LIBRA and HARMONY both did.

Bearish Perspective: The BALANCE study likely missed its primary endpoint, and Cornerstone Therapeutics may be spending a considerable amount of time data mining in order to characterize the data in the best possible light. Even though LIBRA and HARMONY met their primary endpoints, a closer look at the trending p-values does not guarantee BALANCE will meet its primary endpoint. In fact, the trend may support the opposite conclusion. HARMONY enrolled healthier patients with fewer co-morbidities in the outpatient setting. Improving serum sodium concentrations in these patients using lixivaptan may have been clinically less complex than LIBRA where patients were initially hospitalized. As the patient population worsened, the p-value shifted from <0.001 in HARMONY to 0.034 in LIBRA. BALANCE enrolled HF patients hospitalized with volume overload and hyponatremia.

This patient population is considerably more complex and clinically worse than the patient populations in both HARMONY and LIBRA. HF treatment including loop diuretics reduces serum sodium concentrations which could be a competing factor that reduces the efficacy of lixivaptan to increase serum sodium concentrations. It is quite possible that the p-value for the change from baseline in serum sodium concentration observed in BALANCE is >0.05 (not statistically significant). Even though BALANCE has a larger sample size and is powered to detect smaller changes in serum sodium concentration, there is no guarantee that this will offset the above statistical observations and concerns.

Why is FDA's Cardiovascular and Renal Drugs Advisory Committee (CRDAC) reviewing the NDA for lixivaptan on September 13, 2012?

Bullish Perspective: Even though the clinical data from BALANCE, LIBRA, and HARMONY are likely positive, the indication being sought by Cornerstone Therapeutics for lixivaptan is quite broad and includes a diverse patient population. Because of this broad indication and the fact that the lixivaptan phase III studies were complex and included different patient populations, FDA probably is convening CRDAC to understand the safety and efficacy within the various subgroups in order to develop expert consensus regarding the extent of the lixivaptan label. The likely CRDAC outcome is a positive recommendation for a broad and favorable lixivaptan label that covers both hypervolemic hyponatremia associated with HF and euvolemic hyponatremia associated with SIADH.

Bearish Perspective: The LIBRA and HARMONY studies likely support approval for the lixivaptan indication in euvolemic hyponatremia associated with SIADH, but BALANCE as a whole probably does not support approval for the lixivaptan indication in hypervolemic hyponatremia associated with HF. Because BALANCE is complex and prospectively stratified patients by baseline serum sodium concentrations, FDA probably is convening CRDAC to understand any potential safety and efficacy within the various BALANCE subgroups. Regarding hypervolemic hyponatremia associated with HF, CRDAC could make a recommendation against the indication in its entirety or they could recommend for a more narrow indication within a specific patient subgroup where it is believed lixivaptan was efficacious.

What other factors should be considered prior to the CRDAC meeting on September 13, 2012?

Outside of hyponatremia, the other major clinical indication for lixivaptan is the treatment of volume overload in patients with HF. Rather than evaluating increases in sodium serum concentration like in BALANCE, Cornerstone Therapeutics has evaluated lixivaptan in a multicenter, randomized, double-blind, placebo- controlled, parallel group, phase II trial to understand its effect on volume unloading (clinicaltrials.gov identifier: NCT01055912).

Phase II Study in Volume Overload

170 patients were randomized 2:1 to receive lixivaptan 100 mg (two 50 mg capsules) once daily or matching placebo orally for 8 weeks. The study began in January 2010 and was completed in September 2010. The primary endpoint was the change from baseline in body weight at Day 1, and body weight evaluations at Weeks 1, 2, 4, and 8.

The results from this study were published in June 2012 in the European Journal of Heart Failure, vol. 14, no. 6, pg. 642-651.

The results for the primary endpoint were highly significant at Day 1 (p<0.001), and at Week 1, 2, and 4 (p<0.01), but not significant at week 8.

Phase II Study Publication

Bullish Perspective: This is further evidence of the efficacy of lixivaptan and is great news that Cornerstone Therapeutics is having success in their expansion into HF and volume unloading. The HF market is growing and HF hospitalizations are a significant economic burden on the healthcare system. While lixivaptan for the treatment of hyponatremia is important, lixivaptan's aquaretic effect for the treatment of volume overload is much more lucrative for shareholders and is more likely to spark collaboration agreements with big pharma than hyponatremia alone.

Bearish Perspective: The fact that Cornerstone Therapeutics already published results from a phase II study for the treatment of volume overload only magnifies the fact that they have not disclosed any data regarding the phase III BALANCE study for the treatment of hypervolemic hyponatremia. Given the fact the same National Principal Investigator is associated with all four studies (BALANCE, LIBRA, HARMONY, and the phase II study in volume overload), it does not make sense why publication or disclosure of the BALANCE data has not occurred, especially if the data is positive. If the BALANCE data is negative, the National Principal Investigator is not under obligation to publish, but Cornerstone Therapeutics should inform shareholders of this material information prior to the CRDAC meeting. It is important to note that a key secondary endpoint in the BALANCE study was the change from baseline in body weight at day 2. This is the primary endpoint for this phase II study that began three years after BALANCE. It is plausible that BALANCE may have missed its primary endpoint for hyponatremia, but lixivaptan may have shown a very strong aquaretic effect which may have caused BALANCE to meet this secondary endpoint. As a result, this phase II study was designed to more adequately test this aquaretic effect for its primary outcome.

Here is some cautious language from the publication text: "Mean changes from baseline in serum sodium levels were minimal and mean levels remained within normal limits throughout the study in both treatment groups."

While this phase II study did not require patients to have hyponatremia, it is important to note that patients were not excluded if they had hyponatremia. Therefore, it is likely that a significant number of patients enrolled met the criteria for hyponatremia (serum sodium concentration <135 mEq/L). If lixivaptan improved serum sodium concentration in HF patients with hyponatremia, it would have been appropriate to discuss this patient subgroup in detail.

"This study enrolled participants with HF and volume overload, irrespective of their sodium level. It would be interesting to know whether the diuretic effect of lixivaptan is more enhanced in the subset of participants with HF, volume overload, and hyponatremia. THE BALANCE study, a randomized, double-blind, placebo-controlled assessment that evaluated the effects of lixivaptan 50-200 mg daily in patients hospitalized with worsening HF and with hyponatraemia, was recently completed and the study results should further define the role of lixivaptan in patients with HF, hypervolaemia, and hyponatremia."

It is clear the investigators are interested in the diuretic effect (volume unloading) of lixivaptan and are looking to BALANCE for confirmation of this diuretic effect in patients specifically with hyponatremia. There is no mention of the role of lixivaptan for the improvement of serum sodium levels in patients with hyponatremia. Short-term investors should be cautious that Cornerstone Therapeutics is focused on the more lucrative market for treating volume overload (which they have positive data for) and moving away from hyponatremia (which they may not have positive data for).

Conclusions

Given the current body of evidence at this time, I feel that the risk for short-term investors is high and that the bearish perspective is the more likely outcome at the CRDAC meeting scheduled for September 13, 2012. Investors should be concerned about the lack of disclosure from Cornerstone Therapeutics regarding the BALANCE study clinical data.

Investors should be concerned with the statistical trends observed from LIBRA and the possibility that BALANCE may miss its primary endpoint. Investors should be concerned that the lixivaptan clinical data may only support the indication for euvolemic hyponatremia associated with SIADH, and that FDA is convening CRDAC for the primary purpose of narrowing or rejecting the indication for the treatment of hypervolemic hyponatremia associated with HF.

While long-term investors should like the move towards the treatment of volume overload in HF for lixivaptan, short-term investors should be cautious with the speed Cornerstone Therapeutics and the clinical investigators were to publish data from a phase II study when Cornerstone Therapeutics should be working on finishing whatever analysis is required for the phase III BALANCE study so that they can inform the shareholders of this material information prior to the CRDAC meeting.

The closer we move towards the CRDAC meeting scheduled for September 13, 2012, without any disclosure from Cornerstone Therapeutics regarding the BALANCE clinical data, the more confident I am with this bearish perspective. Cornerstone Therapeutics will host their Q2 2012 Conference Call at 8:30 a.m. ET on Thursday, August 9, 2012. Investors should put pressure on Cornerstone Therapeutics Senior Management to provide more details regarding the BALANCE study clinical data.

Source: Cornerstone Therapeutics - What Investors Need To Know Before FDA Advisory Meeting