Merck's Entry Into The Parkinson's Disease Drug Race

| About: Merck & (MRK)

Parkinson's Disease (PD), unlike Alzheimer's, has good therapeutic treatment. The mainstay of treatment involves dopaminergic agonist strategies, (1) Levodopa which is a dopamine precursor, (2) direct dopaminergic agonists, and (3) monoamine oxidase-B (MAO-B) inhibitors. Although treatment options are good, problems with PD therapy remain. Long term use of the most effective drug, Levodopa, is associated with dyskinesias. Also, there is little evidence that any of the drugs are disease modifying drugs. i.e., halt disease progression. There are trials testing whether the MAO-B inhibitors are disease modifying. (For a nice summary of Parkinson's and potential drug development, see this article by another Seeking Alpha contributor.)

Another troublesome aspect of PD therapy is that after long term use of Levodopa, patients experience an "off" effect. This is an often unpredictable loss of therapeutic drug effect. Merck (NYSE:MRK) is developing Preladenant, which is an adenosine 2A (A2A) receptor antagonist. There is promising Phase 2 trial data that suggest Preladenant may reduce "off" time. In preclinical animal models, preladenant monotherapy improves motor function without causing dyskinesia. But more relevant to clinical development, preladenant in combination with levodopa improved motor function without worsening dyskinesia. In a phase 2 trial, preladenant as an adjunct to Levodopa decreased "off" time compared to placebo. All patients in the study were on Levodopa therapy. Phase 3 trials, the first of which may have results in early 2013 are underway; Placebo Controlled Study of Preladenant in Participants With Moderate to Severe Parkinson's Disease (P07037 AM3), A Placebo- and Active Controlled Study of Preladenant in Subjects With Moderate to Severe Parkinson's Disease (Study P04938 AM5), and An Active-Controlled Extension Study to P04938 and P07037 (P06153 AM3).

Idiopathic (unknown origin) PD is caused by a loss of dopaminergic neurons in the Substantia Nigra and it is this loss of neurons that is the focus of disease modifying drug development. But substantial drug development efforts are also focused on what is coined the direct and indirect pathways. Dopamine 2 (D2) receptors and A2A receptors are colocalized on striatal neurons. The idea is that D2 receptor agonists and A2A receptor antagonists reduce the inhibitory output of the basal ganglia indirect pathway, thus increasing excitatory output of the thalamus to the motor cortex and thus increasing excitability of cortical motor neurons (for a complete discussion of the direct and indirect pathways and PD, see Chapter 4: Basal Ganglia). Other companies are developing potential drugs that also target striatal neurons, such as Addex Therapeutics Ltd. (OTC:ADDXF). On the other hand, Acadia (NASDAQ:ACAD) is developing a drug for treating dementia in PD.

Clinical trial of another A2A receptor antagonist, fipamezole, have provided evidence that it may be useful in reducing Levodopa induced dyskinesias. Fipamezole is being developed by Santhera Pharmaceuticals (SANN.SW). Albeit less potent, caffeine is also an A2A receptor antagonist. Coffee drinking is associated with decreased risk of PD. More to the point, coffee drinking may decrease motor problems of patients with PD. Also related to this discussion, coffee consumption may ward off progression of dementia and may decrease all cause mortality (see another Seeking Alpha article).

Although the phase 2 efficacy data bode well for Preladenant, predicting outcome of Phase 3 trials is fraught with uncertainty. Given the long history of coffee consumption, safety would seem less of a concern, but the only thing really predictable about the outcome of a phase 3 trial is it is unpredictable. But, Preladenant does appear promising.

Worldwide revenue in 2012 from PD drugs exceeds $4.5 billion. An on patent adjunct drug for use with Levodopa would likely see sales in the billions of dollars if it were reasonably effective. It also lends itself to development of combination and sustained release drugs containing Preladenant and Levodopa. Merck already markets Sinemet, which is a combination of Levodopa and Carbidopa (reduces peripheral breakdown of Levodopa). Thus Merck already has an effective sales force for PD drugs. In this continuing analysis of Merck's pipeline, the information suggests that Preladenant adds substantially to the potential of Merck's pipeline. In the end, an analysis of Merck's drugs coming off patent versus the potential for revenue replacement and possible revenue growth from new drugs will be required to decide whether shares of Merck, with a PE of 21 according to Yahoo Finance, are an attractive buy.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.