Bulls And Bears Alive For Synavive At Zalicus Incorporated

Zalicus Incorporated (ZLCS) remains publicly confident in Synavive, a compound indicated for rheumatoid arthritis (RA) and osteoarthritis (OA). Bulls remain steadfast in Synavive while bears believe this molecule will fail again as it did in the COMET trial.

Bears’ Case: Same Drug, Same Outcome

Zalicus is trying to breathe life into a molecule that was pronounced dead in 2008 when the company was formerly named CombinatoRx. Synavive, or crx-102 – a combination of dipyridamole and prednisolone – failed the COMET trial due to a high discontinuation rate. In the COMET trial, 32 percent of patients dropped out due to side effects – notably headaches. The culprit, it seems, is dipyridamole, a drug often used in the cardiovascular setting as a vasodilator. Headache, in general, occurs when cerebral blood vessels become dilated and is the mechanism that most headache therapies on the market such as Imitrex by Pfizer (NYSE:PFE) and Maxalt by Merck (NYSE:MRK) target by causing vasoconstriction. In fact, the data from Phase 2a for crx-102 indicates a significantly larger number of patients in the Synavive arm experienced headache, nausea, and vomiting relative to the placebo arm. In the Synavive arm, 48 percent of patients experienced headache, 26 percent for nausea, and 22 percent for vomiting. This compares to 0 percent for headache, 6 percent for nausea, and 3 percent for vomiting in the placebo arm. In June, Zalicus announced the initiation of Synergy - a 12 week, double-blind, placebo-controlled Phase 2b trial – to test the efficacy and safety of Synavive for RA. The active ingredients in Synavive have not changed for the Synergy trial and the negative side effect profile should remain the same. Like the COMET trial, there will be a large number of patients dropping out due to the same side effects – headache, nausea, and vomiting. With a large drop in number of patients in the Synergy trial, so will the share price.

There are still a number of areas and concerns that need to be addressed. Will Synavive be an “as-needed” regimen or maintenance therapy and if so, what are the long-term adverse effects of this compound? Patients who are on long-term (months to years) corticosteroids experience a number of intolerable and serious adverse effects. Compromises in bone integrity, cataracts, “moon faces” and “buffalo humps” due to redistribution of fat are not uncommon with long-term corticosteroid use. Being a 12 week trial, Synergy may not be able to address these concerns. To get a better gauge of Synavive and its role in arthritis therapy, there needs to be long-term, head-to-head studies comparing it to current standard-of-care treatments, especially corticosteroids.

Bulls’ Case: Same Drug, Different Formulation, Different Outcome

With a new company name, clinical trial, and a “reformulated” version of crx-102, Zalicus is hoping that this time may be different. The new formulation of Synavive is designed to be dosed once daily and releases medication in a controlled manner throughout the day. This minimizes many of the side effects by eliminating the sharp spikes in serum peak and trough levels post-dose. A number of medications on the market utilize this delivery method. From Seroquel XR from AztraZeneca (NYSE:AZN) to Wellbutrin XL from GlaxosmithKline (NYSE:GSK), molecules are reformulated to an extended-release version to minimize side effects and improve compliance, but in some cases extend the life of the drug after patent expiration. The Synergy trial will demonstrate less incidence of side effects – headache, nausea, and vomiting – and improved tolerability with the new once-daily formulation.

Combining dipyridamole with another medication to elicit synergistic effects is not a novel idea. In practice, dipyridamole is combined with Coumadin (warfarin) and aspirin in the form of Aggrenox to reduce the risk of blood clots and strokes. Side effects such as headaches attributed to Aggrenox are manageable, often transient, and typically improves as therapy progresses.

In Phase 2a studies, Synavive demonstrated statistically significant improvements at day 42 in DAS28, ACR20, CRP, patient global assessment, clinician global assessment, pain measures, and the health-assessment questionnaire versus placebo. In fact, most of the metrics used in the study indicated improvements versus placebo, but not all are statistically significant. Furthermore, data from the Hand OA trial hints at the possible effectiveness of Synavive in this indication. These preliminary findings are encouraging, but have limitations – namely, the number of patients enrolled in the study.

If approved, Synavive will represent a novel therapy in arthritis. With an estimated 28 million Americans affected with either OA or RA, the market potential is significant and market penetration should not be an issue when Synavive is compared with high-dose corticosteroids. The findings from Synergy will show that Synavive is equally, if not more efficacious, and offers a good side effect profile when compared to other “first-line” agents that are on the market.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: All information is provided for informational purposes only and does not serve as investment advice or an offer of management services. There is no guarantee that the information is accurate. All information is subject to change, amendment, and correction without any notice. Any mention of current and past results does not indicate any future expectations or results. All investments are associated with risks and loss of money. Consult with a professional tax, accounting, legal, and/or investment advisor before making any investment decision.

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