Lundbeck and Otsuka's Antipsychotic Drug Rexulti Fails Two Bipolar Phase III Trials

Denmark’s H. Lundbeck A/S and Japan’s Otsuka Pharmaceutical announced that their brexpiprazole failed to meet its primary endpoint in two Phase III clinical trials to treat manic episodes in patients with bipolar I disorder. The drug was approved by the U.S. Food and Drug Administration (FDA) in July 2015 for adjunctive therapy to antidepressants in adults with major depressive disorder and for adults with schizophrenia. It was also approved in Europe and Canada in 2018 and 2017, respectively, to treat schizophrenia. It is marketed under the brand name Rexulti in non-European markets and as Rxulti in Europe.

The drug was tested in two multicenter clinical trials compared to placebo in about 650 bipolar I patients who had acute manic episodes, with or without mixed features, that were severe enough to require hospitalization. The primary endpoint was statistical separation as measured by the Young Mania Rating Scale (YMRS) at three weeks.

The companies indicated that the placebo effect on the rating scales was much higher than expected. The drug was typically well tolerated.

They expect to continue analysis to decide what to do next. The data from these trials don’t have any effect on the already approved indications for major depressive disorder and schizophrenia.

Analysts with Leerink expressed surprise at the results. Two other drugs on the market, Otsuka’s Abilify and Allergan’s Vraylar that use similar modes of action, have been shown to be effective in this indication. “Amongst the possible psychiatry indications that could be pursued in this space, Bipolar I manic episodes is one of the more ‘low hanging fruit’ indications, as it is often the initial bipolar spectrum approval that allows products to launch or expand in psychiatry—all of which adds to our surprise here … however, we will not make any changes to our sales estimates for Rexulti because we don’t include much sales for this indication anyway,” they wrote.

The news is certainly not good for Lundbeck, which recently reported a tough fourth quarter, marked by significant competition from generics. Revenue dropped 4.5 percent, the first quarterly decline in about four years. It was driven by a 25 percent decrease in its legacy portfolio. In particular, its anti-depressant Lexapro sales fell 28 percent, its Onfi for seizures was down 40 percent, and Xenazine for Huntington’s disease was down 54 percent.

Rexulti was up 52 percent, Abilify Maintena was up 23 percent and Trintellix to treat depression was up 39 percent.

Stephen Simpson, writing for Seeking Alpha, said, “Although revenue pressure is real, and Onfi has been an absurdly profitable drug for the company, gross margin still improved by 170bp as reported and 130bp on a core basis. Core earnings plunged 20 percent, though, and mixed expectations by 11 percent largely due to higher R&D expenses tied to wrapping up the failed AF35700 clinical program. As these things go, then, I’d call this not quite as bad of a miss as it may appear, but it was still a disappointing result.”

The company’s chief executive officer, Deb Dunsire, took the reins four months ago. Her strategy to deal with the bad quarter and generic competition is dubbed “Expand and Invest to Grow,” which is essentially to maximize the value of its existing brands and rebuild its pipeline through internal R&D and more aggressive in-licensing and possibly mergers and acquisitions. It also expects to expand its focus beyond schizophrenia, depression, Parkinson’s, and Alzheimer’s to include other neurological disorders, such as movement disorders.