February 2, 2016
By Mark Terry, BioSpace.com Breaking News Staff
New York-based Pfizer announced today that it had terminated a mid-stage trial of PF-05212377 for Alzheimer’s, which sent ripples through the market, affecting Axovant , which has a similar drug in trial, RVT-101, that targets the same 5HT6 receptor.
Pfizer was conducting a Phase II clinical trial to determine if PF-05212377, taken for 12 weeks, would improve the cognition and memory of mild to moderate Alzheimer’s patients who were on a stable dose of Aricept (donepezil). In October, during an interim analysis, Pfizer decided it did not and announced the results today.
Axovant Sciences Ltd., with offices in Bermuda and New York, acquired RVT-101 from GlaxoSmithKline for $5 million after GSK gave up on it after failing in several mid-stage clinical trials. Axovant is studying the drug in a Phase III trial, called MINDSET, and isn’t expected to be completed until 2017. In MINDSET, RVT-101 is being given with donepezil and compared to patients who receive donepezil alone.
A third company, Denmark-based Lundbeck, is also developing a drug that targets 5HT6, which is currently in a Phase III study. Results aren’t expected until early 2017.
As reported by The Street, Evercore ISI analyst Mark Schoenebaum contacted Axovant, and was told that Axovant believes its drug is more potent against the 5HT6 receptor than Pfizer’s version. Axovant’s study involves patients with less advanced forms of Alzheimer’s and is treating them longer than the Pfizer study did.
Axovant was founded by 30-year-old Vivek Ramaswamy, a former hedge-fund manager. He founded Roivant Sciences in May 2014, then spun off Axovant in October 2015. The company generated some mild controversy among investors because the company had a $1.8 billion market capitalization. Some analysts were skeptical about the company’s value based on the drug it acquired from GSK.
Axovant has been pretty volatile anyway, although it clearly wasn’t helped by the Pfizer news. Shares originally traded for $29.90 on June 11, 2015, dropped to $16.99 on July 14, popped back up to $21.27 on July 17, then cratered to $11.25 on Aug. 21. Shares bounced around for a while until they peaked at $20.75 on Dec. 16. Shares are currently trading for $12.67.
Analysts at HC Wainwright published a report today giving Axovant a “buy” rating and a price target of $35. Brian Krassenstein, writing for said, “The stock has fallen 22.82 percent or $3.80 following this negative news, hitting $12.85 per share. About 489,661 shares traded hands or 30.55 percent up from the average. AXON has declined 14.53 percent since June 26, 2015 and is downtrending. It has underperformed the S&P500 by 5.66 percent.”
Of three analysts covering Axovant, two gave it a “buy” rating and one a “sell” rating. One optimist gave the stock a price target of $35, while another gave it a price target of $8. Mean price target was $21.50.
Alzheimer’s drug trials are notoriously difficult, with well over 123 drugs having failed in trials. However, any company that makes a drug for Alzheimer’s that actually works has a potential blockbuster on their hands.
