Axovant shares capitulate after Alzheimer’s drug failure

Axovant Sciences was set up with just one drug candidate in its portfolio, and a risky one, at that. The treatment had been bought from GSK for $5 million in 2014, despite failing several trials with the company but the biotech saw enough in the drug to take the gamble.

The treatment is intepirdine and the target was Alzheimer’s disease. Many regarded the biotech as taking a shot in the dark with the drug, after numerous companies had tried and failed to provide a therapy for the disease. In particular, both Pfizer and Lundbeck had failed with the same target, 5HT6.

Axovant, however, decided to take the shot and, unfortunately for themselves and patients, missed – wiping 70% off the value of the company, which amounts to $1.8 billion lost from its market cap.

The company revealed that intepirdine had missed all of its endpoints, barring one secondary endpoint of clinician-interview based impression of change plus caregiver interview.

"While we are deeply disappointed by these trial results, we also are saddened for the millions of patients and families impacted by Alzheimer's disease. However, we believe that the fight against Alzheimer's and other important areas of unmet need in neurology is too important to be derailed by this setback," said David Hung, Chief Executive Officer of Axovant. "We are grateful to the investigators, patients and caregivers who participated in this important trial and supported us in this journey."

It will be a chastening experience for Hung, who had joined the company only recently after successfully leading Medivation through to its eventual takeover by Pfizer for $14 billion. On joining the company Hung had suggested that it was opportunity to make up for a failure to bring through a treatment at Medivation but it now looks like that wait will continue.

The question remains on why the company chose to pursue the drug; the parent company of Axovant, Roivant, has made its name by picking up treatments left on the wayside by big pharma companies. In this case, the reasoning behind the decision was based on a glimmer of hope seen in previous clinical trial data to do with pairing the treatment with generic treatment, Aricept.

With that glimmer gone, the biotech will have to move onto another angle with the candidate, or risk having spent $5 million on a dud; the company has already moved onto pointing towards a Phase 2b study into interpirdine and nelotanserin for the treatment of dementia with Lewy bodies.