Axovant Sciences Ltd (NASDAQ:AXON)
Pharmaceutical firm Axovant Sciences Ltd (NASDAQ:AXON) has disclosed that development for a trial Alzheimer’s drug would be halted after it failed to meet its endpoints. Consequently shares of the company fell by 74.7% to settle at $6.13 on Tuesday – a record low.
According to the New York-based firm, there was no difference between a placebo and the drug (known as intepirdine) in the trial involving 1,150 participants. The trial measured the ability of trial participants to carry out regular daily activities such as bathing and dressing. The drug did not affect brain power significantly.
Intepirdine was meant to be taken daily. It is in the class of treatments known as 5-HT6 antagonists. These drugs work by assisting in the release of acetylcholine by blocking 5-HT6 receptors. Acetylcholine is a neurotransmitter which is required in order to perform normal cognitive activities. The failure has raised doubts over whether the mechanism has potential in the development of Alzheimer’s treatments.
“Following a slew of failures with other 5-HT6 receptor antagonists, Axovant Sciences Ltd (NASDAQ:AXON)’s intepirdine put the nail in the coffin for the mechanism in Alzheimer’s disease,” Brian Skorney an analyst at Baird wrote in a research note.
Alzheimer’s is the most common type of dementia. In the United States it affects approximately 5.5 million people. Earlier in the year Lundbeck, a pharmaceutical firm based in Denmark, revealed that the late-phase trials of a similar drug using the same mechanism had failed to meet the endpoints as well. Other pharmaceutical companies that have failed to develop an Alzheimer’s drug include Merck and Eli Lilly.
Over the years drug companies have invested billions of dollars trying to find a treatment for Alzheimer’s since the potential global market for a cure is 44 million-strong. So far only four Alzheimer’s drugs have received U.S. Food and Drug Administration (FDA) approval. The last time the FDA greenlit a new Alzheimer’s drug was 14 years ago. According to some analysts and doctors, pharmaceutical firms are conducting trials without having a full understanding of the science behind the disease.
Axovant Sciences Ltd (NASDAQ:AXON) did not develop intepirdine from the ground up and had actually bought the rights from GlaxoSmithKline three years ago at a price of $5 million. The pharmaceutical startup went public a year later in 2015 achieving a valuation of close to $3 billion. At the time questions were raised over the lofty valuation given that it was based on a drug which in the hands of the previous owner, GSK, had flopped consistently in trials.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.