Neurocrine Biosciences (NBIX, Financial) announced in April that the company’s drug Ingrezza (valbenazine) has been approved by the U.S. Food and Drug Administration (FDA) for treating tardive dyskinesia (TD) – a burdensome and often incurable form of dyskinesia. The FDA granted this application Fast Track, Priority Review and Breakthrough Therapy designations.
Currently, benzodiazepines are used to control symptoms of TD. While benzodiazepines can be effective, their use is limited by the development of tolerance, which requires ever-increasing doses to control TD symptoms. Because of the problems associated with benzodiazepines, Ingrezza is set to make a huge impact on those suffering from the condition, being the first medication approved for long-term treatment. Doctors, patients and investors are excited.
The company is up on the news, but there's potential for an expansion on the gains near term. Later this month, Neurocrine expects to put out top-line data from a Phase II study of Ingrezza in pediatric patients with Tourette's syndrome. The application is (if all runs smoothly) going to be submitted as an sNDA (an expansion on the already approved indication with the same drug) and will be based on a Phase III that is designed based on the outcome of the company's Phase II program; most notably the Phase II for which we are set to pick up results this month. The study – T-Force GREEN – is a randomized, double-blind, placebo-controlled, multidose, parallel group Phase II study that has enrolled approximately 90 children and adolescents. These subjects receive once-daily dosing of Ingrezza or placebo during a six-week treatment period to assess the safety, tolerability and efficacy of the drug. The primary endpoint of this study is the change from baseline of the Yale Global Tic Severity Scale (YGTSS) between placebo and active treatment groups at the end of week six.
There are also a few deep pipeline target indications, which might add value to this one longer term. Right now it's all about the commercial rollout in TD and the progression of the Tourette's program. In the interest of clarity, though, and to reference these alternative indications, the company is conducting studies for Ingrezza in essential tremor and for congenital adrenal hyperplasia. In the third quarter of this year the company’s partner, AbbVie (ABBV, Financial), is set to submit an NDA for elagolix in endometriosis; and sometime in the second half of the year, another partner, BIAL, is planning to initiate discussions with the FDA on opicapone in Parkinson's disease.
There are a lot of exciting prospects for Neurocrine as the year continues to progress. Right now, though, let’s focus on Ingrezza and its application in TD. To better understand the drug's potential for treating the condition, one must understand its symptoms and its impact on sufferers’ lives.
Let's differentiate between dyskinesia and TD. Dyskinesia causes the sufferer to have involuntary and receptive body movements such as facial grimacing, tongue movement, lip smacking and excessive eye blinking. These symptoms come on fast (and when a patient is very young) and very quickly reach maximum severity. In TD, on the other hand, the symptoms have a slow or belated (tardive) onset.
Why this slow onset? This isn’t 100% clear, but we know that TD most frequently occurs as the result of long-term or high-dose use of antipsychotic drugs, or in children as a side effect from using drugs for gastrointestinal disorders. The disease progresses slowly as the use of the drugs in question becomes chronic. As an additional complication, and on top of the underlying condition itself, TD may cause sufferers to become socially isolated. It increases the risk of dysmorphophobias and can even lead to suicide. This is further complicated by the fact that emotional or physical stress can increase the severity of symptoms of TD, too. This necessitates the use of the very drugs that are thought to cause the condition in the first place.
This is where Ingrezza comes into play.
The drug's approval was based on the results from a Phase III, randomized, double-blind, placebo-controlled, parallel-group, fixed-dose study comparing once-daily valbenazine at 80 milligram doses and 40 milligram doses versus placebo. The trial was conducted over six weeks in patients suffering from underlying schizophrenia, schizoaffective condition or mood disorders (and therefore taking psychotropic medication).
Following the study’s conclusion, participants who received valbenazine had improvement in the severity of their involuntary movements as compared to the participants who received placebo. The application for valbenazine also included results from the Kinect 2 and Kinect 3 trials, which evaluated over 330 patients with TD. The drug was well tolerated by participants, and there was no observable worsening of depression, suicidal ideation or other related behaviors.
With these sorts of approvals, and in order to understand why the market potential for the drug exists as it does, an understanding of the science that underpins them can really help investors.
Ingrezza works by inhibiting what's called VMAT2 (presynaptic human vesicular monoamine transporter type 2). VMAT2 is primarily responsible for repackaging and transporting monoamines (dopamine, norepinephrine, serotonin and histamine) in presynaptic neurons. By selectively inhibiting VMAT2, therefore, Ingrezza works by causing a reduction of dopamine release in the synaptic cleft – the region that controls movement and motor function. The idea, then, is that this should cause a marked decrease in a sufferer's uncontrollable movements. That's the theory, and the company was able to validate it with the above-referenced study.
What about market potential?
To determine the numbers, let’s look at a study conducted at the Connecticut Mental Health Center that calculated the risk of developing TD in patients on antipsychotic medication. Any patient who had been on antipsychotic medications for at least three months was eligible as long as another neurologic disease did not interfere with the prospective diagnosis of TD.
Subjects were examined with what's called the Abnormal Involuntary Movement Scale (AIMS), an industry gold standard evaluation tool. Evaluation happened twice each visit with six-month follow-ups. Observers who had been specially trained to evaluate the patients detected 52 new TD cases – out of the 352 subjects – which equates to a risk of 19.7% over 3.9 years. For argument's sake, then, about 20% of patients being treated with antipsychotic medication developed the condition in a four-year time span.
Currently, the U.S population is around 326 million, and according to the Centers for Disease Control and Prevention (CDC), about one in 10 Americans is on psychotropic drugs (around 32.6 million Americans). In considering the results of the aforementioned study, this means that around 6.5 million Americans are at risk for developing TD over a given four-year period. Considering that Neurocrine Biosciences' Ingrezza is the only direct label approved treatment for the condition, this puts the company in a great position moving forward.
So that's TD.
As a near-term catalyst, and again as referenced above, there's Phase II data set to hit press from the Tourette's trial in late May. If the drug hits on its primary endpoint in the study, there's some real and immediate upside on offer in its share price. What we're looking for, then, is the change from baseline of the YGTSS between placebo and active treatment groups at the end of Week 6. If there's a marked improvement between placebo and active, the company is in the green. Keep in mind that an already completed Phase II with the same asset and in the same indication (but in adults) failed to hit on this endpoint at eight weeks. It did, however, translate to a significant improvement in overall symptoms of Tourette's as evidenced by what's called the Clinical Global Impression of Change (p=0.015). This is a risk factor on the Phase II data, but one that's mitigated somewhat (although not entirely) by the previous secondary hits.
Disclosure: The author does not own any of the stocks discussed in this article and does not intend to open a position in any stocks discussed within the next 30 days.
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