Teva's long-delayed MS contender runs into yet another setback

Teva CEO Erez Vigodman

Teva Pharmaceutical's ($TEVA) quixotic efforts to develop a next-generation multiple sclerosis therapy hit another snag as safety issues forced the company to limit dosing in a pair of ongoing trials designed to support approval.

On the advice of its independent data monitors, Teva has stopped doling out the highest doses of its drug, laquinimod, after noting a rash of cardiovascular side effects. In one Phase III study targeting the common relapsing-remitting type of MS, 7 patients getting 1.2 mg of laquinimod ran into cardio risks, the company said, and one patient in the high-dose group in a separate trial on the rarer primary-progressive MS had the same issue.

The resulting imbalance convinced Teva's data monitoring committee to recommend discontinuing dosing in those groups, and Teva is now planning to administer only lower doses and placebo as each trial moves forward.

The latest setback piles onto years of delay for laquinimod, which Teva has pegged as an heir to its blockbuster MS therapy Copaxone, a drug that lost patent protection last year. Laquinimod has endured a pair of Phase III disappointments and has failed to win over regulators in Europe, but Teva and partner Active Biotech have kept the faith, working through 5 MS trials with the drug and expanding the program to include a Huntington's disease study.

Teva has said that it expects to report final Phase III data on laquinimod next year and win FDA approval in 2018, but whether the drug's lower dose can demonstrate the efficacy needed to sway regulators remains a serious question. Evercore ISI analyst Umer Raffat remains cautiously optimistic, noting that past results and the absence of cardio adverse events with smaller doses of laquinimod suggest the drug could meet its goal of delaying disability progression in MS.

But even if the drug comes through, the MS market has evolved since Teva first set out with laquinimod. Oral therapies including Biogen's ($BIIB) Tecfidera and Novartis' ($NVS) Gilenya have become the standard of care for patients with mild disease, while intravenous therapies like Sanofi's ($SNY) Lemtrada and Biogen's Tysabri are prescribed for those with more severe MS. And on the horizon is Roche's ($RHHBY) injectable ocrelizumab, a therapy analysts say could be worth up to $7 billion in peak annual revenue if regulators sign off on it this year.

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