After a very brief and tumultuous tenure at the startup with big hopes and backing, former Medivation chief David Hung, M.D., has resigned as CEO of Axovant.
The startup, part of the ‘Vant’ family of biotechs run by Vivek Ramaswamy and parent company Roivant Sciences, was looking to use an old, discarded med to try and defeat Alzheimer’s, but came up short in several key tests over the past six months.
Axovant recently came out with negative results in a phase 2b trial in Lewy body dementia (DLB), spelling the end for its once leading candidate intepirdine.
Prospects for intepirdine were already looking shaky last year when the MINDSET trial showed no benefit for the drug in mild-to-moderate Alzheimer’s disease, and analysts had already relegated the project to speculative status.
The 5-HT6 inhibitor then suffered terminal setbacks, missing its objectives in the phase 2b HEADWAY trial in DLB, as well as pilot studies looking at gait and balance in dementia patients.
Intepirdine—originally licensed from GlaxoSmithKline for the knockdown price of $5 million upfront in 2014—has now gone the way of Lundbeck’s idalopirdine, a 5-HT6 inhibitor that failed in late-stage Alzheimer’s testing in 2016. Both drugs were being developed in Alzheimer’s on the premise that they could boost the effect of older drugs such as cholinesterase inhibitors or NMDA antagonists.
It’s now turning its attention to ex-Arena drug nelotanserin, and last month, Axovant reported a trend toward efficacy and no safety signals in a phase 2 trial in DLB.
Nelotanserin—a 5-HT2a receptor inverse agonist—is being tested for its ability to reduce visual hallucinations and sleep disorders in patients with DLB as well as for Parkinson’s disease dementia (PDD).
The drug showed a trend toward improvement on the Unified Parkinson's Disease Rating Scale (UPDRS) part III in PDD patients, suggesting an effect on hallucinations, as well as a benefit in DLB patients that just achieved statistical significance.
The drug wasn’t able to significantly improve the Scale for the Assessment of Positive Symptoms (SAPS-PD) scores in the study, however, although Hung at the time said that there was a significant benefit on this measure for patients with more severe disease at enrollment.
But then, a day later, it announced that, actually, it had got the nelotanserin data wrong: “The previously reported data for this population (n=19) that nelotanserin treatment at 40 mg for two weeks followed by 80 mg for two weeks resulted in a 1.21-point improvement (p=0.011, unadjusted) were incorrect,” it said in a sheepish admission.
"While nelotanserin treatment at 40 mg for two weeks followed by 80 mg for two weeks did result in a 1.21 point improvement, the p-value was actually 0.531, unadjusted [in the world of stats, a fail].
It added: “Based on these updated results, the company will continue to discuss a larger confirmatory nelotanserin study with the FDA that is focused on patients with dementia with Lewy bodies with motor function deficits. The company may further evaluate nelotanserin for psychotic symptoms in DLB and Parkinson’s disease dementia (PDD) patients in future clinical studies.”
Embarrassing, and bad optics, as the saying goes, leading it to become one of the worst performers at JPMorgan last month as a result, with its shares being halved in one day.
And remember: Axovant got off an eye-watering $315 million IPO based on what now appears to be hype and hope. It was once seen as having a market valuation of more than $2 billion; today its market cap is around $200 million, and trading at less than $2 a share. It was down 16% premarket on the news this morning.
David Hung is the CEO who sold his company, Medivation, to Pfizer for $14 billion. He got the plaudits, a big payday, and after the deal in 2016, seemingly a free pass to almost any biopharma job he wanted.
It was a gamble for Hung to join Axovant, and clearly one that hasn’t paid off. He remains as a scientific adviser across the Vants, but will also seek to “pursue other opportunities.”
But it doesn’t end there, as there are more departures across his entire team. President and COO Marion McCourt has also resigned “to pursue another opportunity,” according to the company, and directors Kate Falberg, Tony Vernon, and Patrick Machado have also all resigned as members of the company’s board.
Pavan Cheruvu, M.D., who has been involved with Axovant and Roivant since 2015, and a former management consultant at McKinsey & Company, becomes the new CEO.
Roger Jeffs, Ph.D., former president and co-CEO of United Therapeutics, and George Bickerstaff, former CFO of Novartis Pharma, have also joined the Axovant board of directors, as they look to fill the gaps.
“I have appreciated the opportunity to lead Axovant and have enjoyed working with the teams at both Roivant and Axovant,” says Hung. “I hope to continue to assist these teams as a scientific advisor to the Roivant family of companies.”
“I would like to thank David for his commitment to Axovant over the past ten months, and we wish him well in his future endeavors,” said Vivek Ramaswamy, CEO of Roivant Sciences and Chairman of Axovant’s board of directors.
“Roivant remains firmly committed to Axovant’s long-term success. Axovant will need to operate as a lean, entrepreneurial organization in the near term. In that context, Pavan is the right leader for the company at this time. Pavan is emblematic of the future industry leaders we hope to cultivate within Roivant, and I have full confidence in his ability to rebuild Axovant.”
“I am excited for the opportunity to lead Axovant, and I look forward to getting started,” added Cheruvu. “Our top priorities are to expand the pipeline with high-quality product candidates, solidify next steps for nelotanserin and RVT-104, and ensure operational excellence across all areas of the business.
“We will provide a comprehensive update on the company’s strategy by mid-year. Given Axovant’s strong cash position, we are starting from a solid foundation from which to rebuild the company’s value.”
Before the announcement this morning, analysts at Jefferies said in a note to clients: “While we think the company is likely to in-license a new compound to drive shareholder value, timing is uncertain and, as such, we remain on the side-lines and reiterate our HOLD rating.
“Big Picture: We continue to think the company needs to in-license at least 1 or more neurology assets this year to re-invigorate upside potential and investor interest. We would like to see mgmt in-license some new programs in mid/late-stage that could provide new value propositions. While there is a potential pipeline update that could occur over the coming months, the probability of success looks low and we think investors would be better served by in-licensing new assets to diversify and provide more shots on goal.”
Although, the analysts added: “CEO David Hung appears committed (we can only presume, assuming strong Roivant support and sufficient capital to bring in new products), we feel there is among investors some recent growing uncertainty on how committed he is now, and they would like clarity on him staying to develop and bring in new assets.” They now have clarity, and a new CEO.