Lundbeck schizophrenia drug fails phase 3, sinking stock

Lundbeck
It is questionable whether the trial's silver linings will justify further investment in the drug. (Lundbeck)

A phase 3 trial of Lundbeck’s Lu AF35700 in treatment-resistant schizophrenia has missed its primary endpoint. The setback to the mooted blockbuster wiped around 30% off Lundbeck’s stock price.

Lu AF35700 is an antagonist at dopaminergic, serotonergic and alpha adrenergic receptors. Notably, the drug has a higher affinity for human dopamine D1 than the receptor’s D2 sibling. Working from the theory that the preference for D1 would lead to better safety and tolerability, Lundbeck moved the drug into phase 3 in the underserved treatment-resistant schizophrenia population in 2016.

Lundbeck, which is well-versed in the unpredictability of late-phase CNS trials, took steps to mitigate the risks of the study. The company took precautions to ensure that only treatment-resistant patients got into the trial and only initiated one phase 3 study, not the two it will likely need to win approval.

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That cautious, staggered entry into phase 3 looks to have been a wise move. Lundbeck is yet to share data from the phase 3 trial, but the headline findings are negative. Most importantly, AF35700 was statistically no better at improving symptom severity than the old Eli Lilly and Johnson & Johnson antipsychotics olanzapine and risperidone, causing the trial to miss its primary endpoint.

Lundbeck found some positives to highlight in its release, noting that the drug was well tolerated and “showed good antipsychotic effects.” However, while Lundbeck is further analyzing the data, it is questionable whether those silver linings will justify further investment in the drug.

The case for advancing AF35700 rests on the unmet need. Generic clozapine is used to treat patients with treatment-resistant schizophrenia. Around 50% of patients respond to the drug, but it causes a range of side effects that can deter people from sticking to the treatment. AF35700 is designed to be free from these side effects. 

However, Lundbeck will need to run another phase 3 to get the drug to patients. Running the clinical trials sequentially allowed Lundbeck to get a look at data from one phase 3 before committing to the second. And with the first coming up short, Lundbeck may decide to cut its losses and move on.

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