Avanir skyrockets as controversial generic combo claims a hit in PhII Alzheimer's study

Avanir's ($AVNR) combinatorial approach to calming dementia-related outbursts among Alzheimer's patients caught the attention of Wall Street on Monday morning. The biotech touted midstage data demonstrating that a match of two treatments--a generic cough suppressant and a long-approved treatment for irregular heartbeat--significantly reduced the level of agitation among the patients in the study. Its stock shot up about 45% on the prospect of gaining an approval for a new Alzheimer's treatment after a years-long drought in the clinic.

According to Avanir there is no treatment specifically approved for the agitation and aggressive outbursts that often afflict people with advanced cases of the memory-robbing disease, which affects millions of patients around the world. So Avanir matched dextromethorphan (commonly found in NyQuil, among other cough meds) and the generic quinidine (used to control irregular heartbeats) into AVP-923--the same combo that Avanir used to win an approval for Nuedexta as a treatment for pseudobulbar effect, a condition characterized by uncontrolled outbursts of intense crying or laughing.

With its stock price soaring, Avanir says it plans to sit down with regulators in the U.S. and Europe to map out pivotal studies for AVP-923. Last year the drug failed a trial for pain, but the biotech clearly believes it still has a panacea for a multitude of ailments, with studies underway for a movement disorder in Parkinson's disease, depression and autism.

Exactly how the FDA, or ultimately payers, would respond to a new drug that simply combines two old ones has not yet come clear. But some members of Congress are likely to rally against any attempts to tie a high price to something like this. Lawmakers Henry Waxman, Frank Pallone and Diana De Gette went after Nuedexta when Avanir priced a $20 generic combo into a $600 therapy. And that approach is likely to present some fresh challenges to the Aliso Viejo, CA-based biotech at some point. The FDA has made it clear that it wants to see some innovative therapies come into the market for Alzheimer's after a long lineup of clinical pratfalls. But it would be quite a stretch to term this new combo drug as an innovation.

"A potential new treatment option that could alleviate agitation or aggression as a result of Alzheimer's disease would have a significant impact on the daily life of these patients and of their caregivers," noted Constantine Lyketsos, a director of the Johns Hopkins Memory and Alzheimer's Treatment Center and a member of the study steering committee, in a statement.

Dr. Joao Siffert

"With no FDA approved drugs for the treatment of agitation in Alzheimer's disease, we believe these results represent a breakthrough for patients," said Dr. Joao Siffert, chief medical officer at Avanir. "We are extremely excited with the prospect of bringing a potential treatment that can provide clinically meaningful relief to these patients and reduce caregiver burden. These study results represent the second neuropsychiatric disorder where AVP-923 has shown benefit and lends support for further advancement of our research programs into related disorders."

- here's the release