Axovant rolls into Phase III with a risky Alzheimer's gambit

Axovant CEO Vivek Ramaswamy

Axovant Sciences ($AXON), rolling the dice on a once-failed Alzheimer's disease treatment, kicked off its big Phase III trial, a make-or-break effort that could spawn a blockbuster drug or liquidate the company's value.

The startup has begun screening volunteers in a planned 1,150-patient study on RVT-101, an oral Alzheimer's treatment acquired from GlaxoSmithKline ($GSK) for just $5 million up front. The plan is to test whether a combination of Axovant's drug and generic Aricept can significantly improve Alzheimer's symptoms compared with the old drug alone, tracking patients over 24 weeks. If RVT-101 comes through, Axovant plans to submit it for FDA approval by the end of 2017, the company said.

That, of course, is a big if. Alzheimer's has long been biopharma's white whale, with a lengthy history of once-promising treatments coming up short in Phase III, forcing billion-dollar write-offs and large-scale reexaminations of how to approach the disease.

But Axovant believes its drug could break that mold. GSK ran four Phase II trials on RVT-101 before selling it, and three were unequivocal failures. But in the fourth, a combination of RVT-101 and Aricept led to a statistically significant improvement on two measures of Alzheimer's, one charting cognition and the other tracking how well patients get through daily activities. That study, too, was technically a failure, as the combination failed its co-primary endpoint of improving patient scores on a dementia test, but Axovant saw enough of a signal to press forward.

Now the company has modeled its Phase III effort accordingly, testing the RVT-101-Aricept combo against the two endpoints in which the pair previously found success. And the FDA has signed off on Axovant's study design, agreeing that success would demonstrate RVT-101's approvability.

But first the drug must do what none has in more than a decade: come through in a Phase III Alzheimer's study. Axovant, which raised more than $300 million in an IPO over the summer, has been careful to downplay the risk, consistently referring to its late-stage trial not as a chancy gamble but as a "confirmatory" study. The fact that the company is looking to "confirm" a Phase II study that failed is not noted in its press materials.

Axovant is run by Vivek Ramaswamy, a former hedge fund manager who founded parent company Roivant Sciences. The biotech has recruited Lawrence Friedhoff, who led the development of Aricept at Eisai, to oversee RVT-101 as chief development officer.

- read the statement

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