Xenon's Teva-partnered pain drug flunks a test in osteoarthritis

Xenon CEO Simon Pimstone

Xenon Pharmaceuticals' ($XENE) Teva ($TEVA)-partnered treatment for osteoarthritis pain missed its goals in a Phase IIb trial, a failure the biotech believes won't derail the drug's development in other indications.

The topical treatment, TV-45070, failed to make a statistically significant difference in osteoarthritis pain compared with placebo, Xenon said. In a 389-patient trial, Xenon pitted two doses of its drug against a dummy gel, testing whether four weeks of treatment could meaningfully reduce patient-reported pain scores. The biotech isn't disclosing detailed data from the study, saying only that TV-45070 missed the efficacy mark.

The news sent Xenon's shares down as much as 35% on Wednesday morning, as investors feared a failure in osteoarthritis pain could portend similar results from TV-45070's ongoing Phase IIb study in post-herpetic neuralgia (PHN), or pain following shingles.

But management contends that there's no efficacy read-through between the two indications, instead pointing to the drug's "favorable safety and tolerability profile" as a positive omen for the PHN program.

"The Phase IIb trial in PHN being conducted by Teva is progressing as planned, and we look forward to seeing top-line results from that trial in the second half of 2016," Xenon CEO Simon Pimstone said in a statement. "In addition, Xenon will continue to focus on advancing our partnered and proprietary pipeline programs, and leveraging the potential of our Extreme Genetics platform and expertise in ion channel target discovery."

Teva bought into TV-45070, formerly XEN402, back in 2012 for $41 million up front and up to $335 million more tied to milestones. The drug, which works by blocking the sodium channels found in nerve endings, has also shown promise in the rare erythromelalgia, and Xenon believes it has broad potential in nerve pain.

Xenon, which executed a $36 million IPO last year, is also working through partnerships with Roche's ($RHHBY) Genentech, Merck ($MRK) and uniQure ($QURE). Each of the biotech's candidates is the product of what Xenon calls Extreme Genetics, an in-house development platform that focuses on single-gene defects to discover drug targets.

- read the statement