NBIX :Indiplon Update From The APA Meeting
2006-05-24 02:56
Piper Jaffray & Co.
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May 24, 2006
Neurocrine Biosciences Inc. (NBIX - $18.86)
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Health Care
Indiplon Update From The APA Meeting
Thomas Wei, Senior Research Analyst
212 284-9305, thomas.a.wei@pjc.com
Gur A. Roshwalb, M.D., Research Analyst
212-284-9314, gur.a.roshwalb@pjc.com
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KEY POINTS:
* New Data From Objective Measure 15 mg Study. Efficacy data from a two-night,
double blind, crossover sleep laboratory study for indiplon 15 mg was
presented at a poster session at the American Psychiatric Association
meeting in Toronto today. The study involved 100 patients who met the DSM-IV
criteria and who reported >60 min of wake time after sleep onset (WASO).
Patients were randomized to receive either 15 mg indiplon or placebo. The
primary outcome measure was wake time during sleep (WTDS), with secondary
measures of WASO and total sleep time (TST). The indiplon group experienced
reduced WTDS compared to placebo (60.4 +/- 3.5 min vs. 83 +/- 4 min
respectively, p=0.0036). WASO was also reduced in the indiplon group (73.9
+/- 4 min compared to 83 +/- 4min in the placebo group, p=0.019) as was TST
(389.8 +/- 4.9 min in the indiplon group vs. 362.8 +/- 5 min in the placebo
group, p=0.001), although the magnitude of the improvements on these
secondary endpoints is less than what has been seen on subjective measures
in other 15 mg studies. The overall incidence of adverse events was similar
in both groups (8% and 10% on indiplon and placebo, respectively).
* Speculation From Investigators On Indiplon Rejection. We had a chance to
speak with several investigators involved with the indiplon studies, non-
indiplon investigators, and NBIX representatives. The clinicians to whom we
spoke were perplexed that the FDA issued a non-approvable letter and
universally agreed that there was no obvious efficacy or safety issue in the
data to explain this decision. As such, we remain uncertain as to what the
primary concerns expressed in the non-approvable letter were and continue to
await further clarity from NBIX. One investigator speculated that a
potential reason for the non-approvable letter may be the short duration of
the sleep lab study for the 15 mg dose. NBIX submitted three primary studies
for the 15 mg dose: the two-night sleep lab study described above, a two-
week outpatient study in adults, and a four-week outpatient study in elderly
patients. Given that Ambien CR and Rozerem were recently approved with at
least two-week studies measuring objective sleep lab endpoints, this
investigator speculated that a slightly longer-term (>2 weeks) objective
measure study may be necessary for approval of the 15 mg dose. This may also
help to clarify the magnitude of the WASO efficacy difference observed in
the above sleep lab study. However, we remain uncertain if this theory is
correct, as we believe that the FDA would more likely have issued an
approvable letter and asked for additional efficacy data if this were the
case. Given the uncertainty around the requirements, prospects and timeline
for indiplon approval, we remain on the sidelines until the company is able
to provide further clarity.
PRICE TARGET AND JUSTIFICATION:
Our $22 price target is based on 35x 2010 EPS, discounted at 35%.
RISKS TO ACHIEVEMENT OF TARGET PRICE:
Risks include but are not limited to: 1) regulatory uncertainty on indiplon MR
formulation; 2) delays in indiplon launch, and 3) lower-than-expected sales of
indiplon. |
