Axovant's shares plunge after Pfizer halts study of Alzheimer's disease therapy

Shares in Axovant Sciences fell as much as 29 percent on Tuesday after a study of a drug with the same mechanism of action as the company's experimental Alzheimer's disease therapy RVT-101 was terminated. Pfizer disclosed that it terminated a Phase II trial of the investigational 5-HT6 receptor antagonist PF-05212377 for the treatment of Alzheimer's disease, noting that the 12-week study was halted after "pre-specified, interim analysis futility criteria were met."

Pfizer's mid-stage study was designed to clarify whether treatment with PF-05212377 for 12 weeks could improve cognition and memory in patients with mild-to-moderate Alzheimer's disease who experienced symptoms while on a stable dose of Pfizer and Eisai's Aricept (donepezil). Axovant is currently conducting a Phase III trial of RVT-101 with a similar design as Pfizer's study. The late-stage study is not expected to be completed until next year.

Commenting on the news, Evercore ISI analyst Mark Schoenebaum suggested that RVT-101 is a more potent 5-HT6 receptor antagonist than Pfizer's drug. The analyst added that Axovant's ongoing late-stage study is enrolling a population with a less advanced form of disease, while the treatment duration will be longer than that employed in Pfizer's study.

Axovant previously acquired rights to RVT-101 from GlaxoSmithKline for $5 million plus potential sales royalties (see ViewPoints: Axovant sets record straight on why GlaxoSmithKline sold RVT-101 for peanuts). Mid-stage study data released last July showed that the experimental drug significantly improve cognition and memory function in patients with mild-to-moderate Alzheimer's disease.

For further analysis on Axovant and the RVT-101 therapy, read ViewPoints: Axovant can take the hype, but Lundbeck and Otsuka retain the lead.

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