Avanir’s Results for Neurological Drug Triggers Outburst in Trading
The price of shares in Avanir Pharmaceuticals climbed by almost 30 percent today after the onetime San Diego biotech said a late-stage clinical trial shows its drug for treating an unusual neurological disorder can substantially reduce involuntary emotional outbursts and is “generally safe and well tolerated.”
Avanir (NASDAQ: AVNR), which is now based just across the Orange County border, in Aliso Viejo, CA, announced the positive Phase III study results of its reformulated drug dextromethorphan/quinidine, or DMQ, before the market opened today. Wall Street responded with an outburst of its own, sending Avanir shares nearly 80 percent higher. That fell back later, and the stock closed in regular trading at $2.84 a share, a gain of 65 cents, or nearly 30 percent. Trading volume was almost 29.6 million shares, 35 times Avanir’s recent daily average of 845,091 shares.
As Denise reported, Avanir developed the drug, to be marketed as Zenvia, to treat unpredictable episodes of crying, laughing, and other emotional outbursts, which the company calls pseudobulbar affect, or PBA. The random outbursts often accompany brain injury or neurologic disease such as multiple sclerosis, Lou Gehrig’s Disease, or Parkinson’s.
Avanir agreed to develop and test a new formulation of the drug after the FDA raised concerns about possible cardiac side effects from quinidine, which helps metabolize the key ingredient, dextromethorphan. So the latest trial was intended to test whether the drug would still be effective with a smaller amount of quinidine.
The company said it plans to submit the phase III findings to the FDA in the first half of 2010.