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Intra-Cellular Shares Sink As Schizophrenia Drug Flunks Final Test

Xconomy New York — 

[Updated 9/29/16, see below] Several promising antipsychotic drugs have made it to late-stage clinical trials only to come up short. Today, you can add an experimental treatment from Intra-Cellular Therapies to the list.

Shares of New York-based Intra-Cellular (NASDAQ: [[ticker;ITCI]]) cratered late Wednesday, falling more than 67 percent in after-hours trading after the company disclosed that its experimental schizophrenia drug ITI-007 had failed a Phase 3 trial.

This was the second late-stage study for ITI-007, and its most crucial test to date: In a previous Phase 3 study, the drug was tested against a placebo, and the higher of two doses succeeded. In the study being reported on today, ITI-007—a small molecule drug meant to act on serotonin, dopamine, and glutamate levels in the brain—was compared to the standard-of-care schizophrenia drug risperidone (Risperdal). Each of two tested doses of Intra-Cellular’s drug fell short of expectations.

The company enrolled 696 patients, split them into four groups, and gave them either a low (20 mg) or high (60 mg) dose of ITI-007, or risperidone, or a placebo, once a day for six weeks. Intra-Cellular had hoped that ITI-007 would do a better job than either the placebo or risperidone of improving patients’ scores on what’s known as the Positive and Negative Syndrome Scale (PANSS)—a common ratings scale used to judge the effectiveness of treatments for schizophrenia and other mental health disorders. “Positive” symptoms of schizophrenia are the delusions or hallucinations that patients can experience. “Negative” symptoms are traits like a lack of motivation or initiative.

Intra-Cellular’s drug, however, didn’t fare as well as either risperidone or a placebo, and worse, the drug didn’t show a “dose response.” That means the low dose of ITI-007 actually performed better than a high dose. Patients on a low or high dose of the drug saw their PANSS scores improve by 15.0 and 14.6 points, respectively, compared to a 15.1 point improvement for placebo patients and a 20.5 point improvement for those on risperidone.

A number of drugs for antipsychotic disorders—like depression and schizophrenia—have tripped up in late-stage trials. An experimental drug from Alkermes (NASDAQ: ALKS) failed the first two of three late-stage studies for depression in January. And a schizophrenia drug from now-defunct Forum Pharmaceuticals failed two Phase 3 studies in March. Both Alkermes and Forum cited a high level of placebo effect in the control group as a significant problem in the studies.

Intra-Cellular cited the same problem in its announcement this afternoon. The company said an “unusually high placebo response at certain sites…disproportionately affected the trial results,” leading to a different outcome than it has seen in previous trials of ITI-007.

In ITI-007’s first Phase 3 study, placebo patients’ PANSS scores improved by 10.3 points; in an earlier trial, by 7.4 points. The high dose of ITI-007, meanwhile, produced a “similar magnitude in change” in each of the three trials, senior vice president of clinical development Kimberly Vanover said on a conference call with analysts Wednesday afternoon.

Christoph Correll, a psychiatry professor at Hofstra Northwell School of Medicine (and a consultant to Intra-Cellular), said on the call that the psychiatry field is fraught with multiple instances where a drug or a dose of a drug didn’t perform the same way in multiple studies. Often, the varying net results for the drug can be traced to placebo responses that are both high and variable from trial to trial.

That’s why, despite the significant setback, Intra-Cellular still intends to move forward with ITI-007 and make its case to the FDA that the drug is a safer alternative to risperidone. CEO and chairman Sharon Mates repeatedly mentioned on the conference call that ITI-007’s safety profile was “similar to placebo.” It didn’t cause the weight gain or increases in a variety of cardiometabolic measures (like cholesterol or triglycerides) commonly associated with risperidone or other antipsychotic drugs—something Correll pointed to as well.

“I think ITI-007 is still a very much needed addition to the armamentarium because we don’t yet have antipsychotics available on the market that don’t have some Achilles heel in terms of tolerability issues,” Correll said.

In its statement, the company said that certain approved antipsychotics have had negative trial results, that the data it’s accumulated “collectively provide evidence of the safety and efficacy of ITI-007,” and that it intends to meet with the FDA to discuss the regulatory path forward for the drug. Investors clearly aren’t buying into the plan, however—they sank shares from a $42.35 closing price to just $13.22 apiece in after hours trading.

[Updated w/ analyst comments] “While we believe the drug could be ‘fileable,’ approval looks challenging,” Leerink Partners analyst Seamus Fernandez wrote in a note to investors Thursday morning. Fernandez noted that a “confusing dose response” makes it difficult to interpret how effective ITI-007 is, and that as a result the FDA will likely require more trials before approving the drug.