Another Alzheimer’s failure: Axovant’s drug flops in late-stage trial

Yet another once-promising treatment for Alzheimer’s disease has come up short in the final stage of development, this time adding Wall Street drama to the familiar disappointment that has plagued the drug industry for decades.

A pill called intepirdine, developed by the biotech startup Axovant Sciences, failed to blunt the symptoms of Alzheimer’s in a large trial. The drug was never seen as a cure, but the company had hoped it would delay the worst symptoms of the disease, giving patients a few more months of health before needing around-the-clock care.

Axovant, a well-funded and hotly debated company, lost about 70 percent of its value in early-morning trading Tuesday. The New York firm was worth more than $2.6 billion before the news of intepirdine’s failure.

The company rose to that multibillion-dollar valuation on the promise that intepirdine, which had failed in four previous trials, could slow cognitive decline when paired with a generic memory-booster called Aricept. In a trial involving more than 1,300 patients with mild to moderate Alzheimer’s, the combination of intepirdine and Aricept failed to outpace the old drug alone, missing its key goals of improving memory and physical function.

Read more: The billion-dollar gamble: Biotech CEO takes a risky second shot at an Alzheimer’s drug

Intepirdine’s failure is the latest disappointment in a frustrating saga for patients, doctors, scientists, and entrepreneurs pushing for new Alzheimer’s treatments. The drug industry has spent billions over the past decade-plus developing pills and injections that might reverse the course of the disease or at least arrest its progress. All showed early promise; all eventually failed, leaving the more than 5 million Americans who suffer from Alzheimer’s with few options.

It’s a cycle of failure that Dr. David Hung, Axovant’s CEO, knows quite well. His last company, Medivation, endured a painful setback in 2010 when a once-promising Alzheimer’s treatment came up short in pivotal trials. Medivation later found success in oncology, and Pfizer bought it last year for $14 billion. Hung, inundated with job opportunities after the sale, decided to join Axovant — and take a second shot at Alzheimer’s.

The drug’s negative results did not surprise many in the industry, given that it had failed four previous clinical trials. Other drugs that work the same way have also fallen short. But Hung and others at Axovant saw glimmers of hope in the previous trials of intepirdine and insisted that the drug had potential.

The data released Tuesday are devastating for Axovant, a three-year-old startup that has been hailed as one of biotech’s most ambitious endeavors.

Axovant’s parent company, a privately held firm called Roivant, has built an inchoate empire on the idea of finding undervalued drugs languishing in other companies’ pipelines, betting it can succeed where Big Pharma inertia has failed.

Roivant paid GlaxoSmithKline just $5 million up front for intepirdine and built Axovant around it, taking the company to Wall Street in 2015 in what was then biotech’s biggest initial public offering. Roivant’s young founder, former hedge fund manager Vivek Ramaswamy, then spun off other startups devoted to women’s health, dermatology, and rare diseases. He’s attracted major investment and media attention alike for this strategy.

But for Roivant to live up to its billing, at least some of the drugs have to work. Intepirdine’s failure, while unrelated to the fates of the firm’s other drugs, may lead investors to question the broader idea behind Ramaswamy’s empire.

Read more: Are we facing an Alzheimer’s armageddon?

Meanwhile, Axovant has repeatedly insisted the company has promising prospects beyond intepirdine in Alzheimer’s. The company is testing the same drug in dementia with Lewy bodies, a little-known disease that affects about 1 million people, according to Axovant. Data from a mid-stage trial are expected this year. There’s also a second drug, called nelotanserin, that Axovant believes can treat individual symptoms of Lewy body dementia. Phase 2 studies are under way.

Analysts have split on just how valuable nelotanserin might be.

Axovant had about $300 million in cash as of July.