Teva's share price slumps as Laquinimod fails trial

The Bravo Phase III clinical trial of the oral multiple sclerosis drug did not achieve its primary endpoint of reducing the relapse rate.

Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) today announced that the initial results from the Bravo Phase III clinical trial of its oral multiple sclerosis drug, Laquinimod. The trial did not achieve its primary endpoint of reducing the annualized relapse rate.

The trial, the second Phase III trial for Laquinimod was designed to evaluate its efficacy, safety and tolerability, compared with a placebo.

Trading in Teva's shares on the Tel Aviv Stock Exchange was suspended ahead of the announcement. When trading resumed shortly before the close the share price slumped 8% to NIS 147.60.

Sphera Funds Management Ltd. partner Ori Hershkovitz told "Bloomberg," "Laquinimod is dead, if not regulatorily, then commercially,"

Despite the failure Teva Group VP global branded products Prof. Yitzhak Peterburg tried to sound sanguine. He said, "We are encouraged by the overall outcomes achieved in the laquinimod Phase III clinical development program, and plan to submit applications to regulatory authorities in the US and EU. Teva remains committed to the clinical development of laquinimod and is confident that the drug could provide a unique option for the treatment of multiple sclerosis."

Teva chief R&D officer Dr. Ben-Zion Weiner told "Globes" that the trial was not a failure. "A failed trial is a trial in which the drug does not work. Our drug works. The intention of the announcement wasn’t that the drug failed, but that it did not meet its statistical target. There was not a proper balance of patients; there were groups with patients who were in worse shape and groups with patients in better shape. To correct this lack of correlation in patient morbidity, a standard statistical correction was made on previous cases, and the FDA has this correction as part of the analysis plan that Teva submitted to it a long time ago. This correction enables the groups to be balanced in real time. The treatment works, it reduces attacks, but without the statistical correction."

"Globes": So why didn’t you say so in your announcement?

Weiner: "I have no answer to that… Teva says that, as far it's concerned, it did not meet the endpoint but the trial was not a failure. If it were a failure, we would not have submitted an application to the FDA. The drug is safe and has no side effects beyond those in the Allegro trial."

Weiner said, "Ostensibly, we didn’t meet our primary endpoint. But because the patients were randomly divided into three groups, and they did not have the same level of the disease, they were not comparable. In such cases, as we notified the FDA in advance, we use a statistical correction. After the correction, we met the primary endpoint with statistical significance."

In morning trading on Nasdaq, Teva's share price was down 7.53% to $43.13, giving a market cap of $38.7 billion.

The share price of Teva's partner in developing Laquinimod, Sweden's Active Biotech AB (OMX ACTI: Pink Sheets: ATVBF), plummeted 45% on the Stockholm Stock Exchange on the news.

Published by Globes [online], Israel business news - www.globes-online.com - on August 1, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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