Biovail stumbles on Phase III testing for Parkinson's drug

The risks of Biovail Corp.'s expansion into drugs for the central nervous system became apparent yesterday when a trial of a new treatment for Parkinson's disease failed.

The Toronto-based pharmaceutical giant, and its U.S. partner, Acadia Pharmaceuticals Inc., said a Phase III trial of the drug pimavanserin, which is supposed to treat hallucinations and delusions that often come with Parkinson's disease, did not meet its goals. In the trial with almost 300 patients, those treated with a placebo fared better than those getting one of the two trial dosages.

This is a disappointment, given Biovail's new focus on developing and marketing drugs for disorders of the central nervous system (CNS), but is not a significant setback, said chief executive officer Bill Wells.

"This sort of thing is to be expected in the drug development business," he said in an interview. "Phase III failures are quite normal."

Biovail's CNS strategy is unchanged, he said. "This game is all about shots on goal, which is why we wanted to build a portfolio of opportunities, understanding that the majority of those would fail, but the one or two which are successful will pay for all the rest."

Acadia and Biovail said they will examine the trial data in more detail before deciding whether to abandon the drug altogether. Pimavanserin also has potential to treat other diseases, such as Alzheimer's, and there is "a reasonable possibility we might have some other directions to go," Mr. Wells said.

For Acadia, a San Diego-based company that has only a small number of drugs in its pipeline, the failure is much more serious than for Biovail, which has a large portfolio of products. The response from investors underlined this, as Acadia shares plunged 66 per cent on the Nasdaq Stock Market yesterday, while Biovail's fell just 3 per cent on the Toronto Stock Exchange.

Biovail was not expecting any revenue from pimavanserin until at least 2012, so there is no short-term impact on the company, said Claude Camiré, an analyst at Paradigm Capital Inc. in Toronto.

While the new drug would have been helpful if it had been successful, the setback will push Biovail to make other acquisitions and diversify its risk, he said. Biovail is still one of the fastest-growing drug companies in the world, Mr. Camiré said, and he is maintaining his "buy" recommendation on the stock.

Biovail signed its deal with Acadia in May, paying an upfront fee of $30-million (U.S.) for the right to develop, manufacture and commercialize pimavanserin in Canada and the United States. Biovail agreed to make further payments in the hundreds of millions, if the drug were to meet specific milestones leading to commercialization. So far, no more payments have been made.

Acadia's CEO Uli Hacksell told analysts on a conference call that his company will go ahead with another Phase III trial of pimavanserin for Parkinson's, set to be complete in about a year. If the drug completely fails for Parkinson's, it might be useful for other diseases, Mr. Hacksell said.

"While we are obviously disappointed in the data we announced today, we still believe in the potential of pimavanserin as a product candidate, based on our clinical experience to date with this compound and its attractive safety profile," he said. "We haven't given up on pimavanserin."
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