Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) recently reported data from one of its two lead ongoing migraine programs. The headline data was positive — though you wouldn’t know it, looking at TEVA stock — and the trial hit its primary endpoint. Alongside the numbers, Teva reported that it is set to submit a Biologics Licensing Application (BLA) to the US Food and Drug Administration (FDA) at some point during the third quarter of this year.
At a glance, there looks to be nothing we might consider as being a red flag in the safety data. Despite all this, however, and after an initial spike at market open, TEVA shares traded down on its Tuesday close (the market close immediately preceding the news).
In other words, markets aren’t happy with what hit the press.
Here’s why this is the case and a look at what it all means for Teva and a number of its competitors in this space going forward.
All About Migraines
Let’s look at the drug in question. It’s called fremanezumab, and it’s part of a family of drugs called calcitonin gene-related peptide (CGRP) inhibitors. To understand why and how it works, it’s first important to understand a bit about migraines as a condition and the current (and legacy) standard of care (SOC) therapies in the space.
Migraines are a big market. Evidence suggests that more than 37 million individuals in the US alone, or around 12% of the total population, suffer from migraine attacks on a regular basis, and right now, there is a distinct lack of effective therapies available to these millions of sufferers. That is, therapies that work consistently and reliably in a large portion of the population in question.
For a long time — and we’re talking the past 50 years — therapies targeting migraines have had an associated mechanism of action (MOA) that targets vasodilation. The idea is that vasodilation in the blood vessels causes pressure on certain areas of the brain and that it is this pressure that results in the pain experienced by the sufferer.
As a bit of a reference point, this vasodilation is the opposite of what causes a traditional headache, which is increased pressure as a result of vasoconstriction. This is why painkillers that work for headaches won’t work for migraines; they could actually contribute to the migraine severity.
Anyway, I digress.
More recently, scientists have increasingly subscribed to the suggestion that migraine pain is caused by the above-mentioned CGRP. Studies have shown that when a patient suffers from migraine, expression of this peptide increases dramatically, and the theory is that this peptide amplifies the transmission of pain signals within the brain. This amplification results in the intense pain associated with the condition, and not the vasodilation on which many of the current treatments are based.
Needless to say, if there is credence to this suggestion, and if a company can get a drug to market that bases its MOA on the reduction of CGRP expression, there’s a massive potential market waiting for it.
Analysts suggest it’s about a $6 billion market globally.
That’s what Teva is trying to do. Its drug, as mentioned, is called fremanezumab, and it’s designed as a CGRP inhibitor. Basically, it inhibits the activation of the peptide, which is the above outlined theory is correct, should stop the amplified transmission of pain across the brain when a migraine patient suffers an attack.
Teva’s Data
As mentioned in the introduction to this piece, Teva’s numbers look good.
The phase III was called HALO and it looked at the drug when used in a population that suffers from chronic migraines, defined as more than 15 headache days per month over a three-month period of which more than eight are migrainous, in the absence of medication over use. It’s the more serious of the two classifications, with the second being episodic migraines as defined as less than 15 headache days per month.
As per the latest data, then, patients treated with fremanezumab experienced a statistically significant reduction, reported at -2.5, in the number of monthly headache days of at least moderate severity vs. placebo during the 12-week period after first dose. Further, this extended across both dosing regimens — monthly, -4.6 days, and quarterly, -4.3 days. Looking g at the safety profile, the most commonly-reported adverse event in the study was injection site pain, with similar rates in the placebo and active groups. No problems there.
Basically, there’s no argument as to whether the drug works. It does. And it’s safe and tolerable. Readers that have had migraines will know that a bit of injection site pain is nothing compared to the debilitating effect of the condition when it hits.
So what’s the problem?
Well, this is where the competition comes into the equation.
As mentioned, there are a number of companies trying to force their own CGRP assets along their respective development pathways. Amgen, Inc. (NASDAQ:AMGN) and Novartis AG (ADR) (NYSE:NVS) have joined forces on a CGRP asset called erenumab. Eli Lilly and Co (NYSE:LLY) just put out phase III data two trials of its CGRP asset galcanezumab last month (also positive). Alder Biopharmaceuticals Inc (NASDAQ:ALDR) did the same for ALD403 earlier this quarter.
Right now, it looks like there won’t be too much of a time difference between a bunch of different assets hitting markets. This has left investors looking at safety and efficacy as a way to differentiate between the companies that are likely to pick up the lion’s share of the market when they reach commercialization.
The above mentioned programs have all read out ahead of Teva, and the hope was that the company could differentiate its drug, and get ahead of the pack, with some strong efficacy data from this readout. Unfortunately, there’s practically no difference between these numbers and data already put out by any of the others.
Bottom Line for TEVA Stock
Well, CGRP is going to be a big market — of that there’s no doubt. Between now and end 2018, we’re probably going to see at least three different CGRP drugs hit the shelves, each of which will backed by hefty, big pharma size marketing budgets.
It’s also going to be fragmented. With no discernible difference between one CGRP asset and another, chances are we’re looking at a pretty even market share for each player in the space.
For the individual companies, this is disappointing. For an investor wanting to gain exposure to the $6 billion market, there’s only one real strategy available right now: spread across each of the three major CGRP assets through an exposure to the four major players behind them, Novartis, Amgen Eli, and now, TEVA stock.
As of this writing, Samuel Rae did not hold a position in any of the aforementioned securities.
