The FDA slapped down Santa Clara, CA-based Xenoport (NASDAQ: [[ticker:XNPT]]) and GlaxoSmithKline hard a year ago, but the companies have made a heck of a comeback. Glaxo and Xenoport proved it today by winning clearance from the FDA to start selling a new drug for restless leg syndrome. Shares of Xenoport rocketed up 57 percent in after-hours trading on the news.
The FDA is allowing the sale of Xenoport’s long-lasting form of gabapentin enacarbil (Horizant) to patients with moderate to severe forms of restless legs syndrome, a neurological disorder in which people have involuntary leg movements, frequently at night while trying to sleep. The drug is the first of its kind specifically approved by the FDA to treat this disorder.
Xenoport looked like it was in big trouble in 14 months ago, when the FDA shot down its application for approval of the new drug, citing data that suggested it may cause cancer in rats. The company lost two-thirds of its stock value right away, and responded by cutting half of its workforce to save cash after the FDA action. But now the FDA has apparently re-considered the risks and benefits offered by the new medication. Estimates vary on how many people actually have this disorder, and medical professionals will surely debate how often it warrants medical treatment, but Xenoport and Glaxo say something like 1.5 to 2.7 percent of adults in developed countries have “medically significant” symptoms.
Glaxo and Xenoport didn’t say in their statement how much the drug will cost.
“Clinical experience has substantiated that Restless Legs Syndrome, also referred to as Ekbom Disease, is a long-term neurological condition characterized by an urge to move caused by unpleasant sensations in the legs,” said Richard Bogan, chairman and chief medical officer of SleepMed of South Carolina in Columbia, SC, and a clinical trial investigator, in a Glaxo/Xenoport joint statement. “Our experience has shown that patients with moderate-to-severe primary Restless Legs Syndrome can suffer from a range of disruptive symptoms and may benefit from a new treatment option.”
Those who follow generic drug names will recognize gabapentin, as a generic drug that was once heavily marketed by Pfizer under the brand name Neurontin. That drug, while FDA-approved for epilepsy, achieved more than $1 billion status largely on the strength of sales for unapproved uses, known as “off-label” prescriptions. While it’s legal for doctors to prescribe a drug for that use, it’s illegal for companies to market a drug for a use which hasn’t been cleared as safe and effective by the FDA.
While doctors were prescribing gabapentin to patients with restless leg syndrome in the past, Xenoport developed its own new chemical entity that facilitated absorption, and which led to a process in which the new drug is converted into gabapentin.
The FDA-recommended dose of the new drug is 600 milligrams, taken once daily with food at about 5 pm, according to the Glaxo and Xenoport statement. The drug can affect patient’s ability to drive, sleepiness, and dizziness, the companies said.
Xenoport plans to discuss the FDA approval in more detail with investors at 9 am Eastern/6 am Pacific tomorrow on a conference call. I expect lots of chatter about how the questions on animal data were resolved, followed by a lot of pencil-sharpening about sales projections. Lots of people will be listening in, since Xenoport shares shot up $3.62, or about 57 percent, to $10 after the news broke.
