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Shares of Depomed, Inc. (DEPO) plunged on heavy volume during today's session after the Company announced top-line results from the BREEZE 1 and 2 Phase 3 clinical trials evaluating the safety and efficacy of Serada(TM), an investigational non-hormonal extended release formulation of gabapentin for the treatment of menopausal hot flashes.
In the higher dose treatment arm of the two doses evaluated, the 1800mg dose achieved positive results at 4 weeks. All four co-primary endpoints of the 1800mg dose at 4 weeks demonstrated significant reductions in frequency and severity in both clinical trials (p-values ranged from 0.0001 to 0.004). Of the other four co-primary endpoints of the 1800mg dose at 12 weeks, one endpoint was positive (p=0.0026) while the other three endpoints did not achieve statistical significance.
In the lower dose treatment arm, the 1200mg dose at 4 weeks achieved statistical significance in three of the four co-primary endpoints. Frequency was significantly reduced in both clinical trials (p-values of 0.0024 and 0.0117) at four weeks. Severity was significantly reduced in only one trial (p-value 0.0016). Of the other four co-primary endpoints of the 1200mg dose at 12 weeks, one endpoint was positive (p=0.0024) while the other three endpoints did not achieve statistical significance.
Carl Pelzel, Depomed's President and CEO, commented in a conference call today, "We are obviously disappointed in these results announced today. However, we are encouraged by the drug effect seen with Serada. The drug worked well, and the higher dose clearly demonstrated the efficacy of Serada. The higher dose arm also met a number of important seconday endpoints."
He continued, "The placebo effect was in excess of 60%, which was 10%-15% higher than we had expected. It was also higher than one typically sees in hot flash trials."
Dr. Michael Sweeney, M.D., Depomed's VP-Research and Development, noted, "We have a meeting scheduled with the FDA to discuss these results and determine the extent of further activity required."
Mr. Pelzel added, "I believe that we have a product that addresses a significant unmet medical need in the market for non-hormonal therapy for hot flashes. I look forward to completing development of Serada and commercializing the product in the way that makes the most sense for us and our shareholders."
He concluded, "Depomed remains a strong company with a very bright future. Our cash reserves are significant. Just last week, we announced positive results from a Phase 3 clinical trial that demonstrated that DM-1796 (also referred to as gabapentin ER) achieved a statistically significant reduction in pain associated with postherpetic neuralgia (PHN) versus placebo. We have a profitable product in Glumetza(R), a platform technology that generates cash for us, and some early stage assets that we expect to out-license. Our fundamental business and strategy remain strong and focused."
Merriman reiterated its Buy rating today for Depomed (DEPO).
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