FDA Plays

[SC 388]

Re: XenoPort's Horizant (PDUFA Date 4/6/11)

Hi, cccpmd666, colorofmoney, pcrutch, and kei! I have been following “FDA Plays” board for about 7 months, and I’d like thank all for the solid DD and constructive opinions. I have been investing all my funds into biotech stocks for about a year. And, I’ve been enjoying a great deal. Today, I have decided to post my DD on XenoPort’s Horizant for the first time here on this board and get some feedback. I have noticed that there isn’t any high level of approval sentiment out there even though I feel that it will be approved this time. I thank you all so much in advance for some feedback!

I am quite convinced that XenoPort's Horizant, which has a PDUFA date of 4/6/11, will be approved this time. The most compelling and convincing pieces of evidence are actually in the 2/17/10 CRL itself, which was described in the Form 10-K filed with SEC on 2/26/10. The following is the section of the SEC Form 10-K which contains those pieces of evidence of approval. ( Here is the link: http://phx.corporate-ir.net/phoenix.zhtml?c=187883&p=irol-sec&secCat01.1_rs=91&secCat01.1_rc=10 ) I put numerical references to the 10-K filing to show you the "three" compelling and convincing pieces of evidence:

SEC Filing Form 10-K (Filed on 2/26/2010): Part I, Item 1. Business, Overview
Our lead product candidate, XP13512 (gabapentin enacarbil), is licensed to Astellas Pharma Inc. in Japan and five Asian countries and to Glaxo Group Limited, or GSK, in the United States and all other regions of the world. Astellas has filed a new drug application, or NDA, with the Pharmaceuticals and Medical Device Agency, or PMDA, for approval of XP13512 as a treatment for restless legs syndrome in Japan. Restless legs syndrome is a neurological condition that causes an irresistible urge to move the legs. In January 2009, GSK submitted an NDA to the U.S. Food and Drug Administration, or FDA, for U.S. approval to market XP13512, known in the United States by the trade name Horizant (gabapentin enacarbil) Extended-Release Tablets, for the treatment of moderate-to-severe primary restless legs syndrome, or RLS.
In February 2010, GSK received a Complete Response letter from the FDA regarding the NDA for Horizant for RLS. A Complete Response letter is issued by the FDA's Center of Drug Evaluation and Research when the review of a file is completed and questions remain that preclude the approval of the NDA in its current form. The Horizant Complete Response letter states that the FDA concluded that (1) the NDA provides substantial evidence of effectiveness for Horizant as a treatment for patients with RLS and that (2) the FDA had not identified a clinical safety concern that would prevent approval of the 600 mg dose of Horizant. However, a preclinical signal of pancreatic acinar cell tumors in rats was determined to be of sufficient concern to preclude approval of the Horizant NDA for RLS (3) in its current form. In the Complete Response letter, (3) the FDA acknowledged that similar preclinical findings were known for gabapentin, the parent drug of Horizant, at the time of the FDA's approval of gabapentin for refractory epilepsy, but concluded that the seriousness and severity of refractory epilepsy and the benefit to patients provided by gabapentin justified the potential risk. In the Complete Response letter, (3) the FDA also acknowledged that findings in laboratory animals are not necessarily translatable to risk in humans, and the FDA noted that gabapentin products have been available for over 15 years and do not appear to be associated with a clinical signal for pancreatic cancer.

(1) FDA concluded that Horizant had "Efficacy."
(2) FDA concluded that Horizant had No "Safety" Concern.
(3) FDA acknowledged that preclinical pancreatic acinar cell tumors in rats had been associated with gabapentin. (For apprx. 18 years because Pfizer has marketed gabapentin under the brand name Neurontin since 1993.) FDA also knows that those tumors in rats do not necessarily mean risk in humans. Remember that FDA denied the approval because of the tumors in rats. Here comes the really crucial and game changing fact that we have to know. In order for XenoPort and GlaxoSmithKline to take advantage of all the available nonclinical data related to gabapentin, GSK resubmitted the NDA for Horizant as a 505(b)(2) application in October 2010, and FDA accepted it on November 15, 2010. Now, FDA can consider those "published" data in assessing Horizant, which will clearly work in favor of XenoPort. This was exactly how DepoMed received the approval on Gralise and how Pfizer got the approval on Lyrica. The original NDA was submitted on 1/9/2009 as a 505(b)(1) application which didn't allow FDA to consider the known, historical data. In addition to the amendment, GSK submitted new nonclinical data, two epidemiology studies, and final safety update, all of which should definitely help XenoPort and GSK to get the well-deserved approval.

Lastly, the approval of DepoMed's Gralise on 1/29/2011, which contains gabapentin, gives XenoPort so much better chance of getting the approval on Horizant. On 1/31/2011, Wedbush and RBC Capital said that Horizant will be most likely approved and maintained "outperform" rating. Especially, Wedbush maintained $26 price target.