Biotech Values

[rfj1862]

Xenoport (XNPT) RMF

Revised--caught a few mistakes.

Market cap is currently $330 million.

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XenoPort, Inc focuses on developing products that harness transport systems to improve the oral absorption, distribution and pharmacokinetics of drugs. XenoPort is applying its technology to off-patent drugs to provide new, patentable compounds with improved medicinal properties.

Website
www.xenoport.com

Webcast
Lazard Capital Markets Life Sciences Conference, November 29, 2005 (highly recommended)
http://www.wsw.com/webcast/lz2/xnpt/

Technology
In simple terms, XenoPort conjugates approved drugs to actively transported nutrients or proteins to enhance transport, improve bioavailability, and permit localization.
Link: http://www.xenoport.com/technology/technology2index.htm

Pipeline
XP13512
XP13512 is a prodrug of gabapentin with completed phase II clinical trials for restless legs syndrome and postherpetic neuralgia (PHN), a form of neuropathic pain. The company has plans to investigate the drug in painful diabetic neuropathy, another form of neuropathic pain.

Rationale for development
Neuropathic pain: Gabapentin has suboptimal pharmacokinetics, in part due to saturable absorption kinetics, interpatient variability in oral absorption, and a short half life. In clinical trials of gabapentin in patients with PHN, only 30% of patients respond to therapy. Responder rates for pregabalin, a close relative of gabapentin, are approximately 40% at the highest dose. see pregabalin PI: http://www.pfizer.com/pfizer/download/uspi_lyrica.pdf.

According to the company, advantages over gabapentin may include reduced dosing frequency, predictable exposure, ability to maintain drug levels during the night, and efficacy in gabapentin non-responders. Xenoport claims better tolerability as a potential advantage over pregabalin. However, I feel the most important advantage over pregabalin is that XP13512 is unlikely to be considered a controlled substance.

Restless legs syndrome (RLS): Currently, the only agent approved for RLS is Requip (ropinarole), a dopamine agonist. It is approved for moderate-to-severe disease (>15 episodes/month). According to the Requip PI, its indication for RLS is based on three 12-week studies. Link: http://us.gsk.com/products/assets/us_requip.pdf

Clinical Trials
Restless Legs Syndrome
In an unpublished, 96-patient, phase 2b study, patients were randomized to 14 days of double-blind treatment with XP13512 600 mg, XP13512 1200 mg, or placebo following a 7-day baseline period. All drugs were administered once daily.

The primary end point was change in IRLS score at 14 days. IRLS scores declined from 22.4 at baseline to 13.5 at 14 days in the placebo group and from 22.4 at baseline to 6.3 at 14 days in the 1200 mg XP13512 group. The difference between the groups in change from baseline in IRLS was highly significant (P<0.0001).

In the same study, 48% of placebo-treated patients and 81% of XP13512 patients were rated “much improved” or “very much improved” by the investigator. Similar results were observed for the patient-rated global impression of change.

Measures of sleep, including overall quality of sleep, number of nights with RLS symptoms in past week, number of awakenings, and number of hours awake per night, all favored XP13512 (p values range from P=0.0006 to P<0.003). XP13512 was associated with a statistically significant benefit over placebo in terms of 24-hour symptoms, as measured using a symptom diary. Mood assessments were also significantly in favor of XP13512.
Link: http://xnpt.client.shareholder.com/ReleaseDetail.cfm?ReleaseID=170219&category=

Neuropathic pain
Phase 2a study
In a 101-patient, 18-site, phase 2b trial, the efficacy of XP13512 was examined in 101 patients with PHN. Following a 7-day baseline period, patients received gabapentin, titrated to 600 mg three times daily over 4 days, followed by a 7-day run-in period with gabapentin 600 mg three times daily. Patients were then randomized to either XP13512 1200 mg twice daily or placebo for 14 days. [This is a somewhat unusual trial design]

Pain scores were reduced 1.2 points in the placebo group and 2.1 points in the XP13512 groups (p=0.032). Sleep interference scores were reduced 0.9 points in the placebo group and 2.2 points in the XP13512 group (p=0.001). On the patient-rated Global Impression of Change, 13.4% of placebo patients rated their symptoms “much improved” or “very much improved” compared with 42.2% of those who received XP13512. Of interest, the ~50% of patients who were poor gabapentin metabolizers experienced the greatest incremental benefit after switching to XP13512. (Baseline pain score 6.1, post-gabapentin score 4.9, post-XP13512 score 4.0; p=0.0126 for post-neurontin vs post-XP13512).
Link: http://xnpt.client.shareholder.com/ReleaseDetail.cfm?ReleaseID=169135&category=

XP13512
XP19986 is a prodrug of baclofen targeting the GERD market. According to the company it is “designed to engage natural nutrient transport mechanisms found on intestinal cell membranes, thereby gaining efficient entrance into the bloodstream. XP19986 is then rapidly converted to R-baclofen by high-capacity enzymes.”

Rationale for development
Baclofen is approved for the treatment of spasticity; recent clinical data suggest that it may be effective in gastroesophageal reflux disease (GERD). However, baclofen has a very short half life requiring four-times daily dosing, is poorly absorbed, and has substantial side effects (sedation, somnolence, ataxia).

Clinical Trials
A phase 1 study has been completed.
Link: http://xnpt.client.shareholder.com/ReleaseDetail.cfm?ReleaseID=169137&category=
A phase 2a study has been initiated and will be completed 1H06.
Link: http://xnpt.client.shareholder.com/ReleaseDetail.cfm?ReleaseID=177730&category=

XP19986
XP19986 is a prodrug of L-Dopa in preclinical studies. According to the company, XenoPort intends to file an IND in 1H2007.

XP20925
XP20925 is a prodrug of propofol XP in preclinical studies for migraine and chemotherapy-related nausea.
According to the company, it intends to “postpone the previously planned filing of an IND for XP20925...until additional resources become available.”

Near-Term Drivers
Due 1H2006
1) Initiating a Phase 3 study in RLS for XP13512
2) Phase 2a results in GERD for XP19986
3) Partnership for either XP13512 or XP19986

Publication
In a 2005 report published in Antimicrobial Agents and Chemotherapy Xenoport report the in vitro properties of a prodrug of the NRTI tenofovir and pharmacokinetic results of in dogs. The effective concentration(50) of the prodrug was 1000-fold lower than that of tenofovir; in the animal model, increased distribution of the drug to lymphatic tissues was observed. Published in collaboration with Gilead.
From the paper: “In conclusion, the high concentrations of tenofovir observed in lymphatic tissues after oral administration of GS 7340 are expected to result in increased clinical potency relative to tenofovir DF and could have a profound effect on the low-level virus replication that occurs in tissues with suboptimal drug exposure during HAART.”
link: http://www.pubmedcentral.gov/articlerender.fcgi?tool=pmcentrez&artid=1087627

Partnerships
XenoPort and Astellas enter license agreement forXP13512 (gabapentin analog) in Japan, Korea, Philippines, Indonesia, Thailand and Taiwan. Astellas is responsible for clinical trials in these countries, and will initiate phase I in mid-2006. XenoPort will receive an initial license payment of $25 million.

In addition, XenoPort is eligible to receive clinical and regulatory milestone payments totaling up to $60 million, including milestone payments of $10 million at the initiation and $5 million at the subsequent completion of XenoPort's first Phase 3 clinical trial of XP13512 in RLS patients in the United States.
Link: http://xnpt.client.shareholder.com/ReleaseDetail.cfm?ReleaseID=180910&category=

Collaborations
On January 5, 2003, XenoPort announced a collaboration with Pfizer to develop technology to improve drug delivery to the brain. The collaboration is ongoing.
link: http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/01-05-2004/0002083016&....

Financial
$78.8 million on hand as of September 30, 2005 plus $25 million payment from Astellas, $10 million after initiation of the phase III trial of XP13512, and $5 million upon completion. Another $20 million is due from Astellas at unspecified milestones. Quarterly burn is $10.1 million.
link: http://xnpt.client.shareholder.com/ReleaseDetail.cfm?ReleaseID=178573&category=