Transition moves into late-stage drug development

Transition Therapeutics (NASDAQ:TTHI; TSX:TTH) has added late-stage drug development to its operations with its acquisition from Perrigo plc (NYSE, TASE:PRGO) of neuropsychiatric drug candidate, ELND005.

“We’re maybe a year away from seeing the results of ELND005 in two Phase 2 trials for the treatment of agitation/aggression in patients with mild-to-severe Alzheimer’s disease (AD), and as an adjunctive maintenance treatment in patients with bipolar 1 disorder,” Transition chairman and CEO Tony Cruz says in an interview with

“If we get positive data, we believe that these studies could be one of the trials needed for regulatory approval,” he adds.

ELND005 is an oral drug that crosses the blood-brain barrier and has already established an acceptable safety profile in humans. Toronto-based Transition had previously licensed ELND005 to Elan plc and was a co-developer of the drug. Perrigo acquired Elan last year and obtained rights to ELND005.

Under the amended accord signed at the end of February, Transition acquired all the rights to ELND005 from Perrigo. Going forward, Transition is responsible for all future development and commercialization activities of ELND005.

In addition, the transaction makes Perrigo eligible to receive up to $40-million in milestone payments from Transition post-approval and sales, and a 6.5% royalty on net sales of ELND005. It also purchased a 7% stake in Transition for $15-million.

“This is a win-win transaction,” Dr. Cruz says, pointing out that Perrigo’s expertise is not in drug development but rather in the manufacture and distribution of over-the-counter and generic pharmaceuticals, nutritional products and active pharmaceutical ingredients.

Discussions between Transition and Perrigo began in early January. “This was an opportunity for Perrigo to get upside if the drug works,” Dr. Cruz says, adding that Transition has been working on ELND005 since 2004 as a treatment for AD. “So we know the drug well and Perrigo knows the drug is in good hands,” he adds.

“For Transition, we get the rewards that go with late-stage drug development,” Dr. Cruz points out. “And the $15-million investment from Perrigo will go a long way to pay for the remaining Phase 2 development costs in agitation/aggression, and in bipolar disorder.”

Transition, which currently has about $51-million of cash, is also studying ELND005 in a Phase 2a trial in Down syndrome.

An earlier Elan-Transition Phase 2 study, involving 350 mild-to-moderate AD patients, provided the key data supporting the use of ELND005 for the treatment of neuropsychiatric symptoms, such as agitation/aggression, depression, and anxiety associated with various central nervous system disorders.

He explains that a body of research has shown that elevated levels of myo-inositol, a cell-signaling molecule, are correlated with an increase in neuropsychiatric symptoms in AD patients. Mood stabilizers, such as lithium and valproic acids, can reduce brain myo-inositol levels by 15% to 25% in patients who have responded to treatment.

In the Elan-Transition Phase 2 AD study, ELND005 led to a 45% reduction in myo-inositol levels in the brain, and a reduction in the incidence and severity of neuropsychiatric symptoms in AD patients.

“We believe this approach provides a unique opportunity to achieve therapeutic benefit for patients with neuropsychiatric symptoms,” Dr. Cruz contends. For example, up to 60% of AD patients develop agitation/aggression, which is a major reason for institutionalizing AD patients.

In addition to its effects on myo-inositol levels in the brain, ELND005 treatment was associated with a reduction in the levels of beta amyloid and tau proteins in the cerebrospinal fluid of AD patients. Abnormal levels of these proteins are pathological hallmarks in AD as well as clinical targets for the treatment of the disease. The clinical data for cognitive and functional endpoints in the study also showed encouraging trends of efficacy in a pre-specified sub-analysis of mild AD patients.

Dr. Cruz says the transaction with Perrigo also provides a transition plan to “bring people working on the ELND005 program to Transition and to assure continuity of enrollment, patient safety and integrity of the trials. These are extremely important.”

Transition’s Phase 2 study in agitation/aggression began enrolling up to 400 patients with mild-to-severe AD in November 2012 at 76 sites in North America and Europe. Patients are being treated with ELND005 twice daily for 12 weeks or a placebo. The primary endpoints are changes from baseline in a number of agitation and aggression scores.

The bipolar disorder study also is enrolling up to 400 patients at 68 sites in North America and Europe. The 48-week trial began in August 2012. The primary endpoints are the proportion of patients with recurrence of any mood episodes, and time to recurrence of depressive and manic episodes.

A four-week safety study in 24 young adults with Down syndrome, but without dementia, began in September 2013. Patients are receiving oral ELND005 either daily or twice daily versus a placebo.

In addition to its central nervous system focus, Transition has two programs partnered with Eli Lilly (NYSE:LLY): TT401 as a treatment for Type 2 diabetes/obesity and TT601 for osteoarthritis.

TT401 is a GLP-1 dual agonist that targets both the GLP-1 receptor and the glucagon receptor, potentially providing better outcomes for Type 2 diabetes and obese patients. Obesity is a leading cause of diabetes.

Transition previously optioned TT401 as a preclinical drug candidate from Lilly and conducted a successful proof-of-concept trial, with once-weekly dosing of the drug. The trial prompted Lilly to reacquire the drug and assume responsibility to complete development and commercialization.

As a result, Transition will provide a one-time contribution of $14-million to a large Phase 2 study of TT401, scheduled to begin in the second quarter this year. In exchange, Transition will be eligible to receive $240-million in milestone payments from Lilly and a double-digit royalty on sales of TT401 products,

Dr. Cruz says Transition plans to begin a phase 1 study of TT601 in April. If the study is successful, Lilly again has an option to reacquire all rights to TT601. Transition would then be eligible to receive up to $130-million in milestone payments and a high single-digit royalty on sales of TT601.

“We’re very comfortable with this strategy of in-licensing preclinical molecules, spending a couple years to complete the proof-of-concept, with an option for Big Pharma to reacquire the compound and fund the late-stage development,” he adds. “We’re hoping to do more of these.”