Top-line results from a Phase II trial of TO-2061, for obsessive compulsive disorder (OCD), were a let-down for Transcept Pharmaceuticals Inc., of Point Richmond, Calif. The data showed that TO-2061 failed to meet its primary efficacy endpoint of improving OCD symptoms compared to placebo.

No decisions have been made regarding future development for TO-2061, pending remaining analyses in early 2013. Transcept tested the drug in 168 patients with OCD who had not adequately responded to an approved medication.

"It's clearly a disappointment," Transcept CEO Glenn A. Oclassen told BioWorld Today. "At this point, we're not moving forward with the project. We're just trying to figure out what went wrong."

Much of Transcept's story as a company revolves around its sleep drug, Intermezzo (zolpidem tartrate), and that drug's bumpy path to approval. Intermezzo was approved on its third new drug application submission. (See BioWorld Today, Sept. 16, 2011.)

Intermezzo's graduation left TO-2061, a low-dose form of ondansetron, as the star asset in Transcept's pipeline.

Ondansetron is a serotonin subtype 3 (5HT3) receptor antagonist which was approved by the FDA in 1991 and has been used extensively for nausea and vomiting related to chemotherapy, radiation and surgery.

The drug's typical dose for that indication is 16 mg to 24 mg. The TO-2061 formulation is substantially lower, less than 1.0 mg.

"The hope was the ability of this drug at very low doses to down-regulate dopamine would enable you to get a better clinical result by adding this therapeutic to their SSRI treatment," Oclassen said.

Two pilot studies supported Transcept's Phase II program for TO-2061 . In the first, an open-label study in 14 patients, nine patients, or 64.3 percent, responded with a 25 percent or greater reduction in the Yale Brown Obsessive Compulsive Scale and had a Clinical Global Impressions Improvement (CGI-I) score of 1 or 2 at 12 weeks.

In another pilot study in 21 patients, 57 percent responded with a 25 percent or greater reduction in YBOCS, and the mean CGI-I score was 1.2.

Those encouraging results led Transcept to design and launch a double-blind, placebo-controlled Phase II trial in 168 patients with OCD who had not adequately responded to medication.

Those who had at least six weeks of inadequate response to an approved OCD medication continued to receive that medication for an additional six-week run-in period, and if they failed to respond during the run-in phase, were randomized to the 12-week treatment phase to receive the first-line medication plus ondansetron 0.5 mg twice per day, ondansetron 0.75 mg twice per day, or placebo.

The primary endpoint of the study was change from baseline as measured by the Y-BOCS, compared to placebo.

Unfortunately, TO-2061 did not fulfill hopes and expectations in the trial. Oclassen said high placebo response, which is characteristic of psychiatric disorders, could have contributed.

"We were a little bit surprised by it. Typically you do not see placebo effect in patients already shown to be resistant to primary drug therapies," Oclassen said.

Lazard Capital analyst William Tanner saw the TO-2061 failure as a pipeline setback of "minor significance." Tanner emphasized that Intermezzo is getting a new push with a direct-to-consumer campaign funded with $10 million from Transcept and $19 million from its partner Purdue Pharmaceutical Products LP.

The Intermezzo campaign will include digital and print ads, and television spots beginning in February 2013, including Super Bowl ads. That puts the probable loss of TO-2061 in perspective, as it would have been considered nothing more than upside in the larger picture of potential blockbuster sales of Intermezzo.

"With the Intermezzo house in better order, we would be buyers of TSPT shares on any weakness as we believe there was no expectation for TO-2061 success," Tanner wrote.

Jason N. Butler, of JMP Securities, was also unconcerned about the impact of the OCD results. "While we view the results as disappointing, we did not include this product candidate in our model and therefore the news has no impact on our estimates or valuation," Butler wrote.

Transcept's stock (NASDAQ:TSPT) lost 31 cents Friday, closing at $4.85.