A phase II/III study of Transition Therapeutics Inc.'s lead neuropsychiatric drug, ELND005 (scyllo-inositol), found it about as good as a placebo in reducing the agitation and aggression that often surfaces in people with Alzheimer's disease (AD).

Company shares (NASDAQ:TTHI), which had climbed after trials showcasing the drug's safety were released in May, plummeted in heavy trading Wednesday, falling 74 percent to a $2.35. Transition's Canadian-listed shares (TSX:TTH) also fell, closing 73 percent lower at C$2.92.

In a statement, the company said it's still analyzing study data and will look to an external committee to advise it on further development of the drug, which is also in midstage testing for the treatment of Down syndrome.

Patients in both the treatment and placebo arms of the AD study showed significant, but similar, results on the study's primary endpoint: reduction in agitation and aggression relative to baseline as measured by the Neuropsychiatric Inventory ­– Clinician scale. Transition noted a greater than expected reduction in agitation and aggression observed in the placebo group as measured in weeks four, eight and 12 in the study.

Beyond the basics though, it said very little about the randomized, double-blind and placebo-controlled study, which was designed to evaluate ELND005 over 12 weeks of treatment in patients with mild to severe AD. The study included 350 AD patients experiencing at least moderate levels of agitation or aggression. Safety and tolerability of the drug were consistent with previous studies in AD at a twice daily 250-mg dose of the oral medicine.

About 90 percent of AD patients develop neuropsychiatric symptoms, and up to 60 percent develop agitation or aggression over the course of their disease, according to Transition. The company anticipated that ELND005, which can cross from the blood into the brain and reduce myo-inositol levels there, would have a similar impact to other approved drugs with that effect, such as lithium and valproic acid. In addition, earlier studies suggested ELND005 was associated with a reduction in the levels of beta amyloid and tau proteins in the cerebrospinal fluid.

In March, Transition reported results from two phase I studies of ELND005. The first, an absorption-metabolism-excretion (AME) study enrolled eight subjects. A second, a renal clearance study enrolled 42 subjects. In both studies, the compound showed good safety and tolerability. The company found the AME profile of ELND005 to be well suited for AD patients, which are commonly given multiple medications at the same time, many of which are metabolized by the liver. The renal clearance study evaluated the pharmacokinetic profile of ELND005 in subjects with various degrees of renal impairment. It showed minimal protein binding in plasma regardless of renal function. Across the five study arms, subjects with worse renal function had increased plasma drug exposure compared to those with normal renal function. The study provided important guidance for the minimum creatinine clearance needed to allow patient participation in studies with a fixed-dose regimen of ELND005.

Shares had risen 24.4 percent since then, closing at $9.09 on Tuesday before falling Wednesday.

Transition said data from the study will be presented at a future medical meeting, hopefully shedding additional light on where the drug fell short – information that could help researchers considering similar approaches to fight the costly and intractable disease, incidence of which continues to soar.

PERRIGO'S STAKE

In 2006, Transition exclusively licensed the ELND005 technology to Elan (now part of Mylan NV target, Perrigo plc) for worldwide development and commercialization. As of May, it had received $40 million from Elan in up-front and achieved milestone payments. When Perrigo acquired Elan in December 2013, the buy included all Elan's rights and obligations to the development of ELND005. (See BioWorld Today, July 31, 2013 and April 22, 2015.)

By the end of February 2014, Perrigo had transferred all of its ELND005 rights and assets to Transition's Irish subsidiary Transition Therapeutics Ireland Ltd. with a nice bonus: It invested $15 million in Transition, and received stock that represented a 6.4 percent ownership stake in the company at the time. Perrigo also became eligible to receive up to $40 million in approval and commercial milestone payments and a 6.5 percent royalty on net sales of ELND005 products and sublicense fees, though recognition of that value is clearly in doubt now.

BROADER IMPACT?

Toronto-based Transition did not address whether the AD trial's outcome would alter its pursuit of ELND005 in Down syndrome, an area in which it contended the drug may have the potential to improve cognition by decreasing amyloid levels and regulating myo-inositol-dependent neuronal signaling.

In November 2014, the company said that a small study of young adults with Down syndrome helped it determine an optimal dose for a planned phase IIb study. Though it identified treatment-emergent adverse events in seven study subjects, all were said to be mild.

Another line of inquiry, whether the drug might work as an adjunctive maintenance treatment for bipolar disorder type I patients, met its end in April when the company discontinued a phase II study for business reasons. (See BioWorld Today, Aug. 5, 2013.)

DIABETES DEAL

In addition to working on central nervous system indications, Transition has a potentially valuable stake in TT401/LY2944876, a long-acting oxyntomodulin peptide analog under development for type 2 diabetes and associated obesity. After in-licensing the compound from Eli Lilly and Co. in March 2010, Transition carried it through a study demonstrating that both subjects with type 2 diabetes and obese non-diabetic subjects experienced statistically significant reductions in mean fasting plasma glucose, relative to placebo, and statistically significant mean body weight reduction relative to baseline. Half-life was consistent with once-weekly dosing.

While Transition paid Lilly $14 million for the pleasure of validating the compound, it has already recouped half of that. In June 2013, Lilly exercised its option to assume all development and commercialization rights for the drug, an event triggering a $7 million milestone payment for Transition and lining it up for additional milestone payments from Lilly of up to $240 million plus double-digit royalties on sales of TT401 products and a low single digit royalty on sales of related compounds.

At March 31, Transition reported having cash and short term investments were C50.2 million (US$40.5 million).