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Zalicus: Undervalued, With Strong Pipeline Potential

Zalicus announced it has initiated a phase 2b clinical trial evaluating Synavive for the treatment of rheumatoid arthritis (RA). The trial, SYNERGY (SYNavivE for Reducing signs and sYmptoms of rheumatoid arthritis trial), is a 12-week, 5-arm, double-blind, placebo-controlled study to evaluate the safety and efficacy of Synavive as a treatment for the signs and symptoms of rheumatoid arthritis in approximately 250 subjects with moderate to severe disease. The trial will be conducted in up to 60 centers throughout the U.S., Europe, and Latin America.

The primary objective of the trial is to evaluate Synavive efficacy compared to placebo. The primary endpoint will be efficacy measured by the Disease Activity Score in 28 Joints (DAS28). DAS28 is a common outcome tool used in therapeutic trials to assess disease improvement or response. Key secondary objectives include evaluating the efficacy of Synavive compared to its individual components (2.7mg of prednisolone and 360mg of dipyramidamole) as well as how Synavive performs in comparison to 5mg of prednisolone. Subjects who complete the core SYNERGY trial will be eligible to participate in a one-year extension study designed to investigate the long-term safety and durability of response for Synavive. We estimate the program will take approximately 12 months to complete, thus we are expecting top-line data in the middle of 2012.

We are optimistic on the outcome of the trial based on results from the previous phase 2 studies with Synavive in RA. As a reminder, in November 2006, management presented positive data from a phase 2a program studying Synavive in patients with RA. The trial compared Synavive plus a disease-modifying antirheumatic drug (DMARD) to placebo plus DMARD (control) in subjects with RA over a 6-week treatment period. The primary endpoint was reduction in C-reactive protein (CRP) levels comparing drug plus DMARD to placebo plus DMARD from baseline at day 42. Secondary endpoints of the trial included ACR-20 responses and DAS-28 scores.

During the trial, Synavive was generally well-tolerated with no serious adverse events (SAE). The most common side effect was headache, with gastro-intestinal symptoms and dizziness also reported. These are all common side effects of the dipyridamole.

We note that Zalicus has also conducted a phase 2b study testing Synavive in patients with knee osteoarthritis (OA). COMET was a large-scale study in 279 patients with knee OA, with a standard flare design where subjects with active disease needed to demonstrate an increase in knee pain as determined by the WOMAC question #1 (related to pain while walking on a flat surface) upon withdrawal of their NSAID/COXIB therapy to be eligible. Subjects were dosed for a total of 14 weeks (98 days) including an initial two-week dipyridamole titration phase. The data shows a dose-related improvement in baseline change, however, the results were not significant for any cohort tested. We believe this was due to the high discontinuation rate (32%), mainly the result of adverse events and subject requests. In follow-up analysis, management identified a number of protocol violators, including use of restricted or prohibited medications during the trial. It is important to note, over half of the protocol violators were in the placebo or prednisolone alone cohort. This dramatically impacted the statistical analysis when compared to the studied doses of Synavive.

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