Pipeline Update from Avanir - Analyst Blog

Avanir Pharmaceuticals, Inc.'s AVNR shares were up 4.13% following the company's announcement that it finished enrolling patients in a phase II label expansion study on AVP-923. Overall shares increased 9.1% since the announcement.

The double blind, placebo controlled, proof-of-concept study (n=220) is evaluating the safety, tolerability, and efficacy of AVP-923 for the treatment of patients suffering from agitation due to Alzheimer's disease. Top-line results should be out by late September or early October.

We note that AVP-923 is already approved in the U.S. and the EU under the trade name Nuedexta for the treatment of pseudobulbar affect PBA. Nuedexta gross sales were $55.7 million in the first six months of fiscal 2014. The Nuedexta franchise continues to grow as indicated by the increasing number of prescriptions from the year-ago quarter.

Avanir is conducting another phase II study on AVP-923 for levodopa induced dyskinesia (LID) in patients suffering from Parkinson's disease.

Meanwhile, the company is working on strengthening its pipeline. Avanir is developing AVP-786 for managing neuropsychiatric manifestations of neurological disease, including agitation. The company plans to submit an investigational new drug IND application for AVP-786, after which it will initiate a phase II study on 786 in treatment-resistant patients suffering from major depressive disorder. Avanir said that results from the phase II study on AVP-923 will guide the developments for a phase III study on AVP-786.

Additionally, a response from the U.S. Food and Drug Administration (FDA) for the new drug application (NDA) for AVP-825 (acute migraine) should be out by Nov 26. On approval, the company intends to launch AVP-825 in the first half of 2015.

Avanir carries a Zacks Rank #2 (Buy). Other stocks looking good in the health care sector are Grifols, S.A. GRFS, ARIAD Pharmaceuticals Inc. ARIA and Astellas Pharma, Inc. (ALPMY). All these stocks carry a Zacks Rank #2.