Forest, Richter Schizophrenia Drug Met Clinical Trial Goals

Gedeon Richter Nyrt. (RICHT) and Forest Laboratories Inc. (FRX) said that the experimental antipsychotic drug cariprazine met the goals of two late-stage clinical trials for the treatment of schizophrenia.

The companies plan to seek approval for the drug this year to treat schizophrenia and bipolar mania, they said in a statement today. Budapest-based Richter and New York-based Forest previously reported successful late-stage trials for bipolar mania.

“This drug has blockbuster potential and could be a game changer for Richter in the long run,” Adriana Marin, a Bucharest-based analyst at UniCredit SpA (UCG) who recommends buying the stock, said by telephone.

Patients treated with cariprazine showed “significant symptom improvement” in each study compared to those receiving placebo, the companies said. One study, of 617 patients, looked at two different fixed doses of the drug versus Bristol-Myers Squibb Co. (BMY)’s Abilify medicine or placebo. The other tested 446 patients on either flexible doses of the drug or placebo.

“By successfully meeting the primary endpoint in each of these studies, we now have three positive schizophrenia trials and three positive bipolar mania trials,” said Marco Taglietti, Forest’s senior vice president for research and development.

Share Performance

Forest rose 1.1 percent to $32.70 at the close in New York. The shares have gained 8.1 percent this year.

The company’s medicines include the antidepressant Lexapro, which loses patent protection this year, and Alzheimer’s drug Namenda. It’s also seeking approval, with Almirall SA (ALM), for a drug to help patients with a chronic lung disease breathe more easily.

Richter and Forest plan to start selling cariprazine in the U.S. in 2014, Zsuzsa Beke, Richter’s communications director, said in an interview. The drug may be registered in the European Union in 2015 after additional Phase III clinical trials, which are under way, she said.

Richter climbed 2.9 percent to 39,105 forint in Budapest, for its biggest one-day gain in almost a month. The stock has returned 14 percent this year, compared with a 1.7 percent loss for the Bloomberg Europe Pharmaceutical Index.

“This is a success story and investors’ perception of the Richter stock will change as now Richter has proved that it’s capable to create,” said Attila Vago, an analyst at Concorde Securities in Budapest.

Niche Markets

Today’s announcement is proof that Richter can enter niche markets and compensate for the erosion of revenue from generic products, Vago said, adding that 40,000 forint is a “realistic share price.”

Richter will probably get a milestone payment from Forest in the last quarter of 2012, said Beke, who declined to comment on the amount.

Sales of cariprazine would help Richter offset a government squeeze on pricing for medicines in Hungary. Prime Minister Viktor Orban plans spending cuts on drugs, transportation and other areas to help meet budget targets this year and next, according to a decree published Feb. 22. Richter, which also makes the Plan B “morning after” contraceptive, said yesterday that it won European Union marketing approval for the Esmya treatment for uterine fibroids.

Patients enrolled in the cariprazine studies had scores of 80 to 120 on a scale that measures the severity of symptoms such as hallucinations, emotional withdrawal, guilt and anxiety.

Those in the fixed-dose study had a 6-point reduction in their scores when taking 3 milligrams of cariprazine daily, while those taking 6 milligrams had an 8.8-point decrease. Schizophrenics in the second study who took 3 milligrams to 6 milligrams had a 6.8-point reduction, while those receiving 6 milligrams to 9 milligrams had scores that were 9.9 points lower. The changes in both studies were “statistically significant,” the companies said.

To contact the reporters on this story: Phil Serafino in Paris at pserafino@bloomberg.net; Edith Balazs in Budapest at ebalazs1@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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