Shares in Intec Pharma have come under pressure again, following Novartis’ decision to exit a partnership focused on its Accordion drug delivery technology.
Novartis has opted out of a January 2018 alliance to develop an Accordion formulation of an undisclosed drug in its pipeline, despite the project meeting the technical and pharmacokinetic specifications laid out in the contract terms, according to the Israeli company.
Novartis has said the programme no longer fits with its “mid- to long-term strategic goals”, according to Intec, which saw its Nasdaq-listed shares fall by more than 12% after the announcement.
Analyst Michael Higgins of Ladenburg Thalman said it was unclear whether Novartis’ drug failed in development or the competitive market dynamics changed.
The decision is however “an unfortunate event for Intec which had been pinning its hopes on this novel drug delivery asset to produce near- and long-term milestones plus potential royalties”, according to Higgins, who also says that “feasibility agreements are key to Intec’s outlook”.
That means all eyes are now on another feasibility deal signed with Merck & Co in May, which also applies to an undisclosed pipeline drug and is due to generate a formulation for testing in mid-2020.
The loss of Novartis as a partner comes just a few months after Intec was hit hard by a failed phase 3 trial of its lead project – an Accordion formulation of the standard Parkinson’s treatment combination of levodopa and carbidopa.
That revelation sparked an 80% fall in Intec’s shares, consigning it to penny share territory after having been at a high of $9.25 in the previous 12 months.
Ladenburg Thalman has previously estimated that the Novartis deal could be worth $30m to $80m upfront to Intec, with the potential to also generate milestones and single-digit royalties.
A $1.5m sign-off fee is still due from Novartis this quarter, and Intec ended the third quarter with reserves of just under $16m – enough to last it through 2020, according to the analyst.
Intec’s Accordion technology consists of an outer capsule filled with a film – rolled up like an accordion – that carries the active ingredients, which can be designed to release drugs at different rates. The formulation is retained in the stomach for up to 12 hours.
Intec chief executive Jeffrey Meckler said that while the Novartis decision was disappointing, the programme “has added to our growing body of scientific knowledge relating to the Accordion Pill platform and has expanded our tool chest of drug-on-film technology”.
Intec also has Accordion formulations of cannabidiol and tetrahydrocannabidiol that have compared favourably to GW Pharma’s Sativex product in early-stage testing, achieving higher levels of the active ingredient in the blood.