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Mallinckrodt Presents Encouraging Data on Acthar Gel for RA

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Mallinckrodt plc announced positive results from its phase IV study on lead drug, Acthar Gel, at the European Congress of Rheumatology 2019 (EULAR).

The phase IV multicenter study assessed the efficacy and safety of Acthar Gel in patients with persistently active rheumatoid arthritis (RA), who were previously treated with disease-modifying anti-rheumatic drugs (DMARDs) and corticosteroids. The primary endpoint of the study was the proportion of patients reaching low disease activity (LDA) at 12 weeks.

The part 1 of the study was an open-label period (n=259). After 12 weeks of treatment with Acthar Gel, patients were evaluated for treatment response. In part 2 of the study (n=154), participants, who achieved LDA of DAS28-ESR of less than 3.2 at week 12 in part 1, entered a double-blind withdrawal period. These patients were then randomized in a 1:1 ratio to receive either Acthar Gel or matching placebo for an additional 12 weeks.

As previously announced, both parts of the multicenter study are now complete.

The study met all primary and secondary outcome measures, with 63% of patients suffering from persistently active RA achieving LDA, as assessed by DAS28-ESR at week 12.  In the Acthar arm, 86% of patients had sustained LDA at week 24, as defined by Clinical Disease Activity Index, compared with 66% in the placebo arm.

Results from the withdrawal phase of the study showed that 62% of patients with persistently active RA, who met rigorous response criteria at week 12, maintained LDA results when treated with Acthar as compared to 43% with placebo treatment at week 24.

We note that Acthar is approved by the FDA as adjunctive therapy for short-term administration in RA, including juvenile RA. The results reinforce Acthar’s efficacy in treating RA patients, who were treated previously with multiple standard therapies but continued to have active disease.

The drug generated sales of $223.9 million in the first quarter.

Mallinckrodt’s stock has plunged 37.7% in the year so far compared with the industry’s decline of 17.3%.

 

Shares have crashed in recent times as the company has been embroiled in various litigations.  Mallinckrodt recently reached an agreement in principle with the U.S. Department of Justice (DOJ) in relation with the Questcor litigation.

The company has reached an agreement to resolve the previously disclosed government investigation of Questcor's legacy sales and marketing activities, but it is still subject to the finalization of certain terms.

Mallinckrodt expects to pay $15.4 million related to legacy Questcor activities, per the civil False Claims Act settlement. Shares also crashed last month after the company filed suit in federal district court against the U.S. Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS) to protect Medicaid patient access to Acthar.

The lawsuit was filed against the agency’s decision, which required Mallinckrodt to change the base date average manufacturer price (AMP) used to calculate Medicaid drug rebates for Acthar.

Zacks Rank and Stocks to Consider

Mallinckrodt currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks are Bristol-Myers Squibb Co. (BMY - Free Report) , Roche (RHHBY - Free Report) and Celgene Corp. . While Bristol-Myers sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bristol-Myers’ earnings per share estimates have increased from $4.79 to $5.03 for 2020 in the past 60 days.

Roche’s earnings per share estimates have increased from $2.35 to $2.41 for 2019 in the past 60 days.

Celgene’s earnings estimates have moved up by a cent to $10.72 over the past 60 days.

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