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Mallinckrodt (MNK) Discontinues Sclerosis Study on Acthar Gel

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Mallinckrodt plc  is permanently discontinuing its phase IIB study, PENNANT, designed to assess the efficacy and safety of Acthar Gel (repository corticotropin injection) as an investigational treatment for amyotrophic lateral sclerosis (ALS). Shares of the company fell 2.6% following the news. Shares of the company have plunged 48.1% year to date compared with the industry’s decline of 2.8%.

Mallinckrodt took the decision after considering a recent recommendation by the study's independent Data and Safety Monitoring Board (DSMB). The issue specified was a higher-than-expected rate of pneumonia in the treatment group compared to the placebo group. Another factor was the lack of a clear efficacy signal. The independent DSMB noted that there was not a great enough proportion of subjects who completed week 36 to provide a definitive determination of a treatment effect.

Enrollment in the study will stop immediately and patients already enrolled will be tapered off the drug before discontinuing use.

This action does not affect any other ongoing clinical studies on Acthar Gel.

We note that, Acthar Gel, which became part of the company’s portfolio following the Questcor acquisition, is currently approved for 19 indications but marketed for only 9 with a 3% patient penetration rate. Hence, Mallinckrodt is working on boosting Acthar sales in the approved indications, including rheumatology and pulmonology as well as underserved patient populations. Performance of the drug has been impressive so far, propelled by solid demand for rheumatology, pulmonology, ophthalmology and nephrology; expanded access in more recently promoted indications such as lupus and sarcoidosis; and mature indications like infantile spasms and nephrotic syndrome. 

 

Zacks Rank and Stocks to Consider

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

Some better-ranked stocks in the large-cap pharmaceutical sector include Novartis AG (NVS - Free Report) , Merck and Co., Inc. (MRK - Free Report) and Roche Holding AG (RHHBY - Free Report) . All of them carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Novartis’ earnings per share estimates increased from $5.00 to $5.01 for 2019 and from $5.54 to $5.60 for 2020 over the past 60 days. Share price of the company has increased 20.8% year to date.    

Merck’s earnings per share estimates have moved up from $4.72 to $4.74 for 2019 and from $5.20 to $5.28 for 2020 in the past 60 days. Share price of the company has increased 8.2% year to date.    

Roche’s earnings per share estimates have moved up from $2.45 to $2.47 for 2019 and from $2.44 to $2.52 for 2020 in the past 60 days. Share price of the company has increased 10.5% year to date.    

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