Brighter Horizon for XenoPort

XenoPort, Inc. (XNPT - Snapshot Report) recently received a major boost with the US Food and Drug Administration (FDA) approving its restless leg syndrome (RLS) product, Horizant (gabapentin enacarbil). Horizant, which has been developed in collaboration with GlaxoSmithKline (GSK - Analyst Report), has been approved for the treatment of moderate-to-severe primary RLS in adults. The product is not recommended for use in patients who are required to sleep during the daytime and remain awake at night.

The product label mentions the increased the risk of suicidal thoughts or behavior in patients. The suicidal thoughts/behavior warning was expected as gabapentin enacarbil is a prodrug of Pfizer’s (PFE - Analyst Report) gabapentin, an antiepileptic drug (AED). AEDs are associated with an increased risk of suicidal thoughts/behavior.

Tough Regulatory Path for Horizant

The approval path for Horizant has not exactly been smooth. Glaxo had first filed a new drug application (NDA) for Horizant in January 2009. However, the FDA issued a complete response letter (CRL) in February 2010. While the agency did not raise any questions regarding the efficacy or the clinical safety of the drug, the agency was concerned about a preclinical signal of pancreatic acinar cell tumors in rats.

A response to the CRL was submitted by Glaxo in October 2010. Glaxo submitted new data from non-clinical studies and two epidemiology studies.

Approval a Major Positive for XenoPort

Given the challenging regulatory process, the approval of Horizant is as a major positive for XenoPort. Horizant is the first medication in its class to be approved for the moderate-to-severe primary RLS indication.

Currently available treatments include Glaxo’s Requip, Boehringer Ingelheim’s Mirapex and generic versions of these drugs. Opioids, benzodiazepines and anticonvulsants are also used to treat RLS.

According to a study published in Movement Disorders in 2010, it is estimated that about 2% of people in the US suffer from RLS. XenoPort estimates that about 4.6 million prescriptions were written for drugs that are approved for the treatment of RLS in the US in 2010.

Horizant is the first product to gain approval at XenoPort. The company currently recognizes revenues from its collaboration agreements with companies like Glaxo and Astellas. Horizant’s approval should boost XenoPort’s top-line significantly. XenoPort shares were up 56% in after-hours trading.

Horizant is also being studied for the potential treatment of post-herpetic neuralgia (PHN). We currently have a Neutral recommendation on XenoPort, supported by a Zacks #3 Rank (short-term “Hold” rating). We expect investor focus to remain on the commercialization of Horizant.  

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