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Teva Pharmaceutical Industries Ltd (TEVA - Analyst Report) recently announced a deal that will expand the company's central nervous system (CNS) pipeline. Teva acquired all rights, assets and obligations relating to Huntexil (pridopidine / ACR16) from NeuroSearch. Huntexil is being developed for the symptomatic treatment of hand movement, balance and gait disturbances in Huntington disease (HD).

Per the terms of the agreement, NeuroSearch will receive approximately $26 million (DKK 150 million) from Teva over a time-period of at least six months. NeuroSearch is also entitled to receive additional funds in the form of regulatory and commercialization milestone payments.

Although NeuroSearch had conducted late-stage studies with Huntexil in the US, EU and Canada, results from these studies were found insuffient for the purpose of gaining approval from the US Food and Drug Administration (FDA) as well as the European Medicines Agency (EMA). Huntexil, which showed a significant treatment effect on Total Motor Score, failed to meet the primary endpoint (Modified Total Motor score).

Teva plans to conduct new clinical studies with Huntexil. The successful development of the candidate would allow Teva to enter a market that has significant unmet need. According to the company, about one in 10,000 people in North America and Europe are affected by Huntington disease. Death could occur within 15-25 years of diagnosis.

Lundbeck’s Xenazine (tetrabenazine) is approved for the treatment of the involuntary movements (chorea) of Huntington’s disease. However, the treatment is associated with major side effects like suicidality and depression. We note that companies like Pfizer (PFE - Analyst Report) and Medivation (MDVN - Analyst Report) were unsuccessful in their development plans for a Huntington disease treatment (dimebon).

We currently have a Neutral recommendation on Teva, which carries a Zacks #3 Rank (short-term ‘Hold’ rating). We expect investor focus to remain on Teva’s update on its strategic plan in December.

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