ZURICH/LONDON A new lung and heart drug from Actelion beat expectations in a key clinical trial, giving a much-needed boost to its pipeline and providing Europe's leading biotech company with a viable successor to its current top seller.
Actelion is banking on macitentan to replace Tracleer, which treats the same condition and currently accounts for around 90 percent of group sales. Tracleer goes off patent from 2015 and also faces growing competition from Gilead's Letairis.
Investors had been on tenterhooks ahead of the data and the results of the Phase III study were better than many had expected, reassuring doubters that Actelion - essentially a one-drug company until now - will not see its business fizzle away.
The shares leapt 18 percent by 0745 GMT on Monday, valuing Actelion at around $5.8 billion and underscoring the vital importance of macitentan in defending Actelion's dominance of the pulmonary arterial hypertension (PAH) market.
"Essentially 'best case' Phase III results for macitentan should ensure a long-term future for Actelion's PAH franchise and shift the disease treatment paradigm," said analysts at Jefferies in a note.
In the study, macitentan decreased the risk of morbidity and mortality in comparison to a placebo by 45 percent in those patients given 10 milligrams of the drug and by 30 percent in those on 3 mg, Actelion said.
Importantly, there was no sign of potential liver problems associated with the drug, putting macitentan at an advantage over Tracleer and in line with Letairis as a treatment for PAH, an often fatal disease of the heart and lungs.
Positive results from the Phase III SERAPHIN trial had been seen as a last-chance for the company to get back on its feet after a string of product setbacks.
The impressive results mean it has cleared a key hurdle and UBS predicted macitentan could become the new standard of care in PAH, capturing more than half the market and also increasing the market size.
UBS suggested potential macitentan sales of 2.0 billion to 2.5 billion Swiss francs ($2.2-2.8 billion) by 2025.
The outcome may also revive takeover interest in the Swiss company, as Big Pharma companies increasingly look around the biotech landscape for promising new treatments to add to their pipelines.
"The results of SERAPHIN suggest the market's assumption that its business will simply disappear has been overly negative and are likely to make chances the company becomes an M&A target realistic," said Richard Parkes, an analyst at Deutsche Bank.
The firm expects to submit registration dossiers with health authorities around the world in the fourth quarter of 2012.
"I am extremely pleased with the outstanding SERAPHIN results," said Chief Executive Officer Jean-Paul Clozel. "We are committed to working with the health authorities to bring this potentially important advancement in PAH to patients as soon as possible."
Last year, Actelion became embroiled in a boardroom battle with activist investor, Elliott Advisors, a New York-based hedge fund, that urged the company to put itself up for sale.
Actelion, founded by former Roche scientists Clozel and his wife Martine in 1997, saw off that challenge from Elliott. But analysts have continued to speculate the company could be a takeover target once macitentan's potential became clear.
($1 = 0.9059 Swiss francs)
(Editing by Matt Driskill, Jane Merriman and Helen Massy-Beresford)