Takeda incurs $140M loss on failed epilepsy drug, sees FDA potential

Takeda Pharmaceutical Company reported a significant impairment charge of JPY 21.5 billion, roughly $143 million, in its fiscal year 2024 first-quarter earnings report. The charge stems from the disappointing outcomes of clinical trials for their epilepsy drug, soticlestat.

Soticlestat, developed in partnership with Ovid Therapeutics, was tested in phase 3 trials for two severe types of epilepsy: Lennox-Gastaut syndrome and Dravet syndrome. In June, results revealed that the drug did not meet the primary endpoint of reducing seizure frequency in patients with refractory Lennox-Gastaut syndrome. Similarly, another trial for Dravet syndrome patients also fell short of its primary goal, although it narrowly missed achieving a reduction in convulsive seizure frequency compared to a placebo. Despite these setbacks, secondary objectives in the Dravet syndrome trial were met.

The failure of these trials has resulted in a substantial financial impact on Takeda, exacerbating the company's ongoing restructuring efforts. The pharmaceutical giant had previously invested $196 million in 2021 to acquire the rights to soticlestat from Ovid Therapeutics, hoping for more promising results.

Despite the unfavorable trial outcomes, Takeda remains cautiously optimistic about soticlestat's future. The company highlighted the "totality of the data" as a potential beacon of hope for securing FDA approval. In their recent earnings report, Takeda emphasized that soticlestat still holds promise for patients with Dravet syndrome, even though it missed the primary endpoint. This perspective is bolstered by the drug’s orphan drug designation from the FDA, which is granted to treatments for rare conditions.

Andrew Plump, M.D., Ph.D., Takeda’s director and president of R&D, expressed confidence during the earnings call. He noted that the combined data from the phase 2 and phase 3 trials suggest significant clinical benefits for Dravet patients, and the drug demonstrates a differentiated safety profile. He stressed the importance of the large unmet medical need and stated that Takeda is actively exploring potential regulatory paths forward.

Soticlestat continues to feature prominently in Takeda’s development pipeline, as shown in their earnings presentation. The company is committed to engaging with regulators to discuss the future possibilities for the drug.

In summary, while Takeda faces a substantial financial setback due to the underwhelming phase 3 trial results of soticlestat, the company holds onto hope that the drug could still receive FDA approval based on its overall data profile. Takeda's dedication to addressing the unmet medical needs of epilepsy patients remains strong as they navigate the next steps in the regulatory process.

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