Teva's Austedo hits a setback with Tourette syndrome trial failures

Facing long-running challenges in generics and following a global scaling back of its operations, Teva has centered its growth ambitions on new launches Austedo and Ajovy. But this week, the company’s Austedo expansion aims hit a setback with a trial failure in pediatric patients with Tourette syndrome. 

In a phase 2/3 study and another, separate phase 3 study, the drug didn’t meet primary endpoints of reducing motor and phonic tics versus placebo in pediatric patients. Investigators assessed tics using the Total Tic Score of the Yale Global Tic Severity Scale.

It's a "disappointing" result, Teva's executive vice president of R&D, Hafrun Fridriksdottir, said in a statement, "especially as there is such an unmet need for this community of pediatric patients."

Austedo is already approved to treat chorea associated with Huntington’s disease and tardive dyskinesia. The company is assessing its next steps in Tourette syndrome, Fridriksdottir added.

RELATED: Teva's global cutback spree is done. Now it's aiming to grow with Ajovy, Austedo 

The failures deal a setback to Teva’s aims to grow Austedo, but it’s a result that’s “not entirely unexpected” given a prior failure by Neurocrine’s Ingrezza in the indication, Oppenheimer analyst Esther Rajavelu wrote in a note. That drug has a similar mechanism of action. 

The Oppenheimer team isn’t adjusting its Austedo revenue estimates after the trial failures, Rajavelu wrote. 

Still, following Ingrezza's failure in the indication, Teva will miss an opportunity to capitalize with its own offering. And the latest failures follow another miss by fellow new launch Ajovy in cluster headaches. 

The news comes right on the heels of Teva’s fourth-quarter results and conference call when CEO Kåre Schultz positioned Austedo as a key growth driver for the company alongside Ajovy, which is approved to prevent migraines.  

Teva believes it can achieve $650 million in Austedo sales this year and is counting on the med’s growth to help offset generics to big-selling multiple sclerosis drug Copaxone. 

RELATED: Teva, amid massive restructuring, closes in on $3B cost-cutting goal 

Meanwhile, the company just finished its massive cost-cutting effort aimed at chopping $3 billion in annual expenses. In all, the company has laid off 13,000 employees, closed 13 manufacturing sites and 40 offices or labs. It’s planning to close or sell 10 more manufacturing plants. The company reported a fourth-quarter sales decline of 8%, partially due to Copaxone generics and lower sales for Teva's generics in the U.S.