Shares of Definium Therapeutics rose by double digits early Wednesday after the psychedelics developer announced that its main asset scored positive results in another late-stage clinical trial.
Definium has been trying to prove its pharmaceutical-grade form of LSD can improve mental health across a range of conditions. In June, the company disclosed that a single dose significantly reduced symptoms of major depression in an important study. The pill, codenamed DT120, also looked generally safe and fast-acting. Leerink Partners analyst Marc Goodman described the findings as “about as good as we could have hoped for,” and predicted sales could eventually reach $1.5 billion to $2 billion in major depression alone.
The drug has now succeeded again, this time in generalized anxiety disorder. Definium’s study used a well-established, 56-point scale that measures the emotional, cognitive and physical experiences of anxiety — things like worrying thoughts, difficulty sleeping, depression, fidgeting, muscle aches and nausea. The company said that, 12 weeks after a single dose of DT120, scores had declined by an average of 11.6 points.
That’s 5.4 points more than what researchers saw in the trial’s placebo arm. It’s also larger than the five-point separation Wall Street had anticipated, according to Jefferies analyst Andrew Tsai.
All of the “key secondary endpoints” were also hit. Drug-treated patients experienced changes as early as the second day, and those effects held throughout the core study period.
To Paul Matteis, an analyst at the investment firm Stifel, the results are a “clean win” for Definium. Shareholders seemed to agree, as the company’s stock traded up 15% — to just over $47 apiece — at market’s open Wednesday. The share price had settled around $43 by mid-morning, however.
“While success here was mostly expected, we were pleased to see” efficacy data that were rapid and consistent to what was observed in earlier testing, as well as “continued robust durability,” Matteis wrote in a note to clients.
This “unprecedented efficacy” should “raise the bar for what patients and clinicians expect from GAD treatments and reinforces our belief that DT120 has the potential to redefine care for the millions of patients in need,” Rob Barrow, Definium’s CEO, said in a statement.
The experiment didn’t raise any new safety concerns. Namely, there were no signals of suicidal thoughts or behaviors. Once dosed, patients are monitored for up to eight hours. Definium said the average time for a patient on its drug to meet an “end-of-session checklist,” which evaluates their psychological and physical state, was 6.4 hours in the first portion of the study. By the eight-hour cutoff, 92% of participants had met the checklist criteria.
A second Phase 3 trial testing DT120 for generalized anxiety disorder is set to produce data in September. Next year, Definium expects to have high-level results from another major depression study and to begin a late-stage investigation in post-traumatic stress disorder. That slate “sets up a compelling catalyst path for the company as they seek to bring LSD to market with rapid label expansion opportunities shortly behind,” Matteis wrote.
Evercore ISI analyst Gavin Clark-Gartner models $2 billion in peak annual sales of DT120 for generalized anxiety disorder, plus $2 billion from major depression and $1 billion from PTSD.
