RBC Capital Comments on Intra-Cellular's (ITCI) Positive ITI-007 Phase 3 Study

RBC Capital analyst Adnan Butt commented on Intra-Cellular Therapies (NASDAQ: ITCI) following the release of first phase III ITI-007 study results in schizophrenia, which meet its primary endpoint. Butt, who has an Outperform rating on the stock with a price target of $42, made note of the statistically significant benefit and clean safety, though he pointed out that the bull-bear debate continues.

"The first Phase III study met the primary efficacy endpoint of total PANSS and demonstrated potentially differentiated safety vs. existing drugs. A better than expected outcome would have been if there were stat sig differentiation in negative symptoms; however, we had not assumed as much," said Butt.

"The pushback this morning is on magnitude of benefit and negative symptom score but we think positive Phase III, clean safety and differentiated mechanism should allow the Phase III program to continue (data from second Phase III in 2016) and then to expand to other indications such as bipolar depression and behavioral disturbances in schizophrenia (already planned), which are all blockbuster potential indications along with schizophrenia," continued the analyst.

Butt added, "ITI-007 60 mg showed stat sig superiority over placebo at week 4 (least squares [LS] mean change from baseline -14.5 points, effect size [ES]=0.30, p=0.022 versus -10.3 points change from baseline for placebo). While the 40 mg dose showed a benefit, it did not achieve statistical significance (-12.9 points, ES=0.18, p=0.164). Both doses reached stat sig for the secondary endpoint of clinical global impression scale of severity of illness. This was a base case outcome for us .... The press release states that both doses of ITI-007 improved the PANSS Negative Symptom Subscale score more than placebo in the ITT population but that the improvement did not reach statistical significance in this 4 week study. Recall that this was also not stat sig in the Phase II and if it had been met it would have likely beaten expectations."

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Shares of Intra-Cellular Therapies closed at $26.11 yesterday.

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