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SAN DIEGO (TheStreet) -- An experimental drug from Auspex Pharmaceuticals (ASPX) significantly reduced the incidence of uncontrolled movements in patients with Huntington's disease compared to a placebo, according to results from a phase III study announced Tuesday.

The Auspex drug, SD-809, is a chemically modified version of an older drug, tetrabenazine, currently approved to treat chorea (abnormal involuntary movements) associated with Huntington's disease, a genetic and fatal neuro-degenerative disease. Auspex designed SD-809's effect to last longer in a patient's body and to be better tolerated than tetrabenazine, which sees limited use in Huntington's patients because of the need for frequent dosing and relatively high side effects.

Auspex is expected to seek U.S. approval for SD-809 in the middle of next year based on the positive results from the placebo-controlled phase III study plus results from a separate study in which Huntington's patients were switched successfully from tetrabenazine to SD-809.

The phase III study enrolled 90 patients suffering from involuntary movements related to their Huntington's. None of the patients had been treated with tetrabenazine previously. The patients were randomized to receive 12 weeks of treatment with SD-809 once or twice daily or a placebo. The primary endpoint measures Total Maximum Chorea Score to assess the comparable reduction in involuntary movements between SD-809 and placebo.

As reported Tuesday, patients treated with SD-809 showed a 4.4-point improvement in Total Maximum Chorea Score compared to a 1.9-point improvement for patients treated with placebo. The 2.5-point benefit favoring SD-809 was statistically significant. Key secondary efficacy endpoints measuring quality of life and physical functioning also showed a statistically significant benefit for SD-809, Auspex said.

SD-809 was well tolerated in the study. Notably, reported rates of sedation, somnolence, insomnia, anxiety and depression reported by Huntington's patients treated with SD-809 were lower than the comparable side effect profile included in the FDA-approved label for tetrabenazine. The two drugs have not been compared directly against each other in a clinical trial, but Auspex hopes treating doctors will make the comparison themselves and conclude SD-809 is better tolerated than tetrabenazine.

Denmark-based Lundbeck (HLUKF) sells tetrabenazine in the U.S. under the brand name Xenazine and reported $253 million in sales in 2013. There are no patents protecting tetrabenazine in the U.S. and orphan drug exclusivity ends next year.

Zacks analyst Jason Napodano believes Auspex can fend off generic versions of tetrabenazine with SD-809's better tolerability and safety profile, reaching peak sales in Huntington's of $232 million. The more lucrative commercial opportunity for Auspex and SD-809 will come from developing the drug and receiving approval in other movement disorders, including tardive dyskinesia and Tourette's syndrome. Combined, the latter two indications could boost peak sales of SD-809 to more than $1 billion, projects Napodano.

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Auspex is also facing competition from

Neurocrine Biosciences

(NBIX) - Get Neurocrine Biosciences, Inc. Report

, which is developing a drug, valbenazine, for the same movement disorders.

Shares of Auspex were up $1.03 to $25.34 in late Tuesday trading. The stock is up 56% year to date. The company has a market value of $680 million.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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