Biotech's Latest Failed Trials, Missed Targets

|
 |  Includes: ALIOF, CYTK, GSK, RGEN, RHHBY, SOMX, TSMA, UGNE, ZGEN
by: The Burrill Report
Cytokinetics (NASDAQ:CYTK) and GlaxoSmithKline (NYSE:GSK) agreed to terminate their eight-year collaboration and license agreement on cancer drugs. The termination is effective February 28, 2010. As a result, all rights for GSK-923295, an inhibitor of centromere-associated protein E (CENP-E), will revert to Cytokinetics. GSK remains responsible for all activities and costs associated with completing and reporting on the ongoing early-stage clinical trial of GSK-923295 in advanced, refractory solid tumor patients. Cytokinetics said the decision to terminate the collaboration agreement with GSK reinforces its commitment to focus its internal research and development to muscle function and related therapeutic applications.
Previously, Cytokinetics had negotiated for the return of all rights to two other experimental cancer drugs that had also been initially developed in collaboration with GSK. Each of these compounds has demonstrated favorable tolerability and clinical activity in one or more clinical trials. Cytokinetics is now seeking to license its portfolio of these three novel mechanism anti-mitotic drug candidates so that they can be advanced in further clinical trials. “In our industry, and especially in these challenging times, it is increasingly important to remain focused and execute on a core business strategy,” said Cytokinetics CEO Robert Blum. “At Cytokinetics, we believe our best opportunities are rooted in our multiple programs directed to the biology of muscle function.”
The U.S. Food and Drug Administration notified Somaxon Pharmaceuticals (NASDAQ:SOMX) that it would not approve its application to begin marketing Silenor (doxepin) for the treatment of insomnia. In a Complete Response Letter, the FDA said that the Silenor application did not meet the approval standard for efficacy due to a lack of robustness of sustained subjective sleep maintenance efficacy in adults with primary insomnia. The letter did not raise any issues with clinical safety. Somaxon previously received a Complete Response Letter for the application in February 2009, and it resubmitted the application in June 2009.
The most recent Complete Response Letter did request that the company submit an amended Risk Evaluation and Mitigation Strategy, including a Medication Guide to be distributed with the product, in any resubmission of the NDA. Because the agency has not specified requirements to conduct any additional clinical work or other specific guidance to address the issues it raised, Somaxon said a meeting with the FDA will be necessary to discuss the basis for the FDA’s decision and to seek such specific guidance. The company intends to schedule this meeting as soon as possible.
Roche (OTCQX:RHHBY) notified Actelion (OTCPK:ALIOF) that it is discontinuing its alliance with the Allschwil, Switzerland-based biotech to develop autoimmune therapies. The decision is part of an ongoing portfolio review by Roche following its acquisition of Genentech. Actelion said it will move forward in developing ACT‑128800 in psoriasis and multiple sclerosis as well as other autoimmune indications. The decision by Roche to leave the alliance results in accelerated recognition of the deferred revenues from milestones previously paid to Actelion. As of the date of termination, the amount of unrecognized revenue was $88.7 million, which will be recognized over the 6 months starting in December of this year.
Transoma Medical (TSMA) shut its doors after the Arden Hills, Minnesota-based company could not raise needed additional capital, the Minneapolis Star Tribune reported. Transoma, which was developing a device to remotely monitor the electrical activity of a patient’s heart, employed more than 300 people. The company had filed a $75 million IPO in 2007, but pulled it in 2008 because of market conditions. In recent years it had raised $43.7 million in venture funding.
Repligen (NASDAQ:RGEN) said top-line results from a late-stage clinical study of RG1068, its synthetic human secretin to improve magnetic resonance imaging of the pancreas in patients with a history of pancreatitis, failed to meet its primary endpoint. The company’s CEO Walter Herlihy said that although this study did not achieve the pre-specified statistical outcome for the primary endpoint, it provides further evidence of the benefits of RG1068 in MRI imaging of the pancreas. He said development plans for RG1068 will be determined following discussion of these results with the FDA next quarter.
Unigene Laboratories (OTC:UGNE) said it will eliminate about one-third of its workforce as part of a restructuring plan. Under the plan, Unigene will continue Fortical production and will maintain all of its core programs and partnered activities while decreasing operating expenses by approximately $9-10 million for 2010. The company said because it currently maintains an adequate inventory of calcitonin and enzyme to support Fortical, it will temporarily suspend manufacturing of those materials at its Boonton facility. The plan also includes salary reductions at all levels, including senior management, and other cost savings.
ZymoGenetics (ZGEN) will cut its workforce by 15 percent or 52 employees and discontinue ongoing immunology discovery research programs and focus on building a market for its approved product Recothrom, a recombinant blood clotting enzyme, the company said in a filing with the U.S. Securities and Exchange Commission. The company anticipates recording a charge of approximately $3.5 million related to the restructuring and expects the reduction to generate annual expense savings of approximately $8 million to $10 million, which is in addition to the estimated $30 million in annual expense savings generated by its April 2009 restructuring.