Shares in Accentia Biopharmaceuticals plunged 68% yesterday to an all-time low of $0.97 when the company announced the failure of SinuNase for chronic sinusitis to demonstrate superior efficacy when compared to placebo in phase III trials.
Although the company has so far refused to give up on SinuNase completely, the near term outlook for the company is pretty bleak, especially when considering their current cash reserves of around $14m have to cover short-term debt of $30m, due by end of September.
As highlighted by EP Vantage on March 7 “Event - Accentia seeking clarity”,Accentia was heavily dependent on positive data from this trial in order to move forward with regulatory filings, and potentially lucrative licensing deals.
More than placebo effect
SinuNase is an anti-fungal agent, applied as a nasal wash (lavage), developed on the basis of research showing a causal link between airborne fungi and chronic sinusitis. In attempting to explain the negative data, the company highlighted the “control lavage unexpectedly achieved some therapeutic effect”, suggesting that the mere application of a nasal wash reduced the fungal load sufficiently to mask the therapeutic effect of SinuNase.
The company is clinging to the hope that a low-volume pump spray of SinuNase, which should be more user-friendly, will show the desired therapeutic effect. The company intends to initiate trials dependent on the outcome of discussions with the FDA over the current set of data.
As with all disappointments of this magnitude for small biotechs, the company will have to reassess its development strategy, which normally includes a rationalisation of its product portfolio and subsequent job cuts to reduce cash burn rates.
With respect to the rest of its pipeline, the company is expecting an FDA decision for AllerNase in rhinitis by June, phase III results for BiovaxID in April, a novel cancer vaccine for NHL and the initiation of phase III trials for Revimmune in multiple sclerosis in the third quarter.