Agennix facing tough questions about its future following talactoferrin failure
If there were any sounds of music drifting down from Heidelberg castle today, it could have been the fat lady singing for Agennix. The company has faced and failed its biggest challenge, talactoferrin producing positive pivotal data in lung cancer, an event that casts serious doubt over Agennix’s future.
Shares in the German group tumbled by 74% in afternoon trading today to just 49 cents, an historic low. The news comes only six months after the drug bombed in sepsis which had left lung cancer the only development option open to talactoferrin, and Agennix’s only hope of turning its fortunes around.
The 742 patient Fortis-M trial had pitched talactoferrin plus best supportive care against placebo plus best supportive care, in non-small cell lung cancer patients who had failed on two or more previous treatments. Talactoferrin failed to show superiority over placebo, with patients in the placebo arm actually living longer, 7.7 months compared with 7.5 months.
Although the drug had shown promise in earlier phase II lung cancer trials, its track record elsewhere to date has not been good, failing in sepsis earlier this year (Agennix’s failure in sepsis leaves few future options, February 2, 2012).
Agennix claimed talactoferrin could work in two such diverse areas because it was primarily an immunotherapy. As such, failing to show a response in sepsis should at least have raised the possibility of failure in NSCLC - as predicted by EP Vantage (EP Vantage Interview - Agennix hoping for success with multitasking talactoferrin, July 07, 2011).
Slash and burn
Unsurprisingly, with no other drugs in the pipeline other than a phase I multi-kinase inhibitor and phase II talactoferrin gel for diabetic foot ulcers, Agennix has started talking about taking “immediate steps to conserve cash”. On a conference call today Rajesh Malik, chief medical officer, confirmed one immediate cost saving will be discontinuing the Fortis-C trial studying talactoferrin in first line NSCLC.
Although the data for this study will be immediately unblinded and analysed, given the already poor performance from talactoferrin, which is made from recombinant breast milk, hopes are slim that any positive signal will be found.
As with all companies with limited options, Agennix is also taking the tried and tested cost saving route of a restructuring plan and reducing headcount. With a rather profligate looking four locations to its business another obvious place to find synergies would be shutting down some of its overseas operations.
The question, however, is whether all of this will be enough. At the end of June Agennix had €22.7m ($28m) in the bank.
On today’s conference call Torsen Hombeck, chief financial officer, was forced to concede that one strategic option might be to wind down the company. “At this point in time we have to evaluate all options, and by all definitions winding down the company is an option,” he said.
The person who might ultimately decide the fate of Agennix is Dietmar Hopp. The serial biotech investor is Agennix’s biggest shareholder, with a 65% stake. Having reached that stock level by converting loans into equity, Mr Hopp might decide that the best way of recouping his losses would be to liquidate the company and get back what remaining cash there is left.
To contact the writer of this story email Lisa Urquhart in London at [email protected]