KaloBios takes its medicine and cuts losses in asthma

KaloBios Pharmaceuticals’ first star turn as a public company has been an embarrassing stumble. The California-based company pulled the plug on its lead project, KB003, after the asthma antibody failed in a phase II study to induce an improvement in lung function among patients inadequately controlled on corticosteroids.

Despite the asthma agent showing some effectiveness in a subgroup of patients with eosinophilic disease, cancelling its development is a wise move given how close big pharma-owned agents are to reporting pivotal data. Shares fell 30% to a record low of $3.25 today as the group turned its attention to its next candidate, a Sanofi-partnered antibody targeting Pseudomonas aeruginosa infections.

Scrapping it

Across the broad population of patients – those with non-allergic as well as allergic aetiologies – KB003 failed to improve scores compared with placebo on the primary endpoint, forced expiratory volume, or the secondary endpoints of exacerbations and peak expiratory flow.

The 150-patient trial included a pre-specified analysis of patients with elevated levels of eosinophils, an indicator of allergic disease, as well as patients who showed a high level of symptom reverse. Researchers found a statistically significant improvement in FEV1 in these subgroups, but this was an insufficient signal to move the project forward.

Stopping trials is not a common decision among biotech companies looking to keep investors hopes alive, especially as KaloBios floated only a year ago at $8 a share. It will not please long-term investors that today’s drop, following yesterday’s post-market announcement, means their shareholdings have lost more than half their value.

Cancelling work on KB003 will save $10m, which could be used on its second-in-line antibody, KB001-A. KaloBios is recruiting into a 180-patient phase II trial of this project in cystic fibrosis patients with Pseudomonas infections, hoping to forestall antibiotic use due to worsening respiratory symptoms; data are expected by the end of 2014.

Separately, Sanofi Pasteur is assessing the use of KB001-A in ventilator-assisted patients. The French group’s vaccines division paid $35m up front to secure rights to it in 2010, part of a deal potentially worth $290m to KaloBios.

Loaded field

KaloBios hypothesised that KB003, which blocks granulocyte macrophage colony stimulating factor (GM-CSF), would be effective in preventing production of both the eosinophils and neutrophils active in asthma. Discovering effectiveness in eosinophilic disease alone made it hard to justify taking on big pharma given the number of antibodies ahead of ‘003 in the pipeline (Therapeutic focus – Interleukin modulators crowd pipeline for severe asthma, May 28, 2013).

Two interleukin-blocking agents appear to be on the verge of reporting data at any moment – GlaxoSmithKline’s much-delayed Bosatria and Teva Pharmaceutical Industries’ Cinquil – while AstraZeneca and Roche have initiated phase III trials for beralizumab and lebrikizumab. In phase II, an Astra candidate is joined by those from Novartis, Amgen and Sanofi.

To compete in a field that rich, KB003 needed clear differentiation. It failed that test, and KaloBios is wise to move on.

To contact the writer of this story email Jonathan Gardner in London at [email protected] or follow @JonEPVantage on Twitter