No happy ever after for BioMS

The billion dollar fairy tale ending for BioMS and Eli Lilly’s experimental treatment for multiple sclerosis dirucotide looked as if it has firmly been consigned to the land of fantasy yesterday, following the second failure of the drug, this time in a pivotal phase III trial, leading the two groups to announce they would be halting all further development.

The drug was the only late stage candidate in BioMS’ very thin pipeline, which consists of only one other pre-clinical candidate, so it was unsurprising that shares in the Canadian company, which had been buoyed by the hope that Lilly might eventually take out its partner on the back of positive clinical data, fell like a stone today. In early trading they were 88% lower at 32 cents.

With only one option in the pipeline to turn to, BioMS, which does have a $79m cash pillow to save it from immediate extinction, faces limited but stark choices. The group could shut up shop and return the cash to shareholders, or take the risky decision to use the money to license another pipeline candidate and try to rebuild its fortunes. If it does nothing, however, it could see itself become the target of a reverse merger for a private company keen to get their hands on its stock market listing and cash.

Foreshadow of the future

This second and final failure for dirucotide was preceded by another disappointment in January when the drug failed in a phase II trial for relapsing remitting multiple sclerosis (RRMS), sending the shares in the group down 30%. But while this was seen as a big setback, BioMS and Lilly had always stated that the drug’s real focus was secondary progressive multiple sclerosis (SPMS).

Approximately 30%-40% of all MS patients have the secondary progressive form of the disease, in which irreversible disability accumulates steadily, with or without relapses. This varies from RRMS where patients will have acute attacks of the disorder followed by remission periods of varying lengths that can last up to several years.

There are currently few treatment options available for SPMS patients, with the majority of MS drugs focusing on RRMS, and following positive phase II trials that showed the drug delayed the median time to disease progression by five years, hopes had been high that dirucotide could be a new, safe and effective treatment for the disorder. Analysts had forecast sales of $350m in 2014 for Lilly, who licensed dirucotide in December 2007 in a deal worth up to $497m, with an impressive $87m upfront fee.

Novel compound

Dirucotide, in contrast to most MS drugs which suppress the immune system, induces a tolerance to the body’s ongoing autoimmune attacks that characterise MS and is targeted specifically at the 70% of MS patients who have the HLA-DR2 and HLA-DR4 immune response genes.

As only one of two myelin basic protein (MBP) tolerising agents in development (see table) the drug was highly experimental and its failure will turn up the pressure on private company Bayhill Therapeutics, the only other group with a clinical stage MBP tolerising agent in the clinic.

Myelin basic protein (MBP) tolerising agents
Product Generic Name Company Therapeutic Subcategory Phase (Current) WW sales in 2014 ($m)
MBP8298 dirucotide Eli Lilly/BioMS Medical MS Therapies Phase III  350
BHT-3009 - Bayhill Therapeutics MS Therapies Phase II  -
Anergix.MS - Corixa MS Therapies Abandoned - Phase II  -
AG-284 - Novo Nordisk MS Therapies Abandoned - Phase I  -

Bayhill was hoping to find a partner for BHT-3009, the company’s lead product (EP Vantage Interview – Bayhill keeping options open in bid for survival, March 17, 2009), but with the failure of dirucotide the company may now find itself in the catch 22 situation of not being able to start phase IIb trials without a partner, and any potential partners reluctant to partner the drug until more late stage data is available.

What may count in Bayhill’s favour is that Lilly Ventures, the corporate venture fund arm of Lilly, already holds a 9% stake, and in an ideal world the pharma giant could decide to turn its attention to BHT-3009 following the demise of dirucotide; alternatively it might decide that the unproven therapy area that has now seen three products abandoned is just too risky. Although Bayhill's recent deal with Genentech for BHT-3021 eases some of their cash concerns, executives will be hoping for the former and that dirucotide’s failure will not leave it without its own happy ever after.

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