Second time around, Flexion makes the case for a generic steroid

Flexion investors had some reason to celebrate this morning. Their company’s sole clinical asset, Zilretta, managed to score in a phase III osteoarthritis knee pain study – having last September failed a similarly designed phase II trial.

But there is a major caveat: Zilretta is just an extended-release formulation of triamcinolone, a generic steroid used for a variety of inflammatory conditions. And, while Zilretta beat placebo in the phase III study, it failed to show superiority over generic, immediate-release triamcinolone.

This fact did not seem to bother investors who bid Flexion up some 30% in the pre-market, though by this morning’s opening the rise was a more modest 12%. The stock had been trading near its 12-month low, having crashed last September on Zilretta’s failure in phase II.

That trial – only testing the agent against placebo – had shown a benefit in average pain relief over the 12 weeks, but not at week 12 specifically, which was its primary efficacy measure. At the time Flexion and the sellside suggested that uneven numbers of patient dropouts across the study’s two arms might have caused it to miss statistical significance.


This optimism has been vindicated in phase III, where yesterday Flexion said Zilretta met the same primary efficacy endpoint versus placebo, with a highly statistically significant p value of less than 0.0001.

But placebo does not, of course, reflect the real world. Zilretta is an intra-articular injected microsphere-formulated triamcinolone, and the phase III trial included an active control – immediate-release triamcinolone – over which Zilretta failed to show statistical significance at 12 weeks.

Flexion makes the point that Zilretta can avoid the side effects associated with commonly prescribed osteoarthritis knee pain therapies, such as non-steroidal anti-inflammatories, Cox inhibitors and opioids.

But the crux of the matter is this: without a benefit for its extended-release triamcinolone over the standard form, all Flexion has done is make the case for doctors to use cheap, standard triamcinolone, which has been available generically for over five years.

On a call today Flexion said it would seek a pre-NDA meeting with the US regulator to determine Zilretta’s approvability in the absence of a benefit over generic triamcinolone; the group still plans a submission in the second half.

Shortened pathway

Flexion’s business relies on taking advantage of a shortened approval pathway – 505(b)(2) – while having an asset with patent protection. It was on the strength of this that the group raised $75m in a float two years ago, though even after this morning’s climb the stock was still below the IPO price (Biotech’s 2015 gains disappear, September 29, 2015).

The company is well funded, having secured a $30m loan facility last August, some $15m of which had been drawn down at the end of its third-quarter. Its gross cash at that point was $132m.

It says that if Zilretta is approved it will market it to doctors on the strength of its Western Ontario and McMaster Universities Arthritis Index benefit – a secondary endpoint on which Zilretta beat immediate-release triamcinolone.

With Flexion’s cash cushion some optimism is understandable. But in an environment where drug pricing has become a sensitive issue, reimbursement discussions should be interesting.

Study Design Primary endpoint result Trial ID
Phase II 310 pts with osteoarthritis of the knee Failed vs placebo NCT02116972
Phase III 450 pts with osteoarthritis of the knee Beat placebo; failed vs active control NCT02357459

To contact the writer of this story email Jacob Plieth in London at or follow @JacobPlieth on Twitter

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