A year ago Vitae Pharmaceuticals might have hoped to bounce back completely from a sharp fall in early March with strong proof-of-concept data for its lead candidate, the psoriasis pill VTP-43742. But this is a bear market, and bad news trumps good.
Strong signs of efficacy were overshadowed by liver enzyme elevations in patients taking the highest dose tested so far, a signal that will likely keep partners on the sidelines for now. Shares rebounded 65% to $6.79 yesterday on the news, but they are still below the near $10 level where they stood before speculation of a safety issue emerged.
Vitae bulls were encouraged that trial investigators found no liver toxicity issues in a low, 350mg, once-daily dose group that also showed efficacy over four weeks in this multiple-dose phase IIa trial.
However, four patients showing elevated liver transaminases in a 700mg group prompted the Pennsylvania-based group to cease plans to initiate higher-dose groups – the trial ended after 34 patients had enrolled, rather than the planned 60.
Based on the “totality of the data”, the company said it would initiate a 16-week study by the end of the year.
Earlier this month, word that the trial had ended early resulted in a downgrade from “buy” to “hold” from a Stifel analyst, Thomas Shrader, on the basis of toxicity worries, an event that cut the company’s valuation in half. Mr Shrader has now reversed himself following full data release, setting a price target of $15, but the damage has been done.
VTP-43742 is the most advanced project blocking the RAR-related orphan receptor (ROR) gamma pathway, which aims to suppress the production of T helper 17 (Th17) cells, which are implicated in the inflammation characteristic of many autoimmune disorders. It targets a similar pathway to psoriasis antibody Cosentyx from Novartis and ixekizumab from Eli Lilly, both of which block the Th17-triggering cytokine interleukin-17a.
A lack of safety issues with the 350mg dose, combined with similar-looking efficacy across dosing groups at four weeks – the low dose reduced the psoriasis area and severity index by a mean of 23% from baseline while the 700mg dose lowered it 29% – makes it obvious what Vitae will do in its phase IIb trial. The company acknowledged a need for further study to detect the mechanism that leads to the liver enzyme elevations.
Without a better understanding of the cause, it might be very difficult to persuade a partner to sign up for VTP-43742. Vitae’s chief executive, Jeffrey Hatfield, said the company’s $59.4m year-end cash pile was sufficient to see it through the rest of 2016. Thus, the timing and duration of the phase IIb trial strongly suggests that a fundraising will be necessary if a deal fails to materialise.
Still, psoriasis remains a hot developmental area, and there could be interest in an oral drug that has biological-like efficacy. Perhaps Vitae executives should be on the phone with Valeant – its licensing of brodalumab shows that it has little fear of psoriasis projects with safety worries.