Sophiris proves its doubters correct

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Sometimes it pays to go with your gut instinct. A case in point is Sophiris Bio, which had struggled to raise $65m in a Nasdaq float last year, ultimately having to price at 62% below its indicative range to get the IPO away.

In the intervening period the stock had lost 32% of its value, and the market’s fears were proved correct yesterday when Sophiris’s only project, PRX302, flunked the interim analysis of a phase III study in benign prostatic hyperplasia (BPH). After a further 82% crash yesterday the group is worth just $8m – well below the $29m cash balance it reported at the end of September.

Against a BPH market dominated by oral therapies PRX302 is a project injected directly into the prostate. The only other injectable, Nymox’s NX-1207, failed two US trials last month apparently owing to a large placebo effect, and there had been some hope that Sophiris might be able to capitalise on this.

In the event PRX302 now looks also to be dead. Its phase III Plus-1 study had enrolled 479 patients with lower urinary tract symptoms attributable to BPH, trying to show a benefit in the International Prostate Symptom Score from baseline over 52 weeks versus placebo as the primary endpoint (Upcoming events: Sophiris data and US hep C approval for Bristol-Myers Squibb, November 21, 2014).

No efficacy

A planned independent analysis of the three-month efficacy data has determined that, according to an undisclosed threshold, there is no efficacy over placebo.

The company has attempted to put a positive gloss on things, stressing that the analysis revealed no safety concerns. The interim look was intended for planning subsequent trials, it stated, and since Plus-1 remains blinded to everyone but the review board the study will continue to its primary 52-week endpoint.

And there lies Sophiris’s problem. The group has a lead asset that is now dead in the water, yet it is ethically obliged to continue funding its phase III study until completion in around a year’s time.

This predicament explains why it is trading so far below cash; after all, having $29m in the bank does not cut much ice when this has to be spent on a project that is doomed to fail. At the same time, of course, given the state of the share price and its prospects, Sophiris’s chances of raising cash on the public markets are negligible.

This year the group burned $19m in the space of nine months. Its biggest problem now is how to make it to the end of 2015.

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com or follow @JacobEPVantage on Twitter

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