Xoma may have learned a lesson today that other pharma players are coming to appreciate: pursue the orphan disease first, then consider wider indications. The failure of lead candidate Xoma 052 in type 2 diabetes has cost it dearly, as disappointed investors sent the shares down 30% in early trade today to $3.50, wiping out much of the gains made over the past three months (Event - Xoma diabetes drug awaits key proof of concept, March 21, 2011).
The California company quickly pivoted to emphasise the monoclonal antibody’s positive cardiovascular benefits; the terms of the recent deal with Servier suggest the French group was most interested in its promise in Behcet’s disease, where the FDA has already awarded orphan status. A setback in diabetes, however, also raises questions about whether similar anti-diabetic antibodies from Eli Lilly and Novartis will be effective in reducing blood sugar.
Delaying the inevitable
Xoma 052 is an anti-interleukin-1-beta antibody, theorised to work by blocking the destruction of insulin-producing pancreatic beta cells and slow the course of type 2 diabetes. Elevated levels of IL-1-beta, the master pro-inflammatory signalling protein, have been measured in diabetics and shown to damage beta cells.
In so doing, the hope was that ‘052 would represent a disease modifying treatment, a departure from current protocols that involve maximising insulin production or increasing the body’s sensitivity to insulin. Most type 2 diabetics will eventually need insulin therapy, but delaying its start is seen as a positive because of such risks as hypoglycaemia.
However, Xoma announced that the phase IIb trial in 421 diabetics already on metformin failed to show that the antibody, given monthly, reduced HbA1C levels after six months when compared to metformin alone.
Whilst analysts from RBC said expectations were low that the trial would be a success because of disappointing phase IIa data announced in January, the share price decline this morning suggests some investors were more hopeful.
The company has few upcoming catalysts to sustain investor interest, according to RBC, with the most likely ones being technology licensing, funding for a biodefense programme, and initiation of the phase III trial in Behcet’s disease in the second half of the year.
The end or just the beginning
While that would seem to spell the end of its development in type 2 diabetes – the company is still recruiting patients for a small phase II trial in type 1 in collaboration with the Juvenile Diabetes Research Foundation, according to clinicaltrials.gov – the company did take great pains to emphasise positive cardiovascular data.
Those data include statistically significant effects in reducing C-reactive protein (CRP) in all four dosage groups and increasing high density lipoprotein in two of the dosage groups. As both of these markers have been linked to cardiac outcome, company executives expressed a desire to pursue clinical development.
In a call with investors, chief executive Steven Engle noted that 65% of diabetics die from macro cardiovascular events like heart attacks and strokes and thus ‘052 has a role in diabetes treatment. That perhaps may have been as much a sales pitch to Servier, which derives most of its revenue from diabetes and cardiovascular products.
Xoma 052’s licensing deal suggests, however, that the orphan indication holds a greater interest for the private French pharma group – Servier will fund $50m in development costs, and in addition 50% of development in Behcet’s uveitis, underscoring burgeoning interest in high-margin orphan indications (Unmet need and early-stage deals continue to interest big pharma, January 21, 2011).
Behcet’s syndrome is an autoimmune disorder that is manifested by inflammation of the blood vessels; uveitis is one of its symptoms, which can lead to vision loss. In the US, it has a prevalence of 0.12-0.33 per 100,000 population, but in Middle East and Asian countries the prevalence is greater, with Turkey the highest.
Other antibodies have been tested for the disorder, with Remicade approved in Japan and known to be prescribed off-label elsewhere.
As for diabetes, the failure of ‘052 casts some doubts on the IL-1-beta hypothesis. That is not a positive sign for Eli Lilly’s IL-1 beta antibody, code-named LY2189102, or Novartis’ Ilaris.
A phase II trial of the Lilly drug has completed according to clinicaltrials.gov, but the most recent mention of the product to be found on Lilly's website is in a presentation by chief executive John Lechleiter dating back to January 2010.
The Novartis molecule, already approved for treating cryopyrin-associated periodic syndromes (CAPS) also has reportedly completed a phase III trial, but no news has been announced.
Thus Xoma’s failure may have wider reach. As Xoma refocuses its ‘052 efforts outside diabetes, expectations for the anti-IL-1 antibody approach may be narrowed.