Regulus craters after FDA slaps a hold on hep C RNA drug following 2nd case of jaundice

Just days after setting up a $30 million line of credit to ramp up work on its hepatitis C therapy RG-101, Regulus Therapeutics has been forced to slam the brakes on its clinical program after the FDA slapped a clinical hold on the drug after researchers reported a second case of jaundice among patients taking it.

“The SAE occurred in a HCV patient with end-stage renal disease on dialysis enrolled in its on-going Phase I US study 117 days after receiving a single dose of RG-101,” the company said in a statement. Regulus claimed that its development timeline won’t be immediately affected as all patients for three ongoing trials have been recruited and dosed.

Investors, though, weren’t easily calmed. Regulus’s shares plunged 55% on the news.

The setback will do nothing to help its wavering case for the drug. Analysts have been wondering how Regulus can still make a mark in hep C after Gilead, AbbVie and Merck have all plowed ahead with a new wave of therapies that can effectively cure the disease. The only challenges left now are coming up with shorter, less expensive treatment regimens.

RG-101—which targets microRNA-122, which the virus needs to replicate— is San Diego-based Regulus’s leading therapy in the pipeline.

Regulus had been aiming at a short treatment duration, looking for a particular market niche that analysts like Geoff Meacham have largely discounted. Just last February, though, the biotech’s shares spiked on positive Phase II data for RG-101.

Even under the best of circumstances Regulus still has a considerable ways to go before it can get in front of the FDA with a marketing application. RG-101 is also being combined with GlaxoSmithKline’s ($GSK) GSK2878175, a non-nucleoside NS5B polymerase inhibitor, in treatment-naïve patients chronically infected with HCV genotypes 1 and 3.

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