A pair of PhIII failures spells last rites for Menlo’s once-promising Merck drug
Four months after an intercontinental merger, Menlo Therapeutics is counting yet another pair of trial failures — ones with significant consequences for the companies, their shareholders and the drug.
In two pivotal Phase III trials, Menlo’s lead drug serlopitant failed to treat pruritus associated with prurigo nodularis — basically itchiness from a particular skin disease that causes red lesions on a person’s arms or legs. Serlopitant has long been the company’s only drug and as recently as 2018, it looked promising enough to support a stock price of $37. In April of that year, a Phase II failure demolished the stock price overnight: $35 to $9. Other subsequent stumbles trickled the ticker down to just above $2.
In November, though, the NJ–based company merged with an Israeli dermatology biotech called Foamix. The deal gave Foamix 59% of the new company, but with strings attached should serlopitant fail again: The first pivotal failure would send Foamix’s control up to 76%. The second would send their shares up to 82%.
Today’s paired results — wherein the drug failed to show a statistically significant improvement against placebo on an itch-scale across two studies and hundreds of patients — give Foamix the vast majority of shares in the company, and spell the end of a long road for the drug. Merck had originally developed it as an NK1 receptor antagonist for alcohol dependence, before selling it to Menlo for $1 million upfront.
“We will thoroughly analyze these data to better understand the outcome but, at this point, we do not intend to further pursue serlopitant,” CEO David Domzalski said in a statement.
With the news, Menlo’s stock fell 45% premarket to $1.40. It’s no longer at the top of most investors’ radar, but any hope now lays in Foamix’s assets. The next big day for those is June 2, the PDUFA date for FMX103, a treatment of moderate-to-severe papulopustular rosacea.