An Israeli biotech gambles on a failed drug, merging with troubled Menlo ahead of PhIII data
After taking a pair of torpedoes at the waterline last year, a listing Menlo Therapeutics $MNLO is casting its lot with Israeli dermatology biotech Foamix $FOMX in a merger deal that’s carefully hedged against more failures.
Foamix got a big — and much needed — boost a few weeks ago, when the FDA approved its topical formulation of an antibiotic for acne. And they just filed an NDA on another minocycline take with an application for moderate-to-severe papulopustular rosacea.
They’re combining with a company that counts serlopitant as the lead — and only — drug in the pipeline. We last heard of that drug a year ago, when it failed a second trial focused on chronic cough. Now they’re running a pivotal in pruritus, even though it failed the Phase II.
As of now, Foamix shareholders come out of a post-merger company with 59% of the stock in what is a pure share swap. But if serlopitant fails the first of 2 pivotal studies, their share goes up to 76%. A second failure takes that to 82%.
Here are the near term catalysts they’re touting to shareholders.
- Commercial launch of Amzeeq anticipated in January 2020
- Phase II clinical trial results for serlopitant for the treatment of CPUO in January or February 2020
- Phase III clinical trial results in the U.S. and Europe for serlopitant for the treatment of pruritus in PN in March or April 2020
- FMX103 PDUFA action date of June 2, 2020
- Phase II clinical trial results for FCD105 for treatment of moderate to severe acne with top-line data expected in mid-2020
- NDA submission, assuming Phase III success for serlopitant for the treatment of pruritus in PN, in H2 2020
Menlo’s stock hit a high north of $37 in the spring of 2018, then fell off a cliff as the only egg in its basket cracked under stress. Shares closed a little over $5 on Friday, representing a fall from grace that can’t be excused by the breakthrough therapy designation they won on serlopitant.