Fresh from a $72M raise, Jeff Aronin's new lead rare disease drug is flagged as a failure
Just a few days after one of Jeff Aronin’s biotechs put out the word that they had raised $71.8 million to push their rare disease drug into pivotal trials, the company quietly flagged the treatment’s failure in Phase II.
But they are going for Phase III anyway.
The clinicaltrials.gov page on the Phase II study of Castle Creek’s only drug was updated on October 22 and now reads that the trial was terminated after an independent data monitoring committee “suggested that the study will not meet statistical objectives.” The page also includes a timeline with a wrap due in the middle of October.
Castle Creek’s co-founder, Michael Derby, responded to an email query of mine to say that the trial “showed several positive trends in key efficacy measures and a benign safety profile that strongly support continued phase 3 development of this potential treatment, which is our plan.”
The decision to terminate the phase 2 study was made following a planned interim analysis by an Independent Data Monitoring Committee that indicated that the trial, as structured and powered, was unlikely to deliver the level of statistical robustness needed to confirm efficacy as defined by the primary endpoint. In light of this data, we plan to use our most recent investment to pursue the late-stage development of this investigational drug. Given the unmet medical need for patients with EBS, we are also allowing patients from the terminated phase 2 trial to continue therapy in an ongoing open-label extension trial.
To be clear, all of the investors in Castle Creek, including the investors in our most recent financing, were briefed on the interim results and the decision to terminate the trial. They fully support our plan to continue development and to design an adequately powered phase 3 efficacy and safety trial.
Aronin — best known for kicking up a ruckus after cobbling together data on an old, cheap steroid sold overseas for around $1,000 a year and steering it through an FDA approval for Duchenne muscular dystrophy with plans to sell it for $89,000 a year — runs Paragon Biosciences, which in turn owns 6 subsidiaries including Castle Creek.
In Castle Creek’s case, they took an old drug that is marketed in a variety of countries around the world for osteoarthritis — 50 mg diacerein — and reformulated the IL-1 beta anti-inflammatory drug into a topical treatment for an ultra-rare fragile skin disease called epidermolysis bullosa.
Fidelity Management & Research Company and Valor Equity Partners put up the money to fund late-stage development.
Back in 2014 the EMA added restrictions on the use of drugs containing diacerein, citing adverse events that includes problems with the liver. The FDA, in turn, provided the company with a rare pediatric disease designation for diacerein 1% ointment, just as they did when Aronin was developing his steroid Emflaza. Those designations are worth quite a bit, as an approval would warrant an award of a priority review voucher worth more than $100 million.
And there are some distinct similarities between his latest rare disease program and his score on DMD, which a number of harsh critics in Congress concluded was rewarded for a successful plan to game the drug approval system.
Aronin has many of his old crew at Marathon — disbanded in the wake of the controversy over deflazacort — working at Paragon. The biotech proved to be an inspiration for Martin Shkreli, the pharma bro who was castigated when he engineered a 5,000%-plus overnight price hike at Turing for an old drug of his own.
“These guys invented price increases,” Shkreli commented once, before he was sentenced to 7 years in a federal prison for defrauding investors at his hedge funds. “I literally learned it from them.”