Karuna and Incyte scrap programs; More cash for the SPACs
Karuna Therapeutics has built itself into a $2 billion company off the data of an old Eli Lilly drug, when combined with trospium chloride, showed in schizophrenia. For a while, the company hoped that it might also prove effective as a non-opioid treatment for pain.
Now, however, Karuna is abandoning that effort. After a Phase Ib trial of 24 healthy volunteers did “not provide conclusive evidence of an analgesic benefit of KarXT,” the company said it would stop developing it for that indication. Karuna will continue working on the drug, an M1 and M4 agonist, for schizophrenia. Patients who received it in a Phase II trial last year showed a 24-point improvement on a common clinical score.
A Phase III trial is scheduled to begin later this year, CEO Steve Paul said in a statement.
“Looking ahead, we remain focused on developing KarXT for the treatment of severe neuropsychiatric disorders, including schizophrenia and dementia-related psychosis, where robust evidence from previous clinical trials supports the potential of KarXT to provide a new, unique and mechanistically differentiated therapeutic for the treatment of these disorders,” Paul said.
More cash for the SPACs
A week after Tony Coles’ Cerevel Therapeutics nabbed $445 million as part of a merger with a Perceptive Advisers SPAC — a record for a life sciences “blank check” transaction — another firm has announced a new life sciences SPAC, while RTW has priced their latest one.
The new SPAC, from HighCape Capital, has penciled in $100 million in the initial offering, though it remains to be seen how much it will ultimately try to fetch. The new RTW offering, called RTW Health Sciences Acquisitions 2, raised $139 million, selling 13.9 million shares at $10 a piece.
SPACs have risen dramatically in prominence in recent years, going from 3% of the IPO market in 2014 to 35% today, according to NASDAQ’s Jay Heller. Investors who purchase stock are essentially betting that the SPAC’s managers are savvy enough to, within 2 years, pick a good company to merge with. For companies and investors, it can also provide a smoother path to public markets than an IPO, helping skip over the lengthy and volatile process of setting a price. In addition to Cerevel, biotechs that have gone public via this route in the past year include Immunovant and Immatics.
G1 Therapeutics gets up to $170M in China deal
G1 sold rights to trilaciclib, an experimental drug meant to mitigate the side effects of chemotherapy, in China, Hong Kong, Macau and Taiwan to Simcere Pharmaceutical Group for $14 million upfront and $156 million in milestones, plus royalties. The drug has received breakthrough status in the US and was recently submitted for approval in small cell lung cancer.
The drug works by preserving bone marrow function that would otherwise be severely undermined by chemotherapy. It is now being tested in other cancers. Simcere will be responsible for clinical development in China.
Incyte abandons an early candidate
Incyte announced in its second quarter earnings that it retired one candidate from early development.
The experimental molecule, known as INCB59872, is an LSD-1 inhibitor that was being tested in early trials in sickle cell disease, sarcoma, and other malignancies. The sickle cell disease trial was terminated last year, according to clinicaltrials.gov. The cancer trials were terminated in June, with Incyte citing a “strategic business decision” for the cancellation.
Once one of the more lucrative R&D engines in the industry — developing the molecules that become the cancer drug Tabrecta and the JAK inhibitors Jakafi and Olumiant — the 29-year-old biotech has struggled in recent years to keep up the pace of development.