Prothena’s lead drug has decisively failed a crucial Phase IIb study for rare, second-line cases of AL amyloidosis. And after concluding that their Phase III for frontline use is also headed to failure, the biotech’s executive team is scrapping the whole program.
In a preview of the results being released this morning for one of the most closely watched catalysts of Q2, Prothena $PRTA CEO Gene Kinney said the company faced a very difficult decision, and had only one real option.
“We are a science-led company,” Kinney told me. “I’m a scientist myself.” And when you’re up against something like this, he said, you have to “pay attention to the data and take the most appropriate steps forward.”
It’s not pretty, and there will be no hunt for silver linings for a drug once reckoned as a potential blockbuster worth around $1.5 billion in peak sales. There will be no attempt to revive the effort.
Prothena’s shares dropped 62% Monday morning. And as analysts’ bleak assessments hit, things got even worse. By mid-afternoon the stock was down nearly 70%, wiping out close to a billion dollars in market cap after starting the day at $1.4 billion.
“We’ve had a large setback here with this program,” says the CEO, who is turning to review “the most optimal way of moving forward…All of us at Prothena had genuinely hoped that we had a drug that would help patients suffering from this disease.”
Right now, Prothena plans to bring the Phase III to an end as they look over the final data. But there’s no question in Kinney’s mind that the trials had foundered, with the Phase IIb delivering nothing statistically significant on the primary or secondary endpoints.
Some of those endpoints slightly favored the drug, others slightly favored the placebo.
The hazard ratio in the Phase III trial was at 0.84 when they decided to drop the effort at the recommendation of the independent monitoring board.
The primary endpoint of the Phase IIb PRONTO study was a measurement of cardiac best response using the highly regarded biomarker for NT-proBNP as a likely surrogate for survival. Prothena had told investors and analysts that a success here could trigger a request for accelerated approval at the FDA.
“This is the worst case scenario for this program unfortunately for PRTA at this time,” noted Jefferies analyst Michael Lee.
The results will be a particularly bitter pill for Neil Woodford to swallow. The UK investor bet heavily on Prothena’s success with NEOD001, regularly offering his enthusiastic endorsement of the company and the team in charge. Now he’ll have to account for another painful setback on the portfolio, after the stock falls far below what he paid to buy in.
The brutally bad news for investors comes on the heels of a significant step forward for Prothena. The biotech recently signed a rich, preclinical licensing deal with Celgene to beef up its fledgling neurosciences pipeline — with $150 million in cash tied to it — including an Alzheimer’s program for tau.
That effort will take the spotlight, along with another clinical program and the preclinical work under way on other drugs.
AL amyloidosis is a rare condition that’s diagnosed in about 3,000 people a year in the US, though it may also well be underdiagnosed, according to Memorial Sloan Kettering Cancer Center. In the disease, rogue plasma cells produce an immunoglobulin light-chain protein that produces amyloid, which is deposited in organs and gums the works, capable of severe damage.
As there are no drugs approved for the condition, doctors often turn to autologous stem cell transplants following chemotherapy to eradicate the errant plasma cells. Treatment also sometimes involved multiple myeloma drugs like Velcade, with evidence that carfilzomib and daratumumab can tamp down on the production of the plasma cells. There are a variety of studies now in the clinic for myeloma drugs in this condition, but any dedicated drug that can modify the disease will find a big market.
Prothena’s shareholders have had a lot to fret about on this development program. The company’s chief medical officer, Sarah Noonberg, abruptly resigned in February — less than a year after the BioMarin vet joined Prothena — which inevitably spurred some buzz on Twitter. More significantly, Sahm Adrangi’s Kerrisdale offered up one of their Nasdaq SWAT attacks on the drug and the company.
Kerrisdale set the chances of success in these trials at 0%.
“Prothena’s cardiac best response rate is merely a byproduct of well-documented natural variance,” Kerrisdale noted, “and we believe there is no chance of NEOD001 producing statistically significant results in its current Phase 2b and Phase 3 trials.”
Next up for Prothena is their experimental Parkinson’s drug, PRX002/RG7935, which is allied with Roche. It is their only other clinical stage program, following a decision last fall to scrap a program for PRX003.
Kinney says another preclinical program will soon be advanced into human studies, and there’s plenty of cash on hand. The biotech, which had 125 staffers on hand at the end of 2017, also listed $422 million in cash — later augmented with Celgene’s $150 million buy-in.
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