Say goodbye to Tocagen, struggling brain cancer biotech to reverse merge with Forte Biosciences
Five months after a huge Phase III failure triggered mass layoffs at the company, Tocagen will sign itself out of existence.
The biotech, once focused on brain cancer, announced it has signed a reverse merger agreement with Forte Biosciences, a biotech tackling atopic dermatitis and other inflammatory skin diseases. Tocagen’s stock shot up 85% on the news, although that only translated to a 41-cent bump for a company that saw the last of its value go poof in September. The new company will trade under the ticker $FBRX.
Just two years ago, Tocagen went public and raised $85 million on the promise of a two-part therapy for glioblastoma. Part 1 used a vector to attack cancer cells and deliver the gene for an enzyme and Part 2 was a prodrug that converts into an anti-cancer drug. It was an intriguing approach to a deadly indication that has evaded most previous attempts, but in September, in its biggest test, the two-part therapy showed all but no signs of working.
In fact, patients on the control arm lived a month longer on average than patients on the drug arm, 12.2 vs 11.1. That computed to a hazard ratio of 1.06 and a p-value of 0.62. The company’s stock dropped 81% on the announcement, and a month later they cut 65% of their workforce, leaving the San Diego-based biotech with just 30 employees.
There is little readily available public information on Forte Biosciences – there is no apparent website – but they now have some high-profile backers. When the merger closes, an investor syndicate led by Alger, BVF Partners and OrbiMed will invest $14 million, the company said. They said that will bring their total amount raised to $25 million. They were founded in 2017 and soon after began looking for an initial $10.6 million funding round, according to an SEC document, and are led by Paul Wagner, the former chief business officer at CANbridge Life Sciences.
The company said their lead asset is FB-401, a topical drug for an inflammatory skin disease that showed “significant efficacy” in a Phase I/II trial, the results of which will be submitted to a peer-reviewed journal in mid-2020. A Phase II on atopic dermatitis patients is scheduled to begin in mid-2020, with a readout in mid-2021.