Versartis shares hammered by a PhIII flop as growth hormone flunks key test
Two years after Versartis $VSAR got out from under a clinical hold on somavaratan (VRS-317), the biotech says its big Phase III study proved to be a bad flop.
The long-acting form of recombinant human growth hormone failed to meet the primary endpoint for non-inferiority in a comparison against daily Genotropin, with the standard of care actually beating out the experimental rival. Height velocity for somavaratan twice monthly was 9.44 cm, versus 10.70 cm for those receiving Genotropin.
This was a big catalyst for the Menlo Park, CA-based company, which will now have to account for the setback with investors.
The biotech was tagged with a clinical hold by the FDA back in the summer of 2015 as regulators sought out additional info on the drug, delaying the arrival of the pivotal data by 6 months.
Versartis bagged $126 million from their 2014 IPO largely by boasting about the potential of this program to disrupt a multibillion-dollar business dominated by daily injections. And with practically all of its eggs in this one basket, the damage was extensive.
The biotech’s shares were eviscerated, dropping more than 80% on the news in after-market trading.
“We are very surprised and disappointed to learn the outcome of the VELOCITY trial. Somavaratan showed height velocity in the range we had hoped, but it was not sufficient to demonstrate non-inferiority in this trial,” stated Jay Shepard, president and CEO of Versartis. “We have done an initial analysis of the top-line data and are continuing to thoroughly review the results to gain greater insight into the trial outcome. We plan to provide a corporate update later this year. I would like to thank the investigators, pediatric GHD patients and families that participated in the VELOCITY trial.”