All San Diego-based Evoke Pharma wanted to do was to come up with an effective, intranasal spray formulation of metoclopramide that could be used to treat diabetic gastroparesis in women. After all, it had proven active in a mid-stage study and the drug is commonly used to treat a variety of stomach-related ailments.
How hard could it be?
Plenty, as it turned out, as the company today acknowledged that their drug failed a Phase III study, demonstrating once again that the best efforts to de-risk a program can often go awry. Evoke’s shares $EVOK crashed on the news, plunging 75%.
Investigators trying to sort out the reasons for the failure centered on the clinical sites. 28 of 41 sites delivered statistically significant results, but the other 13 favored the placebo. But investors weren’t in any mood to listen to a breakdown of site results.
At the end of the last quarter, Evoke reported only $6.1 million in cash, enough to make it through October. So with a maimed stock price and a failed Phase III drug, the company will be forced to try to raise more money — and quite possibly cut costs — at its weakest moment. Noted Difei Yang at Brean Capital:
“The company’s net cash position at $4 million, it is not sufficient to run another Phase III trial with roughly 200 patients. Downgrade to HOLD. We expect more data analysis to come out over the coming months. Until then, we have limited visibility on the path forward for EVK-001.”
“The topline results are unexpected and an anomaly, given that metoclopramide has been approved and used for treating diabetic gastroparesis for more than 35 years. Additionally, EVK-001 provides predictable absorption of metoclopramide as seen in our prior trials,” said company CEO Dave Gonyer in a statement. “We continue to believe that EVK-001 is a promising treatment option for patients who currently rely on oral drugs to treat their symptoms of gastroparesis. Our analysis will continue as the remainder of the data become available and an update will be provided when we have more clarity on our steps ahead.”
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