Xenon’s lead in-house drug flops in a mid-stage test and stock plunges lower

Simon Pimstone

Xenon Pharmaceuticals has another setback to report.

Twenty months after its drug TV-45070 failed a mid-stage osteoarthritis study in Teva’s hands, the Canadian biotech $XENE reports that its lead, wholly owned topical drug XEN801 flopped in a Phase II trial on acne.

Their drug — a topical stearoyl Co-A desaturase-1, or SCD1 inhibitor — failed both the primary and secondary endpoint in the study, which tracked lesions over 12 weeks compared to a placebo. CEO Simon Pimstone immediately turned to future catalysts for its other drugs, writing off the effort.

Its stock plunged 50% on the news, as investors left in a rout.

Teva is still pursuing TV-45070 for post-herpetic neuralgia, with a Phase IIb readout coming up. And Roche is expected to push its Nav1.7 pain program into a Phase II fairly soon. Xenon also has a proprietary epilepsy drug XEN901 headed for an IND.

Xenon managed to pull off an IPO back in late 2014, as the stock market boomed for biotech, raising $36 million at $9 a share — well below the range it had set.

Pimstone said: “Despite the good scientific and preclinical rationale to pursue SCD1 as a novel acne target, the topline clinical results do not support this hypothesis or the continued development of XEN801. While we are disappointed that XEN801 did not demonstrate efficacy in the treatment of acne, we have a broad, diversified pipeline of small molecule ion channel modulators based on targets with high human validation that we continue to advance.”

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Recursion Pharmaceuticals Salt Lake City, UT
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Atlas Venture Cambridge, MA

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