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Clavis Faces Merger, Shutdown in Wake of Elacytarabine Miss

By Nuala Moran
Staff Writer

LONDON – Clavis Pharma A/S is facing a merger or an orderly shutdown following the Phase III failure of elacytarabine, its lipid-enhanced version of cytarabine, in the 380-patient CLAVELA trial in advanced acute myeloid leukemia (AML).

This is the second big failure of the lipid technology in five months, with Clavis reporting in November that CO-101 (CP-4126), a modified formulation of gemcitabine, had not shown any effect on overall survival in a 360-patient pivotal Phase II study in metastatic pancreatic cancer, conducted in partnership with Clovis Oncology Inc., of Boulder, Colo.

Olav Hellebo, CEO of Oslo, Norway-based Clavis, told BioWorld International it was the end for the technology. "We've taken two drugs all the way through development. Both failed in the final big test; it would be difficult to justify putting huge investment into another trial," he said.

Median survival in the elacytarabine-treated arm in the CLAVELA study was 3.5 months, compared to 3.3 months in the control arm in which patients received the clinician's choice of treatment (p = 0.76). Adverse events were comparable between the two arms, and no meaningful differences were observed in any subgroup analyses. "We have intensively analyzed [the data] to look for subgroups that might have benefitted. There were no such groups; therefore, we will do no further work on elacytarabine," Hellebo said.

The main task now is to "concentrate on maximizing the value of the remaining assets," with immediate moves to cut the cost base and plans to look for a merger partner or else wind down the company. "We will either merge with another Scandinavian biotech, or there will be a managed closure. The options will be evaluated and put to shareholders in the next few months," Hellebo said.

The most recent financial results, reported on Feb. 15, show Clavis had cash of NOK223 million (US$38.3 million) on Dec. 31. Hellebo said there is still sufficient cash to meet all obligations going forward with something left for distribution to shareholders, adding, "It is too premature to say how much will be left."

Apart from what remains of the cash, Clavis has assets including some preclinical compounds and a stock market listing, which Hellebo said he believes could be of interest to a small private biotech. "We have a shortlist and will be contacting them," he said. The company also has carried forward R&D tax credits worth NOK750 million. Under the provisions of the tax law in Norway, those cannot be transferred to a new owner if the main intention of the acquisition is to monetize the tax loss. "For our merger, the rationale has to be [other than] tax losses – that shouldn't be the reason for the [acquisition]," Hellebo said.

The results of the CLAVELA trial fell well short of the 61-patient Phase II trial, where median overall survival was 5.3 months, a result Clavis set against the 1.5 months survival for matched historical controls. Ten of the patients recovered sufficiently to be referred for stem cell transplants after treatment with elacytarabine.

The addition of the lipid tail to cytarabine is designed to increase the half-life, so that higher levels of active drug remain in circulation. Elacytarabine also is retained for longer in cancer cells, magnifying the impact on DNA synthesis.

The failure of the CLAVELA trial also will mean an end to the development of elacytarabine in combination with idarubicin in patients with early stage acute AML who have failed first-line therapy. In December, Clavis reported at the American Society of Hematology meeting in Atlanta that there was a complete response in 13 of 46 evaluable patients in a Phase II trial of that combination therapy.

"We all wish elacytarabine would have worked better, and we could have expanded the options for AML patients, but that didn't happen," Hellebo said.

The investors concurred, with the share price falling by 85 percent to NOK1 .02 when the market opened on Tuesday, in reaction to the CLAVELA data. That translated to a market capitalization of NOK33.76 million. The fall was a smaller hit in relative terms than the news of the Phase II failure of CO-101 on Nov. 12, 2012, when Clavis' share price dropped from NOK66 to NOK8. (See BioWorld International, Nov. 14, 2012.)