VBL Therapeutics shares (NASDAQ:VBLT) plummeted 65.5 percent Tuesday to $4.87, more than a dollar under the company's recent initial public offering (IPO) price, as investors digested news that VB-201, an experimental autoimmune therapy that had appeared to help patients with psoriasis in an earlier midstage study, failed to significantly benefit both psoriasis and ulcerative colitis sufferers in separate phase II trials.

Moving ahead, the company will concentrate on developing its gene therapy candidate VB-111, which it plans to carry into a single pivotal phase III study for treatment of recurrent glioblastoma (rGBM) in mid-2015, CEO Dror Harats told BioWorld Today.

Disappointed, but unbowed, Harats took the data in stride, even if investors did not. "You want to get go/no-go answers in the biotechnology and pharmaceutical world. You don't want trials that aren't conclusive," he said. "We did the right studies to find out that [VB-201] wasn't working well in psoriasis and ulcerative colitis."

While VB-201 proved safe and well tolerated in both trials, the studies left little room for misinterpretation. In psoriasis, the company evaluated VB-201 in 194 patients with moderate to severe plaque psoriasis. The primary efficacy endpoint of the randomized, double-blind, placebo-controlled study was a Psoriasis Area and Severity Index (PASI) score of 50, or the proportion of patients who achieve at least 50 percent improvement from baseline PASI score, at weeks 16 and 24. The trial showed that VB-201 had no effect compared to placebo on the primary or secondary endpoints at either dose level tested. The PASI 50 score for VB-201 patients was 26.4 percent at 16 weeks vs. 38 percent for placebo patients.

In the ulcerative colitis study, 112 patients with mild to moderate ulcerative colitis were evaluated in a randomized, double-blind, placebo-controlled design with a primary endpoint of disease remission at weeks 12 and 24.

No statistically significant effect of VB-201 was observed compared to placebo on either the primary or secondary endpoints. At 12 weeks, the remission rate for VB-201 was 10.5 percent vs. 15.1 percent in the placebo arm.

While the company will take a closer look at the data to evaluate the program's future, Harats said, now it will concentrate on VB-111, the lead candidate from its vascular-targeting platform.

VB-111, an intravenous. anti-angiogenic agent, targets endothelial cells in the tumor vasculature. The therapy contains a nonreplicating adenovector, a proprietary modified murine pre-proendothelin promoter (PPE-1-3x) and a Fas-Chimera transgene to angiogenic tumor blood vessels, leading to their apoptosis, according to the company.

Preliminary data from a phase II study in rGBM patients that the company shared in November suggested that the drug improved overall survival in patients who received VB-111 alone and who, upon further progression, were treated with VB-111 in combination with Avastin (bevacizumab, Genentech Inc./Roche AG) vs. patients treated with Avastin alone upon further progression.

But despite the positive progress, the planned phase III had been stymied since last summer when the FDA placed a partial clinical hold on the program in July. Now, following VBL's submission of additional information regarding a potency assay for the drug that the FDA wanted before allowing the company to move ahead, that hold has been lifted, allowing the pivotal trial to proceed under a previously agreed upon special protocol assessment (SPA).

Under the SPA, the Tel Aviv, Israel-based company will conduct a randomized, controlled, double-arm, open-label study of VB-111 in 250 patients, with a primary endpoint of increased overall survival. Interim data are expected in the second half of 2016.

The therapy has orphan status in both the U.S. and Europe and an FDA fast track designation for prolongation of survival in patients with rGBM. Despite the difficulty of treating rGBM, Harats is optimistic about VBL's prospects. Like Celldex Therapeutics Inc.'s rindopepimut, he said his company's interim analyses have shown VB-111 capable of delivering 12 months of overall survival. That could position VB-111 to function as either a complement or an alternative for patients without the EGFRvIII-positive glioblastoma Celldex is targeting. (See BioWorld Today, Nov. 17, 2014.)

In addition to rGBM, the company has also tested VB-111 in iodine-resistant differentiated thyroid cancer. In December, it announced positive results from an exploratory phase IIa study in that indication, in which 35 percent of the 17 patients given a therapeutic dose met the primary endpoint of six-months progression-free survival, compared to 23 percent, or three patients in a subtherapeutic dose cohort.

An additional phase I/II study combining VB-111 therapy with paclitaxel to test safety and efficacy in platinum-resistant ovarian cancer is ongoing. Results of that study could potentially be presented at the American Society of Clinical Oncology meeting or other medical meetings later this year, Harats said.

Following news of the autoimmune disease trials, Deutsche Bank analyst Alethia Young lowered her target price for VBL shares to $10 from $19. She maintained a "buy" rating on the company's shares. Though optimistic about the rGBM program, she told clients the company faces risks around efficacy or safety concerns with VB-111 in rGBM and a potential inability to garner enough funds to conduct the phase III program effectively.

While the company, which is registered as Vascular Biogenics Ltd., has yet to release its fourth quarter earnings, Harats noted that the company retains about the same amount of cash it had following its October IPO, in which it raised net proceeds of $34.4 million after selling about 6.7 million shares priced at $6 each. That gives the company at least "two years of fuel going forward with our plan, if not more," he said. "I think we are quite stable."

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