When Vitae Pharmaceuticals Inc. called a halt to enrollment in its phase IIa trial testing VTP-43742 in psoriasis with no explanation, investors naturally feared the worst, sending shares plummeting to a 52-week low earlier this month. But concern transformed into enthusiasm late Wednesday after the Fort Washington, Pa.-based firm reported statistically significant data from the study and outlined plans to move the potentially first-in-class oral, retinoid acid receptor gamma t (RORyt) inhibitor, into a lengthier study. (See BioWorld Today, March 7, 2016.)

Shares (NASDAQ:VTAE) gained $2.68, or 65 percent, to close Thursday at $6.79. While not a full turnaround for the company – shares are still down about 60 percent since the start of the year – the positive proof-of-concept data provided much-needed good news in the wake of setbacks last year with partnered programs in diabetes and Alzheimer's disease.

"We're extremely pleased with these data," President and CEO Jeff Hatfield said of the phase IIa trial, which "demonstrated a clear signal of efficacy" that bodes well for VTP-43742 in psoriasis as well as other potential autoimmune indications such as psoriatic arthritis, ankylosing spondylitis, rheumatoid arthritis, multiple sclerosis and inflammatory bowel disease.

VTP-43742 is designed to regulate the production of pro-inflammatory cytokine interleukin-17 – specifically IL-17A and IL-17F – by way of Th17 cells. Hatfield described it as playing a "master regulator role in three aspects." In addition to IL-17A and IL-17F production, the drug appears to up-regulate the IL-23 receptor, the target of Boehringer Ingelheim GmbH's injectable antibody BI-655066, which bested Stelara (ustekinumab, Johnson & Johnson) in a phase II trial last year and has moved into phase III testing in psoriasis.

VTP-43742 also acts to differentiate naive T cells into active TH17 cells. While those three mechanisms are likely to have different rates of onset, Hatfield credited the "direct effects on IL-17A and IL-17F" with the rapid onset of the efficacy response seen in the four-week phase IIa trial. Per historical data, full efficacy of psoriasis efficacy response, as measured by the Psoriasis Area Severity Index (PASI), typically isn't seen until 12 weeks of treatment, he explained on a conference call with investors late Wednesday afternoon.

The phase IIa study tested two dose levels — 350 mg and 700 mg — in patients with moderate to severe psoriasis. After four weeks, the PASI score relative to placebo was -24 percent for the 350-mg dose and -30 percent for the 700-mg dose. (The placebo group has a percent PASI change from baseline of +1 percent.) The "p" values were 0.015 and 0.003, respectively.

"In the aggregate, we believe these data provide strong clinical validation for RORyt as a novel mechanism of action for the treatment of autoimmune disorders, said Chief Scientific Officer Richard Gregg.

VTP-43742 was safe and well tolerated, with no serious adverse events reported. Gregg noted that investigators did observe transaminase elevations in four patients in the 700-mg group, though none triggered the stopping rule, and there was no elevation in bilirubin or sign of liver damage. The elevations all completely reverse after completion of the study period, he added, though they did prompt Vitae to forgo the highest dose cohort of 1,050 mg.

The company also planned a low-dose cohort, 100 mg, but as preliminary data were coming in, "we reached a point where the totality of the data would be sufficient" and closed enrollment at 34 patients, Gregg said.

Vitae plans to launch a 16-week phase II study before the end of this year. While too early to predict how well the drug will perform in a longer trial, both Gregg and Hatfield noted the rapid onset of action, particularly in the third and fourth weeks of the phase IIa trial, which saw a marked acceleration in the rate of reduction in PASI scores in both dosage groups.

DATA 'POINTING TOWARD SUCCESS'

The IL-17 pathway has long been linked to psoriasis, and several monoclonal antibody drugs already have been clinical successes, including Novartis AG's Cosentyx (secukinumab), which won FDA approval for plaque psoriasis in January 2015, and Eli Lilly and Co.'s ixekizumab, which is pending an FDA decision. Also in late-stage development is brodalumab, which Astrazeneca plc is advancing with new partner Valeant Pharmaceuticals International Inc. after Amgen Inc. passed on the compound, citing reports of suicidal ideation as threats to the drug's labeling, despite positive phase III results. (See BioWorld Today, Jan. 22, 2015, and May 27, 2015.)

Vitae is aiming to position VTP-43742 as an oral alternative capable of knocking down IL-17. Promising biomarker data from the phase IIa trial showed the drug lowered IL-17A by 35 percent from baseline in the 350-mg dose group (p = 0.0016) and by 50 percent in the 700-mg dose group (p < 0.0001.) Levels of IL-17F were reduced by 53 percent and 75 percent, respectively (p < 0.0001 for both).

Results of skin biopsies — optional for patients — were less conclusive, Gregg told investors, with the reduction of IL-17 levels in tissue not reaching statistical significance. He said those results were similar to data published for IL-23 inhibitor guselkumab (Johnson & Johnson), currently in phase III development. Based on the RORyt mechanism, VTP-43742 is most likely to replicate the biology of an IL-23 monoclonal antibody, Gregg added.

Other biomarker analyses are ongoing, including full-spectrum transcriptional profiling for IL-21, IL-22, GM-CSF and IL-23R, along with immunohistochemistry and skin cell histology analyses, all of which likely will be reported at a future medical meeting.

But the reduction in IL-17 is key. "With IL-17 inhibition over a sufficient amount of time, the disease response, as measured by criteria such as PASI, will follow," said James Krueger, head of the Laboratory for Investigative Dermatology at Rockefeller University, who joined Vitae's conference call. He added that the IL-17 biomarkers offered "more valuable guidance as to whether the target is being engaged and whether the disease will eventually slow" on this treatment.

"It's absolutely true that one needs 12 weeks or more to see high-grade improvements in PASI scores," Krueger said. "But everything that exists here is pointing toward success of engagement [of the target], and I'm impressed by the consistency with which IL-17 is being reduced in patients."

He compared VTP-43742's ability in the phase IIa trial to modulate IL-17A and IL-17F as "very similar to what happens with IL-23 antagonists, which today are the most effective emerging therapeutics. Of course, these are still in phase III trials."

Vitae is by far the most advanced with the RORyt approach. According to Cortellis Competitive Intelligence, 14 other RORyt programs are in the works, but nearly all are at the discovery stage.

The company owns full rights to VTP-43742, as well as to VTP-38543, a topical liver X receptor, or LXR, selective agonist, which is in a phase IIa study in atopic dermatitis, with results expected in the second half of this year.

A partnership with Boehringer Ingelheim has yet to yield success. A drug for type II diabetes failed to hit its primary endpoint in a phase II study in June of last year, while a separate program targeting Alzheimer's disease was placed on hold. (See BioWorld Today, March 2, 2015, and June 30, 2015.)

As of Dec. 31, Vitae had $59.4 million in cash, equivalents and marketable securities, which should sustain the firm through the end of this year, though CEO Hatfield suggested there were "variables" that could extend the runway beyond 2016.