Shares of Miragen Therapeutics Inc. (NASDAQ:MGEN) fell 17.2% to $1.30 Thursday on news that key phase II data for its lead candidate, cobomarsen for blood cancer, would be delayed until 2021 while support for another program, MRG-110 for heart failure, will be pulled by Les Laboratoires Servier SAS after a strategic review at the French pharma. Miragen is restructuring to cut costs and focus on cobomarsen, its antifibrotic remlarsen and other microRNA-29 mimics, but will be reducing investments in new discovery research, it said.

The news arrived as part of Miragen's second-quarter earnings report, in which the company reported having cash and short-term investments of $43.9 million as of June 30, enough to fund operations into the second quarter of 2020. But even with its move to cut about 26 positions and slow its burn, additional financing needs in the next six months will likely weigh further on company shares, Jefferies analyst Eun Yang said.

"While the phase II data delay is disappointing, if successful, there will likely be significant upside from current levels," she said, nonetheless lowering Jefferies' price target for Miragen to $9 from $11 due to the clinical delay and revised financing assumptions.

Miragen President and CEO Bill Marshall attributed his team's need to extend the timeline on which it would arrive at results of the company's phase II test of cobomarsen to "delays we experienced early in the onboarding process" activating trial sites. Recruitment rates at those sites are now approaching the pace Miragen's team had originally predicted, he said during the company's latest earnings call. But a report of the primary endpoint among trial participants, objective response (OR), will have to wait until the first half of 2021.

The randomized trial, called Solar, is designed to enroll 126 people with biopsy-confirmed cutaneous T-cell lymphoma, evaluating the safety and efficacy of cobomarsen given in 300-mg doses via I.V. as compared to Merck & Co. Inc.'s Zolinza (vorinostat). The OR endpoint is "durable" response for four months, defined as 50% or greater improvement in the severity of a patient's skin disease over the entire body with no evidence of disease progression in the blood, lymph nodes or viscera. Secondary endpoints include progression-free survival and multiple patient-reported outcomes. An extension trial, called Prism, is in the startup phase. (See BioWorld, Jan. 11, 2019.)

So far, more than half the approximately 58 sites Miragen hopes to open in 11 countries have been initiated, Marshall said. "As you know, the modeling of sort of completion dates can be a challenge, and we're zoning in on that now. And we felt it was appropriate to sort of adjust the guidance accordingly," he said.

The impact of Servier's hand-back of MRG-110, an inhibitor of microRNA (miR)-92 intended for the treatment of heart failure and other conditions, wasn't immediately clear, but the next steps for the program involve a readout of phase I data on the drug, due during a fourth-quarter scientific conference, Miragen said, previewing top-line results showing the candidate as "generally safe and well-tolerated" and ready to move to phase II. With the restructuring underway and at least some ongoing financial support from Servier through February, Miragen's team is evaluating development strategies for the candidate, which may include seeking a new development and licensing partner, it said. (See BioWorld, Oct. 19, 2011.)

Just last month, Suresnes, France-based Servier terminated an unrelated collaboration and license agreement with Macrogenics Inc., with which it was developing the bispecific molecule flotetuzumab for the potential treatment of primary refractory acute myeloid leukemia.

For now, in addition to the time it spends advancing cobomarsen, Miragen said it will continue to pursue development of remlarsen, a miR-29b mimic designed to decrease the expression of collagen and other proteins involved in fibrous scar formation. A phase II trial assessing the candidate's safety, tolerability and activity to prevent or reduce keloid formation is underway, with results expected before year-end. The focus of the study is on understanding effect size and the potential for the drug in phase III. The questions under consideration, Marshall said, are "is it most appropriate based on the effect size to seek out a development partner? Is it something that we could contemplate moving forward on our own?"