La Jolla Pharmaceutical Co. discontinued its study LJ401-BT01 due to lack of efficacy and will reassess further development of LJPC-401 (synthetic human hepcidin) based on recent mixed clinical results. The fallout included a rough day for the company, which saw its stock (NASDAQ:LJPC) lose more than half its value, and the departure of the company’s president and CEO.
Halted for lack of efficacy, Study LJ401-BT01 was a pivotal, multinational, multicenter, randomized, controlled study with a target enrollment of approximately 100 patients to evaluate the safety and efficacy of LJPC-401 to treat iron overload in beta-thalassemia patients who, despite chelation therapy, have cardiac iron levels above normal. The primary endpoint is the change in cardiac iron levels, as measured by cardiac T2 magnetic resonance imaging from baseline to six months following treatment. La Jolla recently conducted an interim analysis, which included about half the target-enrolled patients, and found no significant differences in the primary endpoint or key secondary endpoints between patients on the treatment arm and control arm.
Hepcidin is an endogenous peptide hormone, a natural regulator of iron absorption and distribution, preventing excessive iron accumulation in vital organs such as the liver and heart, where it can cause damage and death. Iron overload is a result of primary iron overload diseases such as hereditary hemochromatosis or secondary iron overload diseases such as beta-thalassemia, sickle cell disease, myelodysplastic syndrome and polycythemia vera.
Monday was a painful reminder of how quickly the drug development landscape changes. But the pain hasn’t been limited to just Monday as stock whiplash has been a feature of 2019 for La Jolla. On Jan. 7, the company announced its fourth-quarter of 2018 results, disappointing the market as shares dropped 50% that day to close at $5.24 each.
In March, La Jolla reported net sales for Giapreza (angiotensin II), a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock, were $4.2 million in the fourth quarter and $10.1 million for the full year. The drug had its U.S. market launch in March 2018. The company's net loss for the three and 12 months ended Dec. 31 was $45.4 million and $199.5 million, or $1.73 per share and $7.85 per share, respectively, compared to $38.5 million and $114.8 million, or $1.74 per share and $5.41 per share, respectively, for the same periods in 2017.
On June 6, La Jolla’s stock rocketed upward 92.4% on positive results from the prespecified interim analysis of its phase II study of LJPC-401 in patients with hereditary hemochromatosis. The momentum continued on June 7 as shares zoomed 25.5% upward to close at $12.86 per share.
On Monday, the stock closed at $2.59 per share, down 53.5% for the day and down 76.7% from its June 7 high. The day also saw the loss of its president and CEO, George Tidmarsh. While the search for a new CEO is underway, a committee of the board will oversee the company’s management team. Simultaneously, La Jolla will re-evaluate and adjust its operating plan.
Even so, Cowen analysts wrote Monday that in “the U.S., we continue to think that there is need for Giapreza in catecholamine-refractory patients, with possible use in earlier lines of therapy. Despite the sluggish launch, we think that La Jolla stock is undervalued based on the potential of Giapreza and reiterate our $20 price target.”
The company priorities now include maximizing sales of Giapreza as a vasoconstrictor to increase blood pressure in adults with septic or other distributive shock in the U.S., where it was launched by La Jolla in the first quarter of 2018. It also plans to maximize Giapreza’s value for treating refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite adequate volume restitution and application of catecholamines and other available vasopressor therapies in Europe, where it was approved by the European Commission in August. Also in its sights is FDA approval of LJPC-0118 (artesunate) for treating severe malaria. La Jolla recently submitted its NDA.