Rigel Pharmaceuticals Inc. left open the tiniest prospect for success for dry eye candidate R348 after the Janus kinase/spleen tyrosine kinase (JAK/SYK) inhibitor missed both primary and secondary endpoints in a phase II study. The company said it was halting the general program in dry eye syndrome (DES) while continuing a phase II study in a much smaller subset of dry eye patients with graft-vs.-host disease (GVHD).

Rigel also disclosed that it stopped its indirect AMPK activator program, R118, due to its side-effect profile in phase I trials but plans to continue its direct AMPK activator research.

Those decisions meant the San Francisco-based biotech effectively placed all of its eggs in the fostamatinib basket. Rigel recently moved its lead compound, an oral SYK inhibitor, into a phase III study in patients with the bleeding disorder immune thrombocytopenic purpura (ITP) and plans to begin enrolling a phase II study of patients with IgA nephropathy (IgAN), an autoimmune disease of the kidneys, in the fourth quarter. (See BioWorld Today, July 17, 2014.)

Rigel's president and chief operating officer, Raul Rodriguez, who has been through this scenario a few times, said the company has sufficient funding to see the ITP study to results "and a comfortable runway beyond that."

In its second quarter financials, Rigel reported a cash position of $176 million as of June 30.

Following preclinical studies, Rigel originally investigated R348 for patients with rheumatoid arthritis (RA), psoriasis and other autoimmune diseases, initiating a phase I study in 2008 after the company raised $48.8 million in a public offering to advance its clinical portfolio. (See BioWorld Today, May 4, 2007.)

But fostamatinib was always the company's primary RA play, and in 2012 Rigel moved R348 – also referred to as R-932348 – into a phase I study in 36 patients with mild to moderate dry eye. Findings showed the drug was well tolerated, and in May 2013 Rigel decided to move the wholly owned compound into phase II development.

According to Cortellis Clinical Trials Intelligence (CTI), the randomized, double-blind, placebo-controlled study of R348, known as DROPS, enrolled 206 patients, assessing the safety and efficacy of 0.2 percent and 0.5 percent doses in patients with DES, formally known as keratoconjunctivitis sicca. Patients were randomized to one drop of either dose of the ophthalmic solution or placebo into each eye daily for 12 weeks. Endpoints included changes in corneal fluorescein staining, conjunctival staining, tear production and dry eye symptom scores from baseline.

Rigel did not disclose the efficacy outcomes, but the company reported at the Jefferies Global Healthcare Conference in June that it was seeking to achieve a 10 percent improvement in response rate over placebo to be competitive with market leader Restasis (0.05 percent cyclosporine solution, Allergan Inc.), which generates sales in excess of $800 million annually. Rigel said no significant adverse events were reported in the phase II.

DROPS-2, which is assessing dry eye in patients with chronic ocular GVHD, plans to enroll up to approximately 60 patients at two U.S. centers, using similar efficacy outcomes as the larger study. The company expects to report findings from the trial, which is still enrolling, in the second half of 2015.

DES "is a much more severe disease in graft-vs.-host patients than common dry eye," with the larger indication primarily affecting individuals with Sjögren's disease and postmenopausal women, Rodriguez said. Although R348 did not achieve statistical significance in DROPS, patients with more severe DES who received a higher dose of the drug had better results.

"Graft-vs.-host is a small indication, we grant you that, but there's a tremendous medical need for the drug there," Rodriguez told BioWorld Today. "Given the trends in the more severe patients with the higher dose, we think we have a shot at it."

Partnering opportunities are different in GVHD than in the wider DES indication, he added, noting that the limited number of ophthalmology specialists who work with GVHD patients could potentially justify going to market alone.

'WE UNDERSTAND THE SAFETY PROFILE QUITE WELL'

Rigel isn't the first biotech to stumble in DES, where Restasis is the only drug cleared for marketing in the U.S. and elsewhere. Last year, Seattle-based Acucela Inc. had a phase III failure with 2 percent rebamipide ophthalmic suspension, licensed from Japanese partner Otsuka Pharmaceutical Co. Ltd. And in December, Israel's Ophthalix Inc. disclosed that CF101, an A3 adenosine receptor (A3AR) agonist licensed from parent company Can-Fite Biopharma Ltd., failed to meet primary and secondary efficacy endpoints in a phase III study in moderate to severe DES. (See BioWorld Today, Dec. 31, 2013.)

Biotechs continue to pursue DES because the market is attractive and, as Rodriguez said, "the bar from Restasis is really not that high." One indication of the level of interest was last year's acquisition of Sarcode Bioscience Inc. by Shire plc for $160 million up front, plus undisclosed clinical, regulatory and commercial milestones based on the progress of its main asset, lifitegrast. (See BioWorld Today, March 26, 2013.)

Others in the space include Eleven Biotherapeutics Inc., which is using funds from its initial public offering in January to advance products from its AMP-Rx protein therapeutic platform, among them EBI-005, a phase II DES candidate. Regenerx Biopharmaceuticals Inc., of Rockville, Md., also has a phase II program for RGN-259 (T-beta4 preservative-free eye drops), and Mimetogen Pharmaceuticals Inc., of Montreal, has advanced MIM-D3, a small-molecule mimetic of nerve growth factor that binds to the TrkA receptor, into phase III. (See BioWorld Today, Jan. 19, 2011, and Jan. 2, 2014.)

In June, Lee's Pharmaceuticals Ltd., of Hong Kong, gained CFDA approval to begin phase II trials of RGN-259, licensed from Regenerx for the China market. (See BioWorld Today, June 25, 2014.)

Rigel, meanwhile, will focus most of its attention and resources on fostamatinib. The company expects to have data from the phase III program, which includes two ITP studies, at the end of 2015, "but we're just opening the centers now, and in the fall we'll have a better read on the time frames for enrollment," Rodriguez said.

The phase II in IgAN, which is expected to enroll approximately 75 patients, will explore an indication where patients have few treatment options, since the condition usually advances to dialysis and the need for kidney transplant. "We have some very good preclinical data, and we're running a phase II trial to see if we have a benefit with the product," Rodriguez said.

Safety is the biggest bugaboo for products targeting ITP and IgAN, he added. Trials conducted by Rigel and former partner Astrazeneca plc, of London, collected more than 4,500 patient years of data on fostamatinib, "so I think we understand the safety profile quite well," Rodriguez said.

The primary outcome measures for the indications – platelets in ITP and proteinuria in IgAN – also are more clear-cut than in previous trials of the compound, which disappointed in RA, leading Astrazeneca to terminate a partnership that could have meant up to $1.2 billion. (See BioWorld Today, Feb. 17, 2010, Dec. 14, 2012, and Sept. 6, 2013.)

"From an efficacy perspective, these are more straightforward measures, and the safety is very well understood," Rodriguez said. "That gives us some degree of confidence that we could have a benefit."

Analysts and investors were more cautious. In a flash comment, Wells Fargo Securities LLC analyst Brian Abrahams called the termination of R348 in DES "a disappointment," though he conceded expectations for the program were low. Abrahams was slightly more optimistic about Rigel's decision to focus on fostamatinib.

"We believe FosT's safety profile is well established and the drug has shown signals of activity in refractory ITP," he wrote, "though the ultimate opportunity in this indication is uncertain given the current treatment paradigm."

J.P. Morgan analyst Cory Kasimov agreed that news about R348 and R118 was discouraging but not surprising.

"These two disappointments follow on from the relatively recent clinical disappointments of fostamatinib in RA, R343 in asthma and R333 in discoid lupus erythematosus," Kasimov wrote. "In general, investor interest in the name has remained subdued, and we don't anticipate that to materially change until we get closer to phase III data for fostamatinib in ITP."

Rigel's shares (NASDAQ:RIGL) reflected that sentiment, falling 13.6 percent on Wednesday, to close at $2.67, for a loss of 42 cents.