Shares of Ariad Pharmaceuticals lost two-thirds of their value Wednesday after follow-up safety data showing increased incidents of arterial blood clots in patients treated with Iclusig (ponatinib) prompted an FDA partial clinical hold and left analysts worrying about how the news will affect the drug’s position as a potential blockbuster.

Trading at more than 40 times the usual volume, the Cambridge, Mass.-based biotech’s stock (NASDAQ:ARIA) lost $11.31 to close at $5.83, despite attempts by company management to assuage fears during an early Wednesday conference call.

Iclusig won accelerated approval late last year for use in patients with chronic, accelerated and blast phases of chronic myelogenous leukemia (CML) and Philadelphia chromosome-positive acute lymphoblastic leukemia whose disease is resistant or intolerant to tyrosine kinase inhibitors (TKIs). At the time, management downplayed the inclusion of a black box warning on the label pointing to increased risk of serious arterial thrombosis and liver toxicity, stating that those risks were not uncommon to the TKI class and shouldn’t affect Iclusig’s uptake in the market. (See BioWorld Today, Dec. 17, 2012.)

Analysts, however, were more troubled by the black box warning, and updated data from the PACE study appear to justify those concerns. At a median follow-up of 24 months, serious arterial thrombosis occurred in 11 .8 percent of patients treated with Iclusig – the highest percentage in cardiovascular events. That compared to an 8 percent rate at 11 months of follow-up data, which were included in the current prescribing label for the pan-BCR-ABL inhibitor.

“While disappointing, this highlights underlying safety concerns that the Street has had for Iclusig and its likely limited commercial potential,” noted Jefferies analyst Eun K. Yang in a research report.

Many analysts on the call also expressed chagrin that management didn’t disclose indications of safety concerns earlier, and by noon Wednesday, shareholder rights firm Johnson & Weaver LLP had launched an investigation into whether officers and directors at Ariad may have violated state or federal laws by misleading investors as to Iclusig’s side effects.

Twenty-four-month data from PACE also showed that serious venous occlusion occurred in 2.9 percent of Iclusig-treated patients, compared to 2.2 percent in the prescribing information. The total non-serious and serious arterial and venous adverse event rate was 20 percent of treated patients.

“Over time, the number of events and potential of cardiovascular risk has continued,” acknowledged Chairman and CEO Harvey Berger. But, he added, “we are struck by the fact that the incidence rate, though, has remained absolutely constant,” at about 10 events per 100 patient years. Ariad attributed the increased number to longer duration of treatment, and pointed out that most patients who have had arterial thrombosis events were at increased risk due to age, history of cardiovascular issues and prior exposure to tyrosine kinase inhibitors.

For now, prescribing information remains unchanged. But the company decided to suspend enrollment in all clinical studies, and the FDA issued a partial clinical hold on new patient enrollment. Those already receiving treatment will be allowed to continue while Ariad works out study modifications, which almost certainly will include a dose-reduction strategy.

Iclusig is approved for once-daily administration of 45 mg. Data for lower doses are limited, but the company said efficacy appears to be similar at the 30-mg dose. Maintenance response appears good at 15 mg.

But even if efficacy drops a little at the lower doses, Iclusig’s data likely would still best other treatments. Designed to block certain proteins that promote the development of cancerous cells, the drug showed an impressive 56 response rate at 12 months in chronic-phase CML patients. (See BioWorld Today, June 5, 2012.)

As a comparison, Pfizer Inc.’s Bosulif (bosutinib), which gained approval last year, demonstrated a 27 percent major cytogenetic response.

Still a Potential Blockbuster?

But the question is whether Iclusig’s safety profile will improve enough at the lower doses to warrant continued use in refractory patients, not to mention expansion into the front-line market, which will be needed for sales to top $1 billion.

Some are skeptical. Noting that it would “take a long time to convincingly show” that lower doses would correlate with decreased cardiovascular risk, analyst Joel Sendek, of Stifel Nicolaus Weisel, said, “I have to believe that, ultimately, the peak potential of Iclusig is reduced.”

Many analysts cut their sales projections for Iclusig. Cowen and Co. analyst Phil Nadeau removed estimates for first- and second-line CML, dropping peak sales from $1 billion-plus to about $400 million-plus. Sales for the second quarter totaled $13.9 million.

Much will depend on data from the company’s ongoing EPIC trial, which is designed to compare Iclusig to Gleevec (imatinib, Novartis AG), with a primary endpoint of major molecular response at 12 months. Ariad said it will be reducing the dose of Iclusig to 30 mg to patients enrolled in EPIC trial. Full enrollment had been expected by the end of this year, but “timelines are now likely to all be pushed out,” noted RBC Capital Markets analyst Michael Yee, anticipating that EPIC would not read out until at least the end of 2014.

Berger agreed there would be a delay. “But I think it’s too early to assume the overall potential of Iclusig is less.” He added the firm was “very confident that, at the end of the day, with the dose-reduction scheme that we have and the high circulating levels that can be achieved with lower doses than 45 mg that EPIC has an excellent likelihood of being a positive trial with an appropriate benefit-risk balance.”

The company is in the process of meeting with the FDA – at this time, execs said the government shutdown isn’t affecting those talks – and will be able to provide more detailed plans at the next quarterly call in November. In the meantime, Ariad is notifying health care providers and updating the European Medicines Agency, which approved Iclusig for CML in July.

Ariad, which ended the second quarter with about $351.9 million in cash, said it also would be able to provide greater financial guidance during the third-quarter earnings call.