Metabasis Therapeutics Inc. lost more than half its value on Tuesday after announcing that CS-917, the lead candidate in its metabolic disease program, failed a Phase IIb diabetes trial, while pradefovir, the lead candidate in its liver disease program, was dropped by partner Schering-Plough Corp.
Shares of San Diego-based Metabasis (NASDAQ:MBRX) hit new 52-week lows as they plummeted 54.4 percent, or $3.75, to close at $3.15.
"No one is more surprised and disappointed than we are" about the CS-917 results, Metabasis President and CEO Paul Laikind said during a conference call.
Yet he maintained that the scientists involved with the program "don't view this as a failed product, they view this as a failed study."
The trial randomized 392 patients to receive CS-917 at 50 mg twice a day, CS-917 at 100 mg twice a day, metformin at 850 mg twice a day, or placebo. Neither dose of CS-917 achieved the primary endpoint of significantly lowering levels of hemoglobin A1C (HbA1c) compared to placebo.
After three months, HbA1c for patients receiving the lower CS-917 dose was unchanged, while patients receiving the higher dose experienced a 0.17 percent decrease (p=0.1256). HbA1c for patients in the metformin group decreased 0.5 percent (p<0.0001).
Those results are markedly different from previous 14-day and 28-day Phase IIa trials in which CS-917 significantly reduced elevated blood glucose levels. In the 14-day trial, the drug also significantly lowered post-dose fasting plasma glucose (FPG) compared to placebo in three of the four dose groups. Mark Erion, Metabasis's executive vice president of research and development and chief scientific officer, said FPG reductions in the Phase IIb trial were not statistically significant.
Erion pointed to differences in the patient populations in the trials as a possible reason for the different results. Patients in the Phase IIb trial had baseline HbA1c levels around 7.6 percent, while those in the Phase IIa trials were in the mid-to-upper 8 percent range. Similarly, baseline FPG levels were lower in the Phase IIb trial.
Another key difference may be that the Phase IIb trial enrolled newly diagnosed patients. CS-917 works by inhibiting glucose production in the liver, a process that increases as diabetes advances. Erion said it may turn out that CS-917 is more effective in more advanced diabetes. Dosing also may have presented complications. The two doses tested in the Phase IIb trial were at the lower end of CS-917's previously tested range, and the drug has shown a steep dose-response curve in animal studies.
On the plus side, CS-917 appeared to be safe and well tolerated. In early 2005, Metabasis's long-time partner Daiichi Sankyo Co. Ltd., of Tokyo, halted two CS-917 studies due to concerns about lactic acidosis when the drug was given in combination with metformin. The companies later re-started the program but decided not to test CS-917 in combination with metformin in the Phase IIb trial. (See BioWorld Today, March 17, 2005.)
Daiichi conducted the Phase IIb trial, and the partners plan to fully evaluate the results and conduct subset analyses to confirm exactly what went wrong. "We have more questions than we have answers," Laikind said.
The findings of that analysis will affect not only CS-917 but MB07803, a second-generation, once-daily gluconeogenesis inhibitor that is currently being studied in a Phase IIa trial. Laikind said that trial "will continue until we have a reason to change that course."
The second piece of bad news Metabasis delivered Tuesday, which Laikind said was less surprising, involved the hepatitis B drug pradefovir. Metabasis had licensed the drug to Costa Mesa, Calif.-based Valeant Pharmaceuticals International, which later out-licensed it to Kenilworth, N.J.-based Schering-Plough. (See BioWorld Today, Dec. 15, 2006.)
A Phase II study of pradefovir showed that the adefovir prodrug significantly reduced viral load compared to Hepsera (adefovir dipivoxil, Gilead Sciences Inc.). Yet 24-month oral carcinogenicity studies in rodents indicated an increased incidence of cancer at the higher doses, prompting Schering-Plough to back out of the deal and return all rights to Metabasis.
Laikind said that while the future of pradefovir "certainly remains uncertain," it could be a good drug in the right partner's hands. He also emphasized that Schering-Plough's decision was not, as far as he is aware, related to the HepDirect prodrug technology underlying pradefovir, MB07811 and MB07133.
MB07811 is a liver-targeted, beta-subtype-selective thyroid hormone receptor agonist in a Phase 1b hyperlipidemia trial. MB07133, a liver-targeted prodrug of an activated form of cytarabine, has completed a Phase I/II trial in liver cancer. Metabasis has other metabolic and liver disease programs in preclinical studies.
As of March 31, Metabasis had $71.3 million in cash, equivalents and available securities. The company previously had projected a 2007 burn rate of $43 million to $48 million. Based on Tuesday's news, the company decided to freeze all nonessential discretionary expenditures and hiring.