Shares of AtheroGenics Inc. lost more than half their value after its atherosclerosis drug, AGI-1067, failed to hit its primary endpoint in a 6,100-patient Phase III study.
Patients receiving the oral small molecule showed no difference to those on placebo in the primary endpoint of time to first incident of a composite of major adverse cardiovascular events related to acute coronary syndrome, namely cardiovascular death, resuscitated cardiac arrest, myocardial infarction, stroke, the need the coronary revascularization and hospital admission for unstable angina.
Detailed data will be presented at the upcoming American College of Cardiology meeting in New Orleans, but news of the miss hammered the company's stock (NASDAQ:AGIX), which dropped $4.74, or 60.5 percent, Monday to close at $3.09.
Despite the setback, AtheroGenics plans to continue developing AGI-1067, which, in earlier studies, demonstrated an ability to block VCAM-1 expression and prevent atherosclerosis.
"While we're disappointed that we did not meet the primary endpoint" in the Phase III study, "we are encouraged by positive results we've seen in other predefined endpoints and disease states," said Russell Medford, president and CEO of the Atlanta-based company.
Those endpoints included a reduction in composite endpoints, comprising cardiovascular death, myocardial infarction and stroke. Data also showed an improvement in glycemic control, which is believed to be a long-term complication of diabetes.
According to a preliminary safety analysis from the ARISE (Aggressive Reduction of Inflammation Stops Events) trial, the most common adverse event was diarrhea-related, and there appeared to be an increase in liver function tests in some patients receiving AGI-1067 compared to those receiving standard of care.
Medford said the company's next step will be to further assess the study data. "We're looking at a number of options and development pathways going forward," he told BioWorld Today. He added that the AGI-1067 trial should not affect other pipeline programs and said the company is "in good financial position."
However, not everyone was so optimistic. Analyst Joel Sendek, of New York-based Lazard Capital Markets downgraded AtheroGenics from "buy" to "hold," and wrote in a research note that the company's debt balance of $136 million could hamper efforts to secure additional capital if needed for further clinical trials.
AtheroGenics, which reported a net loss of $20.7 million, or 52 cents per share, for the fourth quarter, ended 2006 with cash, cash equivalents and short-term investments totaling $152 million.
Sendek also anticipates that AGI-1067's commercialization partner, London-based AstraZeneca plc, will pull out of the companies' potential $1 billion deal. Signed in December 2005, the agreement included a nonrefundable $50 million up-front payment to AtheroGenics, but most of the money is on the back end, including up to $650 million in commercial milestones. AtheroGenics also would get a stepped royalty rate on product sales. (See BioWorld Today, Dec. 23, 2005.)
Medford declined to speculate on the AstraZeneca partnership, saying it was "early days," and "both companies are still analyzing the data." Under the terms, AstraZeneca has a 45-day window following completion of the final analysis in which to decide whether to continue with the collaboration.
Earlier in its pipeline, AtheroGenics has AGI-1096, an oral antioxidant and selective anti-inflammatory compound in development against transplant rejection. The company successfully completed a Phase I study before partnering the drug in 2004 with Fujisawa Pharmaceutical Co. Ltd. (now part of Tokyo-based Astellas Pharma Inc.) The company also has preclinical programs in rheumatoid arthritis and asthma.