BioWorld International Correspondent
LONDON - Evolutec plc is reviewing all options for its commercial future after its lead product rEV131 failed its second Phase II trial in a month, in the treatment of inflammation following cataract surgery.
That followed the December failure of rEV131 in the much larger indication of allergic rhinitis. News of the second setback pushed the share price down 2.5 pence to 15.5 pence, giving Evolutec a market capitalization of about £4 million (US$7.7 million), or half its cash. The earlier news inflicted an even greater hit, with the shares falling from £1.34 to 43 pence.
"The market has undoubtedly been very hard on the company, marking the share price down to less than our cash," CEO Mark Carnegie Brown told BioWorld International.
The Reading, UK-based company does not intend to make any further investment in the product, but Carnegie Brown said the fact that it is aimed at a recently discovered histamine target, the H4 receptor that has been implicated in a number of inflammatory diseases, means it should be possible to find a licensee.
"To support my comments, I've talked to a number of clinical experts and researchers who have worked on this receptor, and they are as surprised as we are [at the trial results]," Carnegie Brown said.
In announcing the second failure, the company said "all strategic options to realize value for shareholders" are under consideration. That includes out-licensing products, finding joint development partners and selling the business.
In the trial of rEV131 in treating inflammation after cataract surgery, the results showed no significant differences between rEV131 and placebo.
A review of the hayfever trial confirmed that the rEV131 product and the implementation of the protocol were as specified. But Evolutec noted that the failed Phase IIb trial represented a higher hurdle than the previous Phase IIa trial, with patients being exposed to much greater levels of ragweed pollen.
As a result, patients showed an allergic symptom score that was twice that seen in the previous trial. The company said the lack of efficacy may have been because the amount of histamine released exceeded the binding capacity of rEV131. Carnegie Brown said one route forward for the product, a recombinant version of a naturally occurring anti-inflammatory protein extracted from tick saliva, might be to administer it by infusion, rather than topically, as was the case in the two trials.
There is not much else in the Evolutec portfolio. Although the company has rights to a number of compounds originally discovered by scientists at Oxford University in the saliva of ticks and other biting insects, it has taken a conservative approach to development, raising funding in small tranches against stated objectives.
The low-risk approach appealed to investors, and in July 2004, Evolutec helped nudge the IPO window open in Europe, raising £5.1 million at £1.25 per share.
The only other significant product, rEV576, is a complement inhibitor, which has demonstrated activity in preclinical models of the autoimmune diseases myasthenia gravis and Guillain-Barré syndrome, and asthma and acute myocardial infarction.
Evolutec has established a research collaboration with Case Western Reserve University in Cleveland to carry out further preclinical work with rEV576 in myasthenia gravis and was planning to commence clinical trials this year. Despite its early stage of development, Carnegie Brown believes this is a valuable asset. "rEV 576 is aimed at a validated target in indications where there are no, or few treatments," he said.
Carnegie Brown said he is actively pursuing a number of options. "But we need to do some sort of a deal now. We won't bring anything else forward or start any clinical trials until then."