Washington Editor

It's the kind of mirror image Corgentech Inc. didn't want: Only a few months after reporting a Phase III failure for edifoligide (E2F Decoy), its partnered product with Bristol-Myers Squibb Co., the investigational drug again fell short in another Phase III study.

As a result, further development plans are being dropped and BMS is exiting the partnership. That revelation, coupled with the failed efficacy data, caused Corgentech's shares (NASDAQ:CGTK) to plunge 51.7 percent Wednesday, a $2.60 fall to $2.43. The stock value is the South San Francisco firm's lowest since it went public a year ago at $16 per share.

"BMS has been a great partner for the co-development of this drug, and we appreciate all the support they have provided to Corgentech during the course of this collaboration," Corgentech President and CEO John McLaughlin said during a conference call. "No further development of E2F Decoy is planned."

Top-line results from the PREVENT IV trial showed that E2F Decoy failed to meet its primary and secondary endpoints to prevent vein graft failure following coronary artery bypass graft (CABG) surgery. The primary endpoint was reducing the incidence of graft failure between the E2F Decoy-treated and placebo groups; graft failure was defined as a graft blockage of 75 percent or greater measured by quantitative coronary angiography at one year.

Corgentech, which unblinded the results a day earlier, did not offer any reasons for why the trial failed. In the past, a Phase II trial in CABG patients produced a statistically significant reduction of blockage of 75 percent or greater in E2F Decoy-treated patients.

PREVENT IV was a placebo-controlled, randomized study that involved 3,014 patients undergoing CABG surgery at more than 100 sites. Safety was assessed by monitoring adverse events, post-operative complications and laboratory abnormalities. Treatment with E2F Decoy generally was well tolerated.

Complete data will be presented in future scientific publications and presentations by the study's investigators, similar to what the partners said after reporting E2F Decoy's first Phase III failure from a trial called PREVENT III. In that study, the product failed to show a benefit compared to placebo when considering the rate of vein graft failure in peripheral artery bypass patients through 12 months following surgery. (See BioWorld Today, Dec. 7, 2004.)

The now dissolved co-development deal with New York-based BMS could have been worth $250 million to Corgentech. The agreement's terms called for shared development costs in the U.S. and Europe, with co-promotion and profit-sharing guarantees in the U.S. and royalties due Corgentech in all other countries from BMS. (See BioWorld Today, Aug. 15, 2002.)

E2F Decoy is applied to a vein by a surgeon just prior to implanting as a bypass. The vein is treated outside of the body by bathing it in the drug in a procedure that is incorporated into the operation. The drug is designed to prevent the implanted vein from accumulating smooth muscle cells that collect cholesterol, and instead force the graft to thicken in a different way that causes it to resemble the architecture of an artery.

For BMS, the E2F Decoy setback is a smaller bump in the road. Wednesday, the pharmaceutical firm received FDA approval for a hepatitis B drug, Baraclude (entecavir).

For Corgentech going forward, it plans to conclude a Phase I trial of E2F Decoy in arterial venous grafts, with six further months of BMS funding per terms of the agreement's breakup, but doesn't plan any further development. Instead, the company expects to focus elsewhere in its pipeline on products such as its NF-kappaB Decoy, which was generated in five months and soon will enter clinical studies for eczema. McLaughlin spoke highly of that product's potential, partly because the nature of its topical delivery lends itself to multiple dosing.

"We continue to believe that transcription factor decoys will offer significant therapeutic benefits in the treatment of many diseases," he said. "We are fortunate to have a deep pipeline of products to choose from, and have the ability to generate new product candidates very rapidly."

The company also plans to select its next clinical candidate in the second half of this year. Among its other programs is a third decoy product, being developed to target the HIF transcription factor for oncological indications.