Oryzon Genomics SA is losing its only partner, for lead candidate ORY-1001 (RG-6016), after Roche Holding AG reprioritized its pipeline and abandoned development of the lysine specific demethylase-1 (LSD1) inhibitor.

Since inking a 2014 deal for up to $500 million, the companies completed a phase I/II study in acute myelogenous leukemia (AML) that was already underway and Roche is conducting a phase I study in small-cell lung cancer (SCLC), which the pharma committed to complete. Oryzon, of Barcelona, is set to regain full rights to the drug once termination of the license agreement becomes effective.

Despite the company's positive spin on disappointing news, the company's shares (ORY) on the Madrid Stock Exchange (MSE) closed at €2.105 (US$2.45) for a loss of 27.5 percent.

"We are obviously disappointed by this decision," Carlos Buesa, Oryzon's co-founder and CEO, said, emphasizing that the decision was not data-driven but a consequence of internal business priorities at Basel, Switzerland-based Roche. Buesa said Oryzon is focused on regaining control of the asset as soon as possible "to ensure the continuation of the clinical development plan without interruptions. We are fully committed to develop ORY-1001."

Company representatives did not respond to BioWorld.

The 2014 pact, which included $21 million in up-front and near-term milestone payments, covered oncology, hematology and unspecified nonmalignant applications involving ORY-1001 and backup compounds, plus intellectual property and options on other Oryzon programs. Oryzon was set to receive tiered royalties ranging up to mid-double digits on related product sales. (See BioWorld Today, April 9, 2014.)

LSD1, which plays roles in embryogenic development and the regulation of embryonic stem cell pluripotency, is a histone demethylation agent that acts by demethylating lysine K4 and K9 in histone H3 while functioning either as a co-repressor or as a co-activator of transcription, depending on the relevant transcription complex. The enzyme is overexpressed in many malignancies, including pancreatic cancer, colon cancer and neuroblastoma.

Findings from the phase I/II study showed that ORY-1001 was well-tolerated, based on experience in 41 patients in up to three cycles of treatment. The compound showed good oral bioavailability and pharmacokinetic parameters, and pharmacodynamic biomarkers enabled Oryzon to monitor response to treatment in M4/M5 AML patients. Oryzon reported that promising responses were seen in the phase IIa study arm, which enrolled 14 patients.

The company has advanced a second compound, ORY-2001, into the clinic to treat neurodegenerative disorders such as Alzheimer's and Parkinson's disease, multiple sclerosis and Huntington's disease. A randomized, double-blind, placebo-controlled, single and multiple ascending-dose phase I study is evaluating the safety, tolerability and pharmacokinetic profile of the dual inhibitor of LSD1 and a structurally related target, monoamine oxidase B (MAO-B). The study is expected to recruit approximately 88 healthy volunteers and older adults at a single site in Spain, according to Cortellis Clinical Trials Intelligence.

Oryzon is advancing a third LSD1 inhibitor, ORY-3001, through preclinical work in an undisclosed indication and has more than a dozen additional assets in discovery, according to Cortellis.

A year after the Roche deal, and with "the appetite for biotechnology in Spain" increasing, Oryzon became the first pure-play biopharma to list its shares on the main market of the MSE (Bolsa de Madrid) – a move designed to circumvent the tedious process of conducting an IPO in Spain, Buesa said at the time. (See BioWorld Today, Sept. 18, 2015.)

Over the next year, the company raised €32 million, adding another €18.2 million in March from institutional investors in the U.S. and Europe. During an investor presentation in June, Oryzon officials pegged the company's market cap at $115 million to $120 million and said its cash runway extended into the second half of 2019.

Loss of the Roche partnership certainly impedes Oryzon's trajectory but not, perhaps, other partnering prospects for ORY-1001, which is part of an intellectual property estate that includes more than 20 patent families across the company's LSD1 program. Oryzon has said its desired game plan is to develop compounds against epigenetic targets through phase II trials and then decide, on a case-by-case basis, whether to advance development in-house or to partner or out-license the compound.

Edison Investment Research Ltd. analyst Jonas Peciulis described the company's first-quarter business update in May as "broadly in line with our expectations." With Roche assuming responsibility for development of ORY-1001, "Oryzon is now focusing its internal R&D efforts on ORY-2001 for neurodegenerative diseases and ORY-3001 for as yet undisclosed noncancer indications," Peciulis wrote, valuing the company at €312 million, or €9.1 per share.