Celladon Will Lay Off Workers, Loses 80% of Value As Heart Failure Drug Flunks Phase IIb Trial
April 27, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
San Diego, Calif.-based Celladon Corporation on Monday announced sweeping layoffs of staff after its primary gene therapy failed a late-stage trial, causing the firm to lose almost 80 percent of its market value in trading today, although it has not yet announced how many workers will be affected.
Gene therapy companies are under the gun Monday, after the closely watched Phase IIb trial by Celladon flunked its endpoints, with heart failure gene therapy Mydicar failing to meet its goals and execs at the company left floundering to explain why.
"We are surprised and very disappointed that Mydicar failed to meet the endpoints in the CUPID2 trial, and we are rigorously analyzing the data in an attempt to better understand the observed outcome," elladon's chief executive, Krisztina Zsebo, said in a statement on Sunday.
As a result, Zsebo said in a call with investors and analysts Monday that it will institute sweeping cost-cutting measures, including layoffs, as it attempts to get back on its feet.
The results were particularly surprising given that Mydicar was already granted both "breakthrough" and "fast-track" status by the U.S. Food and Drug Administration (FDA). But in the Phase IIb trial CUPID2, Mydicar failed to show a significant treatment effect when compared to placebo.
The therapy works like other gene treatments of its type, by delivering a corrective gene, in this case one that builds a better enzyme responsible for heart muscle contraction, into a defective area in order to promote healing. However, results of the trial showed no indication it could do that successfully, leaving market participants who had been bullish on gene therapy wondering if other promising treatments could falter at the late-stage trial mark.
In an effort to placate shareholders, Zsebo said the company would try mightily to convince Wall Street that the company’s other assets still hold some promising value.
"At the same time we are evaluating our other programs in order to determine the best path forward to maximize shareholder value," she said.
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