Eleven Biotherapeutics Stock Plunges on Yet Another Failed Clinical Trial

January 18, 2016
By Mark Terry, BioSpace.com Breaking News Staff

Cambridge, Mass.-based Eleven Biotherapeutics Inc. announced on Friday that its Phase III clinical trial of EBI-005 (isunakinra) for severe allergic conjunctivitis failed to meet its primary endpoint.

“We are disappointed that isunakinra failed to meet its primary endpoint, and based on these overall results we see no immediate path forward in allergic conjunctivitis,” said Abbie Celniker, president and chief executive officer of Eleven Biotherapeutics, in a statement. “Our efforts will be focused on submitting an investigational new drug application (IND) for EBI-031 in diabetic macular edema in the first half of 2016. In addition, we plan to provide an update on our corporate strategy later this quarter during our 2015 year-end financial results conference call.”

EBI-031 was designed for intravitreal delivery using Eleven Biotherapeutics’ AMP-Rx platform. The drug blocks both free IL-6 and IL-6 complexed to the soluble IL-6 receptor (IL-6R). The compound is being developed to treat diabetic macular edema (DME) and uveitis.

It’s not the only bad news Eleven Biotherapeutics has reported in the last year. In May 2015, the company reported that its drug EBI-005, for moderate to severe dry eye disease, failed to prevent damage to the cornea or reduce eye pain in comparison to the control group. This study looked at 669 patients.

Eleven Biotherapeutics made its initial public offering (IPO) in February 2014 for $10 per share. Company shares popped to $13.56 on May 12, 2015, then plunged to $2.34 on May 19, 2015 and never really recovered. Shares spiked briefly on Aug. 13, 2015 to $5 per share, then dropped back to $3.61 on Aug. 19. Shares are currently trading for $2.34.

On Jan. 17, 2016, two brokers gave Eleven Biotherapeutics a consensus rating of 1.00 (Strong Buy). They also gave a 12-month consensus price target of $10 per share and predict it will post ($0.51) earnings per share for the first quarter of 2016, according to Zacks.

On Dec. 28, 2015, Celniker filed with the U.S. Securities & Exchange Commission (SEC), that she had sold 10,155 shares of company stock. They sold for an average price of $2.85 for a total value of $28,941.75. She still directly owns 429,975 shares value at about $1.225,428.75.

In addition to discussing the clinical trial, Eleven Biotherapeutics announced its cash position, which of Dec. 31, 2015, was about $36.1 million in cash and cash equivalents. However, because of the outcome of this clinical trial, the company has to fund a cash collateral account with Silicon Valley Bank for about $15.1 million, which is the outstanding amount under its current loan agreement with the bank.

The company says it has enough cash and cash equivalent to operate into the fourth quarter of the year.

“Despite this outcome,” Michael Goldstein, Eleven Biotherapeutics’ chief medical officer, said in a statement, “we plan to continue to assess interluekin-1 (IL-1) genotyping in ocular surface diseases by evaluating data from patient subsets in this clinical trial identified to be high producers of IL-1.”