In Light of Two Major Failed Trials, FORUM Pharma Closes Its Doors This Week

June 28, 2016
By Mark Terry, BioSpace.com Breaking News Staff

It’s official—Waltham, Massachusetts-based FORUM Pharmaceuticals will be shuttering its doors this week before the Fourth of July holiday.

The company had been hammered by two major failed trials. In September 2015, the U.S. Food and Drug Administration (FDA) advised the company to halt its clinical trials of encenicline for Alzheimer’s disease as the result of serious gastrointestinal side effects. Another trial in cognitive impairment in schizophrenia (CIS) was also placed on a clinical hold, which was lifted in November. On March 24, it announced topline results from two Phase III CIS trials. Although encenicline had a positive safety and tolerability profile, it didn’t meet its co-primary endpoints in either study.

At that point the company planned to lay off half of its staff and restructure the company. On March 21, 2016, Forum indicated that it was laying off 77 employees over a 30-day period starting on May 20. It also indicated that another 12 staffers might be laid off pending further clinical trial data. At that time it had 130 employees.

According to Xconomy, the company’s chief executive officer, Deborah Dunsire, left the company around the end of May.

The company was founded in 2001 as EnVivo Pharmaceuticals. The primary investor was Fidelity Biosciences, now called F-Prime Capital. According to Xconomy, Fidelity’s chief executive officer, Ned Johnson, was the driving force behind the company. “Fidelity poured hundreds of millions of dollars into the company over the years; it became Forum’s sole owner in 2008.”

This was a little unusual for biotech startups. Last year Jason Rodes, a partner in Atlas Venture and a former co-founder and partner in Fidelity Biosciences, told Xconomy that Forum was a “very specific, mission oriented business,” that was treated differently than the other biotech companies Fidelity invested in.

Nonetheless, Dunsire, who took over the company in 2013, had plans to find additional outside investors and push toward an initial public offering (IPO), although those plans were contingent on how well encenicline did in clinical trials.

Kees Been, who was the company’s chief executive officer from 2005 to 2013, told Xconomy, “I was very surprised to hear that the schizophrenia study failed since the [data from mid-stage trials] was so convincing.”

Data showed unexpectedly high response rates from the placebo group in both CIS trials.

For her part, Dunsire formed a biotech consulting company, Southern Cross Biotech Consulting, with plans to take the summer off. In a May 25 Xconomy article she suggested that the way it administered the Matrics Consensus Cognitive Battery as part of the trials may have been a mistake. “We probably did it too frequently,” she said. “When you do it every month, people get better at it.”

Which may be partly responsible for the larger pro-cognitive effect in the placebo group.