Active Biotech Forced to Cut 47 of 56 Staffers After Phase III Prostate Cancer Failure
June 2, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Last month, Swedish company Active Biotech AB announced that its Phase III trial for 10TASQ10 in castration-resistant prostate cancer hit its primary endpoint, but did not extend overall survival. Now, a month later, the company yesterday announced it will lay off 47 people.
Active Biotech and French company Ipsen collaborated on the study of 10TASQ10 (tasquinimod). The study found that the drug cut the risk of radiographic cancer progression or death compared to placebo, but did not extend overall survival. This led the two companies to discontinue all studies of tasquinimod in prostate cancer.
“The outcome of the 10TASQ10 study is a major disappointment based on the promising Phase II results,” said Tomas Leanderson, president and chief executive officer of Active Biotech in a statement. “However, the data at hand is unambiguous and cannot motivate further development of tasquinimod in this patient population.”
Active Biotech went on to indicate that its clinical project working with Israel-based Teva Pharmaceutical Industries Ltd. to study laquinimod will continue. However, most of the company’s employees were involved in the 10TASQ10 project, hence the layoffs.
Laquinimod is currently in a Phase III study dubbed CONCERTO, for the treatment of relapsing remitting multiple sclerosis (RRMS). The company also has a pre-clinical projected named ISI, for the potential treatment of cancer and degenerative diseases.
The job cuts, which are major in a company with 56 employees, is expected to cut operating costs by approximately SEK 50 million per year starting in 2016.
The market for treatments of metastatic castration resistant prostate cancer is a lucrative one, but recent entries into the market include Xtandi, marketed by Astellas, and Zytiga, marketed by Janssen Biotech Inc. , a Johnson & Johnson company.
Not surprisingly, Active Biotech stock took a hit at the news. Stock sold for $27.90 on April 14, dropped significantly to $10.90 on April 16 and is currently selling for $9.50.
To a lesser extent, Ipsen stock dropped a bit. The company’s stock sold for $50.19 on June 1, but is currently selling for $48.81. Ipsen’s stock has been on a pretty steady climb for the last year, however. Shares sold for a low of $31,70 on Aug. 22, 2015, but rose to a high of $51.70 on May 5, 2015.
Ipsen has three major targeted therapeutic areas: urology-oncology, endocrinology and neurology. It handles the entire value chain from research to marketing, and has two tech platforms that specialize in peptide and toxin engineering. It also has three flagship products, Dysport, to treat frown lines, Somatuline, for acromegaly and certain types of cancers, and Decapeptyl for prostate cancer, endometriosis and uterine fibroids. The company markets throughout Europe, Brazil, China and Russia, as well as the U.S. and emerging markets.
Will PfizerKline Become the Next Pharma Player?
The speculation surrounding a possible bid from Pfizer Inc. for struggling GlaxoSmithKline is heating up, after one closely-watched biotech analyst said in a note last week that Pfizer buying the company would “unlock access to its balance sheet and improve its tax situation.”
Gregg Gilbert, a biotech analyst at Deutsche Bank, wrote in a note to investors “Introducing PfizerKline” that he thinks a deal would be “materially accretive” for both companies. Gilbert estimated that a bid priced at $29.86 a share, via half stock and half cash, which would push up Pfizer’s earnings per share by 10 percent to 16 percent beginning in 2016.
“We believe that the company has a sense of urgency to create value by leveraging the power of its balance sheet to do needle-moving deals,” Gilbert wrote. “Since media reports in the past have pointed to the potential for a Pfizer/GSK combination, we are revisiting that theme.”
We want to know, dear readers, if you agree? Should Glaxo continue going it alone, or might Pfizer buy it and create one of the world’s largest pharma players in history?