Lpath Shares Fall 80%, Will Cut Jobs After Second Drug Flunks Phase II Trial
Published: May 21, 2015
May 20, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
San Diego, Calif.-based biotech Lpath, Inc. was on the ropes Wednesday, after the company’s shares fell almost 80 percent and it said it would cut jobs and costs after an experimental eye drug flunked a Phase II trial.
Lpath had been testing the drug, iSONEP, on patients with wet age-related macular degeneration, a leading cause of blindness in the elderly. But the trial, dubbed Nexus, did not show a statistically significant improvement in visual clarity in patients. The drug was being developed in partnership with Pfizer Inc. .
The company, which only has 25 employees, said in a statement it would now cut jobs and revamp its R&D programs in an effort to stay alive.
“Lpath will restructure its workforce and conduct a strategic evaluation of its research and development programs in order to conserve working capital and focus its resources on those programs deemed most likely to create value in the near term,” it said.
The failure is a double whammy for Lpath, which had its other flagship drug, a kidney cancer therapy, fail a separate mid-stage trial two months ago.
Investors quickly calculated that Lpath’s pipeline is now nearly depleted and initiated a massive selloff Wednesday, dropping the company’s share price to under $0.50.
The company said cutting jobs and trimming costs should give it enough capital to keep it going until June 30, 2016.
“The company expects that the reduction in workforce together with planned reductions or delays in other expenditures will decrease annualized cash expenditures significantly,” said the statement. “With these planned spending reductions, Lpath estimates that its available cash and committed funding should be sufficient to fund the company's drug discovery and development activities through June 30, 2016.”
Lpath has been developing monoclonal antibodies that bind to problematic lipids. The potential applications are huge – cancer, multiple sclerosis, wet macular degeneration – but the challenges are also enormous.
“How do you create antibodies for molecules so small they don’t even generate an immune response?” former Lpath CEO Scott Pancoast, who has been with the company since its inception as an investor, board chair and executive, told BioSpace last fall. “The dogma in the 90s was you just couldn’t do it.”
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