Phase III Flop for Pfizer's Drug Partner Opko Health

Phase III Flop for Pfizer's Drug Partner OPKO Health December 30, 2016
By Mark Terry, Breaking News Staff

Miami, Fla.-based OPKO Health announced today that its Phase III clinical trial of long-acting human growth hormone product (hCH-CTP) in adults with growth hormone deficiency (GHD) failed to meet its primary endpoint.

Ever optimistic, the company indicated that after unblinding the study, it noted “one or more outliers” that might have skewed the results. It plans to review the data in hopes of finding more promising results without the outliers.

The primary endpoint was change in trunk fat mass from baseline to 26 weeks. In the study, the company found no statistical different between hCH-CTP and placebo. The drug has a satisfactory safety profile, and more patients on hCH-CTP had normalized serum concentrations of insulin-like growth factor-I compared to those on placebo. There were 203 patients in the study.

OPKO acquired the program as part of its all-stock buyout of Israel’s Prolor in 2013 worth $480 million. Pfizer had a partnership with OPKO for the drug. It paid $295 million upfront with another $275 million in regulatory milestones available. OPKO, under the deal, handles the clinical program and Pfizer oversees registration and commercialization.

In late November, OPKO announced that it was launching Rayaldee (calcifediol) extended-release capsules in the U.S. It was approved by the U.S. Food and Drug Administration (FDA) on June 17, 2016. The drug was approved for the treatment of secondary hyperparathyroidism (SHPT) in adults with stage 3 or 4 chronic kidney disease (CKD) and serum total 25-hydroxyvitamin D levels less than 30 ng/mL.

In addition to today’s news, OPKO indicated it plans to start a pivotal Phase III trial immediately in pre-pubertal growth hormone deficient children. The goal of that study is to compare weekly treatment with hGH-CTP against daily injections of Genotropin.

OPKO is currently trading for $11.46. In pre-market trading the stock dropped around 14 percent, or about $900 million of the company’s market cap.

On December 28, ahead of today’s news, the median one-year price target, based on five analysts was $15. The highest analyst price was $22. Two analysts rated it a “buy” and two rated it a “strong buy.” One firm gave OPKO a “hold.”

A certain amount of insider activity was also observed. Frost Phillip, the company’s chief executive officer and board chairman acquired 1,000 shares for $10,000.49 on December 2, giving him a 10.49 percent stake in the company. This was only a day after acquiring 3,800 shares for $39,000.03.

Overall, executives hold 6.93 percent of the company stock. Jane Hsiao, OPKO’s vice-chairman, chief technical officer and director, holds 24,600,633 shares with a current market value of about $290,779,482. Steven Rudin, executive vice president-Administration, and director, owns 5,571,251 shares, currently worth $65,752,186. Subbarao Uppaluri, formerly chief financial officer and senior vice president, currently vice president of Strategic Planning for IVAX Corporation, holds 3,822,869 shares worth around $45,186,311.

In addition to its pharmaceutical research and development programs, OPKO has an extensive clinical diagnostics business, including ownership of Bio-Reference Laboratories, the third-largest clinical laboratory in the U.S., behind Quest Diagnostics and Laboratory Corporation of America .

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