Versartis has retained Cowen to assist in evaluating its strategic options.
Versartis has retained Cowen to assist in evaluating its strategic options. The options available, with the goal of diversifying the company’s pipeline, include “potential strategic combinations.”
Versartis focuses on endocrine disorders. Its XTEN is a proprietary technology that was used to develop its lead product candidate, somavaratan (VRS-317), which was being evaluated to treat growth hormone deficiency (GHD) in children and adults.
On Sept. 21, the company announced that somavaratan failed to meet its primary endpoint of non-inferiority in the VELOCITY Phase III clinical trial in pediatric growth hormone deficiency. The drug was being evaluated in the intent to treat (ITT) population for height velocity at 12 months.
“We are very surprised and disappointed to learn the outcome of the VELOCITY trial,” said Jay Shepard, Versartis’ president and chief executive officer, in a statement. “Somavaratan showed height velocity in the range we had hoped, but it was not sufficient to demonstrate non-inferiority in this trial. We have done an initial analysis of the top-line data and are continuing to thoroughly review the results to gain greater insight into the trial outcome. We plan to provide a corporate update later this year. I would like to thank the investigators, pediatric GHD patients and families that participated in the VELOCITY trial.”
On Oct. 26, the company released its third-quarter financial results, which also included an update on the company in general in light of the failed Phase III trial. In the quarter, it reported a net loss of about $49.8 million, or $1.40 per share compared to a loss of $27.3 million or $0.92 per share in the same quarter the previous year. Total operating expenses for the quarter were $49.7 million, compared to $27.4 million for the third quarter, 2016.
The company continues to analyze the VELOCITY Phase III trial data to determine if there’s any point to continuing development. It’s actively discussing it with its partner in Japan, Teijin, but the J14VR5 Phase III trial in Japan is being discontinued.
It cut its workforce by about two-thirds and is continuing other cost-cutting measures, including the cancellation of supplier contracts, including those with contract manufacturers. There was a short-term increase in research and development expenses because of fees related to the expected cancellation of the supplier contracts.
As of Sept. 30, 2017, the company had cash and cash equivalents of $118.8 million.
“In response to the disappointing outcome of the VELOCITY trial last month, we have been working diligently to understand the results and determine appropriate next steps for the company,” Shepard said in a statement. “While we are exploring our options and the potential viability of moving somavaratan forward, we are implementing a restructuring plan to significantly reduce our costs and preserve cash. We have also begun a parallel process to identify opportunities to diversify our pipeline, including possible strategic transactions, with the aim of leveraging the company’s expertise and resources to create value for shareholders.”
