Coronado Bio cuts execs as second Crohn's study flunks out

Shares of already badly battered Coronado Biosciences stock ($CNDO) took a fresh dive this morning after the biotech announced that the second mid-stage study of its experimental Crohn's drug had to be scrapped after independent monitors concluded that the therapy wasn't helping patients. The decision to end the study comes three weeks after Coronado reported that the first Phase II study of TSO had failed.

The news also comes the day after the company announced plans to restructure, laying off its COO, the EVP of scientific affairs and chief accounting officer--along with two other staffers--as it cuts down on the burn rate. The troubled biotech named Dr. Kevin Horgan as its chief medical officer.

The Burlington, MA-based biotech says its partner on TSO, Dr. Falk Pharma, was told of the data monitoring committee's decision after the second analysis of interim results, forcing it to discontinue the trial. The news triggered an 11% drop in Coronado's shares this morning after a brutal drubbing was delivered when the first trial flunked key endpoints. The stock has dropped 80% over the past month.

Coronado, though, hasn't given up on the program.

"We are not surprised by these results, given the disappointing data from our TRUST-I study," said Dr. Harlan Weisman, Coronado's Chairman and CEO. "We believe TSO has therapeutic potential in other diseases and will continue to work diligently to advance its development for the treatment of autoimmune diseases and to develop CNDO-109 for the treatment of cancer."

Coronado has 7 other studies underway for TSO, including work on rheumatoid arthritis and ulcerative colitis.  The biotech has one other drug, CNDO-109, in the clinic.

Coronado recruited 250 patients for its study of CNDO- 201 (TSO), but investigators say it failed both its primary and secondary endpoints on disease activity and remission. "In the corresponding pre-defined subset analysis, TSO showed a non-significant improved response in patients with CDAI>290 (the disease activity index)," reported the company. "The lack of overall response was driven by higher-than-expected placebo response rate in patients with CDAI."

- here's the release on the latest Phase II
- here's the release on the restructuring

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