Forum Pharmaceuticals' rare, high-risk strategy to launch ambitious late-stage trials for schizophrenia with a single major investor has ended in failure, triggering a company-wide reorganization. And with a companion Phase III program for Alzheimer's on indefinite hold at the FDA, the Waltham, MA-based biotech is hinting that its options for staying in business are dwindling.
The company announced on Thursday that encenicline (FRM-6124) had failed its two co-primary endpoints for function and cognition in two Phase III trials that had recruited some 1,500 patients. The Boston Business Journal reports that Forum has already notified state officials of plans to ax 77 jobs--about half of its workforce--with another 12 on the chopping block based on their study results.
In their statement the company said that it needed to "appropriately scale its spending and resources and to evaluate a potential path forward, if any."
Stephen Knight, a partner at F-Prime Capital (until recently known as Fidelity Biosciences) recruited ex-Millennium chief Deborah Dunsire to run the high-profile effort at Forum about two years ago. She told me at the time that it was exciting to steer a company like Forum into big Phase III studies for a pair of tough targets like schizophrenia as well as Alzheimer's, which has defied the efforts of a long lineup of contenders over the past decade.
Their drug is designed to enhance synaptic transmission in the brain by sensitizing the alpha-7 nicotinic receptor, improving cognition in patients. But the company says the drug was defeated in the schizophrenia studies by a high placebo response.
The FDA still has the Alzheimer's side of the program on hold after a "small" number of patients taking the drug reported severe gastrointestinal events last fall.
Alzheimer's and big Phase III studies like this cost hundreds of millions of dollars to pull off, which is why a small biotech and single primary investor would almost never take on the risk alone. Typically it's giants like Eli Lilly ($LLY), Johnson & Johnson ($JNJ) and Roche ($RHHBY) that dominate the late-stage cognition field. Now Forum has just as big a failure, but none of the resources needed to withstand a setback of this magnitude.