Aerpio may hang the 'for sale' sign up, axes CEO after eye drug flop

Closeup of stock prices
Aerpio Pharmaceuticals has been trading in penny stock territory since its failed test in May. (Getty/Pashalgnatov)

In a classic plot line for biotechs, Aerpio Pharmaceuticals is seeking a “strategic review” for its business and assets after being hit by a trial failure for its leading med earlier this year.

The micro-cap biotech, with a market cap worth less than $20 million and trading in penny stock territory, said its board is “exploring the potential for an acquisition, company sale, merger, business combination, asset sale, in-license, out-license or other strategic transaction.” The chief executive, Michael Rogers, is also out the door.

Aerpio added that it “does not intend to make any further disclosures regarding the strategic review process unless and until a specific course of action is approved,” so don’t expect any more press releases until some sort of deal is done—or not, as the case may be.

As well as looking to potentially sell off some or all of the company, Aerpio's already slimming down, or, as it puts it, “streamlin(ing) operations in order to preserve its capital and cash resources.” It had under $50 million at last count in June.

Joseph Gardner, Ph.D., its current president (and founding CEO of Akebia Therapeutics), will now lead the dwindling C-suite team as Rogers alongside Chief Financial Officer Stephen Hoffman “have transitioned from their roles,” the biotech said in a brief update.

Back in May, shares in Aerpio were more than halved after the failure of its leading drug candidate.

The midstage test, known as the TIME-2b study, was assessing its drug AKB-9778 in diabetic retinopathy but missed its primary endpoint of a two-step reduction in its diabetic retinopathy severity score score when pitted against a dummy treatment.

The percentage of patients achieving this endpoint for the injectable AKB-9778 twice daily and placebo were 9.6% and 3.8%, respectively (p=0.270). Across all eyes, those achieving this endpoint was 8.6% and 2.7%, for AKB-9778 BID and placebo, respectively (p=0.158). That was a hard fail, and one that sent its shares into a free fall from which it has not recovered.