Avalanche CEO finds the door after a costly clinical setback

Former Avalanche Biotechnologies CEO Thomas Chalberg

Avalanche Biotechnologies' ($AAVL) co-founder and CEO is stepping down from the top spot, a month removed from posting mixed clinical results that tanked the company's share value.

Thomas Chalberg has resigned from his posts as CEO and president effective immediately, Avalanche said, and the company has appointed Senior Vice President Hans Hull to take his place on an interim basis. The biotech has also formed a committee led by a pair of independent directors in hopes of finding a permanent replacement for Chalberg as soon as possible.

The news comes on the heels of some mixed clinical results for Avalanche's lead candidate, a gene therapy for wet age-related macular degeneration. In Phase IIa results disclosed in June, Avalanche's AVA-101 met its primary endpoint of safety but came through with only marginal benefits on its secondary efficacy goals. The one-time treatment didn't significantly improve patients' performance on an eye-chart test, and it backfired on its secondary goal of reducing retinal thickness, a symptom of AMD.

Avalanche's share value has fallen more than 60% since then, reflecting mounting pessimism over whether the biotech can successfully develop a gene therapy for one of the most common causes of blindness. And the misstep may have cost Chalberg, a 9-year Avalanche veteran, his position at the company.

Now the Menlo Park, CA, biotech is pressing forward with AVA-101, reviewing the aforementioned data and looking forward to a Phase IIb study. The treatment is also in preclinical development for diabetic macular edema and retinal vein occlusion.

Avalanche went public with a $102 million IPO last year, becoming one of the most visible contenders in what has been a renaissance for gene therapy. Unlike the many drug developers at work on one-time treatments for rare genetic disorders, Avalanche stood out with its ambitions to craft a gene therapy for a much more common disease. Among the company's co-signers is Regeneron ($REGN), maker of the blockbuster AMD treatment Eylea, which has the right to in-license AVA-101 under a deal worth up to $640 million.

- read the statement