Diabetes biotech stock tanks as FDA imposes full clinical hold

Biomea Fusion has suffered another dramatic stock drop, with investors sending the share price down 60% after the FDA imposed a full clinical hold on its diabetes program over liver toxicity concerns. 

The candidate, BMF-219, is designed to stop the menin protein from participating in a process that blocks the replication and expansion of beta cells. In preclinical tests, the molecule improved beta cell mass, leading Biomea to advance into studies in Type 1 and 2 diabetes. The mechanism is theoretically complementary to other ways of treating diabetes. 

However, the FDA has spotted a potential problem. The agency identified possible drug-induced liver damage in Type 2 diabetes patients treated in the dose-escalation portion of Biomea’s phase 1/2 study. In response, the FDA put the study and a trial in patients with Type 1 diabetes on full clinical hold.

Biomea said the study that prompted the hold tested doses of up to 400 mg. The phase 2 part of the Type 2 diabetes trial is testing doses of 100 mg and 200 mg in the first three arms of its expansion cohorts. Biomea added that “various food intake regimens, medical history and concomitant medications may have contributed to observed liver enzyme elevations.” The biotech is working to resolve the setback.

“We are fully collaborating and working diligently with the FDA to put a plan in place as quickly as possible to ensure patient safety and look forward to resuming the studies once we have authorization from the FDA,” Biomea CEO Thomas Butler said in a statement. “Based on the totality of the safety and efficacy data for BMF-219 in diabetes to date, we remain committed to advancing BMF-219.”

Biomea had $145.3 million in cash at the end of March. In May, the biotech warned investors that its “existing financial resources are not sufficient to continue operating activities for at least one year past the issuance date of these unaudited condensed financial statements.” Biomea said money would need to be raised, and “there is substantial doubt about the company’s ability to continue as a going concern.”

The hold hurt Biomea’s ability to raise cash, sending its share price down 60% to $4.50 before the market opened Friday. The stock traded above $40 one year ago. Biomea said ongoing data collection will continue during the hold. Prior to the regulatory action, the biotech identified the publication of top-line Week 26 data from its Type 1 and Type 2 diabetes studies as milestones for this year.