Circassia scraps allergy program after another trial flops

London Stock Exchange
Circassia has suffered a succession of failures in the clinic.

Circassia has pulled the plug on its allergy programs after falling short in another study. The string of failures continued with the publication of subpar data from a house dust mite allergy phase 2b, forcing the company to pivot away from the assets that drove it to a £200 million ($251 million) IPO in 2014.

As with the previous setbacks to its ragweed and cat allergy trials, Circassia pointed to a pronounced placebo effect to explain the failure of the house dust mite study. Participants in the placebo arm experienced a 39.1% decline against a measure of rhinoconjunctivitis symptoms and rescue drug use. With the declines in the three experimental treatment arms coming in at between 34.9% and 44.3%, the study failed to meet its primary endpoint.

The continued failure of the experimental immunotherapies to beat placebo has prompted the British biopharma to halt investment in allergy programs, despite management’s continued belief the drugs work.

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“It is concerning that in two well-designed field trials, a robust placebo response has confounded our ability to demonstrate a significant treatment effect, despite positive results in earlier chamber studies,” Circassia CEO Steve Harris said in a statement. “We remain convinced that the technology has biologic activity, but we also believe the difficulty in overcoming the placebo effect using the field study designs required by regulators represents a significant hurdle, and consequently we will make no further investment in our allergy portfolio.”

The decision, which has been a distinct possibility since the cat allergy flop in June, will result in the Circassia of 2017 looking very different from the company that persuaded British investors to take a punt on a biotech IPO again in 2014. Back then, Circassia convinced investors its synthetic peptides could quickly provide long-lasting symptom relief to allergy sufferers. And, in doing so, raised hopes of a resurgence of interest in publicly-traded biotechs in London.

Now, investors who backed Circassia’s IPO find themselves holding stakes in a commercial-stage respiratory company that is worth 66% less than the hot biotech they committed cash to in 2014.

Although late-phase blowups are commonplace, British investors have historically been less likely to brush off such failures and immediately re-roll the dice on another biotech than their peers across the pond. This contributed to the U.K. going through a long lull in biotech IPOs after the failures of companies such as Antisoma and Renovo.