One of the jewels in the U.K. biotech crown became a lot duller today as Circassia (LON:CIR) saw its shares fall 64% by 12 pm BST after its key allergy drug failed to best placebo.
The late-stage trial for its investigational cat allergy immunotherapy was aiming to not just alleviate symptoms, but also treat the heart of the condition by helping patients’ immune systems tolerate the allergens.
But in the Phase III study, a major and marked placebo effect made the high-profile biotech miss its trial’s primary endpoint, as its med was not significantly different from placebo. RBC analyst Nick Keher described the news as "very disappointing" in a note, and the market thought so too, dragging its shares down by 64% by the end of the morning British time.
The news got worse as the company also said it would stop its recently started registration study of its grass allergy treatment and prep work for a study on suitable doses of its ragweed allergy therapy.
The Phase IIb study of Woodford-backed Circassia’s house dust mite allergy product is currently at an advanced stage--but the biotech said in a statement that it will “assess the implications associated with continuing the trial.” Circassia’s birch allergy product is nearing completion of a Phase II study, which will therefore continue, the company said.
Steve Harris, Circassia’s CEO, said in the statement: “We are surprised and disappointed by these results. Such a dramatic placebo effect was not a feature of our earlier Phase II studies. However, in this large-scale trial it eliminated the ability to identify a treatment effect despite dramatic improvements in subjects’ allergy symptoms and rescue medication use.
“We will now rapidly analyse the full dataset, address the implications for our wider allergy pipeline and provide an update on the development plans for our broader business at our interim results. At the same time, we will continue to focus resolutely on our wider portfolio, rapidly growing the sales of our market-leading NIOX asthma management products and advancing our pipeline of respiratory products.”
The Oxford, U.K., biotech said it “anticipates providing an update on its wider development plans and robust financial position at its interim results” later this year. At the end of May, its unaudited cash balance remained over £139 million ($204 million).
Circassia made a splash in early 2014 with a $332 million London IPO, the U.K.'s biggest biotech debut in decades according to analysts, but this latest news will be a big hit for the company and the country’s life science sector.
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