Flex Pharma is scrapping a pair of phase 2 neuromuscular trials due to tolerability issues that necessitate more work on formulation and dosing. But it can't start those studies with its current cash—which has leadership restructuring the company and considering "strategic alternatives," such as a sale or merger, to keep afloat.
The Boston-based biotech was testing its lead candidate, FLX-787, in amyotrophic lateral sclerosis (ALS) and Charcot-Marie-Tooth disease. There were oral tolerability concerns in both studies, specifically in the patient group being treated with the oral disintegrating tablet formulation at 30 mg three times a day.
"In the past few months we have reported positive efficacy data in two serious and distinctly different neurological diseases: multiple sclerosis (MS) and ALS. We believe that these clinical data demonstrate the clear potential of FLX-787 as a symptomatic therapy to reduce painful cramps and spasms in these patient populations,” said Flex CEO Bill McVicar, Ph.D., in a statement. “However, recent observations of oral intolerability at the current dose and formulation, in a subset of patients, in both studies, indicate that more formulation and dose-ranging studies are required, which is challenging for the Company based upon our current resources.”
The company's board has set up a "strategic committee" that will work with management to evaluate its next steps, which include a potential sale or merger. Flex will keep details under wraps until it secures a deal, but also said the process isn't guaranteed to end in a transaction.
In the meantime, the biotech is reorganizing to slash costs where it can—this includes laying off about 60% of its employees. The reorg, slated to finish by June 30, will cost the company between $800,000 and $1.1 million. Flex expects to start realizing cost savings in the third quarter.
The company has not had it easy of late. In June 2017, its founder and CEO Christoph Westphal stepped down, and just months later, Flex posted a mixed bag of results for its exploratory nocturnal leg cramps (NLC) crossover study of FLX-787.
The biotech said that its preliminary analysis of the entire crossover data set “did not demonstrate a statistically significant difference versus placebo” when it came to its endpoints of muscle cramp frequency, or cramp-free nights. And though Flex did say it thought trial site issues may have affected the data, investors were unconvinced as its shares dropped in the midteens on the news.