Palatin CEO claims 'a positive study on its face,' despite dry eye drug's primary endpoint miss

Palatin Technologies has some changes to make for the upcoming trials of the dry eye disease drug PL9643 after the phase 3 MELODY-1 study failed on the main goal of improving a clinical sign of the disorder.

CEO Carl Spana, Ph.D, spun the results as a positive on a Wednesday morning conference call, pointing to an analysis that considered age and sex that showed statistical significance on the primary endpoints measuring pain and a clinical sign of dry eye disease.

But analysts—and investors—weren’t convinced. The company’s shares fell nearly 40% to $2.40 as the markets opened Wednesday, compared to $3.97 at Tuesday’s close.

MELODY-1 had two co-primary endpoints measuring pain and a clinical symptom, plus other secondary symptom and sign endpoints of the condition. PL9643 was tested over 12 weeks with a four-week run-in period. The trial did not reach statistical significance on the sign endpoint or on secondary sign endpoints, although Palatin noted that the treatment “demonstrated positive treatment effects over vehicle.” Without any adjustments, the main goals of the test were unsuccessful.

On the pain endpoint, MELODY-1 did reach statistical significance.

"It is important to note that it is rare for one clinical study in DED to show efficacy for both a sign and a symptom. While additional analyses are ongoing, the initial results reinforce the potential of PL9643 as a treatment to address both symptoms and signs of DED," Spana said in a statement.

When adjusted for age and sex, Spana said the therapy was a success.

“Although we did not reach the significance for pain, it actually had a p-value of 0.03—so very close,” Spana told investors on the call. “And, in addition, we had multiple other symptom endpoints that actually did transcend 0.025, so we now have a positive study on its face.”

Spana explained that the FDA requires sponsors to examine covariances that could affect the outcome of the study, and in doing so, Palatin noticed the age and gender differences. Both are known to be factors in dry eye disease.

The study had a large population of people over the age of 60 and 70% were women.

“It's standard, everyone does it. You're required to do it. And in our case, we felt just to be transparent, we wanted to make sure everybody understands exactly what we're doing,” Spana said. “So from our context, this is the analysis plan that they would be doing at the agency, this is what we will do in the next studies. So we feel very confident that they will be absolutely fine with what we're doing.”

Palatin has much more work to do before a new drug application can be submitted. The company plans to conduct a detailed analysis of the MELODY-1 data and then meet with the FDA to discuss what would be required for an NDA. Two late-stage studies are being planned: MELODY-2 and an open-label safety study called MELODY-3. Spana expects enrollment to get underway later this year.

The CEO hopes that the learnings from MELODY-1 can lead to stronger results.

“Just based on precedent, it is very rare for dry eye disease studies, particularly the first large one, to hit everything, to get everything you want,” Spana said.

For the next round of studies, Spana said the “covariances will be there” and they will make adjustments on the level of symptoms required to get into the study. That should make efficacy results clearer. But overall, Spana is pretty happy with the symptom results, so “the sign side is where we’ll focus.” Palatin will tweak the analytical methodology and enroll a larger population.

“We’ll make sure that we nail it,” Spana said.