Regulus hit as AstraZeneca hands back rights to one drug, R&D revamp culls two more

New CEO Jay Hagan needs the Alport syndrome trial to deliver the goods.

Embattled biotech Regulus Therapeutics suffered another blow today after revealing AstraZeneca handed back rights to a clinical-stage drug for nonalcoholic steatohepatitis (NASH).

AstraZeneca has said it will terminate the clinical program for AZD4076 (RG-125), a drug it acquired from microRNA specialist Regulus two years ago.

The California outfit also confirmed it has pulled the plug on its ill-fated hepatitis C candidate RG-101, as well as another liver disease candidate, as it desperately tries to put its business back on a secure footing.

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The shake-up comes just over a month after Regulus former CEO Paul Grint, M.D., jumped ship and the biotech stripped out a third of its workforce to eke out its dwindling cash reserves, with COO Jay Hagan stepping up to the helm and given the task of turning the business around.

AstraZeneca's licensing deal for AZD4070 hasn't involved any big money yet—stemming from a $2.5 million research collaboration—but its loss will be felt keenly as Regulus tries to raise confidence in its pipeline, particularly as NASH has become a hot topic for pharma R&D.

In an update, Regulus said on trial of RG-101 is still ongoing and will complete next month. But regardless it plans to discontinue development of the drug—which has been plagued with a jaundice-related side effect called hyperbilirubinemia—once that study comes to an end. 

The biotech says it has some improved microRNAs that could sidestep that problem, but given the high cure rates seen in hep C with new directly acting antiviral agents—and the resulting shrinkage in the market opportunity—it could be a case of too little, too late. Recognising this, Regulus says it will only bring the new candidates forward if it thinks there is a commercial opportunity.

In the meantime, RGLS5040 for cholestatic disease has also been shelved based on a review of the competitive landscape as well as its pharmacological profile. All of which leaves RG-012 for kidney disease Alport syndrome at the head of Regulus' pipeline.

A revised phase 2 trial of RG-012 is planned that could potentially deliver proof-of-concept data by the end of the year, but time is running out for the company. Regulus was sitting on around $15 million in cash reserves at the end of March which it said would last until mid-2018, so the timing of the RG-102 trial takes it right to the wire on current funding levels.

Following after is RGLS4326 for autosomal dominant polycystic kidney disease, but that is still in preclinical development with approval to start clinical trials not due until later this year.

Shares in Regulus were in steep decline premarket, losing almost 29% of their value to teeter at $1, just above becoming a penny stock, having traded at almost $20 at their height a few years ago.

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