Viatris-partnered ulcerative colitis drug fails interim phase 3 review, sending InDex's stock down 60%

InDex Pharmaceuticals may be struggling to think of reasons to be thankful. The Swedish biotech has rocked investors with news it is stopping a phase 3 ulcerative colitis trial early in response to lackluster efficacy, sending its share price down 60%.

The study was testing cobitolimod, a TLR9 agonist that is delivered directly to the inflamed colon via an enema. InDex identified the approach as a way to quickly induce mucosal healing and relieve ulcerative colitis symptoms without the complications of systemic exposure and off-target effects. Management recently tipped the drug to generate blockbuster sales and landed a deal with Viatris in Japan.

Optimism faded fast after the Swedish market closed Tuesday. InDex revealed an interim analysis of the first 133 patients found its phase 3 trial is unlikely to meet its primary endpoint. The analysis, which was designed to check for futility and to choose the best dose, prompted the independent data monitoring committee to recommend stopping the study. 

“This surprising and disappointing news confirms the complexity of the disease and the need for further research within this field, especially as moderate to severe ulcerative colitis is an indication with high unmet medical need for new treatment options,” InDex CEO Jenny Sundqvist said in a statement. “We will conduct a comprehensive analysis of all the study data before announcing next steps.”

The induction stage of the trial was assessing the proportion of patients in clinical remission at Week 6, by which point patients had received two rounds of treatment with cobitolimod or placebo. No safety concerns emerged, but, based on an analysis of the first 30% of planned patients, neither dose was on course to improve on the remission rate achieved by placebo.

Investors responded by sending InDex’s share price down 60% to 0.27 Swedish krona. The crash reflects the rapid revision of expectations for the biotech’s lead candidate. InDex predicted the therapy could claim 20% to 30% of the moderate to severe left-sided ulcerative colitis market, a share that would translate into sales in excess of $1 billion.   

The biotech’s efforts to persuade others of the promise of the program brought some successes. Viatris paid $10 million for the Japanese rights to the candidate in May as part of a deal that is worth up to $40 million in development and sales milestones. The upfront payment helped InDex increase its cash pile to 412.5 million Swedish krona ($39.5 million) by the end of June.