Rhythm rolls into Phase IIb with an Actavis buyout in the balance

Actavis EVP David Nicholson

Boston biotech Rhythm is advancing its lead drug into Phase IIb under the eye of Actavis ($ACT), which has inked a deal to buy the gastrointestinal treatment if it likes what it sees.

The drug, relamorelin, is a peptide ghrelin agonist designed to treat gastroparesis--a halt in the function of stomach muscles--in patients with diabetes. In earlier mid-stage studies, the drug led to statistically significant improvements in the symptoms of gastroparesis, Rhythm said, and the company is now kicking off a placebo-controlled Phase IIb trial, planning to enroll 400 patients and test multiple doses of relamorelin with eyes on an eventual Phase III effort.

Meanwhile, under a deal signed in October, Actavis traded $40 million up front for the right to acquire relamorelin upon the completion of the Phase IIb study, and the company has touted the potential value of Rhythm's drug on the multibillion-dollar GI market.

"The clinical results with relamorelin in the initial Phase II trial in diabetic gastroparesis were precedent-setting," Actavis Executive Vice President David Nicholson said in a statement. "Both Rhythm and Actavis are looking forward to the results from this important trial and to the positive impact this drug may have on the lives of people with GI functional disorders."

Beyond its lead indication, the drug has shown promise in a Phase II study in chronic constipation, Rhythm said, and the company is working through mid-stage trials on other lower-GI disorders.

Back in August, Rhythm pitched an $86 million IPO, earmarking the majority of its potential haul to pay for relamorelin's ongoing development. But the company pulled the plug on that effort about a week after announcing the Actavis deal, a transaction that apparently provided enough cash to proceed.

If Rhythm successfully flips relamorelin to Actavis, the company will be left with RM-493, a peptide that targets the MC4 pathway, which helps regulate body weight. Rhythm says the drug is Phase II-ready after proving itself tolerable in early trials, and the company plans to develop RM-493 for the rare Prader-Willi syndrome and other genetic disorders related to obesity.

- read the statement

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