Roche rejects option on autism drug from struggling Seaside

Seaside Therapeutics has suffered a string of setbacks recently. Swiss drug giant Roche ($RHHBY) has passed on taking an option on Cambridge, MA-based Seaside's lead drug candidate arbaclofen, which the biotech startup revealed last month flunked a Phase II autism study and Phase III trial in Fragile X patients. The New York Times' Andrew Pollack reported on the situation in an article posted last night.

Seaside has declined to comment on the details of its financial situation, but there's no doubt that Roche's passing on arbaclofen deals a significant blow to the company's finances. If Roche had taken the option, Seaside would have reaped fees to support further development. Last month Seaside cited financial constraints as the reason for ending extension studies of its compound, also called STX209, for patients with autism and the related genetic disorder Fragile X.

Seaside, a 2012 Fierce 15 company, gained significant attention last year when Roche stepped up to license compounds and take an option on STX209, which the company had previously supported primarily with funds from a private investment vehicle called the Barony Trust. Seaside has never disclosed the financial details of the deal, so it's unclear exactly how much money was at stake in the Roche agreement. Yet Roche clearly had thought highly of the potential for the compound until more recently.

Luca Santarelli

"We concluded that arbaclofen wasn't going to provide that real difference for patients," Luca Santarelli, head of neuroscience research at Roche, said in an interview with Pollack.

Seaside's suspension of the extension studies has left some families fuming, and the lack of good drugs for autism and Fragile X has become particularly stark through this story. The hope for STX209 has been to offer the first drug to tackle an underlying mechanism behind the disorders, but The New York Times article reads like a postmortem on the program, beginning with its headline: "An Experimental Drug's Bitter End."

- check out the NYT article

Special Report: Seaside Therapeutics – 2012 Fierce 15