AstraZeneca tosses another PhIII failure onto the scrap heap

AstraZeneca just can't catch a break. After looking over lackluster late-stage results for its rheumatoid arthritis drug fostamatinib, the pharma giant ($AZN) has opted to scrap its development efforts and turn the whole program back over to Rigel ($RIGL), the biotech partner which had licensed it to them in the first place. The Phase III failure will cost AstraZeneca a $140 million write-off and another bitter round of headlines announcing its latest drug development failure.

The news couldn't have come as a shock, though. Late last year the treatment failed to measure up to Humira in a Phase IIb study, leaving AstraZeneca executives waiting to see if their position could be salvaged with late-stage data. They were hoping that the monotherapy failure in the IIb trial would be trumped by a successful late-stage strategy, holding out for the full set of data from three trials on the oral spleen tyrosine kinase inhibitor. But the Big Pharma group was forced to walk away from another one of its few Phase III programs as it works to reorganize R&D under new CEO Pascal Soriot. 

Briggs Morrison--Courtesy of AZ

Back in 2010 AstraZeneca paid $100 million upfront and promised $345 million in development and early sales milestones in exchange for the right to take the lead on Rigel's drug, which was sitting on the threshold of its first late-stage trial.

"The results of the late stage trials did not measure up to the promising results we saw earlier in development," says Briggs Morrison, AstraZeneca's late-stage R&D chief, in a statement. "We remain committed to the search for new treatments for patients with rheumatic and inflammatory diseases with Phase II compounds in rheumatoid arthritis and lupus and Phase III compounds in gout and psoriasis."

Developers have been hustling on new oral RA drugs in hopes of coming up with fresh competition to injected biologics like Humira and Enbrel. Pfizer recently was rewarded with an FDA approval for Xeljanz.

"Today's news ... reminds investors that the stock carries significant pipeline execution risk," Panmure Gordon analyst Savvas Neophytou told Reuters.

Over at South San Francisco-based Rigel, which saw its stock slide 7% on the news, CEO James M. Gower said that the company would study the data over the summer before deciding how to proceed.

- here's the press release from AstraZeneca
- read the release from Rigel
- get the Reuters report