GlaxoSmithKline dumps its last two programs in $1.5B ChemoCentryx deal

GlaxoSmithKline has slammed the door shut on its $1.5 billion pact with Mountain View, CA-based ChemoCentryx. A little more than two months after GlaxoSmithKline ($GSK) abandoned its partnership on the biotech's lead drug, the Crohn's drug vercirnon, scrapping three late-stage studies after the first Phase III flopped, ChemoCentryx ($CCXI) says that GSK has begged off pursuing a follow-up anti-inflammatory program and returned another drug--CCX354--licensed out four years ago.

Tuesday evening company executives shrugged off GSK's exit, vowing to continue on with programs the pharma giant had washed its hands of, even as the departure extended a cloud of doubt over all four therapies in the company's mid- and late-stage pipeline.

ChemoCentryx's CEO called the deal termination a clear win, continuing a tradition of denial that has marked a series of nasty setbacks over the course of a very rough year. And it coated this latest bitter pill for investors with the sweetened assertion that the first two steps of a Phase II study of one of the dumped drugs--CCX168--had gotten off to a "promising" start. The biotech's battered shares were up about 4% Wednesday morning.

ChemoCentryx CEO Thomas Schall

GSK's cold shoulder only seemed to incite greater confidence in CEO Thomas Schall. Schall told analysts on a call Tuesday evening that the return of all drug rights from GSK was a "positive outcome" for the company. And he believes the FDA will see great promise where GSK found only failure.

"Given the Phase II results to date and toxicities associated with current treatment options for AARV patients, we intend to file applications for both Breakthrough Therapy and Orphan Drug Designations with the FDA, in hopes of optimizing efficiency of development of CCX168 and bringing this therapy to patients as rapidly as possible. Pending discussions with FDA and key opinion leaders, our hope is that we could initiate a Phase III program in 2014," said Schall in a statement. "CCX168 is a leading asset in our pipeline, and along with CCX140, our CCR2 inhibitor in a Phase II trial for diabetic nephropathy, anchors the renal disease portfolio wholly owned by the company."

Back in September, though, shares of ChemoCentryx tanked after the biotech released weak interim results for its mid-stage study of CCX140. The company claimed the chemokine receptor spurred a significant reduction in proteinuria after 12 weeks of therapy. But some analysts said the drug was not clearly better than a placebo, prompting a 23% plunge in the stock price. 

The failure of the ChemoCentryx pact can't be welcome at GSK. While the drug giant has posted a string of new drug approvals this year, its most innovative programs for drisapersen, darapladib and MAGE-A3 have all experienced late-stage flops this year.

- here's the press release