Avalanche hits the brakes on its gene therapy program after a Phase II misstep

Avalanche Biotechnologies ($AAVL), months removed from a costly Phase II dud, is calling off plans for further study of its lead gene therapy candidate, heading back to the lab to regroup before trying another clinical trial.

The Menlo Park, CA, company had planned to launch a Phase IIb study later this year on AVA-101, designed to be a one-time treatment for the vision-destroying wet age-related macular degeneration. But a closer look at some disappointing Phase IIa results disclosed in June led management to reconsider.

In that 32-patient trial, Avalanche's therapy proved itself safe but had only middling results in improving efficacy and managed to backfire on its goal of reducing retinal thickness. The miss sent Avalanche's shares down more than 50%, and CEO Thomas Chalberg resigned from his post about a month later.

Interim Avalanche CEO Hans Hull

Since then, the company's analysis of the data "gave us more information about some of the factors, including dosing and administration variability, that may have contributed to the Phase IIa study results," interim CEO Hans Hull said in a statement. "We are carefully focusing our resources and leveraging our scientific expertise to develop what we believe could be a transformative treatment for wet AMD that will help patients better manage this devastating disease."

The change of plans sent Avalanche's shares down another 30% on Friday morning. And investors appeared to take the company's fortunes as referendum on ocular gene therapies: Spark Therapeutics ($ONCE), at work on potential cures for rare eye diseases, saw its stock price fall 10% in tandem.

Meanwhile, despite Avalanche's clinical retreat with AVA-101, the company is pressing forward in preclinical development with AVA-201, another AMD treatment, and a pair of therapies designed to rid patients of color blindness.

Avalanche went public with a $102 million IPO last year, becoming one of the higher profile players in what has been a banner few years for gene therapy. Unlike the many drug developers at work on one-time treatments for rare genetic disorders, Avalanche stood out with its ambitions to craft a gene therapy for a much more common disease. Among the company's backers is Regeneron ($REGN), maker of the blockbuster AMD treatment Eylea, which has the right to in-license AVA-101 under a deal worth up to $640 million.

- read the statement

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