Avalanche tanks after its gene therapy posts mixed results in AMD

Avalanche CEO Thomas Chalberg

Gene therapy developer Avalanche Biotechnologies ($AAVL) watched its value plummet after posting some discouraging Phase IIa results for its lead candidate, a treatment for the vision-destroying wet age-related macular degeneration.

The therapy, AVA-101, met its primary endpoint of safety as measured by number of complications in a year compared with placebo. But, on its secondary efficacy goals, the one-time treatment had only middling effects on AMD in the 32-patient study.

Avalanche hoped AVA-101 would help AMD patients perform significantly better on an eye-chart test, but the treatment came through with an average improvement of just 2.2 letters over baseline. Furthermore, the treatment backfired on its secondary goal of reducing retinal thickness, a symptom of AMD, by upsizing patients' retinas by 25 mm on average compared to a mean 56-mm shrink in the control arm. And while the gene therapy did reduce the number of necessary rescue Lucentis injections compared to placebo, it was a difference of just two shots.

The data sent Avalanche's shares down roughly 49% overnight, as investors, bullish on gene therapy as a whole, lost faith in AVA-101's prospects of coming through in late-stage trials.

For its part, Avalanche contends the small study was a net success. AVA-101's effect on eye-chart performance may have been modest compared to baseline, but patients in the control arm read an average of 9.3 fewer letters over the course of the study, according to the company. Through that lens, AVA-101 notched a significant improvement, Avalanche said.

"AVA-101 demonstrated tolerability and a promising treatment effect in the subjects treated in this study, many of whom had been extensively treated with anti-VEGF therapy prior to enrollment and showed difficult-to-treat characteristics including persistent recurrent wet AMD activity," CEO Thomas Chalberg said in a statement.

The biotech plans to divulge detailed results from the study later this year, using the data to inform its planned Phase IIb study. Beyond AMD, AVA-101 is in preclinical development for diabetic macular edema and retinal vein occlusion.

Avalanche jumped to the forefront of gene therapy's resurgence with a $102 million IPO last year, leveraging widespread optimism for the technology into a Wall Street splash. The company is working with Regeneron ($REGN), maker of the blockbuster AMD treatment Eylea, in a wide-ranging ophthalmology partnership that could pay out as much as $640 million. Under that agreement, Regeneron has the right to in-license AVA-101.

- read the statement

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