Flexion routed as lead pain drug flops in first pivotal study

Shares of Flexion Therapeutics ($FLXN) cratered Tuesday evening after the Burlington, MA-based biotech said its lead pain treatment flopped in a pivotal Phase IIb study.

CEO Michael Clayman

Dr. Michael Clayman, CEO of the biotech, used the occasion to try to reassure investors that he was confident in the durability and effectiveness of FX006, being studied in the clinic among patients with moderate to severe osteoarthritis (OA) knee pain. But the flood to the exits took the company's stock down by more than 50% in the rout that followed in a matter of minutes.

Investigators enrolled 310 patients for the Phase IIb, using 40-mg and 20-mg doses. Top-line outcomes cited by the company noted better results for the 40-mg dose, but didn't spell out all the details.

Flexion is still talking about a regulatory submission for FX006, with another pivotal study yet to read out, but the failed study puts their top program under a cloud at a particularly bad time.

The biotech joined in the huge wave of IPOs that has pumped billions of dollars into the industry. But Flexion investors are finding out, like others recently, that small public biotechs can make for an ultrarisky investment, with stock prices shooting up and plunging down at the turn of a card.

"Based on data from this pivotal study and our previously completed Phase IIb dose-ranging study, we believe 40 mg of FX006 can provide clinically meaningful and durable pain relief and has the potential to make a real difference for the many millions of patients with symptomatic knee OA," Clayman said in a statement. "We are also pleased with the safety profile of FX006 and look forward to seeing the upcoming results of the Phase III pivotal trial. We are proceeding with confidence in the development of FX006 and will meet with the FDA at the appropriate time to review all of the data that would contribute to a registration submission."

- here's the release

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