UPDATED: KaloBios tanks after scrapping another antibody following PhII flop

Five months after Sanofi ($SNY) turned its back on KaloBios Pharmaceuticals ($KBIO) and its $290 million deal--$35 million upfront--to partner on the antibody KB001-A to treat lung infections in patients with cystic fibrosis, the biotech has been forced to concede that its midstage program for the drug proved to be another bad mistake. The antibody failed a Phase II study and is now joining the scrap heap started after KB003 failed Phase II for severe asthma last year.

KaloBios CEO David Pritchard

In pre-market trading on Wednesday the biotech's shares went into meltdown mode, dropping 63% and trading at less than 70 cents a share.

"We are very disappointed that KB001-A did not demonstrate a clinically significant effect on Pa infections in these CF patients, but we are thankful to all of them for volunteering to participate in this study," said KaloBios CEO David Pritchard, who had sold investors on the notion that antibody development had grown much easier in recent years. "Based on these top line data, we intend to discontinue our development of KB001-A in cystic fibrosis."

Pritchard's plan now is to retreat around KB004 in oncology, its new lead program, perhaps adding new cancer programs for 004 as well as the failed KB003. Currently the company's KB004 Phase II cohort expansion study is evaluating subjects with myelofibrosis, myelodysplastic syndrome, and acute myeloid leukemia.

KaloBios put out word of the fresh failure after the markets closed Tuesday, and its stock ended the day at $1.83, well below the $8 opening price when the biotech joined a wave of drug developers going public in 2013.

The 2009 Fierce 15 company raked in about $70 million from the IPO but has never managed to break above its debut price.

"The study did demonstrate a non-significant reduction in Pa titer in sputum measured post dosing and a 3% improvement in FEV1 (p=0.0029) at Week 16 for the KB001-A arm compared to placebo; however, these effects were not accompanied by improvements in other clinically significant end-points such as exacerbations or symptoms," said Dr. Nestor Molfino, KaloBios' chief medical officer. 

- here's the release

Special Report: 2009 Fierce 15 - KaloBios

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