XBiotech flubs a Phase III trial with its lead cancer drug

XBiotech CEO John Simard

Texas upstart XBiotech ($XBIT) made a string of embarrassing mistakes in a Phase III trial on its lead cancer therapy, misdosing some patients and failing to adequately test others on the way to a staggering mishap.

The company enrolled about 275 colorectal cancer patients in Europe to determine whether its antibody therapy, Xilonix, could beat placebo in stabilizing body mass, as measured by x-ray, and improve patient well-being based on a scored survey.

From there, everything went wrong. Before dosing even started, 25 patients dropped out, XBiotech said, and then 14 were mistakenly given either Xilonix or placebo when they were meant to get the other. Furthermore, 33 of the patients who completed the trial never received the x-ray scans or surveys required to judge whether the study was a success, the company said. In all, the errors affect 72 volunteers, more than 25% of the patient population.

Or maybe more, XBiotech said, adding that it needs about 10 more days to pore over patient samples before it can fully understand the scope of the problem. That analysis will "not necessarily" delay the final unblinding of trial results, CEO John Simard said in a statement, but the company acknowledges that the loss of so much data will have marred the study's statistical power.

The European trial is one of two Phase III studies XBiotech is running to demonstrate Xilonix's worth. The company is still recruiting for a U.S. trial on about 700 patients with a primary endpoint of improving overall survival and secondary goals of objective response rate, progression-free survival and body mass stabilization.

XBiotech pulled off a $76 million IPO in March with the ambitious goal of both advancing its lead drug on two continents and building a 46,000-square-foot campus in its native Austin where it could eventually manufacture Xilonix at commercial scale. At the height of biotech's recent boom, the company traded as high as $31.50 per share, giving it a market cap of nearly $1 billion.

The company's shares fell about 27% after hours on Monday night's announcement.

- read the statement