Erytech investors who backed last month’s IPO received an unwanted surprise, as the biotech’s lead candidate failed to improve overall survival in patients with acute myeloid leukemia (AML), a 27% drop in the stock price.
The trial contained 123 recently diagnosed AML patients considered unable to tolerate intensive chemotherapy of ages 65 and older. Erytech sought out this population with the theory that its encapsulated form of L-asparaginase, eryaspase, would block the patients’ tumors from receiving certain nutrients without activating adverse effects seen in existing therapies that inappropriate for those with AML. The theory has now been tossed in the garbage.
Although the toxicity report remained “acceptable” and similar to previous studies, eryaspase was unsuccessful in providing effectiveness. Overall survival in the group of patients that took eryaspase in addition to a low-dose cytarabine was not any longer than the group that received chemotherapy alone. The average time of treatment fell short of two months in both arms.
These findings were enough to drop the company’s stock over 25% on exchanges globally. Erytech stands by a claim that AML is the largest gamble in its pipeline, as it’s not the biotech’s most important prospect nor its largest long-term candidate. Both of those are claimed by acute lymphoblastic leukemia (ALL) and pancreatic cancer, respectively.
Analyst, Peter Welford was optimistic about the drug’s failure. “We view this to be a minor setback, having always assigned only a 30% probability to AML,” Welford said to in statement to investors.
Bigger things are in sight for Erytech. The biotech is pursuing European approval in ALL and is preparing for a trial planned to support a green light from the FDA in the indication. Also, Erytech is trying to begin a phase 3 pancreatic cancer trial. If biotech can reproduce effectiveness seen in a phase 2b, the AML error could be forgotten about quickly.