Cartilage damage was observed in dogs given the drug for up to 12 months.

Karo Bio has decided to discontinue the development program for eprotirome after an animal study demonstrated unwanted effects following long-term exposure. The company will terminate its ongoing Phase II and III studies in dyslipidemia.

This termination has prompted Karo Bio to reassess its previous decision to spin off its preclinical activities, which are focused on nuclear receptors, into an autonomous subsidiary. In October 2011, the firm reported that it aimed to restructure activities into two companies: one focused on eprotirome and the other organized around its knowledge in nuclear receptors. While the preclinical part was intended to be sold to new owners so that Karo Bio cound focus on the eprotirome program, the company will now concentrate operations on the preclinical projects.

Eprotirome is a liver-selective thyroid hormone receptor agonist that Karo claims reduces a number of independent risk factors for the development of atherosclerotic cardiovascular disease. Three Phase II studies reportedly showed that when used as monotherapy or in combination with statins or ezetimibe, eprotirome leads to clinically meaningful reductions in risk factors for the development of cardiovascular disease in patients with high blood lipids.

Recent animal studies for eprotirome, however, demonstrated cartilage damage in dogs given the drug for up to 12 months. The damage was apparent in all animals treated, be it with either the high dose of the lower dose. In a six-month toxicology study in dogs these findings were not observed, and patients included in the late-stage study had reportedly been given eprotirome for a considerable shorter period of time.

The company notes, though, that it cannot be excluded that humans may also suffer from similar cartilage damage. Chronic treatment with eprotirome must therefore be considered as too risky in relation to the lipid-lowering effect that the current study intends to demonstrate. “Eprotirome has been a project with great potential but also a project with risks. Unfortunately, the risks associated with long-term use do not outweigh the benefits,” says CEO Per Bengtsson.

The total cost of eprotirome’s Phase III program, which was scheduled to run until 2014, has previously been estimated to be approximately SEK 300 million (about $44.93 million). The cost of the program through 2011 totaled roughly SEK 100 million (almost $14.98 million). Karo Bio will take wind-up charges in the first quarter of 2012 of about SEK 55 million (roughly $8.24 million).

Karo Bio says it will now align its resources to further preclinical operations. In December 2011, the company inked a collaboration and licensing arrangement with Pfizer in the field of autoimmune diseases. Karo Bio is entitled to receive up to $217 million in up-front and milestone payments in addition to royalty fees. The company says that it could receive $10–14 million during the first two years.

The deal covers small molecule RORgamma modulators. RORgamma directly controls the production and secretion of the cytokine IL-17, a major contributor to inflammation. The receptor’s key role in driving disease pathology has been implicated through clinical studies using mAbs that neutralize IL-17 activity.

“The central role of RORgt in Th17 cell differentiation coupled with the increasing clinical validation for the importance of IL-17 and other Th17-derived cytokines in autoimmune diseases makes RORgt a compelling target,” Jose-Carlos Gutierrez-Ramos, svp, biotherapeutics, worldwide R&D, Pfizer, noted at the time the agreement was entered.

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