Firm’s stock declined 60% with negative results.

AGI Therapeutics’ share price crashed nearly 60% as the company announced its IBS (irritable bowel syndrome) candidate, Rezular, failed in Phase III trials. The firm reports that further development of the drug would be dropped for the IBS indication.

Data from the 711-patient international Phase III trial showed the drug did not significantly relieve the symptoms of diarrhoea-predominant IBS (IBS-D), including pain/discomfort or change in severity of pain. Although the study did suggest Rezular had benefits in a number of secondary endpoints relating to stool frequency, stool form, and some quality-of-life scores, AGI said it didn’t believe the drug would meet regulatory requirements as an effective therapy for the broad IBS-D population.

The company’s CEO, John Devane Ph.D., notes that while AGI is disappointed with results, it would not be a prudent use of resources to continue development of Rezular as a treatment for IBS-D. “A safe and effective therapy for patients with IBS-D remains elusive. We will now focus on prioritizing our pipeline and plan how best to move these forward.”

AGI incurred a net loss of $18.2 million in 2008. With an R&D spend of some $15.9 million, the firm had cash and short-term deposits of $23.6 million at the end of 2008 compared with $45.5 million at the end of 2007.

AGI is focused on the development and commercialization of differentiated drug products for gastrointestinal (GI) diseases and disorders. The company’s clinical/preclinical pipeline includes drug candidates developed as either isomers or new drug delivery formulations of existing approved drugs with established safety and tolerability profiles in their currently approved clinical indications.

The disappointing Rezular data follow just weeks after AGI reported positive results from a proof-of-concept Phase II trial with AGI-004, a controlled release transdermal mecamylamine patch, in the treatment of chemotherapy-induced diarrhoea (CID).

Other clinical-stage products in the AGI pipeline include AGI-006, which contains the pure r-isomer form of the racemic CNS disorder drug, baclofen, and is in development for a number of GI and related conditions.  The ulcerative colitis candidate AGI-022 is being developed as an improved, once-daily form of aminosalicylic acid (ASA), formulated in a colon-targeted delayed-release/controlled-release delivery system.

Both AGI-006 and AGI-002 have undergone initial proof-of-concept studies, but in April 2009 the company confirmed further development of the two candidates would be put on hold as it pushed Rezular through Phase III and commercialization.

AGI’s final product is a preclinical-stage, modified-release formulation of the proton pump inhibitor drug (PPI), omeprazole, which is based on AGI’s Chronab controlled-release technology. The company has partnered with Axcan Pharma to develop AGI-010 jointly for North American markets as a treatment for night-time acid breakthrough in gastro esophegeal reflux disease (GERD).


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