Two weeks after acknowledging the failure of its lead drug candidate Rospitor (AQX-1125) in a Phase III trial in patients with interstitial cystitis/bladder pain syndrome (IC/BPS), Aquinox Pharmaceuticals has eliminated half its workforce—30 employees—and shut down its U.S. offices in San Bruno, CA.
The Vancouver, BC, drug developer said the layoffs and office shutdown were part of a restructuring plan designed to reduce operating costs and better align the company’s workforce with the needs of its business—a plan that Aquinox said was approved July 3 by the Compensation Committee of its Board of Directors.
“In connection with the restructuring, the company estimates that it will incur aggregate restructuring charges of approximately $2.5 million related to one-time termination severance payments and other employee-related costs and the shut-down of its San Bruno office,” Aquinox disclosed yesterday in a regulatory filing.
While laid-off employees are eligible for severance payments and outplacement services, Aquinox has conditioned the severance benefits on employees’ signing separation agreements that include a general release of claims against the company, according to the filing.
The filing did not include an estimate of Aquinox’ projected savings from the restructuring.
Aquinox moved to slash jobs and expenses after Rospitor failed to meet its primary endpoint in the Phase III LEADERSHIP 301 trial (NCT02858453), designed to assess the effects of two doses of oral Rospitor on bladder pain and other urinary symptoms in subjects with IC/BPS.
LEADERSHIP 301 enrolled 433 participants, including 341 women who were randomized to receive Rosiptor 100 mg or 200 mg, or placebo. On June 27, Aquinox acknowledged that Rosiptor failed to achieve its primary endpoint of a statistically significant reduction in the mean change from Baseline at Week 12 in maximum daily bladder pain score compared to placebo in the women.
“These results support halting all further development activities with Rosiptor,” Aquinox president and CEO David J. Main said at the time in a statement. “We will be undertaking a thorough evaluation of our pipeline and other strategic options available to the company and will be in a position to provide further guidance later this year.”
Pursuing Proof-of-Concept in Pelvic Pain
Rospitor had also been set to advance to a Phase II proof-of-concept trial (NCT03500159) in men with chronic prostatitis syndrome/chronic pelvic pain syndrome (CP/CPPS) during the second quarter. That trial was recruiting patients as of June 13, according to ClinicalTrials.gov. That study’s primary endpoint is reduction of average daily bladder pain at six weeks with once daily Rospitor.
News of the trial failure touched off a stock sell-off among investors that sent shares of Aquinox cratering nearly 85% the day of the failure announcement, to $2.34 from $15.31 at the previous day’s close of trading. This morning, Aquinox shares were trading at $2.61 in pre-market activity as of 8:43 a.m., down 10% from yesterday’s closing price of $2.90.
Six weeks before the trial failure, Aquinox inked an exclusive license agreement with Astellas Pharma covering Rospitol rights in much of the Asia-Pacific region. Aquinox stood to potentially gain up to $155 million, plus royalties, in return for awarding Astellas exclusive rights to research, develop, and commercialize Rosiptor for all human diseases and conditions in Japan and additional countries in the Asia-Pacific region, including South Korea, Australia, Taiwan, Indonesia, and Malaysia—but excluding China and India.
Astellas agreed to pay Aquinox $25 million upfront, up to an additional $60 million tied to achieving in development milestones, up to $70 million tied to achieving commercial milestones, plus royalties on any future sales of Rosiptor within areas covered under their agreement.
Rospitor was a first-in-class, once-daily, oral treatment being developed to treat inflammation and inflammatory pain. Rosiptor used a novel mechanism of action, activating SHIP1 (SH2-containing inositol-5'-phosphatase 1), an enzyme designed to down-regulate inflammation through its role in the PI3K signaling pathway.