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ObsEva (OBSV) shares all but cratered on Wednesday, freefalling 75% from $1.61 to $0.396 after the Swiss-based women’s health drug developer said it would lay off employees as part of a restructuring that will also entail refocusing its development and commercialization strategy.
ObsEva didn’t specify how many jobs it will eliminate but did call the layoffs a “mass dismissal” pursuant to Swiss law, defined as the dismissal of at least 10 employees for companies of between 20 and 99 employees. ObsEva employed 51 people as of December 31, 2022, according to its most recent Form 20-F annual report, filed in March.
Also, ObsEva said it will pursue temporary protection against debt-enforcement and bankruptcy proceedings in Switzerland, with the aim of undertaking restructuring measures under the supervision of one or more court-appointed administrators.
“A final decision on the extent of the restructuring will be taken following a consultation process with the Company’s employees,” ObsEva said in a statement.
The company blamed a regulatory setback affecting development of its lead U.S. drug candidate linzagolix for uterine fibroids (UF), for which a new drug application (NDA) has been filed with the FDA. Linzagolix is a novel, once-daily, oral gonadotropin-releasing hormone (GnRH) receptor antagonist designed to treat heavy menstrual bleeding associated with UF as well as pain associated with endometriosis.
ObsEva acknowledged that the FDA notified it of “review issues” that it may not be able to resolve by linzagolix’s September 13 target action date under the Prescription Drug User Fee Act (PDUFA).
“These review issues preclude discussion of labeling and post-marketing commitments at this time,” ObsEva asserted. “ObsEva continues to engage in communications with the FDA, including submission of documentation as well as a plan for the provision of additional data addressing the deficiencies.”
The FDA’s review of the NDA is still ongoing, said ObsEva, adding that it had not been informed of any final decision by the agency.
But that isn’t stopping ObsEva from terminating its licensing deal with Japanese-based Kissei Pharmaceutical for lizagolix. ObsEva obtained exclusive rights in 2015 to develop and commercialize the drug worldwide, excluding Asia. In return, ObsEva agreed to pay Kissei an upfront payment and milestone payments, all undisclosed. As a result, Kissei is taking over a strategic licensing agreement ObsEva inked in February of this year with Theramex to support commercialization and market introduction of linzagolix across international markets outside of the U.S., Canada, and Asia.
“ObsEva believes the changes are necessary due to the commercial landscape and potential additional capital needed to fund the completion of the linzagolix clinical development program,” the company stated.
That program had seemed to be progressing after linzagolix won marketing authorizations from the European Commission and the UK Medicines and Healthcare Products Regulatory Agency, and completed two Phase III trials that the company announced last year as having been successful, PRIMROSE 1 (NCT03070899) and PRIMROSE 2 (NCT03070951).
PRIMROSE 1 was conducted in the U.S. and enrolled 574 women. PRIMROSE 2 was conducted in Europe and the U.S. and enrolled 535 women. Both trials consisted of a 52-week treatment period followed by a 6-month post treatment follow-up period.
“We are optimistic about the potential approval of linzagolix in the U.S. for UF,” Edward Nash, an analyst with Canaccord Genuity, wrote in a July 4 research note.
A key reason for his optimism was linzagolix offering flexible dosing options with or without hormonal add-back therapy (ABT; 1 mg estradiol and 0.5 mg norethisterone acetate). That distinguished linzagolix, Nash argued, from two competing products now available in the U.S.: Myovant Sciences’ Myfembree® (relugolix, estradiol, and norethindrone acetate) tablets, which is dosed once daily and contains hormonal agents, and AbbVie’s Oriahnn® (elagolix, estradiol, and norethindrone acetate capsules, plus elagolix capsules), a pre-fixed dose tablet with hormonal ABT that is indicated for twice-daily dosing.
Oriahnn for UF and Orilissa® (elagolix) for endometriosis generated combined net product revenues of $145 million in 2021, while Myfembree racked up net product revenues of $6.4 million in the fiscal year ending March 31.
Nash projected linzagolix would generate peak sales and royalty revenue of $364 million in 2032 for the UF indication alone, with a peak market penetration of 2.1% in the U.S. and 1.1% in the E.U.
Absent linzagolix, ObsEva’s pipeline consists of two drug candidates:
- Ebopiprant, an oral selective prostaglandin F2α receptor antagonist being evaluated as a potential treatment for preterm labor. Ebopiprant is in Phase IIb studies in Europe and Asia, with global rights licensed to Organon—which paid ObsEva $25 million upfront, and agreed to pay up to $90 million in development and regulatory milestone payments, and up to $385 million in sales-based milestone payments, plus royalties. ObsEva licensed the drug in 2015 from Merck KGaA, Darmstadt, Germany.
- Nolasiban, an oral oxytocin receptor antagonist being developed for improving clinical pregnancy and live birth rates in women undergoing in vitro fertilization, now in Phase I/II studies in China. ObsEva has licensed nolasiban rights to YuYuan Bioscience for development and commercialization in China, in return for potentially receiving up to $17 million tied to achieving development, regulatory, and first sales milestones, up to $115 million tied to achieving additional tiered sales milestones, plus royalties.
AlloVir (ALVR)
AlloVir shares jumped 36% on Wednesday, from $4.61 to $6.25 at 10:40 a.m. ET, before settling for a 9% gain, to $5.01, after the company agreed to sell 27,458,095 shares of common stock to a group of institutional and strategic investors that included some big names, in a $126.6 million registered direct offering at Tuesday’s closing price of $4.61 per share.
Arguably the biggest name among the investors is Kite, a Gilead Company, the cancer immunotherapy powerhouse that markets the chimeric antigen receptor T-cell (CAR-T) therapy Yescarta® (axicabtagene ciloleucel), approved in 2017, and is developing eight additional cancer-fighting programs—four of them additional indications for Yescarta.
Another investor of note is ElevateBio, a creator and operator of a portfolio of companies across multiple cell and gene therapy and regenerative medicine technology platforms—including gene editing, induced pluripotent stem cells, and protein, viral, and cellular engineering. ElevateBio has built those companies through a centralized innovation and manufacturing center it calls BaseCamp, a dedicated viral vector and cell therapy process development and manufacturing platform designed for clinical and commercial cell and gene therapies and regenerative medicines. ElevateBio completed a $525 million Series C financing last year.
Joining Kite and ElevateBio among the new and existing investors were investment firms F2 Ventures, Invus, Redmile Group, EcoR1 Capital, and GMT Capital.
AlloVir did not disclose how much it stood to gain in net proceeds, but did say it will use those net proceeds—plus existing cash, cash equivalents, and investments—first to complete enrollment and achieve data readouts in all three of its ongoing Phase III trials of its lead multi-virus specific T-cell therapy candidate posoleucel.
“The additional proceeds will enable the completion of our three ongoing global Phase 3 registrational trials of posoleucel for the treatment and prevention of serious and life-threatening infections caused by six devastating viruses in immunocompromised patients,” AlloVir CEO Diana Brainard, MD, said in a statement.
Other intended uses of the net proceeds include continued advancement of manufacturing processes to support regulatory submissions, other R&D activities for its product candidates, and general corporate purposes.
AlloVir reported $172.7 million in cash, cash equivalents and short-term investments as of June 30.
Cassava Sciences (SAVA)
Cassava shares dropped 21% on Wednesday, from $21.72 to $17.25, after Reuters reported early that morning that the U.S. Department of Justice had launched a criminal investigation into whether the company manipulated research results for its Alzheimer’s disease drug candidate simufilam, citing two unnamed sources.
Cassava struck back seven hours later with an afternoon press release declaring that it had done nothing wrong in its studies of simufilam, a proprietary, small molecule oral drug designed to restore the normal shape and function of altered filamin A (FLNA), a scaffolding protein, in the brain.
“I have said from the onset that allegations of research misconduct are false,” declared Remi Barbier, Cassava’s President and CEO, in the statement. “No government agency has informed us that it has found supporting evidence of research misconduct or any other wrong-doing, and for good reason—there is no supporting evidence for allegations of research misconduct.”
Cassava repeated its disclosure from November 15, 2021, that unspecified government agencies had confidentially asked the company to provide “corporate information and documents.”
“We have voluntarily been cooperating with government authorities,” the company added. “No government agency has informed us that Cassava Sciences, or anyone associated with us, has engaged in any wrongdoing.”
The investigation came after Jordan A. Thomas of the law firm Labaton Sucharow filed a petition with the FDA in August 2021 on behalf of two physicians who requested that the agency end two clinical trials of simufilam (NCT04388254 and NCT04994483). The physicians were David S. Bredt, MD, PhD, a neuroscientist and entrepreneur who previously held executive positions at Johnson & Johnson and Eli Lilly, and Geoffrey S. Pitt, MD, PhD, a cardiologist who is director of Weill Cornell Medicine’s Cardiovascular Research Institute.
The physicians alleged that published studies about clinical trials involving simufilam contained data misrepresentation and images of experiments that appeared to have been manipulated by photo-editing software. The FDA denied the petition and let the trials proceed.
Bredt and Pitt told The Wall Street Journal last November that they shorted Cassava’s stock after coming to doubt the company’s research. They later told The New Yorker magazine that they no longer had a short position in Cassava.
Cassava said none of its officers or directors had sold company stock in more than a decade—and contrasted it with what it claimed were the actions of “short seller” investors, who borrow shares and immediately sell them on the expectation that the stock price will fall: “Short sellers, some of whom have been pursuing an unprecedented attack on Cassava Sciences, have reportedly made over $100,000,000 shorting SAVA stock.” (That figure was reported by Bloomberg News last year, citing data from S3 Partners).
“For a $100 million payday, some investors may be incentivized to make false allegations,” Barbier said. “Our goal is to help people with Alzheimer’s disease, not an easy payday.”
InflaRx (IFRX)
InflaRx shares surged 38% on Tuesday, from $1.39 to $1.92, after the company said it will request that the FDA grant Emergency Use Authorization (EUA) for its COVID-19 monoclonal antibody vilobelimab as a treatment for critically ill, invasively mechanically ventilated patients with the virus. InflaRx cited ‘encouraging interactions” with the FDA at a recent Type B meeting.
During that meeting, InflaRx said, it discussed in detail the completed Phase III part of its PANAMO trial (NCT04333420) assessing vilobelimab in invasively mechanically ventilated, critically ill COVID-19 patients. The company said it also obtained FDA guidance on what it needed to deliver in its planned EUA submission—and committed to additional talks with the agency regarding further development of vilobelimab.
“Our constructive interactions with the FDA and the helpful guidance they provided have encouraged us to move forward with applying for EUA for vilobelimab in critically ill COVID-19 patients,” said Prof. Niels C. Riedemann, MD, PhD, InflaRx’s CEO and Founder, said in a statement. “Our team has committed to submitting the request for an EUA by the end of Q3 2022 and is dedicated to achieving that ambitious goal.”
Last month, InflaRx announced positive PANAMO results showing that Vilobelimab met the trial’s primary efficacy endpoint of a statistically significant reduction in 28-day all-cause mortality vs. placebo by resulting in a 23.9% relative reduction vs. placebo in 368 patients studied. A pre-specified analysis of patients from Western European countries (n=209) showed a 43% relative reduction in 28-day all-cause mortality in the vilobelimab treatment arm when compared to the placebo arm.
Revelation Biosciences (REVB)
Shares of Revelation tumbled 51% on Tuesday, from $1.01 to 49 cents, after the company announced pricing of 6o cents a share for its $5 million public offering that is expected to close on or about Thursday. However, Investor demand for the offering may have been affected by the company’s acknowledgement on June 22 that its lead drug candidate REVTx-99b missed its exploratory efficacy endpoints in the Phase Ib CLEAR trial by demonstrating no reduction in allergy symptoms and no increase in peak nasal inspiratory flow versus placebo.
Conducted in Australia, the CLEAR trial enrolled two patient cohorts: A prophylactic cohort that received REVTx-99b before the nasal allergen challenge, and a treatment cohort that received study drug after the nasal allergen challenge.
“Revelation management plans to evaluate future development of this and other ongoing programs,” the company stated.”
