Crohn's Loses a Possible Treatment, For Now (OSIR, JNJ, ABT)
There is now a delay for hopes of a new treatment for the problematic Crohn’s Disease. Even with the treatments available today, this is a horrible disease that has much room for improvement. Osiris Therapeutics, Inc. (NASDAQ: OSIR) is seeing its stock getting pounded this morning. The company announced that it was ending enrollment at 210 patients in its Phase III trial evaluating its Prochymal for Crohn’s disease. The reason is that the company believes a design flaw exists in the trial resulting in significantly higher than expected placebo response rates.
The Prochymal Crohn’s program consists of two separate but related double blinded trials. The first trial evaluates patients’ initial response to two dose levels of Prochymal as compared to placebo. The trial was originally designed to enroll 270 subjects. The potential trial design flaw may be related to the fact that patients responding to the initial therapy were eligible to participate in a second, longer-term trial evaluating Prochymal as a maintenance therapy. Because the current standard for determining response of Crohn’s patients to therapy is largely subjective, there may have been response bias to meet the eligibility requirements for continuation of therapy in the longer-term maintenance trial.
The decision was apparently made after the trial’s final scheduled interim analysis showed that one of the two Prochymal dose arms had crossed a futility boundary. It noted that the dose arm was unlikely to achieve the primary endpoint of remission because of the high placebo response rate.
This latest analysis continued to show no serious safety concerns with the therapy and safety was not a factor in the decision to stop enrollment.
It is believed that a systemic design flaw in the trial would likely affect the utility of the data for purposes of registration. Osiris is keeping the trial blinded and expects a solid data package for use in designing future trials in Crohn’s disease.
A trial design problem is not as bad as safety issues nor as bad as just outright failures. But this is a huge hit when you consider that the trial had reached Phase III. It is possible that some design changes in the trial may keep it from having to go back to scratch, but this is a serious issue at the company either way.
Osiris is still in its developmental stages for all practical purposes. It counted a mere $10 million in revenues for all of 2008. Losing the Phase III even on a design flaw may be a huge miss. Analysts were expecting to see revenues reach almost $80 million this year and almost $130 million next year. That won’t be happening now.
Johnson & Johnson (NYSE: JNJ) may be too large to play for a single drug. But it acquired Centocor for its REMICADE treatment, which is used for treating Crohn’s Disease. Abbott Laboratories (NYSE: ABT) also has HUMIRA, which is also used for Crohn’s Disease treatment.
Shares of Osiris are getting hit hard. The pre-open trading has this one down over $5.00 or 28% to $13.04. Its 52-week trading range is $10.80 to $21.65.
JON C. OGG
MARCH 27, 2009
