Cerulean Slashes Jobs After Phase II Kidney Cancer Failure
Executive Summary
Cerulean will cut its staff by almost half to reprioritize its remaining cash as it recovers from a clinical trial failure for its lead drug candidate that shifts the program's immediate focus from kidney to ovarian cancer.
Cerulean Pharma Inc. said on Aug. 18 that it will reduce its work force by 48%, leaving the company with 23 full-time employees by the end of 2016 as it shifts its development strategy for lead asset CRLX101 from kidney to ovarian cancer after a Phase II clinical trial failure.
Waltham, Mass.-based Cerulean announced the layoffs after its share price fell 56.2% to close at $1.20 based on the company's disclosure of negative results from a 115-patient Phase II advanced renal cell carcinoma for CRLX101 a day earlier.
Cerulean reported after the stock market closed on Aug. 17 that median progression-free survival was 3.7 months for patients treated with CRLX101 plus Roche's Avastin (bevacizumab) or another standard-of-care (SOC) therapy compared with median PFS of 3.9 months for patients who received only Avastin or another SOC drug. The objective response rate also was better in the SOC-only arm than in the CRLX101 arm of the study – 14% versus 5%.
"These results were somewhat surprising in light of the supportive preclinical rationale to combine the agents as well as open-label Phase I data showing median progression-free survival (PFS) of 9.9 months and overall response rate (ORR) of 23% in 22 similar patients, which compares favorably to standard of care in third/fourth line RCC providing about 3.5 months PFS," Leerink Partners analyst Michael Schmidt wrote in an Aug. 18 report.
In terms of funding studies in ovarian and other cancers going forward, Cerulean said in its second quarter earnings report that it had $47.2m in cash as of June 30, which was expected to be enough money to fund operations through the second quarter of 2017.
But with $23.2m in operating expenses during the first half of 2016 and multiple CRLX101 clinical trials ongoing, the company's cash won't last beyond the first half of 2017 at its current spending rate. Without positive data to drive a major fundraising push, job cuts are inevitable to accommodate ongoing trials and a new CRLX101 development strategy.
"This reduction in force is a difficult but necessary step as we refocus our development priorities for CRLX101, our lead [nanoparticle-drug conjugate (NDC)] candidate" and a "potential best-in-class topoisomerase 1 (Topo-1) inhibitor."
"This reduction in force is a difficult but necessary step as we refocus our development priorities for CRLX101, our lead [nanoparticle-drug conjugate (NDC)] candidate," Cerulean President and CEO Christopher Guiffre said in a statement from the company. "We remain committed to unlocking the power of this potential best-in-class topoisomerase 1 (Topo-1) inhibitor, as well as realizing the promise of our pipeline and platform."
The comment regarding CRLX101's potential for Topo-1 inhibition was striking, because Cerulean previously placed hopes for the drug on its activity against tumors driven by hypoxia inducible factor (HIF), such as renal and lung cancers. CRLX101 failed to effectively treat lung cancer patients in a Phase II trial that ended in 2013. (Also see "Cerulean crashes in PhIIb NSCLC study" - Scrip, 25 Mar, 2013.)
A Biomedtracker report said the renal cell carcinoma study was "a straightforward failure," but the analysis also noted that Cerulean's "attempt to reposition the drug to focus on its Topo-1 inhibition while abandoning its HIF-1a inhibition" was interesting, because of the shift to Topo-1 driven cancers, such as ovarian cancer – an indication in which CRLX101 already is being evaluated. A single-arm Phase II trial yielded some positive results in ovarian cancer in 2014. (Also see "Nano-anticancer promise in Phase II ovarian cancer trial" - Scrip, 15 Jan, 2014.)
"Thus, attention now turns primarily to CRLX101 development for ovarian cancer, and updated results from the Phase Ib/II study in combination with paclitaxel should be presented at [the European Society for Medical Oncology (ESMO) 2016 Congress] in October," the Biomedtracker analysis said.
Investor confidence apparently is running low for Cerulean's lead NDC candidate, however, given the company's stock performance following the RCC study.
Cerulean's lung cancer study for CRLX101 failed a year before it became a public company. The initial public offering in 2014 valued Cerulean at $7 per share, but the company's stock hasn't closed above $5.10 since then. (Also see " TABLE: 2014 IPO values mixed at mid-year " - Scrip, 23 Jul, 2014.)
It remains to be seen when the share price will rebound enough to fund drug development beyond the next year, but Cerulean is not stopping its investments in CRLX101 and CRLX301.
"We will continue to focus on the potent topoisomerase 1 inhibition of CRLX101's payload, camptothecin, in topoisomerase 1-sensitive tumors. Our combinations with weekly paclitaxel [in relapsed ovarian cancer] and [AstraZeneca PLC's] Lynparza (olaparib) [in solid tumors] are examples of ongoing trials that leverage CRLX101's topoisomerase 1 inhibition in combination with chemotherapies and DNA damage repair agents," Cerulean CEO Guiffre said in a statement.
CRLX301 is in Phase I for the treatment of solid tumors. A Phase II study of CRLX101 for colorectal cancers also is ongoing.