Realm Reaches End of The Road And Seeks Buyer
Executive Summary
The US company listed in the UK has been devastated by the failure of its investigational eczema drug in Phase II trials in August and has hired an advisor to look for strategic alternatives, including a sale.
The writing is on the wall for Realm Therapeutics which has decided to discontinue all of its drug development programs and put up the 'for sale' sign following the high-profile failure this summer of its mid-stage atopic dermatitis candidate.
Realm, which is listed on London's AIM exchange but is based in Malvern, PA, has been struggling since August when its shares lost half their value following disappointing top-line results of a Phase II trial of its hypochlorous acid (HOCI)-containing lead product, PR022. In the 122-patient study, PR022 showed no difference from the control in the primary endpoint of percent change in Eczema Area Severity Index (EASI) versus baseline.
When the results came out, CEO Alex Martin declared that "we are conducting a full review to determine whether there is a path forward for our proprietary technology in atopic dermatitis, and to evaluate the implications for our acne and psoriasis programs." That review has resulted in Realm engaging MTS Health Partners as an advisor to explore potential strategic alternatives, which includes a potential sale.
Martin said in a statement that a full analysis of the atopic dermatitis study "showed a statistically significant efficacy signal in a sub-population treated with the higher dose formulation" of the topical gel. However, the overall study results "did not meet our threshold for continued investment and, as such, we have decided to discontinue all of our drug development programs, which are all based on the company’s proprietary technology."
Martin said the company was now seeking to maximize the value of its assets including the growing royalty stream from its out-licensed Vashe wound care product and an anti-itch hydrogel, which was formerly marketed as Aurstat for the management and relief of pain, burning and itching experienced with various dermatoses. He also claimed that Realm "may look to in-license or acquire further assets or undertake a broader corporate transaction."
The company's financial is pretty decent, with cash and equivalents of $21.3m at the end of August. Martin also pointed out that the firm had "implemented cost cutting measures, including a significant reduction in headcount, in order to preserve our capital as we advance this strategic review."
Realm noted that it was not in discussions with any potential buyers, and perhaps more worryingly it has not received an approach. As well as the atopic dermatitis flop, the company's HOCI technology was used in another disappointing trial earlier this year when a Phase II study of PR013 in allergic conjunctivitis failed to show efficacy – development in that indication ceased in March.
It does indeed look like the end for Realm, which was the name given to PuriCore PLC in December 2016 after the latter sold its supermarket retail business for $13.5m in October of that year. That business marketed other formulations of hypochlorous acid to improve the freshness of produce, including cut flowers.
In October 2017, the company completed a private placement which raised $26m from new and existing investors on both sides of the Atlantic including OrbiMed, BVF Partners, RA Capital, Abingworth and Polar Capital.