ChemoCentryx (CCXI) announced on Friday before the open that the Phase III SHIELD-1 study, testing the chemokine receptor inhibitor vercirnon in patients with moderate-to-severe Crohn’s disease, failed to reach either its primary or secondary endpoints. CCXI dropped from $11.69 to $ 6.05 before trading back to $8.09 before the close.
On August 5, PropThink suggested that owning CCXI ahead of numerous Phase III catalysts in the fourth quarter made sense as the stock got more attention and considering the substantial market opportunity for a novel Crohn’s disease treatment. Vercirnon is partnered with GlaxoSmithKline (GSK), and the larger pharmaceutical company plans to continue exploring the safety and efficacy results from SHIELD-1 to inform decisions about the ongoing clinical development program. Vercirnon is being tested in three other large Phase III studies, SHIELD-2, -3, and -4. Recruitment and dosing in the ongoing studies has been suspended pending further review of the SHIELD-1 results.
The Phase III results came much earlier than expected. Given a primary completion date of August and a study duration of 12 weeks, we anticipated top-line data in mid-September at the earliest. Regardless, the failure was unexpected given the positive results seen in previous Phase II/III trials. Patients in the vercirnon arm of the PROTECT-1 study (2009 read-out) saw a 70-point Crohn’s Disease Activity Index (CDAI) score response of 61%, versus 47% for the placebo group (p=0.039); and a 100-point response of 55%, versus 40% for the placebo group (p=0.029). In addition, vercirnon showed statistically significant clinical effects when measured by the Crohn’s Disease Endoscopic Index of Severity (another measure of disease activity, also known as CDEIS). Patients in the vercirnon arm saw a decrease of 8.4 points versus 1.1 in the placebo arm (p=0.049). Safety was also acceptable, with no increases in infection risk reported in PROTECT-1, key to commercialization.
The primary endpoint in SHIELD-1 was the proportion of patients achieving a clinical response, defined as a decrease in CDAI score of at least 100 points at 12 weeks. Clinical remission (CDAI score less than 150 points) at 12 weeks was evaluated as a secondary endpoint. Neither endpoint was achieved with statistical significance.
Now what?
Although GlaxoSmithKline has not fully scrapped development of vercirnon, the value being ascribed to the asset at CCXI has significantly declined, and it is clear that going forward ChemoCentryx will most likely be valued excluding vercirnon milestone payments or royalties. However, we would like to note an important point regarding SHIELD-1 trial design. In the Phase II PROTECT-1 trial, a little over 12% of patients were non-responsive to existing anti-TNF- therapies. However, in the Phase III SHIELD-1 trial, one of the inclusion criteria for all patients in the trial was a “history of inadequate response and/or intolerance/adverse event leading to discontinuation of either corticosteroids or immunosuppressants.” It’s possible that had Glaxo designed the Phase III program around a wider set of Crohn’s Disease patients, not simply those who failed to benefit from currently approved therapeutics, that the outcome would have been different. And it’s possible that Glaxo will redesign a new set of clinical trials around a revised approach. However, until there is clear confirmation that Glaxo is restarting clinical trials of vercirnon, ChemoCentryx will need to be valued on its 9 remaining pipeline assets (3 Phase II assets, 2 Phase I assets, and 4 pre-clinical assets).
With the suspension of the development of vercirnon, ChemoCentryx’s pipeline is now led by CCX140, in Phase II trials for the treatment of diabetic nephropathy. Interim 12-week data will be released during the current quarter, and Glaxo has a Q4 2013 deadline to make a licensing decision about CCX168. Inclusive of the proceeds of its April secondary offering and Q2 2013 results, ChemoCentryx now holds over $166 million in cash & investments (and no debt), or $3.88 per share. We are evaluating our next steps with regards to ChemoCentryx, and will issue a more comprehensive report next week.
