Hyperion Therapeutics (HPTX) shuttered development of DiaPep277 in newly diagnosed Type 1 diabetes on Monday, citing improper trial conduct from the drug’s original developer, Andromeda Biotech. Hyperion acquired Andromeda in June of 2014 shortly before its own initial public offering. Hyperion expects to take a non-cash impairment charge of $25-55 million.
Hyperion reportedly uncovered evidence that some employees of Andromeda “engaged in serious misconduct, including collusion with a third-party biostatistics firm in Israel to improperly receive un-blinded DIA-AID 1 trial data and to use such data in order to manipulate the analyses to obtain a favorable result . . . the biostatistics firm and certain Andromeda employees continued the improper practice of sharing and examining un-blinded data from the ongoing DIA-AID 2 trial.” Hyperion has suspended these employees and is exploring its legal options.
Hyperion currently markets two products for the treatment of urea cycle disorders – RAVICTI (glycerol phenylbutyrate) and BUPHENYL (sodium phenylbutyrate) – which generated $37.1 million in the second quarter of 2014 ($148 million annual run-rate with no growth). HPTX reported $0.81 in 2nd quarter EPS, down from $1.17 in the same period of 2013. The company ended the quarter with $125.5 million in cash.
