Chalk up a pyrrhic victory for the Principia Biopharma short sellers. After arguing Principia’s pipeline was worthless, short sellers saw Sanofi snap up the biotech at a hefty premium in a $3.7 billion deal. Now, rilzabrutinib, one of Principia’s key candidates, has flunked its first major clinical test.
Rilzabrutinib is an inhibitor of BTK, a target that has proven fruitful in the treatment of B-cell cancers but has been a graveyard for autoimmune candidates tested by companies including Bristol Myers Squibb, Gilead and Roche. Principia bet reversible binding would make rilzabrutinib both safe and potent, enabling it to succeed where other similar molecules had flopped.
After generating data in a single-arm phase 2 trial in the rare autoimmune skin disease pemphigus, Principia moved into a pivotal trial designed to support a filing for approval in the first half of next year. The filing plan now lies in tatters.
Investigators randomized 131 newly diagnosed or relapsing moderate-to-severe pemphigus patients to take rilzabrutinib or placebo orally. The primary endpoint looked at the number of patients in each arm who were in complete remission and taking 10 mg or less of corticosteroids a day from week 29 to week 37 of the study. By that yardstick, rilzabrutinib was no better than placebo.
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The failure of rilzabrutinib to free patients from skin lesions validates the arguments put forward by groups that shorted Principia’s stock, notably Sahm Adrangi's Kerrisdale Capital. Early last year, Kerrisdale said Principia’s pipeline was “worthless” and gave a skeptical reading of its data.
As Kerrisdale saw it, Principia’s single-arm phase 2 study in pemphigus suggested the drug was no match for Roche’s Rituxan, which won approval in the most common form of the disease in 2018. Sanofi’s decision to pay $100 a share for Principia, well above the price it traded for at the time of the short attack, delivered a win for the biotech’s investors but Kerrisdale could still prove to be right about the therapeutic potential of rilzabrutinib.
Sanofi is yet to give up on the drug, though. A phase 3 clinical trial in the rare blood disorder immune thrombocytopenia and a phase 2 study in the autoimmune condition IgG4-related disease are continuing. And Sanofi plans to start midphase trials in immunological diseases including asthma, atopic dermatitis, chronic spontaneous urticaria and warm autoimmune hemolytic anemia by the end of the year. The roster of trials reflects Sanofi’s belief that rilzabrutinib is a pipeline in a product.
In a statement to disclose the phase 3 failure, Naimish Patel, Sanofi’s head of global development, immunology and inflammation, said the company still believes “the rilzabrutinib clinical program holds great potential to address the unmet treatment needs of people living with immune-mediated diseases.”