Lackluster Fostamatinib Results Prompt AstraZeneca To Drop Rigel Deal

Disappointing Phase III results have pushed AstraZeneca to end yet another partnership, leaving Rigel in a tough spot as the biotech considers how to move forward now that its largest partner has jumped ship.

The future of Rigel Pharmaceuticals Inc.’s pipeline looks precarious now that its partner AstraZeneca PLC has chosen to return worldwide licensing rights of the rheumatoid arthritis candidate fostamatinib back to the biotech. The decision comes on the back of lackluster Phase III results for the drug, but Rigel isn’t throwing in the towel yet.

Rigel and AstraZeneca announced June 4 that fostamatinib, an oral spleen tyrosine kinase (SYK) inhibitor, showed mixed results in two Phase III studies – OSKIRA-2 and OSKIRA-3. AstraZeneca’s decision isn’t entirely unexpected. The future of the partnership was dependent on it demonstrating compelling efficacy results in late-stage trials after a mid-stage trial comparing fostamatinib to AbbVie Inc.’s Humira (adalimumab), the RA market leader, failed to show non-inferiority.

Now the British pharma has chosen to pull out of the program altogether and take a $140 million impairment charge in the second quarter. The company said the charge would not have any effect on its guidance for 2013.

The news ends the relationship between the two companies, which began in February 2010 when AstraZeneca paid $100 million upfront and agreed to $1 billion in milestones for worldwide rights to the program (Also see "AZ Continues To Buy Pipeline With $100M Rigel Deal" - Pink Sheet, 16 Feb, 2010.). According to Rigel President and Chief Operating Officer Raul Rodriguez, Rigel only collected the upfront and about $25 million of the milestone payments over the course of the deal.

“The results of the late-stage trials did not measure up to the promising results we saw earlier in development,” said AstraZeneca Exec VP of Global Medicines and Chief Medical Officer Briggs Morrison in a statement.

AstraZeneca has been building out its pipeline through licensing deals over the last few years, trying to replace revenues lost from key products that went generic and in preparation for the upcoming expiration of Crestor (rosuvastatin) patents (Also see "AZ’s Make Or Break Moment Comes Down To Business Development" - In Vivo, 17 Apr, 2013.). CEO Pascal Soriot has been trying to refocus the company on areas of high unmet medical need since he took over the top slot, and much of the M&A that has been conducted under his watch has been for early-stage compounds.

The big pharma is one of the few that still faces a steep patent cliff, and it has suffered a string of late-stage development disappointments. A notable example was the nicotine channel blocker it licensed from Targacept Inc. to treat major depressive disorder; one of the several failures to result from the collaboration between the companies (Also see "Targacept, AstraZeneca Face Another Failure With NNR Class" - Pink Sheet, 20 Mar, 2012.). AstraZeneca announced in December 2011 its decision not to take olaparib, a PARP inhibitor, forward into Phase III clinical trials in ovarian cancer as well (Also see "AstraZeneca Takes Impairment Charge After Olaparib, TC-5214 Setbacks" - Pink Sheet, 20 Dec, 2011.).

OSKIRA Disappoints But Rigel Optimistic

The OSKIRA program was designed to show how fostamatinib worked in patients who do not respond adequately to treatment from disease-modifying anti-rheumatic drugs (DMARD) or tumor necrosis factor (TNF) inhibitors, currently the dominant treatments in the $16 billion market. While the studies did show activity in RA patients and a safety profile that was in line with earlier results, Rigel’s Rodriguez was not surprised that AstraZeneca was disappointed.

“The results weren’t as robust as they had anticipated,” he said in an interview with “The Pink Sheet” DAILY. “The safety was good, but the ACR20 scores were not as strong as you see in some other products.”

Yet, Rigel does not intend to scrap the product for now. The company said it would decide before the end of the summer what its next steps will be, including whether it will proceed with an NDA filing in RA or pursue other indications such as lymphoma that could be more manageable for a company of Rigel’s size.

Rodriguez said Rigel will not pursue commercialization of fostamatinib in RA on its own. “We still view fostamatinib as an opportunity,” he said. “But we’ve only had the data for about 24 hours and we have a bit of portfolio management to do.”

Rigel does not yet know how the latest development will affect other programs in its pipeline (Also see "With Much Riding On Fostamatinib, Rigel Awaits The Phase III Results" - Pink Sheet, 4 Mar, 2013.). The company had about $272 million in cash at the end of the second quarter with a burn rate of about $100 million annually.

OSKIRA-2, which included 900 patients who had responded inadequately to DMARDs, compared two doses of fostamatinib (100 mg twice-daily or 100 mg twice-daily for one month followed by 150mg once-daily) to placebo. The primary endpoint was ACR20 scores at 24 weeks; these scores represent the percentage of patients who have at least a 20% improvement in joint swelling and tenderness.

The trial showed that fostamatinib in combination with DMARDs demonstrated statistically significant improvement over placebo in both dosages at 24 weeks with 39.6% of patients on the 100 mg dose and 39.6% of patients in the 100 mg/150 mg dose group showing a greater than 20% response rate at 24 weeks, compared with only 24.5% of the placebo patients (p<0.001 both arms).

OSKIRA 3, which included 320 patients who responded inadequately to TNF-alpha inhibitors, compared the same two doses to placebo with a primary endpoint of ACR20 at 24 weeks.

The trial showed that fostamatinib in combination with methotrexate yielded statistically significant improvement in the higher dose group at 24 weeks with 36.2% of patients on the 100 mg dose and 27.8% of patients in the 100 mg/150 mg dose group showing a greater than 20% response rate at 24 weeks, compared with only 21.1% of the placebo patients (p=0.004 and p=0.168, respectively).

Results of OSKIRA-1 were announced in early April and also were mixed. According to top-line results released April 5, the SYK inhibitor proved a significant effect on signs and symptoms of RA measured by ACR20 response rates. The results for the modified Total Sharp Score (mTSS), a radiographic endpoint that assesses effects on bone and would support a structural damage claim, were not statistically significant (Also see "Fostamatinib Skates Through OSKIRA-1 With Mixed Results" - Pink Sheet, 5 Apr, 2013.).

Rigel believes that fostamatinib still could find a place in the broad RA market. “You don’t need to succeed in all patients, just some subset of patients,” said Rodriguez, who pointed out that many products that are used in the third-line setting in this category still approach close to a billion dollars in sales.

Investors don’t seem to agree. The company’s stock fell more than 18% to close the day at $3.71. The stock is down more than 50% from its April 4 closing price, the day before the company released results from OSKIRA-1.