BioPharma

Two biotech stocks crash on first trading day of the year

Agile Therapeutics released “positive top-line phase 3 results” on Tuesday, but the market did not buy it. Its shares plummeted 74 percent, trumping the 68 percent drop inflicted upon Inotek Pharmaceuticals earlier in the day.

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Lest we forget how brutal the biotech sector can be, two microcap companies had their share prices slashed close to 70 percent on Tuesday — the first trading day of 2017.

Inotek Pharmaceuticals and Agile Therapeutics were independently obliterated by the markets in response to some negative late-stage trial data.

Lexington, Massachusetts-based Inotek took a 68 percent hit for its lead candidate trabodenoson, in development for patients with primary open-angle glaucoma (POAG) or ocular hypertension (OH).

The drug was reportedly well tolerated, but it was outperformed by the placebo arm in a Phase 3 trial of 303 patients, dubbed MATrX-1.

Data released on Tuesday showed the drug failed to meet its primary endpoint, which was a statistically significant reduction in intraocular pressure (IOP) at 12 time points over 84 days. At its highest dose, trabodenoson did triumph over the placebo arm — on average — but it did not consistently show an improvement at every time interval.

“Looking ahead, 2017 is an important year for the trabodenoson development program,” noted David Southwell, Inotek president and CEO, in the company news release. “We will wait for the full results from MATrX-1 to better understand the behavior of the placebo arm.”

Some industry experts believed the placebo discussion was already a moot point — Inotek should have been studying its drug in relation to the gold standard treatment. Instead, the FDA allowed the company to prove efficacy over a placebo arm.

Agile Therapeutics also suffered at the hands of a Phase 3 trial, falling 74 percent in after-hours trading. This, despite an optimistic news release headline that read: “Agile Therapeutics announces positive top-line phase 3 results.”

Headquartered in Princeton, New Jersey, the women’s health company went public in 2014. On Tuesday it delivered top-line results from its SECURE trial of Twirla, a low-dose combined hormonal contraceptive patch.

The study itself was conducted to address issues raised by the FDA in 2013. A Complete Response Letter (“CRL”) sent to the company called for a new study with better clinical trial conduct and a greater cross-section of U.S. women who are using hormonal contraceptives (age, race, body mass index and more).

“We are very pleased with having achieved this critical milestone for Agile,” stated Al Altomari, president and CEO of Agile in the release.  “Now that we have successfully completed SECURE, we are focused on preparing the resubmission of our NDA and continuing our progress towards seeking approval of Twirla and commercializing Twirla in the United States.”

So how did the share price massacre come about?

“For starters, Twirla’s efficacy in preventing pregnancy, measured by a ratio called the Pearl Index (PI), was higher than expected in several patient groups, specifically overweight and obese women,” writes healthcare investor Douglas House on Seeking Alpha.

Investors were also extremely concerned by the 51.4 percent drop-out rate in the 13-cycle trial. For a drug that has already been turned down by the FDA, those outcomes are far from positive.

Photo: Unhappy Trader, Big Stock Photo