Gemphire stock drops to all-time low as lead drug delayed
- Gemphire Therapeutics on Monday announced its effort to lift a partial clinical hold blocking its only drug candidate failed to convince U.S. regulators, pushing back its timeline for development and rattling investor faith in the process.
- The Food and Drug Administration requested more animal studies regarding the safety of gemcabene, an oral therapy being studied for dyslipidemias and NASH, or non-alcoholic steatohepatitis, the Michigan-based biopharma company said in a statement.
- Gemphire also moved back the time frame for the drug's planned commercialization, restructuring a licensing deal with Pfizer and the terms of a $15 million loan agreement.
Gemphire hit investors with two expectation-shifting statements Monday. First, the company announced a restructured licensing deal with Pfizer that pushes back when Gemphire would need to successfully commercialize the drug before the pharma could terminate the deal.
Then, Gemphire disclosed an update that gave some color on the hurdles facing gemcabene. The FDA is now requesting studies of the drug in monkeys and dogs after reviewing a two-year carcinogenicity study on mice and rats that showed tumors in the rodents.
As a result, Gemphire's share price fell nearly 50% Tuesday morning, an all-time low for the company that went public in 2016. Its market cap was cut in half to roughly $50 million.
Gemcabene has been under a partial clinical hold since 2004, when the FDA deemed the drug to have peroxisome proliferator-activated receptor-like properties. The hold barred the company from conducting any clinical trials lasting longer than six months.
Gemphire said Monday that the FDA specified an End of Phase 2 meeting and any planning for Phase 3 trials for gemcabene in dyslipidemia will not happen until the hold is lifted.
The FDA requested a 13-week study involving monkey and canine PPAR isoforms to further test for the human relevance of preclinical safety studies. Gemphire said it expects to submit those results in the second quarter of 2019.
Gemphire said it believes the tumors were a "rodent-specific phenomena" that won't translate to humans.
"Our confidence in gemcabene's safety profile is supported by the fact that it has been observed to be safe in nearly 1,200 human subjects in 24 Phase 1 and 2 clinical trials," Gemphire CEO Steven Gullans said in a statement.
Elsewhere, Pfizer and Gemphire reached new terms in an licensing agreement that previously gave Pfizer the right to terminate the deal by April 2021 if the drug wasn't adequately commercialized by then. That date was pushed back to three years to April 2024 in the new agreement.
Gullans said in a statement that the Pfizer extension gives the company "additional flexibility" in developing gemcabene and reiterated his confidence in bringing the drug to market by that date for at least one disease.
The company also amended a $15 million loan deal with Silicon Valley Bank that previously stipulated a July 31, 2018 deadline for the FDA lifting the clinical hold. Failing to meet that deadline, the restructured agreement will push that target to Sept. 30, 2019.
Phase 2a trials on familial partial lipodystrophy and pediatric NAFLD remain ongoing. Gemphire expects to release top-line interim date in late-2018 and early-2019 on those two studies, respectively.
Gemphire will report second quarter financials Aug. 13 in what will most likely be a testy earnings call with investors.