- The failure of a late-stage drug trial shaved $2 billion off the market value of Wilmington, Delaware-based drugmaker Incyte, which revealed late Thursday a surprising clinical setback for an experimental medicine seen as important to its future.
- In the Phase 3 study, which enrolled more than 400 patients with a condition known as graft-versus-host disease, Incyte's drug did not significantly improve responses to treatment when added to standard steroid therapy.
- Incyte executives plan to continue testing the drug, called itacitinib, in a chronic form of graft-versus-host disease as well as for prevention of the condition, which occurs when transplanted bone marrow or stem cells attack the recipient's body. Wall Street analysts, however, now view those trials as riskier bets, while investors sent shares in Incyte down by about 10% in Friday trading.
Incyte is best known for its drug Jakafi (ruxolitinib), an inhibitor of two cell signaling proteins known as JAK1 and JAK 2.
Approved for two rare blood cancers and, most recently, graft-versus-host disease that's resistant to steroids, Jakafi accounts for almost all of Incyte's revenue. Sales topped $1.2 billion over the first nine months of 2019, and are expected to total about $1.7 billion for the year.
Developing a drug pipeline behind Jakafi has been Incyte's top research priority, a pursuit aimed at solving what Incyte CEO Hervé Hoppenot described to BioPharma Dive as the company's "single asset syndrome."
Itacitinib, which also blocks JAK1, is a large part of that strategy, particularly for expanding into treatment-naive graft-versus-host disease. The failure of the Phase 3 study, called GRAVITAS-301, erodes the drug's prospects in acute forms of GvHD and ups the risk of the ongoing trials in other patient groups.
Perhaps more worryingly for Incyte investors, the study miss lengthens a list of pipeline setbacks in recent years.
"We believe the failure of GRAVITAS-301, which follows three prior high-profile pipeline disappointments in four years ... may lead some investors to question the company's ability to consistently generate value from R&D investment," wrote Andrew Berens, an analyst at SVB Leerink, in a Jan. 3 note to investors.
Berens cited the damaging failure of the company's cancer immunotherapy epacadostat, as well as Incyte's decision to stop testing of Jakafi in solid tumors and struggles with the Eli Lilly-partnered arthritis drug Olumiant (baricitinib).
Wall Street has mixed views on how large a component of Incyte's value itacitinib is, but analysts from RBC Capital Markets, Cantor Fitzgerald and SVB Leerink all saw the negative GRAVITAS-301 result as hurting the company's future revenue prospects.
Incyte didn't release detailed data from the study, but said that itacitinib missed both the study's primary and key secondary goals. After 28 days, treatment with itactinib plus steroids did not appear significantly more beneficial than receiving steroids alone. Nearly three quarters of study participants given the combination responded to treatment, versus 66% of those who were on steroids.
Company leadership attributed the miss to a higher-than-expected response rate in the control group, but did note that no subgroup showed any greater or lesser benefit from itacitinib plus steroids.
Still, executives expressed hope for itacitinib in chronic graft-versus-host disease, which develops differently and has different effects than the acute form.
"The results of the GRAVITAS-301 trial are obviously disappointing but ... it is not clear they have any read through to other studies of itacitinib in chronic GvHD or GvHD prophylaxis," said Incyte's chief medical officer, Steven Stein, on a Thursday call with investors.
Results from GRAVITAS-309, which is testing itacitinib in chronic GvHD, aren't expected for years. The company will do a six-month futility analysis to gauge the trial's likelihood of success, however.
Nearer on the horizon is a Food and Drug Administration decision on pemigatinib, a liver cancer drug Incyte submitted for approval late last year. Another cancer therapy, called capmatinib, is licensed to Novartis, which expected to file with the FDA sometime in the fourth quarter of 2019.