- Rubius Therapeutics will end development of its most advanced drug as the Cambridge, Massachusetts-based biotech looks to save money by moving away from rare disease research.
- The decision, according to Rubius, is partially due to setbacks that stung its lead drug, an experimental treatment for the uncommon metabolic disorder phenylketonuria, or PKU. An early study of the drug had a delayed start, and then results from the first patient were "uninterpretable," the biotech said.
- Rubius expects the costs saved by shuttering its rare disease programs will give it enough cash to operate into 2022. In the meantime, the company will focus resources around cancer and immune system drugs. Those include RTX-240, a cell therapy for solid tumors that was recently cleared for human testing. Rubius also intends to ask regulators before year's end to let it test another drug, RTX-321, in patients with HPV-positive cancers.
It wasn't long ago that investors were bullish on Rubius and its technology platform, which aims to fight diseases with re-engineered red blood cells. In mid-2018, the biotech pulled off a bigger-than-expected public offering that flooded it with $241 million and gave it an overall valuation of $1.8 billion, according to Renaissance Capital.
Yet problems with its lead program have hurt Rubius. Production issues with a contract manufacturer, according to Rubius, forced the biotech to delay an initial readout from the Phase 1 trial. Though Rubius had signaled that data would be available before the end of 2019, the company had still not dosed the first patient by mid-January.
"We understand what we didn't do right in 2019, and we are doing it differently in 2020," CEO Pablo Cagnoni said during a presentation at the J.P Morgan Healthcare Conference in January. "We will deliver in 2020."
The year so far, however, has been much of the same for Rubius. Those highly anticipated results from the first patient given the experimental PKU therapy were deemed uninterpretable, which Rubius said is "possibly due, in part, to the low dose of cells administered and the sensitivity of the flow cytometry assay used to detect circulating cells."
The research update, which came alongside earnings that showed Rubius recorded a higher net loss this year than last, didn't sit well with investors. Shares were down 8% at market's open Thursday but plummeted as trading continued. By late morning, they had fallen almost 50% to trade at $3.50 apiece amid a broader market sell-off due to coronavirus concerns.
Rubius noted that additional capital and better manufacturing efficiency could allow it to revisit chronic, high dose-dependent conditions in the future. For now, though, its exit from rare disease drug development removes a competitor for Homology Medicines and BioMarin Pharmaceutical, each of which are working on gene therapies for PKU.
The retreat may not be all bad news for Rubius either, since Wall Street analysts had questioned whether the biotech's PKU treatment would be able to hold a place in the market against potentially one-time treatments like gene therapy.
"Indeed, we acknowledge if PKU is proven safe, given the cost of capital, it might make more sense to focus on oncology, where long-term market value is much higher," Jefferies analyst Michael Yee wrote in a March 8 note to investors.
As of December 31, 2019, Rubius had $283 million in cash, cash equivalents and investments, down from $404 million at the end of 2018. Net loss for the full year 2019 was $164 million versus $89 million the prior year. Between the two years, R&D investment more than doubled to $112 million, in part because of money poured into the PKU program.