- Third Harmonic Bio, a newly public biotechnology startup, on Thursday said it will halt development of its most advanced drug after observing signs of liver toxicity in two participants in an early clinical trial, a blow to its research plans.
- The toxicity, which involved high levels of two enzymes that are a warning sign of liver injury, occurred in two of the first five participants treated in the trial studying Third Harmonic’s drug for chronic hives. Both patients were asymptomatic, the company said.
- In response to the safety signal, Third Harmonic will terminate the study and turn its attention to developing new “chemically distinct” drug candidates that target the same cellular regulator, a receptor called KIT that’s involved in controlling a type of immune cell known as mast cells.
For much of 2022 — a particularly tough year for young biotech companies — Third Harmonic has been a notable success story.
The Atlas Venture-backed startup made its public debut in February, having raised $105 million and brought on a CEO that helped pilot her last company to a $3 billion buyout. In September, the company successfully pulled off a $185 million initial public offering, one of only 20 biotechs to price an IPO this year and the fifth largest by value.
Thursday’s update is a major setback, however, and sent shares in the company down by more than 75%, erasing hundreds of millions of dollars in market value.
“While this is a deeply disappointing outcome, we are encouraged by the preliminary signs of clinical activity at this starting dose and are optimistic about the potential for a selective oral wild-type KIT inhibitor to become an important treatment modality for mast cell-driven inflammatory diseases,” said Natalie Holles, Third Harmonic’s CEO, in a statement.
According to the company, the reported liver toxicity was not previously observed in earlier clinical testing, nor predicted by prior laboratory toxicology studies.
The first participant treated with Third Harmonic’s drug in the recent Phase 1b study had no signs or symptoms of liver toxicity, nor did the participants treated fourth and fifth. Dosing for those latter individuals was stopped at, respectively, week four and week two of the study after the liver enzyme elevations were detected in the second and third participant.
The company will continue to follow all five individuals, but no new participants will be enrolled. Data from the study will be presented at a future medical meeting, Third Harmonic said.
“We believe this is likely compound-specific, off-target toxicity — a known risk with [Third Harmonic]'s small molecule approach — unrelated to targeting KIT,” Thomas Smith, an analyst SVB Securities, wrote in a note to clients.
Smith views the setback as likely to boost interest in Celldex, a competing drugmaker that’s developing a rival drug for chronic hives. (Smith has an “outperform” rating on Celldex stock.)
Shares in Celldex rose by 9% Thursday morning.
Third Harmonic plans to select a new drug candidate aimed at KIT next year. It said it’s been conducting research to identify next-generation oral inhibitors of the receptor and has several molecules it’s advanced into exploratory toxicology studies.
The form of chronic hives Third Harmonic is targeting, known in clinical parlance as chronic inducible urticaria, is caused by triggers like heat, scratching or sunlight. Oral antihistamines can be used as treatment, but are only effective for roughly half of people with the condition, according to Third Harmonic. Another drug called Xolair can be used, too, but also doesn’t work for everyone.
Third Harmonic was built around the drug it’s now discontinuing, which was previously owned by Novartis.