The American biotech firm announced on Monday that it had decided to discontinue its development of its lead drug, NEOD001, used in the treatment of a rare degenerative disease called AL amyloidosis, after yielding disappointing results in a key clinical test.
NEOD001 was undergoing two late-stage trials, Pronto and Vital, which tested reactions in both previously treated AL amyloidosis patients with persistent cardiac dysfunction and newly diagnosed patients, respectively.
Prothena decided to halt development after the AL amyloidosis drug failed to meet its primary or secondary endpoints in the Phase 2b Pronto and an independent data monitoring committee recommended the discontinuation of the Vital study for futility.
Gene Kinney, PhD, president and CEO of Prothena, said, “we are deeply disappointed by this outcome, particularly for patients suffering from this devastating disease,” adding that the group was “surprised” by the results but would “continue to analyze the resulting data to share insights with our collaborators in the scientific, medical and advocacy communities”.
Less than half an hour after trading began in the US on Monday, Prothena’s shares were down 70% at $11.20 per share, their lowest point in five years.
Woodford is currently the largest backer of the biotech firm, owning 11.53 million shares or a 30% stake in the group. The stock appears in both the Woodford Equity Income fund and Woodford Income Focus fund, making up 2.7% and 1.7% of the portfolio respectively, and is one of the largest holdings in his Patient Capital Trust at 8.6%.
While he admitted Monday’s news was a “undoubtedly a blow” for the firm, he vowed to stick by the battered pharma firm.
“We have always been clear why we have backed Prothena and, given the positive progress throughout the development of this drug, we have been increasingly confident it would be successful,” the celebrity manager said in a statement on Monday.
“Such trial results are symptomatic of early-stage investing, however, and with specific regard to biotech trials outcomes are binary. Nevertheless, the result of this trial is undoubtedly a blow and we will be working with the company and its management team on its strategy beyond Pronto – it has options.”
Woodford’s sizeable position in the biotech firm has been met with widespread criticism from investors since last November when its shares fell 15% after pushing back the endpoint on its Vital trial.
At the time US hedge fund Kerrisdale Capital identified Prothena as “the next big biotech blow-up,” prophesising the failure of its lead drug trials.
“In the words of one amyloid antibody co-inventor, the probability of NEOD001 succeeding in its Phase 3 trial is ‘almost zero’,” said Kerrisdale.
However, Woodford remained confident in the biotech firm’s progress on the amyloidosis drug, arguing that the delayed tests were “a very promising sign that NEOD001 is working”.
On Monday, he reiterated that Prothena still has an early and mid-stage clinical pipeline of other drugs.
“It has a technology platform and a world-leading specialism in misfolding proteins, which are implicated in a number of different neurological disorders,” he said. “This research platform has been validated by two major pharmaceutical companies – Roche (which is partnering Prothena in PRX002 in Parkinson’s disease, currently in Phase II trials) and Celgene (which has recently collaborated with Prothena on three earlier stage clinical assets). The company also has its own, unpartnered assets about to enter the clinic and, with more than $500m on its balance sheet, it is very well-funded.”
